Pepco Holdings Inc. (POM)

[FISH21049]

Exelon to Buy Pepco in All-Cash Deal -- 2nd Update
7:33a ET April 30, 2014 (Dow Jones) Print
Exelon to Buy Pepco in All-Cash Deal -- 2nd Update
By Michael Calia
Exelon Corp. agreed to buy rival electricity and gas utility company Pepco Holdings Inc. in an all-cash deal worth about $6.8 billion.
The per-share price of $27.25 a share represents a 20% premium over Pepco's closing price Tuesday of $22.79.
The deal would create a mid-Atlantic utility serving about 10 million customers from D.C. up to Philadelphia and southern New Jersey, with a rate base of about $26 billion.
Exelon said it expects the deal to add significantly to its adjusted earnings in the first full year after it closes. The companies said they expect the acquisition to close in the second or third quarter of 2015. TOO BAD THEY CAN'T CLOSE THE DEAL THIS YEAR!
Pepco shares, up 19% so far this year through Tuesday's close, rose 17% to $26.76 in premarket trading, while Exelon, up 32% this year, was inactive.
Exelon is financing the deal through a $7.2 billion bridge facility with Barclays and Goldman Sachs, with the permanent financing plan to include equity issuance, long-term debt and corporate cash.
Exelon Chief Executive Chris Crane will lead the combined company. Joseph M. Rigby, who had previously announced his retirement, will stay on as CEO of Pepco until the deal closes.
Also Wednesday, Exelon said it swung to a first-quarter profit, as adjusted earnings missed expectations and revenue easily topped views.
The company posted a profit of $90 million, or 10 cents a share, compared with a loss of $4 million, or a penny a share, a year earlier. Excluding the impact of hedging activities and other items, adjusted per-share earnings fell to 62 cents from 70 cents.
Revenue improved 19% to $7.24 billion.
Analysts polled by Thomson Reuters forecast per-share earnings of 69 cents and revenue of $6.31 billion.
Shares of both companies were inactive in premarket trading. Pepco shares were up 19% so far this year at $22.79 through Tuesday's close, while Exelon, which closed at $36.18 Tuesday, is up 32% so far this year.
Write to Michael Calia at [e-mail]

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(END) Dow Jones Newswires
April 30, 2014 07:33 ET (11:33 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.DN201404300083762014-04-30 11:33:00.0005VOL23TVLK1NF6RMIHVIJ7E0P2DJNF