European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<a href="https://www.smartkarma.com/entities/iberdrola-sa" target="_blank" data-smartkarma-citation="entities:21276:1" rel="noopener">Iberdrola SA (IBE SM)</a> accelerates its expansion in the United States. <a href="https://www.smartkarma.com/entities/avangrid-inc" target="_blank" data-smartkarma-citation="entities:26503:1" rel="noopener">Avangrid Inc (AGR US)</a> , an 81.5% Iberdrola controlled company has announced an agreement to acquire <a href="https://www.smartkarma.com/entities/pnm-resources-inc" target="_blank" data-smartkarma-citation="entities:16546:1" rel="noopener">Pnm Resources (PNM US)</a>, a New Mexico and Texas power company listed on the NYSE.
Iberdrola offers $50.3 in cash, for a total equity value of $4,317.5 mn (€3,663.5 mn), according to a relevant fact sent to the CNMV. Iberdrola has undertaken to provide Avangrid with "the funds that are necessary" for the price of the transaction.
The offer price represents:
<ul>
<li>10% premium over PNM's price per share at the close of Tuesday 20 October and 19.3% premium to PNM Resources 30-day VWAP</li>
<li>22.8x Capital IQ's consensus P/E estimate</li>
<li>2.2x P/BV</li>
<li>12.6x EV/Forward EBITDA vs. 10.9x for comparable companies.</li>
</ul>
The proposed transaction is all cash and I do not see obvious regulatory issues, therefore I expect the merger arbitrage spread to narrow quickly.

Iberdrola SA (IBE SM) accelerates its expansion in the United States. Avangrid Inc (AGR US) , an 81.5% Iberdrola controlled company has announced an agreement to acquire Pnm Resources (PNM US), a New Mexico and Texas power company listed on the NYSE.
Iberdrola offers $50.3 in cash, for a total equity value of $4,317.5 mn (€3,663.5 mn), according to a relevant fact sent to the CNMV. Iberdrola has undertaken to provide Avangrid with "the funds that are necessary" for the price of the transaction.
The offer price represents:

10% premium over PNM's price per share at the close of Tuesday 20 October and 19.3% premium to PNM Resources 30-day VWAP
22.8x Capital IQ's consensus P/E estimate
2.2x P/BV
12.6x EV/Forward EBITDA vs. 10.9x for comparable companies.

The proposed transaction is all cash and I do not see obvious regulatory issues, therefore I expect the merger arbitrage spread to narrow quickly.

PNM Resources - Iberdrola: Friendly Acquisition

United States

PNM Resources Inc. is a holding company. The Company, through its subsidiaries, generates, transmits, and distributes electricity.

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PNM Resources (PNM US)

PNM Resources - Iberdrola: Friendly Acquisition

Iberdrola offers $50.3 in cash. Iberdrola has undertaken to provide Avangrid with the necessary funds. I do not see any obvious regulatory issues,...

Jesus Rodriguez Aguilar

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