NextEra purchase of Hawaiian Electric could be in jeopardy

What will happen to HECO if NexEra pulls the plug?
Robert Harris
Robert Harris
Rep. Chris Lee
Rep. Chris Lee

HONOLULU (HawaiiNewsNow) - New investment reports predict the sale of Hawaiian Electric to NextEra Energy could fall apart if the merger isn't finalized by June 3.

And opponents of the deal charge the reports, from investment firms Barclays, Macquarie Research and Wells Fargo, are being used to pressure the state Public Utilities Commission to move more quickly.

"I imagine the PUC would reject this kind of external influence and in fact might be upset by NextEra's efforts to push it," said Robert Harris, of the Alliance for Solar Choice.

The PUC isn't required to rule on NextEra's $4.3 billion offer by a certain date.

But, as state Rep. Chris Lee pointed out, "probably the faster it's resolved the better deal they get."

"For us, I think it's trying to make sure that we have a PUC that covers all our bases and covers everything to get the best deal for the people," added Lee, who's chairman of the state House Energy Committee.

Financial analyst Charles Fishman, of the Chicago based firm Morningstar, said if the deal dies, it'll be difficult or unlikely for HECO to find another suitor given Hawaii's aggressive renewable energy goals and Gov. David Ige's opposition to NextEra's offer.

"You're going to need an entity that, No. 1 has a lot of expertise in renewables -- wind and solar -- and a balance sheet," he said.

But Harris feels another potential buyer would surface. He said HECO could explore public ownership or go it alone.

"This is an attractive market to be in and people are going to be interested in investing in it for a long time to come," he said.

If NextEra pulls the plug, investment analyst Randy Havre said HECO shareholders will face sticker shock.

"Most of the brokerage houses are saying if it does fall through we're going to see Hawaiian Electric stock fall right back down to where it used to trade around $24 a share, $25 a share. Right not we're about $29-$30 a share," he said.

Fishman, meanwhile, said if the PUC says no to the merger, it's unlikely NextEra will ask for a rehearing.

The third round of PUC hearings begins February 29.

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