NextEra Energy Says No Hostile Takeover of Duke Energy

Shares of NextEra Energy were on the decline on Wednesday after a Wall Street Journal report revealed that the company had approached North Carolina’s Duke Energy about a potential acquisition.

The latter had turned back the idea and while NextEra is still interested in pursuing the deal, the company’s CEO said it would not embark on a hostile takeover.

Chief Executive James Robo announced on Wednesday that his U.S. power utility company would not be doing a hostile takeover.

Speaking at a Wolfe Research conference on Wednesday, Robo declined to comment specifically on NextEra’s approach to Duke but he indicated that a major acquisitions in his industry could only happen if the companies involved worked co-operatively.

“State regulators are really important to getting approvals on getting things done, and you can’t do anything that isn’t mutual in this industry,” Robo said.

Duke Energy operates in North Carolina, South Carolina, Florida, Indiana, Ohio and Kentucky, serving more than 7.7 million households. For any acquisition of the company, all six states would need to sign off on it and federal utilities regulators would also need to assent.

Duke Energy, which has a market capitalization of $65 billion, declined to comment on the report, saying it doesn’t comment on rumors or speculation.

According to a person familiar with the matter who confirmed a Wall Street Journal report about the approach, Duke had turned down the deal. Details of the bid were not revealed.
Duke Energy shares were trading up 7.5% at $88.57 on Wednesday while NextEra shares were down 1.7%.

NextEra owns two electric companies in Florida serving more than 5.5 million customers and is also the world’s largest generator of renewable energy from wind and sun.

“While we have no doubt NextEra would be interested in Duke, securing state regulatory approval could be challenging, particularly in the Carolinas which represent over 60% of Duke’s regulated earnings base,” Jonathan Arnold, principal at Vertical Research Partners, remarked in a note.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.