Port Huron, MI, Feb. 23, 2007 — SEMCO ENERGY Inc. announced that it has entered into a definitive agreement under which Cap Rock Holding Corp. will acquire all of the outstanding common stock and 5% Series B preferred stock of SEMCO.
Under the terms of the agreement, SEMCO’s shareholders will receive $8.15 in cash for each share of common stock they hold, representing a premium of approximately 37 percent over SEMCO’s average closing share price during the five trading days ended February 22, 2007.
The holders of the Series B preferred stock will receive $213.07 per share plus a “make-whole” premium calculated at closing. The transaction is valued at approximately $867 million, including the assumption of approximately $515 million of debt. Cap Rock is a utility holding company with electric utility transmission and distribution assets serving 28 counties in Texas.
The board of directors of SEMCO, upon the unanimous recommendation of its Finance Committee (which is comprised entirely of independent directors), has approved the agreement and has recommended that the holders of SEMCO’s common stock approve the transaction at a meeting to be held at a future date determined in accordance with the agreement.
The transaction is subject to approval by holders of SEMCO’s common stock, as well as other customary closing conditions, including the receipt of applicable regulatory approvals. Cap Rock has obtained financing commitments in the full amount of the consideration to be paid to holders of common stock and Series B preferred stock.
Under the terms of the agreement, SEMCO may solicit alternative proposals from third parties for a period of 35 days from the execution of the agreement. The company said it intends to consider any such proposals with the assistance of its advisors. If SEMCO accepts a superior proposal, a break- up fee and other expenses would be payable to Cap Rock.
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