Cameron right to strike at bamboozling capitalism 19 Oct 2012 The British prime minister’s policymaking is under fire. But his instincts are absolutely right. UK energy utilities along with other companies, and banks, confuse customers where simplicity would aid competition. Government must attack this sort of ugly capitalism.
How many reais needed to screw in a light bulb? 12 Sep 2012 That’s what investors should ask about Brazilian President Rousseff’s plan to slash sky-high electric rates that are restraining economic growth. Power companies are being forced to shoulder most of the burden. Government can afford to pick up the tab on the next round of cuts.
Market could overrule U.S. court on coal pollution 22 Aug 2012 An appeals panel has put the brakes on the EPA’s effort to cut emissions from coal-fired power plants. That could keep the dirtiest U.S. smoke stacks going a bit longer. But at least for now, cheap gas is doing the environmental watchdog’s work, whether judges like it or not.
Hot infrastructure auctions drive down returns 22 May 2012 Investors want big, predictable assets in the less rickety bits of Europe. While debt is cheap, there isn’t much for sale. So auctions like E.ON’s 3.2 bln euro sale of gas grids run pretty hot. Even if the bets are less extravagant than in the credit boom, returns will suffer.
Int’l Power does well to get better buyout from GDF 16 Apr 2012 The power generator’s board has won a 7 pct sweetener from GDF Suez in exchange for agreeing to an $11 bln minority buyout. It’s a decent result for International Power’s 30 pct outside shareholders, given wobbly markets and GDF’s majority.
Int’l Power non-execs have some leverage over GDF 30 Mar 2012 The UK energy firm has had a 6 bln stg approach from GDF for the 30 pct that the French group doesn’t own already. Bid rumours have already effectively added a slim premium to IPR shares. But its independent directors still have some power to push for a bit more.
Monopolies thrive when politicians go short-term 26 Mar 2012 How else to explain the likely approval of a $17.5 bln New England power merger? Northeast Utilities’ incompetence is proven, but dangling a few politically expedient goodies seems to have won authorities over to its NSTAR takeover. Captive customers may lose, but investors win.
Enel woes reflect euro zone’s new normal 9 Mar 2012 Big cuts to the debt-laden Italian utility’s earnings and payout guidance suggest years of tough going in Spain and Italy. The shares are 40 pct off their 2011 highs, but windfall taxes, slack demand and the sector’s lowest dividend yield mean investors’ pain may not be over yet.
Veolia board coup attempt just a bad French farce 23 Feb 2012 Nicolas Sarkozy and Henri Proglio, the former chief of Veolia, are reported to be pressuring the water company’s board to oust current CEO Antoine Frerot. Whatever the latter’s merits, the episode looks to exemplify some of France’s worst political and business habits.
CIC only dips toe into UK with Thames Water stake 20 Jan 2012 As the UK’s chancellor hunts out investors for a $46 billion infrastructure plan, China’s investment in the London utility looks timely. Yet returns on investing in a mature water company are very different from funding risky new projects. Osborne has more schmoozing to do.
Connecticut finally steps up to vet utility merger 18 Jan 2012 More than a year on, the U.S. state reversed its earlier rubber-stamping of Northeast Utilities’ $4.7 bln takeover of NSTAR. It took a couple of storms to expose Northeast’s electrifying incompetence and wake Connecticut’s watchdogs. Now they needn’t be shy of killing the deal.
China firepower pips politics in $3.5 bln EDP win 23 Dec 2011 Portugal has got a neat deal from China’s TGC for 21 pct of its main utility: a top price and a jumbo credit facility. China can press its advantages when it sees strategic value like EDP’s technology and LatAm growth. That mattered more than German lobbying for E.On’s rival bid.
Savvy NRG step may tip scale against utility deal 16 Dec 2011 It’s uncommon to see a supplier try to spoil a marriage between customers. But the U.S. power producer is hoping to break up Northeast Utilities’ $4.7 bln takeover of NSTAR. NRG’s arguments hint at how big and inflexible a utility the deal, if approved, could create.
Clock is ticking on Veolia’s efforts at renewal 6 Dec 2011 The French utility has been hit hard by the economy and its own hubris. Chairman Antoine Frerot is trying to regain the initiative by selling 5 bln euros of assets and widening cost cuts. That’s sensible, but he needs results fast. Investors’ patience must be wearing thin.
New England power merger deserves final nixing 5 Dec 2011 A report on Northeast Utilities’ handling of a snowstorm from a former U.S. disaster official makes it clear: the company failed in the duties that come with its monopoly. Regulators have all the evidence they need to power down the utility’s $4.7 bln takeover of rival NSTAR.
Exclusive: Ditching CEO won’t save US utility deal 18 Nov 2011 Northeast Utilities parted ways with the head of its biggest division, CL&P, after the utility’s bungled storm response. Investors think that makes the pending $4.7 bln takeover of NSTAR more likely. Not so fast: Connecticut plans to reopen the merger review by hook or by crook.
When is a merger-of-equals really a takeover? 7 Nov 2011 One easy way to tell is when the top brass get rich, undeserved paydays. Take NSTAR’s pending $4.7 billion “merger” with Northeast Utilities. NSTAR’s top five executives could feast on $50 mln of payouts from change of control even though they’ll stay, and even run, the place.
Less, not more, better for New England utilities 3 Nov 2011 Too many customers of Northeast Utilities lost power for too long after recent storms. As with banks, risk management and regulation failures are to blame. Towns that run their own utilities offer an alternative; meanwhile, Northeast’s planned $4.7 bln deal needs to be torpedoed.
Irene should blow U.S. utility deal off course 1 Sep 2011 The $4.2 bln merger of Northeast Utilities and NSTAR is up for approval. But blackouts following the hurricane have exposed NU’s deficiencies serving customers despite charging America’s highest rates. Regulators should ensure service is on a better track before they OK any deal.