Utilities

Suez white knight is a flawed M&A saviour

2 Oct 2020

The Paris-based sewage group has backed a last-gasp takeover offer by Ardian. The French fund could best rival Veolia’s bid by offering 13 bln euros for Suez’s equity. But there are no details, and CEO Bertrand Camus may not be OK with his company being broken up.

Veolia raises the tension in French sewage spat

30 Sep 2020

The water-to-waste group upped its bid for Engie’s 30% stake in rival Suez to 3.4 billion euros, a 16% increase. If the state-backed company accepts, it will pile pressure on Suez CEO Bertrand Camus to negotiate a full takeover. If he resists, investors could replace him.

Suez uses leaky defence against hostile bid

24 Sep 2020

The 9 bln euro utility put its water unit in a non-profit foundation. That frustrates bidder Veolia, which wants to sell the business to allay competition issues, but may not stop it. Even if the ploy works, adding complexity dents CEO Bertrand Camus’ pledge to be more efficient.

Corona Capital: Coca-Cola, Viral inequality

22 Sep 2020

Concise views on the pandemic’s corporate and financial fallout: Coca-Cola, once an icon of temperance, is diving into the hard seltzer market; and California is considering using the disparity in numbers of Covid cases between neighborhoods to steer its response.

Hurricane Isaias may claim at least one CEO scalp

10 Aug 2020

Connecticut legislators want the head of dominant utility Eversource’s CEO on a pike as blackouts linger. At a minimum they should insist on a clawback of his $20 mln 2019 pay. But if they want to create accountability for the long term, an Eversource breakup can’t be ruled out.

PG&E’s $58 bln bankruptcy exit is no clean sheet

22 Jun 2020

America’s largest utility emerged from Chapter 11 for the second time with about $16 bln more debt, a torched reputation, continuing political demands, and reduced but not eliminated wildfire liabilities. PG&E is out of court, but not necessarily out of trouble.

Corona Capital: Saudi/Carnival, PG&E

6 Apr 2020

Concise views on the pandemic’s corporate and financial fallout: Today, Saudi Arabia’s Public Investment Fund takes an 8% stake in beleaguered cruise outfit Carnival, and the coronavirus may dislodge one of the moving parts in California utility PG&E’s plan to exit bankruptcy.

More regulation, less return for U.S. utilities

19 Mar 2020

A defensive sector looks less so amid the coronavirus pandemic. A sharp rise in unemployment will make regulators less willing to green-light rate increases. Yet the grid still needs heavy investment, virus or not. PG&E’s return from bankruptcy illustrates the dilemma.

London’s new year IPO will buck sad 2019 trend

9 Jan 2020

KKR is looking to list one-quarter of its UK smart-meter group, Calisen. Last year the volume of London listings dipped as new offers were pulled and existing ones lurched. The strategic tailwinds behind Calisen’s sector should stop it being added to the pile of duds.

PG&E deal gets another restructuring ball in air

9 Dec 2019

The bankrupt California utility has seized the initiative from creditors by settling wildfire victims’ claims for $13.5 bln. It’s a big step in qualifying for a state wildfire fund. Satisfying other political, legal and financial demands on the firm requires more deft juggling.

Some Uniper investors now more equal than others

8 Oct 2019

Finland’s Fortum is buying the 20.5% of the German utility held by activists Knight Vinke and Elliott for 2.3 bln euros. Pushing its own holding above 70% gives Fortum effective control. But it makes second-class citizens of Uniper shareholders that don’t get the same deal.

Suez turnaround is stuck on an amber light

2 Oct 2019

Empire-building has weighed on the French utility’s returns. A new focus on the bottom line is thus a win for activist Amber Capital. Still, a share price dip on Wednesday suggests investors aren’t ready to take CEO Bertrand Camus’s promises of better top line growth on trust.

Britain’s power grid picks bad time to screw up

12 Aug 2019

A big UK power cut would be grim at the best of times for the system’s operator. But National Grid also faces upheaval from new price rules, the transition to greener energy, and a nationalisation threat. Even if blame for the mess lies elsewhere, it hands ammunition to critics.

Centrica’s CEO exit is only partially deserved

30 Jul 2019

Under-fire boss Iain Conn will leave the UK utility next year. Had he quit oil and gas production sooner, Centrica shares might not have dived 70% during his tenure. But preparing an ageing utility for the energy transition while battling state price caps was a thankless task.

Suez boss gets helpful kick in derriere from Amber

18 Jul 2019

The 8 bln euro French utility, whose history includes the Egyptian canal’s construction, presents a juicy target for the activist. Bertrand Camus just took the reins in May, following years of crummy empire-building returns. He should welcome Amber’s thoughtful approach.

UK may swap one utilities dogma for another

15 May 2019

If elected, opposition Labour leader Jeremy Corbyn could nationalise water and energy networks below market value. Crudely ditching privatisation for state ownership carries legal and reputational risks. Better to lower the returns that regulators allow these companies to make.

Swiss do their bit for energy resource nationalism

5 Apr 2019

France’s EDF is selling its quarter-stake in fellow utility Alpiq for $489 million. That helps existing Swiss investors take the group private. But it also fits with a wider trend where European states are happier with vital infrastructure being held by domestic owners.

RWE’s German carve-up looks better than E.ON’s

14 Mar 2019

A year after a 17 bln euro asset swap, the German utilities’ deal is in Brussels’ antitrust sights. It’s more an issue for E.ON, which may lose out if forced disposals erode hoped-for cost savings. RWE, meanwhile, seems to have chosen the right time to bulk up in renewables.

EDP overhaul makes Chinese bid look extra stingy

12 Mar 2019

The Portuguese utility will sell assets to cut debt and invest in renewables. It looks like a balancing act between the demands of activist Elliott, and Portugal’s government. But the potential boost to EDP’s value bolsters the case for rejecting an offer from China Three Gorges.

Engie demystifies before activists come calling

28 Feb 2019

The French gas and power group is decluttering its complex structure by exiting 20 markets. Engie’s state ownership and Belgian nuclear albatross act as a brake on activism, but won’t always save it if its undervaluation lingers. Still, steps to close the gap with big wind and solar peers suggest a capacity for self-help.