By scrolling downward, you can read six articles detailing the breakup of a merger agreement that were written over two and a half weeks in early 2001.

28Feb2001 USA: UPDATE 3-Northeast Utilities wants Con Ed merger assurance.
(Recasts starting with 3rd paragraph to add ConEd statement, NUs response and analyst comments; and to provide closing stock prices.)
By Jim Brumm
NEW YORK, Feb 28 (Reuters) - Northeast Utilities demanded on Wednesday a written assurance from Consolidated Edison Inc. that it will stick to a definitive merger agreement reached by the two utilities 16 months ago, which would create the largest utility in the Northeast.
Northeast's stock fell to a three-month low after the news, and a utility analyst said he believes Con Edison might want to renegotiate the terms of the $7.5 billion merger.
As the stock market closed Wednesday, Con Edison released a brief statement saying it is reviewing the merger in light of changes at Northeast since the agreement was reached, adding it views the agreement as continuing in effect pending completion of this review.
The response is "insufficient," stated Northeast spokeswoman Mary Jo Keating, adding the utility is still seeking Con Edison's written assurance it intends to abide by the merger agreement.
Northeast said its board requested the Con Edison statement by 9 a.m. EDT Friday, adding failure to provide such assurance would be treated as a breach of the October 1999 merger agreement. The company "would pursue all available legal remedies" in that case, its statement added.
Asked the reason for its statement, Keating said the assurance was needed so Northeast could proceed with the necessary paperwork to implement the merger promptly.
STOCK BOUNCES IN HEAVY TRADING
Northeast's stock dropped to $19.60, its lowest price in three months, early in Wednesday's market session; then advanced in heavy trading to close at its highest price of the day - $20.40, down 63 cents for the session. Wednesday's composite volume of2.34 million shares was nearly quadruple the stock's average trading level.
Con Edison's stock was the big gainer in a mixed utilities group, adding 77 cents to close at $26.87 on trading of 1.04 million shares - nearly 70 percent above its average volume.
ABN AMRO analyst Daniel Ford said he believes Con Edison "could be trying to renegotiate the transaction," adding Northeast is likely resisting.
Standard & Poor's equity analyst J. McCann said Con Edison's failure to provide assurance has increased uncertainty about the merger.
A failure by the two companies to merge would have favorable credit implications for Con Edison, as it
will no longer have to issue debt as part of the merger financing package, according to an S&P credit
analysis. 
The credit considerations of a merger are considerably less significant for Northeast than at the time the
merger was announced because the company's credit profile has moved much closer in quality to that of Con Edison, S&P added.
Con Edison agreed to pay $3.29 billion in stock and cash for Northeast in a deal worth $7.5 billion including assumed debt. At the time the merger was announced, the agreement put a value of $25 each on Northeast's shares - which have traded below that level since, reaching a high of $24.5625 on the final trading day of 2000.
Following the sale of Northeast's nuclear assets and a payment for delays in the transaction, Con Edison's payment was scheduled to be $26.70 per Northeast share if the deal was completed this month.
Either company can pull out of the deal without penalty on April 13, if conditions of the agreement have not been met.
Northeast said in a statement that its board was seeking "assurances that Consolidated Edison will
consummate the pending merger at the price set forth in the agreement promptly following receipt of the last required regulatory approval, from the Securities and Exchange Commission, which is expected as early as mid-March."
Its statement noted three federal and seven state regulatory agencies have approved the transaction. After Connecticut regulators failed to change what Con Edison called "limited but significant" financial conditions imposed on the merger in late November, the company said it was awaiting regulatory decisions in New Hampshire and New York before making a final decision on the merger.

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The company, which owns the utility that distributes electricity in New York City and its northern suburbs and gas in much of that area, had made no further comments on the merger until Wednesday's
four line statement.	~
MORE VALUABLE COMPANY
Its officials did not return phone calls Wednesday seeking comment on Northeast's statement and analysts' views, or those seeking elaboration of the statement, which said "Con Edison is reviewing the prospects for the merger in light of the changes in Northeast Utilities' businesses ... since the merger agreement. "
Northeast believes those changes have been for the better, Keating said, pointing out its statement said the company "is a substantially more valuable company today than when we entered into the merger agreement more than 16 months ago."
But not as valuable as its recent stock price indicated, according to analyst Ford. "If the deal breaks," he wrote, "we would look to be opportunistic with Northeast. We see at least $17-$18 of value ... and upside to $20-22 with a (stock) buyback."
The merger would create one of the largest U.S. utilities in terms of customers served.
(C) Reuters Limited 2001.	

02Mar2001 USA: UPDATE 1-Northeast Utilities gives Con Ed more time on merger.
.

(Recasts to add details from NU, analysts comments stock price, and background; Adds byline.)
By Jim Brumm
NEW YORK, March 2 (Reuters) - Northeast Utilities on Friday extended until Monday the deadline it imposed on Consolidated Edison Inc. to commit to the $7.5 billion merger deal the two electric utilities announced 16 months ago.
Northeast, New England's largest utility, on Wednesday threatened to take legal action unless Con Edison provided written assurance by Friday that the New York City-based utility plans to move ahead with the merger pending approval by the U.S. Securities and Exchange Commission.
That demand, and Friday's extension of the deadline, moved the stocks of both companies this week. Equity analysts speculated Wednesday that Con Edison was trying to renegotiate that deal reached in October 1999. Debt analysts from rating agency Standard & Poor's said a failure to merge would have favorable implications for Con Edison, which would no longer have to issue debt to finance the transaction. .
Northeast Utilities said both companies signed an agreement Friday extending the deadline to 5 p.m. EDT (2200 GMT) Monday. Because of this agreement, Northeast said, it expects to receive a definitive response from Con Edison by that time.
Both companies also have agreed to not start any litigation in connection with this matter until after the Monday deadline. Northeast had threatened legal action if Con Edison did not provide written assurance by 9 a.m. Friday.
The New York Stock Exchange delayed trading in Northeast Utilities' shares for nearly three hours Friday until the company released its statement. When the stock opened at mid-day, it was up 7 percent
to $21.00 - the best price paid for Northeast since it demanded Con Edison's assurance. In afternoon trading, the shares were still up $1.45 to $21.05.
Con Edison's stock declined steadily Friday and was down 87 cents to $35.73 in the final hour of the session.
Northeast Utilities' statement followed a two-line statement from Con Edison that said the deadline had been extended but did not elaborate.
Con Edison spokesman Michael Clendenin said the company would have no further comments on the matter.
Con Ed, which owns the utility that delivers power to New York city and its northern suburbs, agreed to pay $3.29 billion in stock and cash for Northeast in a deal worth $7.5 billion including assumed debt. At the time the merger was announced, the agreement put a value of $25 each on Northeast's shares which have traded below that level since, reaching a high of $24.5625 on the final trading day of 2000. Following the sale of Northeast's nuclear assets and a payment for delays in the transaction, Con Ed's payment under that original contract would be $26.80 by mid-April, according to ABN AMRO's U.S. utility analysts.	.
After Northeast Utilities' original statement Wednesday, these analysts had speculated that Con Edison was trying to renegotiate that agreement.
Neither company has responded to questions about those speculations.
Friday, the ABN AMRO analysts went on to say they believe the extension indicates Con Edison has "at least some willingness to proceed. At the same time, we doubt (Northeast Utilities) has interest in renegotiation. "
(C) Reuters Limited 2001.

06Mar2001 USA: UPDATE 2-Northeast Utilities says Con Ed refuses merger: terms.
By Jim Brumm
NEW YORK, March 5 (Reuters) - Consolidated Edison Inc. has advised Northeast Utilities that it was not willing to close the companies' pending $7.5 billion merger on the previously agreed upon terms, Northeast Utilities said Monday.
The Hartford, Conn.-based utility holding company's statement did not say what Con Edison was willing to do. And spokesman Jeff Kotkin was unable to elaborate.
Northeast Utilities said it would proceed with the suit first referred to last Wednesday when it asked Con Edison to provide written assurance it was willing to proceed with the transaction that would
create one of the largest U.S. utilities with customers stretching from New\York City to Canada.
New England's largest utility said it had notified Con Edison its refusal to proceed on the terms agreed to 16 months ago would be treated as a breach of that agreement and a suit would be filed to obtain the benefits of the proposed transaction for Northeast Utilities' shareholders.
Con Edison spokesman Michael Clendenin declined to discuss what the company had told Northeast Utilities.
In a brief statement, the New York City-based utility said it was in compliance with the merger agreement which remains in effect.
The statement went on to say certain aspects of Northeast Utilities' operations raise issues regarding the company's ability to satisfy its obligations under the merger agreement.
In particular Con Edison cited that obligations of Northeast Utilities' unregulated subsidiary, Select, to provide power it does not generate "pose 'a significant risk'."
Such contracts provided nearly half Select's revenues of $2 billion in 2000.
Northeast Utilities' statement responded to Con Edison's contentions before they were released, stating "The changes in our business since we signed the deal with Con Edison, have been overwhelmingly for the better."
"Our earnings for 2000 were above targets in all operations," it added. "We achieved a dramatic turnaround in our unregulated businesses, which delivered a profit of nearly $30 million last year." "We see no basis for Con Edison's refusal to proceed on the agreed upon terms," Michael Morris, chairman of Northeast Utilities said in the company's statement, "We have instructed our attorneys to take appropriate steps to protect our shareholders' interests," Morris said.
Con Edison, which owns the utility that delivers power to New York city and its northern suburbs, agreed to pay $3.29 billion in stock and cash for Northeast in a deal worth $7.5 billion including
assumed debt.	.
At the time the merger was announced, the agreement put a value of $25 each on Northeast's shares which have traded below that level since, reaching a high of $24.5625 on the final trading day of 2000. Following the sale of Northeast's nuclear assets and a payment for delays in the transaction, Con Ed's payment under that original contract would be $26.71 if the transaction were to be closed right now, Northeast Utilities pointed out.
Con Edison shares inched up 16 cents, or 0.5 percent, to finish at $36.05 on Monday, above a year low of$26.9375 and compared with its 52-week high of$39.5.
Northeast shares fell 10 cents, or 0.5 percent, to close at $21 on Monday. Its shares have moved within a $18.25 to $24.5625 range in the last year.
(C) Reuters Limited 2001.

06Mar2001 USA: UPDATE 1-Con Ed asks court to end $7.5 bin Northeast merger.
By Jim Brumm
NEW YORK, March 6 (Reuters) - A $7.5 billion merger agreement that would have created the biggest electric utility in the Northeastern United States broke up on Tuesday, as Consolidated Edison Inc. asked a federal court to end its agreement with Northeast Utilities.
The deal's collapse pushed Northeast Utilities stock sharply lower in heavy trading volume on the New York Stock Exchange. Consolidated Edison's shares rose slightly.
New York City-based Consolidated Edison asked the court to declare it has no obligations to Northeast, New England's largest utility. Northeast had pledged late on Monday to sue its former suitor to recover the value of the $7.5 billion transaction for its shareholders.
Northeast Utilities stock ended the day down $2.20 a share at $18.80 on composite volume of 2.4 million shares - nearly three times the stock's normal trading level. During the session, Northeast shares dropped to $18.33, a level unseen since late October, after Con Edison objected to restrictions placed on the merger by Connecticut regulators.
Con Edison's stock, meanwhile, rose 23 cents to close at $36.28 on trading of 835,200 shares - just above its average daily volume of 670,800.
Getting to the courthouse first, Con Edison asked the federal district court in Manhattan for a declaratory judgment that Northeast Utilities had failed to meet the conditions of the merger agreement.
In a statement, Con Edison said it "has filed suit in the Federal District Court in the Southern District of New York seeking a declaratory judgment that Northeast Utilities has failed to satisfy conditions precedent under the merger agreement."
Company spokesman Michael Clendenin declined to elaborate on the statement. But the court made the filing public later with certain financial information blacked out.
The suit said Con Edison seeks a court ruling that it has no further obligations to Northeast Utilities and that Northeast has no further or continuing rights under the deal.
Con Edison's statement went on to say the suit was in response to the Northeast Utilities statement
issued Monday. The New England utility pledged to sue Con Edison, charging that it breached the merger agreement when it would not abide by the terms set in October, 1999.
Con Edison's statement charged that Northeast Utilities violated the merger agreement by allowing its unregulated subsidiary, Select Energy, to enter into contracts to supply more power than it could provide.
In support of this view, the statement cites Northeast Utilities' prospectus filed Feb. 20 in connection with the sale of $263 million of floating rate, senior notes. The prospectus warned that Select faces "significant risk" in filling contracts for unregulated power sales after this year.
Northeast Utilities has declined to discuss Select's contracts since last Thursday. Company officials have been unavailable since the Con Edison suit was announced.
Analysts have said Con Edison was seeking an end to the deal since Northeast Utilities first threatened last Wednesday to take its merger partner to court. Some feel Northeast Utilities will trade near $18 per share in the near term, until it is boosted by stock buybacks or another merger deal.
(Additional reporting by Gail Appelson.)
(C) Reuters Limited 2001.

12Mar2001 USA: UPDATE 1-Northeast Utilities sues Con Edison for over $1 bln.
(Recasts to add details from lawsuit, background, stock prices and byline)
By Jim Brumm
NEW YORK, March 12 (Reuters) - Northeast Utilities on Monday sued Consolidated Edison Inc. for more than $1 billion for pulling out of a merger that would have created the largest natural gas and power distribution utility in the United States.
Last week Con Edison went to court seeking to void the merger pact the companies signed in October
1999, citing the risk in fixed price power sales contracts taken on by Northeast Utilities' unregulated power marketing and trading subsidiary, Select Energy.
Each company has called the other's suit "without merit."
In late trading on the New York Stock Exchange, Northeast Utilities shares were up 20 cents at $18.50, while Con Edison shares were down one cent at $36.43.
A week ago, Hartford, Conn.-based Northeast Utilities said Con Edison was unwilling to go through with the deal under the terms in the original agreement. Northeast Utilities called this a breech of the merger agreement and said it would file suit to obtain the benefits of the merger pact for its shareholders, with or without a merger.
Since then, Northeast Utilities' shares have traded as low as $18.21, their lowest price since February 2000, about four months after the merger agreement was reached.
Under the merger pact, Northeast's shares would be valued at $26.84 each if the transaction closed on or after April 10. The increase from the $25 price agreed to in October 1999 is due to an agreement to sell the utility's nuclear assets and agreed-to payments for delays in the transaction.
The Northeast Utilities lawsuit, filed in federal court in Manhattan, states that the cash and stock price of its outstanding common has risen to more than $3.7 billion from less than $3.3 billion when the original agreement was reached.
Northeast Utilities spokesman Jeff Kotkin said the increase is due to the increase in shares outstanding, following the company's acquisition of Yankee Energy, as well as the higher value per share. '
He said the total value of the transaction, including Northeast Utilities' debt and preferred stock, has increased to $7.75 billion from the $7.5 billion.
MERGER PREMIUM OF MORE THAN $1 BILLION
Northeast Utilities' suit says this results in a merger premium of more than $1 billion over the price at which the company's shares traded prior to the announcement of the merger.
The suit seeks to recover this premium as well as the company's costs seeking approval of the merger and the value of business opportunities lost due to restrictions imposed by the merger agreement. It asks that the full amount be determined by a jury trial.
Last Tuesday, the day after Northeast Utilities alleged breech of contract, New York-based Con Edison countered with asuit filed in the U.S. District Court for the Southern District of New York seeking a declaratory judgment that Northeast Utilities had failed to meet the conditions of the merger agreements, along with a ruling Con Edison has no further obligations under the 16-month-old agreement.
If the judgments Con Edison sought were granted, lawyers said, this would effectively end the agreement to merge the two companies to form natural gas and power distribution utility serving 6.4 million customers from New York City to Canada.
Northeast Utilities has described that suit as without merit and it is not mentioned in the suit the Hartford, Conn.-based utility filed with the same court Monday.
In Monday's response to Northeast Utilities suit, Con Edison reiterates earlier statements, saying it "has at all times been and remains in compliance with the terms of its merger agreement with Northeast Utilities."
Spokesman Michael Clendenin said the company would not elaborate on the brief statement, even to comment on its litany of agreement violations stretching back to last October.
ANALYST QUESTIONS CONED'S PERCEPTION OF RISK
In that suit, Con Edison cited Northeast Utilities' proxy last month for a $263 million senior note issue that said Select Energy has power under contract only through this year to meet contracts extending

through 2003.
But Deutsche Bank Alex. Brown utility analyst James Dobson called this a "strange" argument, adding
he's "try to figure out ConEd's legal strategy."	
Select is "not being hurt by being short" of power supplies for 2002 and 2003, Dobson continued, saying that his report on U.S. Electricity Supply & Demand Outlook being distributed this week projects New England will have adequate to excess power supplies both years.
ISO New England, the agency that operates the region's power transmission lines, has said it could be making power sales into New York as early as this summer.
Northeast Utilities' suit said Con Edison also cited the decline in the stock price of NEON Communications, a telecommunications company both utilities have invested in.
NEON's stock, which traded at an all-time high of $159 a share in February 2000, dropped as low as $3-1/2 on Dec. 21, 2000. Monday afternoon it was trading at 5-3/8, off9/16.
The suit said $100 million in potential earnings have been identified in addition to the undisclosed gains seen at the time of the original announcement when Con Edison said the merger would add to its earnings per share in the first full year after closing.
(C) Reuters Limited 2001.

18Mar2001 USA: Deal breakup adds Con Edison, Northeast to merger shoot-out.
By Jim Brumm
NEW YORK, March 18 (Reuters) - The failure of plans to create the nation's largest energy distribution utility has added two big targets to the utility merger shoot-out - Consolidated Edison Inc. and Northeast Utilities.
That was one point the chief executives of both companies could agree on.
But the way they communicated this view last week spoke volumes about the differences that had left the companies fighting over the crumbs of an agreement hammered out 16 months earlier.
In October 1999, Con Edison agreed to pay nearly $3.3 billion in stock and cash for Northeast's common stock in a deal worth $7.5 billion including assumed debt.
But in early March, Con Edison went to court seeking to void the merger pact citing the trading activities of Northeast's unregulated power subsidiary, Select Energy, and a drop in price of NEON Communications, a telecommunications company both utilities have invested in.
If the deal had closed, as scheduled in mid-April, Northeast's stock would have been worth more than $3.7 billion, the company said in a suit it filed last week, seeking at least $1 billion from Con Edison for what Northeast calls a breech of that merger contract.
TWO WAYS OF COMMUNICATING
Michael Morris, chief executive of Hartford, Conn.-based Northeast Utilities on Tuesday told investors gathered in person and on the Internet that the company's merger opportunities abound. There will be "no panic mode" as proposals are discussed, he continued, adding that Northeast was "not interested in offers for pieces" of New England's largest utility.
Addressing what many consider a major reason the merger failed - the restrictive limits imposed when Connecticut regulators approved the proposal, Morris said the company is "certain we would get a different order ... if we go back with a different partner."
In contrast, Con Edison's CEO Eugene McGrath, was talking to analysts individually and in small groups when he mentioned the possibility of a foreign buyer.
Some involved in investor relations put the name of Germany's largest utility, RWE AG, with the comments attributed to McGrath.
They pointed out RWE has begun talking about a U.S. listing for its stock and taking other actions to set the stage for such a move. It is also due to sell 3 billion of euro bonds next month and arranged a 5 billion euro bank credit line last week.
As for companies that might be interested in Northeast, several analysts have named KeySpan, National Grid and Energy East.
Although Energy East has not responded to phone queries about this possibility, spokesman for the other two companies pointed out they do not comment on speculation.
Asked how McGrath's meetings with analysts squared with the full disclosure rules detailed by the U.S.
Securities and Exchange Commission in November, company spokesman Michael Clendenin said: "We are following them," adding the company is aware of the SEC's reporting requirements. 
EXTENDED UNCERTAINTY EXPECTED
Analysts stress there will not be any merger bids as long as the lawsuits triggered by the merger's failure are pending.
One expects New York City-based Con Edison to drag the process out for a year and a half or two years, unless Northeast is granted its request for a jury trial. Stating this would result in a quick settlement, the analyst explained "Con Ed's not going before a jury in New York City."
The lawsuits are pending in the federal district court in Manhattan.
The resulting uncertainty is reflected in the stocks of both companies.
Con Edison closed Friday at $35.63, less than $10 above its February 2000 low $26.19. The stock traded at that level 16 months after reaching its all-time high of $56.13 in October 1998. A year later, with its stock about 15 points below that high, Con Edison agreed to acquire Northeast Utilities and watched the price slide continue.
Northeast's stock was slipping when the company first indicated problems with the merger by asking Con Edison for assurances the transaction would be closed as scheduled on Feb. 28. It turned downward Feb. 9 after trading at $24.35. The slide continued until last Wednesday, after Morris' comments, when it traded at $17.50, matching the low reached in September 1999 - a month before the merger agreement was announced. Friday, Northeast closed at $18.01 a share.
(C) Reuters Limited 2001.