A new step was added Thursday to the elaborate tango of WesternResources and Kansas City Power & Light as the companiescontinue their attempt at a union. Western and Kansas City Power& Light (KCPL) restructured their merger agreement, forming anew electric company. The new company-to be named WestarEnergy-will be headquartered in Kansas City, MO, and traded on theNew York Stock Exchange. The announcement met with early approvalfrom at least one analyst.

“By taking advantage of synergies and merging the two companies,there’s an estimated $1 billion savings over the next 10 years,”said Robin Diedrich, Edward Jones utility analyst. “The strategicpremise for this merger is most compelling. In the long term,Westar will be a powerful competitor in the Midwest. This gain inmarket share will serve to strengthen the new company in the comingcompetitive environment.”

Each KCPL shareowner will receive $23.50 worth of WesternResources common stock, subject to a collar, for each share of KCPLcommon stock owned. And for each KCPL common share owned, each shareowner will receive one share of the new company-WestarEnergy-with an estimated value between $10 and $12 per share basedon market conditions.

“This unique and creative approach will give the electricoperations of both companies a foundation for success in the newcompetitive environment,” said John E. Hayes Jr., Western ResourcesCEO.

Western Resources and KCPL will contribute their electricoperations to Westar Energy, which will be 80.1% owned by WesternResources and 19.9% by KCPL shareowners.

“By combining the electric utility businesses of both companies,we are creating a larger regional platform from which to providecustomers with the same reliable competitive energy services towhich they are accustomed,” said Drue Jennings, KCPL CEO.

Westar Energy will operate under the brand names of KCPL, KGE,and KPL. The company will have more than one million electriccustomers in Kansas and Missouri, $8.2 billion in assets and morethan 8,000 MW of generation resources. Hayes will be chairman;Jennings will be CEO of Westar Energy. Westar headquarters will bein Kansas City, MO. The transaction is expected to close bymid-1999.

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