There’s a feeling of electricity in the air, as Volta (NYSE:VLTA) stock is powering up today. Reportedly, Shell (NYSE:SHEL) subsidiary Shell USA has agreed to acquire Volta. It’s not exactly a done deal yet, though, as Volta’s shareholders still have to vote in favor of the buyout.
Shell has a major presence in the U.S., but actually it’s a British energy giant. Like many other large energy businesses nowadays, Shell seeks to stake a claim in the growing vehicle electrification and e-mobility markets.
Instead of starting from scratch, it would be much simpler for Shell to buy out an already established company. Volta already has a network of electric vehicle (EV) charging stations that show video advertisements. Thus, Volta fits the bill perfectly — or at least, Shell USA’s management seems to think so.
To make the deal go as smoothly as possible, a Shell affiliate will reportedly “provide subordinated secured term loans to Volta to bridge Volta through the closing of the transaction.” So, how is the market responding to the potential buyout news?
What’s Happening with VLTA Stock?
SHEL stock moved up 1% this morning, but then, the stock market was generally in the green. On the other hand, VLTA stock was up 18%, a sign that financial traders are bullish on the buyout news.
There are a couple of caveats, however. For one thing, while Volta’s board of directors approved the acquisition, the company’s shareholders still have to vote to approve it. This seems likely to happen, though, based on the investors’ reaction today.
Also, the Volta buyout will cost a pretty penny. The acquisition comes with a $169 million price tag, in fact. It may be worth the cost in the long run, however, as Shell seeks to deploy “Volta’s powerful dual charging and media network.” Without a doubt, that’s what traders are counting on as they excitedly buy VLTA stock today.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
