With the news that Kentucky's electric utilities appear to be for sale and suitors include Duke Energy, we were reminded of 1998-99, when Duke's now-chief executive was at Cinergy and wanted to merge with the Kentucky utilities.
Cinergy never would confirm officially that it had been talking with LG&E Energy, parent of Louisville Gas & Electric and Kentucky Utilities. But good sources discussed it, and it became fairly well known that the companies performed "due diligence" to see if a marriage made sense. In the end, it was known, though never officially said, that Cinergy chief Jim Rogers could not come to terms with LG&E chief Roger Hale on several issues, including which of them would run the merged company.
This was back in the days after Cinergy had been formed by merging Public Service of Indiana with Cincinnati Gas & Electric. In November 1998, our Electric Utility Week reported that "Rogers and Hale are known as hard-charging, hands-on executives who likely would be reluctant to cede power."
Analysts noted at the time that Cinergy and the LG&E companies were contiguous. They still are; that's one thing that hasn't changed. Since then, however, Cinergy has gone on to become Duke Energy, which now has Ohio and Indiana utilities as well as the Carolina Duke utilities. Jim Rogers now heads all of Duke. The LG&E companies are owned by Germany's E.ON, which reportedly wants to sell them to help reduce its debt.
Duke is said to be looking at the purchase, our correspondent Bob Matyi reports, but so is the city of Louisville, which has confirmed its interest. The likely $5 billion or $6 billion price tag could be an awfully big hurdle.
One analyst described Duke as "the logical buyer" and noted that Rogers is even from Kentucky. This might be fulfilling an old ambition.
Leave a comment