PowerGen to Buy LG&E; Energy

PowerGen, the third-biggest power generator in Britain, today will announce plans to buy LG&E; Energy, Kentucky’s biggest utility, for about $3.2 billion in cash and will assume $1.5 billion in debt to establish a foothold in the U.S., people familiar with the buyout said. The offer is 60% higher than LG&E;’s closing price on Friday at $15.75 on the NYSE, one of the largest premiums ever paid for a utility company. PowerGen has made no secret of its desire to buy a U.S. utility, and news reports have linked the company to several potential partners in the past two years.