By Lisa Kerner
Charlotte, N.C., Feb. 7 - Great Plains Energy Inc. and Black Hills Corp. will each acquire portions of Aquila, Inc. in two separate transactions as the result of definitive agreements announced on Wednesday.
In one transaction, Great Plains Energy will acquire all the outstanding shares of Aquila and its Missouri-based electric utility assets for $1.80 in cash plus 0.0856 of a share of Great Plains Energy common stock for each share of Aquila common stock. The transaction, valued at $4.54 per share or about $1.7 billion, includes the assumption of some $1 billion of Aquila's net debt.
Black Hills will acquire Aquila's electric utility in Colorado, its gas utilities in Colorado, Kansas, Nebraska and Iowa and its associated liabilities for $940 million in cash immediately prior to Great Plains Energy's acquisition of Aquila. The company has a binding agreement with a group of lenders, including ABN Amro Bank as administrative agent, for financing.
Both transactions are expected to close in about a year, according to a news release.
Great Plains Energy and Black Hills expect to retain most of the employees working for the Aquila operations being acquired. There are also no plans to change the management teams or boards of directors of Great Plains Energy or Black Hills.
"We have made tremendous progress since 2002 executing our repositioning strategies. Having improved our financial condition significantly, we believe this transaction provides the best overall, long-term value for Aquila shareholders by accelerating their return on investment," Aquila chairman, president and chief executive officer Richard C. Green said in the release.
"Following the combination, our utilities will have access to lower-cost capital to fund investments to meet customer growth projections, environmental upgrades and improvements to utility infrastructure. In addition, Aquila investors will receive a significant ownership stake in Great Plains Energy and resulting dividends."
Based in Kansas City, Mo., Aquila owns electric power generation assets and operates electric and natural gas transmission and distribution networks.
Great Plains Energy is a Kansas City, Mo., holding company for Kansas City Power & Light and Strategic Energy, LLC.
Black Hills is a diversified energy company based in Rapid City, S.D.
| Acquirer: | Great Plains Energy Inc.
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| Target: | Aquila, Inc.
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| Payment per share: | $4.54, or $1.80 plus 0.0856 of a share of Great Plains Energy
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| Announcement date: | Feb. 7
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| Expected closing: | Within one year
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| Stock price for acquirer: | NYSE: GXP; $32.05 on Feb. 6
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| Stock price for target: | NYSE: ILA; $4.67 on Feb. 6
|
|
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| Acquirer: | Black Hills Corp.
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| Target: | Aquila, Inc.
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| Transaction value: | $940 million
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| Announcement date: | Feb. 7
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| Expected closing: | Within one year
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| Stock price for target: | NYSE: ILA; $4.67 on Feb. 6
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