Investor Group Buys TNP Enterprises
TNP Enterprises, the parent company of Texas-New Mexico Power
Co. (TNMP), was bought by a group of investors headed by William
Catacosinos, the former CEO of Long Island Lighting Co., for $1
billion, including assumed debt, the parties announced yesterday.
The deal, which TNP said was the first leveraged buyout of an
electric utility, is expected to close in six to nine months.
The electric utility said the transaction signified an
innovative approach on its part to deal with the consolidation
trend. The investor group will allow the utility to operate as a
stand-alone entity. No layoffs will result from the transaction,
and TNMP's transition to competition in its service area will not
be affected. TNP serves 229,000 customers in Texas and New Mexico.
"It allows us to continue our community-based service programs
for our customers," said Kevern Joyce, CEO of TNP Enterprises, "and
gives us an opportunity to be part of a growing business with no
layoffs for our employees."
The agreement has been unanimously approved by TNP's board of
directors. Shareholders will receive $44/share in cash, which
equals a 39% premium over the 30-day average price. The investor
group will assume $400 million in TNP debt, a TNP spokesperson
said. If the deal is approved, TNP will have switched from a public
corporation to a privately owned corporation.
The transaction still needs approvals from FERC, TNP Enterprises
shareholders, and regulators in New Mexico and Texas.
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