Fortnightly
Comparison of Recent Merger Agreements
July 15, 1995
Financial Aspects Autonomy
Aggregated Price/Earnings Price/ Price to Operating Aggregate Board Officers
value of Latest 12 Book Value Cash Flow revenues consideration Seats
consideration months (LTM) in millions as multiple
to smaller (LTM) (LTM) of LTM
co. (000) operating
revenues
Midwest Energy IR 12.1X 145% 5.15X MWE $563 1.40X 9/9 MWE-chairman
(MWE)/Iowa $506,000 IR $360 MWE/IR IR-CEO
Resources (IR) plus one Management of both
(consolidated into joint MWE and IR
new company) designee to remain
Kansas Power (KP)/ KG 18.1X 168% 8.64X KP 1.88X 10/5 KG officer to be vice
Kansas Gas (KG) $1,000,000*** $1,100 KP/KG chair of KPbd.
(KG merged into KG (for three and president of KP
KP sub) $533 years) sub., and if KG
becomes a division
of KP, president
of the KPDivision.
P.S. Co. of NH (NH)/ NH NU 3.64X NU NU
Northeast Utilities $2,300,000 $2,620 appoints appoints
(NU) (NUAcq. Corp. NH $633 all directors all officers
Sub of NU, to merge
with NH pursuant
to plan of reorg.)**
IE Industries (IE)/ IS 11.9X 188% IE 1.92X 10/6 IE-chair of surviving
Iowa Southern (IS) $264,480 $454 IE/IS co., chair and CEO
(merger of ISinto IE)** IS (for five of present IE electric
$138 years) and gas sub. IS-chair
of exec. comm.,
CEO and president
of surviving co.,
chair and CEO of
present IS electric
and gas sub.
Gulf States (GS)/ GS 19.4X 110% 5.6X E 1.34X 14/4 E/GS for For 3 yrs., unless
Entergy (E) (GS $2,300,000**** $4,051 3 years, if a GS he retires early,
acquired by new GS appointee (other GS CEO to be
holding company $1,702 than GS CEO) is vice chair of H and
(H) which E will unable to serve as CEO of GS.
be merged into) director, H chairman E-CEO, treasurer
appoints replacement GS-president,
director from pool secretary
of GS directors prior
to transaction
PSI Resources, Inc. PSI Not 191% PSI 1.09X 10/9 CG&E CEO to be
(PSI)/Cincinnati $1,200,000 meaningful $1,091 CG&E/PSI chair and CEO
Gas & Electric Co. CGE of H until 12/1/95;
(CG&E) (PSI acquired $1,528 PSI CEO to be
by new holding company vice chairman,
(H) which CG&E president, and CEO
will be merged into) of H until 12/1/95
and CEO after 12/1/95
Central and Southwest EPE Not Not Not CSW 4.2X CSW CSW to designate
(CSW)/El Paso $1,330,000 meaningful meaningful meaningful $3,289 appoints all all officers
Electric (EPE) EPE directors (must of EPE upon
merger of CSW Sub $525 include CSW CEO, consultation
into EPE) CEO and 5 other with EPE
officers of EPE,
and 6 outside
directors
Washington Water SP 19.4X WWP 1.06X 9/8 WWP-CEO until '99
Power (WWP)/ $562,000 $641 WWP/SP and SP-chairman
Sierra Pacific SP until '02; vice
Resources (SP) $528 chairman, president,
(consolidated into and COO until '99;
new company) CEO until '05; and
also CEO of utility
operating divisions
Iowa-Illinois (I)/ $641,960 11.8X 128% MR 1.06X 11/8 MR-CEO until
Midwest Resources $1,168 MR/I 5/1996 and
(MR) (consolidated I chairman until
into new company) $600 5/1997*****
I-president until
5/1997 and CEO
from 5/1996
until 5/1997*****
* Summary and comparison is for general reference, is not intended as legal analysis, and is qualified in its entirety by reference to original agreements and other sources
** Only form of merger agreement available for review
*** Common stock/cash election with cash limit and collar on common stock
**** Common stock/cash election with cash limit of $250M
*****Presumes a closing date prior to May 31, 1995
Source: LeBoeuf, Lamb, Greene & MacRae, L.L.P. February 2, 1995.
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