Puget Energy Stock Up On Expectations Macquarie Deal Will Close
13 Janvier 2009 - 1:48AM
Dow Jones News
Shares of Puget Energy Inc. (PSD) closed Monday near a 52-week
high after a deadline to file regulatory appeals to the company's
$7.4 billion purchase by units of Australian bank Macquarie Group
Ltd. (MQG.AU) passed uneventfully.
Shares of Puget, a Bellevue, Wash., utility holding company,
closed trading 50 cents, or 1.8%, higher at $28.53, just shy of the
$28.62 52-week high and near the $30 a share that the Macquarie
units offered in October 2007. The $30-a-share offer represented a
25% premium to Puget's share price the day before the deal was
announced.
The Washington Utilities and Transportation Commission approved
the deal Dec. 30, allowing the investor group to buy the company,
taking it private.
The WUTC gave the companies and other interested parties until
last Friday to file regulatory appeals or requests for
clarification of the commission's decision. No appeal or any other
regulatory filings were made by the Friday deadline, WUTC
spokeswoman Marilyn Meehan said. This means the merger has been
approved and is out of state regulators' hands, she said.
Judicial appeals of the acquisition must be filed with a county
Superior Court within utility Puget Sound Energy's service
territory by Jan. 29, Meehan said. If no court appeal is filed by
Jan. 29, nothing would appear to stand in the way of the merger
being completed.
The acquirers include Macquarie Infrastructure Partners,
Macquarie-FSS Infrastructure Trust, Macquarie Capital Group Ltd.,
the Canada Pension Plan Investment Board, British Columbia
Investment Management Corp. and Alberta Investment Management
Corp.
It was unclear when the deal would close. Puget spokeswoman
Dorothy Bracken referred questions about the merger to Macquarie
Infrastructure Partners. Telephone calls to Macquarie spokesman
Brian Doughty were not returned.
Since the WUTC approved the deal, neither Puget nor Macquarie
has issued a statement or publicly confirmed that the acquisition
will proceed.
Les Levy, an analyst with ICAP Plc (IAP.LN) unit ICAP
Corporates, said he believes the deal will close by Jan. 22, in
line with a stipulation in the merger agreement that calls for the
deal to close within 15 business days of all closing conditions
being met, with the last condition being WUTC approval.
Levy said that Macquarie confirmed the Jan. 22 deadline. But he
added that many investors are rightfully confused about whether the
merger will go through because of the companies' silence.
"Because Macquarie or Puget hasn't issued a press release saying
they're going to accept the agreement, everyone is nervous the deal
is going to collapse," said Levy, who is based in Jersey City,
N.J.
"They don't have to say anything," Levy added. "This deal could
close without (Puget or Macquarie) making a statement."
After the Macquarie-led investors and Puget reached a settlement
agreement last fall with WUTC staff and customer groups, the only
remaining critic of the acquisition was the state's top consumer
advocate, the Public Counsel Section of the Washington State
Attorney General's Office.
Public Counsel Section Chief Simon ffitch criticized the WUTC's
approval of the merger in a statement Dec. 30. But ffitch didn't
request a review of the commission's Dec. 30 decision and is
unlikely to pursue a court appeal.
Financing for the deal is in place and has been fully
syndicated.
The merger is seen closing in view of the fact that all
approvals have been obtained and all necessary financing has been
secured, said David Parker, an analyst at Robert W. Baird in Tampa,
Fla.
"We expect the deal ... will close at $30 a share, but there's
always a risk something could happen," Parker said. He added that
he doesn't see the deal fully out of the woods until the companies
set a closing date and until Jan. 29 passes without any court
appeals filed.
The acquisition will be funded with $3.4 billion in cash, $2.6
billion of assumed debt held by Puget Sound Energy and $1.45
billion of newly issued debt. Of the new debt, about $600 million
will be used to replace or refinance existing utility debt and $850
million will be held separately by parent company Puget Energy.
Puget shareholders and federal regulators have approved the
deal.
Puget Sound Energy is Washington state's largest electric and
natural gas utility, serving more than 1 million electric customers
and 737,000 natural gas customers, primarily in the western part of
the state.
-By Cassandra Sweet, Dow Jones Newswires; 415-439-6468;
cassandra.sweet@dowjones.com
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