ITC Holdings Corp., the nation’s biggest independent electric transmission company, has confirmed earlier rumors about its search for possible buyers by announcing a “review of strategic alternatives.”
Bloomberg reported the company’s exploration of a sale first, and the story got picked up by various outlets. ELP.com also ran a story on ITC that posted Monday afternoon.
Later, the company posted its own release on the ITC website, announcing that the board of directors has commenced a review of the company’s strategic alternatives. The review could end up with outside buyers acquiring ITC or a “pursuit of other alternatives.”
"Our board of directors is focused on creating value for our shareholders and so we are conducting a review of strategic alternatives to ensure that we are doing that," Joseph L. Welch, chairman, president and CEO of ITC, said in the press release. "While the Board conducts this review, we will remain focused on operational excellence across our entire company and on executing our business plan."
The ITC board has not made any decisions on its alternatives yet, the website release read. The company said it would not comment further unless the board takes a specific action.
The Novi, Michigan-based firm owns and operates transmission systems in Iowa, Minnesota, Michigan, Illinois, Missouri, Kansas and Oklahoma.
Bloomberg named National Grid PLC and Iberdrola as possible bidders for ITC. Those companies, which have their headquarters in the United Kingdom and Spain, respectively, have not commented on any interest.
The talk is reportedly in the early stages and could be unsuccessful even if true, but the power grid sector certainly has been active with mergers and talks of mergers lately. All that stands between Exelon Corp. and its $7 billion takeover of Pepco Holdings are Washington D.C. regulators who are mulling their approval.
Further south, meanwhile, Southern Co. is offering to pay close to $8 billion for AGL Resources Inc. If successful, this deal it would make Southern the nation’s second biggest utility company by customer base.
In early November, ITC reported $273 million in third-quarter operating revenue and $65.6 million in net income. Long-term debt stands at $3.7 billion.
ITC currently has a market capitalization of nearly $5.2 billion, according to the Fidelity investors website. The company’s total debt to capital ratio is listed at 64 percent, above the electric utilities average of 45 percent, according to Fidelity.
Founded in 2003, ITC owns and operates 15,600 circuit miles of transmission lines and can handle a peak load of 26,000 MW on its system, according to its website.
Subsidiary ITC Transmission most recently completed a $510 million project to transmit wind power in Michigan earlier this year.