InterNorth

InterNorth Inc. was a large energy company headquartered at the Northern Natural Gas Building in Omaha, Nebraska, in the United States, specializing in natural gas pipelines but also a force in the plastics industry, coal and petroleum exploration and production. They operated the largest natural gas pipeline in North America (approximately 36,000 miles of pipeline) formed in 1979 as a holding company for Northern Natural Gas Company (founded in 1931), Northern Liquid Fuels Company, Northern Petrochemicals Company, Northern Propane Gas Company, Northern Border Pipeline Company, and People's Natural Gas. InterNorth was briefly renamed HNG/Internorth in 1985, following its takeover of Houston Natural Gas Company.[1] It was renamed Enteron briefly, before the naming people discovered there was a conflict. The name was changed to Enron Corporation just six months later.[2]

In 1980-81, the company launched an unsolicited takeover bid for Crouse-Hinds Company, which wound up being acquired by Cooper Industries the following year.[3] The company continued to pursue expansion opportunities. In 1983, the company purchased the Belco Petroleum Company, a Fortune 500 oil exploration and development company founded by Arthur Belfer;[4] and, in 1985, reached a deal, seen by some as overpriced, to acquire the smaller competitor Houston Natural Gas (HNG) Company. InterNorth was an arbitrage target and acquired HNG as a poison pill. Regardless it was still a target of Irwin Jacobs of Minneapolis. Ex-HNG CEO Ken Lay "borrowed" over $400,000,000 from the employee stock ownership program to buy back Jacobs stock, so he could keep his job and cover other financial losses of Enron as early as 1987. Lay then froze the ESOP for seven years except for retirement or death benefits.

Although intended to secure InterNorth's independence, the HNG takeover proved a "wag-the-dog" transaction: despite an initial plan for dual headquarters in Omaha and Houston, with InterNorth CEO Samuel Segnar in control, the company soon was based entirely in Houston and run by HNG's CEO, Kenneth Lay, who renamed the company Enron Corporation. Initially, Mr. Lay and his secretary picked the name Enteron, due to the positive connotations of the words "enter" and "on'. though it was soon discovered to be a Greek term for digestive system or intestine. The markets reacted with hilarity and a month later he changed the name again to ENRON costing many millions in advertising, signage, stationery and contracts.

The most valuable asset of Internorth had been Northern Natural Gas company which was at one time the largest natural gas distributor in North America. After the bankruptcy of Enron, Northern Natural Gas briefly became part of Dynegy Corp of Houston whose Chairman Daniel Dienstbier had been president of NNG before Ken Lay seized control of Internorth. Dynegy then sold NNG to Warren Buffett's Berkshire Hathaway who moved it back to Omaha.

References

  1. ↑ Walters, Donna H. K. (May 3, 1985). "InterNorth Will Make $2.3-Billion Offer for Houston Natural Gas". Los Angeles Times. Retrieved June 4, 2018.
  2. ↑ Connolly, James J. (editor) (2010). After the Factory: Reinventing America's Industrial Small Cities p. 90. Lexington Books. ISBN 978-0-7391-4825-9.
  3. ↑ Condon, James C. (January 12, 1981). "Planning Ahead at InterNorth". The New York Times. Retrieved June 4, 2018.
  4. ↑ Funding Universe: "History of Belco Oil & Gas Corp." retrieved September 21, 2017
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