US UTILITY ALLETE GOES PRIVATE IN $6.2 BLN DEAL
Allete (ALE.N) announced on Monday that it would be acquired by U.S. investment management firm Global Infrastructure Partners and Canadian pension fund CPP Investments in a deal valued at $6.2 billion. Under the terms of the agreement, shareholders of Allete will receive a cash offer of $67 per share, representing a 19% premium over the company's closing share price on December 4, the day before reports surfaced regarding a potential sale.
Analysts from Guggenheim utilities research noted that while the premium may seem modest from certain perspectives, they considered the deal to be unique and not necessarily indicative of future go-private transactions in the sector. Following the announcement of the deal, shares of Allete initially rose approximately 5% but later fell 1.3% in morning trading. Additionally, the agreement includes provisions for termination fees, with the partnership potentially liable for up to $212 million if the deal falls through, while Allete may be responsible for paying $116 million in such a scenario.
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