The Louisiana Public Service Commission (PSC) on March 28 voted to approve the sale of Cleco Corp. (NYSE:CNL), the parent of regulated electric utility Cleco Power LLC, to an investor group that includes Macquarie Infrastructure and Real Assets (MIRA).
Other members of the purchasing group include British Columbia Investment Management Corporation (bcIMC), with John Hancock Financial and other infrastructure investors (collectively, the investor group).
With the final approval obtained, the transaction is expected to close in April. The Louisiana PSC had earlier rejected the Cleco sale in a February vote.
Last summer, the Federal Energy Regulatory Commission (FERC) had approved the takeover of Cleco by three investors.
Upon closing, Cleco will remain headquartered in Pineville, Louisiana, and retain local management and existing headcount.
In addition, customers will receive approximately $500 on average in rate credits, and Cleco has agreed to extend its current formula rate plan and base rates for an additional two years, according to a Cleco news release.
Cleco will file a rate case by June 2019 for a new formula rate plan effective July 2020. As a result of the transaction, Cleco will operate under a set of commitments that extend its charitable and economic development funding, prolong existing employee and retiree benefits, maintain its financial integrity, increase Louisiana representation on its board of directors and ensure safe, reliable electric utility service and efficient operations.
Cleco will continue to operate under the jurisdiction of the LPSC with assurances that strengthen the Louisiana PSC’s oversight and enforcement rights over the transaction’s commitments.
Under the terms of the merger agreement announced on Oct. 20, 2014, the new owners will acquire all outstanding shares of Cleco for $55.37 per share, a 15% premium to the closing price on the trading day prior to the day of the transaction’s announcement, in cash following the closing of the transaction.
“This process produced a transaction that is unprecedented in its protections and commitments to all of those who depend on us each day,” said Cleco President Darren Olagues. “We look forward to pursuing upcoming opportunities with our new owners,” Olagues said.
“We are committed to ensuring that Cleco remains a strong, locally-based utility in the years ahead and are appreciative that the LPSC voted to approve this sale,” said Andrew Chapman, senior managing director of MIRA. “We are confident that the utility will continue to provide reliable, high-level service to customers, the community and to the region. This is a valuable investment for our group.”