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CNE Going, Going, Gone
N.Y.'s Energy East scoops up Southern Conn. Gas parent
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Business New Haven
5/3/1999
By: BNH
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The Bridgeport-based Connecticut Energy Corp. (CNE), parent company of the Southern Connecticut Gas Co., has agreed to be acquired by Energy East Corp. of Albany, N.Y. in a stock-and-cash deal worth about $430 million, plus assumption of debt.
The definitive merger agreement signed April 23 will add 160,000 natural gas customers in southern Connecticut to Energy East's existing one million customers, primarily in upstate New York.
Connecticut Energy's corporate headquarters will remain in Bridgeport, company officials said, and its Southern Connecticut Gas subsidiary would remain as the operating utility under the agreement.
The deal gives Energy East increased exposure in New England. As well, it positions Connecticut Energy to increase the penetration of natural gas in New England, where natural-gas usage markedly trails that in the rest of the nation.
Connecticut Energy shareholders will receive $42 a share, with half payable in cash and half payable in Energy East shares. Connecticut Energy shareholders will have a choice of receiving stock or cash, “subject to proration,” the companies said in a statement.
Depending on the average price of Energy East's stock in the 20-day period prior to the close of the deal, CNE shareholders will receive between 1.43 and 1.82 shares of Energy East. This equates to stock valued at between $23.10 and $29.40 for each Energy East share.
Energy East Corp. generates and distributes electricity and natural gas and has annual revenues of about $2 billion. For fiscal 1998 ending last September 30, Connecticut Energy yielded a net income of $19 on revenues of $242 million.
The transaction, which is subject to shareholder and regulatory approval, is expected to close within 12 months.
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