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EXHIBIT 99-1
PRESS RELEASE
HERITAGE PROPANE PARTNERS, L.P. TO MERGE WITH US PROPANE TO CREATE
NATION'S FOURTH LARGEST RETAIL PROPANE MARKETER
TULSA, OKLAHOMA JUNE 15, 2000
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HERITAGE PROPANE PARTNERS, L.P. (NYSE:HPG) announced today it has entered into
an agreement to merge with US Propane to create the Nation's fourth largest
retail propane marketer.
The transaction will combine Heritage's 170 locations throughout the United
States with US Propane's 80 locations in Alabama, Florida, Georgia, Kentucky,
North Carolina, South Carolina and Tennessee. The combined operations are
expected to market over 300 million gallons per year to almost 485,000 customers
in 28 states.
US Propane was announced earlier this year and combines the propane operations
of AGL Resources (NYSE:ATG), Atmos Energy Corporation (NYSE:ATO), TECO Energy
(NYSE:TE) and Piedmont Natural Gas Company Inc.(NYSE:PNY).
Through a series of agreements, Heritage Propane Partners, L.P. will purchase
the assets of US Propane for $181 million in cash and limited partner units. US
Propane L.P. will purchase Heritage Holdings, Inc., the general partner of
Heritage Propane Partners, for $120 million in cash. The existing shareholders,
including the key officers and directors of HHI, will then purchase
approximately $50 million of common and subordinated units of the Partnership,
representing approximately 20% of all units outstanding. All current officers
and managers of HHI will continue in their present positions. Larry Dagley, US
Propane's Chief Operating Officer, will fill the currently vacant Chief
Financial Officer's position in Heritage Holdings, Inc. Dagley was formerly
Executive Vice President and Chief Financial Officer of Atmos Energy Corporation
prior to being named Chief Operating Officer of US Propane.
The transaction is expected to close in mid summer. If the projected results are
achieved, the transaction is expected to be accretive to the cash flows of the
Partnership and should allow the new Board to consider an increase in the cash
distribution.
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Page Two
June 15, 2000
Jim Bertelsmeyer, Chairman and Founder of Heritage Propane stated, "This
transaction allows the Partnership to move to the next level as we
significantly increase the size of Heritage with the quality assets of US
Propane and we now have the involvement of four strong energy utilities as
owners of the general partner. I am especially excited by the location of US
Propane's facilities in many of the high growth areas of the Eastern US.
US Propane will be acquiring a management team with a proven track record that
will continue to be very much incentivized by ownership of approximately 20% of
the outstanding units of the Partnership. It appears to me to be a very
positive transaction for both Heritage and US Propane stakeholders. We look
forward to continuing to build the quality company we have assembled over the
past ten years."
Lehman Brothers acted as financial advisor to the Special Committee of the
Board of Directors of Heritage Holdings Inc., established to evaluate the
transaction on behalf of the public unitholders of Heritage Propane Partners,
L.P.
This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 or Section 21E of the Securities
Exchange Act of 1934. These statements reflect current views made in good faith
with respect to future events and performance. Actual results may differ
materially from those suggested in any such forward-looking statements as a
result of certain factors. The factors that could cause actual results to
differ materially from those projected in these forward-looking statements
include the ability to: successfully complete both the purchase transaction and
the US Propane joint venture; effectively integrate the operations and produce
the cost saving synergies; obtain unit holder approval following the closing of
the transaction; and effect future transactions that will contribute to the
growth of the business.
Contact: H. Michael Krimbill
918-492-7272
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