CalEnergy Co. bid $3.3 billion in cash and assumed debt Tuesday for New York State Electric & Gas Corp., and moved to raise its stake in the utility in preparation for a hostile takeover if its overtures are spurned.
In a letter to the utility’s board, CalEnergy said it will pay $27.50 a share in cash, or 29 percent more than the utility’s closing price Monday, if its target accepts a friendly offer. The cash portion of the bid is about $1.8 billion.
On Tuesday, NYSE&G stock rose $3.19, to $24.56, on the New York Stock Exchange.
“I love the offer. We’ve suffered with NYSE&G for a while now,” said Bill Turner, an analyst with Banc One Investment Advisers, which owned 308,900 NYSE&G shares as of March. The utility’s stock had fallen 4.6 percent in the 12 months before the offer.
Omaha-based CalEnergy, an operator of power plants that is expanding internationally, proved a formidable foe last year as it overcame both political and company opposition in its successful $1.5 billion takeover of Northern Electric PLC, a United Kingdom utility.
It’s willing to pay a premium for NYSE&G to get ownership of utility lines in New York, analysts said, where it already owns a power plant that provides electricity to the utility.
NYSE&G said it would review the offer.
