Talen Energy Corporation has announced that it has entered into a definitive merger agreement with affiliates of Riverstone Holdings LLC, a private investment firm.
Under terms of the merger agreement, all outstanding shares of Talen Energy common stock not currently owned by Riverstone affiliated entities will be acquired for US$14.00 per share in cash. Affiliates of Riverstone currently own approximately 35 percent of the outstanding shares of Talen Energy common stock.
The purchase price represents a 56 percent premium to the closing price of $9.00 per share on March 31, 2016, the last trading day before public reports of a potential sale of Talen Energy, and a 101 percent premium to the 60-day volume-weighted average price of $6.95 per share through March 31.
The transaction has a total enterprise value of approximately US$5.2 billion.
Citi is serving as financial advisor to Talen Energy. Kirkland & Ellis LLP is serving as Talen Energy's legal advisor. Goldman, Sachs & Co. and RBC Capital Markets are serving as financial advisors to Riverstone. Wachtell, Lipton, Rosen & Katz and Vinson & Elkins LLP are serving as Riverstone's legal advisors for the transaction.
Paul Farr, Talen Energy President and Chief Executive Officer, said:
"We believe the transaction offers compelling value to our stockholders, while eliminating execution risk, and will provide additional momentum to the outstanding work our employees have done to drive improvements in the safety, reliability and efficiency of our plants in the time since we became an independent company."
Stuart E. Graham, Chairman of Talen Energy's Board of Directors, said:
"The disinterested directors of the Board, not including the two Riverstone directors, with the assistance of our financial and legal advisors, carefully analyzed Riverstone's offer, and after extensive negotiation and thorough consideration, concluded that the agreement we are announcing today is in the best interests of our stockholders."
David M. Leuschen and Pierre F. Lapeyre, Jr., co-founders of Riverstone, added:
"As an experienced owner of power generation assets, Riverstone is excited to acquire Talen Energy and its world class generating fleet, which is located in some of the United States' most attractive power markets."
Riverstone is an energy and power-focused private investment firm founded in 2000 by David M. Leuschen and Pierre F. Lapeyre, Jr. with approximately $34 billion of equity capital raised.
Talen Energy owns or controls 16,000 megawatts of generating capacity in well-developed, structured wholesale power markets, principally in the Northeast, Mid-Atlantic and Southwest regions of the United States.