PNM Resources gains as Spanish judge drops charges against Iberdrola CEO

Jun. 23, 2022 3:15 PM ETPNM Resources, Inc. (PNM), AGR, IBDSFBy: Joshua Fineman, SA News Editor1 Comment

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PNM Resources (NYSE:PNM), whose sale to Avangrid (NYSE:AGR) was blocked by a New Mexico regulatory in December, rose 1.8% as a Spanish judge dropped charges against Iberdrola SA Chairman and CEO Ignacio Galan. Iberdrola (OTCPK:IBDSF) is the majority owner of Avangrid. Avangrid gained 2%.

A judge in Spain ordered the end of an investigation into Galan as part of a corporate spying case as the alleged charges the utility was being investigated for exceeded a legal limit, according to a Bloomberg report, which cited a statement from the court.

The news comes after a New Mexico regulator blocked the $4.3 billion sale of PNM (PRM) to Avangrid (AGR) in December. The New Mexico Public Regulation Commission in December rejected in a 5-0 vote Avangrid's (AGR) planned purchase of PNM Resources (PNM).

Barclays wrote in a note Thursday that the decision is positive for Iberdola because now it can attract ESG funds again and may be important for its planned PNM purchase.

"Additionally, this decision removes any potential pushback that New Mexico commissioners might have had in the past against Iberdola and give leeway to the acquisition of PNM Resources," the Barclays analyst wrote in the note.

On Wednesday, Mizuho upgraded PNM to buy from neutral with a $52 price target, saying it continued to expect Avangrid (AGR) will buy the company for $50.30/share.

Mizuho analyst Paul Fremont also said in February that he expected the PNM sale would be completed by the end of next year.

In January, PNM and Avangrid appealed the decision to the New Mexico Supreme Court and the companies extended the end date of their merger agreement until April 20, 2023.

Fremont's comments are similar to Wells Fargo analyst Neil Kalton, who in January also highlighted that the New Mexico Public Regulation Commission will move in 2023 from the current 5-person elected body to a 3-person governor appointed commission.

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