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El Paso Electric shareholders approve acquisition by JP Morgan-advised fund

El Paso Electric Co. shareholders on Sept. 19 approved the proposed merger under which the Texas utility will be acquired by Infrastructure Investments Fund, an investment vehicle advised by J.P. Morgan Investment Management Inc.

In a special meeting, 99.61% of shares voted in favor of the merger, according to a Sept. 19 news release. The shareholder approval satisfies one of the prerequisite conditions to the transaction in the agreement entered June 1 by El Paso Electric, Sun Jupiter Holdings LLC — an affiliate of IIF — and one of Sun Jupiter's subsidiaries.

The $4.3 billion acquisition is still subject to the approval of the Public Utility Commission of Texas, the New Mexico Public Regulation Commission, the Federal Energy Regulatory Commission and the City of El Paso, among other conditions.

On Sept. 17, Moody's lowered El Paso Electric's issuer and senior unsecured ratings to Baa2 from Baa1, with a stable outlook, citing high, partly debt-funded capital expenditures and cash flow pressure from tax reform as drivers for lower metrics. The rating agency also took the pending acquisition into consideration.