Energy Capital Partners to acquire Atlantica for $2.56 billion

(Reuters) -Private equity firm Energy Capital Partners will buy Atlantica Sustainable Infrastructure for $2.56 billion in cash, the utility said on Tuesday, in a deal that will give its biggest shareholder funds to lower its debt.

Atlantica, which started a strategic review in February last year, will get $22 per share, a near 19% premium to the closing price on April 22, the last trading day before speculation over the UK-based company's possible takeover started.

The price, however, is a 6.1% discount according to Atlantica shares' closing price in the previous session. The stock fell 7.6% in pre-market trade on Tuesday.

Algonquin Power & Utilities, which holds about 42.2% of Atlantica shares, said it supports the acquisition. The deal values Algoquin's stake at about $1.08 billion.

Last year, Algonquin started its own strategic review of its renewable energy division, which includes the Atlantica stake, under pressure from activist firms including Corvex Management and Starboard Value.

"(Algonquin) expects the proceeds will be used to help reduce debt and recapitalize its balance sheet as part of its ongoing strategic transition to a pure play regulated utility," it said in a statement.

The transaction is expected to close in the fourth quarter of 2024 or early first quarter of 2025.

Atlantica owns a portfolio of assets across the United States, Europe, South America and Africa, dealing with renewable energy like wind, solar and natural gas.

(Reporting by Tanay Dhumal in Bengaluru; Editing by Savio D'Souza)