Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Exclusive: NextEra Energy in $15 billion bid for Evergy - sources

Stock MarketsNov 09, 2020 07:26PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. Trucks of the Florida Power & Light Company are seen ahead of the arrival of Hurricane Dorian in Daytona Beach 2/2

By David French

NEW YORK (Reuters) - NextEra Energy Inc (NYSE:NEE), the world's largest producer of wind and solar energy, has made a roughly $15 billion all-stock acquisition offer for U.S. power utility Evergy (NYSE:EVRG) Inc, people familiar with the matter said on Monday.

Evergy turned down the offer in recent days and it is unclear whether NextEra will make a new approach, said the sources, who requested anonymity because the matter is confidential. One of the sources added that NextEra had no immediate plans for a new bid.

The offer for Evergy shows how NextEra is seeking to capitalize on a rally in its stock by pursuing large acquisitions. In September, NextEra was rebuffed by Duke Energy Corp (NYSE:DUK), another major utility it approached with a takeover offer.

NextEra's bid valued Evergy in the mid $60s-per-share, said the sources. Evergy informed NextEra that the price was inadequate, and that it also required a detailed plan to overcome regulatory hurdles to a deal, the sources added.

Evergy shares ended trading on Monday up 5.4% at $57.99. NextEra shares ended trading down 0.3% at $75.51, giving the company a market capitalization of $148 billion.

Evergy solicited takeover bids earlier this year under pressure from hedge fund Elliott Management Corp. It attracted NextEra's interest, but Evergy decided last summer to remain independent. It is not clear what prompted NextEra's latest takeover approach.

"As previously discussed... we conducted an extensive strategic review process, that process is complete, and our attention is focused on our sustainability transformation plan," an Evergy spokeswoman said. NextEra did not respond to a request for comment.

U.S. utilities are under pressure to gain scale through dealmaking, as they grapple with the swelling costs of serving a larger population, upgrading aging infrastructure and investing in cleaner energy production.

Evergy was formed out of the merger of Great Plains Energy and Westar Energy in 2018 and serves 1.6 million customers in Kansas and Missouri. The company is searching for a new leader after chief executive Terry Bassham announced in August that he would step down. The Kansas City, Missouri-based company has also unveiled a standalone plan that calls for infrastructure investment and cost reductions.

NextEra, the largest U.S. utility, owns two electric companies in Florida serving more than 5.5 million customers, and is the biggest producer of renewable energy. It briefly surpassed oil giant Exxon Mobil Corp (NYSE:XOM)'s market capitalization last month to take over as the most valuable U.S. energy company, underscoring the value that investors place on cleaner forms of energy.

NextEra CEO James Robo said on Sept. 30 that he would not pursue hostile acquisitions because major deals in his industry could only clear regulatory hurdles if companies worked co-operatively.

Regulators are often concerned that mergers could push up electricity bills for consumers or weigh on capital expenditure. The Great Plains/Westar tie-up took around two years to complete, after the Kansas regulator demanded changes.

LOST DEALS

NextEra has previously lost out on acquisitions by not acquiescing to regulatory demands.

When it sought to buy Texan power utility Oncor for $18.4 billion four years ago, NextEra was asked by the state regulator to operate Oncor at arm's length. NextEra declined, arguing it needed board control and the ability to extract cash to fund its dividend. It lost the deal as a result, with Oncor subsequently acquired by Sempra Energy (NYSE:SRE).

NextEra had previously spent two years trying to buy Hawaiian Electric Co for $4.3 billion. It abandoned that deal in 2016, amid regulatory concerns the benefits promised by NextEra to local consumers were insufficient.

To be sure, NextEra has managed to complete acquisitions. It paid $5.1 billion for Gulf Power from Southern Co (NYSE:SO) in 2018, pledging to cap transmission rates in Florida for five years, according to a regulator statement at the time.

Exclusive: NextEra Energy in $15 billion bid for Evergy - sources
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email