sa国际传媒官网网页入口

State Public Regulation Commission hearing examiners on Monday said commissioners should reverse a $400 million sale of TXNM Energy Inc. stock to Blackstone Inc., a move that could complicate the New York-based private equity firm鈥檚 $11.5 billion bid to acquire the publicly traded company.

The sale last year of 8 million shares of TXNM stock gave Blackstone a 7.59% stake in TXNM. Regulators said it violated a law prohibiting utility mergers without prior approval from the PRC.

TXNM, which owns Public Service Company of New Mexico, and Blackstone argued that the stock sale was not connected to the multibillion-dollar buyout proposal filed with state regulators in August.

But the sale became an issue when sa国际传媒官网网页入口 nonprofit Prosperity Works filed a motion earlier this year saying the stock transaction violated New Mexico law.

New Mexico Attorney General Ra煤l Torrez, in his own February filing, cast doubt over the transaction, saying the 鈥渁cquisition must proceed in full compliance with the law.鈥�

The PRC asked Blackstone and TXNM to prove why the stock sale was not illegal, leading to the hearing examiners鈥� recommended decision.

But the companies鈥� argument did not prevail with hearing examiners Jocelyn Barrett and Patrick Schaefer. They recommended the companies not only unwind the stock purchase, but also pay penalties 鈥� $100,000 each to be levied on TXNM and two Blackstone-affiliates 鈥� 鈥渇or their knowing participation in the unauthorized transaction.鈥�

They also suggested that Blackstone and TXNM refile the acquisition with state regulators, so that it 鈥渁ccurately reflects the current posture of the transaction and any steps taken to address the unauthorized stock transaction.鈥�

TXNM and Blackstone declined to comment, saying the two companies are reviewing the decision.

The companies have a chance to file what are called exceptions to the hearing examiners鈥� report before commission hearings on the issue. If the three PRC commissioners agree with the hearing examiners鈥� recommendation, Blackstone and TXNM will have to unwind the transaction.

In April, TXNM President and CEO Don Tarry testified to state regulators that if the companies are ordered to unwind the stock transaction, it would result in an $800 million swing in its capital structure because TXNM would have to repay Blackstone $400 million using debt. TXNM has said in filings that the move could ultimately hurt ratepayers.

鈥淲e would have requested (PRC approval) in an expedited process,鈥� Tarry said in April. 鈥淏ut it would have been beneficial 鈥� to be able to do that to both eliminate the delay and the amount of work that would have been done.鈥�

Steven Michel, an attorney representing Prosperity Works, questioned the accuracy of Tarry鈥檚 statement, pointing to the TXNM CEO鈥檚 testimony that the company used at least a portion of the stock sale proceeds to pay down debt.

鈥淩egardless, at the end of the day, they really have no one to blame but themselves,鈥� he said of the companies in an interview. 鈥淚n New Mexico, the laws dealing with utility acquisitions are all one page long, and they have the highest-priced lawyers in the country dealing with this. And this wasn鈥檛 a difficult thing to figure out.鈥�

Mariel Nanasi, whose Santa Fe nonprofit New Energy Economy is a party in the case, said Monday鈥檚 recommendation 鈥渞aises serious questions about the fitness and judgment of the entities seeking to acquire one of New Mexico鈥檚 most important public utilities.鈥�

Her group has long been critical of past utility deals, including the failed takeover of TXNM by Avangrid Inc. just a few years earlier.

鈥淭hey spent millions of dollars on lawyers trying to explain away a transaction that never should have happened,鈥� Nanasi said. 鈥淭oday鈥檚 decision sends a clear message: billion-dollar Wall Street firms do not get a hall pass to ignore state law.鈥�

On Wall Street, TXNM鈥檚 stock fell more than 2% on the day, sharply declining after news of the decision was released. Prices slightly recovered in after-hours trading to roughly $58 per share.

The stock sale, which happened in the summer of 2025, came before the proposed acquisition was filed with state regulators in August, but around the time the two companies first announced the deal.

As part of the deal, Blackstone offered TXNM shareholders $61.25 per share in exchange for ownership of the company. Blackstone plans to delist TXNM 鈥� which also owns the utility Texas-New Mexico Power Co. 鈥� from the New York Stock Exchange.

Justin Horwath covers tech and energy for the Journal. You can reach him at jhorwath@abqjournal.com.