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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.
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(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:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:*
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4) Proposed maximum aggregate value of transaction:
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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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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/x/ Filing fee paid with preliminary filing.
The following materials will be used in presentations to be made to the
public beginning May 15, 1996.
Western
Resources(r)
and
KCPL
The common-sense
combination
Shareholder advantages
Western Western
Resources' UtiliCorp's Resources'
Offer (1) Offer Premium
Price $28.00 $23.88 (2) 17.3%
Current
dividend $1.88 - $2.03 $ 1.56 (3) 20.2% - 30.1%
Dividend
at closing $1.95 - $2.11 $ 1.85 (4) 5.2% - 13.9%
Tax-free Tax-free
(1) Subject to exchange ratio of .910 - .985 Western Resources shares for
each KCPL share. Based on 5.8.96 prices, exchange ratio would be .945
Western shares for each KCPL share. Dividend at closing based on
post-merger indicated dividend of $2.14 as forecasted in Western's
proposed exchange offer.
(2) KCPL closing share price on April 12, 1996, the last trading day
before the public announcement of the Western Resources Offer.
(3) Current dividend of KCPL.
(4) Based on announcement by KCPL of intent to recommend a dividend of
$1.85 following the close of the merger.
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
UtiliCorp's "Growth" Story
1993 1994 1995
"Energy-related
other assets (millions) $972 $1,127 $1,786
Operating Income (millions) $(41) $ 41 $ 29
Return on Investment -4.2% 3.6% 1.6%
Since 1992, UCU has recorded more than
$120 million in writeoffs
Conclusion: Phantom Growth, Illusory Profits
Calculated based on UtiliCorp Annual Reports to shareholders
Western
Resources(r)
and
KCPL
The common-sense
combination
Strategic Results
WR UtiliCorp
Four-year annualized total return to 12.4% 8.3%
shareholders*
Current bond ratings** A-/A3 BBB/Baa3
1995 financial results***
Total Debt/Total Capital 47% 61%
Payout ratio 74% 100%
Return on average equity 11.1% 8.4%
* Since completion of the March 31, 1992 KPL/KGE merger
** Source: S&P's and Moody's published reports
*** Source: 1995 Annual Reports
Conclusion: Western Resources is a stronger company, a growing company and
a better strategic fit with KCPL
Western
Resources(r)
and
KCPL
The common-sense
combination
10 year savings (net)
WR/KCPL UCU/KCPL*
($ 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
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
Western Resources' offer
can succeed
Critical Issue: How does WR differ from
failed attempts of others?
o Western has offered what it believes is superior
value from the start -- market premium and
greater dividend accretion
o KCPL has already agreed to a reorganization --
UtiliCorp's competing bid offers no premium
and smaller projected dividends
o Western is taking its offer directly to KCPL
shareholders
o Western filed its regulatory plan the same day
as it made its offer
o Western Resources' regulatory plan is better for
customers
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.
Western
Resources(r)
and
KCPL
The common-sense
combination
Contacts
Georgeson & Company, Inc.
Wall Street Plaza
New York, New York 10005
800-223-2064
Rick Kready
Western Resources
818 Kansas Avenue
Topeka, Kansas 66612
913-575-8226
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.