Barclays Downgrades Hawaiian Electric, Would Rather Buy NextEra

In a report published Thursday, analysts at Barclays downgraded Hawaiian Electric Industries, Inc. (NYSE: HE) from Equal Weight to Underweight. The price target was also lowered from $32.50 to $26.00.The company's shares are currently trading at an about 3 percent discount to the acquisition price of NextEra Energy, Inc. (NYSE: NEE) and the analysts said that they would rather buy NextEra's stock directly, instead of through Hawaiian Electric.The shareholder's meeting to approve the acquisition of NextEra is scheduled for May 12 in Honolulu. For the merger to proceed, the company would need the affirmation of 75 percent holders of the outstanding shares of Hawaiian Electric's common stock. "Abstentions and broker non-votes will count as a vote against the merger," the analysts explained.While the analysts believe that achieving 75 percent votes in favor of the merger would prove challenging, the deal also faces risk associated with regulatory approval. According to Barclays, "Vocal opposition in Hawaii, as well as attempts to derail the merger, have come from a variety of sources, including local and state politicians, consumer advocates, customers, and solar providers."If the merger succeeds, there could be a 3 percent upside to Hawaiian Electric's stock, while a failure could lead to downside risk of about 19 percent.