Asserting that the current landscape for merger-related activity in the utility sector is “kind of barren,” Dominion Resources Inc. CEO Thomas Capps on Friday denied rumors that the Virginia-based power company is in merger talks with another unnamed company.
“The ones that we probably could acquire — [Dominion CFO Thomas] Chewning would have a heart attack because you’d have to issue so much equity that they would be dilutive, and so they’re out,” Capps said in a conference call with investors following Dominion’s release of fourth quarter 2003 financial results.
As for other companies Dominion may be interested in acquiring, Capps noted that “it takes two to tango and we haven’t found anybody to tango with, so right now we have no acquisition or merger activity going on.”
Dominion had been “rumored with one particular company and we have not talked to them.” Declining to name the company, Capps added, “We see no indication that they want to do anything, and even if they did, we can’t make the numbers work.”
While it doesn’t look like Dominion will be combining with another company anytime soon, it hasn’t hesitated to pull the trigger on individual asset acquisitions. Dominion, for example, in November, reached an agreement with Wisconsin Public Service Corp. and Wisconsin Power & Light Co. (WP&L) to purchase the Kewaunee Nuclear Power Plant located in northeastern Wisconsin.
Dominion in 2003 also agreed to buy the 240 MW Gordonsville power station in Virginia from subsidiaries of Calpine Corp. and Edison International. Federal and state regulators signed off on this acquisition last year.
In the fourth quarter of 2003, Dominion reported a net loss in accordance with GAAP of $130 million (40 cents per share) compared to net income of $339 million ($1.12 per share) for the same period of 2002. Operating earnings for the quarter were $274 million (84 cents per share) compared to operating earnings of $342 million ($1.13 per share) for the same period in 2002.
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