On The Block

After being pinned down by lower commodity prices, frozen credit markets and Hurricane Ike, Reliant Energy Inc.’s (NYSE:RRI) board intends to review business options. Morgan Stanley and Goldman Sachs & Co. will assist in the review. News of the plan came a week after the Houston-based electricity wholesaler and retailer raised $1 billion to replace a facility it is unwinding because it couldn’t meet conditions set by Merrill Lynch. To raise the money needed to support operations, Reliant Energy signed a more expensive $650 million credit agreement with Goldman Sachs and sold $350 million in convertible preferred shares to energy buyout shop First Reserve Corp.

Natural gas producer Constellation Energy Partners LLC (NYSE: CEP) prepares to review strategic alternatives because its sponsor, Constellation Energy Group Inc. (NYSE: CEG), has a $4.7 billion buyout offer from MidAmerican Energy Holdings Co. Houston-based Constellation Energy Partners has hired Tudor, Pickering, Holt & Co. Securities Inc. to provide independent advice. For the second quarter, Constellation Energy Partners swung to a loss of $8.8 million from net income of $2.2 million a year earlier, despite nearly doubling revenue to about $24 million. It booked higher operating expenses and a larger loss from mark-to-market activities in the latest period.

PECO II Inc. (Nasdaq: PIII) plans to consider an acquisition, a merger or the sale of the company as it explores options. The maker of communications and power systems, which also provides engineering and on-site installation services, hired Western Reserve Partners as exclusive financial adviser for the process. For the second quarter, the Galion, Ohio-based company’s losses widened to $1.2 million from $745,000 a year earlier. The decline in performance partly reflects a reduction in services gross margins that resulted from reduced business levels. Sales for the period rose to $11.1 million from $10.6 million a year earlier.

Progressive Gaming International Corp. (Nasdaq: PGICD) has hired Roth Capital Partners LLC to help review strategic alternatives, including the sale of the supplier of casino and jackpot management systems. No timetable was set and Progressive Gaming won’t provide an update on the process until its board approves a course of action. Last month, the Las Vegas-based company said it would miss its 2008 financial forecast because of poorer economic conditions in the United States than expected. (It previously expected to generate revenue of $80 million to $90 million in 2008). The company separately said it would lower yearly expenses by $13 million to $15 million and will streamline certain sales, marketing and service operations.