Fortis Inc., Canada’s biggest publicly traded electric utility, said it agreed to buy Central Vermont Public Service Corp. for about $470 million to enter the U.S. regulated electricity market.
Fortis, based in St. John’s, Newfoundland, will pay about $35.10 a share in cash, or 44 percent higher than the U.S. utility’s closing price on May 27 on the New York Stock Exchange. Fortis will also assume about $230 million in debt held by the Rutland, Vermont-based company, Fortis said in a statement today.
Central Vermont Public Service is the largest integrated electric utility in the state, with about 160,000 customers in about two-thirds of the cities and towns in Vermont, according to the statement. Upon completion, the acquisition will boost Fortis’s assets by about 7 percent to C$13.9 billion ($14.3 billion), and add to earnings in the first year, Fortis said.
The purchase is expected to close in about six to 12 months, Fortis said. The company plans to sell 9.1 million shares to the public at C$33 each for proceeds of C$300.3 million. Scotia Capital and RBC Capital Markets are leading the sale.
Lazard Ltd. is advising Central Vermont in the transaction.
Fortis fell 69 cents, or 2.1 percent, to C$32.97 at 4 p.m. in trading on the Toronto Stock Exchange, the biggest one-day decline since November. Central Vermont closed at $24.32 on May 27. The U.S. markets are closed today for a holiday.