We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Westar Energy and Great Plains Energy Step Closer to Merger
Read MoreHide Full Article
Westar Energy, Inc. and Great Plains Energy Incorporated (GXP - Free Report) , the parent company of Kansas City Power & Light (“KCP&L”), announced that shareholders of both companies have approved the merger proposal worth $15 billion.
Deal So far
Westar Energy and Great Plains Energy submitted a revised proposal in the month of July to the Kansas Corporation Commission (“KCC”) following the refusal of its original request. The companies took necessary steps with the regulators and authorities of the states to further the proposal for the newly revised merger deal.
Per the revised filing, the deal will have no transaction debt, no exchange of cash, and a stock-for-stock merger of equals.
In the month of August, Westar Energy and Great Plains Energy filed for a request with the KCC to approve the proposed merger. The merger is anticipated to close by the first half of 2018, once approvals from the KCC, Missouri Public Service Commission (“MPSC”) and other regulators are received
Benefits of the Merger
The new entity is expected to sell electricity services to approximately 1 million Kansas customers and nearly 600,000 in Missouri.
Both the companies are expecting certain integration and strategic benefits from the merger of equals. Notably, they have identified initial savings of about $28 million in 2018, and anticipate it to grow to $160 million per year by 2022. The deal is further anticipated to benefit both the parties through better infrastructure programs and improved customer service.
Toward this, the merger is expected to benefit the customers and shareholders as well. The companies have committed to maintaining charitable contributions to community and anticipate no involuntary job losses due to the merger. Both companies expect the merger savings to be reflected in future electricity rates, they also intend to share $50 million in form of customer bill credits to retail customers in Missouri and Kansas after the merger. Additionally, the merger is expected to be accretive to shareholders of both companies, with Westar Energy anticipating a dividend increase for its shareholders.
On the legislative front, modernizing Missouri’s regulatory framework remains a long-term priority for Westar Energy.
Our View
With no cash premium and transaction debt, the combined entity is likely to be financially strong. This will enable it to provide reliable service to customers and attractive returns to shareholders. Further, we expect the merger to result in a larger entity in the industry that will aid in creating a healthy competitive market for other players as well.
Toward this, such mergers and acquisitions have been in trend in the same sector. Another utility, Avista Corporation (AVA - Free Report) announced on Nov 21, 2017, that the shareholders had approved its proposed acquisition by Hydro One Limited. The buyout is expected to conclude in the second half of 2018.
Notably, another utility provider Sempra Energy (SRE - Free Report) confirmed its plan to buy Texas’ electrical giant Oncor Electric Delivery Company, LLC (Oncor). The deal is expected to be concluded by the first half of 2018. (Read more: Sempra Energy to Acquire Oncor for $18.8B, Beats Buffet)
Price Movement
In the last 12 months, Westar Energy has outperformed the industry. The company’s shares gained 58% compared with the industry’s growth of 37%. However, Great Plains shares underperformed, gaining 34.3% compared with the industry’s gain.
Zacks Ranks
Great Plains Energy Inc. currently carries a Zacks Rank #3 (Hold), while Westar Energy Inc, carries a Zacks Rank #4 (Sell).
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Image: Bigstock
Westar Energy and Great Plains Energy Step Closer to Merger
Westar Energy, Inc. and Great Plains Energy Incorporated (GXP - Free Report) , the parent company of Kansas City Power & Light (“KCP&L”), announced that shareholders of both companies have approved the merger proposal worth $15 billion.
Deal So far
Westar Energy and Great Plains Energy submitted a revised proposal in the month of July to the Kansas Corporation Commission (“KCC”) following the refusal of its original request. The companies took necessary steps with the regulators and authorities of the states to further the proposal for the newly revised merger deal.
Per the revised filing, the deal will have no transaction debt, no exchange of cash, and a stock-for-stock merger of equals.
In the month of August, Westar Energy and Great Plains Energy filed for a request with the KCC to approve the proposed merger. The merger is anticipated to close by the first half of 2018, once approvals from the KCC, Missouri Public Service Commission (“MPSC”) and other regulators are received
Benefits of the Merger
The new entity is expected to sell electricity services to approximately 1 million Kansas customers and nearly 600,000 in Missouri.
Both the companies are expecting certain integration and strategic benefits from the merger of equals. Notably, they have identified initial savings of about $28 million in 2018, and anticipate it to grow to $160 million per year by 2022. The deal is further anticipated to benefit both the parties through better infrastructure programs and improved customer service.
Toward this, the merger is expected to benefit the customers and shareholders as well. The companies have committed to maintaining charitable contributions to community and anticipate no involuntary job losses due to the merger. Both companies expect the merger savings to be reflected in future electricity rates, they also intend to share $50 million in form of customer bill credits to retail customers in Missouri and Kansas after the merger. Additionally, the merger is expected to be accretive to shareholders of both companies, with Westar Energy anticipating a dividend increase for its shareholders.
On the legislative front, modernizing Missouri’s regulatory framework remains a long-term priority for Westar Energy.
Our View
With no cash premium and transaction debt, the combined entity is likely to be financially strong. This will enable it to provide reliable service to customers and attractive returns to shareholders. Further, we expect the merger to result in a larger entity in the industry that will aid in creating a healthy competitive market for other players as well.
Toward this, such mergers and acquisitions have been in trend in the same sector. Another utility, Avista Corporation (AVA - Free Report) announced on Nov 21, 2017, that the shareholders had approved its proposed acquisition by Hydro One Limited. The buyout is expected to conclude in the second half of 2018.
Notably, another utility provider Sempra Energy (SRE - Free Report) confirmed its plan to buy Texas’ electrical giant Oncor Electric Delivery Company, LLC (Oncor). The deal is expected to be concluded by the first half of 2018. (Read more: Sempra Energy to Acquire Oncor for $18.8B, Beats Buffet)
Price Movement
In the last 12 months, Westar Energy has outperformed the industry. The company’s shares gained 58% compared with the industry’s growth of 37%. However, Great Plains shares underperformed, gaining 34.3% compared with the industry’s gain.
Zacks Ranks
Great Plains Energy Inc. currently carries a Zacks Rank #3 (Hold), while Westar Energy Inc, carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>