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Kentucky Utilities might be sold

There is increasing speculation that Kentucky Utilities is about to be sold — again.

The Financial Times reported Friday that North Carolina-based Duke Energy already had a deal to buy KU and Louisville Gas and Electric from E.On, a German utilities giant. The Times cited an anonymous source.

Reuters followed with a report Sunday that contradicted the Financial Times: It said that three anonymous sources had said there were three "shortlisted" bidders for E.On's Kentucky business (known as E.On U.S.) but that no deal had been reached.

In addition to Duke Energy, the other bidders were PPL, a Pennsylvania-based utility, and a group of Australians, Reuters reported. (A Bloomberg report said E.On is trying to reduce its debt and wants at least $5.35 billion for the companies.)

There's also the city of Louisville, which has long been interested in buying the companies.

On Friday, Louisville Mayor Jerry Abramson persuaded the city-owned Louisville Water Co. to acquire Wildcat Acquisition, a corporation created to bid on LG&E if the opportunity arises.

Abramson said if a willing-seller purchase of LG&E and KU seems likely, Louisville would ask other local governments if they wanted to get involved in ownership. Abramson did much the same thing six years ago, when there were rumors that E.On might be ready to jettison the Kentucky companies.

The main players aren't talking on the record. E.On won't even say whether the companies are for sale.

"There's a lot of unnamed sources out there suggesting a lot of different things, and we just do not comment on that at all," Duke spokesman Tom Williams said.

Because any transfer of ownership would have to be approved by the Kentucky Public Service Commission, the PSC's Andrew Mel nykovych called LG&E on Monday to inquire whether it had anything to tell the agency.

"They said that when they have something to tell us, they will tell us, but they have nothing to tell us," Melnykovych said.

Abramson's spokesman, Chad Carlton, said Monday that the Louisville mayor has been "reading those speculative reports like everybody else."

"If we kept a list of all the potential buyers that have been listed in the trade press for just the last three months, you probably would have 15 or 20," Carlton said.

He also said he suspected there could be some news on the Kentucky companies' future soon.

All the discussion in the trade magazines suggests strongly that something is likely to happen, he said.

Kentucky Utilities was based in Lexington until 1998, when it merged with the larger LG&E. Some leaders of the Lexington fight to acquire Kentucky American Water a few years later said they were motivated in part by the city's loss of the KU headquarters and its corporate leaders.

In 2000, a British company, Powergen, bought KU and LG&E for $3.2 billion. In 2002, E.On acquired Powergen for nearly $15 billion.

According to the E.On U.S. Web site, KU serves 518,000 customers in 77 Kentucky counties and five counties in Virginia. LG&E serves 318,000 natural gas and 390,000 electricity customers in Louisville and 16 surrounding counties.

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