CVPS, GMP announce tentative merger deal - WCAX.COM Local Vermont News, Weather and Sports-

CVPS, GMP announce tentative merger deal

Burlington, Vermont - July 12, 2011

Reporters flocked to Rutland Tuesday to hear about a paramount deal that's been talked about for decades.

"I can tell you since I've been in the business, which is 13 years, it's come up at least a couple times dating back many years ago," said Mary Powell, the president and CEO of Green Mountain Power.

Central Vermont Public Service accepted GMP's $702 million deal over Fortis' offer for $700 million. Terminating the agreement with Fortis will cost CVPS $19.5 million in termination fees.

"(GMP) has the access to capital markets that we need to actually facilitate those future investments in transmission. We can get that investment done now in a very cost-effective way," said Larry Reilly, the president and CEO of CVPS.

Both boards are a who's who list of business and political leaders. For example, on the GMP board; Liz Bankowski, a top aide to Governor Shumlin; Kathy Hoyt, the former chief of staff for Governor Dean; and David Coates, who sits on multiple government, educational and business boards. GMP's president, Mary Powell, also chaired Governor's Shumlin's inaugural ball and is a big Democratic donor.

Reporter Susie Steimle: Would you say this is a politically motivated deal for CVPS because of the support from the state and the governor?

Larry Reilly: No, I wouldn't. This is primarily driven by the financial terms here from a 44 percent premium for investors. That's very hard to beat.

Gaz Metro, Green Mountain Power's parent company, will pay shareholders $32.25 a share, 15 cents more than the Fortis offer.

GMP officials say they're committed to building the new headquarters in downtown Rutland. The deal has the support of the state, the governor and the city's mayor, but some are still concerned for job security.

"What I'm hearing from the residents of Rutland is, frankly, a great deal of distrust and fear that our jobs will leave the community," Rutland Mayor Chris Louras said.

Powell says there will be no layoffs due to this deal, but some top managers could lose their jobs.

"There will be some changes at the executive leadership level and those decisions will be made in the coming months," Powell said.

Those cuts include Larry Reilly, who just started this year at CVPS. He'll be retiring after aiding the transition. As CVPS loses its CEO, it could lose its name as well.

"I think it's safe to assume it'll have the Green Mountain words will be in it. But other than that, we're going to work on that and come up with a name in the coming weeks," Powell said.

Clearly the name isn't the only information left up in the air at this point. Reilly says the merger will take anywhere from 6 to 12 months. He says that gives both companies the much needed time to work out all of the kinks and find the best answers to these concerns and the mounting questions from all their employees.

Susie Steimle - WCAX News

Related Stories:

Shumlin reiterates support for GMP, CVPS merger

Which bid for CVPS is best for Vermonters?

Bidding war for CVPS

Powered by WorldNow
All content © Copyright 2000 - 2014 WorldNow and WCAX. All Rights Reserved. For more information on this site, please read our Privacy Policy and Terms of Service.