CNP: Hunt withdraws from Oncor bid; opportunity for CNP

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Market Price (5/19/2016): $21.89/share; ST-Target: $26/share; NIV: $36/share

  • Unsurprisingly, Hunt has withdrawn its current offer for Oncor
  • Equally predictable was that much of Hunt’s decision to withdraw its offer had to do with PUCT’s determination to share tax savings more equitably between investors and Oncor customers
  • It seems that Hunt is willing to resubmit its bid for Oncor that would be viewed by all as a more fair and just sharing of the tax benefits
  • We would assume that if the new bid includes more sharing of tax benefits, by definition, the price offered would be lower
  • Regardless, we believe that this opens up an opportunity for CNP to enter the fray

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