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InfraREIT To Be Acquired By Oncor In Deal Valued At About $1.275 Bln

InfraREIT, Inc. (HIFR) said Thursday that it has agreed to be acquired by Oncor Electric Delivery Company LLC for $21.00 per share in cash, valued at about $1.275 billion, plus the assumption of about $940 million of InfraREIT's net debt, as of June 30, 2018.

InfraREIT said its stockholders will receive $21.00 in cash for each share of InfraREIT common stock, representing an 18 percent premium to the company's unaffected share price of $17.79 on January 12, 2018. After receiving all required approvals, the transaction is expected to close by mid-2019.

Oncor plans to fund its acquisition of InfraREIT with capital contributions from its owners Sempra Energy (SRE) and Texas Transmission Investment LLC.

InfraREIT said it expects to continue paying regular quarterly dividends of $0.25 per share through the closing of the transaction, including a pro-rated dividend for any partial quarter prior to the closing.

As a condition to the acquisition, InfraREIT's subsidiary, Sharyland Distribution & Transmission Services, L.L.C. and Oncor also signed a definitive agreement with SDTS's tenant, Sharyland Utilities, L.P. to exchange SDTS's South Texas assets for Sharyland's Golden Spread Electric Cooperative interconnection or Golden Spread Project located in the Texas Panhandle, along with certain development projects in the Texas Panhandle and South Plains regions.

This includes the Lubbock Power & Light interconnection or LP&L Project. The exchange will be immediately prior to Oncor's acquisition.

InfraREIT noted that the agreement with Oncor includes a "go-shop" provision that allows the Conflicts Committee and its advisors to actively solicit and negotiate with other potential acquirers to determine whether they are interested in making a proposal to acquire InfraREIT.

Accordingly, InfraREIT will solicit competing acquisition proposals through November 17, 2018.

Concurrently with the execution of the merger agreement and the asset exchange agreement, Sempra Energy will purchase a 50 percent limited partnership interest in Sharyland Holdings LP, which will own a 100 percent interest in Sharyland. The closing of Sempra Energy's purchase is a requirement of the asset exchange agreement between SDTS and Sharyland.

Additionally, under a separate agreement with Sharyland, Oncor has agreed to operate and maintain all of Sharyland's assets following the closing of the transactions.

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