SEC Info - Northwestern Corp - PREM14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant x

Filed by a Party other than the Registrant o

Check the appropriate box:

[ X ]		Preliminary Proxy Statement
[	]	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[	]	Definitive Proxy Statement
[	]	Definitive Additional Materials
[	]	Soliciting Material Pursuant to §240.14a-12

NorthWestern Corporation

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
o	No fee required.
x	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
	(1)		Title of each class of securities to which transaction applies:
			Common Stock, par value $0.01 per share, of NorthWestern Corporation
	(2)		Aggregate number of securities to which transaction applies:
			35,493,837 shares of Common Stock 37,966 Deferred Stock Units 35,164 shares of Unvested Restricted Stock
	(3)		Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
			The filing fee is determined based upon the sum of (a) (i) 35,493,837 shares of common stock, (ii) 37,966 deferred stock units, and (iii) 35,164 shares of unvested restricted stock, multiplied by the merger consideration of $37.00 per share, and (b) warrants to purchase 4,838,448 shares of common stock, multiplied by $9.83 (which is the difference between $37.00 and the exercise price of those warrants. In accordance with Section 14(g) of the Securities Exchange Act of 1934, as amended, the filing fee was determined by calculating a fee of $107 per $1,000,000 of the amount calculated pursuant to the preceding sentence.
	(4)		Proposed maximum aggregate value of transaction:
			$1,363,539,726
	(5)		Total fee paid:
			$145,898.75
o	Fee paid previously with preliminary materials.
o	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
	(1)	Amount Previously Paid:

	(2)	Form, Schedule or Registration Statement No.:

	(3)	Filing Party:

	(4)	Date Filed:

		Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

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2006

Notice of Annual Meeting

and

Proxy Statement

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NorthWestern Corporation

d/b/a NorthWestern Energy

Sioux Falls, SD 57104

125 S. Dakota Ave.

www.northwesternenergy.com

June

, 2006

Dear NorthWestern Stockholder:

You are cordially invited to attend the 2006 annual meeting of stockholders of NorthWestern Corporation, which will be held at the Sioux Falls Convention Center, 1201 N. West Avenue, Sioux Falls, South Dakota, on Wednesday, August 2, 2006, at 2:00 p.m. local time.

On April 25, 2006, our board of directors approved a merger agreement providing for the acquisition of NorthWestern by Babcock & Brown Infrastructure Limited, an Australian public company, or BBIL. If the merger is completed, you will be entitled to receive $37.00 in cash, without interest, for each share of our common stock that you own.

At the annual meeting, you will be asked to adopt the merger agreement and to elect directors, among other matters. After careful consideration, the board of directors unanimously (i) approved the merger agreement, (ii) determined that the merger is advisable and is fair to, and in the best interests of, NorthWestern and its stockholders and (iii) recommends that NorthWestern stockholders vote “FOR” adoption of the merger agreement.

The proxy statement included with this letter provides you with information about the annual meeting, the merger agreement, the proposed merger and other related matters. We encourage you to read the entire proxy statement carefully. You also may obtain more information about NorthWestern from documents we have filed with the Securities and Exchange Commission, or SEC.

Your vote is very important. The merger cannot be completed unless we receive the affirmative vote of holders holding a majority of the shares of our common stock outstanding at the close of business on the record date and entitled to vote. The completion of the merger is also subject to the satisfaction or waiver of other conditions, including receipt of required regulatory approvals. If you fail to vote on the merger agreement, the effect will be the same as a vote against the adoption of the merger agreement.

Whether or not you plan to attend the annual meeting, please take the time to submit a proxy by following the instructions on your proxy card as soon as possible. If your shares are held in an account at a brokerage firm, bank or other nominee, you should instruct your broker, bank or other nominee how to vote in accordance with the voting instruction form furnished by your broker, bank or other nominee. If you do not vote or do not instruct your broker, bank or other nominee how to vote, it will have the same effect as voting against the adoption of the merger agreement.

If you properly transmit your proxy and do not indicate how you want to vote, your proxy will be voted “FOR” the adoption of the merger agreement and “FOR” the other matters set forth in the accompanying notice of annual meeting, including any proposal to adjourn the annual meeting to a later date to solicit additional proxies if there are not sufficient votes in favor of adoption of the merger agreement.

I enthusiastically support this transaction and join the other members of our board of directors in recommending that you vote for the adoption of the merger agreement.

Thank you for your continued support of NorthWestern Corporation.

Very truly yours,

Michael J. Hanson

President and Chief Executive Officer

Neither the SEC nor any state securities regulatory agency has approved or disapproved the merger, passed upon the merits or fairness of the merger or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.

THIS PROXY STATEMENT IS DATED JUNE , 2006,

AND IS FIRST BEING MAILED TO STOCKHOLDERS ON OR ABOUT JUNE , 2006.

NorthWestern Corporation

d/b/a NorthWestern Energy

125 S. Dakota Avenue • Sioux Falls, South Dakota 57104

Notice of Annual Meeting of Stockholders

August 2, 2006

To Our Stockholders:

The 2006 annual meeting of stockholders of NorthWestern Corporation, a Delaware corporation, will be held on August 2, 2006, beginning at 2:00 p.m. Central Daylight Time at the Sioux Falls Convention Center, 1201 N. West Avenue, Sioux Falls, South Dakota, to consider and vote upon the following proposals:

1.

To adopt the Agreement and Plan of Merger, dated as of April 25, 2006, among Babcock & Brown Infrastructure Limited, an Australian public company (“BBIL”), BBI US Holdings Pty Ltd., an Australian company and a direct wholly owned subsidiary of BBIL (“Holding Company”), BBI US Holdings II Corp., a Delaware corporation and direct wholly owned direct subsidiary of Holding Company (“Holdings”), BBI Glacier Corp., a Delaware corporation and direct wholly owned subsidiary of Holdings (“Sub”), and the Company, as the same may be amended from time to time, pursuant to which, among other things, (i) Sub will merge with and into NorthWestern upon the terms and subject to the conditions set forth in the merger agreement, with NorthWestern continuing as the surviving corporation, and (ii) upon consummation of the merger, each issued and outstanding share of NorthWestern common stock will be converted into the right to receive a cash payment of $37.00, without interest.

2.

To elect seven (7) members of our board of directors to hold office until the annual meeting of stockholders in 2007 and until their successors are duly elected and qualified or the merger is completed, whichever is earlier;

3.

To ratify the appointment by the audit committee of our board of directors of Deloitte & Touche LLP as our independent registered public accounting firm for the year ending December 31, 2006;

4.

Any proposal to adjourn the annual meeting to a later date to solicit additional proxies if there are insufficient votes at the time of the meeting to adopt the merger agreement; and

5.

To transact any other business as may properly come before the annual meeting and any adjournment or postponement of the annual meeting.

Our board of directors has fixed the close of business on June 5, 2006, as the record date for determining the stockholders entitled to receive notice of and to attend and vote at the annual meeting and any adjournments or postponements of the annual meeting. A complete list of NorthWestern stockholders will be available at our executive offices at 125 S. Dakota Ave., Sioux Falls, South Dakota, for 10 days before the annual meeting and will also be available for inspection at the annual meeting itself.

You are cordially invited to attend the annual meeting in person. An admission ticket is enclosed with this proxy statement. The annual meeting is open to stockholders and those guests invited by us. Stockholders may be asked to provide photo identification, such as a driver’s license, in order to gain admittance to the annual meeting. If you wish to attend the annual meeting and your shares are held in an account at a brokerage firm, bank or other nominee (i.e., in “street name”), you will need to bring a copy of your brokerage statement or other documentation reflecting your stock ownership as of the record date. For additional information about attendance at the annual meeting, please refer to Annual Meeting Guidelines included with this proxy statement as Annex F.

Your vote is very important. Please submit your proxy or voting instructions as soon as possible to make sure that your shares are represented and voted at the annual meeting, whether or not you plan to attend the annual meeting. Whether you attend the annual meeting or not, you may revoke a proxy at any time before it is voted by filing with our corporate secretary a duly executed revocation of proxy, by properly submitting a proxy by mail with a later date or by appearing at the annual meeting and voting in person. You may revoke a proxy by any of these methods, regardless of the method used to deliver your previous proxy. Attendance at the annual meeting without voting will not itself revoke a proxy. If your shares are held in an account at a brokerage firm, bank or other nominee, you must contact your broker, bank or other nominee to revoke your proxy.

Under Delaware law, if the merger is completed, our stockholders who do not vote in favor of adoption of the merger agreement will have the right to seek appraisal of the fair value of their shares of our common stock as determined by the Delaware Court of Chancery, but only if they submit a written demand for such an appraisal prior to the vote on the merger agreement and they comply with other Delaware law procedures and requirements explained in the accompanying proxy statement. The procedures are described more fully in the accompanying proxy statement, and a copy of the applicable Delaware law provision is included as Annex D to the proxy statement.

For more information about the merger described above and the other transactions contemplated by the merger agreement, please review the accompanying proxy statement and the merger agreement included with it as Annex A. The proposals to elect seven (7) directors to serve on our board of directors, to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2006, and to adjourn the annual meeting to a later date to solicit additional proxies if there are insufficient votes at the time of the meeting to adopt the merger agreement are also described in detail in the accompanying proxy statement.

By Order of the Board of Directors,

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Thomas J. Knapp

Vice President, General Counsel and Corporate Secretary

SUMMARY VOTING INSTRUCTIONS

YOUR VOTE IS IMPORTANT

Ensure that your shares of NorthWestern common stock can be voted at the annual meeting by submitting your proxy or contacting your broker, bank or other nominee. If you do not vote or do not instruct your broker, bank or other nominee how to vote, it will have the same effect as voting “AGAINST” the adoption of the merger agreement.

If your NorthWestern shares are registered in the name of a broker, bank or other nominee, check the voting instruction card forwarded by your broker, bank or other nominee to see which voting options are available or contact your broker, bank or other nominee in order to obtain directions as to how to ensure that your shares are voted on the proposals at the annual meeting.

If your NorthWestern shares are registered in your name, submit your proxy by signing, dating and returning the enclosed proxy card in the enclosed postage-paid envelope, so that your shares can be voted on the proposals at the annual meeting.

If you need assistance in completing your proxy card or have questions regarding the NorthWestern annual meeting, please contact:

NorthWestern Corporation
Dan Rausch, Director – Investor Relations
Telephone: (605) 978-2902

or

Tammy Lydic, Assistant Corporate Secretary
Telephone: (605) 978-2913

or

Innisfree M&A Incorporated
Stockholders: call toll-free at
(888) 750-5834
Bankers and Brokers: call
collect at (212) 750-5833

TABLE OF CONTENTS

Page

QUESTIONS AND ANSWERS ABOUT THE

ANNUAL MEETING AND THE MERGER			1
SUMMARY TERM SHEET ABOUT THE MERGER			9
FORWARD-LOOKING INFORMATION		19
THE NORTHWESTERN CORPORATION ANNUAL MEETING		20
	Date, Time and Place	20
	Purpose of the Annual Meeting	20
	Recommendation of Our Board of Directors	21
	Record Date; Stockholders Entitled to Vote; Quorum	21
	Vote Required	22
	Voting by Our Directors and Executive Officers	22
	Voting Procedures	22
	Adjournments; Other Business	23
	Revocation of Proxies	23
	Solicitation of Proxies	23
	Appraisal Rights	24
	Assistance	24
PROPOSAL – 1 ADOPTION OF THE MERGER AGREEMENT		25
THE MERGER		25
	The Companies	25
	Structure of Transaction	28
	Management and Board of Directors of the Surviving Corporation	30
	Background of the Merger	30
	Recommendation of Our Board of Directors; Our Reasons for the Merger	43
	Opinion of Credit Suisse Securities (USA) LLC	46
	Opinion of The Blackstone Group L.P.	52
	Certain Effects of the Merger	57
	Dividends	58
	Interests of Our Directors and Executive Officers in the Merger	58

-i-

TABLE OF CONTENTS

(continued)

Page

	Regulatory Matters	62
	Appraisal Rights	65
	Material United States Federal Income Tax Consequences	69

Consequences of the Merger to

United States Holders of Our Common Stock

70

Consequences of the Merger to

	Non-United States Holders of Our Common Stock	71
	Accounting Treatment	72
	Delisting and Deregistration of NorthWestern Common Stock	72
	Financing	72
	Litigation Related to the Merger	74
THE MERGER AGREEMENT		76
	The Merger	76
	Completion of the Merger	76

Certificate of Incorporation, Bylaws and Directors and Officers

	of the Surviving Corporation	77
	Conversion of Stock	77
	Payment for Shares	78
	Transfer of Shares	79
	Treatment of Warrants and Deferred Stock Units	79
	Representations and Warranties	80
	Conduct of Our Business Pending the Merger	83
	Stockholders’ Meeting; Proxy Statement	87
	Covenant to Recommend	87
	No Solicitation	89
	Access to Information; Confidentiality	89
	Regulatory Matters; Reasonable Best Efforts	90
	Fee and Expenses	91
	Public Announcements	91

-ii-

TABLE OF CONTENTS

(continued)

Page

	Notification of Certain Matters		91
	Employee Benefit Matters		91
	Delisting		92
	Rule 16b-3		92
	BBIL Financing		92
	No Agreement with NorthWestern Stockholders		94
	Irrevocable Letter of Credit		94
	Conditions to the Merger		95
	Termination		96
	Termination Fee and Business Interruption Fee		97
	Amendment and Waiver		98
AMENDMENT TO NORTHWESTERN’S STOCKHOLDER RIGHTS PLAN			99
MARKET PRICES OF COMMON STOCK AND DIVIDENDS		101
PROPOSAL 2 – ELECTION OF DIRECTORS		103
BENEFICIAL OWNERSHIP OF COMMON STOCK		105
MEETINGS OF OUR BOARD OF DIRECTORS AND COMMITTEES		106
EXECUTIVE OFFICERS		109
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS		111

REPORT OF HUMAN RESOURCES COMMITTEE

ON EXECUTIVE COMPENSATION	117
AUDIT COMMITTEE REPORT	120
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE	121
PERFORMANCE GRAPH	121

PROPOSAL 3 – RATIFICATION OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM	122
PROPOSAL 4 – ADJOURNMENT OF THE ANNUAL MEETING	123
STOCKHOLDER PROPOSALS	124
COMMUNICATIONS WITH OUR BOARD OF DIRECTORS	124
OTHER MATTERS	125

-iii-

TABLE OF CONTENTS

(continued)

ANNEX A

Agreement and Plan of Merger, dated as of April 25, 2006, among Babcock & Brown Infrastructure Limited, BBI US Holdings Pty Ltd., BBI US Holdings II Corp., BBI Glacier Corp. and NorthWestern Corporation

ANNEX B

Opinion of Credit Suisse Securities (USA) LLC

ANNEX C

Opinion of The Blackstone Group L.P.

ANNEX D

Section 262 of the General Corporation Law of the State of Delaware

ANNEX E

Audit Committee Charter

ANNEX F

Annual Meeting Guidelines

-iv-

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND THE MERGER

The following questions and answers briefly address some questions you may have regarding the annual meeting and the proposed merger. These questions and answers may not address all questions that may be important to you as a stockholder of NorthWestern. Please refer to the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement, and the documents referred to or incorporated by reference in this proxy statement.

Q:	What matters will you vote on at the annual meeting?

A:	You will vote on the following proposals:

•

to adopt the merger agreement;

•

to elect seven (7) directors to serve on our board of directors;

•

to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2006;

•

to approve any proposal to adjourn the annual meeting to a later date to solicit additional proxies if there are insufficient votes at the time of the annual meeting to adopt the merger agreement; and

•

to transact any other matters and business as may properly come before the annual meeting or any postponement or adjournment of the annual meeting.

On April 25, 2006, we entered into a merger agreement with BBIL. Under the merger agreement, we will become a wholly owned indirect subsidiary of BBIL, and holders of our common stock will be entitled to receive $37.00 per share in cash, without interest.

In order to complete the merger, the stockholders holding a majority of the shares of our common stock outstanding at the close of business on the record date and entitled to vote must vote to adopt the merger agreement. We are holding the annual meeting of our stockholders to obtain this and other approvals. This proxy statement contains important information about the merger and the annual meeting, and you should read it carefully. The enclosed voting materials allow you to vote your shares without attending the annual meeting.

At this time, our board of directors is unaware of any matters, other than as set forth above, that may be presented for action at our annual meeting. If other matters are properly presented, however, the persons named as proxies will vote in accordance with their judgment with respect to such matters.

Q:	As a stockholder, what will I receive in the merger?

A:	You will be entitled to receive $37.00 in cash, without interest, for each share of our common stock that you own immediately prior to the effective time of the merger, unless you perfect your appraisal rights under Delaware law.

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Q:	If I hold warrants to purchase shares of NorthWestern common stock, how will my warrants be treated in the merger?

A:	Immediately prior to the effective time of the merger, each holder of an outstanding warrant to purchase shares of our common stock will be entitled to receive an amount in cash, without interest and less applicable withholding taxes, equal to the product obtained by multiplying:

•

the total number of shares of our common stock issuable upon the exercise in full of the warrant, by

•

the excess, if any, of $37.00 over the exercise price per share of common stock under the warrant.

Q:	Is the approval of the BBIL stockholders required to complete the merger?

A:	No. BBIL may complete the merger without obtaining the approval of its stockholders.

Q:	When and where is the annual meeting of our stockholders?

A:	The annual meeting of our stockholders will be held at the Sioux Falls Convention Center, 1201 N. West Avenue, Sioux Falls, South Dakota, on Wednesday, August 2, 2006, at 2:00 p.m. local time.

Q:	What vote of stockholders is required to adopt the merger agreement?

A:	For us to complete the merger, stockholders holding at least a majority of the shares of our common stock outstanding at the close of business on the record date and entitled to vote must vote “FOR” adoption of the merger agreement.

At the close of business on the record date, 35,493,837 shares of our common stock were issued and outstanding and entitled to vote.

Q:	What vote of stockholders is required for each other proposal at the annual meeting?

A:

A plurality of the votes cast by the shares of common stock present in person or represented by proxy at the annual meeting is required for the election of the directors. A properly executed proxy marked “WITHHOLD AUTHORITY” with respect to the election of one or more directors will not be voted with respect to the director or directors indicated, although it will be counted for purposes of determining whether there is a quorum. Stockholders do not have the right to cumulate their votes for directors.

The affirmative vote of the holders of a majority in voting power of the shares of our common stock present in person or represented by proxy at the annual meeting and entitled to vote thereon is required to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2006 and to approve any proposal to adjourn the annual meeting to solicit additional proxies.

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Q:	Who can vote and attend the annual meeting?

A:

All stockholders of record as of the close of business on June 5, 2006, the record date for the annual meeting, are entitled to receive notice of and to attend and vote at the annual meeting, or any postponement or adjournment of the annual meeting. If you wish to attend the annual meeting and your shares are held in an account at a brokerage firm, bank or other nominee (i.e., in “street name”), you will need to bring a copy of your brokerage statement or other documentation reflecting your stock ownership as of the record date. “Street name” holders who wish to vote at the annual meeting will need to obtain a proxy authorizing them to vote at the annual meeting from the broker, bank or other nominee that holds their shares.

Q:	How does our board of directors recommend that I vote?

A:	Our board of directors recommends that you vote:

•

“FOR” the proposal to adopt the merger agreement;

•

“FOR” the election of each of the nominees for director;

•

“FOR” ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2006; and

•

“FOR” any proposal to adjourn the annual meeting to solicit additional proxies if there are insufficient votes at the time of the annual meeting to adopt the merger agreement.

Q:	*Why is our board of directors recommending that I vote “FOR”* the proposal to adopt the merger agreement?**

A:

After careful consideration, our board of directors unanimously approved the merger agreement and unanimously determined that the merger is advisable and fair to, and in the best interests of, our company and our stockholders. In reaching its decision to approve the merger agreement and to recommend the adoption of the merger agreement by our stockholders, the board of directors consulted with our management, as well as our legal and financial advisors, and considered the terms of the proposed merger agreement and the transactions contemplated by the merger agreement. Our board of directors also considered each of the items set forth on pages 43 through 46 under “The Merger—Our Reasons for the Merger.”

Q:	What will happen to the directors who are up for election if the merger agreement is adopted?

A:

If the merger agreement is adopted by stockholders and the merger is completed, the directors of BBI Glacier Corp., and not our directors, will become the directors of the surviving corporation in the merger. Our current directors, including those elected at the annual meeting, will serve only until the merger is completed.

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Q:	How do I cast my vote?

A:	If you were a holder of record on June 5, 2006, you may vote in person at the annual meeting or by submitting a proxy for the annual meeting. You can submit your proxy by signing, dating and returning the enclosed proxy card in the accompanying pre-addressed, postage paid envelope.

If you properly transmit your proxy but do not indicate how you want to vote, your proxy will be voted “FOR” the adoption of the merger agreement, “FOR” the election of each of the nominees for director, “FOR” ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2006, and “FOR” any proposal to adjourn the annual meeting to solicit additional proxies.

Q:	*How do I cast my vote if my NorthWestern shares are held in “street name”* by my broker, bank or other nominee?**

A:

If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, you must provide the recordholder of your shares with instructions on how to vote your shares in accordance with the voting directions provided by your broker, bank or other nominee. Please refer to the voting instruction card provided by your broker, bank or nominee to see if you may submit voting instructions using the Internet or telephone.

Q:	How are votes counted?

A:

For the proposal relating to the adoption of the merger agreement, you may vote FOR, AGAINST or ABSTAIN. Because the vote is based on the number of shares outstanding, the failure to vote, either by not returning a properly executed proxy card or not voting in person at the annual meeting, or abstaining from voting, has the same effect as if you vote AGAINST the adoption of the merger agreement.

For the election of directors, you may vote FOR all of the nominees or you may WITHHOLD AUTHORITY for one or more of the nominees. Withheld votes will not count as votes cast for the nominee, but will count for the purpose of determining whether a quorum is present. As a result, if you withhold your vote, it has no effect on the outcome of the vote to elect directors.

For the proposal relating to ratification of our independent registered public accounting firm, you may vote FOR, AGAINST or ABSTAIN. The failure to vote, either by not returning a properly executed proxy card or not voting in person at the annual meeting, will have no effect on the outcome of the voting on the ratification proposal. However, abstentions will have the same effect as voting AGAINST ratification of our independent registered public accounting firm.

For the proposal relating to the adjournment of the annual meeting in order to solicit additional proxies, you may vote FOR, AGAINST or ABSTAIN. The failure to vote, either by not returning a properly executed proxy card or not voting in person at the annual meeting, will have no effect on the outcome of the voting on any proposal to adjourn the annual meeting in order to solicit additional proxies. However, abstentions

4

will have the same effect as voting AGAINST any proposal to adjourn the annual meeting in order to solicit additional proxies.

If you sign your proxy card without indicating your vote, your shares will be voted “FOR” the adoption of the merger agreement, “FOR” each of the nominees for director, “FOR” ratification of Deloitte & Touche LLP as our independent registered public accounting firm, “FOR” any proposal to adjourn the annual meeting to solicit additional proxies, and in accordance with the recommendations of our board of directors on any other matters properly brought before the annual meeting for a vote.

Q:	*What is a “broker non-vote”?*

A:

A “broker non-vote” generally occurs when a broker, bank or other nominee holding shares in “street name” on your behalf does not vote on a proposal because the broker, bank or other nominee has not received your voting instructions and lacks discretionary power to vote the shares. Generally, brokers, banks and other nominees have the discretion to vote for directors and the ratification of the appointment of our independent registered public accounting firm, unless you instruct otherwise. However, brokers, bank and other nominees cannot vote shares of our common stock that they hold beneficially either for or against the adoption of the merger agreement or for or against any proposal to adjourn the annual meeting to solicit additional proxies.

“Broker non-votes” will be treated as shares that are present and entitled to vote for the purpose of determining whether a quorum exists. However, for the purpose of determining the outcome of any matter as to which the broker, bank or other nominee has indicated on the proxy that it does not have discretionary authority to vote, those shares will be treated as not present or entitled to vote with respect to that matter, even though those shares are considered present for quorum purposes and may be entitled to vote on other matters.

As a result, “broker non-votes” will have the same effect as a vote against the adoption of the merger agreement. However, “broker non-votes” will be disregarded and will have no effect on the outcome of the voting on the election of directors, the ratification proposal and the adjournment proposal.

Q:	How will the NorthWestern shares in the disputed claims reserve be counted?

A:

Pursuant to our plan of reorganization, we established a reserve of shares of our common stock, or the disputed claims reserve shares, from the shares allocated to holders of our trade vendor claims in excess of $20,000 and holders of Class 9 unsecured claims. The shares held in this reserve may be used to resolve various outstanding unsecured claims and unliquidated litigation claims, as these claims were not resolved or deemed allowed upon consummation of our plan of reorganization. We have surrendered control over the common stock provided to the shares reserve, which is administered by our transfer agent; therefore we recognized the issuance of these shares of our common stock upon emergence from bankruptcy.

As of the date of this proxy statement, there were 3,144,642 disputed claims reserve shares. Such shares will not be represented in person or by proxy at the annual meeting

5

and therefore will not count as being present for the purpose of determining whether a quorum exists. In addition, the disputed claims reserve shares will not be voted on the proposal to adopt the merger agreement and, therefore, will have the same effect as a vote against the adoption of the merger agreement.

Furthermore, since such shares will not be present or voted at the annual meeting, the disputed claims reserve shares will have no effect on the outcome of the voting on the election of directors, the ratification proposal or the adjournment proposal.

Q:	Can I change my vote after I have delivered my proxy?

A:

Yes. If you are a recordholder of our common stock, you can change your vote at any time before your proxy is voted at the annual meeting by properly delivering a later-dated proxy either by mail or attending the annual meeting in person and voting. You also may revoke your proxy by delivering a notice of revocation to our corporate secretary prior to the vote at the annual meeting. If your shares are held in “street name,” you must contact your broker, bank or other nominee to revoke your proxy.

Q:	What should I do if I receive more than one set of voting materials?

A:

You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please vote each proxy and voting instruction card that you receive.

Q:	Am I entitled to appraisal rights?

A:

Yes. If you do not wish to accept the $37.00 per share cash consideration payable pursuant to the merger, you may seek, under Section 262 of the General Corporation Law of the State of Delaware, judicial appraisal of the fair value of your shares by the Delaware Court of Chancery. This value could be more than, less than or equal to the merger consideration of $37.00 per share. This right to appraisal is subject to a number of restrictions and technical requirements summarized under the section entitled “The Merger—Appraisal Rights” beginning on page 65.

We have included the full text of Section 262 of the General Corporation Law of the State of Delaware as Annex D to this proxy statement. We urge you to read all of Section 262 carefully if you wish to exercise your appraisal rights. If you fail to timely and properly comply with the requirements of Section 262, you will lose your appraisal rights under Delaware law.

Q:	Will the merger be taxable to me?

A:

Yes, if you are a United States person. In that case, for United States federal income tax purposes, as a result of the merger, you generally will recognize gain or loss on each share of our common stock you hold measured by the difference, if any, between $37.00 and your adjusted tax basis in that share. However, subject to certain exceptions, a non-

6

United States person will generally not be subject to United States federal income tax as a result of the merger.

You should read “The Merger—Material United States Federal Income Tax Consequences” beginning on page 69 for a more complete discussion of the United States federal income tax consequences of the merger. Tax matters can be complicated, and the tax consequences of the merger to you will depend on your particular tax situation. We urge you to consult your tax advisor on the tax consequences of the merger to you.

Q:	If I am a holder of certificated shares, should I send in my share certificates now?

A:

No. Shortly after the merger is completed, you will receive a letter of transmittal with instructions informing you how to send your stock certificates to the paying agent in order to receive the merger consideration. You should use the letter of transmittal to exchange your stock certificates for the merger consideration to which you are entitled as a result of the merger. If your shares are held in “street name” by your broker, bank or other nominee, you will receive instructions from your broker, bank or other nominee as to how to effect the surrender of your “street name” shares and receive cash for those shares. DO NOT SEND ANY STOCK CERTIFICATES WITH YOUR PROXY.

Q:	When do you expect the merger to be completed?

A:

We are working to complete the merger as quickly as possible. We currently expect to complete the merger in the first or second quarter of 2007. We cannot, however, predict the exact timing of the merger because the merger is subject to the receipt of regulatory approvals and other closing conditions. While we believe that we will obtain all required regulatory approvals, we cannot assure you that these regulatory approvals will be obtained and, even if they are ultimately obtained, they might not be obtained for a substantial period of time following the adoption of the merger agreement at the annual meeting.

In addition, the consummation of the merger is conditioned on the receipt of all regulatory approvals required to consummate the merger on terms that would not reasonably be likely to have a material adverse effect on us, the consummation of the merger or the financial condition of BBIL. See “The Merger Agreement—Conditions to the Merger” and “The Merger Agreement—Effective Time.”

Q:	Who will bear the cost of this solicitation?

A:	We will pay the cost of this solicitation, which will be made primarily by mail. Proxies also may be solicited in person, by telephone, facsimile or similar means, by our directors, officers or employees without additional compensation.

In addition, we have retained Innisfree M&A Incorporated to assist us with the solicitation of proxies and to verify certain records related to the solicitations. We will pay Innisfree for these services a fee of $50,000 for the first two months and $20,000 per month thereafter, if necessary, plus their reasonable expenses.

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We will, on request, reimburse stockholders who are brokers, banks or other nominees for their reasonable expenses in sending proxy materials and annual reports to the beneficial owners of the shares they hold of record.

Q:	Who can help answer my questions?

A:	If you have any questions about the merger or how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card, you should contact:

NorthWestern Corporation
Dan Rausch, Director – Investor Relations
Telephone: (605) 978-2902

or

Tammy Lydic, Assistant Corporate Secretary
Telephone: (605) 978-2913

or

Innisfree M&A Incorporated
Stockholders: call toll free
at (888) 750-5834
Bankers and Brokers: call collect
at (212) 750-5833

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SUMMARY TERM SHEET ABOUT THE MERGER

This summary highlights selected information from this proxy statement and may not contain all the information about the merger that is important to you. We have included page references in parentheses to direct you to more complete descriptions of the topics presented in this summary term sheet. In addition, to understand the merger fully and for a more complete description of the legal terms of the merger, you should read carefully this proxy statement in its entirety, including the annexes, and the other documents to which we have referred you.

The Companies (Page 25)

NorthWestern Corporation

NorthWestern Corporation

d/b/a NorthWestern Energy

125 S. Dakota Avenue

Sioux Falls, SD 57104

(605) 978-2908

We are a Delaware corporation and one of the largest providers of electricity and natural gas in the Upper Midwest and Northwest, serving approximately 628,500 customers in Montana, South Dakota and Nebraska under the trade name “NorthWestern Energy.” We have generated and distributed electricity in South Dakota and distributed natural gas in South Dakota and Nebraska since 1923 and have distributed electricity and natural gas in Montana since 2002.

Babcock & Brown Infrastructure Limited

Babcock & Brown Infrastructure Limited

The Chifley Tower, Level 39

2 Chifley Square

Sydney NSW 2000

Australia

Telephone: 61-2-9229-1800

BBIL, along with Babcock & Brown Infrastructure Trust, or BBIT, form Babcock & Brown Infrastructure, or BBI. BBI is a utility infrastructure company based in Sydney, Australia, listed on the Australian Stock Exchange (ASX: BBI) and admitted to the ASX 200 Index. BBI has a current enterprise value of approximately US$4.9 billion and equity value of approximately US$1.7 billion. Each share in BBIL is stapled to a unit of BBIT. Babcock & Brown Investor Services Limited, a subsidiary of Babcock & Brown Limited (ASX: BNB), or Babcock & Brown, is the Trustee for BBIT. BBI is rated investment grade by Moody’s Investors Service.

BBI was formerly known as Prime Infrastructure. Its principal activity is owning and managing utility and infrastructure businesses worldwide. BBI owns companies in electricity transmission and distribution, gas transmission and distribution, and transport infrastructure, and has ownership interests in thermal and renewable power generation.

BBI US Holdings Pty Ltd. is a direct wholly owned Australian subsidiary of BBIL. BBI US Holdings II Corp., a Delaware corporation, is a wholly owned direct subsidiary of BBI US Holdings Pty Ltd. BBI Glacier Corp., a Delaware corporation, is a wholly owned direct

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subsidiary of BBI US Holdings II Corp. None of BBI US Holdings Pty Ltd., BBI US Holdings II Corp. or BBI Glacier Corp. has conducted any business operations other than incidental to its formation and in connection with the transactions contemplated by the merger agreement. Each was formed solely for the purpose of engaging in the merger and the other transactions contemplated by the merger agreement.

Structure of Transaction (Page 28)

The proposed transaction is a merger of BBI Glacier Corp. with and into NorthWestern with NorthWestern surviving the merger as a wholly owned indirect subsidiary of BBIL. The following will occur in connection with the merger:

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Northwestern Corp · PREM14A · For 6/9/06

Filed On 6/9/06 4:42pm ET · SEC File 1-10499 · Accession Number 73088-6-62

Preliminary Proxy Solicitation Material -- Merger or Acquisition · Schedule 14A
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Northwestern Corp · PREM14A · For 6/9/06

Filed On 6/9/06 4:42pm ET · SEC File 1-10499 · Accession Number 73088-6-62

Preliminary Proxy Solicitation Material -- Merger or Acquisition · Schedule 14AFiling Table of Contents

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Preliminary Proxy Solicitation Material -- Merger or Acquisition · Schedule 14A
Filing Table of Contents