Calpine Corporation (NYSE:CPN), a US power company focused on generating electricity from natural gas and geothermal plants, announced today it will change its ownership under a USD-5.6-billion (EUR 4.77bn) deal.
Private equity and credit investment firm Energy Capital Partners (ECP) and a group of investors led by Access Industries and Canada Pension Plan Investment Board (CPPIB) have agreed to buy Calpine for USD 15.25 per share in cash. The price is a roughly 51% premium to Calpine’s unaffected share price on May 9, 2017, it noted.
Under the terms of the deal, the target has 45 days to seek and evaluate superior proposals, but will need to pay a USD-142-million fee to the investor consortium if this process leads to signing a deal with another party. The termination fee would be lower -- USD 65 million -- if a deal is inked with certain exempted persons.
“This transaction is the result of an exhaustive review of strategic alternatives undertaken by our Board, with the assistance of outside advisors, to maximize shareholder value and unlock the company’s intrinsic value, while eliminating execution risk,” said Frank Cassidy, chairman of Calpine’s board of directors.
In addition to natural gas-fired plants, Calpine operates 13 geothermal steam turbine-based facilities in the world's largest geothermal field -- The Geysers, located in California. These geothermal power stations have a combined net generating capacity of about 725 MW. The company also has one solar photovoltaic (PV) park.
Tyler Reeder, a partner at ECP, said that the buyers do not plan to make changes to the way Calpine operates its business, to its financial policy or the previously announced USD-2.7-billion deleveraging plan. The company will also keep its current headquarters in Houston, Texas as well as its management team.
The transaction is pending regulatory and stockholders approvals and is expected to close in the first quarter of next year. It is not subject to a financing condition.
(USD 1.0 = EUR 0.851)
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