HONOLULU (HawaiiNewsNow) - Financial analysts, advising their clients on stock prices, are expressing doubt that the NextEra Energy acquisition of Hawaiian Electric will ever go through.
Wells Fargo calls it a 50-50 proposition given the continued opposition of Gov. David Ige and what it calls "the tendency of Hawaii residents to favor local ownership of businesses over 'outsiders'."
"While both parties remain committed to the merger, NextEra has made it clear that they are willing to walk away if they view Hawaii's terms to be unreasonable," Wells Fargo says.
Macquarrie Research, in its own analysis, also gives 50-50 odds, but says, "we're increasingly skeptical that the NextEra acquisition will close."
Macquarrie also expresses doubt that the announced spinoff of American Savings Bank – a wholly-owned Hawaiian Electric Industries subsidiary – will actually occur, citing "negative…bank investor sentiment."
In yet another analysis, Barclay's says "we think NextEra is likely to walk away if the merger is not completed by June 3," the date on which the deal can be canceled without financial penalty.
Randy Iwase, chairman of the Public Utilities Commission, has said more than once he does not think a decision will be completed before June, and adds that he does not feel any deadline pressure. There isn't any statutory deadline.
A bill in the Hawaii Legislature, H.B. 2567, which has already cleared one committee, would require that such a deal confer a "substantial net benefit." That's more than current law requires and "would likely be a death knell for the merger" if it passes, Barclay's says.