MarketSpan To Buy Back Stock
GARDEN CITY, N.Y. (AP) _ MarketSpan, the Long Island utility that replaced LILCO, has announced a share buyback aimed at restoring investor confidence after the resignation of its chairman.
The energy company said Monday that it would buy back as much as a tenth of its shares _ or about $450 million worth _ to try to boost its stock price.
Its stock tumbled recently amid disclosure that MarketSpan’s chairman, William Catacosinos, had taken a $42 million payout when the Long Island Lighting Company disbanded. He resigned Friday after complaints from politicians and ratepayers.
The buyback is to begin Aug. 13, MarketSpan’s new chairman, Robert Catell, said Monday in a telephone session with about 150 investors and analysts. Catell told them that stock price was ``greatly undervalued.″
During the dispute about severance pay, the price slid from about $37 a share to about $26.
The company was created May 28 through a merger of Brooklyn Union Gas and what was left of LILCO after its electricity service was sold to the Long Island Power Authority. MarketSpan received about $2 billion for selling part of LILCO to a state agency.
Gov. George Pataki had backed a state takeover of LILCO as a way of lowering electric rates. The high rates were blamed in part on losses suffered when the utility built, but never opened, the $5.5 billion Shoreham nuclear power plant.