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The Empire District Electric Company Message Board

  • paulfingspears paulfingspears Nov 7, 2011 10:41 AM Flag

    Utilities this small make great buyout targets

    I think 2012 is going to be a busy year for utility consolidation and EDE looks like a nice target. Would like to see $43.00 per share buyout price, any opinions?

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    • The problem that I see is that does EDE cut divy every time a storm hits an area of theirs? I still have the stock but won't buy anymore because I lost confidence in EDE. I don't think they needed to cut divy because most of the storm was covered by insurance. I think Mgt wanted to keep bonus's in tact rather than pay us. My own opinion.

      • 2 Replies to romannorga
      • Yeah, if by "every time" you mean once and by "a storm" you mean an F5 tornado that decimated most of their service area. People cannot buy and use power if they are not connected to the grid.

        I think they did a great job getting service restored as quickly as possible. Insurance may help with some restoration costs, but much of that lost revenue is the reason for the div suspension.

        Anyway I found it an opportunity to buy shares at a 10% discount for 6 months of no 4% dividend, so it really didn't hurt investors who knew when to buy in.

    • They apparently had an agreement to be sold to Utilicorp/now Aquila (I think) about 10 years ago for $29.50 or so. The deal fell apart because of some regulatory issues, but maybe something will develop once again.

    • Will not happen here. The management and board are mostly local people and jobs are hard to come by especially in Joplin.

      They would rather have the big paycheck and perks than make money for shareholders. What else is new in corp. America?

      • 1 Reply to implants_2
      • Well a few thought the same thing about the sleepy little utility in Vermont. Skidding along for years and years between 19-24 bucks, paying a dividend around 4-4.5% a share. Investors woke up one morning and there it was. A buyout from a Canadian utility for $35.00 per share. A huge premium to the $24 bucks or so it was trading at the time.

        Yes that was CV / Central Vermont. Nobody predicted this move, but the acquiring company saw value and almost bought it until another company offered a slight bit more.

        Moral of the story is that these stocks are not just traded in the hometown or region. The investors will make the decision of whether the buyout is appeasing or not. After all the CEO will be the most motivated because for him or her it is retirement time!

        Right now Empire looks attractive because no dividend is being paid. It makes it much easier for an acquiring company.

        GLTA!

 
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