(From Buffalo News (New York), provided by LexisNexis)
Publication: Buffalo News (New York)
David Robinson, The Buffalo News, N.Y.
Dec. 20--National Fuel Gas Co. is asking New York's utility regulators to investigate whether the hedge fund that wants to change the way the Amherst-based energy company is run is complying with the state's utility laws.
National Fuel, mirroring a move it made in Pennsylvania more than a month ago, on Wednesday asked the state Public Service Commission to determine whether New Mountain Vantage, which controls 9.7 percent of the company's stock, is trying to acquire a controlling interest in the company.
If the PSC were to rule that was the case, New Mountain could be forced to obtain approval from the commission to hold the shares. Regulators also could hold hearings on whether New Mountain's acquisition of National Fuel stock is in the public interest.
"Public utility law is designed to protect utility companies," said Julie Coppola Cox, a National Fuel spokeswoman. "Any entity like this that's trying to influence, or take over, a utility should be observant of those laws."
New Mountain is nominating its own slate of three directors in the February shareholder vote on the three open seats on National Fuel's board. The company also has recommended that National Fuel sell several of its businesses, change the ownership structure of others and speed up the pace of its drilling operations on the nearly 1 million acres of land the company controls in New York and Pennsylvania.
"National Fuel's petition is without merit," said Nina Devlin, a New Mountain spokeswoman. The investors believe their plan would increase shareholder value for National Fuel's stock holders, while "preserving the reliability" of its utility operations.
The filing "is merely another tactic being employed by National Fuel's entrenched board to frustrate the federal securities laws and to disenfranchise shareholders from electing the board
representatives they desire," Devlin said.
National Fuel, in its petition, alleges that New Mountain and "other hedge funds and similar entities" it has been acting in concert with control more than 20 percent of the company's stock, topping the 10 percent threshold that would require PSC approval.
The petition asks the PSC to force New Mountain to disclose how much stock the hedge fund and its allies have accumulated while "advancing its scheme to gain control of National through the purchase of stock by allies that remain cloaked in anonymity."
Devlin said New Mountain already has disclosed its direct holdings, as required by the Securities and Exchange Commission, and would update that information if it were to change.
In addition to accelerating its Appalachian drilling, New Mountain has recommended that National Fuel sell its smaller energy marketing, timber and landfill gas businesses, along with its Gulf of Mexico oil and natural gas wells, using the proceeds to buy back stock or pay a special dividend to shareholders.
National Fuel said it believes New Mountain, whose plans would effectively break up the company, should have sought approval from the PSC before it positioned itself to have "substantial influence and control" over the way the utility business is run.
A similar petition still is pending before the Pennsylvania Public Utility Commission.
No comments:
Post a Comment