Daily Brief Utilities: ENN Energy, Xcel Energy Inc, Naturgy Energy Group SA and more

• ENN Energy (2688 HK) announced a pre-conditional privatisation from ENN Natural Gas (600803 CH)/ENN-NG comprising HK$24.50 cash per share + 2.9427 ENN-NG H Shares per ENN share.
• The appraised offer value is HK$80.00 (HK$82.35, including the 2024 dividend), which is a tad optimistic. My calculations suggest a realistic offer value range of HK$71.47-76.32. 
• The offer is final. The precondition satisfaction is low-risk. A high AGM minority participation is a risk, but the scheme vote should pass as the offer terms are reasonable.   

• The proposed privatisation price for ENN Energy (2688 HK) appears reasonable, which is estimated to be 1.73x P/B and 11.5x PER on a 12-month forward basis. 
• The valuations are both at a good premium over the average since 2024. ENN Energy is also being put at the top of the sector’s PER range. 
• Scheme shareholders will hold new H-shares of ENN Natural Gas (600803 CH), which historically has a more volatile earnings record, but its A-share has been doing well. 

• ENN Natural Gas has made a pre-conditional proposal to privatise ENN Energy (2688 HK). For each ENN share, shareholders will receive 2.9427 ENN Natural Gas shares and HK$24.5 in cash.
• The ENN Natural Gas H-shares will be listed on the HKEX. The value received by ENN Energy shareholders depends on ENN Natural Gas stock performance and the H-share discount.
• The ENN Natural Gas (600803 CH) H-shares are likely to replace ENN Energy (2688 HK) in global indices and the Hang Seng Index (HSI INDEX). 

• Brian Van Abel, CFO of Xcel Energy, discusses the opportunities presented by power hungry data centers
• Xcel Energy is a large fully regulated electric and gas utility serving eight states with a market cap of approximately $40 billion
• Xcel Energy has a track record of delivering on earnings guidance and is committed to carbon reduction goals, with a 2050 carbon-free goal and plans to reduce carbon by more than 80% by 2030

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• Naturgy’s 10% self-tender offer at €26.50/share offers a 3.5% premium and ~40.6% annualized return, pending CNMV approval with settlement likely by mid-May 2025.
• Strategic negotiations may see Taqa acquire up to 29.9% from exiting funds GIP and CVC, rebalancing Naturgy’s ownership toward industrial partners and reducing geopolitical friction.
• With treasury shares reissued, free float could rise to 21%, boosting ADTV above €12 million and enhancing index eligibility, while dividend payouts remain attractive despite temporary uplift being unsustainable.