Mystery counteroffer for Crius caused Vistra’s price to soar
Vistra Energy, the Irving-based power company, thought it had a deal this month when it bought a Connecticut retail power company for $328 million, a sale that would make Vistra the nation’s biggest seller of electricity.
Then an unidentified third-party swooped in on Valentine’s Day and made an unsolicited counteroffer for the company, Crius Energy. That prompted Vistra to come up with something sweeter.
Vistra, which sells power under the TXU brand, said Wednesday that it would pay an additional $50 million to buy Crius, raising its price to $378 million for the company that sells power in Texas under several brand names including TriEagle Energy, Energy Rewards and Viridian Energy. Vistra also agreed to assume Crius Energy's debt of $108 million.
Vistra's president and chief executive officer Curt Morgan said in a statement that the value Crius brings to Vistra still justifies the higher price. By combining with Crius, Vistra will expand its footprint to 19 states and add another 1 million customers, bringing the total to 3.9 million customers — about 1 million more than its rival NRG Energy, of Houston and Princeton, N. J., serves nationally.
The sale is the latest in the continuing trend toward consolidation in the electricity market. Texas has 27 fewer retail electricity sellers in 2018 compared to the previous year, according to the Public Utility Commission.
Neither Vistra or Crius will say who came forward with an unsolicited offer.
“But it’s not hard to imagine who would,” said Ramanan Krishnamoorti, chief energy officer at the University of Houston.
It’s entirely possible that it’s a venture capital fund looking for a haven from oil and gas, he said, an industry that has been struggling with disappointing investment returns over the past three years and fears climate concerns will depress demand for fossil fuels.
Or it could be one of the big power companies, said Krishnamoorti, such as NRG Energy, which is the biggest seller of electricity in Texas, controlling about 31 percent of the market through brands such as Reliant Energy, Green Mountain Energy and, among its latest acquisitions, Discount Power. It might make sense for NRG to make a play for Crius to ex- pand in the North East, close to NRG’s home base of New Jersey, he said.
NRG would not comment.
Another possible bidder could be Florida Power & Light, suggested Krishnamoorti, referring to the nation’s third largest utility owned by NextEra Energ, which owns Gexa Energy, a retail electricity seller in Texas. Florida Power & Light declined to comment.
In any event, the price for Crius was already high to begin with before it went up another $50 million, said Krishnamoorti.
“They must really be eager,” he said, referring to the mystery bidder, “to get into that market.”
The sale is expected to close during the second quarter.