A thorough understanding of a business opportunity can help better ensure its success. It was recently reported that a utility company a couple of hours north of Baton Rouge received a $5 billion, unsolicited, offer from an infrastructure investor. The reports caused the utility company’s stock price to rise. Stock prices for the utility company have ranged from $43.69 to $56.37 over the past year but the company is looking for $61 to $62 a share and has hired a prominent investment bank as an advisor. The utility shopped itself around last year but failed to garner the price it was looking for in any acquisition.
The Public Service Commission would have to review and approve any proposed acquisition and according to its representative, it has not received a filing to prompt it to do so. The electric utility is a regulated utility; it supplies wholesale power in Louisiana and a neighboring state and serves approximately 284,000 customers in Louisiana via its retail business. The electric utility owns 11 generating units.
Acquiring a new business may look different depending n the circumstances and the parties involved. At times, other interests and even government entities may be involved and implicated. Whether business goals include buying a company, a publicly traded merger or a friendly acquisition, different concerns may require consideration and resolution. If the important considerations involved with acquiring a new business are not properly resolved, business litigation can result.
Having the proper understanding of the transaction the party is entering into can help avoid and resolve business litigation when and if it arises. Approaching business opportunities with the appropriate knowledge and forethought can oftentimes help better ensure success.
Source: The Advocate, “Cleco stock surges on report of $5 billion offer,” Ted Griggs, June 19, 2014