Robbins LLP: Acquisition of Cleco Corporation (CNL) by an Investment Group Led by Macquarie Infrastructure and Real Assets May Not Be in Shareholders’ Best Interests
Robbins LLP is investigating the proposed acquisition of Cleco Corporation (NYSE: CNL) by a North American investment group led by Macquarie Infrastructure and Real Assets. On October 20, 2014, Cleco announced the signing of a definitive merger agreement pursuant to which Macquarie will acquire all the outstanding shares of Cleco for $55.37 per share in cash.
Is the Proposed Acquisition Best for Cleco and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at Cleco is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the proposed consideration represents a premium of 14.7% based on Cleco’s closing price on October 17, 2014. This premium is significantly below the median one-day premium of over 26% for comparable transactions within the past five years. Further, Cleco last traded above the offer price as recently as September 19, 2014, reaching a high as $55.41 per share.
On July 30, 2014, Cleco released its second quarter 2014 earnings reporting strong quarterly results and increased revenues. In particular, Cleco reported operational earnings of $34.8 million following a one-time $22.3 million customer refund. Excluding the refund, Cleco would have reported operational earnings of $0.79 per diluted share, compared to $0.62 per diluted share for the same period in 2013. In commenting on these results, Bruce Williamson, chairman, president, and CEO of Cleco, remarked, “During the second quarter, growth in our wholesale business drove higher revenues …. With that said, our earnings this quarter contain the full effect of the one-time refund to customers as we transition from our former rate plan to our recently approved FRP extension. Excluding this one-time adjustment to earnings, we produced a strong quarter in line with current year expectations.”
In light of these facts, Robbins LLP is examining Cleco’s board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Cleco shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
Cleco shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.