Fear for loss of Shattuck revived


Revelations that Mayo A. Shattuck III might soon give up running Constellation Energy Group to pursue a dream job as NFL commissioner has renewed concerns that Baltimore risks losing another one of its corporate stars after the energy giant merges with FPL Group Inc. of Juno Beach, Fla.

Ever since the merger was announced Dec. 19, industry analysts have been skeptical that the former investment banker would stay on after giving up the title of chief executive officer to FPL's Lewis Hay III. Shattuck's bid for the National Football League job is a long shot, experts say, but some see his interest in the position as a harbinger of things to come, since his deal-making and networking skills may prompt other job opportunities.

That has some concerned that losing Shattuck would leave Baltimore without a powerful advocate in the merged company's boardroom, which will be packed with directors whose loyalties lie in Florida. The two companies have pledged to maintain corporate headquarters in both cities for five years, after which Baltimore and Juno Beach would presumably compete for the prize.

"Losing him could be a problem in this case," said Aris Melissaratos, secretary of the Maryland Department of Business and Economic Development. "You have a strong member of the management team that has Baltimore ties, and I think it strengthens the local position as to where you put the headquarters or where you don't put the headquarters."

Baltimore and its surrounding suburbs have lost more than a dozen company headquarters to buyouts and mergers in the past generation. Included in those were the recent purchase of mall and community developer Rouse Co. of Columbia and the sale of investment bank Alex. Brown Inc., which was engineered by Shattuck when he was chairman of the firm.

Constellation strongly dismisses speculation that Shattuck is shopping for a new job, saying the NFL post is just a unique opportunity that comes along once in a lifetime - especially for a self-professed football fan and sports enthusiast. Absent the NFL, they say, Shattuck is not looking to leave the company.

"I don't think one should attempt to read into this in terms of suggesting that Mayo is looking at his next opportunity," said David Nevins, vice president and chief marketing officer for Constellation. "He is 100 percent, in fact, 110 percent focused on leading Constellation."

Shattuck's name appeared on a list of five finalists for the job in a league press release made public Sunday. Also on the list were NFL Chief Operating Officer Roger Goodell, a top aide and heir apparent to retiring commissioner Paul Tagliabue; Gregg Levy, the league's outside counsel; Frederick Nance, a Cleveland lawyer; and Robert L. Reynolds, chief operating officer of Fidelity Investments.

The league will meet Aug. 7-9 in Chicago to elect a new commissioner. The winner must garner 22 votes from the 32 teams to be successful.

Shattuck and Hay were careful to craft their $11 billion merger so that Baltimore would appear a winner despite the fact that Constellation was the company being acquired. In addition to maintaining dual headquarters, the executives pledged to maintain philanthropic giving in both states at current levels.

The company will retain Constellation's name and be incorporated in Maryland, and Shattuck is to become chairman with a generous three-year employment contract.

But FPL shareholders will own 60 percent of the merged company's shares and nine of the 15 board members will be chosen by FPL. And Hay will have operational control as chief executive officer. Shattuck and Hay have made it clear in meetings with investment analysts that Hay will be in charge of the new company.

FPL officials declined to comment yesterday on Shattuck's bid for the NFL job.

"I've never been one too hung up on titles," Shattuck said in December.

But analysts have been skeptical from the start that Shattuck would stick around for the long term. He has a reputation as a consummate deal-maker - one who lays out a goal and then moves on to the next thing after completing it. There are few examples in corporate America where two chief executives have successfully shared power after a merger.

"Sometimes when you've reached levels within a certain position and you've achieved certain goals, sometimes you're ready to move on to take on other challenges," said Michael S. Worms, an analyst with BMO Capital Markets in New York.

Worms said the merger will go forward regardless of Shattuck's status.

"It will move on its own merits and not on who's running Constellation or who's not running Constellation," he said.

Regardless of what happens, some analysts don't see a big downside for Baltimore if Shattuck leaves before or after the merger. FPL's strong interest in the deal was motivated largely by Constellation's growing energy trading operations headquartered in Baltimore. Those operations are likely to be the source of much of the merged company's future growth.

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