Boston, MA 06/20/2014 (wallstreetpr) – Cleco Corporation (NYSE:CNL), a utility company based in Pineville, is pursuing a sale opportunity that could see it taken over for $5 billion. The company declined to comment on the matter, but sources say it is in for a deal with a Canadian company. The company has reportedly retained Goldman Sachs Group Inc (NYSE:GS) to advise it on the sale.
The unsolicited deal came from Borealis Infrastructure, a Canadian company. The deal comes several months after Cleco Corporation (NYSE:CNL) reportedly abandon efforts to seek buyers because it could not land a reasonable offer. According to The Deal.com, a website that first revealed that Cleco has received an unsolicited offer from Borealis, the company tried to shop for buyers last year but failed to seal the deal.
Shares of the company jumped gained more than 6 percent on the acquisition report.
The board jumps of the opportunity
The Board of Director of Cleco Corporation (NYSE:CNL) has started a sale process and is seeking a price in the range of $61 – $62 per share. Given that the company has a market cap of $3 billion and about $1 billion in debt, the value of the deal could surpass $5 billion.
However, the company’s enterprise value is being put between $4.4 and $4.5 billion. The enterprise value is the estimated current market value of a company, and it is often used in determining acquisition of merger prices.
No filing on acquisition
According to Louisiana Public Service Commission spokesman Colby Cook, the commission has not received filings about a potential sale of Cleco (NYSE:CNL). The PSC would review the deal to clear to give the go-ahead.
Cleco Corporation (NYSE:CNL) through its subsidiary called Cleco Power, owns 11 power generating units and serves 284,000 customers Louisiana. Cleco Power announced this week that Louisiana PSC approved the extension of its Formula Rate Plan (FRP). The rate plan would allow the company to pursue growth while helping customers to experience reduced base rates.
