Research Desk Line-up: American Electric Power Post Earnings Coverage
LONDON, UK / ACCESSWIRE / August 21, 2017 /Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Calpine Corp. (NYSE: CPN), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=CPN. The Company announced on August 18, 2017, that it has signed an agreement pursuant to which Energy Capital Partners ("ECP"), along with a consortium of investors led by Access Industries and Canada Pension Plan Investment Board ("CPPIB"), will acquire Calpine for $15.25 per share in cash, or $5.6 billion. The acquisition price represents around 51% premium to Calpine's unaffected share price of $10.07 on May 09, 2017. For immediate access to our complimentary reports, including today's coverage, register for free now at:
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A wholly owned and controlled entity of ECP and its consortium will fund 100% of the equity required to accomplish the transaction. Houston, Texas will continue to remain Calpine's corporate headquarters, and no changes in the management team are expected.
45-Day Period for Deal Evaluation
Calpine has been granted a 45-day period within which, with the help of its legal and financial advisors, it can evaluate and enter into negotiations with parties offering superior alternative proposals. If Calpine decides to terminate the agreement for a superior proposal, it will be required to pay a termination fee of $142 million to the investor consortium.
Transaction Follows Exhaustive Review of Strategic Alternatives
Frank Cassidy, Chairman of Calpine's Board of Directors, expressed his pleasure to announce the proposed transaction and that he believes it to be in the best interests of the Company's shareholders and stakeholders. Frank added that the transaction is the result of an exhaustive review of strategic alternatives undertaken by the Board, with the assistance of outside advisors, to maximize shareholder value and unlock the Company's intrinsic value, while eliminating execution risk.
ECP Does Not Intend to Change Calpine's Financial Policy
Tyler Reeder, Partner at ECP, stated that they were looking forward to joining forces with Calpine's talented team as they continue executing their strategy. ECP sees significant value in Calpine's operational excellence and strong and stable cash flows and has been impressed by the Company's exceptional leadership and talented employees. Tyler further stated that ECP does not expect to make any changes to the way Calpine operates its business and intends to remain focused on providing the high-level of service to which Calpine's wholesale and retail customers have become accustomed. Also, the Company does not intend to make any changes to its financial policy, or previously announced $2.7 billion deleveraging plan.
Transaction Subject to Regulatory Approvals
The transaction, expected to close in Q1 2018, is subject to approval by stockholders that represent a majority of outstanding shares of common stock of Calpine, along with expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.
Other regulatory filings include Federal Energy Regulatory Commission (FERC), New York Public Service Commission (NYPSC), the Public Utility Commission of Texas (PUCT), and other states, as necessary.
About Calpine Corp.
Founded in 1984, Calpine is America's largest generator of electricity from natural gas and geothermal resources with operations in competitive power markets. The Company's fleet of 80 power plants in operation and under construction represents approximately 26,000 megawatts of generation capacity. Based in Houston, Texas, Calpine, through wholesale power operations and retail businesses, serves customers in 25 states of Canada and Mexico.
About Energy Capital Partners
ECP is a private equity firm focused on investing in North America's energy infrastructure, including traditional and renewable power generation, midstream oil and gas, electric transmission, environmental infrastructure, and related energy services sectors. ECP has offices in Short Hills, New Jersey; Houston, Texas; and San Diego, California.
About Canada Pension Plan Investment Board
CPPIB is a professional investment management organization that invests the funds not needed by the Canada Pension Plan (CPP) on the behalf of 20 million contributors and beneficiaries. CPPIB invests in public equities, private equities, real estate, infrastructure, and fixed income instruments. Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City, São Paulo, and Sydney, CPPIB is governed and managed independently of the CPP.
Last Close Stock Review
At the closing bell, on Friday, August 18, 2017, Calpine's stock surged 10.52%, ending the trading session at $14.92. A total volume of 123.13 million shares have exchanged hands, which was higher than the 3-month average volume of 3.67 million shares. The Company's stock price soared 8.51% in the last three months, 30.08% in the past six months, and 18.70% in the previous twelve months. Moreover, the stock skyrocketed 30.53% since the start of the year. The stock is trading at a PE ratio of 114.77 and currently has a market cap of $4.87 billion.
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