PNM Resources’ shareholders approved a proposed merger with Connecticut-based energy giant Avangrid at a special online meeting Friday morning.
Of the shares voted at the event, about 93% supported the merger, reflecting about 70% of the total 86 million in outstanding common shares as of Dec. 31.
“We are delighted by the overwhelming shareholder support of this merger,” said PNMR chairman, president and CEO Pat Vincent-Collawn in a statement. “… We continue to move forward on the remaining regulatory approvals in New Mexico and Texas, along with federal approvals.”
PNMR and Avangrid filed in November for state regulatory approval in New Mexico and Texas. If allowed, PNMR and its two utilities – Public Service Co. of New Mexico and Texas New Mexico Power – would become subsidiaries of Avangrid in an all-cash transaction valued at $4.3 billion.
PNMR shareholders would receive $50.30 for every share of outstanding common stock, representing a 19.3% premium over the 30-day average price of PNMR shares as of Oct. 20, when the companies signed the deal.
Shareholders also voted to approve a combined $38 million in executive compensation for PNMR’s top six executives, most of which are earnings and benefits they’re all entitled to under their employment contracts regardless of the merger. About $12.5 million, however, would go to three departing executives, including Vincent-Collawn, as a “golden parachute,” although that’s contingent on finalizing the merger.
Apart from state regulators, the merger still needs clearance from the Federal Communications Commission, the Nuclear Regulatory Commission, and the Federal Energy Regulatory Commission.
The New Mexico Public Regulation Commission will hold public hearings in May. A hearing examiner will then make recommendations to the five PRC commissioners who will vote to approve or reject the merger.
In a recent interview, PRC Chair Stephen Fischmann said he wants to learn more about Avangrid’s financial structure and how it has administered the eight electric and gas utilities it already owns in northeastern states.
“I want to look at Avangrid’s management performance and philosophy,” Fischmann said. “There has to be enough independence (of PNMR) as a local unit of Avangrid that it can follow New Mexico law and not be looking at larger corporate imperatives that could impede it. I’d also like to see indications that they can run the company at least as efficiently for customer benefit, if not more so, as PNM has done.”
Commissioner Joe Maestas said he’s encouraged by Avangrid’s national reputation as a clean energy developer, plus the financial strength it could bring to advance New Mexico’s energy goals.
“They’re known as progressive leaders in wind development and they look really good on paper, but let’s see what they can do here,” Maestas said. “With Avangrid’s resources, the company could accelerate the transition to clean energy and help modernize the grid, which is very antiquated and in need of serious enhancement.”