ANCHORAGE - A Texas utility company has agreed to buy Enstar Natural Gas Co. and its current owner, Michigan-based Semco Energy Inc.
Sound off on the important issues at
Enstar is Southcentral Alaska's major natural gas utility. The proposed $867 million deal was announced Friday.
The deal must be approved by the Regulatory Commission of Alaska.
The commission will require the new owner, Cap Rock Holding Corp., to provide the same services to Alaska rate-payers for the same price, state regulators said.
"If they want to make any changes, they'll have to file a tariff case with the commission," said RCA spokeswoman Grace Salazar.
The purchase could take a year to complete and will not mean any immediate changes for utility workers, Semco officials said. The sale agreement maintains Semco's current salaries and benefits for two years.
Enstar spokesman Curtis Thayer said the company's new owner has deeper pockets than Semco.
"Hopefully, there will be more to invest in Alaska with this new owner," he said.
The deal would turn Enstar from a public company into a private one. Cap Rock is owned by Lindsay Goldberg & Bessemer, a $5 billion New York-based private equity firm.
Cap Rock has agreed to assume all of Semco's $515 million debt, which is most of the $867 million acquisition cost, company officials said.
There are also potential drawbacks to private-equity firm ownership, some observers of the deal said.
"You can't immediately get public information around a company's balance sheet to determine the health of a company," said Tony Izzo, Enstar's former chief executive.
However, such information will be filed and scrutinized by the RCA, he said.
In response to the sale announcement, Semco's share price on Friday jumped $1.79 a share to close at $7.79, a 30 percent increase. Cap Rock proposes to buy Semco for $8.15 a share.
Enstar has been part of Semco since 1999, when the Michigan natural gas company bought it for $290 million.
Enstar says it supplies natural gas to about 340,000 Alaskans.
Cap Rock does not own any power generation plants but owns distribution systems providing electricity in 28 Texas counties.
In addition to the RCA's approval, Semco shareholders must approve the sale. Also, Semco can try to obtain a more attractive buyout offer from other companies for the next 35 days.