RECENTLY, less than three months after UIL Holdings Corporation abandoned its bid to purchase Philadelphia Gas Works, an energy firm based in Spain - Iberdrola - announced that it was acquiring UIL in order to "help the company [diversify] away from Spain," according to the Financial Times.
That's great for Iberdrola, which now has an expanded portfolio in the United States, a much more economically stable nation than Spain. That's also great for UIL, which was purchased for $4.6 billion, including assumption of its debt in the deal.
But what would this have meant for PGW and its approximately 500,000 customers in Philadelphia?
According to its SEC filing, UIL and Iberdrola entered into a confidentiality agreement on Nov. 20. Knowing that these sensitive and detailed contracts do not get written and signed overnight, we on City Council can't help but wonder: When did UIL and Iberdrola begin discussing the possibility of a takeover? Was its effort to acquire PGW designed to help UIL stave off a takeover by a much larger company, or to increase its asking price?
It was always clear that buying PGW would be great for UIL. But we are more convinced than ever that selling PGW would have been a bum deal with a steep price tag for Philadelphia.
Darrell L. Clarke