Q: The other day a member asked about utility companies being takeover candidates and you closed your answer by saying:
"Companies we think would prefer stock deals and may be loathe to add more debt right now. But, AQN, ALA, TA, RNW, CPX and INE are probably getting a little antsy right now about overtures."
I am not sure how to interpret the "getting antsy" reference; are you saying these companies could potentially be subject to a takeover? If so, most of the time that would be a good thing but are you thinking that these companies are in bad shape and would be forced into a distressed (low ball) sale? Thanks much for your excellent service.
"Companies we think would prefer stock deals and may be loathe to add more debt right now. But, AQN, ALA, TA, RNW, CPX and INE are probably getting a little antsy right now about overtures."
I am not sure how to interpret the "getting antsy" reference; are you saying these companies could potentially be subject to a takeover? If so, most of the time that would be a good thing but are you thinking that these companies are in bad shape and would be forced into a distressed (low ball) sale? Thanks much for your excellent service.
5i Research Answer:
We meant it as a net positive comment, though of course sometimes there are 'takeunders' vs 'takeovers'. But our comments were meant to reflect the fact that, as smaller utilities with low stock valuations, larger companies are likely interested in acquiring them, and they are likely concerned about the possibility of a hostile bid and are thus 'looking over their shoulder'. Control on these is mostly in the market. Hostile takeovers are rare, but do occur in the industry.