Filing: Another Suitor Came Knocking on Dominion’s Door
The leaders of Dominion Energy Inc. were entertaining a rival takeover bid to that of NextEra Energy Inc. right up until they voted to approve a combination that’s worth about $67 billion and will create a utility with 10 million customers.
In a recent U.S. Securities and Exchange Commission filing, NextEra and Dominion executives outlined how Chairman, President and CEO John Ketchum approached Bob Blue, his counterpart at Dominion, late last October to start the talks that led to NextEra and Dominion announcing their megadeal in mid-May. The filing also shows that another of Blue’s peers sought to join forces with Dominion and was in active talks until the boards of Dominion and NextEra approved their deal plan on May 15.
The second suitor, named in the SEC filing as Party A, contacted Blue on March 6 to say it would be interested in combining with Dominion and was prepared to move quickly and sign a merger agreement by the end of that month. Blue, who with his team was by then awaiting a second offer from NextEra that would include a higher premium to Dominion’s stock price, said to his counterpart that he’d discuss the matter at Dominion’s board meeting late that month.
When the preliminary bid from Party A arrived before that board meeting, the Dominion team wrote in the SEC filing, it “provided an indicative premium which was materially below the premium proposed by NextEra Energy.”
The timeline provided by NextEra and Dominion (you can read their full narrative here) suggests that Party A was from the outset chasing NextEra both in terms of the financial muscle of its offer as well as other deal details—think bill credits, employee retention commitments and board composition—that Blue and his team were looking for. The company’s revised bid submitted May 14 “remained materially below” NextEra’s offer, the SEC filing states.
And while Party A isn’t identified in the filing, there are a few hints as to which big industry name it could be: Early during talks, the company’s CEO emphasized his team’s “history of successful significant transactions and stated that Party A believed that regulators would view a proposed merger positively.” In addition, a later version of Party A’s bid allocated spots on the company’s management council to the Virginia and South Carolina leaders of Dominion.
Those factors, as well as the requirement that Party A being in the same size league as Dominion and NextEra, suggest that Duke Energy Corp. might have been the second suitor. The company doesn’t operate in Virginia and its South Carolina operations have nearly 1.1 million customers, which makes them smaller than Dominion’s, which has 1.3 million electric and gas clients in the Palmetto State.
The track record of significant M&A also could point to Duke. Since 2006, the company has acquired:
- Cinergy in the spring of 2006 for about $9 billion
- Progress Energy in mid-2012 for some $26 billion
- Piedmont Natural Gas in the fall of 2016 for nearly $5 billion
Duke also has a little more financial flexibility in mid-2026 that it did a year ago. In March, investment firm Brookfield paid it $2.8 billion for 9.2% of Duke Energy Florida and Spire completed its $2.5 billion acquisition of the Tennessee arm of Piedmont Natural Gas.
Regardless of who the second bidder for Dominion was, Kania and his BTIG colleagues think the company’s megadeal with NextEra is unlikely to be the last as the utility sector continues to adapt to the demands of the data-center boom and broader load-growth and electrification trends.
“The presence of an unsolicited bidder could suggest a broader interest in M&A, which we continue to think makes sense given the expanding capital plans across the space,” Kania wrote.
About the Author
Geert De Lombaerde
Senior Editor
A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications T&D World, Healthcare Innovation, IndustryWeek, FleetOwner and Oil & Gas Journal. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.