US power utility Allete explores sale, sources say

ALLETE

05/12/2023 20:07

By David French
       Dec 5 (Reuters) - Allete  ALE.N , a U.S. power utility
and renewable energy developer that has a market value of about
$5 billion, including debt, is exploring a sale of the company,
people familiar with the matter said on Tuesday.
    Allete is working with JPMorgan Chase & Co  JPM.N  on a sale
process that has attracted suitors that include infrastructure
funds and buyout firms, the sources said, cautioning that no
deal is certain and asking not to be identified because the
matter is confidential.
    Allete and JPMorgan did not immediately respond to requests
for comment.
    Headquartered in Duluth, Minnesota, Allete has 150,000
electricity customers in northern Minnesota and 15,000
electricity customers, 13,000 natural gas customers and 10,000
water customers in northwestern Wisconsin. It also operates
wind, solar, coal-fired, biomass and hydroelectric power
generation assets across the Upper Midwest.
    Allete's shares have lost 14% of their value this year,
underperforming a 12% drop in the S&P Utilities index  .SPLRCU ,
as the company's pivot to renewable energy production weighed on
its profitability.
    The company plans to invest around $3.3 billion in clean
energy initiatives and transmission projects by 2027, it said in
an investor presentation last month.
    Allete reported operating income of $36 million in the third
quarter of 2023, little changed from the $33.4 million it posted
a year ago. Its operating expenses came in at $348.8 million,
little changed from the $354.9 million it posted a year ago.


 (Reporting by David French in New York; Editing by Lisa
Shumaker)
 ((Greg.Roumeliotis@thomsonreuters.com; +1 646 223 6022; Reuters
Messaging: greg.roumeliotis.thomsonreuters.com@reuters.net))