DULUTH, Minn. - ALLETE, Inc. (NYSE: ALE), an energy company based in Duluth, Minnesota, has announced a definitive agreement for its acquisition by a partnership led by Canada Pension Plan Investment Board (CPP Investments) and Global Infrastructure Partners (GIP). The deal, valued at $6.2 billion including debt, will result in shareholders receiving $67.00 per share in cash.
The transaction, expected to close in mid-2025, has been unanimously approved by ALLETE's Board of Directors and is subject to shareholder and regulatory approvals. Upon completion, ALLETE will transition from a publicly traded company to a private entity, discontinuing its listing on the New York Stock Exchange.
ALLETE's current management team, including CEO Bethany Owen, will continue to lead the company, ensuring operational consistency. The company's headquarters will remain in Duluth, and commitments have been made to retain the workforce and maintain current compensation and benefits programs. Union agreements will be honored, and the utilities Minnesota Power and Superior Water, Light and Power will continue to be regulated by their respective commissions.
The acquisition by CPP Investments and GIP, both with extensive experience in large-scale infrastructure investments, is aimed at providing ALLETE with the capital necessary to pursue its "Sustainability-in-Action" strategy. This strategy focuses on expanding renewable energy sources, reducing carbon emissions, and enhancing grid resiliency to support a clean-energy transition.
The acquisition represents a premium of approximately 19.1% over ALLETE's closing share price on December 4, 2023, the day before media reports suggested the company was exploring a sale. It also marks a 22.1% premium over the 30-day volume-weighted average share price prior to that date.
ALLETE's commitment to its clean-energy goals and community involvement will remain intact, with continued investments in solar, wind, storage, and transmission infrastructure. The company's utility rates for customers are not expected to be impacted by the acquisition.
In light of the announced transaction, ALLETE will release its financial results for the first quarter of 2024 as scheduled but will cancel its earnings conference call. Additional information can be found on ALLETE's dedicated transaction website.
This news article is based on a press release statement.
InvestingPro Insights
As ALLETE, Inc. (NYSE: ALE) prepares for its transition into a private entity, investors are closely monitoring the company's financial health and stock performance. According to InvestingPro data, ALLETE has a market capitalization of $3.71 billion and trades at a P/E ratio of 14.75, which is considered low relative to its near-term earnings growth. This suggests that the stock may be undervalued by the market, making the acquisition price potentially attractive for shareholders.
ALLETE has demonstrated a strong commitment to returning value to its shareholders, as evidenced by its impressive history of dividend payments. The company has not only raised its dividend for 13 consecutive years but has also maintained dividend payments for 54 consecutive years. The current dividend yield stands at 4.39%, reflecting the company's robust approach to shareholder remuneration.
Investors interested in the detailed financial health of ALLETE can explore further with InvestingPro Tips, which highlight the company's high shareholder yield and the fact that its liquid assets exceed short-term obligations. These factors contribute to ALLETE's financial stability and may reassure investors as the company approaches its acquisition.
For those looking to delve deeper into ALLETE's financial metrics and stock performance, additional tips are available on the InvestingPro platform. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
Moreover, ALLETE's stock has seen a significant return over the last week, with a 1 Week Price Total Return of 8.2%. This uptick in stock price performance could be a response to the acquisition news, reflecting investor optimism about the deal's potential value. With a total of 11 InvestingPro Tips available, investors can gain a more comprehensive understanding of ALLETE's market position and future prospects.
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