Archive for Wednesday, February 7, 2007

Aquila sells its natural gas business to new company

Black Hills will purchase Aquila’s electric utility in Colorado and its gas utilities in Colorado, Kansas, Nebraska and Iowa.

February 7, 2007, 11:57 a.m. Updated February 7, 2007, 12:19 p.m.

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— Aquila Inc.'s natural gas operations in Kansas - based in downtown Lawrence - are being sold to Black Hills Corp., a South Dakota-based utility, the companies announced this morning.

The deal, expected to close in about a year, is one component of Black Hills' decision to buy Aquila's gas operations in Kansas and related operations in three other states - Colorado, Iowa and Nebraska - for $940 million in cash.

Black Hills intends to retain all 30 Aquila employees in Lawrence and all 132 statewide, as the company expands its reach as a regional utility, said Curt Floerchinger, an Aquila spokesman in Lawrence.

The deal, approved by the boards of both companies, awaits regulatory approval.

The Black Hills transaction comes as Aquila plans to sell its other utility assets to Great Plains Energy Inc., another Kansas City-based utility.

Great Plains, the parent company of Kansas City Power and Light, said it will acquire all the outstanding shares of Aquila in a deal valued at about $1.7 billion. Kansas City-based Great Plains will pay $4.54 in cash and stock for each Aquila share. The shares closed Tuesday at $4.67 and were down 32 cents at $4.34 in early trading Wednesday on the New York Stock Exchange.

Great Plains will also assume about $1 billion in Aquila's debt.

A news conference to discuss the purchase was scheduled for 10 a.m. CDT Wednesday.

Great Plains said the transaction will boost its revenues over $3 billion and increase its customer base to about 800,000. The combined Black Hills/Aquila utility will have more than 750,000 retail and wholesale customers in 12 states.

Great Plains also said it plans to retain most employees currently working for Aquila's Missouri-based electric utility, although it acknowledged some job losses are possible. Black Hills said it plans to keep all employees who work for the operations it is acquiring.

The two companies said there will be no changes to their senior management teams or board of directors.

Both transactions are expected to close in about a year.

Shares of Great Plains were up 10 cents at $32.15 in early trading on the New York Stock Exchange. Shares of Black Hills were down 21 cents at $38.87.

Comments

unite2revolt 8 years, 5 months ago

I hope for everyone's sake that this new company remains as generous to our community as Aquila has been.

b_asinbeer 8 years, 5 months ago

Generous? Wait until you see my gas bill.

shirinisb 8 years, 5 months ago

hopefully their customer service sucks less

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