Power Firm AES Explores Options Amid Takeover Interest
(Bloomberg) -- AES Corp., which provides renewable power to tech giants such as Microsoft Corp., is exploring options including a potential sale amid takeover interest, people with knowledge of the matter said.
Infrastructure investors including Brookfield Asset Management Ltd. and BlackRock Inc.’s Global Infrastructure Partners unit have been studying AES after the company’s shares lost about half their value over the past two years, the people said. With an enterprise value of about $40 billion, a leveraged buyout of Arlington, Virginia-based AES would still rank among the biggest of all time.
Shares of AES jumped as much as 12% in premarket trading on Wednesday.
AES owns a fleet of renewable power assets, including wind and solar, as well as two utilities in Indiana and Ohio. The company aims to provide renewable power to data center companies and has signed deals with technology customers including Google, Microsoft and Amazon.com Inc.
The company’s shares closed regular trading Tuesday down 3.9% to $11.07 apiece, giving AES a market value of $7.9 billion after a 38% drop in the stock over the past 12 months.
There’s no certainty that any of the suitors will decide to pursue a deal for AES, the people said, asking not to be identified discussing confidential information. Representatives for AES, Brookfield and BlackRock declined to comment.
Investors are betting that the immense computing power needed for artificial intelligence and cryptocurrency mining will fuel demand for companies that can help provide it and this is driving dealmaking across the sector. This year, Blackstone Inc. has agreed to take TXNM Energy Inc. private for about $11.8 billion, and Constellation Energy Corp. reached a deal to buy Calpine Corp. for $16.4 billion.
AES has seen its stock erode as US President Donald Trump has put in place anti-renewable policies including permitting restrictions, higher tariffs and, most recently, a rapid phaseout of clean energy credits as part of his budget bill. The company in May reported adjusted earnings per share for the first quarter that missed analyst estimates.
While AES has reduced its international scope and pivoted toward developing mostly renewable energy, its sprawling operations and ownership of both utilities and power plants make it challenging for the company to sell a simple investment story, compared with peers in the US power sector.
(Updates with pre-market trading on Wednesday in third paragraph.)
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