The $595 million merger of Chesapeake Utilities Corp. and Florida Public Utilities Co. (FPU) has cleared all state regulatory hurdles and the two utilities said they will now file their joint proxy with the Securities and Exchange Commission (SEC).
The combined company would have approximately 117,000 natural gas customers, 31,000 electric customers and 48,000 propane customers in Delaware, Maryland and Florida. The deal was announced in April (see NGI, April 27).
Chesapeake Utilities has received all approvals needed from the Delaware Public Service Commission, the Maryland Public Service Commission and the Florida Public Service Commission. The merger also made it through the statutory waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. The utilities noted that the transaction is not subject to approval by the Federal Energy Regulatory Commission (FERC).
"Chesapeake and FPU will now proceed with the next step in the process, which is filing with the Securities and Exchange Commission their joint proxy and the Chesapeake registration statement for the registration of the Chesapeake shares to be issued in the merger," said Chesapeake Utilities CEO John R. Schimkaitis. "Chesapeake will also be filing with the New York Stock Exchange its listing application for the Chesapeake shares."
Chesapeake's management said it still believes that the merger will close sometime in the fourth quarter of 2009. After the close of the merger, FPU will be a wholly owned subsidiary of Chesapeake.
The merging process has not been a smooth one. In mid-June natural gas utility company Energy West Inc. took steps to put a wedge between the companies by demanding that FPU turn over a list of its shareholders to Energy West, a minority holder of the outstanding shares of FPU (see NGI, June 22). Claiming that it is "entitled to such a list," Energy West filed its request with the Securities and Exchange Commission (SEC), so it would be able to communicate with other FPU shareholders regarding the affairs of FPU.
Energy West did not return calls for update.
Montana-based Energy West, which serves approximately 36,000 natural gas customers in Montana, Wyoming, Maine and North Carolina, reported that it owns 394,522 shares of common stock at $1.50/share in FPU. Under terms of the all-stock transaction, holders of FPU common stock will receive 0.405 shares of Chesapeake Utilities' common stock in exchange for each outstanding FPU share. Based on the average of Chesapeake Utilities' closing stock price on the 15 trading days prior to April 15, the transaction has an approximate value of $12.20/FPU share.
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