El Paso Electric Company and the Infrastructure Investments Fund, an investment vehicle advised by J.P. Morgan Investment Management Inc. (IIF), today announced that they have entered into a definitive agreement under which IIF will purchase EPE for $68.25 in cash per share representing an enterprise value of approximately $4.3 billion.

The acquisition will require authorization from the Texas PUC

Although the standards in PURA under which the PUC will review the merger do not specifically include the impact on competition from any merger, a merger review under PURA must broadly consider whether the transaction is consistent with the public interest, and also consider the cost of service of the electric utility

While not required to do so under PURA, the PUC generally has considered, as part of its determination of other factors (e.g. the public interest) in prior utility merger proceedings whether the transaction would have an adverse impact on competition.

The shelved transition to competition at El Paso Electric could be raised by an intervenor under either of those categories.

IIF will purchase EPE for $68.25 per share in cash representing an enterprise value of approximately $4.3 billion, including EPE’s net debt. The per share purchase price represents a 17% premium to EPE’s closing price on May 31, 2019, the last trading day prior to the announcement of the agreement. The agreement has been unanimously approved by EPE’s Board of Directors and is expected to close in the first half of 2020, subject to the approval of EPE’s shareholders, the receipt of regulatory approvals and other customary closing conditions.

EPE and IIF have committed to $21 million in credits on customer electric bills over 36 months.

EPE and IIF remain committed to $1.2 million in annual charitable contributions under EPE’s existing Community Partner Program

EPE and IIF have committed to establish a Community Economic Sustainability Fund to invest $100 million over 20 years to fund growth and economic development in EPE’s service area

Tags:
El Paso Electric   Texas   M&A  

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