As much as CMS Energy Corp. might wish it to be true, the rumorthat Dynegy Corp. may acquire it just doesn’t fit the profile ofwhat the energy marketer has been on a path to do recently,according to a Houston financial analyst who currently tracksDynegy for investors.

“Chuck Watson (Dynegy CEO) and his team are diligent in thekinds of acquisitions that they want to make,” said Merrill Lynch’sDonato Eassey. “CMS doesn’t fit the profile, if you will, of thetypes of acquisitions that Dynegy is likely to be involved in,”Eassey responded to questions about published reports that Dynegywas interested in CMS.

Eassey said that Dynegy, based in Houston, has its “hands fullright now” with recent acquisitions, including its purchase of Extant,the wholesale communications provider (see Daily GPI, Aug. 3)) and two deals involving powergeneration facilities. One deal, just announced last week, involvesthe purchase of two power generating facilities in Newburgh, NY, with1,700 MW for $903 million (see Daily GPI, Aug. 9).

In late July, Dynegy also announced it had started full-scaleoperations at its 800 MW Rockingham Power Plant in North Carolina, thelargest facility developed under its planned generation developmentprogram (see Daily GPI, July 28).

“Dynegy’s got a lot going on. I don’t think the CMS rumor has alot to it,” Eassey said.

Both Dynegy and CMS officials declined comment on the report,which first surfaced on Monday, citing anonymous sources who saidthat Dynegy had been buying CMS shares, and might acquire thecompany. In particular, the anonymous sources said that Dynegywanted CMS’s Panhandle Eastern Pipe Line Co., a 6,300-mile gaspipeline that connects North Texas with the U.S. Midwest. CMS’subsidiaries also include Consumers Energy, a Michigan gas andelectric utility.

As to whether there are rumors about Dearborn, MI-based CMSbeing gobbled up by someone else, Eassey said that he wouldn’t besurprised to see someone considering it, perhaps even a companyheavily involved with the Internet.

“A lot of tech issues and telecommunications companies areburning their cash quickly,” he said, with mega mergers likeAOL-Time Warner. He said energy companies, which are becoming moreinvolved in telecommunications, are likely targets for companiesoutside the realm of the energy sector. Utilities, he said, are”very cheap on a historical profile, so when you get good currency,it might be a good strategy to align yourself if you are atelecommunications or a tech company with a utility.”

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