The deal has yet to get the approval of Energy East shareholders, the Federal Energy Regulatory Commission and state agencies. Iberdrola has stressed that the deal is a “friendly” one and is expected to get regulatory approval towards the end of 2008.
Iberdrola has said that it may carry out a capital hike to fund the acquisition, and is exploring possibilities including the issue of new shares, though this would not take place until the deal is near completion.
Iberdrola has yet to explain the reasons behind the hefty premium it is paying in terms of expected synergies. Victor Peiro Peiro, an analyst at Spain’s Caja Madrid, said it will hope to avoid the problems that have plagued several European acquisitions recently, where plans have fallen through at the last minute as a result of the low premium paid.
In addition Energy East, which has a total of 3 million customers, is a good sized company for Iberdrola to acquire in order to begin its first foray into utility distribution in the U.S.
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Tuesday, February 12, 2008
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