TXNM/Blackstone

TXNM: Intervenors call out stock purchase by Blackstone affiliate

A group that provides limited-income households in New Mexico with social and financial help accused a Blackstone affiliate of unlawfully acquiring a significant stake in TXNM Energy in the lead-up to the private-equity firm’s proposed acquisition of the state’s largest electric utility.

Attorneys for Prosperity Works alleged Blackstone and its merger partner may have broken New Mexico law by executing what they characterized as unapproved stock transactions.

Contemporaneously with the May 18, 2025, signing of the merger agreement, Blackstone Infrastructure invested $400mn in TXNM through the purchase of 8 million newly issued shares at a price of $50 per share by way of a private placement. That transaction closed on June 2, 2025. 

Prosperity Works contends New Mexico statutes governing M&A of public utilities require prior express authorization for such transactions by the New Mexico Public Regulation Commission (NMPRC).

“The fact that such a significant transaction, involving the issuance and sale of 7.6% of TXNM’s outstanding shares with a compensation to TXNM of $400mn, is unlawful and void, will likely have severe consequences,” Prosperity Works attorneys Steve Michel and Cara Lynch wrote in a motion filed with the regulator.

The attorneys asked the NMPRC to issue an order directing the joint applicants to show why the stock purchase does not contravene state law and for TXNM and Blackstone “to address the implications of such a determination”.

Until now, TXNM and Blackstone have taken pains to brief the governor’s office, state lawmakers and intervenors on their planned merger, and their efforts have generally been well received.

But the legal brief could introduce a new line of argument for the intervenors and similarly aligned groups such as New Energy Economy (NEE) — one that the commission might have to deal with before delving further into the details of the merger itself. NEE is a vocal critic of the merger and is widely credited with helping to topple the prior purchase of PNM Resources by Avangrid. 

In its brief to the commission, Prosperity Works noted the stock purchase made TopCo TXNM’s third largest shareholder — owning 7.59% of its shares. “By contrast, the largest owner, BlackRock, holds just 11.02%,” the brief noted, lamenting that “There was no prior express authorization by the commission for TopCo to acquire TXNM stock.”

Prosperity Works also accused TopCo of “acting in concert with TXNM to acquire the TXNM stock” and argued that the merger application “is replete with evidence that the $400mn stock purchase by TopCo was made to advance and enable the acquisition of TXNM”.

“There is simply no credible way to characterize the stock purchase otherwise,” the attorneys added.

TXNM did not respond to requests for comment by the time of publication.