8-KMaterial AgreementsExhibits & Filings

ENTERGY CORP /DE/ 8-K Report, Material Agreement (Dec 6, 2011)

Filed December 6, 2011For Securities:ETR

Summary

Entergy Corporation announced on December 5, 2011, a significant strategic move to divest its transmission business through a Reverse Morris Trust transaction with ITC Holdings Corp. This transaction involves separating Entergy's transmission assets into a newly formed subsidiary, TransCo, which will then merge with a subsidiary of ITC. Following the merger, Entergy shareholders will receive shares of ITC common stock in exchange for their TransCo units, with the entire process structured to be tax-free for both Entergy and its shareholders. This strategic move aims to create a more focused Entergy, allowing it to concentrate on its regulated utility operations while providing its shareholders with an ownership stake in a larger, combined transmission entity. The transaction is complex, involving multiple agreements including a Merger Agreement, Separation Agreement, and Employee Matters Agreement, and is subject to various closing conditions such as regulatory approvals, shareholder approvals, and financing availability. The completion of this transaction is anticipated in 2013.

Key Highlights

  • 1Entergy Corporation is divesting its transmission business via an all-stock Reverse Morris Trust transaction with ITC Holdings Corp.
  • 2The transaction involves separating Entergy's transmission assets into a new subsidiary (TransCo) and merging it with an ITC subsidiary.
  • 3Entergy shareholders will receive ITC common stock in exchange for their TransCo units.
  • 4The entire transaction is structured to be tax-free for Entergy and its shareholders.
  • 5The deal is subject to various conditions, including regulatory approvals, ITC shareholder approval, and financing.
  • 6Completion is expected in 2013, with specific details covered in the Merger, Separation, and Employee Matters Agreements.
  • 7ITC plans a $700 million special dividend to its shareholders prior to the merger, which Entergy shareholders will not receive.

Frequently Asked Questions

The main purpose is to divest Entergy's transmission business into a separate entity that will merge with ITC Holdings Corp. This allows Entergy to focus more on its core regulated utility operations and provides its shareholders with an interest in a larger, independent transmission company.

Entergy shareholders will exchange their ownership units in Entergy's transmission business (TransCo) for shares of ITC Holdings Corp. common stock. This transaction is designed to be tax-free for them.

Key conditions include obtaining necessary regulatory approvals (e.g., FERC, state commissions), approval from ITC's shareholders, successful financing for the transaction, and the absence of any material adverse effects on the transmission business or ITC. The transaction is also subject to a specified closing date of June 30, 2013, with potential extensions.

The transaction is expected to be completed in 2013. Specific timing will depend on the satisfaction of all closing conditions, including regulatory and shareholder approvals.