New FERC application filed From RBC
"EQUITY RESEARCH QUICK TAKE
Algonquin Power & Utilities Corp.
Our initial read of AQN and AEP's new application to the FERC seeking approval for AQN's pending acquisition of Kentucky Power
appears to address the FERC's concerns (mainly relates to ensuring that the transaction will not adversely impact consumer
rates). We expect the market will continue to debate whether the additional information and commitments made by AQN in the
application will be sufficient to satisfy the FERC and consumer groups. Even if the transaction is eventually approved, there is
uncertainty whether the transaction will close by April 26, 2023 (Outside Date).
Details
New FERC application filed to seek approval for the Kentucky Power transaction. On February 13th, American Electric Power
(NASDAQ - AEP, covered by RBC Capital Markets analyst Shelby Tucker) announced that AEP and AQN filed a new application with
the FERC, seeking approval for the acquisition of Kentucky Power.
Seeking expedited review process. AEP and AQN's application requests an expedited process and requests the FERC to i) provide a
shortened 30-day comment period, ii) grant the waivers and other relief requested by the applicants, and iii) issue an order within
60 days authorizing the Kentucky Power transaction without modification, condition (other than customary conditions) or further
proceedings. We note that if the transaction does not close by April 26, 2023 (Outside Date), AQN has the option to terminate the
transaction and pay the $65 million termination fee (AQN investors we've spoken to all prefer to not close the Kentucky Power
acquisition)."