PPL Corp. (NYSE: PPL) announced April 29 the timing of and additional details regarding the spinoff of its competitive power generation business, PPL Energy Supply LLC, to PPL shareowners and the combination of that business with the competitive power generation business, called RJS Power, owned by affiliates of Riverstone Holdings LLC to form Talen Energy.
Immediately after the spinoff and combination, Talen Energy will be an independent, publicly-traded company listed on the New York Stock Exchange (NYSE). It will own and operate the combined competitive power generation businesses of PPL Energy Supply and RJS Power, with PPL’s shareowners owning 65% of Talen Energy’s outstanding common stock and affiliates of Riverstone owning the remaining 35%.
Each holder of shares of PPL common stock outstanding as of 5:00 p.m. New York City time on May 20, the record date set by PPL’s board of directors, will be entitled to receive a number of shares of Talen Energy common stock on June 1, the distribution date. PPL shareowners will not receive fractional shares of Talen Energy common stock. Instead, fractional shares of Talen Energy common stock will be aggregated and sold in the open market, with the net proceeds distributed pro rata in cash payments to the PPL shareowners who would otherwise receive a fractional share of Talen Energy common stock.
Talen Energy common stock is expected to begin trading on a “when-issued” basis on the NYSE under the symbol “TLN WI” beginning on May 18. On June 2, “regular way” trading of Talen Energy common stock under the symbol “TLN” is expected to begin.
PPL has been advised by the NYSE that from May 18 through the distribution date, there will be two markets for PPL common stock: a “regular way” market and an “ex-distribution” market. Shares of PPL common stock will continue to trade “regular way” on the NYSE under the symbol “PPL” through the distribution date of June 1 and thereafter. Any holders of shares of PPL common stock who sell PPL shares regular way on or before June 1 will also be selling their right to receive shares of Talen Energy common stock in the distribution and merger. Holders of shares of PPL common stock who sell in the “ex-distribution” market on or before June 1 (which will trade on the NYSE under the symbol “PPL WI”), will be selling only their shares of PPL common stock and will be retaining their right to receive shares of Talen Energy common stock in the distribution and merger.
PPL Corp., with 2014 revenues of $11.5 billion, is one of the largest companies in the U.S. utility sector. The PPL family of companies delivers electricity and natural gas to about 10 million customers in the United States and the United Kingdom. The company will retain, among other things, its regulated Louisville Gas & Electric and Kentucky Utilities and their power plants. Being spun off within Talen Energy are a number of unregulated power plants now held by PPL, including its big Montour and Brunner Island coal plants in Pennsylvania.
In other recent developments in the formation of Talen Energy:
- The U.S. Nuclear Regulatory Commission on April 10 approved PPL Susquehanna LLC‘s request for indirect transfer of control of the operating licenses for both units at the Susquehanna nuclear power plant to Talen Energy.
- The Pennsylvania Public Utility Commission on March 11 approved the transfer of PPL Electric Utilities Corp.’s indirect ownership interests in PPL Interstate Energy Co. to Talen Energy.
- PPL Corp. and RJS Power Holdings told the Federal Energy Regulatory Commission on Jan. 27 that they have opted for other power market mitigation measures, not extra power plant sales, to ease FERC concerns about the creation of Talen Energy.