CenterPointEnergy Inc.'s CFO said Sept. 28 with the 30-day window to accept anoffer from OGE EnergyCorp. for its ownership stake in passing, he had no deal to report.
OGE on Aug. 17 submitted a proposal to acquire, along with a thirdparty, CenterPoint's 55.4% interest in Enable. OGE held a 26.3% limited partnerinterest and 50% general partner interest in Enable, according to an Aug. 19filing. OGE had a right of first offer to CenterPoint's Enable share.
Addressing the investment community at the Wolfe ResearchPower & Gas Leaders Conference in New York on Sept. 28, CenterPointExecutive Vice President and CFO Bill Rogers noted the 30-day window to acceptOGE's offer had passed.
"That 30-day period has lapsed and suffice it to saythat, given that we have not put out a press release and a Form 8-K on amaterial agreement, there is no material agreement to report at thistime," Rogers said.
CenterPoint has been conducting a strategic review of itsstake in Enable, a publicly traded master limited partnership, and isconsidering a sale, spinoff or maintaining its ownership. CenterPoint owns a50% general partner interest in Enable and a 55.4% limited partner interest.CenterPoint executives havesaid they intend to provide an update on the Enable strategicreview by the end of the year.
CenterPoint now has certain limitations, based on itspartnership agreement with OGE, on its next step with Enable, Rogers said. IfCenterPoint accepts an offer for its Enable stake from a third party, it needsto do so within 120 days of the end of OGE's 30-day offer period, and the priceneeds to be at least 105% of what OGE offered, he added.
Tax considerations will be a factor in any offer CenterPointaccepts for the Enable stake. "We have negative basis in our Enableinvestment as the result of return of capital being greater than taxable incomeand we would recognize a taxable gain if we sold," Rogers said. "Thegain would be significant because our basis is negative so we need to bethoughtful as to when and how we might recognize that gain over time. It willnot go away."