With active pursuers from the private and public sectors courting its favor, Sioux Falls, SD-based NorthWestern Corp.’s board Tuesday confirmed that it has entered confidentiality agreements with an unspecified “select number” of suitors. In a terse status report to shareholders, the board confirmed that its assessment of all of its “strategic options,” including the two outstanding public offers, is still incomplete and it needs what it called “formal due diligence.”

Expected to start this week, the due diligence process “may take several weeks,” according to the board’s written four-paragraph announcement that reiterated it would not identify the parties with which it is in negotiations and undergoing due diligence. In the meantime, the board “has not decided to pursue any specific strategic alternative,” the announcement said.

More than a year out of Chapter 11 bankruptcy restructuring, NorthWestern since mid-2005 has been pursued hotly by two entities: (1) a coalition of Montana cities that have formed a public-sector entity, Montana Public Power, to buy the multi-state utility holding company’s assets; and (2) its neighbor in South Dakota, Black Hills Corp., which has made the more recent and more aggressive offer.

Using financial adviser Credit Suisse First Boston to start the due diligence, NorthWestern’s board said that it had “entered into confidentiality agreements with a select number of parties who have expressed an interest in participating in the process. Under the terms of the confidentiality agreements, the identities of these parties will not be disclosed.”

The board’s written statement said it was “gratified by the quality of the expressions of interest” received thus far, and that such interest demonstrates that the strategic review process “is the best means of maximizing stockholder value.”

“It is expected that the board will make its determination following completion of due diligence and confirmation of interest by parties, which may take several weeks. The board has informed all interested parties that it may terminate the process at any time and that there is no guarantee that any transaction will take place.”

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