Electricity producer Talen Energy Corp said private equity firm Riverstone Holdings LLC will buy the remaining stake it does not already own in the company for about $1.8 billion, amid a string of deals in the USA power industry.
Advertisement
Riverstone affiliates now own approximately 35 percent of the outstanding shares of Talen Energy, which were issued in the June 2015 transaction.
The transaction is being valued at $5.2 billion.
Through Thursday’s close, Talen shares had more than halved since May past year. Talen will face a $50 million termination fee if it ends the deal with Riverstone, which would drop to $25 million if another offer is accepted during the “go-shop” period.
Talen Energy went public only a year ago, when Pennsylvania-based utility PPL completed its spinoff of its competitive generation arm to focus on its regulated business. Since then, low power market and natural gas prices have squeezed revenues at the generator, whose fleet was about 40% gas, 40% coal, and 15% nuclear plants when it was formed.
It wasn’t immediately clear what the deal means for Talen’s future in downtown Allentown.
Its chairman, Stuart Graham, also opined, “The disinterested directors of the Board, not including the two Riverstone directors, with the assistance of our financial and legal advisors, carefully analyzed Riverstone’s offer, and after extensive negotiation and thorough consideration, concluded that the agreement we are announcing today is in the best interests of our stockholders”.
The loan has been committed by Goldman Sachs Bank USA, Royal Bank of Canada, Barclays, Credit Suisse and Credit Suisse, Deutsche Bank Securities and Deutsche Bank AG New York Branch, Morgan Stanley Senior Funding Inc. and the Bank of Tokyo-Mitsubishi.
Advertisement
Attorney advertising. Prior results do not guarantee a similar outcome.
