Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, March 4, 1994 TAG: 9403040188
SECTION: BUSINESS PAGE: A-7 EDITION: METRO
SOURCE: Associated Press
DATELINE: CHARLOTTE, N.C. LENGTH: Medium
"It's not prudent financial management to put all of your eggs in one basket, no matter how wonderful that basket is now and has been over the years," said foundation spokeswoman Elizabeth Locke.
The Duke Endowment, one of the nation's largest private foundations with more than $1.4 billion in assets, said it will sell 16 million shares of Duke Power common stock.
Locke insisted the decision was no reflection on the Charlotte-based electric utility or its future earnings potential.
"There is no lack of gratitude or confidence," she said. "The board felt we needed to take action to be more balanced."
Officials with the Charlotte foundation noted that the 26 million shares of Duke Power stock make up about 75 percent of the endowment's total holdings - and 80 percent of its income.
The huge stock offering is expected to be made later this month, with three Wall Street investment firms managing the sale. After the sale, the endowment still be Duke Power's largest shareholder, with 10 million shares.
"We have no plans to sell our remaining Duke stock," said Mary Semans, chairman of the endowment's board of directors.
"Diversifying our investment portfolio is the right course of action for us at this time," she said in a prepared statement. "As trustees, we have to take the long view, and this is in the best long-term interests of all the people and organizations that benefit from the trust income."
The Duke Endowment was founded in 1924 by North Carolina industrialist James Buchanan Duke, who also founded Duke Power, the nation's sixth-largest electric utility with 1993 revenues of $4.3 billion. The company has 1.7 million customers in North Carolina and South Carolina.
Company officials said they were not surprised by the decision and will offer any help they can to foundation officials.
"We understand the endowment's desire to diversify, and we are working with them to serve the interests of the endowment and all our shareholders," said Duke Power Chairman William Lee.
The stock sale will increase the number of shareholders in the company without increasing the total number of shares of stock outstanding, he said.
Last year, the endowment approved grants totalling more than $50 million.
by CNB