Subscribe Feed (RSS)Entergy (ETR) Stock Spin-off To Go In Other Direction?
November 3rd, 2009 by john | Filed under Uncategorized.
The Entergy Stock Spin-off of its nuclear power plants has been in the hands of the regulators for some time. Apparently, Entergy is thinking that if they can’t get their nuclear business separated by spinning it off, then maybe they can do the reverse. And why not? If the point of a stock spin-off is to end up with more focused, effective entities that each will do better on its own, what does it really matter which part is the parent?
Recently the Wall Street Journal wrote . . . “Entergy Chairman and Chief Executive J. Wayne Leonard with saying that the company could spin off its utility businesses into a stand-alone company to accomplish the same goal of separating its regulated utility businesses concentrated in the Southeast from its nuclear plants that sell power at market prices.” The article is worth reading if you are following Entergy’s efforts from another point of view.
The question for us may end up being ‘which one is the parent?’ We, of course, want the one whose stock price is going to go up the most, the fastest whatever it ends up being called. I guess that’s the one whose real value has been bound up the most in the present organization. Is it the utility that is stuck with the nuclear power plants or the nuclear power plants that are stuck with being part of a utility whose main focus is in another part of the country?
We can just keep watching it unfold. There seems to be plenty of time for that.
Tags: Entergy, ETR, nuclear power, stock spin-off
I guess it is hard to unload nuclear power plants. Not all the people of Vermont seem to be convinced it is a great deal for them. This Bennington newspaper article on a lawsuit trying to block the spin-off is writes about local reservations about the deal.
Apparently New York wasn’t too excited about the idea either finding Entergy’s spinoff “not in the public interest”. Now where does it go. Seems as though it must be a good deal for ETR to get rid of the nuclear plants this way if New York and Vermont are so opposed to it. Might this mean that in this case, the parent is a better bet than the spin-off?