May 31, 2024 | Energy | North America | Active

Avangrid / Iberdrola: Deal Insight

On 17-May-24, Spanish renewable energy company Iberdrola and its US-listed and incorporated portfolio company, Avangrid, announced an agreement whereby Iberdrola will take Avangrid private by purchasing the remaining issued and outstanding shares that it does not already own. Iberdrola is offering $35.75 per share for the outstanding 18.4% publicly-listed stake, representing a 11.4% premium to Avangrid’s undisturbed share price on 6-Mar-24, before Iberdrola’s unsolicited proposal was made public; on 7-Mar-24, Iberdrola proposed $34.25 per share. Avangrid plans to continue paying its quarterly cash dividends, of up to $0.44 per share, through deal completion, and a pro-rata dividend will also be paid for any partial quarter, prior to settlement. Avangrid’s board has accepted the offer based on a unanimous recommendation from a special committee that evaluated strategic alternatives and conducted negotiations. The minority buyout is subject to Avangrid shareholder approval and regulatory clearances from the Federal Energy Regulatory Commission (FERC), the Maine Public Utilities Commission, and the New York Public Service Commission. Notifications for these are expected to be made within 30 business days, by 2-Jul-24. The target vote requires majority of minority votes, and the merger agreement contains customary clauses on representations, warranties, and covenants with specific MAC carve-outs for war and pandemic. Avangrid is subject to non-solicitation clauses with customary fiduciary-out exemptions ...

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