By Lauren Pollock
NextEra Energy Inc. agreed to acquire most of Hawaiian Electric
Industries Inc. for about $2.6 billion, a deal it said would bring
cleaner, renewable energy to Hawaii.
Hawaiian Electric supplies power to about 450,000 customers, or
95% of Hawaii's population, through its electric utilities, and
provides an array of banking services through American Savings
Bank, which isn't included in the deal. The banking unit will be
spun off into a separate publicly traded company.
The stock-swap offer values Hawaiian at $33.50 a share,
including the value of American Savings Bank, which was pegged at
about $8 a share, and the payment of a one-time special dividend.
The valuation excludes the assumption of about $1.7 billion in debt
and marks a 19% premium to Wednesday's close.
In recent late trading, Hawaiian Electric shares were up 14% to
$32.05.
NextEra, a Florida-based clean-energy company, has multiple
subsidiaries, including the Florida Power & Light utility and
NextEra Energy Resources, a wind- and solar-energy provider. In
September, the company withdrew an offer to acquire the shares that
the struggling Energy Future Holdings Corp. held in Oncor, a Texas
transmission business. Neither company has said whether NextEra has
definitively walked away.
In October, it reported its revenue grew 5.9% in the third
quarter on customer growth and new contracts.
Hawaiian Electric said in November that its third-quarter
revenue rose 5% to $867.1 million.
Moody's Investors Service affirmed NextEra's debt ratings.
"Being relatively small and 100% equity-financed, the Hawaiian
Electric acquisition will have minimal impact on NextEra's credit
metrics," Moody's said.
NextEra said the deal is expected to be neutral to earnings per
share in the first full year after closing, and is projected to add
to earnings per share thereafter.
NextEra and Hawaiian Electric plan to file a merger approval
application with the Hawaii Public Utilities Commission within 60
days. The companies intend to show that "customers will receive
measurable and significant value and savings."
No involuntary workforce reductions at Hawaiian Electric are
expected for at least two years after closing.
Josh Beckerman contributed to this article.
Write to Lauren Pollock at lauren.pollock@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires