Deal reached to sell Vt.’s largest electric utility

Posted May 30, 2011, at 9:35 p.m.

RUTLAND, Vt. — Vermont’s largest electric utility has agreed to be acquired by Canadian utility Fortis Inc. for $700 million, the Central Vermont Public Service Corp. said Monday.

Officials from CVPS and Fortis finalized the details of the sale over the weekend, said CVPS spokesman Steve Costello.

The sale price includes $230 million in debt that will be assumed by Fortis.

If approved by CVPS shareholders and state and federal regulators, the all-cash transaction will pay shareholders $35.10 a share, a 44 percent premium over the utility’s Friday stock price.

The headquarters for CVPS, which has about 159,000 customers throughout Vermont, will remain in Rutland, and no job losses are anticipated.

“At Fortis, we believe that to serve customers well, our operating companies need to stay close to our customers,” said Fortis President Stan Marshall. “CVPS will remain autonomous in the Fortis model, with its own board of directors and its own local management team.”

Gov. Peter Shumlin said Monday the state would examine the details of the proposed transaction carefully.

“In a utility acquisition such as this, it is critical that the transaction serve the best interests of Vermont’s ratepayers and job creators,” Shumlin said. “While CVPS’s Board has cited benefits of retained management and control, I will examine this transaction for strong value to the customers in furtherance of our state’s priorities. I will also insist on a continuation of the ex traordinary corporate ethic we expect here in Vermont.”

The Fortis Group of Companies has regulated utility in five Canadian provinces and three Caribbean countries.

The company has almost 7,000 employees. It is based in St. Johns, Newfoundland, where it has less than 20 employees.

CVPS said Fortis was chosen following a confidential sales process directed by the CVPS Board.

“Fortis brings financial strength to CVPS, giving us strong access to capital markets not available to smaller utilities,” said CVPS President Larry Reilly said.  “And we look forward to sharing best practices with the other operating companies of Fortis, with the goal of finding new ways to reduce costs and improve service to our customers.”

The deal must still be approved by CVPS shareholders and state and federal regulators. The deal is expected to close in six to 12 months.

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