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By David French

(Reuters) -Allete Inc, a U.S. power utility and renewable energy developer that has a market value of about $5.2 billion, including debt, is exploring a sale of the company, people familiar with the matter said on Tuesday.

Allete (NYSE:) is working with JPMorgan Chase & Co (NYSE:) on a sale process that has attracted suitors that include infrastructure funds and buyout firms, the sources said, cautioning that no deal is certain and asking not to be identified because the matter is confidential.

Allete and JPMorgan did not immediately respond to requests for comment.

Allete shares jumped 9% on the news to $61.22 in afternoon trading in New York on Tuesday, giving the company a market capitalization of about $3.5 billion. Allete also had net debt of about $1.7 billion as of the end of September.

Headquartered in Duluth, Minnesota, Allete has 150,000 electricity customers in northern Minnesota and 15,000 electricity customers, 13,000 customers and 10,000 water customers in northwestern Wisconsin. It also operates wind, solar, coal-fired, biomass and hydroelectric power generation assets across the Upper Midwest.

Prior to the news of the potential company sale, Allete’s shares had lost 14% of their value this year, underperforming a 12% drop in the S&P Utilities index, as the company’s pivot to renewable energy production weighed on its profitability.

The company plans to invest around $3.3 billion in clean energy initiatives and transmission projects by 2027, it said in an investor presentation last month.

Allete reported operating income of $36 million in the third quarter of 2023, little changed from the $33.4 million it posted a year ago. Its operating expenses came in at $348.8 million, little changed from the $354.9 million it posted a year ago.

Original: Stock Market News: Exclusive-US power utility Allete explores sale, sources say By Reuters