US power firms Entergy and ITC abandon merger deal
Entergy Corp is discontinuing plans to transfer its high-voltage power lines to electricity transmission firm ITC Holdings Corp. The cancellation follows a rejection this week of the assets-for-stock merger by Mississippi utility regulators, according to The Wall Street Journal.
The merger plan failed when Mississippi regulators denied a proposal to move 15,000 miles of power lines in Arkansas, Texas, Louisiana, and Mississippi to ITC. In exchange of the asset transfer, Entergy shareholders were supposed to receive a controlling stake in ITC, the report detailed.
Mississippi regulators cited the transfer of rate-setting authority to the Federal Energy Regulatory Commission (FERC) as one of the reasons for the rejected deal. The regulators also predicted the merger would lift power consumer price higher with the approval of FERC. This is because ITC has upped its fees and grid spending after completing other transactions, the report explained.
Despite investor predictions that Entergy would not succeed in the deal, ITC shares have soared about 20% this year, the report added.
ITC Chief Financial Officer Cameron Bready is still hopeful that the firm will be able to grow through future deals, The Wall Street Journal reported.