HOUSTON - Via Renewables, Inc. (NASDAQ:VIA; VIASP), a retail energy services provider, has received favorable recommendations from Institutional Shareholder Services, Inc. (ISS) and Glass Lewis & Co. for its upcoming shareholder vote on a merger proposal. Both advisory firms have endorsed the approval of the merger with Retailco, LLC and its subsidiary NuRetailco LLC, which if passed, will result in Via Renewables becoming a privately held company.
The merger, announced on December 29, 2023, offers Via Renewables' shareholders $11.00 per share in cash. This represents a 17.0 percent premium over the stock price the day before the announcement and a 51.3 percent premium two months prior. Following the announcement, the company's stock price increased by 14.1 percent, outperforming the S&P 600 Electric Utilities Index.
ISS highlighted the transaction's potential risks if not approved and noted the board's efforts to mitigate conflicts of interest. The firm also pointed out the absence of competitive bids during the go-shop period, ultimately supporting the transaction based on the certainty of value provided by the cash consideration.
The Federal Energy Regulatory Agency (FERC) approved the merger on May 10, 2024, satisfying one of the necessary conditions for the merger's completion. The remaining conditions must still be met or waived for the merger to proceed.
The Special Meeting of Shareholders is scheduled for Thursday, May 23, 2024, where shareholders of record as of March 25, 2024, will vote on the merger proposal and, on an advisory basis, the executive compensation related to the merger.
Via Renewables, founded in 1999, serves residential and commercial customers with alternative natural gas and electricity options in competitive markets across the United States. The company emphasizes its commitment to stable energy costs and green product alternatives.
InvestingPro Insights
As Via Renewables, Inc. approaches a pivotal moment with its shareholder vote on the proposed merger, the company's financial metrics provide a deeper context for investors. According to InvestingPro data, Via Renewables boasts a market capitalization of $79.13 million and is trading at an attractive earnings multiple, with a P/E Ratio (adjusted for the last twelve months as of Q1 2024) of just 6.13. This low valuation could signal a potential upside for investors, especially when considering the InvestingPro Fair Value estimate of $15.29 per share, which is significantly higher than the current offer of $11.00 per share in the merger proposal.
InvestingPro Tips highlight that Via Renewables is trading at a low revenue valuation multiple and has experienced a large price uptick of 37.96% over the last six months. This suggests that the market is responding positively to the company's performance and prospects, despite the absence of a dividend payout to shareholders. With these insights, investors can make more informed decisions ahead of the crucial vote.
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