Ohio Gov. Bob Taft signed into law a bill requiring the state’sPublic Utilities Commission to investigate any hostile takeover biddirected at an Ohio gas utility at the time the bidder’s tenderoffer is made.

The governor’s signing of House Bill 452, sponsored by stateRep. David Goodman (R-Bexley), completed the process of adetermined effort by state policy makers to close a loophole inOhio law that would allow hostile takeovers of natural gasutilities to take place without adequate public review andscrutiny. H.B. 452 earlier had been approved by unanimous 99-0 and33-0 votes in the Ohio House of Representatives and Ohio Senate,respectively.

The bill contains an emergency clause that makes the new laweffective immediately rather than the customary 90 days from theday the Governor signs the bill.

“House Bill 452 is about disclosure and accountability. Itrequires companies to explain, in detail and on the record, howtheir hostile takeover bids would be beneficial for Ohio consumers,businesses and communities,” Goodman said. “The overwhelming showof bipartisan support for this legislation should send a loud andunmistakable message to Wall Street that Ohio is serious aboutprotecting its consumers from hostile takeovers that can’t be shownto be in their best interests.”

Under current Ohio law, any hostile takeover bid for acompetitive business or public utility in Ohio is subject toregulatory review. However, natural gas companies are not includedin this list of companies to be reviewed. The new law closes thisloophole with three provisions:

It requires the PUCO to begin a public investigation of anyhostile takeover bid for an Ohio natural gas utility at the time atender offer is made, providing full public review of the detailsof the takeover bid early enough in the process to ensure adequateconsumer protections.

The legislation requires the PUCO to issue an informationalreport on the proposed merger, which would provide the public andthe marketplace with the information they need to make informeddecisions about the potential risks and benefits of the attemptedhostile takeover. It requires the company seeking the hostiletakeover bid to demonstrate that its proposed takeover wouldpromote public convenience and result in adequate, reasonablypriced natural gas service.

The loophole addressed by Rep. Goodman’s legislation becameapparent during discussions of a current hostile takeover bid byIndiana-based NiSource, Inc. for Virginia-based Columbia EnergyGroup, parent company of Columbia Gas of Ohio, which isheadquartered in Columbus.

Joe Fisher, Houston

©Copyright 1999 Intelligence Press, Inc. All rightsreserved. The preceding news report may not be republished orredistributed in whole or in part without prior written consent ofIntelligence Press, Inc.