Allete, an energy company listed on the New York Stock Exchange, got a boost in its stock price by 1.1% before the stock market opened on Monday. This happened because a group led by Canada Pension Plan Investment Board and Global Infrastructure Partners decided to buy Allete. They’re offering to pay $67 for each share of Allete, which adds up to $6.2 billion when you include the company’s debts.
This offer is more than what Allete’s shares were worth when the stock market closed on Friday and also higher than their value on December 4, 2023, which was before news reports about the company considering a sale. The deal ensures that Allete will still be managed locally from its base in Minnesota, and they’ve promised to keep their current employees. Bethany Owen will stay on as the CEO. Allete’s Minnesota Power utility serves about 150,000 customers and has significant operations in developing clean energy.
Key Points:
- Acquisition Announcement: Allete’s stock price rose in pre-market trading after news broke that a consortium led by Canada Pension Plan Investment Board and Global Infrastructure Partners agreed to buy Allete for $67 per share in cash, totaling $6.2 billion, considering debt obligations. This represents a 4% premium over Allete’s closing share price on the previous Friday and a substantial 19.1% premium over its closing price on December 4, 2023, preceding reports of the company exploring a sale.
- Local Management and Commitments: Allete assured stakeholders that despite the acquisition, it will maintain its local management and operational autonomy, headquartered in Minnesota. The agreement also includes significant commitments to retaining Allete’s existing workforce, with Bethany Owen continuing in her role as CEO. This reassures continuity and stability within the company’s leadership structure and operations post-acquisition.
- Minnesota Power Utility: Allete’s Minnesota Power Utility plays a crucial role in serving approximately 150,000 customers. Additionally, the company has been actively involved in the development of clean energy solutions, indicating a strategic focus on sustainability and environmental responsibility. This aspect of the company’s operations likely adds value to the acquisition deal, considering the increasing emphasis on renewable energy sources and environmental sustainability in the energy sector.
About Allete
ALLETE, Inc. is a publicly held energy company that operates in a complex, dynamic, and competitive environment. Here are some key points about ALLETE:
- Clean-Energy Leader: ALLETE is well-positioned as a provider of resilient, reliable, and competitively-priced energy. They have operations across the nation and invest in energy-centric businesses and transmission infrastructure.
- Businesses and Operations:
- ALLETE owns a lignite mine in North Dakota.
- They generate electricity using various sources, including coal, natural gas, biomass, hydro, wind, and solar.
- ALLETE’s Minnesota Power electric utility serves 144,000 residents, 16 municipalities, and some of the nation’s largest industrial customers.
- The company also has a strategic investment in the American Transmission Company.
- Sustainability Focus: ALLETE puts sustainability into action by delivering 50% renewable energy today. They are committed to clean energy and environmental responsibility.
- Corporate Governance: ALLETE’s board of directors is accountable to its shareholders and is responsible for the direction and control of the company. All employees and directors are expected to comply with the Code of Business Conduct and relevant policies.
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