With little fanfare, Avista Corp.’s shareholders approved the sale of the 128-year-old company to Canadian utility Hydro One Ltd. on Tuesday.
About 98 percent of shareholders voted in favor of the $5.3 billion transaction, which is expected to be finalized in August.
Most of Avista’s shareholders are institutional investors, who voted in advance of the Tuesday morning meeting.
About 60 people attended the brief shareholders’ meeting in Avista’s auditorium. Several hundred, however, gathered for a community reception for Hydro One CEO Mayo Schmidt Monday evening at the Historic Davenport Hotel.
“We don’t view this as an acquisition. We view this as a coming together, a partnership,” Schmidt told the crowd at the Davenport.
The Toronto-based utility, which serves 1.3 million customers in suburban and rural Ontario, is the right size for the acquisition to be a “merger of equals,” said Scott Morris, Avista’s chairman and CEO.
Spokane-based Avista started exploring merger and sale options late last year. Several utilities expressed interest before Avista’s board of directors approved Hydro One’s offer.
Morris said a number of community residents have asked him why Avista didn’t seek an alliance with a publicly traded utility in the Northwest, such as Puget Sound Energy or PacifiCorp. It came down to size, he said.
“We’re smaller than they are,” Morris said.
By aligning with Hydro One, Avista was able to negotiate key concessions, such as keeping Avista’s corporate headquarters in Spokane, securing an increase in the company’s charitable giving and continuing its role in local economic development initiatives, he said.
“You’ll still see the same Avista,” Morris promised the crowd at the reception.
The sale must be reviewed and approved by state and federal regulators, which is expected to take about nine months. When the transaction is complete, Avista will operate as a wholly owned subsidiary of Hydro One.
At the time of the sale, Hydro One will purchase Avista’s outstanding stock for $53 per share. The price represents a 23 percent premium over the company’s closing share price on July 19, the day the sale was announced.
Despite the large payout, at least one local shareholder was disappointed by Avista’s decision to sell.
Dennis Hueber, of Spokane, owns about 1,000 shares of Avista. He likes to invest in local stocks and considers Avista a stable, well-managed company.
“I’d prefer to hang on to those shares,” said Hueber, who didn’t attend Tuesday’s shareholder meeting. “I feel like I’m being pushed out by this move.
“It’s hard to find something that you will feel as comfortable parking your money in as a local utility,” he said.
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