news : utilicorp plans to spin off aquila energy * utilicorp wants to spin off aquila
kansas city business journal  ) 09 / 29 / 2000
by brian cookson
utilicorp united inc . wants to parlay the rapid growth of its aquila energy
subsidiary into a piece of a new , larger aquila .
the kansas city - based utility has plans to spin off aquila , possibly
retaining ownership of a third of it , selling another third to a partner and
offering the remainder in the stock market . the move could allow aquila , now
engaged primarily in trading power and natural gas , to gain more hard assets
of its own and seek higher valuation from investors .
 & we really think the value of our company is much higher than the market
currently values it because it values it as a utility ,  8 aquila spokesman al
butkus said .
aquila , which moved its headquarters to kansas city last year , has been the
engine behind earnings growth for utilicorp . for the second quarter of this
year , aquila reported earnings before interest and taxes ( ebit ) of $ 49 . 5
million , up 113 percent from the previous year . utilicorp as a whole had
ebit of $ 103 . 9 million for the second quarter of 2000 .
aquila may be able to attract more interest because it wouldn  , t carry the
image of a traditional utility , butkus said .
richard stuebi , president of next wave energy , agreed . the head of the
denver - based electricity consulting firm said wall street historically has
undervalued conglomerates such as utilicorp .
 & in general , the stock market prefers companies that are clean or pure
plays ,  8 stuebi said .
aquila  , s strategy comes as little surprise to stuebi . as much success as the
company has had , he said he thought aquila would need to get bigger to
compete .
 & in most aspects of the energy business , the race for scale is on ,  8 he said .
aquila also could increase its value to shareholders by looking for hard
assets to match its marketing prowess . aquila ceo keith stamm said the
company could address this need by building , such as the new electric
generation plant it is building in pleasant hill . it also could buy
generation capacity or take on a partner with electric generation capacity .
stamm said the company is looking for such a partner but is keeping the other
two options open . finding a partner with power plants could become easier as
energy deregulation causes many utilities to look at separating generating
operations from power sales and distribution .
stamm said that aquila has talked to several companies and that an
announcement could come by the end of the year .
the timing of any initial public stock offering would be dependent on the
results of the search for a partner .
butkus said utilicorp isn  , t sacrificing its hold on aquila . instead ,
executives are hoping to own part of an infinitely more valuable company .
aquila already is moving to enter a new market  ) trading bandwidth , or
capacity on communications networks . stamm said the bandwidth market is
potentially several times larger than the energy market because
communications networks can be linked by satellite to anywhere in the world .
gas pipelines require a physical connection .
traders in the bandwidth market could include telecom companies or internet
providers that either have network capacity to sell or that need to boost
their capacity .
 & we like to see volatility , and we  , re seeing it ,  8 stamm said .
aquila is adding a crew of 35 to 40 people to begin trading bandwidth by the
end of the year . it won  , t be alone , however , as companies such as houston  , s
enron corp . also are getting into bandwidth trading .
* * * * * * * *
news : utilicorp plans to spin off aquila energy
* utilicorp wants to spin off aquila
kansas city business journal  ) 09 / 29 / 2000
by brian cookson
utilicorp united inc . wants to parlay the rapid growth of its aquila energy
subsidiary into a piece of a new , larger aquila .
the kansas city - based utility has plans to spin off aquila , possibly
retaining ownership of a third of it , selling another third to a partner and
offering the remainder in the stock market . the move could allow aquila , now
engaged primarily in trading power and natural gas , to gain more hard assets
of its own and seek higher valuation from investors .
 & we really think the value of our company is much higher than the market
currently values it because it values it as a utility ,  8 aquila spokesman al
butkus said .
aquila , which moved its headquarters to kansas city last year , has been the
engine behind earnings growth for utilicorp . for the second quarter of this
year , aquila reported earnings before interest and taxes ( ebit ) of $ 49 . 5
million , up 113 percent from the previous year . utilicorp as a whole had
ebit of $ 103 . 9 million for the second quarter of 2000 .
aquila may be able to attract more interest because it wouldn  , t carry the
image of a traditional utility , butkus said .
richard stuebi , president of next wave energy , agreed . the head of the
denver - based electricity consulting firm said wall street historically has
undervalued conglomerates such as utilicorp .
 & in general , the stock market prefers companies that are clean or pure
plays ,  8 stuebi said .
aquila  , s strategy comes as little surprise to stuebi . as much success as the
company has had , he said he thought aquila would need to get bigger to
compete .
 & in most aspects of the energy business , the race for scale is on ,  8 he said .
aquila also could increase its value to shareholders by looking for hard
assets to match its marketing prowess . aquila ceo keith stamm said the
company could address this need by building , such as the new electric
generation plant it is building in pleasant hill . it also could buy
generation capacity or take on a partner with electric generation capacity .
stamm said the company is looking for such a partner but is keeping the other
two options open . finding a partner with power plants could become easier as
energy deregulation causes many utilities to look at separating generating
operations from power sales and distribution .
stamm said that aquila has talked to several companies and that an
announcement could come by the end of the year .
the timing of any initial public stock offering would be dependent on the
results of the search for a partner .
butkus said utilicorp isn  , t sacrificing its hold on aquila . instead ,
executives are hoping to own part of an infinitely more valuable company .
aquila already is moving to enter a new market  ) trading bandwidth , or
capacity on communications networks . stamm said the bandwidth market is
potentially several times larger than the energy market because
communications networks can be linked by satellite to anywhere in the world .
gas pipelines require a physical connection .
traders in the bandwidth market could include telecom companies or internet
providers that either have network capacity to sell or that need to boost
their capacity .
 & we like to see volatility , and we  , re seeing it ,  8 stamm said .
aquila is adding a crew of 35 to 40 people to begin trading bandwidth by the
end of the year . it won  , t be alone , however , as companies such as houston  , s
enron corp . also are getting into bandwidth trading .
* * * * * * * *