Kadas’ hostile takeover 

Although Missoula committed Oct. 24 to taking the next step in its joint effort to purchase NorthWestern Energy and transform it into a public utility, it did so hesitantly and after a stormy debate. Following nearly three hours of discussion, City Council deadlocked on approval of a second $100,000 investment, which would fund due diligence should the deal move ahead. Also included in the vote was a $100,000 termination fee the city would have to pay if it backs out of a contract at the last minute.

The tensest moment came at the meeting’s end, when Mayor Mike Kadas, who’s also chairman of Montana Public Power Incorporated (MPPI), broke the tie in favor of moving ahead after Council tied 5-5. When he voted aye, local citizens who had spoken against the bid and the handful of NorthWestern representatives in attendance stood up and abruptly walked out. Moments earlier, councilpersons Ed Childers, John Engen, Heidi Kendall, Jack Reidy and Stacy Rye had voted in support of the motion, while Jerry Ballas, Lou Ann Crowley, Clayton Floyd, Don Nicholson and Mike Peissig opposed it.

The four other municipalities—Helena, Bozeman, Great Falls and Butte-Silverbow—that make up MPPI are in the process of considering their next $100,000 contributions, Kadas says. The $2 billion bid to buy the utility, which NorthWestern has soundly rejected in months past, received a boost Oct. 19 when the company’s largest shareholder, Harbert Distressed Investment Master Fund, sent a letter urging NorthWestern to consider MPPI’s offer. Harbert, which owns more than 20 percent of NorthWestern’s stock, also said it had discussed the offer with other shareholders, and they too were in support. NorthWestern’s board promptly and unanimously voted against accepting the offer, again.

The Oct. 24 debate was rife with concerns about the deal, though Kadas and supporting council members strongly defended its merits. Citizens expressed worries both practical (about finances, public involvement and governance) and philosophical (one man said it “reeks of socialism” while another said it was a necessary first step toward controlling an essential public service).

  • Email
  • Print

Comments

Subscribe to this thread:

Add a comment

© 2014 Missoula News/Independent Publishing | Powered by Foundation