9:50 AM, Jun 3, 2019 — El Paso Electric (EE) said Monday it has agreed to be purchased by J.P. Morgan Investment Management’s Infrastructure Investments Fund in an all-cash deal for $4.3 billion.
The power company said the fund will pay its stockholders $68.25 for each share, a 17% premium to El Paso’s closing price on Friday. The deal, which is expected to close in the middle of next year, includes the company’s debt, El Paso added.
El Paso was up nearly 14% in early trading.
“As we look to the future and the long-term investment required to meet the growing energy needs of our communities, we are confident IIF is the ideal partner for our region and EPE,” said Mary Kipp, the El Paso’s chief executive. “This agreement demonstrates that IIF values local job retention and growth; creating a sustainable path to enhance our renewable energy resources and protecting the environment; and treating our 1,000 employees, their families and our customers with transparency and respect.”
The company said the deal contains pledges from IIF that its union and non-union employees will stay in place and remain headquartered in El Paso, Texas. The company added that it and the IIF have pledged to $21 million in credits on customers’ electric bills over three years.
According to El Paso, it and IIF will establish a Community Economic Sustainability Fund to invest $100 million to fund economic development over 20 years in the service area.
“As a long-term owner of utilities, we understand the importance of EPE’s mission and believe our resources and experience can expand EPE’s leadership as a provider of safe, clean, affordable and reliable energy,” said Matthew LeBlanc, chief investment officer of J.P. Morgan’s Infrastructure Group.
J.P. Morgan Investment Management is a unit of JPMorgan Chase (JPM).
Price: 66.42 Price Change: +8.22 Percent Change: +14.12