Dive Brief:
- ITC Holdings has confirmed that it is reviewing "strategic alternatives," another way of saying the company is likely seeking bidders in an effort to maximize shareholder value, Penn Energy reports.
- The Michigan-based transmission giant confirmed it was considering a possible sale after Bloomberg named National Grid PLC and Iberdrola as potential buyers earlier this week.
- Shares in the company which traded around $34 last week now sit close to $38. ITC could sell for as much as $45/share, according to Citigroup analysts.
Dive Insight:
The largest transmission provider in the country issued a brief statement on Monday, confirming that it is considering "strategic alternatives" to maximize shareholder value, possibly including a sale of the company.
"Our Board of Directors is focused on creating value for our shareholders and so we are conducting a review of strategic alternatives to ensure that we are doing that," Joseph Welch, chairman, president and CEO of ITC, said in a statement issued in response to media reports. "While the Board conducts this review, we will remain focused on operational excellence across our entire company and on executing our business plan."
ITC added that the board has not made any decisions, and there are no guarantees a sale will move forward.
"The company does not expect to make further public comment regarding these matters unless and until the Board makes a decision with respect to a specific action or otherwise concludes its review," it said.
ITC issued the statement following media reports that a sale was being considered. Bloomberg earlier this week named two multinational utilities, National Grid and Iberdrola, as potential suitors.
The announcement comes during a period of industry consolidation, as slowing load growth has forced a number of mergers.
Southern Co. wants to pay almost $8 billion for AGL Resources, and Exelon Corp.'s proposed $6.8 billion takeover of Pepco Holdings would create the largest utility in the country.
ITC Holdings is a bit of a holdout when it comes to grid modernization. While much of the industry is embracing distributed generation and pushes to modernize the grid, CEO Welch last year predicted the centralized power system would never be replaced.
“Distributed generation wasn’t successful in 1900. It wasn’t successful in 1950. It wasn’t successful in 2000. And it won’t be successful in 2050,” Welch told DNV GL’s Utility of the Future Leadership Forum. “I’m not a big fan of seeing distributed generation playing a big role because — from a cost to the customer, from an efficiency of delivery, from an environmental standpoint — it loses on all counts."
