Boston, MA 06/03/2014 (wallstreetpr) – The private equity firm Blackstone Group L.P. (NYSE:BX) continues to put its money where its heart is. The company can be seen pursuing energy investments with vigor as it anticipates growth in the industry. The company’s latest energy target is Duke Energy Corp (NYSE:DUK).
Blackstone Group L.P. (NYSE:BX) has teamed up with Riverstone Holding to bid on Duke Energy’s power plants in the Midwest in a deal that could fetch $2.5 billion for Duke Energy. The energy company has earmarked a portfolio of 11 power plants for sale as it does not consider the assets strategic to its business thesis. As such, several private equity firms have stepped forward to bid for the assets.
Towards the sale of the 11 Midwestern electricity power plants, Duke Energy hired Morgan Stanley (NYSE:MS) and Citigroup Inc (NYSE:C) to advise it on the sale of the assets. According to Duke Energy’s documents marketing the sale, the 11 power plants served energy providers that include First Energy Corp, Dominion Resources Inc and Dayton Power and Light Co.
Betting On Price Recovery
The shale boom in the U.S. has created a price strain for electricity generators because of the lower costs of natural gas. However, in bidding for the Duke Energy’s electricity facilities, Blackstone Group L.P. (NYSE:BX) and its partner Riverstone are betting on a recovery in electricity prices.
Other investors are also making the same bet, and they include Energy Capital Partners, a private equity firm focused on energy, and Energy Investors Fund, another energy-focused private equity firm.
Blackstone’s growing interest in energy is in the public domain. The company recently put $685 million to acquire three gas-fired power plants in Texas from Direct Energy, U.S. unit of Centrica PLC.
Other Dealings
In addition to energy investment, Blackstone Group L.P. (NYSE:BX) recently sold a portion of its real estate properties in the Boston area for $2.1 billion. The five office properties in Boston sold last month were part of the real estate assets that the company gained through its acquisition of Equity Office Properties Trust for $39 billion before the financial crisis.
