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PNM Resources Announces Avangrid Termination of Merger Agreement, Schedules Financial Update

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PNM Resources (NYSE: PNM) terminates its merger agreement with Avangrid, citing disappointment over the decision. The company plans to focus on infrastructure investments to meet future energy needs and target long-term earnings growth of 5%. Investors can join the financial update conference call on February 6, 2024, for more information.
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  • None.
Negative
  • The termination of the merger agreement with Avangrid may negatively impact the company's future growth and expansion plans.

Insights

The termination of the merger agreement between PNM Resources and Avangrid is a significant event that warrants scrutiny from a financial perspective. The initial market response might reflect uncertainty, potentially affecting PNM's stock price. Investors will be closely monitoring the company's next steps, particularly in relation to its strategic plans and infrastructure investments that are aimed at fulfilling future energy needs. The projected long-term earnings growth of 5% remains a critical metric, as it signals the company's financial health and operational efficiency. The dissolution of this merger could also open PNM Resources to other strategic opportunities or partnerships that may better align with its growth targets.

Moreover, the reference to the New Mexico Supreme Court's pending decision on the merger indicates regulatory risks that are inherent in the utilities sector. This could have broader implications for the industry, as companies may need to navigate an increasingly complex regulatory environment. The termination of the merger may serve as a case study for how regulatory hurdles can impede or alter large-scale transactions within the industry.

From an energy sector perspective, PNM Resources' continued focus on infrastructure investment is essential for meeting the growing demand for electricity and transitioning to emissions-free energy sources by 2040. This strategic direction is in line with industry trends towards sustainable energy solutions. However, the abrupt end of the merger with Avangrid raises questions about PNM's ability to achieve its ambitious goals independently, particularly in a capital-intensive industry.

The company's commitment to diversifying its energy mix and achieving a significant reduction in emissions is commendable. Nonetheless, the termination of the merger might necessitate revisiting capital allocation strategies to ensure that the necessary investments in renewable energy sources and infrastructure can be sustained without the additional support that a merger might have provided.

From a market research standpoint, the terminated merger between PNM Resources and Avangrid could have ripple effects on the competitive landscape of the utilities sector. PNM Resources' focus on long-term earnings growth and infrastructure investments signifies a strong market position. However, the company will need to reassess its competitive strategies to maintain and enhance this position in the absence of the merger.

Investor confidence can be influenced by such corporate developments, with potential impacts on stock performance and market perception. The upcoming financial update call is an opportunity for PNM Resources to clarify its revised strategies and reassure stakeholders. The company's ability to articulate a clear and compelling post-merger strategy could be pivotal in maintaining investor trust and market stability.

ALBUQUERQUE, N.M., Jan. 2, 2024 /PRNewswire/ -- PNM Resources (NYSE: PNM) announces the termination of its merger agreement with Avangrid. While the PNM Resources Board of Directors approved an extension, it was not accepted by Avangrid and Avangrid terminated the merger.

"We are greatly disappointed with Avangrid's decision to terminate the merger agreement and its proposed benefits to our customers, communities and shareholders," said Pat Vincent-Collawn, PNM Resources Chairman and CEO. "As we move forward, our strategic plans remain focused on the infrastructure investments necessary to meet the future energy needs of our customers and communities. We look to build upon our strong track record of delivering financial results and continue to target long-term earnings growth of 5%."

The companies' merger agreement, announced in October 2020, had been extended through December 31, 2023, while awaiting a decision from the New Mexico Supreme Court on the January 2022 appeal of the New Mexico Public Regulation Commission decision denying the transaction. All other federal and state approvals had been received in 2021.

FINANCIAL UPDATE CONFERENCE CALL: 11 A.M. EASTERN TUESDAY, FEBRUARY 6

On February 6th, 2024, PNM Resources will provide a financial update including preliminary 2023 results, 2024 guidance and the continued 5% long-term earnings growth target. A press release will be issued prior to market open and management will host a live conference call at 11 a.m. Eastern to discuss these items along other company updates. The press release and accompanying presentation materials for the conference call will be posted on the company website at www.PNMResources.com.

Investors and analysts can participate in the live conference call by pre-registering using the following link to receive a special dial-in number and PIN: https://dpregister.com/sreg/10185268/fb4a373624. Telephone participants who are unable to pre-register may participate in the live conference call by dialing (877) 276-8648 or (412) 317-5474 fifteen minutes prior to the event and referencing "the PNM Resources financial update." Listeners are encouraged to visit the website at least 30 minutes before the event to register, download and install any necessary audio software. A live webcast of the call will be available at http://www.pnmresources.com/investors/events.cfm.

Background:

PNM Resources (NYSE: PNM) is an energy holding company based in Albuquerque, N.M., with 2022 consolidated operating revenues of $2.2 billion. Through its regulated utilities, PNM and TNMP, PNM Resources provides electricity to more than 800,000 homes and businesses in New Mexico and Texas. PNM serves its customers with a diverse mix of generation and purchased power resources totaling 2.7 gigawatts of capacity, with a goal to achieve 100% emissions-free energy by 2040. For more information, visit the company's website at www.PNMResources.com.

Contacts:

Analysts                                           

Media

Lisa Goodman                           

Raymond Sandoval

(505) 241-2160                             

(505) 241-2782

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
Statements made in this news release for PNM Resources, Inc. ("PNMR"), Public Service Company of New Mexico ("PNM"), or Texas-New Mexico Power Company ("TNMP") (collectively, the "Company") that relate to future events or expectations, projections, estimates, intentions, goals, targets, and strategies, including the unaudited financial results and earnings guidance, are made pursuant to the Private Securities Litigation Reform Act of 1995. Readers are cautioned that all forward-looking statements are based upon current expectations and estimates and apply only as of the date of this report. PNMR, PNM, and TNMP assume no obligation to update this information. Because actual results may differ materially from those expressed or implied by these forward-looking statements, PNMR, PNM, and TNMP caution readers not to place undue reliance on these statements. PNMR's, PNM's, and TNMP's business, financial condition, cash flow, and operating results are influenced by many factors, which are often beyond their control, that can cause actual results to differ from those expressed or implied by the forward-looking statements. Additionally, there are risks and uncertainties in connection with the proposed acquisition of the Company by Avangrid, Inc. (the "Merger") which may adversely affect the Company's business, future opportunities, employees and common stock, including without limitation, (i) the expected timing and likelihood of completion of the pending Merger, including the timing, receipt and terms and conditions of any remaining required governmental and regulatory approvals of the pending Merger that could reduce anticipated benefits or cause the parties to abandon the transaction, (ii) the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement, (iii) the risk that the parties may not be able to satisfy the conditions to the proposed Merger in a timely manner or at all, and (iv) the risk that the proposed transaction and its announcement could have an adverse effect on the ability of the Company to retain and hire key personnel and maintain relationships with its customers and suppliers, and on its operating results and businesses generally. For a discussion of risk factors and other important factors affecting forward-looking statements, please see the Company's Form 10-K, Form 10-Q filings and the information included in the Company's Forms 8-K with the Securities and Exchange Commission, which factors are specifically incorporated by reference herein.   

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SOURCE PNM Resources, Inc.

FAQ

What is the recent announcement from PNM Resources (NYSE: PNM)?

PNM Resources (NYSE: PNM) has announced the termination of its merger agreement with Avangrid, expressing disappointment over the decision.

What is the company's future focus following the termination of the merger agreement?

Following the termination, PNM Resources (NYSE: PNM) plans to focus on infrastructure investments to meet future energy needs and target long-term earnings growth of 5%.

When is the financial update conference call scheduled for PNM Resources (NYSE: PNM)?

Investors can join the financial update conference call on February 6, 2024, for more information on PNM Resources (NYSE: PNM).

PNM Resources, Inc.

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Utilities - Regulated Electric
Electric Services
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United States of America
ALBUQUERQUE