DIRK LAMMERS AP Business Writer
SIOUX FALLS, S.D. NorthWestern Corp. shareholders on Wednesday approved an agreement to have an Australian company buy the utility company in a cash deal worth $37 per share. The $2.2 billion purchase by Babcock & Brown Infrastructure, of Sydney, Australia, must still be approved by several state and federal regulatory agencies. Stockholders cast proxy votes representing 22. 5 million shares, or 63 percent of those outstanding, approving the sale. Less than one percent voted against it. “Obviously, we thought the transaction was not only excellent value for shareholders, but good for our customers, our communities, our employees and everyone involved,” said Michael J. Hanson, NorthWestern’s president and chief executive officer. The votes were tallied and certified Wednesday afternoon at NorthWestern’s annual shareholders meeting, which was brief and free of controversy. Employees, executives and board members made up most of the 50 or so attendees at the Sioux Falls Convention Center. Hanson said the new owners will bring financial stability to a company that emerged from bankruptcy in November 2004 after some tumultuous times. “They’ll also help with access to capital,” Hanson said in an interview after the meeting. “BBI is much larger in the capital markets around the world continually. We’re not. We get there occasionally.” Steven Boulton, BBI’s chief executive officer, said NorthWestern is a perfect fit for the company, which owns similar utility businesses in New Zealand and the United Kingdom.
Boulton considers North- Western a long-term investment and said BBI will continue to invest in the communities it serves. That includes setting aside replacement capital for aging assets and looking at incremental growth in an area and planning capital investments to achieve that growth. “We don’t take a six-month view. We take a 10- or 15-year view and start to plan for those investments and think about the capital that’s needed to be accessed and required to grow the business,” Boulton said. Officials with BBI and NorthWestern hope regulators will approve the deal by mid- 2007. The Federal Energy Regulatory Commission and state utility commissions in South Dakota, Nebraska and Montana must give their stamps of approval. The Committee on Foreign Investment in the United States (CFIUS) issued its OK on July 31. NorthWestern’s predecessor company was $2.2 billion in debt with its stock trading below $1 when it filed for Chapter 11 protection in September 2003. The utility emerged from bankruptcy in November 2004 after shedding more than 60 percent of that debt. It issued 35.5 million new common stock shares as a debt-for-equity swap to creditors, rendering the previous shares worthless. Hanson said much of the company’s troubles were caused by the previous management’s expansion into unrelated industries “which failed.” NorthWestern is now on solid financial footing, improving its cash flow and reducing its debtto- capital ratio to 47 percent, he said. NorthWestern Corp. is the parent company to NorthWestern Energy, which sells electricity and natural gas to about 628,500 electric and natural gas customers in South Dakota, Montana and Nebraska. Shares of NorthWestern were down 10 cents to close at $34.65 Wednesday on the Nasdaq.