InterNorth
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InterNorth Inc. was a very large energy company headquartered 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. It was formed in 1979 as a holding company for Northern Natural Gas Company, founded in 1931. InterNorth was briefly renamed HNG/InterNorth in 1985, following its takeover of Houston Natural Gas Company, before taking the name Enron Corporation just six months later.
Later that year, the company launched an unsolicited takeover bid for Crouse-Hinds Company, which wound up being acquired by Cooper Industries the following year. The company continued to pursue expansion opportunities 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 $400,000,000.00 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, Nancy McNeil 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, stationary and contracts.
