ML20059A743
| ML20059A743 | |
| Person / Time | |
|---|---|
| Site: | Wolf Creek  |
| Issue date: | 08/14/1990 |
| From: | Martin R NRC OFFICE OF INSPECTION & ENFORCEMENT (IE REGION IV) |
| To: | Jonathan Evans KANSAS CITY POWER & LIGHT CO. |
| References | |
| NUDOCS 9008230203 | |
| Download: ML20059A743 (7) | |
Text
q AUG l 41933 i
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Kansas City _ Power & Light Company ATTN:
J. M. Evans, Senior Vice President 1
and Chief Operating Officer J
1330 Baltimore Avenue j
P.O. Box 418679 i
Kansas City, MO 64141-9679
Dear Mr. Evans:
This ackowledges your August 8, 1990, visit to NRC Region IV. Thank you J
for informing ne and my staff of the status.of your actions with respect to the recent Kansas City Power & Light Company offer to purchase Kansas Gas &
Electric Company. Your assurance that this offer to purchase will have no effect on the safety of operations at the Wolf Creek Nuclear Generating Station is of importance to ne and the NRC. Of course, my staff will continue to monitor safety-related activities at Wolf Creek.
Sincerely.
ORIGINAL SIGNED By l
ROBERT D. MART Robert D. Mart N.n-Regional Administrator i
cc:
Wolf _ Creek Nuclear Operating Corporation j
ATTN: Bart D. Withers President and Chief Executive Officer-
)
P.O. Box 411 1
Burlington, Kansas 66839 1
Wolf Creek Nuclear Operating Corp.
ATTN: Gary Boyer, Plant Manager P.O. Box 411 l
Burlington, Kansas 66839 RIV:DD:DRP RA TPGyynn/bh RDM in 8/13/90 8/l /90 1
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.c Kansas City Power & Light Company I
Shaw, Pittman, Potts'&;Trowbridge ATTN: Jay Silberg, Esq.
1800 M Street. NW.
Washington. D.C.
20036-j Public Service Commission-ATTN: Chris R. Rogers., P.E.
Manager, Electric Department '
i P.O. Box 360 Jefferson City, Missouri 65102
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. U.S. Nuclear Regulatory Commission
' ATTN:
Regional Administrator, Region III 799 Roosevelt Road
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Glen Ellyn Illinois.60137 o
Wolf Creek Nuclear Operating Corp.
ATTN: Otto Maynard, Manager Regulatory Services-P.O. Box 411 Burlington, Kansas 66839 K6asas Corporation Conn 11ssion i
ATTN:
Robert Elliot, Chief Engineer r
Utilities Division 4th Floor - State Office Building Topeka, Kansas 66612-1571 Office of the Governor State of Kansas Topeka, Kansas 66612 i
Attorney General Ist Floor - The Statehouse Topeka, Kansas 66612 Chairman, Coffey County Commission i
Coffey County Courthouse Burlington, Kansas 66839 Kansas Department of Health and Environnent Bureau of Air Quality & Radiation Control ATTN:
Gerald Allen, Public Health' Physicist Division of Environment Forbes Field Building 321 Topeka, Kansas 66620-
Kansas City Power & Light Company
Enclosure:
July 23, 1990, Press Release w/bec only bcctoDMB(IE45)DocketSTN50-482 bec distrib.-by RIV:
R. D. Martin Resident Inspector Section Chief (DRP/0)
DRP DRSS-FRPS-R. Hague, RIII RIV File SRI, Callaway RIII Project ~ Engineer (DRP/D).
Lisa Shea, RM/ALF-DRS 1
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- KANSAS CITY POWER & LIGHT COMPANY.
1830 94LitMORt AviteUC P O 90141M79 b
KANSAS CITY, MISSOURI 64141. % 79 FOR IMMEDIATE RELEASE o
For: _ Kansas City Power & Light Company
Contact:
' J. Turner White
' Joele Frank M DSS 6-2997 j
KANSAS CITY POWER & LIGHT COMPANY COMMENCING FULLY FINANCED TT.NDER OFFER FOR KANSAS GAS AND ELECTRIC COMPANY -
AT $27 PER SHARE IN CASH b
KANSAS CITY, MISSOUkL hily 23,1990 - Kansas City Power & Light Company (NYSE: KLT) announced that.it has today commenced a tender offer for all outstanding shares of Kansas Gas and &ctric Company Common Stock'(NYSE: KGE) at $27.00 per share in cash, Kansas Gas and Electric 4-1/2% Preferred Stock at $110.00 per share in cash, Kansas Gas and Electt:c 4.32% Preferred Stock at $101.64 per share ~in cash and Kansas Gas and Electric 4.28% Preferred Stock at $101.00 per share in cash. The offer price for the Common Stock, approximately $857 million in the aggregate, represents a-1
=37% premium over the niarket price of Kansas Gas and Electric Common Stock on July 20,1990, the last trading day prior to the commencement of Kansas City Power &
Light's offer.
<q Kansas City Power & Light has executed a $1 billion definitive credit agreement -
j with Westpac Banking Corporation and The First National Bank of Chicago providing for
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financing necessary to complete the tender offer and related transactions. Donaldson, 9
Lufkin & Jenrette Securities Corporation is serving as the financial advisor and dealer q
manager for the tender offer.
The tender offer is conditioned upon, among other. things: -
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o-at least 90% of the total number of common shares and each blass of preferret h
shares of Kansas Gas and Electric being-tendered in the offer and the "short-form"
, merger provisions of Kansas and Missourilaw being cpplicable to the merger of
- Kansas City Power & Light and Kansas Gas and Electric after consummation of the offer; f
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4 Kansas City Power & Light having received all necessary governmental and o-regulatory approvals and consents for the accuisition of shares in the offer, for consummation of the merger and related transactions and to borrow funds under the definitive credit agreement, including necessary approvals or consents of the Federal Energy Regulatory' Commission, the Nuclear Regulatory Commission and the state utility commissions in Kansas and Missouri; 1
Kansas City _ Power & Light being satisfied that the Kansas Bustr.ess Combination t
o Act has been complied with or is inappilcable to the offer and the merger; Kansas City Power & Light having obtained sufficient financing to enable it to
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o purchase all Kansas Gas and Electric shares, redeem certain preferred shares of Kansas City Power & Light, pay related expenses and, if necessary, to refinance certain indebtedness of Kansas Gas and Electric; and o
the authorization by Kansas Gas and Electric' stockholders under the Kansas Control Share Acquisitions Act of voting rights for all shares acquired by Kansas City J
Power & Light unless Kansas City Power & Light determinet such Act is
-inapplicable to Kansas City Power & Light.
Kansas City Power & Light has made a request under the Kansas Control Share Acquisitions Act that Kansas Gas and Electric call a Special Meeting of Kansas Gas and l
Electric stockholders within 30 to'50 days in order that Kansas Gas and Electric's stockhol&:s may authorize Kansas City Power & Light to vote all shares it acquires in the tender offer.
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The offer is scheduled to expire at 12:00 midnight, New York City time, on Monday, e
August 20,1990, but it is anticipated that the offer will be extended from time to time q
until af ter the Special Meeting and until all necessary governmental and regulatory approvals and consents have been received. Dewe Rogerson Inc. will be information l
agent for this offer.
A. Drue Jennings, President and Chief Executive Officer of Kansas City Power &
Light, today sent the following letter to Wilson K. Cadman, Chairman of the Board and President of Kansas Gas and Electric:
Dear Wilson:
l On a number of occasions over the past two years we have expressed to you.
L our interest in exploring the possibility of a business combination of Kansas Gas and Elec"Ic Company ("KG&E") and Kansas City Power & Light Company
("KCPL"). This interest has grown as we have reviewed the potential l
synergies that we believe exist between our two companies.
I
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l Therefore, on behalf of KCPL's Board of Directors, I have been authorized to -
propose a negotiated merger in which all holders of KG&E Common Stock will receive $27.00 per share in cash, all holders of KG&E 4-1/2% Preferred Stock will receive $110.00 per share in cash, all holders of KG&E 4.32% Preferred Stock will receive $101.64 per share in cash and all holders of KG&E 4.28%
Preferred Stock will receive $101.00 per snare in cash. In order to accomplish
= this goal, we are today announcing a cr n tender offer for all of KG&E's outstanding Common Stock and Pre arred Stock at these prices and are r
l requesting you to call a Special Weting of Stockholders within 50 days (but l
not less than 30 days), all in accordance with Kansas' Control Share 1-Acquisitions Statute, so that KG&E's stockholders may authorize us to vote I
all shares we acquire in the tender offer. KCPL has entered into a definitive credit agreement with Westpac Banking Corporation and The First National Bank of Chicago which provides the financing necessary to complete the proposed transaction.
This offer c-oresents a 37% premium over the market price of KG&E Common Stoc. on July 20,1990, the last trading day prior to the commencemem of our offer. Because of our belief that we can provide the best opportunity for your stockholders, customers and employees, I expect that, should you provide non-public information to any third party, you will, l
consistent with your obligation to your stockholders, provide the same information to us in order to permit us the opportunity to evaluate the impact of such information on our offer.
Wilson, I want to emphasize our strong desire to achieve a negotiated transaction and would like to meet with you as soon as possible to discuss all l
aspects of our offer. Personally, I would have preferred to proceed with L
negotiations prior to commencement of our tender offer, but we were strongly advised to commence our offer before making a proposal to you.
The logic behind this offer is quite simple: we believe it offers substantial advantages to all constituencies served by both utilities. As our neighbor, you know that KCPL has a history of investing in and operating its business to achieve continuing long-term benefits for its stockholders, customers and employees. KCPL's strong record of constantly improving the productivity and profitability of its plants and facilities speaks for itself. We are confident that this combination will benefit customers of both our utilities, Specifically, due to anticipated cost savings and reduced capital expenditures which will result from the combination, KCPL is committed to freezing rates for all of the KG&E and KCPL retail and wholesale sales for resale customers through January 1,1993. We believe this is possible because the merger will minimize the need for future capital expenditures by either company to build needed generating capacity. The combination will make more complete and efficient use of KG&E's 'nstalled generating capacity, and at the'same time delay KCPL's need to add capacity. Based on our analysis of presently available information, we estimate the combined' company's cumulative revenue requirements during the first five years after the merger would be at least $85 million less than they would otherwise be absent the merger.
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4-1 We are quite proud of our public service record and intend to continue to adhere to the highest business standards possible and to enhance the communities which we serve. We plan to build on this record after the merger of our two companies. Moreover, to ensure that the constituencies KG&E serves are represented on the combined company's Board, we are also 4
proposing that KCPL's Board of Directors be expanded by nominating five members drawn from the territories served by KG&E.. We plan to institute a citizens advisory grou : in KG&E's service territory similpr to the group of r
citizens which was formed in 1980 by KCPL and which currently advises KCPL on its plans, programs and operations.'
i We also recognize that, in addition to considering the best interests of stockholders and communities served, directors properly feel a further responsibility toward employees, and we would like you to be aware of KCPL's sincere concern in this regard. We expect that KG&E's plants and facilities will continue to be operated by the f. ne employees currently working for KG&E, All existing labor agreements and employment contracts will be honored and we do not anticipate any layoffs as a result of this merger. Moreover, we do not anticipate reducing the levels of compensation and benefits provided by KG&E to its employees. Indeed, we believe that KG&E's employees will make significant contributions to, and have enhanced career opportunities in, the dynamic new company that will be created by this combination. Wilson, I strongly believe that we can work together to ensure the smooth integration of our organizations and thereby contribute to the success of the combined company.
I have enclosed sufficient additional copies of this letter for you to provide a copy to each member of your Board of Directors. We would appreciate an opportunity to meet with you and your Board promptly to pursue this matter i
further.
Sincerely, 1
by A. Drue Jennings-President and Chief Executive Officer r
Kansas City Power & Light Company l
l Kansas Gas and Electric, headquartered in Wichita, Kansas, is an electric utility which generates, transmits, distributes and sells electricity in the southeastern quarter of Kansas, including the Wichita metropolitar area. In 1989, Kansas Gas and Electric's revenues totalled $533.5 million with net prdts of $47.5 million. As of December, 1989, Kansas Gas and Electric has 1,330 employees and last year provided service to ovtr 254,000 customers.
Kansas City Power & Light, headquartered in Kansas City, Missouri, is a medium-sized public utility engaged in the generation, transmission, distribution and sale of electricity. In 1989, the company's revenues exceeded $730 million and its net income was $108.6 million. Kansas City Power & Light employs over 2,800 people and currently serves over 409,000 customers ranging across a 4,700 square mile area of western Missouri and eastern Kansas.
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