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Merger? Takeover? Buyout? What’s Ahead For KeySpan?

One of the borough’s largest companies, with roots dating back to the days when Harry Houdini performed in Coney Island, confirmed last week that it is discussing a merger, takeover or buyout with multiple companies. KeySpan Corporation, whose headquarters are at One MetroTech in Downtown Brooklyn, let out their possible plans in a terse, three-paragraph press release last Friday. “We have been pursuing a successful strategy that is working well to serve our customers and deliver shareholder value, and we are well positioned to continue doing so as an independent company,” said KeySpan Chief Executive Officer Robert Catell. “However, as our industry has evolved, we believe it is appropriate to explore all alternatives that may be in the best interests of all our stakeholders, particularly the customers we serve,” he added. Currently the third largest natural gas supplier in the United States, the KeySpan Corporation was founded as Brooklyn Union in 1895. In 1998, the company changed its name to KeySpan, and currently supplies gas to the entire New York City area as well as a large portion of the northeast with about 2.6 million customers and 3,000 employees. Additionally, KeySpan is the largest owner of electric generation in New York, with about 6,650 megawatts of generating capacity that provides power to 1.1 million customers of the Long Island Power Authority, and supplies about 25 percent of the city’s capacity needs. The company also has assets in production, pipeline transportation, distribution and storage. Catell is from Borough Park, where he was raised by a single mother. Additionally, the company stays involved in a number of philanthropic enterprises throughout the borough including a strong involvement with the Brooklyn Botanic Garden. The company also has given considerable support to KeySpan Stadium, home of the Brooklyn Cyclones in Coney Island. In addition, their Cinderella and Green Cinderella program has opened up affordable housing opportunities in low- and moderate-income neighborhoods. According to George Laskaris, director of KeySpan Investor Relations, stock has gone up for the publicly traded company about 10 percent since a possible sale or merger was announced. It is currently traded in the $40-plus range, he said. Both Laskaris and KeySpan spokesperson Jody Fisher refused to comment on what companies have been in talks with KeySpan about a deal. Both spokespeople said there will be no further official comments on the matter until the board of directors signs off on any deal. However, various published articles cite sources as saying that London-based National Grid USA appears to be the most serious contender in acquiring KeySpan. Both Laskaris and Fisher refused to even venture a guess as to the possibility of KeySpan moving their headquarters out of Brooklyn if it is sold. “We certainly will do what’s in our best interest for our shareholders, employees and customers,” said Fisher. However, one business source noted that utility companies are strongly regulated by the state and federal government, and that much of KeySpan’s large infrastructure remains in Brooklyn, near its customer base. Brooklyn Chamber of Commerce President Kenneth Adams called the KeySpan Corporation one of the borough’s most successful and enduring homegrown corporations. “Under the leadership of Bob Catell, it has become one of the most important energy companies in the country. So it’s understandable that it is in a position to consider various options for its future growth,” said Adams. “When a business is successful, it attracts attention, and let’s see where it goes,” he added.

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