HELENA, Mont., July 8, 2005 (PRNewswire) — Montana Public Power, Incorporated (“MPPI”), a Montana non-profit corporation formed for the purpose of bringing NorthWestern’s utility businesses under local control and public ownership, reiterated its commitment to acquiring NorthWestern Corporation.
Mike Kadas, Chair of MPPI and the Mayor of Missoula, Montana said: “We are disappointed with NorthWestern’s response, particularly because they chose not to discuss any of their apparent concerns with us and give us an opportunity to address them prior to the announcement of their decision. Since MPPI was formed more than a year ago, we have diligently planned our acquisition of NorthWestern to ensure that it would meet the needs of both NorthWestern shareholders and our local communities. We are confident that we have succeeded on both accounts.
For NorthWestern shareholders, we are offering a significant premium and are pleased with the positive reception we received in our discussions with them. For our communities, we are offering stability by ensuring long-term, high quality service at reasonable rates. We believe it is time for the NorthWestern board to move forward and do the right thing for its shareholders and local communities by entering into negotiations with MPPI to proceed expeditiously toward a purchase agreement.”
MPPI noted that, contrary to what NorthWestern has suggested:
* MPPI is offering compelling value to NorthWestern shareholders. Our offer represents:
— a 17% premium to NorthWestern’s unaffected closing stock price on April 28, 2005;
— a premium of 45%-85% to the per share equity value of NorthWestern estimated by its financial advisor less than 12 months ago in NorthWestern’s Second Amended and Restated Disclosure Statement dated August 18, 2004; and
— a multiple of 22.4x NorthWestern’s projected 2005 earnings, as estimated by Wall Street consensus forecasts (source: IBES). This compares with average multiples of 17.4x 2005 earnings for comparable regulated utilities with a focus on transmission and distribution, which we note are trading close to all-time highs.
* MPPI has received a commitment letter from Citigroup in an amount sufficient to consummate the transaction.
* MPPI contemplates financing this transaction consistent with established norms for public entities. MPPI’s projected coverage ratios are consistent with investment grade credit ratings.
* MPPI anticipates a relatively straightforward approval process that we believe will, with NorthWestern’s cooperation, allow the transaction to close by year-end. Importantly, MPPI is well-positioned to satisfy the criteria established by the Montana Public Service Commission in evaluating any sale of NorthWestern.
* The Montana Attorney General has issued a draft Opinion that there are no legal impediments precluding MPPI from acquiring NorthWestern and operating the utility.
* MPPI has the support of its local communities. In fact, a poll of Montana voters indicated support for public ownership of NorthWestern by a 2-to-1 margin.
On June 30, 2005, MPPI announced its offer to purchase all of the outstanding common stock of NorthWestern for $32.50 per share in cash. The total transaction value is approximately $2 billion, which includes the assumption of NorthWestern debt.
About Montana Public Power, Incorporated [ www.montanapublicpower.org ]
MPPI is a non-profit corporation formed in 2004 for the purpose of bringing NorthWestern’s utility businesses under public ownership. MPPI’s sole member is The Montana Public Power Authority, which is comprised of the cities of Bozeman, Great Falls, Helena and Missoula, along with the consolidated city/county government of Butte-Silver Bow, Montana.
About South Dakota Power Company
SDP is a non-profit corporation formed in 2005 for the purpose of acquiring NorthWestern’s electrical and gas transmission facilities in South Dakota and natural gas transmission and distribution facilities in three cities in Nebraska. SDP represents the interests of municipalities in South Dakota which comprise 70% of NorthWestern’s service territory in South Dakota.