Doubts grow as deadline passes for NextEra-Hawaiian Electric merger
STAR-ADVERTISER / FEB. 2, 2016
Public Utilities Commision Commissioner, Lorraine Akiba, left, PUC Chair Randy Iwase, with Eric Gleason, president and CEO of NextEra Energy Hawaii on the stand at the NextEra hearings at the Blaisdell Center on Feb. 2.
Doubts over whether NextEra Energy Inc. can overcome local opposition to its proposed $2.6 billion takeover of Hawaiian Electric Industries Inc. have increased as a deadline for the deal passes.
NextEra can walk away from the deal that was announced 18 months ago after today by paying the utility and bank owner about $95 million, Hawaiian Electric executives told investors May 4.
“The merger faces long odds against deep-seated local opposition in the Aloha state,” Peter Cohn, an analyst with Height Securities LLC, wrote in a research note on today. “We don’t see a path for the NextEra-Hawaiian Electric merger coming to fruition.”
NextEra is awaiting a decision by Hawaii regulators on the takeover, which has been opposed by Governor David Ige, who has questioned NextEra’s commitment to Hawaii’s goal of reaching 100 percent renewable power by 2045. NextEra has said it supports the state’s clean energy goals and views Hawaii as a testing ground for a transition from fossil fuels to power generated from the sun and wind.
Hawaii regulators have “declined to be pressured” by the merger deadline, Cohn said in the note. Hawaiian Electric Chief Executive Officer Constance Lau said on the investor call last month that the merger agreement can “continue on” even if the June 3 deadline comes and goes.
The Hawaiian Public Utilities Commission declined to comment on a schedule for a decision. NextEra didn’t immediately respond to a request for comment. Hawaiian Electric declined to comment.
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If the deadline passes without a regulatory decision, “the question is will NextEra pick up its marbles and go home,” said Paul Patterson, an analyst with Glenrock Associates LLC in New York. “It looks a little challenging.”
18 responses to “Doubts grow as deadline passes for NextEra-Hawaiian Electric merger”
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As they say in Iran, “DEATH TO THE MERGER!”
This deal is dead. It was a silly proposal from the start. Connie is famous for her disastrous business decisions but she is a Punahou type that is well connected. She handled the entire thing very poorly and apparently put her own financial interest and the interest of her weak, avaricious board first. That is what most experts say anyway. There is always another mainland company that wants HECO ..so nothing lost.
why would hawaii want another mainland company?
Aloha NEXTERA. Take your marbles and go home.
But leave the 95 million first.
That Randy Iwase really earned his chops on this one. Before him the PUC was a doormat.
agree..he has done great work
He is a soldier who just follows the orders from his superiors. Someone has/had a serious ax to grind with HECO, apparently.
Ax to grind yes, most of the general public
HE stock was $28 before the merger was announced in December 2014, rising to $34 about a month later. HE closed at $33 today. Investors seem unconcerned.
Perhaps they have priced in the breakup fee? Also, you’re leaving out that HE saw some fairly large drops that timed out with releases about the merger.
Still, we’re all waiting for Randy.
HE spent at least $14 million in merger-related costs. Also pays a $1.24/share annual dividend.
Mr. Iwase is in a tough spot. The PUC can only deny the merger if it can PROVE it will be bad for Hawaii.
The fat lady has not yet sung. Too early to place any kind of judgement on Randy Iwase, I think.
Lets see what happens. We may all end up surprised.
all i want is my .31 cents dividend
Now it is time to replace Lau-Lau and the rest of the dummies. Shame…
If you people knew the politics behind this, it would make you sick.
Why didn’t Ige voiced his opposition from the start? A total waste of everybody’s time.
Do you really believe the PUC will act in the best interests of Hawaii ratepayers? Do they ever? The politicians in this state are all about money, Nextera has more than Heco and is just as willing to pay the democratic party “monopoly tax”.
Like every state board, the PUC exists only to shield the real decision makers (democratic leadership) from public criticism when a controversial decision is made.
This merger was approved before Connie even announced it to the public.