Electric Services Company ALLETE Going Green And Private: Details
Portfolio Pulse from Lekha Gupta
ALLETE, Inc. (NYSE:ALE) has agreed to be acquired by a partnership led by Canada Pension Plan Investment Board and Global Infrastructure Partners for $6.2 billion, including debt. The deal, at $67.00 per share in cash, represents a premium over recent share prices and is expected to close in mid-2025. Post-acquisition, ALLETE will become a private company. The acquisition is seen as a move to bolster ALLETE's clean energy initiatives. ALLETE's recent financial performance showed a miss on both EPS and sales estimates. Investors can gain exposure to ALLETE through ETFs like CSB and WCEO.
May 06, 2024 | 2:39 pm
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NEUTRAL IMPACT
Investors can gain exposure to ALLETE through the VictoryShares US Small Cap High Div Volatility Wtd ETF (NASDAQ:CSB), which may see an impact due to ALLETE's acquisition.
CSB's exposure to ALLETE means the acquisition could have indirect effects on the ETF's performance, though the extent is uncertain due to the diverse nature of the ETF's holdings.
CONFIDENCE 75
IMPORTANCE 50
RELEVANCE 50
NEUTRAL IMPACT
The Affinity World Leaders Equity ETF Hypatia Women CEO ETF (NYSE:WCEO) offers another avenue for investors to gain exposure to ALLETE, potentially impacting the ETF due to the acquisition.
WCEO's inclusion of ALLETE in its holdings suggests that the acquisition news could have an indirect impact on the ETF, though the overall effect is uncertain given the ETF's broad portfolio.
CONFIDENCE 75
IMPORTANCE 50
RELEVANCE 50
POSITIVE IMPACT
ALLETE is being acquired for $6.2 billion by CPP Investments and GIP, with the deal expected to close in mid-2025. The acquisition price of $67 per share represents a significant premium to recent trading prices.
The acquisition at a premium price indicates a positive short-term impact on ALE's stock price, reflecting the value seen by the acquiring entities. The transition to private ownership post-deal suggests a significant change in shareholder structure and investment outlook.
CONFIDENCE 90
IMPORTANCE 100
RELEVANCE 100