Want to Buy Bankrupt PG&E? California’s Governor Is Seeking Bids

(Bloomberg) -- Bankrupt utility giant PG&E Corp. has said its assets aren’t for sale. Don’t tell California’s governor that.

While attending a conference in San Francisco on Tuesday, Governor Gavin Newsom said he had encouraged San Francisco to make its $2.5 billion bid to buy PG&E’s power operations within the city’s limits. And he wants to see more offers.

“I back more competition,” he said. “I am very specifically encouraging others to come into this space and to make some bids. We want to create a competitive space -- and all of it with an eye on different approaches.”

Newsom has called for a major reorganization of San Francisco-based PG&E since the company orchestrated a massive blackout that plunged more than two million people into darkness last week -- a measure it took to keep power lines from sparking the kind of catastrophic wildfires that forced it into bankruptcy in January. PG&E has drawn outrage from customers and politicians alike who’ve blasted it for poorly communicating the shutoffs and making them more extensive than they needed to be.

Newsom on Tuesday floated the idea of spinning off PG&E’s gas business and of breaking up the company into different pieces. “All of that needs to be considered,” he said.

Last week, PG&E rejected San Francisco’s offer, saying it significantly undervalues the company’s assets and that a deal wouldn’t be in the best interests of its customers. The company also said it doesn’t need to sell its businesses to finance a restructuring and emerge from bankruptcy by next year.

California’s utility commission has already opened a proceeding to consider whether PG&E needs to be restructured. The agency would have to sign off on any transaction. It’s also holding an emergency meeting with company executives on Friday to discuss the mismanagement of last week’s blackout.

©2019 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.