The banking firm that's conducting the stock swap for the Utah Power & Light Co.-PacifiCorp merger has fallen behind schedule because of the unexpected quick response by shareholders anxious to cash in on the $2 billion deal.
Former Utah Power & Light Co. shareholders, wanting to cash in as soon as possible on the utility's merger with PacifiCorp, have inundated the U.S. postal system and New York office of First National Bank of Chicago, causing a delay in the conversion procedure, officials said."They (the bank) had never experienced that kind of response before. It was unusually quick," said PacifiCorp spokeswoman Dolores Chenoweth.
She said about half of UP&L's 85,000 shareholders mailed their stock certificates in to be converted within a week of being notified.
Because the mailing was registered, requiring hand delivery and a signed receipt for each shareholder request, a backlog built up in the postal system and the First Chicago office, she said.
PacifiCorp has also been flooded with calls by concerned shareholders, But, Chenoweth said the backup has been mostly cleared and shareholders should be receiving their certificates soon.
About 18,000 shareholders have had their shares converted, and the transfer agent is processing about 2,000 shareholders a day.
Chenoweth explained that a when-issued-market mechanism is in force, allowing UP&L shareholders to sell their PacifiCorp stock at the current price before receiving their new certificates.
Former UP&L stockholders are cashing in each share valued at $31.375 its last trading day for .909 shares of PacifiCorp, which closed Thursday at $34.375.
Former UP&L shareholders will have to wait, however, until May 15 for their dividend payment from PacifiCorp. The Portland, Ore.-based utility pays on a different schedule than UP&L did, which would have paid its dividend on April 3.