NewPower Holdings Inc. on Wednesday disclosed that it is discussing a possible sale of the company to Centrica plc, which is been on a buying spree for North American retail service providers. Centrica, a leading provider of energy and other essential services in the UK, also is the largest retail energy marketer in North America with more than two million customers. NewPower’s 800,000 customers would further add to Centrica’s massive customer base.

Pending resolution of a number of issues, the companies are discussing a cash tender offer of $1.05 per share for all of NewPower’s outstanding stock and warrants (or about $66 million), subject to price adjustments based on changes in commodity prices and a variety of conditions for closing the tender offer. NewPower shares rose nearly 30% by the Wednesday afternoon to 84 cents/share on the news.

Holders of a majority of the outstanding shares and warrants of NewPower Holdings have indicated their intention to support the transaction currently being discussed, NewPower Holdings noted. “There can be no assurance that the outstanding issues will be resolved and a transaction will be announced,” NewPower Holdings said.

NewPower Holdings, through its subsidiary, The New Power Co. (TNPC), serves customers in 10 states and has been working to build the first national provider of electricity and natural gas to residential and small commercial customers in the United States.

TNPC, which received significant start-up assistance and supply and risk management help from Enron, in late November of last year, reaffirmed its earnings and business plan, while making clear that it is an independent and separately held company from Enron (see Daily GPI, Nov. 30, 2001). Among other things, TNPC reaffirmed fourth quarter 2001 loss per share guidance of $0.65 to $0.73.

NewPower Holdings in December 2001 said that as a result of the bankruptcy filing of Enron, NewPower had terminated all of its commodity supply and forward contracts with Enron and its affiliates. NewPower said at the time that it expected to replace supply with other providers without missing delivery to customers or suffering any material economic loss (see Daily GPI, Dec. 6, 2001). For information about NewPower Holdings, go to its web site at: www.newpower.com

If the NewPower Holdings transaction comes to fruition it would continue the buying spree that Centrica has been on the past couple of years. Most recently, Centrica last month announced that its Centrica North America division will double its retail customer base in Canada with the purchase of Calgary-based Enbridge Inc.’s retail energy marketing and business services division for C$1 billion (see Daily GPI, Jan. 29). The Enbridge transaction is subject to regulatory approvals, and completion is anticipated in the spring.

In December 2000, Centrica completed its acquisition of Energy America LLC, taking full ownership and management control of the gas and electricity marketer that serves nearly 400,000 U.S. residential and small business customers (see Daily GPI, Dec. 13, 2000).

And in the summer of 2000, Centrica scooped up Calgary’s Direct Energy Marketing Ltd. and its primary marketing agent Natural Gas Wholesalers for C$912 million (see Daily GPI, Aug. 22, 2000).

The Enbridge deal will boost Centrica’s customer base to more than two million households, making it by far the largest unregulated energy retailing company in North America. The company already was among the largest retail marketers with more than 1.3 million gas customers in Canada and the United States. It recently signed up 600,000 electricity customers in Ontario in advance of market opening at the beginning of May.

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