American Electric to Buy BlueStar Energy - Analyst Blog
January 06 2012 - 6:45AM
Zacks
American Electric Power Company Inc. (AEP), a
public utility holding company, has reached an agreement to acquire
BlueStar Energy Holdings Inc. and its independent retail electric
supplier BlueStar Energy Solutions. The terms of the agreement have
not been disclosed.
BlueStar, based in Chicago, provides electric supply for retail
customers in Ohio, Illinois and other deregulated electricity
markets. The company also provides energy solutions, including
demand response and energy efficiency services, nationwide.
BlueStar has been in operation since 2002 and has approximately
21,000 customer accounts.
American Electric Power expects the transaction to close by the
end of March 2012, pending regulatory approval from the Federal
Energy Regulatory Commission and anti-trust review by the
Department of Justice under Hart-Scott-Rodino. BlueStar's
operations will continue to be based in Chicago and will remain
focused on providing retail electric services to residential,
commercial and industrial customers, as well as cater to energy
solution and efficiency services.
American Electric Power by virtue of the acquisition would at
one-go acquire BlueStar’s retail customer base and a wide array of
energy solutions network in Illinois, Pennsylvania, Delaware,
Maryland, New Jersey, Ohio and Washington, D.C.
American Electric Power is of late experiencing a growth in
industrial volume. The third-quarter 2011 results saw the sector
registering a 5% jump in volume owing to increased production at
its metals customers and refiners. We view the growth in industrial
demand as a significant indicator of a reviving economy, a fact
that will surely benefit the company, going forward.
American Electric Power has a long-standing record of consistent
dividend payments ever since July 1910. In October 2011, the
company increased its quarterly dividend by 2.2% to 47 cents per
share. The company at present shells out an annualized dividend of
$1.88 per share.
The company currently retains a short-term Zacks #3 Rank, which
translates into a short-term Hold rating. We have a long-term
Neutral recommendation on the stock. Some of its main competitors
are Duke Energy Corporation (DUK) and
Entergy Corporation (ETR).
Columbus, Ohio-based American Electric Power is a public utility
holding company which, through directly and indirectly owned
subsidiaries, generates, transmits, and distributes electricity,
natural gas, and other commodities. The company derives revenues
mainly from power generation.
AMER ELEC PWR (AEP): Free Stock Analysis Report
DUKE ENERGY CP (DUK): Free Stock Analysis Report
ENTERGY CORP (ETR): Free Stock Analysis Report
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