Cleco Merger Arbitrage Offers Low-Risk 13% Annualized Return
Dr. Hugh Akston
Dr. Hugh Akston
Tue, Mar. 29, 9:09 AM
- Cleco (NYSE:CNL) +13.3% premarket on news it won approval yesterday from Louisiana's Public Service Commission to sell itself to an investor group led by Macquarie Infrastructure and Real Assets.
- Three of the five PSC members were needed to overturn their previous rejection and approve the sale; the final vote for approval was 4-1.
- As part of the deal, CNL customers will receive ~$500 on average in rate credits, and CNL will extend the current formula rate plan and base rates for an additional two years.
- The Macquarie-led group is buying CNL at a 15% premium of ~$55.37/share, and will then take the company private.
Tue, Mar. 22, 2:34 PM
- Cleco (CNL -1.9%) withdraws its request for a rehearing before the Louisiana Public Service Commission regarding approval for its proposed sale to Maquarie Infrastructure following comments from one of the commissioners that he would not support the agreement in its current state; CNL will now state its case at a special meeting on March 28.
- The PSC rejected the sale last month; since then, CNL and Maquarie have decided to offer additional commitments that address issues raised by the PSC, such as $100M of immediate rate relief for customers and a $15M contribution to economic development in CNL's service territory.
Thu, Feb. 25, 9:14 AM
- Cleco (NYSE:CNL) -2.7% premarket, on top of yesterday's 9.4% plunge, after Louisiana's Public Service Commission rejected a $4.9B proposed takeover by a Macquarie-led (OTC:MCQEF) investor group, saying the deal was not in the best interest of customers.
- Among their objections, commissioners cited the purchase by Australian and Canadian investors who planned to sell the utility in 8-10 years, and the “double leverage” method of financing the transaction that left open the possibility that CNL customers could be on the hook for the debt.
- The rejection comes as foreign buyers including Fortis (OTCPK:FRTSF) and Emera (OTCPK:EMRAF) are seeking approval to take over U.S. power companies, and the CNL ruling may hurt the chances of future acquisitions by non-U.S. companies.
- Shares are downgraded to Sell from Neutral at Ladenburg Thalmann on the news.
Oct. 20, 2014, 7:26 AM
- Cleco (NYSE:CNL) agrees to be acquired by an investor group led by Macquarie Infrastructure and Real Assets in a deal that values the utility holding company at ~$4.7B including assumed debt.
- The $55.37/share offer price represents a ~15% premium to CNL's Friday closing price.
- CNL will continue to operate as an independent company led by local management and will maintain its headquarters in Louisiana.
Sep. 25, 2014, 11:33 AM
- Cleco's (CNL -9.1%) attempt to find a buyer is faltering, as the likeliest suitor for the Louisiana utility struggles to drum up investor backing for the deal, according to a Bloomberg report.
- Australian bank Macquarie (OTC:MCQEF) reportedly has been seeking to acquire CNL through a special purpose fund managed by its infrastructure group, but the fund's co-investors have balked at the prospective low returns, a result of CNL's already high share price and low growth prospects.
- Iberdrola (OTCPK:IBDRY) is said to have dropped out of the bidding; an earlier report indicated CNL had been close to a deal to sell itself to the Spanish utility.
Sep. 8, 2014, 6:05 PM
- Cleco (NYSE:CNL) is nearing a deal to sell itself and has narrowed down the list of prospective buyers to Spanish power company Iberdrola (OTCPK:IBDRY, OTCPK:IBDSF) and Australian investment bank Macquarie (OTC:MCQEF), FT reports.
- Both bidders reportedly have discussed terms with CNL and a deal could be announced within weeks; a deal likely would fetch a premium to its market value, which now stands at $3.4B.
- The Louisiana electricity supplier has been the subject of takeover rumors since June, when it said it was exploring strategic options after receiving attention from Canada's Borealis (OTCPK:BOREF), which is no longer interested; CenterPoint Energy (NYSE:CNP) also is no longer involved in discussions.
Jul. 30, 2014, 5:58 PM
- Cleco (NYSE:CNL) popped to a 3% gain just before the close after WSJ reported that Spanish power company Iberdrola (OTCPK:IBDRY, OTCPK:IBDSF) has emerged as a potential buyer.
- Iberdrola is among a small group of second-round bidders for Cleco, which supplies power to 280K-plus customers in Louisiana and Mississippi; other bidders are not known.
- Iberdrola USA supplies power to nearly 3M customers in eight states and owns more than 60 renewable energy projects in 24 states.
Jun. 20, 2014, 2:27 PM| Jun. 20, 2014, 2:27 PM | 2 Comments
Cleco Corp. is a public utility holding company, which generates, transmits, and distributes electricity. Through its subsidiary, it supplies wholesale power in Louisiana and Mississippi. The company was founded by Floyd Wilson Woodcock in 1934 and is headquartered in Pineville, LA.
Industry: Electric Utilities
Country: United States