Riverstone to buy remaining stake in Talen Energy

Shares in Talen Energy surged in pre-market trade after the energy and power generation company said private equity firm Riverstone Holdings will buy the remaining stake it does not already own for $1.8bn.

Riverstone will pay $14 per share for the 65% stake it does not own and the transaction has a total enterprise value of around $5.2bn.

Talen Energy’s president and chief executive officer Paul Farr said: “We believe the transaction offers compelling value to our stockholders, while eliminating execution risk, and will provide additional momentum to the outstanding work our employees have done to drive improvements in the safety, reliability and efficiency of our plants in the time since we became an independent company.”

The agreement provides for a "go-shop" period, during which Talen Energy, with the assistance of its legal and financial advisors, may actively solicit, receive, evaluate and potentially enter into negotiations with parties that offer alternative proposals.

The deal – to be funded by a conversion of Riverstone's existing ownership of 35% of the common stock of Talen into shares of the surviving corporation, Talen Energy's cash on hand, and proceeds of a $250m new secured term loan – is expected be completed by the end of the year.