Agreement and Plan of Merger

9 Months Ended

Sep. 30, 2015

Business Combinations [Abstract]

Agreement and Plan of Merger

Note 15 — Agreement and Plan of Merger

On October 17, 2014, Cleco Corporation entered into the Merger Agreement with Cleco Partners and Merger Sub providing for the merger of Merger Sub with and into Cleco Corporation, with Cleco Corporation surviving the Merger as an indirect, wholly-owned subsidiary of Cleco Partners. Pursuant to the Merger Agreement, at the effective time of the Merger each outstanding share of Cleco Corporation common stock, par value $1.00 per share (other than shares that are owned by Cleco Corporation, Cleco Partners, Merger Sub, or any other direct or indirect wholly-owned subsidiary of Cleco Partners or Cleco Corporation), will be converted into the right to receive $55.37 per share in cash, without interest, with all dividends payable before the effective time of the Merger.

A Special Meeting of Shareholders of Cleco Corporation was held on February 26, 2015, in Pineville, Louisiana to obtain shareholder approval of the Merger Agreement. Cleco Corporation received approval of the Merger Agreement by a vote of approximately 77% of shares of common stock of Cleco Corporation entitled to be cast.

The Merger remains subject to approval from the LPSC. On February 10, 2015, Cleco Power filed an application with the LPSC seeking approval of the Merger. The LPSC has scheduled a hearing to begin on November 9, 2015, on the proposed Merger with an ALJ. The ALJ is expected to issue a recommended decision to the LPSC for its review and decision. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 expired on May 4, 2015. On June 12, 2015, the Committee on Foreign Investment in the U.S. cleared the Merger to proceed without further review. On July 17, 2015, Cleco Power, Perryville, Attala, and Cleco Partners received approval of the Merger from FERC. On July 28, 2015, the Federal Communications Commission’s consent to Cleco Corporation’s request to transfer certain licenses to Cleco Power became final. Management expects the Merger to close in the first quarter of 2016.

As prescribed in the Merger Agreement, the deadline for completing the Merger was automatically extended to April 17, 2016, to enable satisfaction of the closing condition related to obtaining regulatory approvals. The Merger Agreement provides for certain termination rights for both Cleco Corporation and Cleco Partners, and further provides that, upon termination of the Merger Agreement under certain specified circumstances, Cleco Corporation will be required to pay Cleco Partners a termination fee of $120.0 million. If the Merger Agreement is terminated under certain specified circumstances, Cleco Partners will be required to pay a termination fee to Cleco Corporation equal to $180.0 million. If the Merger Agreement is terminated due to lack of regulatory approval, neither Cleco Corporation nor Cleco Partners would be required to pay a termination fee. Upon completion of the Merger, Cleco Corporation will pay an additional $12.0 million in contingency fees.