RE:RE:RE:RE:RE:AEP to sell Kentucky operations to Liberty Capharnaum wrote:
Most of the latest transactions for regulated assets have been done between 1.8 and 2.0 times the base rate (basically the book value of assets for the regulator). Kentucky Power was acquired at 1.3 times the base rate
There was assumed debt, so the net purchase price was $2.846B+$1.221B = $4.067B. The rate base is important for future income, but the actual bought equity appears to be about $1B at a purchase price of $2.846B, implying an acquisition premium of 185%. And the future liability for converting from coal generation is yet to come.
I freely admit my lack of experience in regulated utility analysis. Someone please correct me if I'm wrong; I do not like these numbers. I also don't like that this deal is being marqueed as "accretive to
adjusted net EPS", which borders on non-GAAP meaninglessness.