Progress Energy's stock is getting a positive bump following a Wall Street report saying the Raleigh-based power company is in preliminary merger talks with Charlotte-based Duke Energy.
The possibility of a merger was first reported by DealReporter, a financial information service, then rebroadcast by Bloomberg News.
DealReporter cited an unnamed source saying there's preliminary interest on Duke's part but Progress won't play unless it's paid at least $47 a share.
Investors apparently responded to the cue, and Progress's stock inched up from $43.39 a share Wednesday to $43.90 a share Thursday. Just as telling: Progress stock, which is typically traded between 1.5 million and 2 million times a day, surged to a trading volume of about 6.5 million.
Progress shares crept up to $44.06 a share by late morning today.
Both Duke and Progress get pegged from time to time as M&A candidates, not necessarily with each other, but company officials decline to comment on merger speculation as a matter of policy. Presumably, such talk could run afoul of securities rules that restrict stock manipulation by company insiders who have an interest in boosting their stock portfolios.
"There's been speculation off and on over the years," said Duke spokesman Tom Williams. "We never comment on merger speculation either way."
Several years ago another report, based on an unnamed source, suggested the Progress was in talks with Atlanta-based Southern Co.
Both North Carolina companies are ripe for such speculation because both have exhibited an appetite for mergers.
A decade ago Progress Energy was formed by Raleigh's Carolina Power & Light buying a power company in Florida, creating a three-state electric utility with 3.1 million customers.
Duke bought Ohio-based Cinergy in 2006, making Duke one of the biggest energy companies in the country with a 5-state electric utility service area and 4 million customers in the Carolinas and the Midwest.
If the two companies combined, they would become a mega-utility with over 7 million customers.
One benefit of such a corporate marriage, from a parochial standpoint, is that the company's headquarters would remain in-state.
John Murawski has been a full-time newspaper reporter since 1991, with stints at Legal Times and The Chronicle of Philanthropy (both in Washington, DC), The Philadelphia Inquirer and The Palm Beach Post (in South Florida) before arriving at the N&O in December 2004. At the N&O he covers energy (nuclear, coal, renewable, efficiency), hydralic fracturing (or "fracking"), public utilities (both electric and natural gas) and health care. His beat includes Progress Energy, PSNC Energy, Piedmont Natural Gas, PowerSecure International, GlaxoSmithKline, Merck, Novo Nordisk, Pfizer, Biogen Idec and others. You can reach him at 919-829-8932 or
Comments
Duke & Progress Energy.
Fri, 01/07/2011 - 19:03 — henryeWhile this may be a good deal for Duke. It could pose problems for the customers like higher rates, since no competition..Competition is very necessary especially since the 1980s Teaching and praticing of anything goes without regard to Ethics.This is very self evident in todays Business World. like the old saying Money is the root of all evil...
agreed
Fri, 01/07/2011 - 14:12 — keithoProgresss is a decent company.........if duke buys them i bet progress customers will suffer.................hope it fails
Not a good deal for NC
Fri, 01/07/2011 - 13:28 — JoeTarheelRemember the last time a 'charlotte, nc' based company merged with a North Carolina based company to keep it 'in-state' and how that worked out?
The Wachovia shareholders as well as Winston-Salem probably would not agree that allowing another ego-maniac charlotte based company to merge with Progress would work out so well for anyone......except charlotte perhaps as I'm sure Duke's egomanic CEO has no interest in keeping the new HQ in Raleigh.
Duke's CEO is a scumbag. Just watch what's going on in Illinios with the lawsuits about conflicts of interest that he apparently was 'completely unaware of'.