The shares of Hawaiian Electric Industries, Inc. (NYSE:HE) surged after announcing its $4.3 billion merger agreement with NextEra Energy Inc (NYSE:NEE) today.
According to Hawaiian Electric Industries, the merger deal includes the assumption of its $1.7 billion debt and excludes its banking subsidiary.
Odey Asset Management's Special Situations Fund was down 3.2% in March, compared to its benchmark, the MSCI World USD Index, which was up 3.3%. Through the end of March, the fund is up 8.7%, beating the benchmark's return of 4.9%. Q1 2021 hedge fund letters, conferences and more Odey's Special Situations Fund deploys arbitrage and Read More
The company also announced the spinoff of ASB Hawaii as an independent publicly traded company. ASB Hawaii is the parent company of American Savings Bank.
The stock price of Hawaiian Electric Industries, Inc. (NYSE:HE) increased more than 15% to $32.44 per share. On the other hand, the stock value of NextEra Energy Inc (NYSE:NEE) dropped more than 1% to $103.24 per share at the time of this writing around 1:18 P.M. in New York.
Terms of the agreement
The shareholders of Hawaiian Electric Industries, Inc. (NYSE:HE) will receive 0.2413 shares of NextEra Energy Inc (NYSE:NEE) for every HE share they own. They will also receive a one-time dividend of $0.50 per share.
The total value to the shareholders of Hawaiian Electric Industries, Inc. (NYSE:HE) is approximately $3.5 billion or $33.50 per share including the one-time special dividend and the current estimated value of the American Savings Bank of $8.00 per share (excluding the assumed debt).
The transaction is expected to be neutral to earnings per share for NextEra Energy Inc (NYSE:NEE) shareholders during the first full-year after the closing, but accretive afterward.
Hawaiian Electric Company to maintain its name and there will be no involuntary workforce reductions for at least two years after the transaction.
Transformational opportunity for Hawaiian Electric, ASB
Connie Lau, chairman, president and CEO of Hawaiian Electric Industries, Inc. (NYSE:HE) and American Savings Bank said the merger is a “transformational opportunity to unlock the value of two strong, local companies.”
Lau added that Hawaiian Electric and NextEra Energy Inc (NYSE:NEE) share a common vision of providing a more affordable clean energy future for Hawaii.
On the other hand, NextEra chairman and CEO Jim Robo said, “Today’s announcement marks an important milestone for both our companies as we seek to leverage our respective strengths, commitments to our customers and the communities we serve and the mutual goal of building a cleaner energy future.”