Why Energy Holding Company PNM Resources Shares Are Sliding Today

Author: Shivani Kumaresan | January 02, 2024 07:31am

Sustainable energy company Avangrid Inc (NYSE:AGR), a member of the Iberdrola S.A. (OTC:IBDRY) (OTC:IBDSF) Group, has terminated the merger agreement with PNM Resources, Inc (NYSE:PNM) as all final regulatory approvals were not received by December 31, 2023.

Avangrid added that it has been fighting since 2020 to gain approval of its merger with PNM, a merger that would bring over $300 million in benefits to PNM consumers and communities.

The two parties had obtained all the necessary regulatory approvals for the closing of the merger by the end of 2022, except the approval of the New Mexico Public Regulation Commission. 

Even at the end of 2023, there is no clear timing on the resolution of the court review of the New Mexico regulator's denial of the merger.

Avangrid will continue to focus on its growth opportunities, with over $9 billion in incremental capital projects secured during the pendency of the merger.

Developing new renewable energy projects, including powering Vineyard Wind, delivering over $5 billion in capital projects under its New York and Maine multi-year rate plans plus an incremental $2 billion in capital projects are in the pipeline for the company.

Avangrid reaffirmed its EPS and Adjusted EPS 2023 guidance of $1.90 - $2.10 and $2.20 - $2.35 respectively.

On February 6, 2024, PNM Resources plans to provide a financial update, including preliminary 2023 results, 2024 guidance, and the continued 5% long-term earnings growth target.

"We are greatly disappointed with Avangrid's decision to terminate the merger agreement and its proposed benefits to our customers, communities and shareholders," said Pat Vincent-Collawn, PNM Resources Chairman and CEO.

Price Action: PNM shares traded lower by 3.87% at $39.99 premarket Tuesday.

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Posted In: AGR IBDRY IBDSF PNM