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Utility owner Black Hills makes an offer to buy NorthWestern

Black Hills Corp. made an offer worth as much as $1.25 billion to acquire NorthWestern Corp., a deal that would combine utility owners of similar size that serve customers in Montana, South Dakota, Wyoming and Nebraska. Shares of NorthWestern rose as much as 11 percent.

The stock offer has a value of $33 to $35 per share, Black Hills, based in Rapid City, S.D., said Wednesday in a statement. That's as much as 20 percent higher than NorthWestern's closing stock price Wednesday. Black Hills said it would also consider paying part of the transaction in cash.

The offer, along with other alternatives, will be reviewed by NorthWestern's board of directors, the Sioux Falls, S.D., company said in a separate statement. The company last month rejected a $1.16 billion, or $32.50 per share, takeover bid from a group of Montana municipalities.

"We felt compelled to make our interest in NorthWestern known after witnessing public overtures from another potential buyer and the strong support for a sale of the company from NorthWestern stockholders," David R. Emery, chief executive of Black Hills, said in the statement.

In a Nov. 21 letter to NorthWestern's board, Emery said Black Hills intends to contact some of NorthWestern's shareholders directly "to gauge their enthusiasm" for the transaction.

NorthWestern serves more than 617,000 electric and natural-gas customers. The company emerged from bankruptcy about one year ago, after restructuring $2 billion of debt.

Shares of the company jumped $3.25 to $32.40 as of 5:47 p.m. in after-hours trading in New York. Shares of Black Hills fell 53 cents, or 1.4 percent, to $37.36 as of 4:15 p.m. They've climbed 22 percent this year.

NorthWestern spokeswoman Bobbi Schroeppel declined to say if the Black Hills offer included a deadline or when NorthWestern's board would meet.

Black Hills, owner of utilities in South Dakota, Wyoming and Montana, agreed to sell a communications unit for $103 million in April to focus on the energy business.