California Review Delays Securus Sale Closing
A California administrative law judge warned Securus and SCRS Acquisition that a regulator could impose penalties or nullify their transfer of control if the companies tried to close their deal before getting California Public Utilities Commission approval. The warning was…
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reported in a Monday scoping memo by Commissioner Liane Randolph. At a July 20 prehearing conference, ALJ Patricia Miles informed the parties that the CPUC can’t complete review of the Securus sale to SCRS Acquisition until commissioners' Aug. 10 meeting, even though the companies targeted Aug. 1, the memo said. Securus and SCRS asked for expedited processing, saying they would be charged about $75,000 every day after Aug. 1 that the deal wasn’t closed and that fees could total $1.5 million if the transaction didn’t close by Aug. 31, the memo said. “When asked why they had waited so long to file the application, the Joint Applicants explained that they had assembled the application and mailed it as quickly as possible after April 29, 2017, the date when they reached agreement on the stock purchase transaction.” The companies’ petition is uncontested, the memo said. The Wright Petitioners, fighting the deal at the FCC, notified the commission about the California situation in a Monday ex-parte letter in docket 17-126. “Any urgency that Securus and Platinum Equity may have expressed to the Commission to obtain approval, and close the transaction, by August 1, 2017, should be balanced against the fact that the State of California, in which Securus serves 65 facilities, has yet to approve the transaction, and views it as impossible to close by August 1, 2017.” Securus and SCRS “expect to close the transaction as soon as we receive all applicable/required approvals,” Securus CEO Richard Smith emailed Tuesday. “We hope that the key FCC transfer of control approval is granted shortly.” Securus discussed the negative impact of delay and other merger issues in meetings last week with FCC Wireline Bureau staff and aides to Chairman Ajit Pai, the company said in an ex parte dated Monday.