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UtiliCorp in $800 Million Merger

UtiliCorp in $800 Million Merger

UtiliCorp United and Empire District Electric Co. have announced they have signed a definitive agreement to merge the two Missouri-based companies in a stock and cash transaction valued at $800 million, including the assumption of debt.

Under terms of the agreement, UtiliCorp is offering $29.50 for each Empire District common share, payable in UtiliCorp common stock or cash, which $505 million. UtiliCorp also will assume approximately $260 million of existing Empire District debt. Existing Empire District preferred stock totaling approximately $33 million will be redeemed prior to closing.

The agreement contains a collar under which the value per share will decrease if UtiliCorp's common stock is below $22 per share at closing and will increase if UtiliCorp's common stock is above $26 per share at closing. Empire District shareholders may elect to take cash or stock. Total cash paid to Empire shareholders will be limited to no more than 50% of the total merger consideration, and the stock that may be issued in the merger is limited to 19.9% of the then outstanding common stock of UtiliCorp.

The agreement has been approved by the boards of directors of both companies, and is subject to approvals by Empire District shareholders and by state and federal regulatory agencies and other customary conditions. UtiliCorp shareholder approval is not required. Robert K. Green, UtiliCorp president and chief operating officer, termed the merger "a significant step in growing UtiliCorp's domestic operations," following UtiliCorp's $270 million merger agreement with Missouri-based St. Joseph Light & Power

The deal represents a premium of 39% to Empire District shareholders based on Empire District's closing share price of $21.25 on May 10, 1999, and an approximate 14% increase in annual dividend based on UtiliCorp's current dividend rate and current common stock price. Based on Empire's average share price since the beginning of 1999, the agreement represents a premium of 28%.

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ISSN © 2577-9877 | ISSN © 1532-1231
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