FORM 425
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 425
(LOGO) NATIONAL GRID GROUP, PLC
(Exact name of registrant as specified in charter)
UNITED KINGDOM
(State or other jurisdiction of
incorporation or organization)
15 Marylebone Road, London NWI 5JD, England
(Address of principal executive offices)
Registrant's telephone number, including area code
(011 44 207 312 5600)
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Filed by National Grid Group plc
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12 of the
Securities Exchange Act of 1934
Commission File No.: 001-02987
Subject Company: Niagara Mohawk Holdings, Inc.
THE FOLLOWING IS AN EMPLOYEE UPDATE
Q. Are there restrictions on purchasing or selling company stock?
A. There are restrictions on insider trading in the company's
stock, which carry severe penalties. Simply put, if you have
information as an employee that the general public is not aware
of, and that if known by the public could impact the price of
Niagara Mohawk stock, then you have insider information and
should not be trading in Niagara Mohawk stock. At a minimum,
employees who are working on the pending merger with National
Grid Group, or on the sale of the nuclear assets, should consider
themselves restricted from trading the company's stock. If you
have specific questions concerning your ability to trade in
Niagara Mohawk stock during this pre-closing period, contact
Kapua Rice, Corporate Secretary, at tieline 821-6954.
Q. What's to prevent somebody from dumping everything they've got
into Niagara Mohawk stock, knowing that a year from now the stock
will sell at $19 a share?
A. It would be inappropriate for us to give investment advice.
We do note, however, that the transaction is subject to a number
of conditions, including regulatory and other consents and
approvals in the U.S., the sale of Niagara Mohawk's nuclear
facilities or other satisfactory arrangements being reached, and
the approval of the shareholders of both Niagara Mohawk and
National Grid Group. In addition, the $19 per share
consideration only applies if the dollar value of five National
Grid Group ordinary shares is between $32.50 and $51.00, during a
defined period shortly before the closing.
Q. When will the transfer of Niagara Mohawk stock take effect?
In other words, when are you going to start buying the stock
back?
A. Niagara Mohawk is not buying back stock to effect this
transaction. Subject to a number of conditions, National Grid
Group is merging with Niagara Mohawk and is offering a
combination of cash and stock (shares of National Grid Group
American Depositary Shares) in return for Niagara Mohawk common
stock. This exchange will take place upon completion of the
merger, the timing of which is projected to be sometime in late
2001.
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Q. What about dividends?
A. Currently, while Niagara Mohawk does not pay a common stock
dividend, the National Grid Group does pay a dividend on its
common stock.
Q. What about the sale of the nuclear plants? Will Niagara
Mohawk get the sale proceeds, or will they go to the National
Grid Group?
A. Niagara Mohawk will receive the proceeds from the sale of Nine
Mile Point Unit One and its 41 percent ownership of Nine Mile
Point Unit Two. In accordance with the terms of our senior note
indenture, at least 85 percent of the nuclear plant sale proceeds
must be used to retire debt.
Q. I have shares of Niagara Mohawk and I'm interested in knowing
exactly what I would receive per share when the merger is
completed and if it's in cash or shares.
A. In exchange for each share of Niagara Mohawk common stock,
Niagara Mohawk shareholders will receive consideration of $19.00
per share, if the dollar value of five National Grid Group
ordinary shares is between $32.50 and $51.00, during a defined
period shortly before closing. In the event that the dollar
value of five National Grid Group ordinary shares is greater than
$51.00, the per share consideration received by Niagara Mohawk
shareholders will increase by two-thirds of the percentage of the
increase in value over $51.00. In the event the dollar value of
five National Grid Group ordinary shares is less than $32.50, the
per share consideration received by Niagara Mohawk shareholders
will decrease by two-thirds of the percentage of the decrease in
value below $32.50.
Shareholders will be able to elect to receive their consideration
either in cash, National Grid Group American Depositary Shares
(ADSs), or a combination of both, subject to the aggregate cash
consideration paid to all Niagara Mohawk shareholders being at
least $1.015 billion. If cash elections received from Niagara
Mohawk shareholders exceed $1.015 billion, National Grid Group
has the option to increase the cash component of the
consideration.
More information will be provided to shareholders in the form of
a proxy statement/prospectus, which will set forth in detail, the
specifics of this transaction.
Q. There was something in the NM Update special edition
concerning the dollar value of five National Grid Group ordinary
shares. Does that mean there's something more than just NGG ?
National Grid Group, which is on the New York Stock Exchange?
Are there other shares? What are the symbols for them?
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Q. In the proposed agreement it says that Niagara Mohawk shares
will be bought for $19 a share, providing the dollar value of
five National Grid Group ordinary shares is between $32.50 and
$51.00. I was wondering what five National Grid Group ordinary
shares are, because one share of stock being traded on the New
York Stock Exchange under the symbol NGG currently is trading at
around $40 a share, so I'm not sure what you mean by five
ordinary shares.
Q. I was wondering if you could explain a little bit better the
five National Grid Group shares that are referred to in some of
the press releases, as opposed to the American Depositary Shares,
and the way the pricing will work at the time of the completion
of the merger. I just want to understand a little better the
difference between the five shares listed in the press releases
and the American Depositary Shares which are listed on the New
York Stock Exchange.
A. In answer to the last three questions:
National Grid Group ordinary shares are listed and traded on the
London Stock Exchange under the ticker symbol NGG. National Grid
Group stock is also listed and traded on the New York Stock
Exchange in the form of American Depositary Shares (ADSs), under
the same ticker symbol: NGG. One ADS represents the dollar
equivalent of five ordinary shares traded on the London Exchange.
As an example, if one National Grid Group ordinary share is
valued at 540p (540 pence, or, 5 pounds 40 pence), then five
ordinary shares would equal 2,700p. The dollar equivalent of
which, assuming an exchange rate of $1.46 to 1 pound (the rate on
September 4, 2000), would be $39.42.
Q. On page 27 of the National Grid Annual Review we received, it
says that this is only a summary financial statement and that a
full copy of the annual report can be obtained by contacting
National Grid Group in London. How can we obtain a copy?
A. We have requested copies of National Grid Group's full annual
report and expect to have a supply available shortly. Please
call Deb Parry at tieline 821-6949 if you would like to get a
copy. In the meantime, copies of the full annual report can be
easily obtained on-line from the National Grid Group's website:
www.nationalgrid.com. From the main page, select "Investors,"
then "Results," then select a "pdf" copy of the annual report.
The proxy statement/prospectus to be filed with the Securities and
Exchange Commission (the "SEC") by National Grid and Niagara Mohawk
in connection with the transaction will contain important
information regarding the transaction and we urge you to read it and
any other relevant documents when they become available. A free
copy of the proxy statement/prospectus and other documents filed by
the two parties with the SEC is available at the SEC's web site at
http://www.sec.gov.
