THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Thursday, August 8, 1996 TAG: 9608080393
SECTION: BUSINESS PAGE: D3 EDITION: FINAL
SOURCE: ASSOCIATED PRESS
DATELINE: RICHMOND LENGTH: 38 lines
Virginia regulators have refused to sanction the proposed takeover of a British electric utility by Virginia Power parent Dominion Resources Inc., probably killing the deal.
The State Corporation Commission balked at the deal because of concerns about its ability to protect Virginia Power's 1.8 million customers from the investment's risks, according to a published report.
A Richmond newspaper said its sources estimated the proposed takeover at $2 billion to $2.5 billion.
Neither holding company officials nor the SCC would comment or even confirm that regulators had considered such a proposal. Federal securities law prohibits disclosure of pending transactions by publicly traded companies.
A 1992 federal law gives states a role in overseeing certain foreign investments by utility holding companies.
Approval is usually routine, but a previous clash between Dominion Resources and the SCC may have contributed to the British deal's impasse.
Two years ago, Dominion Resources challenged the SCC's authority to intervene in a management feud it was having with Virginia Power.
The attempted takeover involves East Midlands Electricity plc, one of the last electric distribution companies in Great Britain not taken over by private investors.
Three of the 12 companies have been bought by U.S. utility holding companies.
East Midlands, based in Nottingham, serves about 2.2 million customers.
Thomas E. Hamlin, an industry analyst at Wheat First Butcher Singer in Richmond, thinks the British distribution companies are good investments for U.S. utility holding companies.
``It depends on the price,'' Hamlin said. ``I don't know how much they're going to pay for it.''
KEYWORDS: DOMINION RESOURCES by CNB