Shares of Westar Energy Inc (NYSE:WR) are off $4.22 per share, or 7.7%, after the State Corporation Commission of Kansas rejected Great Plains Energy’s purchase of Westar Energy. Fellow electric utility Great Plains Energy Incorporated (NYSE:GXP) had originally agreed to buy Westar Energy Inc (NYSE:WR) for around $12.2 billion, including assumed debt, in May 2016, but the merger unraveled after Kansas regulators took objection to the deal, saying, among other things, that the takeout price was too high and that the merger was not in the best interest of the general public. Although the merger was expected to unlock substantial synergies, Kansas regulators thought the combined company would be rather fragile and might have to raise rates for consumers. It is presently unknown whether Westar will appeal (if that is a possibility).
What Does The Smart Money Sentiment Say?
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Of the 742 elite funds we track, 27 funds owned $889.2 million of Westar Energy Inc (NYSE:WR) and accounted for 11.10% of the float on December 31, up slightly from 22 funds and $864.88 million respectively on September 30.
The Bottom Line
Westar Energy Inc (NYSE:WR) shares are down due to Kansas regulators giving the thumbs down to a M&A deal. Great Plains Energy Incorporated (NYSE:GXP) shares are modestly higher, perhaps due to the relief by some shareholders that the company won’t be paying a premium anymore. For those of you interested, read ‘8 Countries That Produce The Most Electricity In the World‘.