Comments on: Puget Energy Merger Approved and Review

By: Jae Jun

Jae Jun — Fri, 23 Jan 2009 17:55:05 +0000

Merger closing on track.
PSD debt financing complete. Press release

By: Jae Jun

Jae Jun — Sat, 17 Jan 2009 20:44:38 +0000

“PSD: To ensure that shareholders continue to receive dividends at the current rate until closing of the merger, Puget Energy plans to pay a special pro rata dividend based on the number of days from the last regular dividend record date (Jan. 21, 2009) until the closing date of the merger, payable to shareholders of record as of a date prior to the closing to be established by the board of directors”

News link

By: MKL

MKL — Wed, 14 Jan 2009 20:54:03 +0000

Heh! Guess I might not understand either… Just trying to reassure myself. Just fearful in my greediness. Thanks for your comment.

By: Jae Jun

Jae Jun — Wed, 14 Jan 2009 17:30:25 +0000

Hi MKL,

I dont understand what you mean by “to understand and feel some certainty in this risk”?

As for insider selling, it bears no risk or influence on the fact of the merger. If he did sell because he knew something, he’d get caught for insider trading.

By: MKL

MKL — Wed, 14 Jan 2009 15:27:58 +0000

Hi Jae Jun, I have been trying to investigate this PSD purchase to understand and feel some certainty in this risk. Consequently, I am searching for suspicious bits of interest. What do you think of Stephen P Reynolds selling ~1,400 shares recently (reported the 6 January 2009) at $27.30, if he knows that the sale is going to go through shortly at $30?

6-Jan-09 *5,622 PSD Option Exercise at $27.30 per share.
(Cost of $153,480)
6-Jan-09 *1,406 PSD Disposition (Non Open Market) at $27.30 per share.
(Value of $38,383)
2-Jan-09 768 IN Acquisition (Non Open Market) at $13.01 per share.
(Value of $9,991)

By: Jae Jun

Jae Jun — Sun, 11 Jan 2009 05:34:33 +0000

But the argument against the 15 commitments is that they are not new commitments. All 15 are part of the original 63 with additional clarifications. Nothing has been included or modified drastically so if the buyer and PSE have already agreed and no one has filed for a rehearing or clarification, doesn’t that mean all parties understand the deal?

I’m not so worried about the 15 points but more about whether the deal will get delayed if someone files a court challenge.

By: Josh

Josh — Sun, 11 Jan 2009 00:22:54 +0000

It does not look like smooth.

I’ve been concerning about these additional 15 commitments. Some of them gave WUTC lots of power on new entity.

I guess by Monday morning, there will be a PR to report that it will comply or why there will be a delay, which may cause price drop …. It can be another opportunity to pick up shares or run away pending on the reasons.

By: Jae Jun

Jae Jun — Sat, 10 Jan 2009 09:48:00 +0000

“Deadline passes for Puget Energy filing”

Neither Puget Energy Inc. nor the attorney general’s public counsel office filed with the Utilities and Transportation Commission Friday to ask for a rehearing or clarification of a UTC order approving the sale of the Bellevue-based utility to an Australian-Canadian consortium.

Friday was the deadline for such filing. Participants have until Jan. 29 to file a court challenge to the ruling.

http://seattlepi.nwsource.com/business/395545_bizbriefs10.html

This could mean the deal wont close until Jan 29??

By: Dividend Growth Investor

Dividend Growth Investor — Fri, 09 Jan 2009 13:56:37 +0000

Based on my experience with Anheuser-Busch deal, most people got the $70 buyout price per share plus the dividend that was expected to be paid in the fourth quarter. If the board has announced that it will pay it at a particular date, most likely than not they will.

Dividend Growth Investor’s last blog post..Dividends and The Great Depression

By: Ken

Ken — Wed, 07 Jan 2009 15:20:28 +0000

I would not be surprised if we do. The quarter ended Dec. 31st and the deal had not yet commenced so it would only seem right that shareholders collect a dividend for that quarter. But given the choice of dividend and waiting vs no dividend w/quick closure I would take the later.

Ken’s last blog post..PSD: Dividend announced

By: Jae Jun

Jae Jun — Wed, 07 Jan 2009 08:49:22 +0000

I wonder whether we can get the dividends.. I’m thinking it was just formality.
Although that extra 4% yield would be nice.

By: Jae Jun

Jae Jun — Wed, 07 Jan 2009 07:40:07 +0000

Thanks for the info Josh.
Good to know that additional capital isnt required.

Hopefully this whole deal with close by next week. I’ll see what the spread is late this week and decide whether I want to add more.

By: Josh

Josh — Wed, 07 Jan 2009 06:20:51 +0000

Correction to my previous post. The additional commitment #2 is asking for $1.4B and no less than 3 years term. Please ignore my writing about $1.6B. What UTC wants is to have an affidavit to affirm this is done.

Therefore, this should not an issue.

By: Josh

Josh — Wed, 07 Jan 2009 03:18:33 +0000

Hi Jae,

There are more than 63 commitments needed. I’ve located those additions in attachment B of the 8-K

http://phx.corporate-ir.net/phoenix.zhtml?c=63643&p=IROL-secToc&TOC=aHR0cDovL2NjYm4uMTBrd2l6YXJkLmNvbS94bWwvY29udGVudHMueG1sP2lwYWdlPTYwNTI0MDUmcmVwbz10ZW5r&ListAll=1

Over there, you will find additional 15 commitments as a condition for UTC final approval. I think 2, 8 and 13 are more significant than others.

In #2, by closing day, PSE needs to secure a contractually committed $1.6B credit facility.

I believe investors has secured a $1B + 0.4B credit facility but not yet to $1.6B.

Can they achieve this in a short period of time?

By: KC

KC — Tue, 06 Jan 2009 20:39:27 +0000

PSD dividneds announced for shareholders of record January 21st 09. Does this mean we are waiting till at least the 21st before knowing if this is a done deal?

KC’s last blog post..PSD: Dividend announced

By: Jae Jun

Jae Jun — Mon, 05 Jan 2009 17:56:08 +0000

I think that may have been a mistake. A human wrote it after all. All the documents including the final one and the initial stipulation from July 23,2008 included 63 commitments.

By: Josh

Josh — Mon, 05 Jan 2009 16:32:03 +0000

Hi Jae,

In the following link, you can see what CEO said about PSD’s acceptance or compliance

http://seattlepi.nwsource.com/business/394208_puget31.html?source=rss

In the PR, you can see that there are 78 commitments.

http://www.wutc.wa.gov/webimage.nsf/0/282DEDF46BFA989B8825753000005D8F

I saw both docs you referred.

The question is that what are those extra ones?

By: Jae Jun

Jae Jun — Mon, 05 Jan 2009 05:26:12 +0000

Hi Josh,

1. There really is only 63 conditions, its in the filings and on the WUTC website.
RIght down the bottom of this link are the 63 conditions
http://www.sec.gov/Archives/edgar/data/81100/000119312509000402/dex991.htm

and the actual filing only contains 63 as well.
http://wutc.wa.gov/rms2.nsf/177d98baa5918c7388256a550064a61e/55643d79e36c97598825752f00826c46!OpenDocument

2. I don’t recall reading anything on this.. do you have a link I can look at?

Well PSD has to answer by Jan 9th because the deal is that it has to close within 15 days of the announcement.

By: Josh

Josh — Mon, 05 Jan 2009 05:04:10 +0000

Hi Jae,

Excellent reviews on PSD. Thanks for sharing your thoughts.

Two questions:
1. From PSD, they have 63 commitments. The approval news release talking about 78 commitments. Were you able to locate where those additional commitments required ?

2. Puget Energy Chief Executive Steve Reynolds said the decision, and the additional conditions imposed by the UTC, will have to be reviewed by the company and the acquirers. If both accept the decision, the purchase could close in 15 business days.

When do you think PSD will get back to UTC for compliance?

(I am thinking they will do that on the 10th day (1/9) after check out which party will ask WTC for reconsideration.)

By: Jae Jun

Jae Jun — Sat, 03 Jan 2009 21:27:31 +0000

lol true. I better not get lulled into a false sense of security.

Happy New Year to you too and I’m hoping to leech some of your ideas in 2009