MADRID (Reuters) - Power group UIL Holdings UIL.N said on Wednesday it would quickly address regulators’ concerns after its $3 billion takeover by Spain’s Iberdrola (IBE.MC) was rejected by a U.S. antitrust watchdog in a preliminary decision.
Iberdrola agreed in February to buy UIL to gain presence in Connecticut, Massachusetts, Maine and New York as part of an expansion plan in the United States, where it hopes to offset falling profits at home.
The Public Utilities Regulatory Authority (PURA) of Connecticut, however, rejected the deal on Tuesday, saying the benefits for the public were not “tangible and sizeable”.
Iberdrola and UIL now have until July 7 to present their response. A final decision on the purchase is due on July 17.
“While the current draft language would, if adopted as final, deny the change of control of UIL, the draft decision also provides an opportunity to UIL and Iberdrola to address the concerns,” said UIL president and CEO James P. Torgerson in a press release.
“We look forward to providing clarification and additional information to PURA quickly. We truly believe the proposed transaction can bring significant value to our customers, including tangible benefits, as we continue to deliver safe and reliable service,” he also said.
According to public filings, the Office of Consumer Counsel set 97 conditions to Iberdrola and UIL, 39 of which have been accepted by the companies.
The firms have, however, so far rejected two key financial conditions which would see Iberdrola and UIL crediting each client with $128, for a total amount of $88 million, and investing $202 million over three years into a fund set up to benefit customers.
The state of New York has already given its approval while the states of Massachusetts and Maine as well as several federal agencies, including the Federal Energy Regulatory Commission, the Department of Justice and Federal Trade Commission, the Committee on Foreign Investment and the Federal Communications Commission, still need to review and approve the deal.
Reporting by Jose Elias Rodriguez, Writing by Julien Toyer; Editing by Tracy Rucinski and Mark Potter