DPL Shareholders Cheer AES Merger - Analyst Blog
27 Setembro 2011 - 6:15AM
Zacks
DPL Inc. (DPL) announced that its shareholders
have voted in favor of the proposal to adopt the agreement and plan
of merger with The AES Corporation (AES). Earlier,
in April 2011, the companies announced that AES will acquire DPL in
a transaction valued at $4.7 billion.
AES will acquire all of the outstanding shares of DPL for
approximately $3.5 billion in cash, or $30 per share, representing
an 8.7% premium over DPL’s closing share price on April 19, 2011.
AES will also assume DPL's net debt of $1.2 billion.
Upon closure of the transaction, DPL will become a wholly-owned
subsidiary of AES. The parties expect to complete the merger in the
fourth quarter of 2011 or first quarter of 2012. Completion of the
merger transaction is however dependant upon pending regulatory
approvals from the Federal Energy Regulatory Commission and the
Public Utilities Commission of Ohio.
Upon completion of the transaction, DPL’s common stock will
cease to trade publicly, and each outstanding share of DPL’s common
stock will be converted into a right to receive a cash amount of
$30 per share, without interest. AES estimates post-acquisition its
adjusted earnings per share for fiscal year 2011 to be in the range
of $0.97–$1.03.
Arlington, Virginia-based AES Corporation is a global power
company and is involved in the generation, distribution,
transmission and selling of electricity to end-customers in the
residential, commercial, industrial and governmental sectors. AES
Corporation’s businesses encompass 28 countries across 5 continents
representing a highly-diversified earnings base.
Geographic diversity has resulted in a portfolio that is
well-positioned for capitalizing on regional differences in power
prices and weather-driven demand and also insulates the company
from specific risks in any single region or country.
Dayton, Ohio-based DPL Inc. is a regional energy company. DPL,
through its subsidiaries, owns and operates approximately 3,800
megawatts of generation capacity, of which 2,800 megawatts are low
cost coal-fired units and 1,000 megawatts are natural gas and
diesel peaking units.
DPL has performed consistently across its solid base of stable
utility operations. We also like its strong balance sheet, higher
rates, and regulatory approval for recovery of fuel cost.
However, the near-term upside is constrained by regulatory
risks, tepid growth in the economy, the high unemployment level in
Ohio and lofty purchase power costs. Thus, in the absence of any
positive near-term triggers, DPL presently retains a short-term
Zacks #4 Rank (Sell). Over the longer run we maintain our long-term
Neutral recommendation on the stock.
AES CORP (AES): Free Stock Analysis Report
DPL INC (DPL): Free Stock Analysis Report
Zacks Investment Research
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