Calpine To Be Acquired By ECP, Consortium For $15.25 Per Share, Or $5.6B

Calpine Corporation announced that it has entered into a definitive agreement under which Energy Capital Partners along with a consortium of investors led by Access Industries and Canada Pension Plan Investment Board will acquire Calpine for $15.25 per share in cash, or $5.6B.

The purchase price represents an approximately 51% premium to Calpine's unaffected share price of $10.07 on May 9, 2017, the day prior to initial media speculation of a transaction. The transaction follows a competitive strategic review process and was unanimously approved by Calpine's Board of Directors. Calpine will maintain its corporate headquarters in Houston, Texas with the current management team expected to remain in place. The agreement includes a 45-day "go-shop" period, during which Calpine, with the assistance of its legal and financial advisors, can actively solicit, evaluate and potentially enter into negotiations with parties that offer superior alternative proposals. The agreement provides for the payment of a termination fee by Calpine of $142 million to the investor consortium in the event that the agreement is terminated for a superior proposal; except that the termination fee will be $65 million if Calpine terminates the agreement for a superior proposal from certain exempted persons prior to 12:01 a.m., Eastern time, on the 106th day after the date of the agreement. There can be no assurance that this process will result in a superior proposal. Calpine does not intend to disclose developments during this process unless and until its Board has made a decision with respect to any potential superior proposal. The proposed transaction is subject to approval by stockholders representing a majority of outstanding shares of common stock of Calpine.

In addition, the transaction is subject to expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. Other necessary regulatory filings include Federal Energy Regulatory Commission, New York Public Service Commission, the Public Utility Commission of Texas and other states, as necessary.

The parties currently expect the transaction to close in the first quarter of 2018. Lazard is serving as financial advisor and White & Case LLP as legal advisor to Calpine. Barclays Capital Inc. is serving as financial advisor and Latham & Watkins LLP as legal advisor to Energy Capital Partners.

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