TXNM Energy (TXNM) Drops 0.26% to 2025 Low Amid Regulatory Scrutiny of Blackstone Bid

Shares of TXNM Energy (TXNM) fell 0.26% on Thursday, marking a new low since July 2025, with an intraday decline of 0.41%. The stock’s weakness reflects growing uncertainty around its proposed $61.25-per-share acquisition by Blackstone Infrastructure Partners LP, now under legal and regulatory scrutiny. A shareholder investigation led by Halper Sadeh LLC has raised questions about the fairness of the offer, potentially complicating the deal’s approval timeline and investor confidence.

The transaction faces significant regulatory hurdles in Texas and New Mexico, where utility mergers are subject to strict public interest evaluations. Both states’ regulatory bodies—Texas’s Public Utility Commission and New Mexico’s Public Regulation Commission—must approve the merger, with historical precedents like Avangrid’s 2021–2024 failed bid for TXNM’s predecessor highlighting the challenges. Regulators are likely to demand concessions such as ratepayer credits or governance reforms to secure approval, which could delay the expected 2026 closing and dilute shareholder value.

Legal scrutiny of the $61.25-per-share offer, a 23% premium to TXNM’s 30-day volume-weighted average price, adds another layer of risk. If the Halper Sadeh investigation finds the bid inadequate or raises fiduciary concerns, it could prompt renegotiations or alternative bids. However, prolonged legal challenges may erode market confidence, exacerbating downward pressure on the stock. Analysts note that the outcome could set a precedent for future utility mergers, particularly in states with restrictive regulatory environments.

Blackstone’s all-equity financing structure, including a $400 million private placement of TXNM shares, avoids increasing leverage but introduces dilution risks for existing shareholders. The acquisition also involves a leadership transition, with current CEO Pat Collawn stepping down in favor of COO Don Tarry. While this aligns with Blackstone’s long-term strategy, it raises questions about governance continuity under new ownership. Past merger attempts, such as Avangrid’s rejected bid, underscore the importance of addressing regulatory and operational concerns proactively.

The broader context of Texas and New Mexico’s regulatory climates—rated “restrictive” by industry analysts—further complicates the deal’s path. Delays or stringent conditions from regulators could reshape the transaction’s profitability, particularly if Blackstone is forced to accept ratepayer concessions or service obligations. Investors will closely monitor developments in the legal and regulatory fronts, as well as the company’s ability to maintain transparency and stakeholder trust amid ongoing challenges.