Berkshire’s MidAmerican to pay $5.6 bn for NV Energy
31 May 2013
A Berkshire Hathaway unit is acquiring NV Energy, which supplies electricity to power-hungry Las Vegas and its casinos, in a $5.6-billion deal.
According to Berkshire's MidAmerican Energy Holdings Co, it would buy NV Energy for $23.75 per share, a 23-per cent premium to NV's Wednesday closing price. NV Energy shares were up at $23.90 in after-hour trades on Wednesday.
It was not uncommon for shares in Buffett's target companies to trade slightly above the offer price, even where there were no competing bids and Buffett had said explicitly the offer was his best and final one.
NV Energy, based out of Las Vegas and serving around 2.4 million people in Nevada, said last month it would accelerate the retirement of its coal-fired power generating facilities as also the construction of natural gas and renewable power plants.
"We are pleased to make a long-term investment in Nevada's economy," Buffett said in a statement.
On completion of the transaction Greg Abel's unit, MidAmerican, which already operates in states including Iowa, Oregon and Utah, would emerge as the largest US utility owner by customer accounts.
Abel, 50, had helped guide MidAmerican and its predecessor companies acquire energy assets in the UK and US during the last two decades. After taking over as chief executive officer in 2008, his company had also agreed to invest in renewable-energy projects and agreed to help fund natural-gas power plants in Canada.
Abel said in a phone interview yesterday that MidAmerican had expressed interest to NV Energy in the past and indicated it would be open to a dialogue at the ''right time'' which helped to spur the transaction that came together in the last few weeks with CEO Michael Yackira, he said.
He added MidAmerican had always believed that Michael and his team were a good management team. He added, MidAmerican liked the quality of the assets and the state of Nevada.
MidAmerican would have around $66 billion in assets after completion, expected in the first quarter of 2014, according to a statement yesterday.
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