La. regulators vote to allow the sale of Cleco for $4.9 billion _lowres

Advocate Photo by MARK BALLARD – Andrew Chapman, of Macquarie Infrastructure and Real Assets, discussed Monday with Louisiana Public Service Commission, particulars of his group’s $4.9 billion purchase of Cleco Corp., which sells electricity to 286,000 customers on parts of the North Shore, Acadiana and central Louisiana.

Shareholder claims that Cleco management flubbed last year’s $4.7 billion sale to an international consortium received new life when an appellate court reversed a decision to toss the lawsuit.

A state district trial court in Alexandria erred when she earlier dismissed the case finding that the Cleco shareholders had no legal right to sue, ruled a three-judge panel the Third Circuit Court of Appeal, based in Lake Charles. 

Judges John D. Saunders, D-Ville Platte, Billy H. Ezell, R-Lake Charles, and Phyllis M. Keaty, R-Lafayette, sent the case back and told 9th Judicial District Court Judge Patricia Koch, of Alexandria, to try again.

Cleco management hasn’t decided yet whether it will appeal the appellate court decision. “At this point we’re reviewing our options,” Cleco spokeswoman Jennifer Cahill said Thursday.

Cleco sells electricity to 287,000 customers in Acadiana, Central Louisiana and on the north shore of Lake Pontchartrain.

The appellate court’s decision reopens what had been an angry battle to sell the Pineville-based utility company to a group of international buyers headed by Australia-based Macquarie Infrastructure and Real Assets.

Initially, the shareholders who filed the lawsuit — Helen Moore, Calvin I. Trahan and L.E. L’Herisson — sought to block the sale.

The shareholders claimed that company administrators and board members pushed a sale/merge style of acquisition “that resulted in a windfall reward” for the executives, but caused Cleco stock to underperform. They wanted compensation for their personal losses from the price of stock being lower than its potential because of the way the sale was handled.

The Louisiana Public Service Commission, after months of bickering, in March 2016 gave regulatory approval for the sale, but only after the buyers made 77 commitments, including giving each customer a $475 credit – basically a month or two of free electricity – plus contributing $7 million towards economic development and guaranteeing salaries and benefits for Cleco’s 1,205 employees.

Cleco was purchased the following month by an investor group led by Macquarie Infrastructure and Real Assets, British Columbia Investment Management Corp. and John Hancock Financial.

The plaintiffs dropped trying block the sale from the lawsuit, but continued to seek repayment for the lost value of their shares of Cleco stock. The PSC set the sales price at $55.37, which was 15 percent above the closing price on the day Cleco and the new owners finalized terms.

The Third Circuit panel stated that some legal interpretations could support the trial court’s decision that the shareholders had no cause of action given the case's history. But more cases hold the opposite and giving the plaintiffs their day in court “is more in line with traditional notions of fairness.”

Follow Mark Ballard on Twitter, @MarkBallardCnb.