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Connecticut Natural Gas Seeks Sale or Acquisitions

Connecticut Natural Gas Seeks Sale or Acquisitions

CTG Resources Inc., parent of Connecticut Natural Gas, announced it has retained Paine Webber Inc. to advise it on strategic alternatives to maximize shareholder value, including the potential sale of the company and acquisitions of nonregulated enterprises to expand the company's district heating and cooling activities.

"With the recent entry of a number of large players into the Northeast energy markets, the size and scope of operations needed to compete increases dramatically," CTG Chairman, President and CEO Arthur C. Marquardt said. The company includes The Energy Network, an unregulated subsidiary. CNG provides natural gas service to approximately 142,000 residential, commercial, and industrial customers, principally in greater Hartford and Greenwich, CT.

In the last year Massachusetts' Eastern Enterprises, parent of Boston Gas, has offered to buy nearby distributors, Colonial Gas Co. and Essex County Gas. And Northern Indiana Public Service reached across the country and grabbed Bay State Gas, the so-called "plum" among a flock of small Massachusetts distributors last December.

Also in December Boston Edison parent BEC Energy announced it would buy Cambridge, MA-based combination gas and electric utility, Commonwealth Energy System, parent of Commonwealth Electric Co., Cambridge Electric Light Co., Canal Electric Co., and Commonwealth Gas Co.

Then in January Energy East Corp., parent of New York State Electric & Gas, put in an offer to buy Connecticut Energy Corp. (CNE) for $617 million, paving the way for the combined utility to add 160,000 new gas customers and at the same time continuing to shrink the number of pure gas utilities.

The New England area is marked by numerous small distributors, who analysts expect to see combined over the next few years into just three or four large combination utilities.

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