Great Plains Energy to Buy Westar for $8.6 Billion
May 31 2016 - 07:30AM
Dow Jones News
Missouri-based Great Plains Energy Inc. on Tuesday said it
agreed to buy Kansas' Westar Energy Inc. for roughly $8.6 billion,
a major consolidation in the utilities sector that the companies
hope will lead to more controlled costs and consumer rates.
Westar holders will receive $60 a share—$51 in cash and $9 in
Great Plains stock—a 13% premium to Westar's closing price of
$52.92 on Friday. The transaction has a total value of about $12.2
billion including Westar's roughly $3.6 billion of debt.
The companies anticipate the transaction, which requires
regulatory approval and a shareholder vote, closing in the spring
of 2017.
"The utility industry is facing rising customer expectations,
increasing environmental standards and emerging cybersecurity
threats," said Terry Bassham, chairman and chief executive of Great
Plains. "These factors, coupled with slower demand growth for
electricity, are driving our costs and customer rates higher."
Mr. Bassham added that the anticipated savings from the deal
would help reduce future rate increase requests. Upon completion of
the transaction, Great Plains will have more than 1.5 million
customers in Kansas and Missouri.
Mr. Bassham will be chairman and CEO of the combined company.
Mark Ruelle, chief executive of Westar, will remain in his current
role until the closing of the transaction. Great Plains will add
one Westar director to its board.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
May 31, 2016 07:15 ET (11:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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