UtiliCorp in $800 Million Merger
UtiliCorp United and Empire District Electric Co. have announced
they have signed a definitive agreement to merge the two
Missouri-based companies in a stock and cash transaction valued at
$800 million, including the assumption of debt.
Under terms of the agreement, UtiliCorp is offering $29.50 for
each Empire District common share, payable in UtiliCorp common
stock or cash, which $505 million. UtiliCorp also will assume
approximately $260 million of existing Empire District debt.
Existing Empire District preferred stock totaling approximately $33
million will be redeemed prior to closing.
The agreement contains a collar under which the value per share
will decrease if UtiliCorp's common stock is below $22 per share at
closing and will increase if UtiliCorp's common stock is above $26
per share at closing. Empire District shareholders may elect to
take cash or stock. Total cash paid to Empire shareholders will be
limited to no more than 50% of the total merger consideration, and
the stock that may be issued in the merger is limited to 19.9% of
the then outstanding common stock of UtiliCorp.
The agreement has been approved by the boards of directors of
both companies, and is subject to approvals by Empire District
shareholders and by state and federal regulatory agencies and other
customary conditions. UtiliCorp shareholder approval is not
required. Robert K. Green, UtiliCorp president and chief operating
officer, termed the merger "a significant step in growing
UtiliCorp's domestic operations," following UtiliCorp's $270
million merger agreement with Missouri-based St. Joseph Light &
The deal represents a premium of 39% to Empire District
shareholders based on Empire District's closing share price of
$21.25 on May 10, 1999, and an approximate 14% increase in annual
dividend based on UtiliCorp's current dividend rate and current
common stock price. Based on Empire's average share price since the
beginning of 1999, the agreement represents a premium of 28%.
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