Yankee Energy Approves One Merger
Oct. 13, 1999
MERIDEN, Conn. (AP) _ Shareholders of Yankee Energy System Inc. accepted a $679 million, or $45 a share cash and stock, offer by Northeast Utilities, even though some anticipated that NU would soon become part of another power giant, Consolidated Edison Inc.
About 70 percent of Yankee shareholders voted Tuesday in favor of the merger that would make the Meriden-based natural gas distributor a subsidiary of the largest electric utility in New England.
The deal _ which returns to NU a company it was forced to spin off 10 years ago _ still needs the approval of federal regulators but is expected to be completed early next year.
Yankee Chief Executive Officer Charles E. Gooley made the case for the merger with NU to shareholders Tuesday, saying Yankee could not compete with bigger companies in the coming deregulated market.
``A number of natural gas companies in surrounding states and across the country have a customer base several times ours and are benefiting from the economies of scale these customer counts offer,'' Gooley said.
Yankee serves about 185,000 customers in 68 Connecticut cities and towns. Northeast Utilities serves more than 2.3 million customers in Connecticut, Massachusetts and New Hampshire.
Meanwhile, Wall Street was abuzz Tuesday with continuing rumors that Berlin, Conn.-based NU would be bought by New York's Con Ed or Britain's National Grid Group PLC.
Edward J. Tirello Jr., an analyst with Deutsche Banc Alex. Brown, said the combination makes sense.
``Con Ed has been looking to expand, and Connecticut is a very affluent market. There's a lot of synergies, and in the new world you've got to be big,'' he said.
The Wall Street Journal, citing a source it did not identify, reported Tuesday that Con Ed is offering a combination of cash and stock for NU.
Neither Con Ed nor NU has commented on the rumors, although Con Ed officials said last week the company was always on the lookout for a good investment.
Northeast Utilities stock, traded on the New York Stock Exchange, closed up 12 1/2 cents, at $21.25. Con Ed, also traded on the NYSE, was down 75 cents at $36.43 3/4. The merger rumors have led to unusually high trading volumes on both stocks.