GO
Loading...

Enter multiple symbols separated by commas

U.S. State Opposes NorthWestern Sale to Australia's Babcock Fund

Australia's Babcock & Brown Infrastructure said its planned $2.2 billion acquisition of utility NorthWestern has been opposed by a U.S. state regulator, knocking its shares lower.

The Montana Public Service Commission had instructed staff to draft an order to deny the purchase, the Australian-based infrastructure fund said in a statement. The order was expected to be voted on by commissioners by the end of June.

Babcock and Brown Infrastructure said all five commissioners came to the decision that the acquisition should not proceed.

NorthWestern serves about 640,000 electric and natural gas customers in Montana, South Dakota and Nebraska.

Two U.S. power industry mergers failed last year, due in part to state opposition over rate increases.

Exelon and Public Service Enterprise Group pulled the plug on their merger due to opposition in New Jersey, while FPL Group and Constellation Energy Group ended plans to join due to hostility in Maryland.

Northwestern, after seeing the events in other states, decided last year not to seek a rate increase that it was entitled to so it could concentrate on its pending acquisition.

Babcock and Brown Infrastructure said it was surprised by the Montana commission's stance and believed it had made a strong case that it would provide long-term stability for rate payers.

The company said the decision would not affect its distribution guidance of 14.25 cents per security in fiscal 2007, or its guidance for 2008 and 2009.

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

  • In a rare menu test, Chipotle is testing a Chorizo Burrito, a spicy sausage made with chicken and pork, in its Kansas City restaurants.

    In a relatively a rare move for Chipotle Mexican Grill, Chipotle began testing a new menu item Tuesday.

  • A prototype of a Diebold bank branch of the future.

    Big banks are spending on futuristic branches, but it's all a waste of time and money, say financial technology experts.

  • Nouriel Roubini

    Nouriel Roubini explains how and why more economic liquidity may have led to "severe market illiquidity."

U.S. Video