The Louisiana Public Service Commission (LPSC) has derailed a months-long process that was due to see Macquarie Infrastructure & Real Assets (MIRA), along with the British Columbia Investment Management Corporation (bcIMC) and other institutional partners, acquire Louisiana-based public utility Cleco Power for $4.7 billion.
The Commission found that the sale was not in the public’s interest.
“I did not think that Cleco customers should serve as an ATM for a conglomeration of foreign companies, just so top Cleco executives could walk off with millions, leaving customers with long-term risk,” LPSC chairman Clyde Holloway said in a statement, stressing that since the deal concerns a monopoly, the utility’s customers do not have a choice when it comes to purchasing their electricity.
In October 2014, the MIRA-led group, which in addition to bcIMC also includes John Hancock Financial as well as other institutional investors, agreed to acquire all of Cleco’s outstanding shares at $55.37 each and to assume $1.3 billion of company debt.
In a statement issued at the time, the investor group pledged to maintain Cleco Power’s local presence and headquarters in Pineville, Louisiana. It said it would maintain employment levels, compensation and benefits; it would also appoint Louisiana residents to senior-level management positions as well as to the board of directors.
“We are disappointed with the LPSC's decision, which we believe fails to acknowledge the benefits this transaction would have provided to all Cleco stakeholders,” Cleco and the consortium said in a statement. “We will review our options regarding this decision.”
It is unclear what the investor group's options are as the LPSC has no official appeals process in place. Macquarie and bcIMC declined to comment beyond the collective statement.
The news comes after the consortium obtained approval from Cleco shareholders, clearance from the Committee on Foreign Investment in the US and consent from the Federal Energy Regulatory Commission (FERC).