NOVI, Mich., April 20, 2016 /PRNewswire/ -- Fortis Inc.
("Fortis") (TSX: FTS) announced today that it has reached a
definitive agreement with GIC Private Limited ("GIC"),
Singapore's sovereign wealth fund,
to acquire a 19.9% equity interest in ITC Holdings
Corp. ("ITC") (NYSE: ITC) for aggregate
consideration of US$1.228 billion in
cash upon the closing of the acquisition.
This definitive agreement follows the announcement on
February 9, 2016 that Fortis will
acquire ITC in a transaction valued on announcement at
approximately US$11.3 billion. With
the definitive agreement for the sale of 19.9% of ITC to GIC,
Fortis has completed a significant component of the ITC acquisition
financing.
The financing of the ITC acquisition has been structured to
allow Fortis to maintain an investment‑grade credit rating and is
consistent with maintaining Fortis' existing capital structure.
Financing for the cash portion of the acquisition purchase price
will be achieved primarily through this minority investment sale,
as well as through the issuance of approximately US$2 billion of Fortis debt.
"An important milestone in the acquisition of ITC has been
accomplished," said Barry Perry,
President and Chief Executive Officer of Fortis. "We are very
pleased to be partnering with GIC in the future growth and
development of ITC. GIC is astute and thoughtful, with a
proven track record in North American infrastructure investing.
They share our vision for ITC and we look forward to working
together in this partnership."
ITC Holdings Corp. President, CEO and Chairman of the Board,
Joseph L. Welch, said, "GIC will be
a great investment partner for Fortis as ITC builds on its success
by continuing to take advantage of the growing opportunities for
transmission investment in North
America."
Rhys Evenden, Head of
Infrastructure for North America
at GIC, said, "We believe this is an attractive opportunity to
partner with Fortis to invest in ITC. Given the high quality
transmission platform ITC offers, the strength of the Fortis
management team, and GIC's long-term approach to infrastructure
investing, we look forward to a successful transaction and
partnership."
Upon closing of the acquisition, GIC will be granted certain
customary minority rights in connection with its investment in ITC.
Additional details will be contained in Amendment No. 1 to the Form
F‑4 ("Amendment No. 1") to be filed by Fortis with the United
States Securities and Exchange Commission ("SEC") in the coming
days and will be available at www.sec.gov. When filed, Amendment
No. 1 will be available under Fortis' issuer profile at
www.sedar.com.
The closing of the acquisition of ITC is expected to occur in
late 2016, and is subject to ITC and Fortis shareholder approvals,
certain regulatory and federal approvals and other customary
closing conditions.
Scotiabank acted as exclusive financial advisor to Fortis in
connection with the ITC minority investor process. Citigroup
Global Markets Inc. acted as financial advisor to GIC on this
transaction.
About Fortis
Fortis is a leader in the North American
electric and gas utility business, with total assets of
approximately C$29 billion and fiscal
2015 revenue of C$6.7 billion. The
Corporation's asset mix is approximately 96% regulated (70%
electric, 26% gas), with the remaining 4% comprised of
non‑regulated energy infrastructure. The Corporation's regulated
utilities serve more than 3 million customers across
Canada, the United States and the Caribbean. For more information about Fortis,
visit www.fortisinc.com or www.sedar.com.
About ITC
ITC is the largest independent electric
transmission company in the United
States. Based in Novi,
Michigan, ITC invests in the electric transmission grid to
improve reliability, expand access to markets, allow new generating
resources to interconnect to its transmission systems and lower the
overall cost of delivered energy. Through its regulated operating
subsidiaries ITCTransmission, Michigan Electric Transmission
Company, ITC Midwest and ITC Great Plains, ITC owns and operates
high-voltage transmission facilities in Michigan, Iowa, Minnesota, Illinois, Missouri, Kansas and Oklahoma, serving a combined peak load
exceeding 26,000 megawatts along approximately 15,700 circuit
miles of transmission line. ITC's grid development focus includes
growth through regulated infrastructure investment as well as
domestic and international expansion through merchant and other
commercial development opportunities.
Additional information can be accessed at www.itc-holdings.com
or www.edgar.com.
About GIC
GIC is a leading global investment firm
with well over US$100 billion in
assets under management. Established in 1981 to secure the
financial future of Singapore, the
firm manages Singapore's foreign
reserves. With its disciplined long-term value approach, GIC is
uniquely positioned to invest in both the public and private
markets, including equities, fixed income, real estate, private
equity and infrastructure. In infrastructure, GIC's primary
strategy is to invest directly in operating infrastructure assets
with a high degree of cash flow visibility and which provide a
hedge against inflation. These include mature, low to moderate-risk
assets in developed markets, complemented by investments with
higher growth potential in emerging markets. GIC employs over 1,300
people across offices in Singapore, Beijing, London, Mumbai, New
York, San Francisco,
Sao Paulo, Seoul, Shanghai, and Tokyo. For more information, please visit
www.gic.com.sg.
Additional Information about the Acquisition and Where to
Find It
Fortis filed with the SEC on March 17, 2016, a registration statement on Form
F-4, including a proxy statement of ITC and a prospectus of Fortis,
and other documents in connection with the acquisition of ITC. The
proxy statement/prospectus will be sent to the shareholders of ITC.
This communication is not a substitute for the proxy
statement/prospectus or any other document Fortis or ITC has filed
or will file with the SEC in connection with the acquisition.
SHAREHOLDERS OF ITC ARE URGED TO READ THE PROXY
STATEMENT/PROSPECTUS, AND ANY OTHER FILINGS THAT MAY BE MADE WITH
THE SEC IN CONNECTION WITH THE ACQUISITION WHEN THEY BECOME
AVAILABLE, AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
ACQUISITION. The registration statement and proxy
statement/prospectus and other documents filed by Fortis and/or ITC
with the SEC, when filed, will be available free of charge at the
SEC's website at www.sec.gov, on Fortis' website at
www.fortisinc.com or by contacting Fortis' Investor Relations
department, and upon written request from ITC at ITC, Investor
Relations, 27175 Energy Way, Novi,
MI 48377. You may also read and copy any reports, statements
and other information filed by Fortis and ITC with the SEC at the
SEC public reference room at 100 F Street N.E., Room 1580,
Washington, D.C. 20549. Please
call the SEC at (800) 732-0330 or visit the SEC's website for
further information on its public reference room. This
communication shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be
any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to appropriate
registration or qualification under the securities laws of such
jurisdiction. No offering of securities shall be made except by
means of a prospectus meeting the requirements of Section 10 of the
U.S. Securities Act of 1933, as amended.
Participants in the Solicitation of Proxies
This
communication is not a solicitation of proxies in connection with
the acquisition of ITC. However, ITC, Fortis and certain of their
respective directors and executive officers and certain other
members of management and employees, under SEC rules, may be deemed
to be participants in the solicitation of proxies in connection
with the acquisition. Information about ITC's directors and
executive officers may be found in its 2015 Annual Report on Form
10-K filed with the SEC on February 25,
2016, and definitive proxy statement relating to its 2016
Annual Meeting of Shareholders filed with the SEC on April 8, 2016. Information about Fortis'
directors and executive officers may be found in its Management
Information Circular available on its website at www.fortisinc.com
and under its issuer profile at www.sedar.com. Additional
information regarding the interests of such potential participants
in the solicitation of proxies in connection with the acquisition
will be included in the proxy statement/prospectus and other
relevant materials filed with the SEC when they become
available.
Forward-Looking Statements
This news
release contains forward-looking statements within the meaning of
applicable securities laws including the Private Securities
Litigation Reform Act of 1995. Forward-looking statements
included in this news release reflect Fortis' and ITC's
management's expectations regarding future growth, results of
operations, performance and business prospects and opportunities.
Wherever possible, words such as "will", "anticipates", "believes",
"expects", "intends", "assumes", "estimates", "projects", "plans",
"seeks", "may", "could", "would", "can", "continue" and the
negative of these terms and other similar terminology or
expressions have been used to identify the forward-looking
statements, which include, without limitation, those statements
related to the acquisition, the expectation that Fortis will borrow
funds to satisfy its obligation to pay a portion of the cash
purchase price for the acquisition, the expected time of closing of
the acquisition, the intention of the parties to the acquisition to
seek shareholder approvals in relation to the acquisition, the
receipt of certain regulatory and federal approvals and the
satisfaction of the conditions precedent to the closing of the
acquisition. These statements reflect management's current beliefs
and are based on information currently available to Fortis' and
ITC's management.
Forward-looking statements involve significant risk,
uncertainties and assumptions. Certain material factors or
assumptions have been applied in drawing the conclusions contained
in the forward-looking statements. These factors or assumptions are
subject to inherent risks and uncertainties surrounding future
expectations generally, including those identified from time to
time in the forward-looking statements. Such risk factors or
assumptions include, but are not limited to, the risks and
uncertainties disclosed in Fortis' filings with Canadian securities
regulators and ITC's annual report on Form 10-K and ITC's quarterly
reports filed on Form 10-Q filed with the SEC, the ability to
obtain shareholder and regulatory approvals in connection with the
acquisition and the timing and terms thereof, state and federal
regulatory legislative decisions and actions, interloper risk,
risks relating to uncertainty relating to the completion of the
acquisition and the timing thereof, the risk that conditions to the
acquisition may not be satisfied, risks relating to the ability of
Fortis to access capital markets on favourable terms or at all,
risks relating to the ability of Fortis to satisfy the conditions
precedent in the bridge financing facilities in order to access
funds to complete the acquisition, currency exchange rates and
resolution of pending litigation matters. Fortis and ITC caution
readers that a number of factors could cause actual results,
performance or achievements to differ materially from the results
discussed or implied in the forward-looking statements. These
factors should be considered carefully and undue reliance should
not be placed on the forward-looking statements. For additional
information with respect to certain of these risks or factors,
reference should be made to the materials filed from time to time
by Fortis with Canadian securities regulatory authorities and to
ITC's filings with the SEC, including the proxy circulars filed or
to be filed by each such company in connection with the
acquisition. Fortis and ITC disclaim any intention or
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or
otherwise.
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SOURCE ITC Holdings Corp.