Eastern Enterprises stock price jumped more than 10% yesterdayto $43.62/share on news it is evaluating strategic alternativesthat could include share repurchases, joint ventures or a sale ofall or part of the company.

Eastern has retained Salomon Smith Barney to assist its boardand management in the review. The process will include anassessment of its current strategy of consolidating New England gasdistribution utilities following regulatory approval of its mergerswith Colonial Gas and EnergyNorth, which are expected by next monthand next summer, respectively. The two LDC additions come on theheels of Eastern’s purchase of Essex Gas late last year. Combinedwith subsidiary Boston Gas, the purchases will make the company thelargest gas distributor in New England, serving more than 800,000customers throughout Massachusetts and New Hampshire.

“We have made substantial progress in achieving our strategicobjective of consolidating New England gas distribution companiesfor the benefit of both our customers and shareholders,” said CEOJ. Atwood Ives. “As a result of the dramatic changes taking placewithin the utility industry, Eastern’s board of trustees andmanagement believe now is a prudent time to undertake a review ofall of Eastern’s options.”

Eastern also owns and operates Cincinnati-based MidlandEnterprises, a leading carrier of coal and a major carrier of otherdry bulk cargoes on the nation’s inland waterways, and ServicEdge,which is the largest unregulated provider of residential HVACequipment installation and service to customers in Massachusetts.

The company reported a net loss of $2.6 million ($0.11/share)during the second quarter, compared with net income of $52.3million ($2.30/share). The loss was attributed mainly to a one timecharge related to pooling-of-interest accounting for the Essexmerger last October and to several other factors which will havelittle impact on future earnings. Gas distribution operationsshowed an operating loss of $1.9 million compared with operatingincome of $8.1 million in 2Q98. Marine transportation operatingincome was down about $2 million to $5.8 million, and the company’sother businesses, including ServicEdge, reported a combinedoperating loss of $1.2 million compared to an operating loss in2Q98 of $2.6 million.

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