US: Iberdrola’s $3 billion UIL takeover rejected by regulator

Connecticut regulators rejected Iberdrola SA’s $3 billion acquisition of UIL Holdings Corp. in a preliminary decision, saying it wasn’t clear how the new Spanish owner planned to run the company.

“Iberdrola’s record of mergers and divestitures in the region is mixed,” the Public Utilities Regulatory Authority wrote in the decision, which went on to question Iberdrola’s commitment to the local business distributing gas and electricity. “The change of control request is in effect asking for the authority’s and Connecticut ratepayers’ leap of faith into an unknown situation.”

The companies can respond to the proposed decision and regulators will issue a final decision on the merger on July 17, according to a state filing. Massachusetts regulators also must approve the deal.

Iberdrola, based in Bilbao, Spain, offered to pay $52.75 a share for UIL in February, a 25 percent premium to the company’s share price at the time. UIL, which has about 727,000 customers in Connecticut and Massachusetts, fell 3.6 percent to $45.82 at the close in New York.

Full content: Miami Herald

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