Beacon Power, NxtPhase Agree To Drop Merger Agreement
OW JONES NEWSWIRES
November 17, 2005 9:26 a.m.
WILMINGTON, Mass. -- The boards of Beacon Power Corp. (BCON) and NxtPhase T&D Corp. agreed to terminate a merger agreement under which Beacon Power would acquire the closely held Canadian company for 15.7 million Beacon common shares and 2.7 million restricted shares.
In a press release Thursday, Beacon Power said the decision was based on the current status of the Securities and Exchange Commission review process as well as the increase in its stock price since the signing of the agreement.
A Beacon Power spokesman said the SEC has asked for various clarifications on business models and other subjects, and it became clear as the process went on that there wasn't enough time to complete the deal by Dec. 31. The merger agreement specified that the transaction would automatically terminate if not completed by year's end.
The spokesman declined to comment on whether Beacon Power will have to pay a termination fee. He said the termination agreement is still subject to NxtPhase shareholders' approval but is expected to close shortly.
In April, Beacon Power agreed to buy NxtPhase, a supplier of digital and fiber-optic products that had $3 million in annual revenue, according to the Beacon Power spokesman.
Under the merger agreement, Beacon was to issue 15.7 million shares of its common stock to NxtPhase shareholders and 2.7 million restricted stock units to NxtPhase employees. Beacon Power shares closed at 84 cents a share on April 22 and since rose to a 52-week high of $5.35 on Aug. 24. The 52-week low, set Nov. 17, 2004, is 37 cents.
The shares closed Wednesday's session at $2.20, up 5.3%, and recently changed hands at $2.25 in pre-market trading. |
