The B.C. Investment Management Corp. has taken a minority stake in a US$3.5 billion deal to privatize Puget Sound Energy, Washington state's largest utility.
bcIMC joined a consortium led by Australia's Macquarie Infrastructure Partners that includes the Canada Pension Plan Investment Board, Alberta Investment Management Corp., Macquarie-FSS Infrastructure Trust and Macquarie Bank Ltd.
Under terms of the deal, the consortium will acquire all the outstanding shares of Puget Sound Energy at US$30 each. The cash payment represents a 25% premium over Puget Sound's October 25 closing share price. bcIMC's stake in the company was not disclosed.
Puget Sound was seeking a suitor that could invest in the company to secure future energy supply and pay for needed infrastructure improvements. The consortium will invest US$5 billion over the next five years in a region that's expected to grow by 28%, or by a million people, in the next 20 years.
The consortium will also assume about US$3.2 billion in debt and raise about US$300 million through a private placement of shares at US23.67 per share to fund construction and working capital needs.
The deal, which is subject to customary closing conditions and regulatory approval, is expected to close in mid-2008.