Electric utilities that may not appear attractive on a "standalone basis" could become attractive takeover targets because of their location, according to PaineWebber's Electric Utility Monthly Industry Update.
The company pointed to the recent failed attempt by CalEnergy to acquire New York State Electric and Gas. PaineWebber noted that, at the time of the attempted takeover, NYSEG was not a favored stock. In fact, NYSEG was not on PaineWebber's list of possible takeover targets.
PaineWebber said the strategic location of NYSEG appeared to be the key factor in the attempt.