Posted on 09/29/2003 4:57:54 AM PDT by MeneMeneTekelUpharsin
HOUSTON--(BUSINESS WIRE)--Sept. 26, 2003--Dynegy Inc. (NYSE:DYN) today announced that it is engaged in exclusive discussions with Exelon Corp. (NYSE:EXC) related to a possible sale of Illinois Power Company, Dynegy's regulated energy delivery business.
Any transaction between the parties would be subject to satisfactory completion of Exelon's due diligence, negotiation of final terms and structure, negotiation and execution of definitive agreements, receipt of board of directors and required regulatory approvals and other conditions. Dynegy does not anticipate making any further announcement about this potential transaction until a definitive agreement is reached or discussions are terminated.
Dynegy Inc. provides electricity, natural gas and natural gas liquids to wholesale customers in the United States and to retail customers in the state of Illinois. The company owns and operates a diverse portfolio of energy assets, including power plants totaling approximately 13,000 megawatts of net generating capacity, gas processing plants that process more than 2 billion cubic feet of natural gas per day and approximately 40,000 miles of electric transmission and distribution lines. Certain statements included in this news release are intended as "forward-looking statements." These statements include assumptions, expectations, predictions, intentions or beliefs about future events, particularly the entering into of a transaction regarding the sale of Illinois Power Company. Dynegy cautions that actual future results may vary materially from those expressed or implied in any forward-looking statements. Some of the key factors that could cause actual results to vary materially from those expressed or implied include the satisfactory completion of Exelon's due diligence, the parties' ability to negotiate final terms and structure and to negotiate and execute definitive transaction agreements, the receipt of board of directors and required regulatory approvals and the satisfaction of other conditions precedent to the consummation of any such transaction. There can be no assurance that such conditions will be satisfied or that any such transaction will be agreed to or consummated. More information about the risks and uncertainties relating to these forward-looking statements are found in Dynegy's SEC filings, which are available free of charge on the SEC's web site at http://www.sec.gov.
As the article states, the net impact depends entirely on the actual terms of the proposed sale--and on what Dynergy does with the funds it receives from the sale.
The situation is analogous to that of a landlord who owns a rent-controlled property. It may be that a prospective buyer would be interested in living on the property himself, and the law would permit the owner to evict the current tenant(s) in order to occupy the premises himself. The result would probably be to significantly increase the market value of the property, due to its being freed from its controlled rent.
Similarly, Dynergy is hoping to find a buyer for Illinois Power whose situation enables the buyer to operate the utility more profitably, and who would therefore be willing to buy it for a price that exceeds its worth to Dynergy.
I think (s)he came up with a very good analysis. Posted for later referral.
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