Item 1.01. |
Entry into a Material Definitive Agreement. |
On February 19, 2024, CenterPoint Energy Resources Corp., a Delaware corporation (“Seller”) and a wholly owned subsidiary of CenterPoint Energy, Inc. (the “Company”), entered into an Asset Purchase Agreement (the “Purchase Agreement”) by and among Seller, Delta Utilities No. LA, LLC, a Delaware limited liability company (“North Louisiana Buyer”), Delta Utilities S. LA, LLC, a Delaware limited liability company (“South Louisiana Buyer”), Delta Utilities MS, LLC, a Delaware limited liability company (“Mississippi Buyer”), and Delta Shared Services Co., LLC, a Delaware limited liability company (“ServiceCo Buyer” and, together with North Louisiana Buyer, South Louisiana Buyer and Mississippi Buyer, “Buyers” and, each individually, a “Buyer”), pursuant to which Seller has agreed to sell its Louisiana and Mississippi regulated natural gas local distribution company businesses (the “Business”) to Buyers (the “Transaction”).
The purchase price for the Business is $1.2 billion and subject to adjustment as set forth in the Purchase Agreement, including adjustments based on net working capital, regulatory assets and liabilities and capital expenditures at closing.
The completion of the Transaction is subject to customary closing conditions, including (i) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (ii) approval of the Louisiana Public Service Commission, (iii) approval of the Mississippi Public Service Commission, (iv) no Material Adverse Effect (as defined in the Purchase Agreement) having occurred, and (v) customary conditions regarding the accuracy of the representations and warranties and compliance by the parties with their respective obligations under the Purchase Agreement. The Transaction is not subject to a financing condition and is expected to close by the end of the first quarter of 2025, subject to satisfaction of the foregoing conditions.
The Purchase Agreement contains customary representations, warranties and covenants related to the Business and the Transaction. Between the date of the Purchase Agreement and the completion of the Transaction, Seller has agreed to cause the Business to operate in the ordinary course of business and has agreed to certain other operating covenants with respect to the Business as set forth in the Purchase Agreement. The Purchase Agreement includes customary termination provisions, including if the closing of the Transaction has not occurred within 15 months of February 19, 2024 (or within 6 months if the only remaining closing condition is regulatory approval).
The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the Purchase Agreement. A copy of the Purchase Agreement is filed as Exhibit 2.1 to this Current Report on Form
8-K
(this “Current Report”) and is incorporated herein by reference. The representations, warranties and covenants set forth in the Purchase Agreement have been made only for the purposes of the Purchase Agreement and solely for the benefit of the parties thereto and may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Purchase Agreement instead of establishing these matters as facts. In addition, such representations and warranties were made only as of the dates specified in the Purchase Agreement and information regarding the subject matter thereof may change after the date of the Purchase Agreement. Accordingly, the Purchase Agreement is included with this filing only to provide investors with information regarding its terms and not to provide investors with any other factual information regarding the Company, Seller or the Business, as of the date of the Purchase Agreement or as of any other date. Investors should not rely on such representations and warranties as characterizations of the actual state of facts or circumstances, since they were made only as of a specific date, were negotiated by the parties and are modified in important part by the underlying disclosure schedules. In addition, certain representations and warranties may be subject to a contractual standard of materiality different from what might be viewed as material to shareholders.
Item 7.01. |
Regulation FD Disclosure. |
On February 20, 2024, the Company issued a press release announcing the Transaction. A copy of this press release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.
The information provided in this Item 7.01 (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as expressly set forth by specific reference in such filing.