Avista Slows Shopping Spree, Plans Stock Purchase
At an annual meeting yesterday, Avista Corp. CEO T.M. Matthews
unveiled a new strategy that will include the purchase of 10% of
Avista's common stock and will defer any major acquisitions so
Avista can concentrate on the company's existing energy business.
"The share repurchase program is an expression of the confidence
we have in the underlying strength of our company, in our
strategies for long-term growth and the belief by us and others
that our stock is very undervalued in the market today," he said.
Matthews added the company has re-evaluated its strategy of
acquiring regulated assets in the Northwest. Although it still
makes sense, there are few acquisition opportunities available that
would be accretive to earnings in the first year, a significant
factor for Avista Corp. in any purchase scenario, he said. Current
price expectations, which are based on other recent industry
activity, are not attractive to the company at this time. "We are
still interested in growing our customer base, acquiring electric
and natural gas distribution, generation and storage assets, and
realizing cost savings and synergies-but at the right price. We
will not overpay for assets," he said.
Along with its partners, Avista recently agreed to sell the
1,340 MW Centralia Power Plant and the adjacent coal mine to
TransAlta of Calgary. The company also recently formed a joint
venture with STEAG AG, Germany's largest independent power
producer, with the intention of investing in various power
projects. Avista has a similar agreement with Cogentrix Energy to
develop natural-gas fired generating plants in the Pacific
Northwest. Recent important acquisitions have included the first
quarter 1999 purchase of Vitol Gas & Electric, which has
substantially expanded Avista's energy marketing and trading
presence in the eastern United States and has established the
company as a significant participant in the emerging coal marketing
business. In January, Avista also purchased a majority interest in
One Eighty Communications and formed Avista Communications, a
competitive local exchange carrier that provides local dial tone,
data and Internet services in the Pacific Northwest.
©Copyright 1999 Intelligence Press Inc. All rights reserved. The
preceding news report may not be republished or redistributed, in
whole or in part, in any form, without prior written consent of
Intelligence Press, Inc.