HONOLULU, Dec. 3, 2014 /PRNewswire/ -- Hawaiian Electric
Industries, Inc. (NYSE: HE) today announced that its Board of
Directors has unanimously approved a plan to spin off ASB Hawaii,
Inc., the parent company for American Savings Bank, and establish
it as an independent publicly traded company. The spinoff of
ASB Hawaii is contingent upon the closure of the separately
announced definitive agreement under which NextEra Energy, Inc.
will combine with HEI and will occur immediately prior to the
closing of the NextEra Energy-HEI transaction.
American Savings Bank is one of Hawaii's largest full-service financial
institutions with over $5 billion in
assets1, more than $4
billion in deposits, 56 branches and 1,200 employees. It
currently operates as a subsidiary of HEI. The spinoff
transaction is not expected to result in significant changes to
American Savings Bank's operations.
"Our ability to establish American Savings Bank as a new,
independent public company reflects the strength of the bank's
business, its strong market position and its talented team of
employees," said Connie Lau,
chairman of the board for American Savings Bank and president and
chief executive officer of HEI. "This plan also enables HEI
shareholders to participate in the upside potential of American
Savings Bank following the spinoff. We are confident that American
Savings Bank is well positioned to thrive into the
future."
"For nearly 90 years, American Savings Bank has been dedicated
to serving and investing in Hawaii
and its people. This mission will continue to guide us," said
Rich Wacker, president and chief
executive officer of American Savings Bank. "As an
independent public company, American Savings Bank will continue to
benefit from our experienced management team and a highly motivated
team of employees, as well as its history of high performance,
conservative risk management, and solid profitability."
Following the spinoff, American Savings Bank will remain based
in Hawaii and continue to provide
a full range of financial products and services, including business
and consumer banking, insurance and investments, corporate banking
and commercial real estate lending. American Savings Bank will
maintain its name and corporate identity.
American Savings Bank has been named a "Best Place to Work in
Hawaii" for five consecutive years
and has also been recognized as one of the state's healthiest
employers. In addition, American Savings Bank has been
recognized as one of the "Best Banks to Work for" by American
Banker Magazine for two years in a row since the inception of the
ranking.
Terms and Timing of ASB Hawaii Spinoff
Under the planned spinoff, HEI shareholders would receive a
distribution of stock in ASB Hawaii, pro rata to their ownership
interest in HEI. NextEra Energy will assume the corporate tax
liability related to the spinoff (estimated to total approximately
$1.60 per HEI share). The
spinoff is expected to be tax-free for HEI shareholders. In
addition, ASB Hawaii's tax basis in its assets is expected to be
increased to reflect their fair market value at the time of the
spinoff, which is expected to create a deductible amortization of
an intangible asset for tax purposes and a corresponding deferred
tax asset (DTA) for generally accepted accounting principles
purposes, improving regulatory capital ratios and providing
improved cash flow by reducing cash taxes as the DTA is amortized.
Based on the median of six equity analyst consensus estimates, on
Dec. 2, 2014, ASB Hawaii's estimated
current value is approximately $800
million, or approximately $8.00 per share. This valuation represents
1.7-1.8x tangible book value for ASB Hawaii. Following the spinoff,
American Savings Bank expects to realize higher year-over-year fee
income due to regaining its exemption from regulatory limits on
interchange fees (Durbin Amendment). Prior to losing the Durbin
Amendment exemption in 2013, American Savings Bank realized
approximately $6 million, after tax,
in higher interchange fees.
The spinoff separation is expected to be completed immediately
prior to and is contingent upon the completion of the combination
of HEI and NextEra Energy, which is expected to occur within
approximately 12 months, and remains subject to HEI shareholder and
regulatory approvals. The spinoff is also subject to customary
conditions and final approval by the HEI board of directors.
Advisors
J.P. Morgan Securities LLC is serving as financial advisor to
HEI, and Skadden, Arps, Slate, Meagher & Flom LLP is legal
counsel.
Citigroup Global Markets Inc. is serving as financial advisor to
NextEra Energy, and Wachtell, Lipton, Rosen & Katz is legal
counsel.
Analyst and Investor Webcast and Conference Call
HEI will conduct a webcast and conference call for analysts and
investors to discuss this announcement today, Wednesday, Dec. 3, 2014, at
1:00 p.m. Hawaii time (6:00
p.m. Eastern time). The webcast and conference
call will be conducted jointly with NextEra Energy, as the
separately announced agreement under which NextEra Energy and HEI
will combine will also be discussed. The event can be accessed
through each company's website at www.NextEraEnergy.com and
www.HEI.com or by dialing (866) 610-1072, passcode: 38818848
for the teleconference call. The presentation for the webcast
will be on the websites under the heading "Investor
Relations."
An online replay of the webcast will be available on each
company's website, beginning about two hours after the event.
Audio replays of the teleconference will also be available
approximately two hours after the event through Dec. 10, 2014, by dialing (800) 585-8367,
passcode: 38818848.
Hawaiian Electric Industries, Inc.
HEI supplies power to approximately 450,000 customers or 95
percent of Hawaii's population
through its electric utilities, Hawaiian Electric Company, Inc.,
Hawaii Electric Light Company, Inc. and Maui Electric Company,
Limited and provides a wide array of banking and other financial
services to consumers and businesses through American Savings Bank,
one of Hawaii's largest financial
institutions.
FORWARD LOOKING STATEMENTS
This document contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are typically identified by words or
phrases such as "may," "will," "anticipate," "estimate," "expect,"
"project," "intend," "plan," "believe," "predict," and "target" and
other words and terms of similar meaning. Forward-looking
statements involve estimates, expectations, projections, goals,
forecasts, assumptions, risks and uncertainties. HEI cautions
readers that any forward-looking statement is not a guarantee of
future performance and that actual results could differ materially
from those contained in any forward-looking statement. Such
forward-looking statements include, but are not limited to,
statements about the anticipated benefits of the proposed merger
involving NextEra Energy (NEE) and HEI, including future financial
or operating results of NEE or HEI, NEE's or HEI's plans,
objectives, expectations or intentions, the expected timing of
completion of the transaction, the value, as of the completion of
the merger or spin-off of HEI's bank subsidiary or as of any other
date in the future, of any consideration to be received in the
merger or the spin-off in the form of stock or any other security,
potential benefit of tax basis step up to HEI shareholders, and
other statements that are not historical facts. Important factors
that could cause actual results to differ materially from those
indicated by any such forward-looking statements include risks and
uncertainties relating to: the risk that HEI may be unable to
obtain shareholder approval for the merger or that NEE or HEI may
be unable to obtain governmental and regulatory approvals required
for the merger or the spin-off, or required governmental and
regulatory approvals may delay the merger or the spin-off or result
in the imposition of conditions that could cause the parties to
abandon the transaction; the risk that a condition to closing of
the merger or the completion of the spin-off may not be satisfied;
the timing to consummate the proposed merger and the expected
timing of the completion of the spin-off; the risk that the
businesses will not be integrated successfully; the risk that the
cost savings and any other synergies from the transaction,
including the value of a potential tax basis step up to HEI
shareholders, may not be fully realized or may take longer to
realize than expected; disruption from the transaction making it
more difficult to maintain relationships with customers, employees
or suppliers; the diversion of management time and attention on
merger and spin-off-related issues; general worldwide economic
conditions and related uncertainties; the effect and timing of
changes in laws or in governmental regulations (including
environmental); fluctuations in trading prices of securities and in
the financial results of NEE, HEI or any of their subsidiaries; the
timing and extent of changes in interest rates, commodity prices
and demand and market prices for electricity; and other factors
discussed or referred to in the "Risk Factors" section of HEI's
most recent Annual Report on Form 10-K filed with the Securities
and Exchange Commission. These risks, as well as other risks
associated with the merger, will be more fully discussed in the
proxy statement/prospectus that will be included in the
Registration Statement on Form S-4 that will be filed with the SEC
in connection with the merger. Additional risks and uncertainties
are identified and discussed in HEI's reports filed with the SEC
and available at the SEC's website at www.sec.gov. Each
forward-looking statement speaks only as of the date of the
particular statement and HEI does not undertake any obligation to
update or revise its forward-looking statements, whether as a
result of new information, future events or otherwise.
ADDITIONAL INFORMATION AND WHERE TO FIND
IT
This document does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. The proposed business
combination transaction between NEE and HEI will be submitted to
the shareholders of HEI for their consideration. NEE will file with
the SEC a Registration Statement on Form S-4 that will include a
proxy statement of HEI that also constitutes a prospectus of NEE.
HEI will provide the proxy statement/prospectus to its
shareholders. NEE and HEI also plan to file other documents with
the SEC regarding the proposed transaction. This document is not a
substitute for any prospectus, proxy statement or any other
document which HEI may file with the SEC in connection with the
proposed transaction. INVESTORS AND SECURITY HOLDERS OF HEI ARE
URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT
DOCUMENTS THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR
ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. You may
obtain copies of all documents filed with the SEC regarding this
transaction, free of charge, at the SEC's website (www.sec.gov).
You may also obtain these documents, free of charge, from HEI's
website (www.hei.com) under the tab "Investor Relations" and then
under the heading "SEC Filings." Additional information about the
proposed transaction is available at www.forhawaiisfuture.com.
PARTICIPANTS IN THE MERGER SOLICITATION
HEI and certain of its directors, executive officers and other
members of management and employees may be deemed to be
participants in the solicitation of proxies from HEI shareholders
in connection with the proposed transaction. Information regarding
the persons who may, under the rules of the SEC, be deemed
participants in the solicitation of HEI shareholders in connection
with the proposed transaction will be set forth in the proxy
statement/prospectus when it is filed with the SEC. You can find
information about HEI's executive officers and directors in its
definitive proxy statement filed with the SEC on March 25, 2014 and in its Annual Report on Form
10-K filed with the SEC on February
21, 2014. Additional information about HEI's executive
officers and directors can be found in the above-referenced
Registration Statement on Form S-4 when it becomes available. You
can obtain free copies of these documents from HEI using the
contact information above.
1 All American Savings Bank data as of December 31, 2013 unless otherwise noted.
Hawaiian Electric Industries Contact
Media
A.J. Halagao
Manager, Corporate & Community Advancement
(808) 543-5889
ajhalagao@hei.com
Investor Relations
Cliff Chen
Manager, Investor Relations & Strategic Planning
(808) 543-7300
IR@hei.com
American Savings Bank Contact
Jayson Harper
First Vice President, Director of Communications and Public
Relations
(808) 538-2652
jharper@asbhawaii.com
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SOURCE Hawaiian Electric Industries, Inc.