Rapid City, SD, Nov. 28, 2005 — Black Hills Corp. Inc., a diversified energy company, announced that it has proposed a merger with NorthWestern Corp., a neighboring utility company, in a stock-for-stock merger of the two companies.
Black Hills said that its objective in combining with NorthWestern is to build a strong diversified regional energy company that would serve the best interests of shareholders, customers and the communities served by the two companies.
Under the proposal, NorthWestern stockholders would receive Black Hills stock based upon an exchange ratio with an implied value for NorthWestern shares between $33 to $35 per share, or a 13% to 20% premium based on NorthWestern’s current stock price of $29.15.
Black Hills said that it would consider paying a part of the consideration in cash. Based on 35.7 million NorthWestern shares outstanding, the total equity value of the transaction to NorthWestern stockholders would range between $1.178 billion and $1.250 billion.
The proposal was outlined in a letter from David R. Emery, chairman, president and CEO of Black Hills, to Michael J. Hanson, president and CEO of NorthWestern Corp. and Linn E. Draper, chairman of the board of NorthWestern.
Black Hills proposal is subject to customary conditions, including negotiation of a definitive agreement, completion of final due diligence and receipt of required regulatory and other approvals. Black Hills is being advised by Lehman Brothers. Morgan, Lewis & Bockius LLP is the legal advisor to Black Hills.