The shareholders of UniSource Energy Corp. voted overwhelmingly March 26 to approve the company's proposed acquisition by Saguaro Utility Group. More than 72 percent of the 34,019,401 shares outstanding on the record date were voted, with approximately 97 percent of the votes in favor of the proposal.

The acquisition still requires approval by the Arizona Corporation Commission, the Securities and Exchange Commission, the Federal Energy Regulatory Commission and the satisfaction of other conditions set forth in the acquisition agreement. The company expects the federal filings to be made within the next 30 days. Hearings before the Arizona Corporation Commission are scheduled to begin on June 21.

Through this transaction, an affiliate of Saguaro Utility Groupan Arizona limited partnershipagreed to purchase all of UniSource Energy's outstanding shares for $25.25 per share. The price represents a 30 percent premium over the closing price on the last trading day before the agreement was announced on Nov. 21.

Print this story Email this story Post a Comment ADVERTISEMENT

The general partner of Saguaro Utility Group is Sage Mountain, an Arizona company whose managing member is Frederick Rentschler, former president and chief executive officer of Armour-Dial, Beatrice Cos. and Northwest Airlines.

The transaction would provide up to $263 million to Tucson Electric Power Co., UniSource Energy's principal subsidiary, through the retirement of a $95 million inter-company loan from TEP to UniSource Energy and a capital contribution to TEP. TEP will use a significant portion of these funds to retire some of its outstanding debt.

"This transaction would give us the financial resources to meet the growing demand in our utility service territories while maintaining the high levels of service and reliability our customers have come to expect," said James Pignatelli, chairman, president and chief executive officer of UniSource Energy.

UniSource Energy's senior management team is expected to remain in place under the proposed acquisition, and the company's headquarters will remain in Tucson. No changes in UniSource Energy's operations or personnel are expected to result from the transaction.