Canadian utility owner Fortis Inc. completed its acquisition of Tucson-based UNS Energy Corp. on Friday, adding Tucson Electric Power and rural provider UniSource Energy Services to its stable of electric and gas utilities.
The UNS Energy board of directors was reconstituted as a result of the acquisition. The new board includes Fortis President Barry Perry; John C. Walker, Fortis’ executive vice president of western Canadian operations; UNS Energy President and CEO David Hutchens and six other longtime Arizona residents who will stay on as independent directors from the previous UNS Energy board.
The other directors are Larry Aldrich, chairman and executive director of the Arizona Business Coalition on Health; Bob Elliott, president and owner of Elliott Accounting; Louise L. Francesconi, former president of Raytheon Missile Systems; Ramiro G. Peru, former chief financial officer of Phelps Dodge Corp.; Greg Pivirotto, former CEO and director of University Medical Center; and Joaquin Ruiz, dean of the University of Arizona College of Science and a UA vice president.
TEP and UES will remain headquartered in Tucson under local control with current management and staffing levels and no planned changes to existing operations, the company said. Under a settlement agreement approved Tuesday by the Arizona Corporation Commission, customers will receive $30 million in bill credits over the next five years.
UNS Energy shareholders will receive $60.25 per share for their stock, which will no longer trade on the New York Stock Exchange. Shareholders will be notified by the transfer agency Computershare with instructions on how to redeem their shares, said Fortis, whose stock is traded on the Toronto Stock Exchange.
Wall Street reacted positively to the deal, which is expected to shore up UNS Energy’s balance sheet and give it better and cheaper access to capital.
On Friday, bond rater Fitch Ratings raised its rating of TEP’s unsecured debt to “BBB+” from “BBB,” while Moody’s Investor Service affirmed its bond ratings for UNS and its subsidiaries while changing their ratings outlook from “stable” to “positive.”
A partial quarterly dividend will be paid to shareholders of record as of Friday.
For more shareholders information, see answers to frequently asked questions at www.uns.com.
