In consortium with a host of investors led by Access Industries and Canada Pension Plan Investment Board, Energy Capital Partners (ECP) has signed a definitive agreement to purchase US-based power producer Calpine for $5.6bn in cash.
As part of the transaction, Calpine investors will receive $15.25 per share. The deal also includes a 45-day consultation period, which will see Calpine solicit, evaluate, and potentially enter negotiations with other parties to obtain a better deal.
If the newly signed deal is terminated for a better proposal, Calpine will pay $142m to the investor consortium. This fee will be reduced to $65m if the agreement is terminated due to a proposal from ‘certain exempted persons’.
Calpine’s board of directors has already approved the deal and it is expected to be completed by Q1 of next year, subject to approval by stockholders of Calpine and other necessary regulatory filings.
Energy Capital Partners partner Tyler Reeder said: “We do not expect to make any changes to the way Calpine operates its business and intend to remain focused on providing the high level of service that Calpine’s wholesale and retail customers have become accustomed.
“Finally, we do not intend to make any changes to the company’s financial policy or previously announced $2.7bn deleveraging plan.”
Energy Capital Partners is mainly focused on investing in traditional and renewable power generation, midstream oil and gas, electric transmission, environmental infrastructure, and related energy services sectors across North America.
Calpine is engaged in the generation of electricity from natural gas and geothermal resources.