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Del.icio.usCentral Vermont Public Service Corp. (NYSE: CV) shares surged 40.1% to $34.06, a day after Canadian utility Fortis Inc. said it would acquire the electricity distributor for about $470 million. Volume for the stock neared 406,000 late Tuesday morning, more than 10 times its full-day average.
The all-cash transaction will provide CVPS shareholders $35.10 per share, a 44% premium over the CVPS common share closing price of $24.32 on Friday, May 27.
“CVPS is a well-run utility whose operations and operating philosophy are very similar to those of our Canadian regulated utilities,” said Fortis CEO Stan Marshall.
“The commitment of CVPS to customers, as evidenced by the company’s stellar customer service record, is very much aligned with the operating philosophy of Fortis — to provide our customers with safe, reliable service in the most cost-efficient and environmentally responsible manner possible,” he explained.
CVPS will remain headquartered in Rutland, Vermont with Larry Reilly as President and CEO, and Marshall added “There are no job losses anticipated with this transaction.”
“Fortis and CVPS share a deep commitment to the environment, our workers and the people and places that host our businesses,” Reilly said. “While the share offer price by Fortis was a critical consideration by the CVPS Board, the fact that CVPS would essentially be preserved as a stand-alone autonomous company within the Fortis Group was also an important consideration for the CVPS Board.
The Fortis Group of Companies has regulated utility companies operating in five provinces of Canada — British Columbia, Alberta, Ontario, Prince Edward Island and Newfoundland — and three Caribbean countries.
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