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Bearish -60

New Mexico attorney general: PNM stock sale to Blackstone should be voided

📉 New Mexico Attorney General argues a $400 million sale of TXNM Energy stock to Blackstone should be declared void.

🏛️ The nullification request is part of Blackstone's larger $11.5 billion bid to acquire Public Service Company of New Mexico.

⚖️ State regulators face a hearing later this month to consider the validity of the controversial stock deal.

⚠️ Advocacy groups and residents oppose the takeover, citing potential cost increases and service cuts linked to private equity ownership.

🔍 An investigation was triggered after an advocacy group noted the 2025 stock sale lacked prior commission approval.

💼 The $400 million transaction occurred in June 2025 as a PIPE deal intended to finance the utility before the merger.

⚖️ Legal experts argue state law requires prior express authorization for utility stock sales related to acquisitions.

🔄 If voided, Blackstone and PNM would need to restart their regulatory approval process from scratch.

🛑 The joint applicants' application for Commission approval could be rejected if the stock deal is deemed illegal.

🗣️ Dozens of citizens attended public comment sessions in Albuquerque expressing concern over private equity acquisition.

Bullish Signals
  • The proposed acquisition of PNM by Blackstone has ignited controversy, drawing concerns from many residents, advocacy organizations and public officials.
  • The Public Regulation Commission will consider the issue at a hearing later this month.
  • Companies' attorneys have maintained the regulatory proceeding can still move forward even if there is a finding that the stock deal violated state law.
Risk Factors
  • New Mexico Department of Justice attorneys are arguing that a $400 million TXNM Energy stock sale to Blackstone in 2025 should be considered null and void due to alleged state law violations.
  • The proposed $11.5-billion acquisition faces significant regulatory scrutiny, with hundreds of residents and advocacy groups urging commissioners to reject the takeover over concerns about cost increases and service cuts.
  • State law requires 'prior express authorization' for utility stock sales related to acquisitions, but the 8 million shares sold in June 2025 proceeded without commission approval according to investigators.
  • If regulators determine the PIPE transaction is void and incurable, Blackstone and PNM would need to re-submit their merger application from scratch before receiving approval.
  • Attorneys for the Joint Applicants have maintained that regulatory proceedings could continue despite potential findings of violation, but this uncertainty creates a major delay risk for the deal.
  • Hundreds of residents and advocacy groups have submitted comments opposing the takeover, citing historical concerns about private equity ownership driving up costs and cutting services in industries like housing, health care and retail.
Full Analysis
New Mexico attorney general officials are requesting that the Public Service Company of New Mexico (PNM) regulatory commission declare a $400 million stock sale to private equity firm Blackstone null and void, according to a brief filed recently with state utility regulators. This legal maneuver centers on a 2025 transaction where 8 million shares of TXNM Energy stock were issued to a Blackstone holding entity known as Troy TopCo in June 2025 under a public private equity (PIPE) structure intended to finance the proposed $11.5-billion takeover of PNM, which owns New Mexico's largest electric utility. Department of Justice attorneys argue that this specific issuance and sale violated state law by failing to secure prior express authorization from regulators for sales tied to acquisition purposes. While state regulators have ordered a re-evaluation of the process following advocacy group concerns, Blackstone and its partners maintain that the regulatory proceeding can advance even if the stock deal is found to be non-compliant with existing statutes. The Public Service Company of New Mexico's board has supported the PIPE deal as a necessary financial step ahead of the merger, though hundreds of residents, advocacy organizations, including Albuquerque-based group Prosperity Works, and public officials have opposed the acquisition. Opponents cite historical precedents where private equity ownership in other sectors led to service cuts and increased costs for consumers, prompting these groups to urge commissioners to reject the takeover. The Public Regulation Commission is scheduled to consider the validity of the stock deal at a hearing later this month. The state attorney general's brief explicitly states that if the commission determines the PIPE transaction is void and incurable, the deal would have no legal effect, effectively requiring the joint applicants to re-submit their merger application for approval. This includes the necessity to address any new issuance or sale of stock related to the acquisition from the ground up, potentially delaying or fundamentally altering the timeline for Blackstone's proposed ownership of PNM. The outcome will determine whether the original financing structure remains intact or if the companies must restart regulatory approvals under corrected terms.