U.S. reg­u­la­tors deny Avista takeover

The Observer (Sarnia) - - ONTARIO NEWS -

TORONTO — Wash­ing­ton State reg­u­la­tors have de­nied Hy­dro One Ltd.’s pro­posed takeover of Avista Corp., cit­ing po­lit­i­cal in­ter­fer­ence in the On­tario util­ity by the pro­vin­cial gov­ern­ment.

The Wash­ing­ton Util­i­ties and Trans­porta­tion Com­mis­sion said it found the deal, which val­ued Avista at $6.7-bil­lion, was not in the pub­lic in­ter­est after it be­came clear the On­tario gov­ern­ment was will­ing to in­ter­fere in the util­ity.

The U.S. reg­u­la­tor cited Premier Doug Ford’s move to force the Hy­dro One CEO to re­tire, which was fol­lowed by the res­ig­na­tion of the en­tire board, as ev­i­dence the prov­ince was will­ing to put po­lit­i­cal in­ter­ests above those of share­hold­ers, in­clud­ing those who own a ma­jor­ity of the On­tario util­ity’s stock.

Hy­dro One’s 14-mem­ber board re­signed en masse after the sud­den re­tire­ment of chief ex­ec­u­tive Mayo Sch­midt, who Ford had la­belled “the six-mil­lion-dol­lar man” for his hefty com­pen­sa­tion.

“Pro­vin­cial gov­ern­ment in­ter­fer­ence in Hy­dro One’s af­fairs, the risk of which has been shown by events to be sig­nif­i­cant, could re­sult in di­rect or in­di­rect harm to Avista if it were ac­quired by Hy­dro One, as pro­posed,” it stated in its de­ci­sion.

“This, in turn, could di­min­ish Avista’s abil­ity to con­tinue pro­vid­ing safe and re­li­able elec­tri­cal and nat­u­ral gas ser­vice to its cus­tomers in Wash­ing­ton. Avista’s cus­tomers would be no bet­ter off with this trans­ac­tion than they would be with­out it.”

Hy­dro One and Avista said in a re­lease that they are “ex­tremely dis­ap­pointed” in the de­ci­sion and are re­view­ing the or­der to de­ter­mine the ap­pro­pri­ate next steps.

The reg­u­la­tor said the On­tario gov­ern­ment’s ac­tion re­sulted in credit down­grades and de­creased the value of Hy­dro One and Avista shares.

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