CHARLOTTE, NC (WBTV) - Duke Energy executives had a severe bout of buyers remorse and badly wanted to get out of their planned merger with Progress Energy, according to some explosive testimony in Raleigh on Thursday..
Progress chief Bill Johnson was ousted from his promised position as president and CEO of the combined company as soon as the merger finally did go through, and today he dished a lot of dirt about Duke in front of the North Carolina Utilities Commission.
"They wanted the merger. And then they didn't want it. And they couldn't get out of it, and then they didn't want to be stuck with me as the person who dragged them to it," Johnson said.
The complicated merger makes Duke the largest, most powerful utility in the country, and CEO Jim Rogers chased the deal for years, promising employees and shareholders it was the best move for them. So what happened? According to Johnson, the two companies were like a bride and a groom bickering before the wedding.
"The tensions between the teams were very high, the relationship between Mr. Rogers and I deteriorated," he said. "I believe some intemperate things were said, tempers flared."
But Johnson says it was ultimately Rogers who got cold feet. He claims Rogers bad mouthed the deal on Wall Street, saying things like, "We're better off without this deal," Johnson said. "We think it's going to be really hard to close it. There's a potential burdensome affect here."
Johnson said investors started coming to him with questions. "What is Duke up to? What are they doing?" he said.
But when Rogers sat before the commission last week, he gave no indication that he had wanted out of the merger. He was trying to explain to visibly angry regulators why they were surprised by Johnson's dismissal.
"There was a loss of confidence in his ability to lead," Rogers said. "Our board did not feel his style was appropriate or transferable to a leadership of the combined company."
Johnson told the commission that no one relayed that message to him.
"It seems odd to me that if these issues were burning issues I never heard about them from anybody," Johnson said.
When the utilities commission approved this massive merger, it did so under the belief that Johnson would be in charge. Now, commissioners say they feel misled by Duke, and they do have the power to take back their approval. They are continuing to hear testimony.
Duke Energy spokesman Tom Williams issued a statement denying Johnson's accusations. "Throughout the process, we strongly believed – and continue to believe – that the merger is in the best interests of our customers and shareholders," Williams said in the statement. "The evidence clearly shows that Duke Energy worked diligently to complete the merger throughout the 18-month merger review process."
North Carolina Supreme Court Chief Justice Burley Mitchell is operating as outside legal counsel to Duke Energy, and he also issued a statement: "Many allegations were made [at this hearing], but unfortunately the North Carolina Utilities Commission denied Duke Energy due process by refusing to allow us to question or cross-examine the three witnesses. I'm very disappointed by the commission's lack of due process. This was not a proper or fair hearing by any legal standard."