MONTREAL and RUTLAND, VT, July 12, 2011 /CNW/ -- MONTREAL and
RUTLAND, VT, July 12, 2011 /CNW Telbec/ - The leaders of Central
Vermont Public Service Corporation (NYSE-CV) (CVPS) and Gaz Métro
Limited Partnership (Gaz Métro) today announced that a definitive
agreement for the sale of CVPS has been signed. This clears the
path for the combination of CVPS and Green Mountain Power
Corporation (GMP), a subsidiary of Gaz Métro, into one stronger
utility for Vermonters. The new agreement provides
significant benefits for customers, community, employees and
shareholders, including US$144 million in customer savings over 10
years, a Vermont ownership interest in VELCO, and the establishment
of the Headquarters for Operations and Energy Innovation in
Rutland. The all-cash transaction will provide CVPS shareholders
US$35.25 per common share, a 45 percent premium over the closing
price of US$24.32 immediately prior to the announcement of the
previous agreement CVPS had reached with Fortis Inc.
(Fortis). The CVPS Board has terminated the agreement with
Fortis after deeming "superior" the offer from Gaz Métro. "CVPS and
GMP will together become a stronger, more efficient enterprise,
built on our deeply held mutual commitment to Vermont," GMP
President and CEO Mary Powell and CVPS President and CEO Larry
Reilly said. "We believe that this is not only a tremendous
opportunity for CVPS and GMP, but for Vermont's economy at this
critical time. Our combined resources will allow us to
continue to provide competitively priced power, which is necessary
for vibrant communities and a growing economy, and strengthen our
commitment to low-carbon electricity in sync with the environmental
ethic of our state." "The CVPS Board, first and foremost, had a
legal responsibility to ensure the best possible deal for
shareholders, but the board also wanted to ensure the best possible
outcome for our customers, employees and the communities we serve,
Rutland in particular," said Bill Sayre, chairman of the CVPS Board
of Directors. "GMP shared that vision, and our agreement
serves all of these constituencies, and ensures CVPS's historic
commitment to Rutland will continue." One stronger enterprise is
good for customers and Vermont's economy The agreement provides a
number of unique benefits for customers. First, the
combination of the two companies will deliver US$144 million in
savings for customers over the next decade - with even greater
savings continuing into the future. These savings will be
achieved through more efficient distribution of resources,
equipment and facilities throughout a more contiguous service
territory, regulatory savings and improved purchasing leverage with
vendors and service providers. Savings will not be achieved
through layoffs - other than some executive officers - but instead
through natural retirements and turnover, which will allow for the
smooth integration of both companies' workforces. "When we deliver
US$144 million in savings for families, businesses and communities
that frees up US$144 million that can be reinvested to strengthen
Vermont," said Mr. Reilly and Ms. Powell. "We have an obligation to
the public that we operate in a transparent manner and keep costs
as low as possible." "Also, through the contribution of VELCO stock
to a public trust, this deal presents a dual benefit by helping our
neighbors in need, as well as giving Vermonters an important
ownership stake in the operation of the state's most important
transmission asset," noted Mr. Reilly and Ms. Powell. The
establishment of a public trust with US$1 million in annual income
to support a low-income rate program is made possible by an annual
dividend generated through a contribution of VELCO stock, as well
as an annual charitable contribution from the combined
entity. The contribution of VELCO stock to the public trust
means that the new combined entity will hold less than 50 percent
of VELCO voting stock, and control of VELCO will remain with
Vermont entities. Finally, there are a number of important ways
that the combination of CVPS and GMP will improve reliability and
service for Vermonters. A contiguous service territory and
one Operation Headquarters will streamline storm response to
restore power faster and reduce the overall frequency and duration
of outages. Also, with the benefit of the combined utility's
information technology resources, it will be able to move basic
services online more swiftly, and allow customer service
representatives to provide more personalized service, which will be
especially important for the implementation of the statewide Smart
Grid initiative. New benefits for Rutland The companies agreed that
CVPS's historic commitment to its hometown of Rutland will remain
part of the new utility's corporate culture. To ensure that
commitment, the merged company will locate its Headquarters for
Operations and Energy Innovation in Rutland, and pledge to build on
CVPS's extensive community support efforts. "When the communities
we serve succeed, we succeed," said Ms. Powell. "In talking with
local leaders in recent weeks, I can't help but be excited about
all that is happening in Rutland. Making sure that the
Rutland region maintains a strong utility presence is important -
but it is as important for us to be a catalyst for job
growth. With the right mix of public and private sector
support, I know that Rutland will be a strong economic engine in
our state." The Headquarters for Operations and Energy Innovation
will be the combined company's command post for utility
operations. On the energy innovation side, the headquarters
will include staff focused on creative generation solutions, such
as distributed generation and renewable energy projects. The
nature of the work will mean enhancing appropriate staff at the
Rutland headquarters. In addition to locating the Operations
Headquarters in Rutland, the combined company will: -- Commit to no
layoffs other than some executive officer positions due to the
consolidation, nor the mandatory relocation of Rutland employees.
Under the combined company's plan for customer savings, natural
retirements and turnovers will be proportional between CVPS and
GMP; -- Work with local leaders to find space in the downtown for a
new facility - with a strong preference towards rehabilitating
vacant downtown space - and work on a plan to repurpose existing
CVPS facilities; -- Create a US$100,000 "Open for Business" fund,
to be administered by Rutland's Downtown Partnership, to help
continue the revitalization of downtown Rutland by subsidizing rent
for several new businesses for up to two years. CVPS will provide
half the funds immediately, with GMP providing the second half at
closing; -- Create a US$100,000 "Green Growth" fund, to be
administered by the Rutland Economic Development Corporation
(REDC), to support specific initiatives to advance green sector
jobs and technologies. CVPS will provide half the funds
immediately, with GMP providing the second half at closing; --
Kick-start a significant new "Solar City" program in Rutland.
Building on CVPS's renewable energy success with CVPS Cow Power™
and other programs, GMP will bring its expertise in solar power to
develop ideas such as a commercial-size solar orchard, small-scale
backyard and rooftop solar, and deployment of other renewable
energy technology. In the coming weeks, a committee of Rutland
region leaders and interested residents will be announced to help
develop these ideas and recommend a direction for the effort. "GMP
has clearly listened to and addressed concerns Rutland leaders and
residents have voiced since their offer was made public," Rutland
Mayor Christopher Louras said. "Ultimately I would have
preferred that CVPS remain an independent company headquartered
here, but through the agreement, significant, meaningful
commitments to Rutland are made, especially related to local jobs,
and therefore, I endorse the merger. Making Rutland the
Headquarters for Operations and Energy Innovation is important to
the region, and the commitments to downtown, REDC, solar
development and ongoing community support have convinced me that
the new merged company will be a leading corporate citizen just as
CVPS has been. GMP's commitment to a plan that any positions
unfilled through natural turnover and retirement will be
proportional, that CVPS will not face disproportional losses, and
that relocations will not be used to reduce local jobs, was also
critical to me and the City of Rutland." "We are committed to
Rutland and the unique and meaningful community programs CVPS has
developed here, including Shareheat, the Gift-of-Life Marathon,
osprey conservation and the company's corporate giving program,"
Ms. Powell said. "We are also mindful that this new statewide
utility will be serving more than 250,000 customers located across
Vermont: from St. Albans to Bennington, Brattleboro to St.
Johnsbury, and west across Route 2 through the capital district
back to Chittenden County - and most of the towns in between," Ms.
Powell noted. "These communities are important economic
drivers for Vermont, so our services and focus must be statewide."
Maximize employee knowledge and experience "Both CVPS and GMP are
blessed with great employees, and it will be a privilege to meet
and work alongside the CVPS staff," said Ms. Powell. "As we
write the next chapter in the story of these great companies, we
must harness the experience and know-how of all employees to be the
best-of-the-best for our customers." To achieve the maximum
benefits of a combination of GMP and CVPS, a transition committee,
to be co-chaired by Ms. Powell and Mr. Reilly, will be
created. The committee will look at the operations and
business processes of each company in detail, identify best
practices and craft a plan to provide customers of the combined
company with the best service possible. Through this process,
a combined organizational structure will be developed, which will
be staffed by the strongest team of executives and professional
staff available - regardless of which legacy company they came
from. This substantial effort will begin soon, but will take
months to complete. "This combination is a unique opportunity that
will allow employees at both companies to provide quality service
to our customers well into the future, while maintaining the
important local bonds that set Vermont utilities apart," added Mr.
Reilly and Ms. Powell. "That's why the CVPS and GMP teams are
committed to working closely together during this transition to
ensure that our customers benefit directly from this
combination. We want to be sure that when the merger is
complete we deliver tremendous value for our customers, exciting
opportunities for our employees, and the same deep commitment to
our communities and Vermont." Shareholder benefits In addition to
customer and community benefits, CVPS shareholders will also
benefit as a result of the agreement between CVPS and Gaz
Métro. Not only is the purchase price of US$35.25 per common
share, a 45 percent premium over the pre-Memorial Day closing price
of US$24.32, CVPS shareholders will retain the right to receive
CVPS's regular quarterly dividend of US$0.23 per share until
closing. "Gaz Métro is excited to expand its operations in Vermont
through the combination of CVPS and GMP," said Gaz Métro President
and CEO Sophie Brochu. "We believe that the combination of
CVPS and GMP will prove deeply beneficial to our customers.
Both companies share a vigorous commitment to community and
customer service that is consistent with our corporate approach."
"Our philosophy is to rely on experienced local management and
provide them the capital they need to grow and thrive," added Ms.
Brochu. "Mary Powell will be the president and CEO of the combined
company, and she will assemble a strong local leadership team to
guide the company forward." The sale is subject to approval of CVPS
common shareholders, and U.S. federal and state regulators, and is
expected to be completed in approximately six to 12 months.
Following the completion of the transaction, CVPS and GMP's
combined operations will join Vermont Gas Systems and Portland
Natural Gas Transmission Systems under Gaz Métro's wholly owned
Vermont-based subsidiary, Northern New England Energy Corporation.
BMO Capital Markets acted as Gaz Métro's financial advisor.
Legal counsel to Gaz Métro was provided by Osler, Hoskin
& Harcourt LLP. Lazard Ltd. advised CVPS. Legal
counsel to CVPS was provided by Sidley Austin LLP, Loeb & Loeb
LLP, and Downs Rachlin Martin PLLC. About Central Vermont Public
Service CVPS, the largest electric utility in Vermont, serves
nearly 160,000 customers in 163 cities and towns across
Vermont. CVPS has 530 employees. The company is a
three-time winner of the Edison Electric Institute's national
Emergency Recovery Award, and CVPS Cow Power™ won the 2009 U.S.
Department of Energy Utility Green Program of the Year Award.
CVPS has been listed by Forbes Magazine as one of the most trusted
companies in America for 60 straight months. About Green Mountain
Power Green Mountain Power generates, transmits, distributes and
sells electricity in Vermont and is a leader in wind and solar
generation. It serves more than 96,000 customers.
www.greenmountainpower.com. About Gaz Métro With over $3.6 billion
in assets, Gaz Métro is Quebec's leading natural gas distributor.
Its 10,000 kilometer network serves 300 municipalities. Gaz Métro
has operated in this regulated industry since 1957 and is the
trusted energy provider to its customers in Quebec and Vermont, who
choose natural gas for its competitive price, efficiency, comfort
and environmental benefits. Gaz Métro is also present in the
electricity distribution market and is involved in natural gas
transportation and storage, the development of projects such as
wind power, natural gas as fuel for the transportation industry,
and biomethanation. Gaz Métro is committed to the satisfaction of
its customers, partners, employees and the communities it serves.
www.gazmetro.com. Cautionary note regarding forward-looking
statements Certain statements contained in this press release may
be forward-looking pursuant to applicable securities laws. Such
forward-looking statements reflect the intentions, plans,
expectations and opinions of the management (the "Management") of
Gaz Métro inc., Gaz Métro's general partner, and are based on
information currently available to Management and assumptions about
future events. Forward-looking statements involve known and unknown
risks and uncertainties and other factors outside Management's
control. A number of factors could cause actual results of Gaz
Métro to differ materially from the current expectations as
expressed in the forward-looking statements. Although these
forward-looking statements are based upon what Management believes
to be reasonable assumptions, Management cannot assure investors
that actual results will be consistent with these forward-looking
statements. These forward-looking statements are made as of the
date of this press release, and Management assumes no obligation to
update or revise them to reflect new events or circumstances,
except as required pursuant to applicable securities laws. You are
cautioned not to place undue reliance on these forward-looking
statements. The complete version of the cautionary note regarding
forward-looking statements as well as a description of the risk
factors likely to affect Gaz Métro's actual results are included in
the Management's Discussion and Analysis for the year ended
September 30, 2010 of Valener Inc., a limited partner of Gaz Métro,
and in Valener Inc.'s and Gaz Metro's disclosure filings. These
documents are available on SEDAR at www.sedar.com and on Valener
Inc.'s website at www.valener.com. To view this news release
in HTML formatting, please use the following URL:
http://www.cnw.ca/en/releases/archive/July2011/12/c4771.html table
border="0" valign="top" tr valign="top" td bGaz Métro/bbr/ Mediabr/
bJean Charles Robillard/bbr/ Media and Public Relationsbr/
514-719-8201 /td td br/ br/
br/ br/ /td td br/ Investors and
analystsbr/ bCaroline Warre/bbn/b br/ Investor Relations
br/ 514-598-3324 /td /tr tr td /td td /td td
/td /tr tr valign="top" td bGreen Mountain Power/bbr/
bCorporation/bbr/ Dorothy Schnurebr/ Office 802-655-8418br/ Pager
802-450-2213 /td td br/ br/ br/ br/
/td td bCentral Vermont Public/bbr/ bService Corporation/b
br/ Steve Costello br/ Office 802-747-5427 br/
Pager 802-742-3062 /td /tr /table
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