By Lisa Kerner
Charlotte, N.C., Oct. 26 - Puget Sound Energy's parent company Puget Energy Inc. agreed to be acquired by a consortium of long-term infrastructure investors led by Macquarie Infrastructure Partners, the Canada Pension Plan Investment Board and British Columbia Investment Management Corp.
The consortium will acquire all of the outstanding shares of Puget Energy for $30.00 per share in cash or a total of some $7.4 billion including $3.2 billion of Puget Energy redeemable securities and outstanding debt obligations.
The per-share price is a 25% premium over Puget Energy's closing share price on Oct. 25.
Puget Energy's board of directors approved the transaction, which is slated to close during the second half of 2008 after which the company's stock will cease trading publicly.
The consortium has also committed to an initial investment of some $300 million via a separate private placement of 12.5 million shares of newly issued Puget Energy common stock priced at $23.67 per share. The proceeds will be used for the company's ongoing construction program and working capital needs.
In addition, the consortium agreed to secure credit facilities of at least $2.15 billion to help fund Puget Sound Energy's capital expenditure program and to support energy hedging activities.
"Like many other utilities, Puget Sound Energy faces significant future capital requirements to meet the growing energy needs of our customers, while continuing to provide safe and reliable service to this dynamic region," Puget Energy and Puget Sound Energy chairman, president and chief executive officer Stephen P. Reynolds said in a company news release.
"The merger will provide us with $5 billion over the next five years, insulating us from volatility in the public equity markets."
Puget Energy and Puget Sound Energy, a regulated utility, will continue to be based in Bellevue, Wash., with current management remaining. The company said it will pay its regular quarterly dividend on Nov. 15.
Morgan Stanley & Co. Inc. provided a fairness opinion to Puget Energy's board. The consortium was advised by Macquarie Securities (USA) Inc. and Latham & Watkins LLP. Debt financing for the transaction was provided by Barclays Capital and Dresdner Kleinwor.
| Acquirer: | Consortium led by Macquarie Infrastructure Partners
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| Target: | Puget Energy Inc.
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| Transaction value: | $7.4 billion
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| Per share price: | $30.00
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| Announcement date: | Oct. 26
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| Estimated closing: | Second half of 2008
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| Stock price of target: | NYSE: PSD: $23.95 on Oct. 25
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