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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant / /
Filed by a Party other than the Registrant /X/
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or
or Rule 14a-12
KANSAS CITY POWER AND LIGHT COMPANY
- ----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
WESTERN RESOURCES, INC.
- ----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-
6(i)(2)
/ / $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3)
/ / Fee computed on table below per Exchange Act Rules 14a-
6(i)(4)
and 0-11
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:*
-----------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------
Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / 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:
------------------------------------------------------------
/x/ Filing fee paid with preliminary filing.
The following information will be presented to industry analysts and KCPL
shareholders beginning May 8, 1996:
Western
Resources(r)
and
KCPL
The common-sense
combination
Western
Resources(r)
and
KCPL
The common-sense
combination
Superior merger in all
respects
o SMART
... a better deal for ALL
o SOUND
... a stronger union
o STRATEGIC
... a better fit
o VISIONARY
... a better future
Western
Resources(r)
and
KCPL
The common-sense
combination
Recent Activities
o WR tightened its collar, resulting in a
projected post-merger dividend of $1.95 -
$2.11 per KCPL share, assuming
12/31/97 closing
o WR mailed its definitive proxy materials
and BLUE proxy card beginning 5/4/96
o WR continues preparation of final
exchange offer (preliminary prospectus
was mailed with proxy material)
o KCPL/UCU announced its "intention to
recommend" a post-merger dividend of
$1.85 per KCPL share
Western
Resources(r)
and
KCPL
The common-sense
combination
Critical issue: Stock value/dividend
Western Resources' Offer UtiliCorp's Offer
o Indicated dividend increase o Intent to recommend
to $1.95 to $2.11 per a dividend of $1.85
share following the close following the close
of the merger* of the merger
o 17% price premium** o No premium
o Tax-free transaction o Tax-free transaction
* Based on Western Resources projected annual dividend of $2.14 per share
in 1998
** Prices at market closing April 12, 1996, which was the last trading day
before announcement of Western Resources' offer
Both proposed transactions are conditioned
upon pooling of interests accounting
Western
Resources(r)
and
KCPL
The common-sense
combination
Calculation of stock price and
dividends to KCPL shareholders--
current annual dividends
Western Exchange Stock Premium Dividend Increase
Stock Ratio Value to KCPL to KCPL in KCPL
Price WR/KCPL to KCPL April 12 Holders/1 Dividend/1
$27.00 0.985 $26.59 11.4% $2.03 30.1%
27.50 0.985 27.08 13.4% 2.03 30.1%
28.00 0.985 27.58 15.5% 2.03 30.1%
----------------------------------------------------------
Collar 28.43 0.985 28.00 17.3% 2.03 30.1%
28.50 0.982 28.00 17.3% 2.02 29.5%
29.00 0.966 28.00 17.3% 1.99 27.5%
29.50 0.949 28.00 17.3% 1.96 25.6%
30.00 0.933 28.00 17.3% 1.92 23.3%
30.50 0.918 28.00 17.3% 1.89 21.2%
Collar 30.77 0.910 28.00 17.3% 1.88 20.2%
----------------------------------------------------------
31.00 0.910 28.21 18.2% 1.88 20.2%
31.50 0.910 28.66 20.1% 1.88 20.2%
32.00 0.910 29.12 22.0% 1.88 20.2%
32.50 0.910 29.57 23.9% 1.88 20.2%
33.00 0.910 30.03 25.8% 1.88 20.2%
33.50 0.910 30.48 27.7% 1.88 20.2%
1/ Based on current annual dividends of $2.06 for Western Resources
and $1.56 for KCPL
Western
Resources(r)
and
KCPL
The common-sense
combination
Calculation of stock price and projected
dividends to KCPL shareholders --
post-merger indicated dividends
Western Exchange Stock Premium Dividend Increase
Stock Ratio Value to KCPL to KCPL in KCPL
Price WR/KCPL to KCPL April 12 Holders/1 Dividend/1
$27.00 0.985 $26.59 11.4% $2.11 13.9%
27.50 0.985 27.08 13.4% 2.11 13.9%
28.00 0.985 27.58 15.5% 2.11 13.9%
----------------------------------------------------------
Collar 28.43 0.985 28.00 17.3% 2.11 13.9%
28.50 0.982 28.00 17.3% 2.10 13.6%
29.00 0.966 28.00 17.3% 2.07 11.7%
29.50 0.949 28.00 17.3% 2.03 9.8%
30.00 0.933 28.00 17.3% 2.00 7.9%
30.50 0.918 28.00 17.3% 1.97 6.2%
Collar 30.77 0.910 28.00 17.3% 1.95 5.2%
----------------------------------------------------------
31.00 0.910 28.21 18.2% 1.95 5.2%
31.50 0.910 28.66 20.1% 1.95 5.2%
32.00 0.910 29.12 22.0% 1.95 5.2%
32.50 0.910 29.57 23.9% 1.95 5.2%
33.00 0.910 30.03 25.8% 1.95 5.2%
33.50 0.910 30.48 27.7% 1.95 5.2%
1/ Based on projected 1998 post-merger dividend of $2.14 as forecasted
in Western's proposed exchange offer
2/ Based on proposed 1998 post-merger indicated dividend of $1.85 as
announced in
the UtiliCorp deal
Western
Resources(r)
and
KCPL
The common-sense
combination
Implied Value of
Competing KCPL Offers
Last two years (April 1994 - Current)
[Line Graph)
[Line plotting the effect the exchange ratio would have had if the merger
of WR and KCPL had been effected on that date based on the closing price of
Western Resources' common stock closing price each month from April 1994 to
December 1995, Weekly stock price from January 19, 1996 to April 12, 1995
and Daily stock prices from April 14, 1996 to May 6, 1996]
Based on WR's price
and exchange ratio of
0.910 to 0.985
[Line plotting the effect the exchange ratio would have had if the merger
of UtiliCorp and KCPL had been effected on that date based on the closing
price of UtiliCorp's common stock closing price each month from April 1994
to December 1995, Weekly stock price from January 19, 1996 to April 12,
1995 and Daily stock prices from April 14, 1996 to May 6, 1996]
Based on
UtiliCorp's price
and exchange
ratio of 0.912
Line showing plotting the stock price of KCPL's common stock closing price
each month from April 1994 to December 1995, Weekly stock price from
January 19, 1996 to April 12, 1995 and Daily stock prices from April 14,
1996 to May 6, 1996
WR's offer, had it been in effect the past
two years, would have yielded superior
stock value compared to KCPL's stock
performance and the UtiliCorp deal.
[Legend]
KCPL [solid line]
WR Offer to KCPL [dashed line]
UCU Offer to KCPL [dotted line]
(Monthly data April '94 - December '95; Weekly data 1/19/96 - 4/12/96;
Daily data 4/11/96 - 5/6/96
Western
Resources(r)
and
KCPL
The common-sense
combination
Equivalent Dividends from
Competing KCPL Offers
Historical and Projected Dividend Levels
[Line Graph]
[line plotting the top of the range for dividends per share of common stock
based on the exchange offer and WR's historical dividends for the WR offer
from 1992 to 1995 and line plotting the top of the range for dividends per
share of common stock based on the exchange offer and WR's projected
dividends for the WR offer from 1998 to 2000]
Range based on WR's Range based on WR's dividend
dividend and exchange projected and exchange ratio of
ratio of 0.910 0.910 to 0.985
[line plotting the bottom of the range for dividends per share of common
stock based on the exchange offer and WR's historical dividends for the WR
offer from 1992 to 1995 and line plotting the bottom of the range for
dividends per share of common stock based on the exchange offer and WR's
projected dividends for the WR offer from 1998 to 2000]
[line plotting dividends per share of common stock based on the exchange
offer and UtiliCorp's historical dividends for the UtiliCorp offer from
1992 to 1995 and line plotting dividends per share of common stock based on
the exchange offer and combination of UtiliCorp and KCPL's projected
dividends for the UtiliCorp offer from 1998 to 2000]
Based on UCU's UCU announced
dividend and dividend of $1.85
exchange ratio of assuming
0.912 $0.04 annual
annual increase
[line plotting the KCPL dividend from 1998 to 2000]
WR's offer, had it been in effect the past
two years, would have yielded superior
dividends compared to KCPL's dividend
and the UtiliCorp deal. WR offers greater
dividend value following the merger.
[legend]
KCPL - solid line
WR Offer to KCPL - dotted line
UCU Offer to KCPL - dashed line
Western
Resources(r)
and
KCPL
The common-sense
combination
Customer advantages
Critical issue: Rate impact
Western Resources' Offer UtiliCorp's Offer
KCPL rates decrease $21 million KCPL rates decrease $16 million
per year (30 percent better than per year
UtiliCorp's plan)
No electric rate increase for five No electric rate increase for
years five years
KGE rates decrease $10 million per
year
KCPL, KGE and KPL rates will all be below
current national average within seven years
under the Western Resources plan
Western
Resources(r)
and
KCPL
The common-sense
combination
Electric Rates
Cents/KWH
[Bar Graph]
Three bars showing WR's, KCPL, and WR/KCPL residential electric rate at
slightly below 8 cents. Line above showing national average residential
rate of 8.83 cents.
Three bars showing WR's, KCPL, and WR/KCPL commercial electric rate at less
than 7 cents. Line above showing national average commercial rate of 7.85
cents.
Three bars showing WR's, KCPL, and WR/KCPL industrial electric rate at less
than 4.5 cents. Line above showing national average industrial rate of 4.85
cents.
Three bars showing WR's, KCPL, and WR/KCPL average retail electric rate at
less than 7.1 cents. Line above showing national average retail rate of
7.13 cents.
[Legend]
WR - Blue
KCPL - Yellow
WR/KCPL - Green
National Average - Line
Employee advantages
Critical issue: Job security/job opportunities
Western Resources' Offer UtiliCorp's Offer
No layoffs No commitment
Job opportunities with Western Involuntary severance
Resources business units relocated programs announced by
to Kansas City and Wichita UCU as recently as
June 1995 10q
Western Resources can accomplish, based on
previous KPL/KGE merger experience:
o Normal attrition (2-3% per year)
o Controlled hiring
o Work management
o Early retirement
o Employment growth in non-regulated segments
Western
Resources(r)
and
KCPL
The common-sense combination
Community advantages
Critical issue: Charitable giving/
economic development
Western Resources' Offer UtiliCorp's Offer
Maintain Western Resources/KCPL's Current corporate giving
level of civic and charitable "substantially comparable" for
giving for five years only two years
The WR/KCPL combination results in a
stronger community presence and a
coordinated economic effort focused
on growth
Western
Resources(r)
and
KCPL
The common-sense
combination
Western Resources'
strategic position
o "We regard Western Resources'
management among the most
innovative in the industry, a
characteristic that will become
increasingly important as the
industry becomes more
competitive."
--Edward Tirello
Senior Vice President
and Global Utilities Analyst
NatWest Securities
December 22, 1995
Western
Resources(r)
and
KCPL
The common-sense
combination
Western Resources'
strategic position
o Our objectives
o Leading energy and energy-related services provider in America
o Superior sustained shareholder value
o Our track record
o Four-year average annual shareholder return of 12.4%
o Solid dividend performance
o Annual increases
o 70-75% payout ratio
o Demonstrated success with strategic combinations/investments
Western
Resources(r)
and
KCPL
The common-sense
combination
Western Resources'
strategic position
o Our current position
o Strong core business
o Integrated energy solutions
o Low-cost profile
o Significant regional presence
o Leading electric wholesaler
o Leading natural gas marketer
o Developing branded identity
Western
Resources(r)
and
KCPL
The common-sense
combination
Western Resources'
strategic position
o Our future
o Strategic national competitor
o Focus on market expansion
o Energy and Security
o ADT
o Selective international investments
o The Wing Group
o 8,000 MW under development
(China, Middle East, Southeast Asia)
o Minimize risk with optional investments
o Western Resources' strategic plan
complements KCPL's plan
o Integrated, low-cost production
o Strong credit
o Sensible, strategic investments
Western
Resources(r)
and
KCPL
The common-sense
combination
UtiliCorp's strategic position
o Asset growth through diverse acquisitions
o Appears to be less concerned with near-term
earnings, dividend payout, and credit quality
o Appears to be less concerned with system
integration
o Striving to create brand identity in advance of
actual competitive sales
Western
Resources(r)
and
KCPL
The common-sense
combination
UtiliCorp's "Growth" Story
1993 1994 1995
"Energy-related
other assets (millions) $972 $1,127 $1,786
Return on Investment -4.2% 3.6% 1.6%
Since 1992, UCU has recorded more than
$120 million in writeoffs
Conclusion: Phantom Growth, Illusory Profits
Calculated based on UtiliCorp Annual Reports to shareholders
Western
Resources(r)
and
KCPL
The common-sense
combination
Strategic Results
WR UtiliCorp
Four-year annualized total return to 12.4% 8.3%
shareholders*
Current bond ratings** A-/A3 BBB/Baa3
1995 financial results***
Total Debt/Total Capital 47% 61%
Payout ratio 74% 100%
Return on average equity 11.1% 8.4%
* Since completion of the March 31, 1992 KPL/KGE merger
** Source: S&P's and Moody's published reports
*** Source: 1995 Annual Reports
Conclusion: Western Resources is a stronger company, a growing company and
a better strategic fit with KCPL
Western
Resources(r)
and
KCPL
The common-sense
combination
Better geographic match
[U.S. Map]
o Western Resources
o Kansas City Power & Light's Electric
System
o UtiliCorp's Electric System
Western
Resources(r)
and
KCPL
The common-sense
combination
Operational synergies:
joint ownership of generating properties
Western Resources:
o WR and KCPL jointly own Wolf Creek (under a separate operating
company) and LaCygne generating plants -- More than $2.2 billion
in common plants
o WR and KCPL share about 100,000 customers
in 26 communities
UtiliCorp
o No common plants with KCPL
o Few common customers
with KCPL
[picture of power plant]
Western
Resources(r)
and
KCPL
The common-sense
combination
Operational synergies
transmission interconnections
[map of Kansas and Missouri]
All of Western Resources' and Kansas City Power & Light's electric
operations are directly interconnected at high voltage through FIVE 345 kV
lines.
Only one of UtiliCorp's electric divisions is directly interconnected with
Kansas City Power & Light through TWO 345 kV lines.
[legend]
Western Resources - blue dot
Kansas City Power & Light - yellow dot
UtiliCorp - red dot
Western
Resources(r)
and
KCPL
The common-sense
combination
10 year savings (net)
WR/KCPL UCU/KCPL*
($ in Millions) ($ in Millions)
Generation
Electric Dispatch $65 $107
Capacity Deferrals 57 162
Other Generation 117 46
Field Operations 106 36
Purchasing Economies (non-fuel) 239 51
Corporative & Administrative:
Information Services 133 109
Other Administrative &
General
(net of costs to achieve) 326 125
TOTAL $1,043 $ 636
* Source: UCU/KCPL Kansas Corporation Commission merger application
Western
Resources(r)
and
KCPL
The common-sense
combination
Synergies comparison to
announced transactions
[Bar Graph]
Potential reductions
(% of Total Company)
Low 3.4%
Average 8.5%
High 11.0%
WR/KCPL 7.3%
[Bar Graph]
Nonfuel O&M
Savings -- Year 5
(% of Nonfuel
Expenses)
Low 5.0%
Average 9.5%
High 15.3%
WR/KCPL 10.7%
[Bar Graph]
Fuel Savings -- Year 5
(% of Fuel Expenses)
Low 0.0%
Average 1.0%
High 3.8%
WR/KCPL 1.2%
Information based on the last nine transactions
prior to WR/KCPL offer
Source: Deloitte and Touche study of regulatory filings
Western
Resources(r)
and
KCPL
The common-sense
combination
Where do the savings go...
[Bar Graph]
WR/KCPL
$1,043 million
$310 Customers 30%
$250 Accelerated depreciation 24%
$88 Transaction costs 8%
$220 Add'l dividends to KCPL shareholders* 21%
$175 Retained earnings 17%
* Based on Western Resources' April 26, 1996 stock price and current annual
dividend levels.
[BAR Graph]
UCU/KCPL
$636 million
$225 Customers 35%
$250 Accelerated depreciation 39%
$ 30 Transaction costs 5%
$131 Retained earnings 21%
Western
Resources(r)
and
KCPL
The common-sense
combination
Western Resources
Regulatory Plan
o Before offer to KCPL
o Accelerate Wolf Creek depreciation by $50
million per year, for seven years
o Gas rate increase of $36 million (granted
$33.8 million)
o Balance of depreciation covered by internal
cost savings and extending transmission and
distribution lives
o KGE rate reductions of $8.7 million per year
growing to $61 million per year
o With KCPL offer
o Continue all of the above
o Accelerate Wolf Creek depreciation by an
additional $50 million per year, for five years
o $21 million rate reduction to KCPL customers
o $10 million additional KGE rate reduction
o Virtual parity of KCPL and KGE rates -- to below
current national average within seven years
Western
Resources(r)
and
KCPL
The common-sense
combination
Impact of Western Resources's
regulatory plan on Wolf Creek
investment
[BAR Graph]
Wolf Creek Nuclear Generating Station ($ per KW)
1995 1,867
1996 1,773
1997 1,679
1998 1,585
1999 1,491
2000 1,397
2001 1,303
2002 1,209
2003 1,119
2004 1,021
2005 927
2006 833
2007 739
Western
Resources(r)
and
KCPL
The common-sense
combination
Simpler regulatory approval
*
Western/KCPL UtiliCorp/KCPL
o Federal Energy Regulatory o Federal Energy Regulatory
Commission Commission
o Kansas Corporation Commission o Kansas Corporation Commission
o Missouri Public Service Commission o Missouri Public Service
Commission
o Nuclear Regulatory Commission o Nuclear Regulatory Commission
o Hart-Scott-Rodino o Hart-Scott-Rodino
o Colorado Public Service
Commission
o Iowa State Utility Board
o Michigan Public Service
Commission
o Minnesota Public Utility
Commission
o W. Virginia Public Service
Commission
o British Columbia Utilities
Commission
o Treasury of Australia
o New Zealand Investment
Commission
* Source: UCU/KCPL joint proxy statement
Western
Resources(r)
and
KCPL
The common-sense
combination
Combined company profile*
Western Merged
KS, MO, OK Resources KCPL Company
Electric
Customers 600,000 430,000 1,030,000
Gas Customers 650,000 0 650,000
Annual Revenues $1.57 billion $886 million $2.46 billion
Assets $5.49 billion $2.88 billion $8.37 billion
Transmission
(miles of line) 6,300 1,700 8,000
Generating
Capacity 5,240 3,103 8,343
(MW)
* Source: 1995 Annual Reports and FERC Form 1
Western
Resources(r)
and
KCPL
The common-sense
combination
Combined company
financial forecast
1998 1999 2000
(dollars in thousands, except per share amounts)
Operating revenues $2,663,371 $2,726,047 $2,799,694
Operating expenses 2,193,688 2,241,227 2,316,283
Transaction costs 88,000 -- --
Operating income 381,683 484,820 483,411
Other income and deductions 65,943 94,531 100,599
Income before interest charges 447,626 579,351 584,010
Interest charges 216,531 210,379 206,877
Net income 231,095 368,972 377,133
Preferred and preference dividends 1,129 1,129 1,129
Earnings applicable to
common stock $229,966 $367,843 $376,004
Average common shares
outstanding 126,732 128,020 128,020
Earnings per common share $1.81 $2.87 $2.94
Earnings per common share excluding
costs to achieve savings and
transaction costs $2.64 $2.89 $2.94
Dividends per share $2.14 $2.18 $2.22
Projected dividends per share
to KCPL shareholders
Low $1.95 $1.98 $2.02
High $2.11 $2.15 $2.19
Western
Resources(r)
and
KCPL
The common-sense
combination
Projected merger timeline
o Western Resources definitive
proxy and preliminary
exchange offer Mailed May 4
o KCPL shareholder vote
rejected or postponed May 22
o Western exchange
offer effective May 30 - June 30
o Western receives 90% + After effective date
KCPL stock tendered of exchange offer
OR
o Western negotiates with
KCPL Board '' ''
OR
o Western seeks removal of
KCPL Board '' ''
o Western completes merger August 1997 -
with KCPL December 1997
Western
Resources(r)
and
KCPL
The common-sense
combination
Summary
To be able to take advantage of
what we believe is the
financially superior Western
Resources merger offer --
Vote "AGAINST" the UtiliCorp
deal on the BLUE proxy card.
A registration statement relating to the Western Resources securities
referred to in this letter has been filed with the Securities and Exchange
Commission but has not yet become effective. Such securities may not be
sold nor may offers to buy be accepted prior to the time the registration
statement becomes effective. This letter shall not constitute an offer to
sell or the solicitation of an offer to buy nor shall there be any sale of
these securities in any state in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the
securities laws of any such state.
The preceding material contains forecasts, projections, and other forward-
looking statements, that are based on the unaudited forecasted financial
data included in Western Resources' preliminary prospectus dated April 22,
1996, with respect to the exchange offer. All such information is subject
to the assumptions and variables described in the preliminary prospectus.
This ad runs in the national run of the Wall Street Journal Thursday, May
9; the Kansas City Star Wednesday, May 8; the Topeka Capital Journal
Wednesday, May 8; and the Wichita Eagle Wednesday, May 8:
ATTENTION KCPL SHAREHOLDERS
THE BLUE PROXY CARD
GIVES YOU FREEDOM
OF CHOICE AND
BETTER DIVIDENDS.
[PICTURE]
The board of directors of KCPL is trying to prevent you from considering
the Western Resources' offer. Western Resources believes that KCPL
shareholders deserve to make the choice for themselves. The BLUE proxy
card that you have received gives you the freedom to consider the Western
Resources' offer. When you sign the BLUE proxy card and vote "AGAINST" the
UtiliCorp merger, you are voting to have the chance to accept a better
deal. It's that simple. Even if you've already mailed a white proxy card,
you have every legal right to change that vote by signing, dating, and
mailing your BLUE proxy card today.
[PICTURE]
Vote AGAINST UtiliCorp with the BLUE proxy card. YOU CAN TURN OFF THE
UTILICORP/KCPL MERGER
For more information, call Georgeson & Company, Inc., assisting us toll-
free at 1-800-223-2064.
[LOGO]
Western Resources
Western Resources has filed exchange offer materials with the Securities
and Exchange Commission and intends to make its offer directly to
shareholders of KCPL as soon as its registration statement has been
declared effective by the S.E.C.
A registration statement relating to the Western Resources securities
referred to in these materials has been filed with the Securities and
Exchange Commission but has not yet become effective. Such securities may
not be sold nor may offers to buy be accepted prior to the time the
registration statement becomes effective. These materials shall not
constitute an offer to sell or the solicitation of an offer to buy nor
shall there be any sale of these securities in any state in which such
offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state.
The following is correspendence sent to KCPL:
John E. Hayes, Jr.
Chairman of the Board and
Chief Executive Officer
May 8, 1996
Mr. A. Drue Jennings
Chairman & CEO
Kansas City Power & Light Company
1201 Walnut
Kansas City, MO 64141
Dear Drue,
Your comments regarding the "collar" associated with our $28 per share
offer for KCPL, although inaccurate in our opinion, indicate that you
recognize the importance to KCPL shareowners of the level of dividend that
will result from a merger.
The announcement made today regarding intended dividend action by you
and UtiliCorp confirms that you understand that priority. However, we
believe that announcement will serve more to confuse KCPL shareowners than
to create any real benefit for them.
To make it clear to you and the KCPL shareowners that we have a
commitment to providing superior value, our Board of Directors has approved
the following improvement in the offer already made to the KCPL Board and
announced to the KCPL shareowners on April 22. The improvement changes the
minimum exchange ratio in the collar from .833 to .91 Western Resources'
common share per KCPL common share. As a result, the lowest annual
equivalent indicated dividend rate for KCPL shareholders would be $1.88
based on our current $2.06 dividend rate. It also improves the opportunity
for increased share value should Western Resources' stock price increase
beyond the tighter collar. The other terms of our offer remain the same.
Because our offer represents a substantial improvement to the
KCPL/Western Resources merger, we would expect your Board will want to
reconsider our offer. Naturally, as the time until your annual meeting
gets shorter, we must continue to move forward with our communications with
the KCPL shareowners. Therefore, we would appreciate your response no
later than the end of the day May 8, 1996.
As always, we are prepared to meet with you and your Board to discuss
this or any other aspect of our offer.
Sincerely,
John E. Hayes, Jr.
Chairman and Chief Executive Officer
Western Resources, Inc., 818 Kansas Avenue, P.O. Box 889, Topeka, Kansas
66601-0889
1-800-527-2495
http://www.wstnres.com
The following is correspondence sent to Western Resources shareholders:
John E. Hayes, Jr.
Chairman of the Board and
Chief Executive Officer
May 3, 1996
Dear Western Resources' Shareowner,
As we told you one week ago, we are entering a very active phase in
our effort to combine with Kansas City Power & Light.
During this period, I want you to know that the value of your Western
Resources' investment and the strength of your dividend is at the forefront
of our consideration.
Be assured every step we are taking in this effort is designed to
increase the value of Western Resources.
Thank you for all the support you have given us in this effort.
Sincerely,
John E. Hayes, Jr.
Chairman and Chief Executive Officer
Western Resources, Inc., 818 Kansas Avenue, P.O. Box 889, Topeka, Kansas
66601-0889
1-800-527-2495
http://www.wstnres.com