Capital Markets

Mirant to Buy Back $1.25 Billion in Stock

The electricity generator also looks to sell-off its overseas businesses.
Helen ShawJuly 11, 2006

Power company Mirant, which emerged from bankruptcy last January, will repurchase $1.25 billion of its shares and sell its Caribbean and Philippines businesses.

Mirant will conduct a modified “Dutch auction” tender offer in which stockholders can sell all or part of their shares to Mirant for between $25.75 and $29 per share. The buyback of up to 43 million common shares will total up to $1.25 billion. Currently, there are approximately 300.2 million outstanding shares. Officials at Mirant expect to use cash and funds from a term loan forged by its Philippines business to finance the tender offer, which expires August 21.

Additionally, Mirant has begun an auction of its businesses located in the Philippines and the Caribbean, which it expects to have completed by mid-2007, pending regulatory approvals. Mirant has tapped Credit Suisse as its financial advisor for the sale of the Philippines unit and JPMorgan as the advisor for the Caribbean sale, which includes stakes in utilities in Jamaica and Grand Bahama.

The company’s remaining businesses are its U.S. operations, which officials expect will continue to generate sufficient cash for its needs.

The buyback and business sales are the Atlanta-based company’s most recent developments following its emergence from Chapter 11. In May, the company offered almost $8 billion to buy its rival NRG Energy, which rebuffed its offer and prompted Mirant to sue and claim its rival was blocking the acquisition. In June, Mirant did an about-face and rescinded its offer for NRG.

Mirant, which had $19.4 billion in assets on its balance sheet as of December 31, 2002, filed for bankruptcy in July 2003. The Chapter 11 filing was one of the largest U.S. corporate bankruptcies at the time.