Talen Energy To Be Bought By Riverstone At $14.00 A Share

Talen Energy Corporation TLN, a competitive energy and power generation firm with 16,000 megawatts of capacity in eight states, revealed that it struck a definitive deal with private investment firm, Riverstone Holdings LLC's affiliates. The agreement allowed the investment firm to buy the energy firm for $14.00 a share and the transaction's total enterprise was valued about $5.2 billion. The price represented 17.25 percent premium over Thursday's closing price of $19.04. The companies expect the transaction to be completed before the current year ends. Talen energy said that the merger agreement allowed all outstanding shares, which are not currently owned by Riverstone affiliated entities, to be purchased in cash. Currently, the investment firm's affiliates own about 35 percent of the outstanding shares of it, which were issued in the June 2015 transaction. That transaction also established Talen Energy combining competitive generation assets that had been owned by affiliates of PPL Corporation, as well as, Riverstone. The company claimed that the acquisition price represented a 56 percent premium to the closing price of $9.00 per share on March 31, the last trading day before public reports of a possible sale of Talen Energy, and a 101 percent premium to the 60-day volume-weighted average price of $6.95 per share until March 31. Talen Energy President and CEO, Paul Farr, commented, "We believe the transaction offers compelling value to our stockholders, while eliminating execution risk, and will provide additional momentum to the outstanding work our employees have done to drive improvements in the safety, reliability and efficiency of our plants in the time since we became an independent company." Its chairman, Stuart Graham, also opined, "The disinterested directors of the Board, not including the two Riverstone directors, with the assistance of our financial and legal advisors, carefully analyzed Riverstone's offer, and after extensive negotiation and thorough consideration, concluded that the agreement we are announcing today is in the best interests of our stockholders." Riverstone said that the consideration for the common stock in the transaction, of about $1.8 billion, would be funded by a conversion of its current ownership of 35 percent of the common stock of Talen into shares of the surviving corporation, Talen Energy's cash on hand, and proceeds of a $250 million new secured term loan. Also, the new secured term loan is fully committed by different financial institutions while the unsecured debt of $3.3 billion would remain as outstanding. On Thursday, the stock traded 0.75 percent down.