KKR £1.3B Smart Meter Biz Deal: Snatching Smart Metering Systems in a High-Stakes Chess Game

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KKR £1.3B Smart Meter Biz Deal
Trading information for KKR & Co is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., August 23, 2018. REUTERS/Brendan McDermid

In a move reminiscent of a grandmaster’s decisive strike in chess, U.S. investment behemoth KKR has unveiled its ambitious plan to take British energy infrastructure titan Smart Metering Systems (SMS) private. This power play, valued at a staggering £1.3 billion ($1.6 billion), signals a bold departure of yet another business from the bustling London market.

KKR’s Strategic Acquisition: A Game-Changer in the Energy Sector

KKR & Co. LP has orchestrated a masterful agreement to acquire SMS shares at 995 pence each, placing the Glasgow-born utility company’s value at £1.3 billion. This strategic move will see SMS bow out from the London Stock Exchange, akin to a venerable actor leaving the stage.

KKR £1.3B Smart Meter Biz Deal : Legal Luminaries in the Limelight

In this high-stakes transaction, Simpson Thacher & Bartlett LLP emerges as the legal guiding star for KKR and Sienna Bidco Ltd., a bespoke entity crafted by KKR for this very deal. Meanwhile, Hogan Lovells International LLP and Burness Paull LLP cast their legal expertise over SMS, with the latter focusing on the nuances of Scottish law.

A Premium Proposition: SMS Shareholders Poised for a Windfall

The offer, a princely 40.4% premium over SMS’s closing share price of 680 pence, has shareholders on the edge of their seats. Adding to the excitement, SMS investors remain entitled to a recently announced dividend of 8.32 pence per share.

SMS Shares Soar: A Meteoric Rise in the Market

In response to this thrilling news, SMS shares skyrocketed by 40.59% to 956 pence, mirroring the ascent of a rocket bound for the stars.

KKR £1.3B Smart Meter Biz Deal : A Greener Future with SMS

KKR envisions SMS as a pivotal player in the UK’s march towards cleaner energy. With SMS’s smart meters, battery storage, and carbon reduction initiatives, KKR anticipates transforming SMS into a powerhouse of energy infrastructure, dedicated to a greener future.

The Private Advantage: Unleashing SMS’s Potential

Tara Davies, KKR’s co-head of European infrastructure, articulates a shared vision of placing SMS at the epicenter of the UK’s energy transition. The private market, with its vast resources, is seen as the ideal breeding ground for SMS’s growth and innovation.

KKR £1.3B Smart Meter Biz Deal : Navigating the Corporate Labyrinth

To finalize this deal, a scheme of arrangement under the Companies Act 2006 is essential. This process, requiring a 75% shareholder vote and approval from Edinburgh’s Court of Session, awaits confirmation of critical meeting dates.

SMS Leadership: Unanimous Endorsement of the Deal

SMS’s directors, holding a strategic 0.1% share capital, have pledged their unwavering support for the transaction, heralding a new era for the company.

Regulatory Hurdles and Financial Advisors: The Final Pieces of the Puzzle

While regulatory approvals remain pending, financial wizards from Morgan Stanley and Macquarie Capital are advising KKR, with RBC Capital Markets and Investec Bank PLC championing SMS’s interests.

KKR £1.3B Smart Meter Biz Deal: London’s Market Sees Companies Depart

This deal mirrors a broader narrative of companies retreating from the London market, highlighted by German travel giant TUI AG’s recent announcement to withdraw its shares from the London Stock Exchange.