Florida-based utility company NextEra Energy has made a takeover approach to Duke Energy, but the company declined the offer.
NextEra and Duke Energy news
On Sept. 29, The Wall Street Journal reported that NextEra Energy aims to take over Duke Energy in what would be at least a $60 billion deal. Duke Energy declined, but NextEra Energy will continue to pursue the deal.
Duke Energy is valued at $61 billion following a 14 percent decline in share prices in 2020. NextEra Energy, the largest public utility in the U.S., has a market value of $139 billion after a 22 percent increase in stock prices this year.
NextEra owns Florida Power and Light Co., which serves 5 million Florida customers. The company also owns Gulf Power Co., which serves nearly half a million customers.
NextEra invests a great deal in clean energy. The company's website states that its strategy is “based on generating and delivering clean energy and building energy infrastructure that's reliable and affordable.”
NextEra has been “using tax subsidies to help finance wind and solar projects around the country and avoiding debt,” according to The Wall Street Journal. In 2001, NextEra Energy was the 30th largest U.S. power company. Currently, NextEra Energy is the largest U.S. power company.
Duke Energy provides electricity to approximately 7.7 million retail customers throughout six states. The company is also a natural gas provider to 1.6 million customers.
The COVID-19 pandemic has led to a surge in retail energy use and a decline in commercial use. More people are working from home instead of in offices.
The Wall Street Journal also reported that the deal will be difficult to accomplish. Duke Energy and its executives may continue to resist a takeover. Government officials would also need to approve and follow all of the industry regulations.
TheStreet reported that the deal would help NextEra Energy increase its footprint and put cash to work. The deal would also help Duke Energy to “diversify away from coal and toward renewable energy.”
NextEra Energy's stock split
Earlier in September, NextEra Energy announced it would split its stock. The company wanted to make the stock a more accessible investment for less-wealthy investors. According to Barron’s, NextEra Energy is pursuing a 4-to-1 split to be completed in October.
Tesla and Apple have also announced stock splits in 2020.
What is NextEra stock price today?
NextEra Energy's stock prices closed Sept. 29 at $283.12 per share. As of 11:35 a.m. ET on Wednesday, Sept. 30, the price was $276.69 or down 2.33 percent.
What is Duke Energy's stock price today?
Duke Energy was priced at $82.41 at the closing on Sept. 29. In pre-market hours, the price was $88.50 as of 8:00 a.m. ET on Sept. 30, which is an increase of 7.39 percent.
Should you buy NextEra Energy stock?
NextEra stock should continue to see earnings growth into 2021 and the following years, according to The Motley Fool. The company expects the 2021 earnings to be $0.20 per share above the previous forecast.