In what is becoming an extremely verbose war between neighboring South Dakota energy holding companies, NorthWestern Corp. Monday fired off another letter to its pursuer, Black Hills Corp., reiterating that its board has not rejected the Black Hills' offer to start serious merger talks, and it wants to consider the offer as one of several strategic alternatives, but only after a confidentiality agreement between the two companies is hammered out. Black Hills is balking at the current confidentiality proposal.
Calling some of Black Hills' statements in a letter sent late last week "inaccurate and misleading," NorthWestern CEO Michael Hanson said his board of directors will not negotiate with any party through the press or through certain of its shareholders.
"If Black Hills is serious about a potential transaction with NorthWestern, then Black Hills should negotiate in good faith directly with our management and board," NorthWestern's Hanson wrote to Black Hills CEO David Emery in the latest correspondence, which characterized the so-called "stand-still" provisions in its proposed confidentiality agreement as "customary and reasonable" requirements.
In terms of attempting to set the record straight from its point of view, Sioux Falls, SD-based NorthWestern challenged Rapid City, SD-based Black Hills' contention that the proposed stand-still restrictions are "onerous" and would survive for a year without exception. Hanson called this characterization "incorrect and unfortunately misleading," noting that the provisions would terminate "immediately and automatically," given certain events, such as if NorthWestern supported or failed to reject another competitive offer.
Hanson further corrected Black Hills' contention in its Dec. 8 letter that there has been a "positive public response" to the offer from NorthWestern shareholders. "This, too, is inaccurate and misleading," Hanson wrote. "While it is true that certain of our shareholders with a short-term investment horizon have urged us to sell the company, they do not represent the interests or views of all shareholders."
Black Hills stepped up its increasingly aggressive play for NorthWestern in a recent letter to the company's board, stating it can't be "unreasonably constrained from pursuing what it views as a perfect strategic marriage of companies (see Power Market Today, Dec. 12)."
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