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NextEra’s pursuit of $2.6 billion Hawaii deal goes past deadline
Credit: Mark Chediak | Bloomberg | www.bloomberg.com ~~
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NextEra Energy Inc. and Hawaiian Electric Industries Inc. haven’t terminated their $2.6 billion merger agreement after the island state missed a deadline for deciding whether to approve the transaction.
The accord for NextEra to take over Hawaiian Electric requires action by one of the parties to end it and didn’t automatically lapse on their June 3 target date, the companies said in a statement Saturday. Hawaii Public Utilities Commission Chair Randy Iwase said Friday that he hoped the three-member panel would issue a ruling on the deal this month.
The board is reviewing an internal staff recommendation on the transaction, Iwase said in a telephone interview. He declined to comment on what action the staff proposed.
Doubts are swirling about whether the companies will be able to close on a transaction they announced more than 18 months ago. The takeover has drawn intense opposition among local officials, including Governor David Ige, a Democrat, who has questioned NextEra’s commitment to Hawaii’s goal of sourcing all of its power from renewable sources by 2045.
NextEra and Hawaiian Electric agreed to June 3 as a deadline after which either company could walk away from the deal. A NextEra exit would trigger a payment of about $95 million, Hawaiian Electric executives told investors May 4.
“That deadline does not apply to us,” Iwase said. “It’s not even something in our psyche. That’s a deadline between the two parties and it doesn’t affect us at all.”
Iwase said commissioners were reviewing hundreds of thousands of pages of documents including briefs and transcripts of testimony. “We are still looking at it,” he said.
Hawaiian Electric Chief Executive Officer Constance Lau said on the investor call last month that the merger agreement could “continue on” beyond the June 3 deadline. NextEra has said it supports Hawaii’s clean energy goals and views the state as a testing ground for a transition to solar and wind power and away from fossil fuels.
Hawaiian Electric rose 1.1 percent to $33.31 at the close in New York on Friday. Juno Beach, Florida-based NextEra added 1.7 percent to $121. 80.
Hawaiian Electric, based in Honolulu, serves 95 percent of the state’s population. With the Hawaiian Electric deal dragging out, NextEra recently renewed its interest in buying the Oncor Electric unit of Texas-based Energy Future Holdings Corp., two people familiar with the talks said May 12.
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