The sale of Cleco to a cadre of international investors is still up in the air as Louisiana regulators Tuesday agreed to postpone until next week whether to reconsider their rejection of the $4.9 billion bid.
After a long day of huddled meetings, false starts and new directions, the five elected members of the Louisiana Public Service Commission settled on voting Monday at 1 p.m. to determine whether the transaction would continue. The commission, whose permission the Cleco buyers need, said “no” on Feb. 24.
Last week the buyers, led by Macquarie Infrastructure and Real Assets, sweetened their offer to include what amounts to a free month or two of electricity for most of Cleco’s 286,000 customers; $15 million in grants for economic development; and a 10-year commitment to keep employee levels and benefits the same, at least, as they are now.
The Macquarie investors want to buy all the Cleco stock at $55.37 per share, and then take the 80-year-old company private.
The buyers also have lobbied state government hard in the past week — drawing in Gov. John Bel Edwards as a supporter — all in hopes of persuading one of the three commissioners openly opposing the deal to change his vote.
The governor’s chief of staff, Ben Nevers, met with officials from Cleco and Macquarie to discuss the sale, and Edwards briefly joined the meeting, according to Richard Carbo, the governor’s spokesman.
Edwards understands that the buyers’ proposal seems to have addressed many of the initial concerns, and he likes the part about the buyers giving the state Department of Economic Development $15 million to invest in projects around the utility’s service area, Carbo said.
“Based on this new information, the governor expressed to several members of the commission his support for the new proposal, but deferred to their judgment,” Carbo wrote in an email response to questions.
Macquarie investors had hoped Tuesday would be the day they could overturn the commission’s initial rejection of the deal. But it was clear from the outset that Macquarie investors didn’t have the three votes necessary. They asked the commission to reconvene in a special meeting.
The first vote on Monday will be whether to hold another hearing. Then, if the hearing is held, the commissioners eventually would vote on whether to change their order that came out in the wake of their rejection last month.
“My guess is we’ll rehear it,” Public Services Commission Chairman Clyde Holloway said after the meeting. He remains opposed to the sale.
Holloway, R-Forest Hill, said he would limit Monday’s debate to an hour for each side and then try to get a vote, up or down, on whether to continue consideration of the purchase.
Three is the threshold that wins on the five-member panel of elected regulators.
Three votes are needed to restart the sale of the Pineville-based utility that serves parts of Acadiana, the North Shore and much of central Louisiana. Three votes the other way would kill the transaction — short of a court order.
Commissioner Foster Campbell, a Bossier Parish Democrat who is running for the U.S. Senate and had opposed the purchase, offered to change his vote if the Cleco buyers agreed to consider dropping their monthly bills by 21 percent for five years. Cleco has the highest electricity rates in Louisiana.
“I thought I could offer up a compromise that could make me vote for this,” Campbell said. “I met with the people last night, and I don’t think they can do that.”
Holloway added, “Unless you can do what Campbell says, you’ll get a 3-2 vote no.”
Andrew Chapman, of Macquarie Infrastructure and Real Assets, said the coalition of international investors had offered $101 million in credits — about $370 for each Cleco customer — that would lower bills but couldn’t afford to do more.
Officials with Cleco and Macquarie said they were unprepared to comment publicly immediately after Tuesday’s hearing.
Commissioner Lambert Boissiere III, D-New Orleans, said in an interview after the meeting that as the situation stood now, he would continue his opposition. But he added he would keep an open mind.
“I can stand with Foster because he’s asking for the right things,” Boissiere said. “I want to see rates go down.”
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