View:
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 brochure was mailed to KCPL Shareholders on June 26, 1996:
New! Information specifically requested by KCPL shareowners is inside!
Updated with Western Resources' June 17, 1996 higher offer to KCPL
shareowners!
"From KCPL's point of view, it's going to be hard to convince shareholders why
they need to turn this offer down. It's clearly more competitive that what
UtiliCorp has on the table."
Satyam Mallick
Utility Analyst
Duff & Phelps Credit
Rating Company
June 18, 1996
A plain language guide to the Western Resources/KCPL Merger
Why should KCPL merge with Western Resources?
We believe the future of this combination means...
The creation of one of the strongest regional business bases in the utility
industry providing a platform to achieve greater growth in the competitive,
unregulated environment.
KCPL will join with a company that has already achieved success in new
markets, including home security, power development and electric and gas
marketing.
KCPL shareowners will benefit from a combination of near term and long term
growth. The near term growth is reflected in the dividend policy and the
premium share price offer. The long term growth is reflected in marketplace
positioning as a strong regional utility and in Western Resources' growth in
new markets.
Moving forward as a financially stronger company, Western Resources is able to
accomplish this merger and maintain its financial strength through the large
amount of savings that the combination can provide and the healthy growth
projected.
Dear KCPL Shareowner:
You have told us you wanted to receive a clear, plain language description of
our offer, our company and the process that lies ahead. This brochure is in
direct response to those requests.
Those of you who hold KCPL stock for income want to know about the dividends.
Those of you holding it as an investment want to know about selling price or
growth prospects. All of you want to make the right decision.
We understand the concern many of you have expressed with the amount of
information you received in April and May about the competing proposals. While
these details are a necessary part of the process, this brochure is intended
to give you the essentials of, and our beliefs about, our improved offer in
clear and simple terms. You may want to review the details of our proposal
with your financial advisor.
On June 17, 1996, Western Resources significantly improved its offer to merge
with KCPL. It includes $31 in Western Resources common stock. Your dividend
per KCPL share is projected to rise to between $2.00 and $2.35, based on
Western Resources' projected annual dividend in 1998. We believe the benefits
you would receive under our new offer are far superior to the UtiliCorp/KCPL
proposal.
If you wish to receive a copy of Western Resources' annual report, if you have
specific questions about our offer, or if you simply want to know more about
how this process works, please call toll free at 1 800 223 2064.
We look forward to welcoming you as shareowners of an exciting new company.
John E. Hayes, Jr.
Chairman and Chief Executive Officer
WESTERN RESOURCES' OFFER TO COMBINE WITH KCPL
"The Kansas City board has no option but to sit down and talk to (Western).
Shareholders will bring lawsuits if they don't."
Edward Tirello
Utility Analyst
NatWest Securities
June 18, 1996
"This is a very generous offer. I think it will be difficult for the (KCPL)
board to reject the offer so quickly again."
Barry Abramson
Utility Analyst
Prudential Securities
June 18, 1996
"I suspect that they (KCPL board) would have to give this serious
consideration. It certainly is a generous price relative to what the merger
with UtiliCorp would be."
Ray Moore
Utility Analyst
Dillon Read
June 18, 1996
KCPL Shareowners
Our Offer: Western Resources
Dividend increase to $2.00 to $2.35 projected following closing. That is
23% 45 % higher than the current dividend and 8% 27% higher than
UtiliCorp/KCPL projected dividend.*
$31.00 per share in Western Resources stock, a 30% premium over market.***
Tax free transaction.
Their Proposal: UtiliCorp
"Intention to recommend" dividend of $1.85 following closing.**
Floats with UtiliCorp value.****
Tax free transaction.
*Dividend increases projected for KCPL shareowners are based upon Western
Resources' 1998 projected annual dividend of $2.14 per share and KCPL's
current annual dividend of $1.56 per share, and the UtiliCorp/KCPL announced
intention to recommend a dividend of $1.85 after their proposed merger.
**KCPL News Release, May 6, 1996.
***Based upon closing stock prices April 12, 1996, the last trading day prior
to the public announcement of Western Resources' offer, 20% premium over
closing stock price on June 14, 1996, the last trading day prior to the
announcement of the improved offer. The exchange ratio provides that KCPL
shareowners will receive at least 0.933 and as much as 1.1 shares of Western
Resources' common stock
****Based on one for one exchange ratio announced May 19, 1996.
Financial Strength
Our Offer: Western Resources
Western Resources' bond rating is A-.
Their Proposal: UtiliCorp
UtiliCorp's bond rating is BBB.
*Western Resources has been placed on credit watch with negative implications,
which Western Resources believes is a normal process for companies involved in
merger activities. For example, KCPL has also been put on credit watch with
negative implications.
"It would appear UtiliCorp's offer is not competitive. I think it would be
hard for UtiliCorp, considering its financial condition, to compete with this
offer."
Barry Abramson
Utility Analyst
Prudential Securities
June 18, 1996
"The ball is definitely in UtiliCorp's court. This is enough of a premium
that (UtiliCorp) will have to come back with a very good offer or an excellent
rationale as to why the KCP&L shareholders should stick with them."
Dennis Hudson
Utility Analyst
George K. Baum & Company
June 18, 1996
KCPL Employees
Our Offer: Western Resources
No layoffs, period.
Their Proposal: UtiliCorp
No commitment.
In the KGE merger of 1992, savings were achieved with no layoffs.
Greater Kansas City Community Benefit
Maintain Western Resources'/KCPL's current level of civic and charitable
giving for at least five years.
KCPL remains headquartered in Kansas City, Mo.
Relocation of a rapidly growing Western Resources business unit to Kansas
City.
Enhanced bistate economic development.
The Savings
Western Resources/KCPL merger is projected to result in cost savings of $400
million more than projected in the UtiliCorp proposal over the first ten years
of the merger.
Western Resources' numbers were developed with the assistance of Deloitte &
Touche Consulting Group, the firm which previously assisted management in
accurately estimating the savings amount in the KPL/Kansas Gas & Electric
merger. Deloitte & Touche Consulting Group has assisted in similar savings
analysis in 13 of the last 16 announced utility mergers.
Western Resources' savings are supported in detailed documents, which have
been publicly filed with regulatory agencies.
Why we believe Western Resources' offer has more savings than the UtiliCorp
deal.
UtiliCorp's far flung operations (including British Columbia, Australia and
New Zealand) make it more difficult to manage and achieve savings.
Western Resources electric operations are all adjacent to and interconnected
with KCPL.
Western Resources shares more than $2 billion in assets and almost 100,000
customers with KCPL.
Western Resources is a bigger company than UtiliCorp.
Western Resources has demonstrated the ability to make utility mergers work.
"They (Western Resources) have more opportunity for economies, cost savings,
synergies, however you want to put it, than UtiliCorp has, and they (Western
Resources) can afford to pay more."
Dan Rudakas
Utility Analyst
Everen Securities
June 18, 1996
Our Record
"Western Resources has a proven track record of successfully working through
utility mergers in the recent past in a way that creates shareholder value and
benefits for ratepayers. Because of this, we have a great deal of confidence
that the management can accomplish similar success in a merger
with (KCPL)."
Barry M. Abramson
Utility Analyst
Prudential Securities
June 18, 1996
Profile
Western Resources (NYSE:WR) is a Kansas based, diversified energy company that
began operating in Topeka as The Kansas Power and Light Company (KPL) more
than 70 years ago.
During that time, KPL grew into the company it is today through more than 300
mergers or acquisitions of predecessor companies the most recent of which was
KPL's merger with KGE in 1992 resulting in the formation of Western Resources,
Inc.
Through its regulated and unregulated companies, Western Resources provides a
full range of energy and energy related products and services. Its regulated
utilities, KPL and KGE, provide electricity and natural gas service to more
than 1.2 million customers in Kansas and northeastern Oklahoma. The companies
provide natural gas service to approximately 650,000 customers and electric
service to approximately 600,000 customers.
Through its subsidiaries, Westar Business Services, Westar Consumer Services,
Westar Capital, The Wing Group and the Mid Continent Market Center, energy
related products and services are developed and marketed in the continental
U.S. and internationally.
Information about Western Resources and its operating companies can be
accessed on the Internet at http://www.wstnres.com.
Financial Strength and Stability
Western Resources has paid dividends every year since its founding in 1924,
and dividends have been increased every year for the last 20 years.
Since 1992, Western Resources has delivered total returns to shareholders
(through stock price appreciation and dividends) nearly 50 percent greater
than has UtiliCorp. (Based on 1992 1995 Western Resources and UtiliCorp
annual reports.)
Western Resources is 41 percent larger by assets than UtiliCorp. (Based on
1995 Western Resources and UtiliCorp annual reports.)
UtiliCorp's Poor Track Record
Since 1992, UtiliCorp has had to write off more than $120 million in bad
investments. (Based on 1993 1995 UtiliCorp annual reports.)
UtiliCorp has invested almost half of its assets (nearly $1.8 billion) in
"energy related and other" assets, which in 1995 produced a return on
investment below a passbook savings rate. (See page 54, 1995 UtiliCorp annual
report)
UtiliCorp's bond rating is BBB.
Promises Made, Promises Kept
Western Resources' 1992 merger with Kansas Gas & Electric:
$32 million in customer rebates.
Promised and delivered!
No layoffs of KGE employees.
Promised and delivered!
Millions of dollars in savings.
Promised and delivered!
KGE headquarters to remain in Wichita.
Promised and delivered!
Western Resources: Corporate Stewardship
Western Resources is committed to preserving the environment. Since 1992,
Western Resources has received 12 major awards for its environmental programs.
Western Resources is an industry leader in technologies to make power plants
"cleaner"; we help our customers use energy wisely; and have an employee
directed "Green Team" that recommends policies and projects to improve our
facilities and the environment in the areas we serve.
Through the Western Resources Foundation, we make contributions to programs
benefiting children, the elderly and the environment.
Western Resources is one of the major area firms contributing to the Royals
Succession Plan, which keeps major league baseball in Kansas City.
Western Resources employees volunteer in their communities. We take an active
role in United Way programs, the March of Dimes, in local Chamber activities
and other worthwhile causes.
Through Project DESERVE, Western Resources provides emergency energy related
bill payment assistance to elderly and disabled persons.
Western Resources helps "take a bite out of crime" through the vigilance of
our employees within the neighborhoods we serve. Our McGruff Truck tm program
trains employees to watch for and report problems. Company radio equipped
vehicles also serve as safe havens for those waiting for authorities or
needing assistance in emergency situations.
Our Vision Respected
"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
Utility Analyst
NatWest Securities
June 18, 1996
The Vision That Works
Western Resources' vision is to be the leading provider of energy and energy
related services in America, while providing superior, sustained shareowner
value.
Western Resources' four part business strategy consists of the following
elements:
A strong core utility business.
A strong regional presence as a total energy provider.
Branded national presence that will cause us to be among the leading
diversified energy and related services companies in the U.S.
Being a leader in the international energy business.
The foundation for this balanced approach is a policy of growing only through
transactions which increase both near term and long term shareowner value.
Our Vision Realized
In 1996, Western Resources acquired The Wing Group, the premier developer
of international power projects, expanding Western Resources' access in
unregulated markets.
Western Resources has become the largest shareholder in ADT Limited, the
largest provider of monitored security services, an investment designed to
expand our national reach of unregulated services.
To prepare its employees for the changing energy industry, Western Resources
instituted an innovative program called Project BLUEPRINT in 1994. The
program engages employees in changing the traditional ways we think about
business, while enhancing customer service with multiple products and
services.
What is going to happen now?
If I accept the Western Resources offer, what happens to my KCPL stock?
Under the exchange offer, you will have the opportunity to exchange tax free
your KCPL stock for Western Resources stock valued at $31. The exchange ratio
has a protective collar so that KCPL shareowners will receive at least 0.933
and as much as 1.1 shares of Western Resources common stock for each share of
KCPL common stock. Upon completion of the merger, you will be a shareowner of
the combined company.
I sent in my proxy card in May. Why do I have to go through this again?
UtiliCorp and KCPL cancelled that vote on their merger proposal when it became
apparent the transaction would not be approved by KCPL shareowners. Now, it
is necessary to begin again. By filling out the GOLD proxy card and voting
against the UtiliCorp proposal, you are helping to move the Western Resources
offer forward.
How will my KCPL shares be stronger?
First, under our offer of $31 of Western Resources' stock, you will receive
significantly more than the current market price of your KCPL stock.. Also,
you will receive a company with a vision that works ... one that we believe
produces growth and value.
What is going to happen now?
Why should I vote against KCPL management?
First, we believe our offer is financially superior to the UtiliCorp proposal
and provides greater value both short and long term for your KCPL shares.
Second, the shareowners are the owners of KCPL, not management which owns less
than 1% of KCPL's stock. The KCPL management and board refused to meet with us
to gain an understanding of our original offer last April. We had to present
our offer directly to you because we never had the opportunity to present
these ideas in person to KCPL management.
Can the Western Resources/KCPL merger succeed?
Yes. You, the shareowners, can help make it happen by voting AGAINST the
UtiliCorp proposal on the GOLD card, by letting KCPL management know how you
feel and tendering your shares after our exchange offer is declared effective.
What do I do about the UtiliCorp proposal?
To have the opportunity to accept our offer, you should vote AGAINST the
proposal on the UtiliCorp plan. Remember, the decision is yours as an owner
of KCPL. We believe we have a financially superior offer and a vision that
works.
Western Resources/KCPL
Timeline
KCPL shareowner vote on CANCELLED by
original UtiliCorp offer KCPL
Record date on which you June 26, 1996
must be a KCPL shareholder
to vote
KCPL shareowners begin Immediately after
to tender shares to Western effective date of
Resources exchange offer
Western Resources completes Expected August to
merger with KCPL* December 1997
*Completion of the merger is subject to terms and conditions detailed in the
Western Resources' preliminary prospectus dated June 19, 1996.
Your vote in the previous merger election has been cancelled by KCPL and
UtiliCorp.
This is a new vote because KCPL cancelled the May 22 merger vote after, we
believe, it became apparent the UtiliCorp proposal would be defeated by KCPL
shareowners. To be able to take advantage of what we believe is a financially
superior and visionary offer...
Vote AGAINST the UtiliCorp/KCPL proposal on the GOLD proxy card. Sign, date
and return the GOLD proxy card today.
Support Western Resources with a call to KCPL and to the members of KCPL's
board of directors.
Tender KCPL shares to Western Resources when we begin the exchange offer to
you.
If you have any questions on our offer, please call Georgeson & Company, who
is assisting us, toll free at 1 800 223 2064.
If you want additional information on Western Resources, please call toll free
at 1 800 544 0176 or access our web site at http://www.wstnres.com.
Western Resources has filed exchange offer materials with the Securities and
Exchange Commission and intends to make its offer directly to shareowners of
KCPL as soon as its registration statement has been declared effective by the
Securities and Exchange Commission.
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 an excerpted script of a media teleconference conducted by
Western Resources' Senior Management on June 17, 1996:
INTRODUCTION: "Important legal information about the status of Western
Resources' registration statement follows the excerpts of the media
conference. The material that follows contains certain statements of opinion
and belief."
Excerpted Transcript of the Western Resources Media Teleconference
with John E. Hayes, Jr., Chairman and CEO, David Wittig, President, Steve
Kitchen, Executive Vice President and CFO
June 17, 1996
John E. Hayes, Jr.:
Thank you very much and good morning to you all.
Thank you for joining us. I would like to make a few brief opening comments
and then open it up for any questions you may have.
First of all, David Wittig, president of Western Resources, and Steve Kitchen,
who is our executive vice president and chief financial officer are present.
As you know, we have made an offer to merge with KCPL. It is our view that
the benefits of combining KCPL and Western Resources are simply too great to
pass up.
Now, because of this opportunity for shareowners, customers and employers and,
in fact, the communities we serve, our board of directors has authorized me to
make the following increase in our proposal.
We are now offering KCPL shareowners $31 per share (within a collar of .933
and 1.1). That is an increase from our original proposal of $28 per share.
This new price represents a 30% premium over KCPLs closing price on April 12,
which was the last trading day prior to the announcement of our original offer
and it's a 20% premium over last Friday's KCPL closing price. The projected
dividend range per KCPL share also goes up with this offer.
Western Resources projects that the annual dividend and closing in 1998 will
range from $2 to $2.35. This compares with the announced UtiliCorp intention
to recommend a $1.85.
Raising our offer reflects our belief that this merger makes great business
sense and we must aggressively pursue its completion. Our plan is to move
forward.
We've urged the KCPL board of directors to accept our offer, which we believe
is clearly financially superior to the UtiliCorp proposal.
In our view, the recent restructuring of the UtiliCorp proposal is frankly an
obvious attempt to restrict the voice of the KCPL shareowners. We remain
hopeful that KCPL's management and board will see the merits and benefits of
our new offer, and for the sake of their shareowners, employees and customers
will take the opportunity to meet with us personally to discuss our offer.
With that, I'd be interested in hearing questions and comments if there are
any.