Westar Energy is in the early stages of exploring strategic options that could lead to a sale, sources told Bloomberg News. The discussions come amid consolidation in the U.S. utilities industry.
The Topeka-based company, the biggest electric utility in Kansas, is talking with potential financial advisers as it evaluates its options, according to the sources, who asked not to be identified because the matter is private.
Several possible buyers have been contacted to gauge interest in Westar, one source said. Westar hasn't yet formally hired an adviser and may still decide to remain independent, according to the sources.
A Westar spokeswoman said the company doesn't comment on merger and acquisition activity.
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The potential sale comes amid a boom in utilities dealmaking as power companies grappling with flat electricity demand and rising costs seek growth through acquisitions. Canadian utilities Fortis and Algonquin Power & Utilities agreed to buy two U.S. utilities on the same day last month.
Westar delivers power to about 700,000 customers in Kansas and owns power generators with a total capacity of about 7,000 megawatts, according to its website. Westar chief executive Mark Ruelle fanned takeover speculation in November when he indicated it would be open to a sale.
“In the context of M&A, given our relative size, we don't really perceive ourselves likely to be a buyer, were there a consolidation,” he said in a conference call with analysts in November discussing the company's third-quarter results. “I think we would be more likely to see ourselves (as a) seller than a buyer.”