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NorthWestern Mum on Suitors; Speculation Grows

Speculation grew last week in Montana regarding potential merger/acquisition partners for the state's largest utility owner, South Dakota-based NorthWestern Energy Corp. But a NorthWestern spokesperson said the company's board has not set any timetable for deciding on competing offers, and would not speculate on any potential new suitors in addition to Black Hills Corp. and a public sector coalition of Montana cities, named Montana Public Power.

Midwest-based Xcel Energy and MidAmerican Energy Holdings Co. were named last Monday in a Montana Standard news report as possible buyers of NorthWestern, but neither of those two companies, nor NorthWestern would verify the report. "That is just pure speculation on the newspaper reporter's part," said the NorthWestern spokesperson.

The Standard, published in Helena, MT, reported that NorthWestern spokesperson Claudia Rapkoch said the continuing board review process would take "several weeks, after which the board will evaluate any forthcoming offers."

Rapkoch is the same spokesperson that told NGI there is no timetable for the board to conclude its review, and no one has confirmed the interest of Xcel or MidAmerican publicly, something NorthWestern would never do during review and/or negotiation stages.

An Iowa-based spokesperson for MidAmerican said company policy is not to mention any prospective deals before they are finalized, but he did direct NGI to the March 4 letter to shareholders by billionaire Warren Buffett, CEO of MidAmerican's holding company, Berkshire Hathaway. In that letter, Buffett summarized MidAmerican's now completed purchase of PacifiCorp from ScottishPower and said the company is looking to buy more utilities.

"You can't expect to earn outsized profits in regulated utilities, but the industry offers owners the opportunity to deploy large sums at fair returns -- and therefore, it makes good sense for Berkshire," Buffett wrote in the 22-page letter summarizing the parent company's results from all of its business units, including utilities. "A few years back, I said that we hoped to make some very large purchases in the utility field. Note the plural -- we'll be looking for more."

Along with the two newest reported suitors, the Montana newspaper noted the state's second largest utility owner, North Dakota-based MDU Resources Group, has not thrown its hat in the ring for NorthWestern, saying publicly that it thinks both the Black Hills and Montana Public Power informal offers are too high.

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