With no opposition, shareholders of Central Vermont Public Service Corp. (NYSE-CV) have approved the sale of the company to Canadian Gaz Métro Limited Partnership in voting that concluded Oct. 1. Gaz Métro is the parent company of Green Mountain Power. CVPS and GMP will ultimately merge into one stronger Vermont company after the sale is completed in 2012.
As of of Oct. 1, there are no locally owned power companies of note in Vermont.
Shareholders began voting in late summer by phone, mail and Internet, and final votes were cast today at a special shareholder meeting in Rutland. Over 75 percent of the outstanding shares of the company were represented at the meeting, and of those, more than 97 percent voted in support of the $702 million sale.
“This is a critical milestone in the sale process,” said CVPS President and CEO Larry Reilly. “The overwhelming support of CVPS shareholders demonstrates the soundness of the agreement and the value it will provide to CVPS’s owners, customers, employees and other constituents.”
“I am very pleased that CVPS shareholders have accepted our offer and merger proposal, which will create one strong electric utility to help our Vermont customers save hundreds of millions of dollars over the next 20 years by combining CVPS and GMP service areas,” said GMP President and CEO Mary Powell, who will lead the new company. “These savings will allow families, businesses and communities to reinvest to strengthen Vermont, which is so important for our economic vitality.”
Earlier this week, CVPS received clearance for the sale from the Federal Trade Commission. The transaction must still be approved by the Federal Energy Regulatory Commission and the Vermont Public Service Board, among others. The PSB has already held one pre-hearing conference and has set a preliminary schedule for the docket, with a workshop in October, a public hearing on Nov. 1, and technical hearings in February.
The sale agreement provides significant benefits for customers, communities, employees and shareholders, including $144 million in customer savings over 10 years, benefits for low-income customers, and the establishment of the Headquarters for Operations and Energy Innovation in Rutland. Savings will not be achieved through layoffs – other than some executive officers – but instead through natural retirements and attrition, which will allow for the smooth integration of both companies’ workforces.
The all-cash transaction will provide CVPS shareholders $35.25 per common share, a 45 percent premium over the closing price of $24.32 immediately prior to the announcement of the previous agreement CVPS had reached with Fortis Inc. The CVPS board of directors terminated the agreement with Fortis after deeming “superior” the offer from Gaz Métro.
“The sale will create one much-stronger company, which will capitalize on the strengths of both CVPS and GMP,” Reilly said. “The new company will continue to provide the top-quality service for which both companies are known, and will build on the environmental, renewable energy and community-focused programs they have developed individually.”
Powell and Reilly said now that CV’s shareholders have voted with such overwhelming support, the focus will turn to gaining the remaining required regulatory approvals, particularly the approval of the PSB.
“CVPS and GMP will work together to provide regulators with a clear view of the tremendous benefits the sale and merger will provide to customers and Vermont as a whole,” Powell and Reilly said. “We are extremely optimistic that they will find the sale to be in the public interest, and that the combined company will be uniquely positioned to provide high-quality, affordable and clean energy services for decades to come.”
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 customers in Quebec and Vermont, who choose imported natural gas.
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.