Broadening its scope in the wake of a pending offer from neighboring South Dakota-based Black Hills Corp., NorthWestern Corp.’s board of directors met Tuesday to “consider potential strategic alternatives to maximize stockholder value,” the company said in a formal announcement. It confirmed that the potential $1.25 billion Black Hills offer was among the alternatives being examined (see Daily GPI, Nov. 29).

In a related move, the board adopted a so called “stockholders’ rights plan” to protect shareholder interests and to allow the board “to review and evaluate its strategic alternatives in an orderly fashion.”

“The rights plan is similar to plans adopted by many other companies to protect the interests of stockholders by discouraging coercive, unfair or abusive takeover tactics that do not offer fair value to all stockholders and that could impinge on the board’s review of strategic alternatives,” a NorthWestern spokesperson said.

NorthWestern said that under the rights plan, preferred stock purchase rights will be distributed as dividends at the rate of one right for each share of common stock of the company held by stockholders of record as of the close of business on Dec. 15. The rights expire on Dec. 5, 2015. “The rights generally will be exercisable only if a person or group acquires beneficial ownership of 15% or more of the NorthWestern stock, or commences or publicly announces a tender or exchange offer upon consummation of which they would beneficially own 15% or more of the common stock,” NorthWestern said.

Black Hills made its offer just before the Thanksgiving holiday last month but only publicly acknowledged it after NorthWestern announced its board would review the offer. Black Hills emphasized the stock-for-stock merger proposal was only an “offer” that awaited the NorthWestern board’s decision as whether to pursue a marriage through future negotiations.

Black Hills CEO David Emery stressed publicly last week that coming out of a completed Chapter 11 bankruptcy a year ago, NorthWestern is strong on the regulated utility side, an area where Black Hills wants to put more emphasis. On the other hand, Black Hills sees its current strengths in the wholesale generation and management of fuel assets where it holds coal, oil and natural gas reserves.

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