The state's Public Utilities Regulatory Authority rejected the deal in a preliminary decision in July, saying the benefits for the public were not "tangible and sizable," but finally concluded that the application met its financial, managerial, technical and public interest requirements.
UIL Holdings (NYSE:UIL) and proposed merger partner Iberdrola (OTCPK:IBDSF, OTCPK:IBDRY) would pick up the entire $30M tab for cleaning up the long-idled, polluted English Station power plant in New Haven, in an agreement announced today by Connecticut's attorney general.
The agreement is separate from the merger approvals the companies are seeking from the state's utility regulator, whose members have said they cannot consider the cleanup as a condition of approving the merger, but the agreement is contingent on the merger securing all regulators' approvals.
UIL Holdings (NYSE:UIL) and Iberdrola (OTCPK:IBDSF, OTCPK:IBDRY) say they have reached an agreement in principle with Connecticut's Office of Consumer Counsel that would resolve the regulator's concerns with the companies pending merger application, if agreement can be reached with other parties concerning English Station in New Haven.
Iberdrola agreed in February to buy UIL as part of an expansion plan in the U.S., but Connecticut regulators rejected the $3B deal, saying the benefits for the public were not "tangible and sizable"; federal regulators already have approved the takeover.
UIL Holdings (UIL +2.9%) pops after an SEC filing shows it and Iberdrola (OTCPK:IBDSF, OTCPK:IBDRY) will submit a new application to Connecticut's Public Utilities Regulatory Authority regarding their merger.
The companies say they will file a new application for a change of control of UIL in a manner they believe addresses the points and guidance included in the state's rejection of their proposed merger.
In its decision, the regulator had said a lack of certain corporate safeguards could "weaken" the Connecticut utilities.
The state Public Utilities Regulatory Authority says in a draft decision that although Iberdrola has the technical experience and financial resources to complete the merger, the lack of certain corporate safeguards could "weaken" the Connecticut utilities.
The transaction was announced in February and was still subject to regulatory and UIL shareholder approvals.