Newspaper article The Topeka Capital-Journal

CEOs Talk Westar Acquisition, Stock ; Westar: CEO Doesn't Foresee Deal Falling Through

Newspaper article The Topeka Capital-Journal

CEOs Talk Westar Acquisition, Stock ; Westar: CEO Doesn't Foresee Deal Falling Through

Article excerpt

The purchase of Westar Energy by Great Plains Energy isn't expected to close for a year, but the chief executive officers of both companies are on the road, answering questions and attempting to allay investor concerns about the $12.2 billion deal.

Terry Bassham, CEO of the Kansas City, Mo.- based Great Plains, told The Topeka Capital-Journal editorial board Thursday that he has been talking with shareholders for the last three weeks after his company took what he said was an expected stock dip when the Westar acquisition was announced in late May.

Great Plains stock dropped from its May 27 price of about $31 to a low of $28.35 on June 6, and has slowly edged back up to $29.47 to close out the week last Friday.

Bassham and Mark Ruelle, Westar Energy CEO, met with the board to answer questions about the proposed acquisition, including an inquiry about the announced $60 per share -- $51 in cash and $9 in stock -- that Great Plains will pay. Unlike Great Plains, Westar's stock jumped from almost $53 on May 27 to $55.72 on Friday.

"So, what traditionally happens to stock in a deal like this is the acquiree will pop up towards what the price was," Bassham said. "The deal's not closed yet, so it will lay a little below that until they see where it's headed. Our stock performed as we expected, which is our stock dropped right off the bat. Ours even might have been a little more pronounced because I don't think anybody expected us to be the winner. The guessing, the rumor-mongering, had other folks involved, so it was a little bit of a surprise to our shareholders."

Bassham said he expects the stocks to hover around where they are until "the process develops."

Utility transactions, Ruelle said, answer to regulatory agencies and the process of approval through the Kansas Corporation Commission, which means the deal won't close until next year.

"But as we close the transaction, we would expect the Westar price to converge to the transaction price of $60. But because there's some uncertainty and there's some time value to the money, we're not troubled that we're not trading closer to that today. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.