Q: Comments on duke deal. Market early Tuesday doesn't like it. Is this a buy opportunity or risky purchase and possibly reduce?
5i Research Answer:
The stock decline more likely reflects the $500M bought deal equity issue, which is being done at a discount from Monday's price, moreso on a commentary that the acquisition is bad. It is a large transaction, but Duke was a motivated seller and BEP gets more than 3,400 megawatts of solar, wind and battery power. It diversified BEP, and is 'immediately' accretive to cash flow per unit. The size of the deal does add some risks, but overall we think it is a good acquisition for BEP.