CalEnergy Wins Battle for Northern Electric

CalEnergy Inc. said it won a two-month battle to buy Britain’s Northern Electric for $1.54 billion in cash and assumed debt. CalEnergy said it owns 50.3% of Northern’s shares in a hostile tender offer, and extended its offer for the remaining minority interest. Northern said it will advise shareholders on what action to take after Thursday and declined further comment. The power-plant builder and operator is counting on Northern’s expertise in building and operating transmission lines to help it win power contracts in the Philippines, Canada and South America. The move would boost earnings at a time when revenue from key California plants is expected to drop. “Northern Electric is a good company with good people and a strong customer base,” said David Sokol, CalEnergy’s chairman and chief executive. CalEnergy is the latest U.S. company to buy a British electricity supplier to add new sources of revenue as Congress prepares to end U.S. utilities’ decades-old monopoly on energy sales. CalEnergy shares rose 75 cents to close at $30.50 on the New York Stock Exchange.