Bernstein Research said Jan. 29 that the financial community has become much less confident that NextEra Energy (NYSE:NEE) will be able to successfully complete its proposed merger with Hawaiian Electric Industries (NYSE:HE).
The companies announced back in December of 2014 that they had reached agreement to combine. Some regulatory approvals have been secured both others have been harder to attain.
“Hawaii’s governor and several members of Hawaii’s Public Utility Commission remain strongly opposed to NEE’s proposed acquisition of Hawaiian Electric,” Bernstein Research said Jan. 29, one day after NextEra’s quarterly earnings report. The assessment was written chiefly by Bernstein Senior Analyst Hugh Wynne.
“The public equity market now assigns a low probability to the deal closing (~20-25%), and as a consequence we no longer assume in our financial forecast of NEE that the deal will close. This modestly reduces our EPS [earnings per share] outlook in 2017 and beyond, but does not have a material impact on valuation.”
The Hawaii PUC said on its website that it began its formal evidentiary hearings on issues related to the proposed change of control of the Hawaiian Electric Companies and NextEra Energy filed in Docket No. 2015-0022 on Nov 30. The PUC recessed its hearings Dec. 16. The hearings are scheduled to resume Feb. 1.
Bernstein Research and Sanford C. Bernstein are affiliated with Alliance Bernstein. Bernstein is a major global investment-management and research firm.