Gaz Metro to buy Central Vermont PSC

Montreal-based Gaz Métro Limited Partnership plans to buy Central Vermont Public Service Corp. (NYSE: CV) (CVPS) for $35.25 a share and combine the company with its Green Mountain Power Corp. (GMP). The sale is subject to the approval of shareholders and regulators and is expected to be completed in six to 12 months. The purchase price is a 45 percent premium over the pre-Memorial Day closing price of $24.32.

Central Vermont owns power generating assets with a combined nameplate capacity of 74.2 MW. The assets include 20 hydroelectric generating facilities with nameplate capacities ranging from 0.3 MW to 7.5 MW, for an aggregate nameplate capacity of 45.3 MW;  two oil-fired gas turbines with a combined nameplate capacity of 26.5 MW; and one diesel peaking unit with a nameplate capacity of 2.4 MW. The diesel plant has been deactivated since 2007.

Central Vermont also has joint-ownership interests in three generating facilities: the oil-fired Wyman Unit 4 (10.8 MW entitlement), the Joseph C. McNeil Station (10.8 MW entitlement) and the uranium-fired Millstone Unit 3 (21.4 MW entitlement).

CVPS had agreed to be purchased by Fortis Inc. but that deal ended it after its Board of Directors said Gaz Metro made a superior offer.

The combined companies join Vermont Gas Systems and Portland Natural Gas Transmission Systems under Gaz Metro’s unit, Northern New England Energy Corp. The new agreement provides both companies with a 30 percent ownership interest in Vermont Electric Power Co. and establishes the headquarters for operations and energy innovation in Rutland, Vt.

No layoffs are planned other than some executive officers.

BMO Capital Markets acted as Gaz Métro’s financial advisor and the company’s legal counsel was provided by Osler, Hoskin & Harcourt LLP. CVPS’ financial advisor was Lazard Ltd. and legal counsel was provided by Sidley Austin LLP, Loeb & Loeb LLP, and Downs Rachlin Martin PLLC.

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