By Stephanie N. Rotondo
Seattle, Sept. 28 – Great Plains Energy Inc. priced a $750 million offering of 7% $50-par series B mandatory convertible preferred stock with a 20% initial conversion premium, the company said in an FWP filed with the Securities and Exchange Commission.
The deal came late Tuesday with a yield at the tight end of the 7% to 7.5% talk and a conversion premium in the middle of the 17.5% to 22.5% talk.
Great Plains also raised approximately $1.4 billion via a concurrent offering of 52.6 million shares of common stock.
The proceeds of both offerings will be used to finance a portion of the cash consideration for the company’s previously announced acquisition of Westar Energy Inc.
Goldman Sachs & Co. is lead bookrunning manager of the concurrent offerings. Barclays Capital Inc. and Wells Fargo Securities LLC are the joint bookrunners on the preferred offering.
The convertible preferreds are mandatorily convertible on Sept. 15, 2019.
Should the aforementioned merger fail to go through, or if it should not be completed by 5 p.m. ET on Nov. 30, 2017, the preferreds will be redeemed in full at par plus a make-whole amount within 10 business days.
The preferreds are convertible at a threshold appreciation price of $31.74.
Holders of the preferreds can also elect to convert the securities early upon a fundamental change. In such a case, holders will receive a make-whole premium amount calculated using a 4.25% discount rate on top of the initial conversion rate.
The company plans to list the preferred shares of the New York Stock Exchange under the symbol “GXPPB.”
Kansas City, Mo.-based Great Plains is the holding company of Kansas City Power & Light Co. and KCP&L Greater Missouri Operations Co.
| Issuer: | Great Plains Energy Inc.
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| Securities: | Series B mandatory convertible preferred stock
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| Amount: | $750 million, or 15 million shares
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| Greenshoe: | $112.5 million, or 2.25 million shares
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| Maturity: | Sept. 15, 2019
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| Lead bookrunner: | Goldman Sachs & Co.
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| Bookrunners: | Barclays Capital Inc. and Wells Fargo Securities LLC
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| Senior co-managers: | JPMorgan Securities LLC, BofA Merrill Lynch and MUFG
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| Co-managers: | BNP Paribas Securities Corp., Mizuho Securities USA Inc., SunTrust Robinson Humphrey, Inc., BTIG, LLC, BNY Mellon Capital Markets, LLC and KeyBanc Capital Markets Inc.
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| Dividend: | 7%
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| Price: | Par of $50
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| Yield: | 7%
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| Initial conversion premium: | 20%
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| Threshold appreciation price: | $31.74
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| Conversion ratio: | 1.5753, 1.8904
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| Call: | Non-callable
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| Special call: | If merger fails or is not completed by 5 p.m. ET on Nov. 30, 2017, preferreds will be redeemed at par plus a make-whole amount within 10 business days
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| Pricing date: | Sept. 27
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| Settlement date: | Oct. 3
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| Expected listing: | NYSE: GXPPB
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| Talk: | 7% to 7.5%, up 17.5% to 22.5%
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| Cusip: | 391164 878
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| Stock symbol: | NYSE: GXP
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| Stock reference price: | $26.45 (price of concurrent stock offering)
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| Market capitalization: | $4.19 billion
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