Progress Energy Inc. (PGN:US)’s chief executive officer said he’s “hopeful” the proposed $17.6 billion takeover by Duke Energy Corp. (DUK:US) will receive final regulatory approval this week, creating the largest U.S. utility owner.
The companies are intensifying their plans for integrating the two companies, Bill Johnson, who would become CEO of the combined company, said in an interview at an industry conference in Orlando, Florida, today.
The deal, announced almost 17 months ago, remains compelling, Johnson said. Charlotte, North Carolina-based Duke has promised rate cuts to state regulators and proposed spending an additional $110 million on power lines to ease federal anti- competition concerns.
“This makes as much sense as it ever did,” said Johnson, who is also chairman of Raleigh, North Carolina-based Progress.
Duke and Progress asked the Federal Energy Regulatory Commission for approval by June 8 so they can close the deal by July 1. Their agreement expires July 8.
While proposed concessions to state and federal regulators will erase some of the term’s near-term benefits, the merger is “still accretive to us based on our analysis,” Duke’s Chief Executive Officer and Chairman Jim Rogers said during a separate interview at the industry conference today.
“It still makes sense economically,” Rogers said.
The gap between the value of Duke’s all-stock offer and Progress’s share price narrowed 5.3 percent to $2.75 at the close in New York.
Regulators in North Carolina and South Carolina haven’t voted on the transaction, saying they’re waiting for FERC approval. Duke and Progress have announced agreements with state regulatory staff based on the latest proposal to the federal commission.
Progress rose 0.9 percent to $56.31 in New York. Duke increased 0.6 percent to $22.61.
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