By opening the field to far-flung deals, PUHCA’s repeal changes the merger game.
The repeal of the 1935 Public Utility Holding Company Act has attracted a surprising amount of attention in the business and consumer press. But while some analysts predict a wave of utility M&A activity, others are more sanguine about the change.
Solving the electricity credit malaise.
Buying Time
Slowly and cautiously, utilities are moving back into growth mode.
The air is buzzing with talk of mergers and acquisitions (M&A). It can be heard in the boardroom and on the trading floor. Bankers hear it, and they see their deal backlog beginning to grow. Fund managers hear it, as they hunt for the best buys in the market before strategic investors snatch them up. Financial advisers and lawyers hear it, too; their phones are ringing more than they have in years.
Financial players bring credit depth to energy markets, but will they play by the rules?
The center of gravity for energy marketing and trading activity is moving from Houston to Wall Street. Some major financial institutions already have plunged into the market, while others are testing the waters, gearing up to participate in a bigger way. Already their impact is being felt, and it is most definitely welcome.
Business & Money
By approaching Sarbanes-Oxley compliance as an opportunity rather than a burden, companies can reap strategic rewards and become stronger.
The stakes have risen in the compliance game. A series of incendiary scandals-followed by the Sarbanes-Oxley Act and its implementing regulations-have focused the scorching light of public scrutiny onto public companies in all industries, and the heat is particularly intense for investor-owned utilities.
The new CROs are bringing back much-needed discipline to restore investor confidence.
Scott Smith's title is senior vice president and chief risk officer. But when he's out of earshot, some people at AEP call him the chief SOB.
"I'm not a popular guy," Smith says half-jokingly. "I continually get comments about what a pain I am. My people are aggressive and they don't take any crap."
Debt + secret triggers = another Enron.
What utilities ought to know before doing business overseas.
Mergers & Acquisitions
CP&L + Florida Progress. Carolina Power & Light announced Aug. 23 that it would purchase Florida Progress Corp. for $5.3 billion in a combination that would create the nation's ninth-largest utility in terms of generating capacity, with $6.7 billion in annual revenues and 2.5 million customers in three states. CP&L would pay a premium (between 16.5 percent and 21 percent) over the pre-announcement share price of FP stock.