NextEra Energy to Buy Most of Hawaiian Electric for $2.6 Billion -- Update

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 [e-mail]

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