<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) - MARCH 2, 1998
TEXAS UTILITIES COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS 1-12833 75-2669310
(STATE OR OTHER JURISDICTION (COMMISSION (I.R.S. EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
ENERGY PLAZA, 1601 BRYAN STREET, DALLAS, TEXAS 75201-3411
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE - (214) 812-4600
================================================================================
<PAGE> 2
ITEM 5. OTHER EVENTS
Information contained in the two news releases of Texas Utilities
Company (the "Company") dated March 2, 1998, the four news releases of the
Company dated March 3, 1998, and the news release of the Company dated March 5,
1998, each relating to the proposed cash offer by TU Acquisitions PLC, a
subsidiary of the Company, for all outstanding Ordinary Shares, including
Ordinary Shares evidenced by American Depositary Shares, of The Energy Group
PLC, is incorporated herein by reference.
<PAGE> 3
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
<TABLE>
<S> <C> <C>
99(a) - US press release dated March 2, 1998, announcing terms of recommended cash
offer
99(b) - UK press release dated March 2, 1998, announcing terms of recommended cash
offer
99(c) - US press release dated March 3, 1998, announcing increased cash offer
99(d) - UK press release dated March 3, 1998, announcing increased cash offer
99(e) - US press release dated March 3, 1998, announcing acquisition of Energy Group
Shares
99(f) - UK press release dated March 3, 1998, announcing acquisition of Energy Group
Shares
99(g) - UK press release dated March 5, 1998, announcing terms of increased cash offer
and acquisition of Energy Group Shares
</TABLE>
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Texas Utilities Company
Date: March 13, 1998 By: /s/ J. W. Pinkerton
--------------------
J. W. Pinkerton
Controller
<PAGE> 5
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C> <C>
99(a) - US press release dated March 2, 1998, announcing terms of recommended cash
offer
99(b) - UK press release dated March 2, 1998, announcing terms of recommended cash
offer
99(c) - US press release dated March 3, 1998, announcing increased cash offer
99(d) - UK press release dated March 3, 1998, announcing increased cash offer
99(e) - US press release dated March 3, 1998, announcing acquisition of Energy Group
Shares
99(f) - UK press release dated March 3, 1998, announcing acquisition of Energy Group
Shares
99(g) - UK press release dated March 5, 1998, announcing terms of increased cash offer
and acquisition of Energy Group Shares
</TABLE>
<PAGE> 1
EXHIBIT 99(a)
TEXAS UTILITIES COMPANY
ENERGY PLAZA o 1601 BRYAN STREET o DALLAS, TEXAS 75201 o (214) 812-4600
News
Release
- --------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE
---------------------
TEXAS UTILITIES OFFERS TO PURCHASE THE ENERGY GROUP
DALLAS, TEXAS - MARCH 2, 1998 - Texas Utilities Company (NYSE:TXU)
announced today that it has agreed with the Board of The Energy Group PLC
(NYSE/LSE:TEG) on the terms of a recommended cash offer for The Energy Group
PLC.
The Texas Utilities offer values the fully diluted share capital of
The Energy Group at approximately $7 billion. Texas Utilities will offer The
Energy Group shareholders 810 pence per share (US$13.37) and L.32.40 per
American Depositary Share (ADS) (US$53.46) in cash. Subject to the Securities
and Exchange Commission declaring a registration statement effective by not
later than 18 business days after the date of the offer document (or such later
date as Texas Utilities and The Energy Group may agree), Texas Utilities will
also offer The Energy Group shareholders an option pursuant to which up to 20%
of Energy Group shares may be exchanged for new shares of Texas Utilities
common stock. In addition, Texas Utilities will assume approximately $3
billion of net debt.
If the share alternative is offered, holders of Energy Group
securities would be entitled to receive new shares of Texas Utilities common
stock with a value equal to 835 pence (US$13.78) for each Energy Group share
and L.33.40 (US$55.11) for each Energy Group ADS, in each case based on the
average of the closing prices of Texas Utilities common stock on the NYSE on
the 20 trading days ending on the third trading day prior to the date Texas
Utilities intends to declare the offer unconditional in all respects, and the
US $/L. sterling exchange rate on such date; provided that the maximum number
of new shares of Texas Utilities common stock which may be issued with respect
to each Energy Group share and each Energy Group ADS shall be 0.374 and 1.496,
respectively.
The Texas Utilities cash offer is in excess of the current renewed
PacifiCorp offer of 765 pence per share. HOLDERS OF THE ENERGY GROUP WHO HAVE
ALREADY ACCEPTED THE RENEWED PACIFICORP OFFER MAY WITHDRAW THEIR ACCEPTANCES AT
ANY TIME UP TO MARCH 9, 1998, OR, IF THE RENEWED PACIFICORP OFFER IS EXTENDED,
UNTIL IT BECOMES OR IS DECLARED WHOLLY UNCONDITIONAL.
Subject to certain regulatory consents and to the Texas Utilities
offer becoming or being declared unconditional in all respects, The Energy
Group has agreed to sell the Peabody coal business, which includes Citizens
Power, to an affiliated company of Lehman Brothers Merchant Banking Partners II
L.P. for a total cash consideration of approximately $2.3 billion plus the
assumption of debt. Proceeds of the sale will be used by Texas Utilities to
help fund the cash offer.
<PAGE> 2
The Energy Group is a diversified international energy group which
includes Eastern Electricity plc. Through Eastern, The Energy Group is one of
the leading integrated electricity and gas groups in the United Kingdom and is
involved in a wide range of operations:
* Eastern Electricity - is the largest supplier and
distributor of electricity in England and Wales with
over 3 million customers and an authorized area of
over 20,300 sq. km in the east of England and parts
of North London.
* Eastern Generation - is the fourth largest generator
of electricity in Great Britain and currently owns,
operates or has an interest in eight power stations,
representing approximately 10% of the United
Kingdom's total registered generating capacity as of
March 31, 1997.
* Eastern Power and Energy Trading - manages for The
Energy Group the price and volume risks associated
with the generation, wholesaling and sale to end
users of electricity. It also has small equity
interests in three natural gas-producing fields in
the North Sea.
* Eastern Natural Gas - is one of the largest suppliers
of natural gas in the United Kingdom after Centrica
plc.
Commenting on the Texas Utilities offer, Erle Nye, chairman and chief
executive of Texas Utilities, said: "Eastern's unique blend of electricity
generation, supply and distribution and its strengths in natural gas and energy
trading make it a perfect fit for our own operations. We are looking forward
to working with The Energy Group's and Eastern's highly regarded management
team to maximize the potential of Eastern in what we perceive to be a dynamic
and attractive market."
Texas Utilities has formulated a strategy to position itself to thrive
in a more competitive environment and to identify new business investments that
both capitalize on its core competencies and are complementary to its existing
portfolio of businesses in order to grow earnings, broaden its markets beyond
the traditional service areas and expand customer services.
The acquisition of The Energy Group is further confirmation of Texas
Utilities' commitment to this strategy. The Energy Group comprises a unique
blend of electricity generation, supply and distribution assets, combined with
strengths in natural gas and energy trading. Texas Utilities believes that the
highly complementary nature of these activities to those of Texas Utilities,
combined with The Energy Group's experience of operating within a deregulating
market, will enable the enlarged group to capitalize upon the sharing of the
expertise and best practices that reside within the two groups in each of these
areas.
Texas Utilities expects the transaction to be earnings and cash flow
enhancing in the first complete year following completion of the acquisition
and thereafter (prior to considering any synergy or other benefits that the
transaction may give rise to). This statement should not be interpreted to
mean that the future earnings per share of Texas Utilities, as enlarged by the
acquisition of The Energy Group, will necessarily be greater than the
historical published earnings per share of Texas Utilities.
<PAGE> 3
Derek Bonham, chairman of The Energy Group, said: "We have considered
the Texas Utilities offer of 810 pence per share and, in the context of the
existing offer from PacifiCorp, we believe that the Texas Utilities offer
represents improved shareholder value. The Board therefore recommends it to
our shareholders."
The Texas Utilities offer and the sale of Peabody are subject to
certain regulatory consents and confirmations being obtained. Amongst other
approaches to relevant regulatory authorities, Texas Utilities is making a
submission to the Office of Fair Trading concerning the offer and, together
with The Energy Group, will enter into discussions with The Director General of
Electricity Supply of the United Kingdom. It is currently anticipated that all
approvals and consents required under the Texas Utilities offer will be
received within the normal timetable for an offer in the United Kingdom.
Texas Utilities utilized Lehman Brothers International (Europe) and
Merrill Lynch International as financial advisors. The Energy Group is
represented by Lazard Brothers & Co., Limited and Morgan Stanley & Co. Limited.
Texas Utilities Company is an investor-owned holding company for
energy service companies engaged in domestic and international electric and
natural gas utility services, energy marketing, telecommunications, and other
energy-related services.
- E N D -
FOR ADDITIONAL INFORMATION
FINANCIAL COMMUNITY CONTACT: DAVID ANDERSON TIM HOGAN
214/812-4641 OR 214/812-2756
[email protected] [email protected]
GENERAL NEWS MEDIA CONTACT: CAROL PETERS 214-812-5924
JOAN HUNTER 214-812-4071
<PAGE> 1
EXHIBIT 99(b)
EMBARGOED UNTIL 07.30 HOURS 2 March 1998
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO CANADA, JAPAN OR
AUSTRALIA.
TEXAS UTILITIES COMPANY
-----------------------
RECOMMENDED CASH OFFER FOR
THE ENERGY GROUP PLC
The Boards of Texas Utilities and The Energy Group announce that they have
agreed the terms of a recommended cash offer for The Energy Group to be made by
Lehman Brothers and Merrill Lynch on behalf of TU Acquisitions, a wholly-owned
subsidiary of Texas Utilities.
The Texas Utilities Offer values each Energy Group Share at 810 pence, valuing
the fully diluted share capital of The Energy Group at approximately L4.3
billion (assuming the exercise in full of all outstanding options and the
vesting of all outstanding awards under the Energy Group Share Schemes).
The Texas Utilities Offer represents a premium of:
- 45 pence to the Renewed PacifiCorp Offer of 765 pence per Energy Group
Share;
- 44.3 per cent. to the Closing Price of 561.5 pence per Energy Group
Share on 9 June 1997, the last dealing day prior to the announcement by
The Energy Group that it was in talks with PacifiCorp in relation to the
Original PacifiCorp Offer; and
- 18.2 per cent. to the Closing Price of 685.5 pence per Energy Group
Share on 23 January 1998, the last dealing day prior to the announcement
by The Energy Group that it was in talks with parties other than
PacifiCorp which might lead to an offer.
The Texas Utilities Offer includes a full Loan Note Alternative. Subject to the
SEC declaring the relevant documentation effective by not later than 18 Business
Days after the date of the Offer Document (or such later date as Texas Utilities
and The Energy Group may agree), Texas Utilities will also make available a
limited share alternative pursuant to which up to 20 per cent. of Energy Group
Shares may be acquired for new shares of Texas Utilities common stock.
Subject to certain regulatory consents and to the Texas Utilities Offer becoming
or being declared unconditional in all respects, The Energy Group has agreed to
sell the Peabody Coal Business to an affiliated company of Lehman Brothers
Merchant Banking Partners II L.P. for a cash consideration of approximately $2.3
billion plus the assumption of debt.
The Texas Utilities Offer is subject to, inter alia, certain further regulatory
consents and confirmations.
Texas Utilities expects that all consents and confirmations relating to the
Texas Utilities Offer and the Peabody Sale will be obtained within the normal
timetable for an offer in the United Kingdom.
The Board of The Energy Group, which has been so advised by Lazard and Morgan
Stanley, its financial advisers, considers the terms of the Texas Utilities
Offer to be fair and reasonable. In providing advice to the Board of The Energy
Group, Lazard and Morgan Stanley have taken account of the Directors of The
Energy Group's commercial assessment. Accordingly, the Directors of The Energy
Group will unanimously recommend all holders of Energy Group Shares and Energy
Group ADSs to accept the Texas Utilities Offer.
1
<PAGE> 2
Commenting on the Texas Utilities Offer, Erle Nye, Chairman and Chief Executive
of Texas Utilities, said:
"Eastern's unique blend of electricity generation, supply and distribution and
its strengths in natural gas and energy trading make it a perfect fit with our
own operations. We are looking forward to working with The Energy Group's and
Eastern's highly regarded management teams to maximise the potential of Eastern
in what we perceive to be a dynamic and attractive market."
Derek Bonham, Chairman of The Energy Group, said:
"We have considered the Texas Utilities Offer of 810 pence per share and, in the
context of the existing offer from PacifiCorp, we believe that the Texas
Utilities Offer represents improved shareholder value. The Board therefore
recommends it to our shareholders."
This summary should be read in conjunction with the attached announcement. The
Conditions of the Texas Utilities Offer are attached as Appendix I. The sources
and bases of certain information contained herein are set out in Appendix III
and definitions of certain expressions used in this announcement are set out in
Appendix IV.
Enquiries:
TEXAS UTILITIES COMPANY
David Anderson (Investors)
Telephone: 1-214-812 4641
Joan Hunter (Press)
Telephone: 1-214-812 4071
LEHMAN BROTHERS INTERNATIONAL (EUROPE)
Richard Collier
Anthony Fobel
Telephone: 44-171-601 0011
MERRILL LYNCH INTERNATIONAL
Justin Dowley
Lewis Lee
Martin Falkner
Telephone: 44-171-628 1000
MERRILL LYNCH INTERNATIONAL
CORPORATE BROKING
Mike Gibson
Stephen Robinson
Telephone: 44-171-772 1000
FINANCIAL DYNAMICS
Nick Miles
Andrew Dowler
Telephone: 44-171-831 3113
THE ENERGY GROUP PLC
Aviva Gershuny-Roth
Telephone: 44-171-647 3200
LAZARD BROTHERS & CO., LIMITED
Nicholas Jones
John Wilford
Telephone: 44-171-588 2721
MORGAN STANLEY & CO. LIMITED
Piers de Montfort
Telephone: 44-171-513 5007
BRUNSWICK
Louise Charlton
Telephone: 44-171-404 5959
ANALYSTS' AND PRESS BRIEFINGS
LONDON:There will be a presentation to analysts at 9.15 am and a press
conference at 11.00 am London time today at Financial Dynamics, 30
Furnival Street, London EC4A 1JE.
NEW YORK:There will be a conference call for analysts at 10.00 am New York City
time today.
The Texas Utilities Offer will not be made, directly or indirectly, in or into
Canada, Australia or Japan. Accordingly, copies of this announcement are not
being, and must not be, mailed or otherwise distributed or sent in or into
Canada, Australia or Japan.
Lehman Brothers and Merrill Lynch, which are regulated in the United Kingdom by
The Securities and Futures Authority Limited, are acting for Texas Utilities and
TU Acquisitions and no one else in connection with the Texas Utilities Offer and
will not be responsible to anyone other than Texas Utilities and TU Acquisitions
for providing the protections afforded to their respective customers or for
providing advice in
2
<PAGE> 3
relation to the Texas Utilities Offer or any other matter referred to herein.
Lehman Brothers and Merrill Lynch will be acting through Lehman Brothers Inc.
and Merrill Lynch & Co., respectively, for the purposes of making the Texas
Utilities Offer in the United States.
Lazard and Morgan Stanley & Co. Limited, which are regulated in the United
Kingdom by The Securities and Futures Authority Limited, are acting for The
Energy Group and no one else in connection with the Texas Utilities Offer and
will not be responsible to anyone other than The Energy Group for providing the
protections afforded to their respective customers or for giving advice in
relation to the Texas Utilities Offer or any other matter referred to herein.
This announcement does not constitute an offer or invitation to purchase any
securities.
RULE 8 NOTICES
Any person who, alone or acting together with any other person(s) pursuant to an
agreement or understanding (whether formal or informal) to acquire or control
securities of The Energy Group or of Texas Utilities, owns or controls, or
becomes the owner or controller, directly or indirectly, of 1 per cent. or more
of any class of securities of The Energy Group or of Texas Utilities is
generally required under the provisions of Rule 8 of the City Code to notify the
London Stock Exchange and the Panel of every dealing in such securities during
the Initial Offer Period. Dealings by The Energy Group or by Texas Utilities or
by their respective "associates" (within the definition set out in the City
Code) in any class of securities of The Energy Group or of Texas Utilities from
26 January 1998 until the end of the Initial Offer Period must also be so
disclosed.
3
<PAGE> 4
EMBARGOED UNTIL 07.30 HOURS 2 March 1998
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO CANADA, JAPAN OR
AUSTRALIA.
TEXAS UTILITIES COMPANY
-----------------------
RECOMMENDED CASH OFFER FOR
THE ENERGY GROUP PLC
1. INTRODUCTION
The Boards of Texas Utilities and The Energy Group announce that they have
agreed the terms of a recommended cash offer for The Energy Group at a price of
810 pence per Energy Group Share, valuing the fully diluted share capital of The
Energy Group at L4.3 billion (assuming the exercise in full of all outstanding
options and the vesting of all outstanding awards under the Energy Group Share
Schemes).
The Board of The Energy Group, which has been so advised by Lazard and Morgan
Stanley, its financial advisers, considers the terms of the Texas Utilities
Offer to be fair and reasonable. In providing advice to the Board of The Energy
Group, Lazard and Morgan Stanley have taken account of the Directors of The
Energy Group's commercial assessment. Accordingly, the Directors of The Energy
Group will unanimously recommend all holders of Energy Group Shares and Energy
Group ADSs to accept the Texas Utilities Offer.
On 3 February 1998, PacifiCorp announced the terms of a cash offer of 765 pence
per Energy Group Share which was recommended to shareholders by the Board of The
Energy Group. Texas Utilities announced its interest in acquiring The Energy
Group prior to that announcement and has been given access to management and
provided with certain information about The Energy Group. Nomura International
plc had also announced, but subsequently withdrew, its interest in acquiring The
Energy Group.
The Texas Utilities Offer is conditional upon the sale of the Peabody Coal
Business to Lehman Merchant; this sale is conditional upon the receipt of
certain regulatory consents in both the United States and Australia. The Texas
Utilities Offer is also subject to further regulatory consents and confirmations
in the United Kingdom. It is expected that all consents and confirmations
relating to the Texas Utilities Offer and the Peabody Sale will be obtained
within the normal timetable for an offer in the United Kingdom. However, it is
not expected that these consents and confirmations will have been received by 9
March 1998 (the first closing date of the Renewed PacifiCorp Offer), at which
point PacifiCorp will be entitled to withdraw its offer unless it has then
become wholly unconditional.
In reaching its decision to recommend the Texas Utilities Offer, the Board of
The Energy Group has considered the higher price of the Texas Utilities Offer in
the context of the conditionality both of that offer and of the associated sale
of the Peabody Coal Business.
Unless released from the terms of irrevocable undertakings provided to
PacifiCorp, Derek Bonham, John Devaney, Irl Engelhardt, Eric Anstee and David
Nash will be prevented from accepting the Texas Utilities Offer unless and until
the Renewed PacifiCorp Offer lapses.
Chase Manhattan, Lehman Brothers and Merrill Lynch, and their respective
affiliates are acting as underwriters and arrangers for the required credit
facilities for the Texas Utilities Offer. Merrill Lynch is also broker to the
Texas Utilities Offer.
The sources and bases of certain information contained herein are set out in
Appendix III and the definitions of certain expressions used in this
announcement are set out in Appendix IV.
4
<PAGE> 5
2. THE TEXAS UTILITIES OFFER
The Texas Utilities Offer will be subject to the Conditions set out in Appendix
I which, together with the further terms of the Texas Utilities Offer, will
appear in the Offer Document and will be made by Lehman Brothers and Merrill
Lynch, on behalf of TU Acquisitions, on the following basis:
<TABLE>
<S> <C>
FOR EACH ENERGY GROUP SHARE 810 PENCE; AND
FOR EACH ENERGY GROUP ADS L32.40
</TABLE>
The Texas Utilities Offer values the fully diluted share capital of The Energy
Group at approximately L4.3 billion (assuming the exercise in full of all
outstanding options and the vesting of all outstanding awards under the Energy
Group Share Schemes). The Texas Utilities Offer represents a premium of:
- 45 pence to the Renewed PacifiCorp Offer of 765 pence per Energy Group
Share;
- 44.3 per cent. to the Closing Price of 561.5 pence per Energy Group Share
on 9 June 1997, the last dealing day prior to the announcement by The
Energy Group that it was in talks with PacifiCorp in relation to the
Original PacifiCorp Offer; and
- 18.2 per cent. to the Closing Price of 685.5 pence per Energy Group Share
on 23 January 1998, the last dealing day prior to the announcement by The
Energy Group that it was in talks with parties other than PacifiCorp
which might lead to an offer.
HOLDERS OF ENERGY GROUP SECURITIES WHO HAVE ALREADY ACCEPTED THE RENEWED
PACIFICORP OFFER MAY WITHDRAW THEIR ACCEPTANCES AT ANY TIME UP TO 9 MARCH 1998
OR, IF THE RENEWED PACIFICORP OFFER IS EXTENDED, UNTIL IT BECOMES OR IS DECLARED
WHOLLY UNCONDITIONAL.
The Texas Utilities Offer will be subject to the applicable requirements of both
the City Code in the United Kingdom and United States federal securities laws.
3. LOAN NOTE ALTERNATIVE
A Loan Note Alternative will be available to holders of Energy Group Shares
(other than persons who are citizens or residents of the United States and
certain other overseas shareholders) who validly accept the Texas Utilities
Offer on the basis of, for every L1 of cash otherwise payable under the Texas
Utilities Offer, L1 nominal of Loan Notes, subject to aggregate valid elections
being received, on or before the date on which the Texas Utilities Offer becomes
or is declared unconditional in all respects, for in excess of L1 million
nominal value of Loan Notes. If insufficient elections are received, holders of
Energy Group Shares who elect for the Loan Note Alternative will instead receive
cash in accordance with the terms of the Texas Utilities Offer. Subject as
aforesaid, the Loan Note Alternative will remain open for as long as the Texas
Utilities Offer is open for acceptance. The interest rate on the Loan Notes will
be calculated as described in paragraph 2 of Appendix II of this announcement.
Merrill Lynch, as broker to the Texas Utilities Offer, has advised that, based
on market conditions on 27 February 1998 (the latest practicable date prior to
the publication of this announcement), in its opinion, if the Loan Notes had
then been in issue, the value of each L1 nominal of Loan Notes would have been
approximately 98 pence.
In considering the Loan Note Alternative, holders of Energy Group Shares should
note that the obligations of the issuer of the Loan Notes are not guaranteed or
secured.
A summary of the terms of the Loan Notes is set out in Appendix II to this
announcement.
4. PROPOSED LIMITED SHARE ALTERNATIVE
Subject to the SEC declaring the relevant documentation effective by not later
than 18 Business Days after the date of the Offer Document (or such later date
as Texas Utilities and The Energy Group may agree), Texas Utilities will make
available to holders of Energy Group Securities a limited share alternative.
5
<PAGE> 6
Under the share alternative, holders of Energy Group Securities would be
entitled to receive new shares of Texas Utilities common stock with a value
equal to 835 pence for each Energy Group Share and L33.40 for each Energy Group
ADS, in each case based on the average of the closing prices of Texas Utilities
common stock on the NYSE on the 20 consecutive dealing days ending on the third
dealing day prior to the date TU Acquisitions intends to declare the Texas
Utilities Offer unconditional in all respects, and the US$/L sterling exchange
rate on such date; provided that the maximum number of new shares of Texas
Utilities common stock which may be issued with respect to each Energy Group
Share and each Energy Group ADS shall be 0.374 and 1.496, respectively.
The share alternative, if not included in the Offer Document, would be made
available by means of a revised offer which would be posted to holders of Energy
Group Securities immediately following the relevant documentation, which is
expected to be filed with the SEC today, being declared effective. The share
alternative would be available only in respect of a maximum of 20 per cent. of
all Energy Group Shares (including Energy Group Shares represented by Energy
Group ADSs) acquired pursuant to the Texas Utilities Offer or otherwise. To the
extent that actual, and in certain circumstances potential, elections for the
share alternative exceed that maximum, elections would be scaled down on a pro
rata basis.
THE AVAILABILITY OR OTHERWISE OF A SHARE ALTERNATIVE WILL NOT AFFECT THE ABILITY
OF HOLDERS OF ENERGY GROUP SECURITIES TO ACCEPT THE TEXAS UTILITIES OFFER FOR
CASH. THE BOARD OF THE ENERGY GROUP WILL COMMENT ON THIS SHARE ALTERNATIVE
SHOULD IT BE MADE AVAILABLE.
5. REGULATION
The Texas Utilities Offer is subject to certain regulatory consents and
confirmations being obtained. Amongst other approaches to relevant regulatory
authorities, TU Acquisitions is making a submission to the Office of Fair
Trading concerning the Texas Utilities Offer and, together with The Energy
Group, will enter into discussions with the DGES. The Peabody Sale is subject to
the conditions described in paragraph 8 below.
It is currently anticipated that all approvals and consents required under the
Texas Utilities Offer and the Peabody Sale will be received within the normal
timetable for an offer in the United Kingdom.
TU Acquisitions will not invoke either of Conditions (d) or (e) of the Texas
Utilities Offer in respect of the DGES seeking, or indicating that it is his
intention to seek, modifications to any of the TEG Groups's licences under the
Electricity Act 1989 or undertakings or assurances from any member of the Texas
Utilities Group or the TEG Group provided that such modifications, undertakings
or assurances substantially reflect the assurances proposed by the DGES to
PacifiCorp in connection with the referral of the Original PacifiCorp Offer to
the Monopolies and Mergers Commission (as described in the Monopolies and
Mergers Commission Report relating to the Original PacifiCorp Offer published on
19 December 1997) or are substantially in keeping with the proposals outlined by
the DGES in his consultation paper dated 24 February 1998 regarding
modifications to public electricity supply licences following takeovers.
The full text of the Conditions to the Texas Utilities Offer is set out in
Appendix I.
6. INFORMATION ON TEXAS UTILITIES
Texas Utilities is an investor-owned holding company for energy service
companies engaged in domestic and international electric and gas utility
services, energy marketing, telecommunications, and other energy-related
services. Texas Utilities is based in Dallas, Texas, USA.
Wholly-owned subsidiaries of Texas Utilities include: two electric utility
systems in Texas -- Texas Utilities Electric Company ("TU Electric") and
Southwestern Electric Service Company ("SESCO"); ENSERCH Corporation
("ENSERCH"); Texas Utilities Australia Pty. Ltd. ("TU Australia"); Lufkin-Conroe
Communications Co. (the fourth largest telephone company in Texas with
approximately 100,000 access lines); Texas Utilities Communications Inc., which
holds a 20 per cent. limited partnership interest in the Texas operations of
PrimeCo Personal Communications; and Texas Utilities Fuel Company and Texas
Utilities Mining Company, which provide for the fuel and coal needs of TU
Electric's generating stations.
6
<PAGE> 7
TU ELECTRIC generates, purchases, transmits, distributes and sells electricity
wholly within the state of Texas. TU Electric's net generating capability of
more than 22,000 MW makes it one of the top five generators in the United
States. TU Electric and SESCO provide electric energy to over 6 million people
in a service area that stretches approximately 600 miles east to west and 250
miles north to south in Texas. TU Electric also operates the largest
transmission system in Texas, including 13,000 circuit miles of transmission
lines.
ENSERCH is an integrated company focused on natural gas. ENSERCH has established
operations in pipeline and gathering, processing and marketing, and natural gas
distribution. ENSERCH's pipeline business (Lone Star Pipeline Company) includes
the fourteenth largest pipeline in the US with about 8,000 miles of transmission
pipeline connecting the three major gas hubs in Texas. ENSERCH's natural gas
distribution business (Lone Star Gas Company) is one of the largest local
distribution companies in the US with 23,500 miles of distribution mains serving
550 cities and towns and approximately 1.3 million people in north, central and
east Texas. Approximately 70 per cent. of Lone Star Gas Company's service area
is also served by TU Electric.
TU AUSTRALIA represents Texas Utilities' business interests in the rapidly
changing energy industry in Australia. TU Australia holds the common stock of
Eastern Energy Ltd., a major electricity distributor and retailer in
southeastern Australia. Eastern Energy serves about 1.3 million people in the
state of Victoria, including suburban Melbourne, the second largest city in
Australia.
Texas Utilities common stock is listed on the New York, Chicago and Pacific
stock exchanges under the symbol "TXU". Texas Utilities had annual operating
revenues for the year ended 31 December 1997 of $7.9 billion and assets and
common stock equity at 31 December 1997 of $24.9 billion and $6.8 billion,
respectively. For the year ended 31 December 1997, Texas Utilities reported net
income of $660 million, or basic earnings per share of common stock of $2.86. As
at the close of trading on the NYSE on 27 February 1998, Texas Utilities had an
equity market capitalisation of approximately $10 billion.
TU Acquisitions, a wholly-owned subsidiary of Texas Utilities, is a public
limited company incorporated in England and Wales on 27 October 1997.
7. INFORMATION ON THE ENERGY GROUP
The TEG Group is a diversified international energy group which includes
Eastern, one of the leading integrated electricity and gas groups in the United
Kingdom, and Peabody, the world's largest private producer of coal. The Energy
Group has entered into an agreement to sell the Peabody Coal Business to an
affiliated company of Lehman Merchant, subject to the conditions summarised in
paragraph 8 below.
Through Eastern, The Energy Group is involved in a wide range of operations:
- Eastern Generation, the fourth largest generator of electricity in Great
Britain, currently owns, operates or has an interest in eight power
stations, representing approximately 10 per cent. of the United Kingdom's
total registered generating capacity as at 31 March 1997;
- Eastern Power & Energy Trading manages for the TEG Group the price and
volume risks associated with the generation, wholesaling and sale to end
users of electricity. These exposures are managed by trading its contract
portfolio and by bidding Eastern's generation output into the Electricity
Pool (the electricity trading market in England and Wales). It also has
small equity interests in three natural gas-producing fields in the North
Sea;
- Eastern Natural Gas is one of the largest suppliers of natural gas in the
United Kingdom after Centrica plc; and
- Eastern Electricity is the largest supplier and distributor of
electricity in England and Wales, with over three million customers and
an authorised area covering approximately 20,300 sq. km. in the east of
England and parts of North London.
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Peabody is the largest producer of coal in the United States and operates 25
underground and surface mines in the United States and three surface mines in
Australia:
- as at 31 March 1997, Peabody owned or controlled 9.5 billion tons of
proven and probable coal reserves;
- in the six months ended 31 March 1997, Peabody sold 81.4 million tons of
coal worldwide and had an estimated 14.4 per cent. of the US market; and
- Peabody Australia, one of the ten largest coal producers in Australia,
has interests in four surface mines in New South Wales, three of which
are currently in operation. Peabody's equity share of the coal sales of
these mines amounted to 3.5 million tons in the six months ended 31 March
1997 and its equity share of the proven and probable reserves associated
with these mines as at 31 March 1997 amounted to 466 million tons.
The Peabody Coal Business also includes Citizens Power, one of the leading US
power marketing firms which was acquired by the TEG Group in May 1997. Its
headquarters are in Boston and it has field offices in Milwaukee, Denver and
Toronto.
On a pro forma basis for the year ended 31 March 1997, The Energy Group reported
consolidated turnover of L4,460 million and consolidated profit on ordinary
activities after taxation of L286 million. For the nine months ended 31 December
1997, The Energy Group reported unaudited consolidated turnover of L3,390
million and operating profits of L379 million before exceptional costs
associated with the Original PacifiCorp Offer and restructuring charges.
8. THE PEABODY SALE
Subject to the conditions set out below, The Energy Group has agreed to sell the
Peabody Coal Business to an affiliated company of Lehman Merchant for a cash
consideration of approximately $2.3 billion, payable on completion, plus the
assumption of debt.
Information on the Peabody Coal Business is set out in paragraph 7 above. For
the nine months ended 31 December 1997, the Peabody Coal Business contributed
L1,014 million and L112 million to TEG Group turnover and operating profits,
respectively.
The Peabody Sale is conditional on the fulfilment of conditions to the following
effect:
(a) the Texas Utilities Offer becoming or being declared unconditional in
all respects (and the Texas Utilities Offer not at that time being
publicly opposed by the Board of directors of The Energy Group);
(b) the waiting period applicable to the Peabody Sale under the US HSR Act
having expired or been terminated;
(c) the consent of the Treasurer of the Commonwealth of Australia, acting
in such capacity or through the body known as the Foreign Investment
Review Board, having been given to the Peabody Sale (or to any aspect
thereof as shall be subject to approval pursuant to the Foreign
Acquisitions and Takeovers Act of Australia) either unconditionally or
subject to such conditions as do not have and could not reasonably be
expected to have a material adverse effect on the value of the
relevant companies and their subsidiaries (taken as a whole);
(d) FERC having issued an order approving the Peabody Sale or any aspect
thereof which shall be subject to regulation by FERC on terms that do
not have and could not reasonably be expected to have a material
adverse effect on the value of the relevant companies and their
subsidiaries (taken as a whole); and
(e) no order having been issued (and remaining in effect) by any court or
other governmental authority, and no statute, rule, regulation,
executive order, decree or other order of any kind existing or having
been enacted, entered or enforced by any governmental authority, which
(in any such case to an
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extent which is material in the context of the Peabody Sale)
prohibits, restrains or restricts completion of the Peabody Sale.
In the event that (i) the Peabody Sale is not completed because of a breach of
condition (e) above and (ii) the Renewed PacifiCorp Offer (or any revision of
that offer) lapses, Texas Utilities will, subject to certain exceptions, pay The
Energy Group a break-fee of $50 million on the date following one year after the
date of this announcement.
Texas Utilities has entered into an agreement into an agreement with Lehman
Merchant relating to the Peabody Sale which, inter alia provides for the parties
to make certain payments to each other to reflect adjustments to the net assets
of the Peabody Coal Business as shown in a post-completion balance sheet and
contains other payment obligations of Texas Utilities in certain circumstances.
9. REASONS FOR THE OFFER
Texas Utilities has formulated a strategy to position itself to thrive in a more
competitive environment and to identify new business investments that both
capitalise on its core competencies and are complementary to its existing
portfolio of businesses in order to grow earnings, broaden its markets beyond
the traditional service areas and expand customer services.
The acquisition of The Energy Group is further confirmation of Texas Utilities'
commitment to this strategy. The Energy Group comprises a unique blend of
electricity generation, supply and distribution assets, combined with strengths
in natural gas and energy trading. Texas Utilities believes that the highly
complementary nature of these activities to those of Texas Utilities combined
with The Energy Group's experience of operating within a deregulating market
will enable the enlarged group to capitalise upon the sharing of the expertise
and best practices that reside within the two groups in each of these areas.
Texas Utilities expects the transaction to be earnings and cash flow enhancing
in the first complete year following completion of the Acquisition and
thereafter (prior to considering any synergy or other benefits that the
transaction may give rise to). This statement should not be interpreted to mean
that the future earnings per share of Texas Utilities, as enlarged by the
acquisition of The Energy Group, will necessarily be greater than the historical
published earnings per share of Texas Utilities.
10. THE ENERGY GROUP SHARE SCHEMES
The Texas Utilities Offer will extend to any fully paid Energy Group Shares
which are unconditionally allotted or issued while the Texas Utilities Offer is
open for acceptance, including those unconditionally allotted or issued pursuant
to the exercise of options under the Energy Group Share Schemes.
Appropriate proposals will be made to the participants in the Energy Group Share
Schemes in due course.
In relation to the Energy Group Sharesave Scheme, it is anticipated that, as an
alternative to the rights provided under the rules of that scheme, participants
will be offered an opportunity to surrender their existing options in
consideration for a cash sum, calculated by reference to the difference between
810 pence and the exercise price of their options multiplied by the number of
Energy Group Shares that they could have acquired with their total savings
contributions (together with any interest payable thereon) under the Energy
Group Sharesave Scheme up to the date the Texas Utilities Offer becomes or is
declared unconditional in all respects plus a further six months' savings
contributions.
11. MANAGEMENT AND EMPLOYEES
TU Acquisitions has given assurances to the Board of The Energy Group that the
existing employment rights, including pension rights, of all TEG Group
management and employees will be fully safeguarded. Texas Utilities looks
forward to welcoming all TEG Group employees to the Texas Utilities Group.
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12. HOLDINGS IN THE ENERGY GROUP
Neither TU Acquisitions, nor Texas Utilities, nor any of their respective
Directors, nor, so far as TU Acquisitions is aware, any party acting in concert
with TU Acquisitions, owns or controls any Energy Group Securities or holds any
options to purchase Energy Group Securities or holds any derivatives referenced
to Energy Group Securities, other than as set out below:
(a) as at 27 February 1998 (the latest practical date prior to this
announcement), Erle Nye, Chairman and Chief Executive of Texas Utilities,
held 25 Energy Group ADRs;
(b) as at 27 February 1998 (the latest practicable date prior to this
announcement) Lehman Brothers was interested in 492,475 Energy Group
Shares, held as constituents of various baskets of securities; and
(c) as at 27 February 1998 (the latest practicable date prior to this
announcement) the Retirement Plan for Employees of the Texas Utilities
Company System held 24,375 Energy Group ADRs.
Lehman Merchant has agreed that neither it nor any subsidiary or affiliate will
directly or indirectly be involved in, inter alia, acquiring an interest, in
Energy Group Securities as referred to above for so long as Texas Utilities and
Lehman Merchant are regarded by the Panel as acting in concert as regards The
Energy Group.
In the interests of confidentiality, TU Acquisitions has not made any enquiries
in this respect of certain parties who may be deemed by the Panel to be acting
in concert with it for the purposes of the Texas Utilities Offer.
13. FINANCING
TU Acquisitions has arranged appropriate financing in connection with the Texas
Utilities Offer. Texas Utilities and other wholly-owned subsidiaries of Texas
Utilities have arranged their own funding to assist in TU Acquisitions'
financing of the Texas Utilities Offer.
14. GENERAL
(a) Lehman Brothers and Merrill Lynch, which are regulated in the United Kingdom
by The Securities and Futures Authority Limited, are acting for Texas
Utilities and TU Acquisitions and no one else in connection with the Texas
Utilities Offer and will not be responsible to anyone other than Texas
Utilities and TU Acquisitions for providing the protections afforded to
their respective customers or for providing advice in relation to the Texas
Utilities Offer or any other matter referred to herein.
(b) Lazard and Morgan Stanley & Co. Limited, which are regulated in the United
Kingdom by The Securities and Futures Authority Limited, are acting for The
Energy Group and no one else in connection with the Texas Utilities Offer
and will not be responsible to anyone other than The Energy Group for
providing the protections afforded to their respective customers or for
giving advice in relation to the Texas Utilities Offer or any other matter
referred to herein.
(c) The Offer Document will be posted shortly and will be available for
inspection at the offices of Norton Rose, Kempson House, Camomile Street,
London EC3A 7AN. The Conditions are set out in Appendix I to this
announcement. Appendix III sets out the sources and bases of certain
information contained in this document. Appendix IV contains the definitions
of the terms used in this announcement.
(d) Energy Group Securities will be acquired by TU Acquisitions fully paid and
free from all liens, equities, charges, encumbrances and other interests
and, together with all rights now or hereafter attaching thereto, including
without limitation the right to receive and retain all dividends and other
distributions declared, made or paid hereafter.
(e) The Initial Offer Period is expected to expire at 10.00 pm (London time),
5.00 pm (New York City time) on the 20th Business Day from the date of the
Offer Document, unless extended. At the conclusion of the Initial Offer
Period, including any extension thereof, the Texas Utilities Offer, if
wholly unconditional, will be extended for a Subsequent Offer Period of at
least 14 calendar days. Holders of Energy Group Securities will have
withdrawal rights during the Initial Offer Period, including any extension
thereof, but not during the Subsequent Offer Period, including any extension
thereof. The
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Condition in paragraph (b) of Appendix I is not expected to be fulfilled
before the date falling 30 Business Days after the date on which the Offer
Document is posted.
(f) The Texas Utilities Offer will not be made, directly or indirectly, in or
into Canada, Australia or Japan. Accordingly, copies of this announcement
are not being, and must not be, mailed or otherwise distributed or sent in
or into Canada, Australia or Japan.
(g) The Loan Notes to be issued pursuant to the Texas Utilities Offer have not
been, nor will be, registered under the Securities Act or under any relevant
securities laws of any state or district of the United States, will not be
the subject of a prospectus under the securities laws of any province of
Canada and will not be registered under any relevant securities laws of any
other country. The Loan Notes are not to be offered, sold or delivered,
directly or indirectly, in or into the United States, Canada, Australia or
Japan.
(h) This announcement does not constitute an offer or invitation to purchase any
securities.
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APPENDIX I
CONDITIONS OF THE TEXAS UTILITIES OFFER
The Texas Utilities Offer, which will be made by Lehman Brothers and Merrill
Lynch on behalf of TU Acquisitions, will comply with the rules and regulations
of the City Code and with US federal securities laws (except to the extent that
exemptive relief has been granted by the SEC) and the rules and regulations made
thereunder, will be governed by English law and be subject to the jurisdiction
of the courts of England and the following Conditions:
(a) valid acceptances being received (and not, where permitted, withdrawn) by
not later than 10.00 pm (London time), 5.00 pm (New York City time) on the
20th Business Day following the date of the Offer Document (or such later
time(s) and/or date(s) as TU Acquisitions may, subject to the rules and
regulations of the City Code, decide) in respect of not less than 90 per
cent. in nominal value of Energy Group Shares (including Energy Group
Shares represented by Energy Group ADSs) to which the Texas Utilities Offer
relates (or such lesser percentage as TU Acquisitions may decide), provided
that this Condition shall not be satisfied unless TU Acquisitions and its
wholly-owned subsidiaries shall have acquired or agreed to acquire, whether
pursuant to the Texas Utilities Offer or otherwise, Energy Group Shares
(including Energy Group Shares represented by Energy Group ADSs) carrying
in aggregate more than 50 per cent. of the voting rights then exercisable
at general meetings of The Energy Group and provided further that this
Condition shall be capable of being satisfied only at a time when all other
Conditions have been satisfied, fulfilled or waived. For the purposes of
this Condition: (A) any Energy Group Shares (including Energy Group Shares
represented by Energy Group ADSs) which have been unconditionally allotted
shall be deemed to carry the voting rights they will carry upon being
entered in the register of members of The Energy Group; (B) the expression
"Energy Group Shares (including Energy Group Shares represented by Energy
Group ADSs) to which the Texas Utilities Offer relates" shall be construed
in accordance with sections 428 to 430F of the Companies Act; and (C) valid
acceptances shall be treated as having been received in respect of any
Energy Group Shares which TU Acquisitions shall, pursuant to section 429(8)
of the Companies Act, be treated as having acquired or contracted to
acquire by virtue of acceptances of the Texas Utilities Offer;
(b) the Peabody Sale Agreement becoming unconditional in all respects (except
for any condition or conditions relating to the Texas Utilities Offer
becoming unconditional in all respects) and not being amended or varied
without the prior approval of TU Acquisitions;
(c) an announcement being made in terms reasonably satisfactory to TU
Acquisitions that it is not the intention of the Secretary of State for
Trade and Industry to refer the Acquisition, or any matters arising from
it, to the Monopolies and Mergers Commission;
(d) the DGES indicating in terms reasonably satisfactory to TU Acquisitions
that it is not his intention to seek modifications to any of Eastern's
licences under the Electricity Act 1989 (except on terms reasonably
satisfactory to TU Acquisitions);
(e) the DGES indicating in terms reasonably satisfactory to TU Acquisitions
that he will not seek undertakings or assurances from any member of the TU
Acquisitions Group or the TEG Group (except on terms reasonably
satisfactory to TU Acquisitions) and that in connection with the
Acquisition he will seek or agree to such modifications (if any) and such
other consents and/or directions (if any) as are in the reasonable opinion
of TU Acquisitions necessary or appropriate with respect to the licences
referred to in Condition (d);
(f) the waiting period applicable to the Texas Utilities Offer under the US HSR
Act having expired or been terminated;
(g) no relevant authority having intervened in a way which would be likely, or
having failed to institute or implement any action the failure of which
would be likely (to an extent which is, in the case of (i) to (iv) below,
material in the context of the TU Acquisitions Group or of the TEG Group or
of the financing of the Texas Utilities Offer):
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(i) to require, prevent or delay the divestiture or materially alter the
terms of any proposed divestiture by TU Acquisitions or The Energy
Group or any member of the TU Acquisitions Group or the wider TEG
Group of all or any portion of their respective businesses, assets or
properties or impose any limitation on the ability of any of them to
conduct any of their respective businesses or to own any of their
respective assets or property or any part thereof;
(ii) to impose any limitation on the ability of any member of the TU
Acquisitions Group or the wider TEG Group to acquire, or to hold or
to exercise effectively, directly or indirectly, any rights of
ownership in respect of shares in, or management control over, any
member of the wider TEG Group;
(iii) otherwise adversely to affect the financial or trading position of
any member of the TU Acquisitions Group or the wider TEG Group;
(iv) to make the Texas Utilities Offer or its implementation or the
acquisition or the proposed acquisition of any Energy Group Shares or
Energy Group ADSs or control of The Energy Group by any member of the
TU Acquisitions Group void, illegal and/or unenforceable, or
otherwise, directly or indirectly, to restrain, restrict, prohibit,
delay or otherwise interfere with the implementation thereof, or
impose additional conditions or obligations with respect thereto, or
otherwise challenge or hinder any thereof;
(v) to result in a delay in the ability of any member of the TU
Acquisitions Group, or render any such person unable, to acquire some
or all of the Energy Group Shares or Energy Group ADSs or require or
prevent or materially delay divestiture by any such person of any
such securities; or
(vi) to require any member of the TU Acquisitions Group or the wider TEG
Group to offer to acquire any shares or other securities (or the
equivalent) in any member of the wider TEG Group owned by any third
party;
and all applicable waiting and other time periods during which any relevant
authority could, in respect of the Texas Utilities Offer or the acquisition
or proposed acquisition of any Energy Group Shares or Energy Group ADSs or
control of The Energy Group by TU Acquisitions, intervene having expired,
lapsed or terminated;
(h) all necessary filings having been made, all regulatory and statutory
obligations having been complied with, all appropriate waiting periods
under any applicable legislation or regulations of any jurisdiction having
expired, lapsed or terminated in each case in respect of the Texas
Utilities Offer or the acquisition of any shares or other securities in, or
control of, The Energy Group by any member of the TU Acquisitions Group and
all authorisations and determinations necessary or appropriate in any
jurisdiction for or in respect of the Texas Utilities Offer (including,
without limitation, its implementation and financing) or proposed
acquisition of any shares or other securities in, or control of, The Energy
Group by any member of the TU Acquisitions Group or in relation to the
affairs of any member of the TU Acquisitions Group or the wider TEG Group
having been obtained in terms and in a form reasonably satisfactory to TU
Acquisitions from all relevant authorities or (without prejudice to the
generality of the foregoing) from any persons or bodies with whom any
member of the TU Acquisitions Group or the wider TEG Group, as the case may
be, has entered into contractual arrangements and such authorisations and
determinations together with all material authorisations and determinations
necessary or appropriate for any member of the TU Acquisitions Group or the
wider TEG Group to carry on a business which is material in the context of
the TU Acquisitions Group or the TEG Group as a whole or of the financing
of the Texas Utilities Offer remaining in full force and effect and all
filings necessary for such purpose having been made and there being no
notice or intimation of any intention to revoke or not to renew any of the
same and all necessary statutory or regulatory obligations in all relevant
jurisdictions having been complied with;
(i) TU Acquisitions not having discovered (other than by virtue of the same
having been disclosed to it prior to the date of this announcement by any
member of the TEG Group) any provision of any agreement,
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arrangement, licence or other instrument to which any member of the wider
TEG Group is a party or by or to which any member of the wider TEG Group or
any part of its assets may be bound, entitled or subject which would be
likely, as a result of the Texas Utilities Offer, the proposed acquisition
by TU Acquisitions of any shares in, or change in the control or management
of, The Energy Group or otherwise, to result in (to an extent which is
material in the context of the TU Acquisitions Group or the wider TEG Group
as a whole or of the financing of the Texas Utilities Offer):
(i) any moneys borrowed by or any other indebtedness, actual or
contingent, of any member of the wider TEG Group being or becoming
repayable or capable of being declared repayable immediately or prior
to its stated maturity, or the ability of any such member to borrow
moneys or incur any indebtedness being withdrawn or inhibited;
(ii) any such agreement, arrangement, licence or instrument being
terminated or adversely modified or any obligation or liability
arising or any action being taken or arising thereunder;
(iii) the rights, liabilities, obligations or interests of any member of
the wider TEG Group under any such arrangement, agreement, licence or
instrument or the interests or business of any such member in or with
any other person, firm, company or body (or any arrangements relating
to any such interests or business) being terminated or adversely
modified or affected;
(iv) any assets or interests of any such member being or becoming liable
to be disposed of or charged, or any right arising under which any
such asset or interest is required or is likely to be required to be
disposed of or charged, in each case other than in the ordinary
course of business;
(v) the creation of any mortgage, charge or other security interest over
the whole or any part of the business, property or assets of any
member of the wider TEG Group or any such security interest, whenever
arising or having arisen, becoming enforceable;
(vi) the creation of liabilities for any member of the wider TEG Group
other than in the ordinary course of business; or
(vii) the financial or trading position of any member of the wider TEG
Group being prejudiced or adversely affected;
(j) TU Acquisitions not having discovered, save as publicly announced by The
Energy Group in accordance with the Listing Rules prior to the date of this
announcement, or as disclosed to it prior to that date by any member of the
TEG Group, that any member of the wider TEG Group has, since 31 December
1997 to an extent which is material in the context of the TEG Group as a
whole or of the financing of the Texas Utilities Offer:
(i) save to any member of the TEG Group and save for the issue of Energy
Group Securities on the exercise of options granted under any of the
Energy Group Share Schemes prior to date of this announcement, issued
or agreed to issue or authorised or proposed the issue of additional
shares of any class, or of securities convertible into, or rights,
warrants or options to subscribe for or acquire, any such shares or
convertible securities or redeemed, purchased or reduced any part of
its share capital;
(ii) recommended, declared, paid or made or proposed to recommend,
declare, pay or make any bonus, dividend or other distribution in
respect of the share capital of The Energy Group;
(iii) merged with any body corporate or acquired or disposed of or
transferred, mortgaged or charged or created any security interest
over any assets or any right, title or interest in any assets
(including shares and trade investments) or authorised or proposed or
announced any intention to propose a merger, demerger, acquisition,
disposal, transfer, mortgage, charge or security interest (in each
case, other than in the ordinary course of business);
(iv) made or authorised or proposed or announced an intention to propose
any change in its share or loan capital save for options granted
under any of the Energy Group Share Schemes prior to the
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date of this announcement and for any Energy Group Securities
allotted upon exercise of such options;
(v) issued, authorised or proposed or announced an intention to propose
the issue of any debentures or (save in the ordinary course of
business) incurred or increased any indebtedness or contingent
liability;
(vi) otherwise than in the ordinary course of business, entered into any
contract, reconstruction, amalgamation, commitment or other
transaction or arrangement or (save for changes in remuneration
notified to TU Acquisitions prior to the date of this announcement)
changed the terms of any contract with any Director of The Energy
Group;
(vii) save in the ordinary course of business, entered into or varied any
contract, transaction or commitment (whether in respect of capital
expenditure or otherwise) which is of a long-term, onerous or unusual
nature or magnitude or which involves or could involve an obligation
of such a nature or magnitude;
(viii)waived or compromised any claim otherwise than in the ordinary course
of business;
(ix) taken any corporate action or had any order made for its winding-up,
dissolution or reorganisation or for the appointment of a receiver,
administrator, administrative receiver, trustee or similar officer of
all or any of its assets or revenues; or
(x) entered into any contract, commitment, agreement or arrangement or
passed any resolution with respect to, or announced an intention to,
or to propose to effect, any of the transactions, matters or events
referred to in this Condition;
(k) since 31 December 1997, save as publicly announced in accordance with the
Listing Rules by The Energy Group prior to the date of this announcement or
as otherwise disclosed to TU Acquisitions prior to that date by any member
of the TEG Group, none of the following having occurred to an extent which
is material in the context of the wider TEG Group as a whole or of the
financing of the Texas Utilities Offer:
(i) any adverse change or deterioration in the business, assets,
financial or trading position of any member of the wider TEG Group;
(ii) any litigation or arbitration proceedings, prosecution or other legal
proceedings having been instituted or threatened in writing by or
against or remaining outstanding against any member of the wider TEG
Group or to which any member of the wider TEG Group is a party
(whether as plaintiff, defendant or otherwise) and any investigation
by any relevant authority against, or in respect of any member of the
wider TEG Group having been threatened in writing, announced or
instituted or remaining outstanding by, against or in respect of any
member of the wider TEG Group; and
(iii) a contingent or other liability of any member of the wider TEG Group
having arisen which would be likely adversely to affect any member of
the wider TEG Group;
(l) TU Acquisitions not having discovered:
(i) that any financial, business or other information which has been
publicly disclosed at any time by or on behalf of any member of the
wider TEG Group is materially misleading, contains a material
misrepresentation of fact or omits to state a fact necessary to make
the information contained therein not misleading and which in any
such case is material in the context of the wider TEG Group taken as
a whole or of the financing of the Texas Utilities Offer; or
(ii) that any member of the wider TEG Group was, at the date of the Energy
Group Listing Particulars, or has, outside the ordinary course of
business since that date, become subject to any liability (contingent
or otherwise) which is not disclosed or referred to in the Energy
Group Listing
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Particulars and which is material in the context of the wider TEG
Group taken as a whole or of the financing of the Texas Utilities
Offer; and
(m) save as publicly announced in accordance with the Listing Rules by The
Energy Group prior to the date of this announcement or as otherwise
disclosed to it prior to that date by any member of the TEG Group, TU
Acquisitions not having discovered:
(i) that any past or present member of the wider TEG Group has not
complied with all applicable legislation or regulations of any
jurisdiction with regard to the disposal, discharge, spillage, leak
or emission of any waste or hazardous substance or any substance
likely to impair the environment or harm human health, which
non-compliance or any other disposal, discharge, spillage, leak or
emission which has occurred would be likely to give rise to any
liability (whether actual or contingent) on the part of any member of
the wider TEG Group and which is material in the context of the wider
TEG Group taken as a whole or of the financing of the Texas Utilities
Offer; or
(ii) that there is, or is likely to be, any liability (whether actual or
contingent) to make good, repair, reclaim, remediate, reinstate or
clean up property now or previously owned, occupied or made use of by
any past or present member of the wider TEG Group under any
legislation, regulation, notice, circular or order of any relevant
authority relating to the protection of or enhancement of the
environment and which is material in the context of the wider TEG
Group taken as a whole or of the financing of the Texas Utilities
Offer.
For the purposes of these Conditions:
(A) "AUTHORISATIONS" mean authorisations, orders, grants, recognitions,
certifications, confirmations, consents, licences, clearances, permissions
and approvals;
(B) the "TU ACQUISITIONS GROUP" means Texas Utilities and its subsidiary
undertakings, associated undertakings and any other undertaking in which
Texas Utilities and such undertakings (aggregating their interests) have a
substantial interest and, for the purposes of this sub-paragraph (B) and
sub-paragraph (C) below, "SUBSIDIARY UNDERTAKING", "ASSOCIATED
UNDERTAKING", "HOLDING COMPANY" and "UNDERTAKING" have the meanings given
by the Companies Act (but for this purpose ignoring paragraph 20(1)(b) of
Schedule 4A of the Companies Act) and "SUBSTANTIAL INTEREST" means a direct
or indirect interest in 20 per cent. or more of the equity capital of an
undertaking;
(C) the "WIDER TEG GROUP" means The Energy Group and its subsidiary
undertakings, associated undertakings and any other undertakings in which
The Energy Group and such undertakings (aggregating their interests) have a
substantial interest;
(D) "RELEVANT AUTHORITY" means any government, government department or
governmental, quasi-governmental, supranational, statutory or regulatory
body, court, trade agency, professional association or institution or
environmental body in any jurisdiction; and
(E) a relevant authority shall be regarded as having "INTERVENED" if it has
instituted, implemented or threatened to take any action, proceedings,
suit, investigation or enquiry or reference, or made, enacted or proposed
any statute, regulation, decision or order and "INTERVENE" shall be
construed accordingly.
TU Acquisitions will not invoke either of Conditions (d) or (e) in respect of
the DGES seeking, or indicating that it is his intention to seek, modifications
to any of The Energy Group's licences under the Electricity Act 1989 or
undertakings or assurances from any member of the TU Acquisitions Group or the
TEG Group provided that such modifications undertakings or assurances
substantially reflect the assurances proposed by the DGES to PacifiCorp in
connection with the referral of the Original PacifiCorp Offer to the Monopolies
and Mergers Commission (as described in the Monopolies and Mergers Commission
Report relating to the Original PacifiCorp Offer published on 19 December 1997)
or are substantially in keeping with the proposals outlined by the DGES in its
consultation paper dated 24 February 1998 regarding modifications to public
electricity supply licences following takeovers.
16
<PAGE> 17
TU Acquisitions reserves the right to waive, in whole or in part, all or any of
Conditions (b) to (m) inclusive. TU Acquisitions reserves the right, subject to
the consent of the Panel, to extend the time required under the City Code for
satisfaction of Condition (a) until such time as Conditions (b) to (m) inclusive
have been satisfied, fulfilled or waived. TU Acquisitions shall be under no
obligation to waive or treat as satisfied any of the Conditions (b) to (m)
inclusive by a date earlier than the latest date specified below for the
satisfaction thereof notwithstanding that the other Conditions may at such
earlier date have been waived or fulfilled and that there are at such earlier
date no circumstances indicating that any such Conditions may not be capable of
fulfilment.
If TU Acquisitions is required to make an offer for Energy Group Securities
under the provisions of Rule 9 of the City Code, TU Acquisitions may make such
alterations to any of the Conditions, including Condition (a), as are necessary
to comply with that Rule.
The Texas Utilities Offer will lapse unless all the Conditions are fulfilled or
(if capable of waiver) waived or, where appropriate, have been determined by TU
Acquisitions in its reasonable opinion to be or to remain satisfied no later
than the Initial Closing Date (as it may be extended). The Texas Utilities Offer
will also lapse if the Acquisition is referred to the Monopolies and Mergers
Commission before the Initial Closing Date (as it may be extended). The Initial
Closing Date cannot be extended beyond midnight (London time), 7.00 pm (New York
City time) on the 60th day after the date of the Offer Document, except with the
consent of the Panel.
17
<PAGE> 18
APPENDIX II
SUMMARY OF THE TERMS OF THE LOAN NOTES
The unsecured floating rate loan notes 1998/2004 of TU Acquisitions will be
created by a resolution of the Board of TU Acquisitions (or a duly authorised
committee of TU Acquisitions) and will be constituted by a loan note instrument
(the "Loan Note Instrument") executed as a deed by TU Acquisitions. The Loan
Notes will not be guaranteed. The issue of the Loan Notes will be conditional on
the Texas Utilities Offer becoming or being declared unconditional in all
respects. Loan Notes will only be issued if the aggregate valid elections for
the Loan Note Alternative received on or before the date on which the Texas
Utilities Offer becomes or is declared unconditional in all respects will result
in TU Acquisitions issuing in excess of L1 million nominal value of Loan Notes.
The Loan Note Alternative is not (subject to certain exceptions) available to
persons with registered addresses in the United States, Canada, Japan or
Australia or to or for the account or benefit of any US Person. The Loan Note
Instrument will contain provisions, among others, to the effect set out below.
1. FORM AND STATUS
The Loan Notes will be issued by TU Acquisitions in registered form in amounts
and integral multiples of L1 and will constitute unsecured obligations of TU
Acquisitions ranking pari passu with its other unsecured obligations apart from
those preferred by law. Fractional entitlements will be disregarded. The Loan
Note Instrument will not contain any restrictions on borrowing, disposals or
charging of assets by TU Acquisitions or any member of the Texas Utilities
Group.
2. INTEREST
a) Interest on the Loan Notes will accrue from day to day and will be calculated
on the basis of a 365-day year (or in the case of a leap year, a 366-day
year) and will be payable (subject to any requirement to deduct income tax
therefrom) twice yearly in arrears on 30 June and 31 December or, if any such
day is not a business day, on the immediately preceding business day
("interest payment dates") in each year in respect of the interest periods
(as defined below) ending on those dates at a rate calculated as provided in
sub-paragraph 2(b) below or, if no rate can be established in accordance with
sub-paragraph 2(b) below, as provided in sub-paragraph 2(c) below, except
that the first payment of interest on any Loan Note, which will be made on 31
December 1998, will be in respect of the period from the date of issue of
such Loan Note to 31 December 1998 (both dates inclusive). The period from
the date of issue of such Loan Notes to 31 December 1998 and the period from
the day following 31 December 1998, or any subsequent interest payment date,
to the next following interest payment date (inclusive of the next following
interest payment date) is herein called an "interest period".
b) The rate of interest on the Loan Notes for each interest period will be that
calculated by TU Acquisitions to be 0.5 per cent. below the rate per annum of
the offer quotation for six months' deposits in sterling for an interest
period which appears on Telerate Page 3750 at or about 12.00 noon (showing
the rate as at or about 11.00 am) on the first day of the relevant interest
period, except that in the case of the first interest period (being from the
date of the issue of each Loan Note to 31 December 1998) such calculation
will be made on the day on which any of the Loan Notes are first issued or,
if any such day is not a business day, on the next succeeding business day
(the "Calculation Day"). If no such offer quotation as at or about 11.00 am
appears on Telerate Page 3750 on or before 3.00 pm on the Calculation Day,
the rate of interest for each interest period shall be the arithmetic mean
(rounded upward to the nearest five decimal places) of the offer quotations
for sterling deposits for a period equal, or as nearly equal as possible, to
an interest period which appear on the Reuters Screen LIBP Page at or about
11.00 am on the Calculation Day. Any calculation of the rate of interest and
of each such interest amount shall, in the absence of manifest error, be
final and binding.
c) If a rate of interest cannot be established in accordance with the provisions
in sub-paragraph 2(b) above for any interest period, then the rate of
interest on the Loan Notes for such interest period shall be calculated by
reference to a rate 0.5 per cent. below such rate as TU Acquisitions shall
determine on the
18
<PAGE> 19
basis of quotations made by reference to a London clearing bank or a group of
London clearing banks as selected by TU Acquisitions or (failing which) to
rates offered in any other sterling inter-bank market or markets as TU
Acquisitions may select and if a rate of interest cannot be established in
accordance with the above provisions of this sub-paragraph for any interest
period then the applicable rate of interest shall be the same as that
applicable to the Loan Notes during the previous interest period.
3. REDEMPTION OF LOAN NOTES
a) A holder of Loan Notes ("Noteholder") shall be entitled to require TU
Acquisitions to redeem the whole (whatever the amount) or any part of his
holding of Loan Notes at par, together with accrued interest (subject to any
requirement to deduct income tax therefrom) to (and including) the date of
payment, on 31 December 1998, and on any interest payment date falling
thereafter by giving notice in writing to TU Acquisitions (in the form
endorsed on the Loan Note certificate) not less than 30 days prior to such
interest payment date accompanied by the certificate(s) for all the Loan
Notes to be redeemed, provided that no such notice may be given in respect of
any Loan Notes in respect of which notice of redemption has previously been
given by TU Acquisitions in accordance with sub-paragraph 3(b) below.
b) If, at any time, the nominal amount of all Loan Notes outstanding is 20 per
cent. or less of the total nominal amount of Loan Notes issued, TU
Acquisitions shall have the right on giving to the remaining Noteholders not
less than 30 days' notice in writing, such notice not to take effect prior to
31 December 1998, to redeem, on the expiry of such notice, all (but not some
only) of the outstanding Loan Notes by payment of the nominal amount thereof
together with accrued interest (subject to any requirement to deduct income
tax therefrom) to (and including) the date of redemption.
c) Any Loan Notes not previously so redeemed or purchased will be repaid in full
at par on 31 December 2004.
4. PURCHASE OF LOAN NOTES
TU Acquisitions will be entitled at any time after 31 December 1998 to purchase
Loan Notes at any price by tender, private treaty or otherwise by agreement with
the relevant Noteholder(s).
5. CANCELLATION
Any Loan Notes redeemed under paragraph 3 above or purchased under paragraph 4
above shall be cancelled and shall not be available for re-issue.
6. MODIFICATIONS
The provisions of the Loan Note Instrument and the rights of the Noteholders
will be subject to modification, abrogation or compromise in any respect with
the sanction of an Extraordinary Resolution of the Noteholders, as defined in
the Loan Note Instrument, subject to the consent of TU Acquisitions. TU
Acquisitions may amend the provisions of the Loan Note Instrument without such
sanction or consent if, in the reasonable opinion of the financial adviser to TU
Acquisitions, such amendment would not be materially prejudicial to the
interests of Noteholders or is of a formal, minor or technical nature or
corrects a manifest error.
7. REGISTRATION AND TRANSFER
The Loan Notes will be registered in amounts and multiples of L1. The Loan Notes
will be transferable in amounts or integral multiples of L1.
19
<PAGE> 20
8. RESTRICTIONS ON OWNERSHIP AND TRANSFER
Notwithstanding the foregoing, prior to the date occurring 180 days after the
last date of issue of any Loan Notes pursuant to the Texas Utilities Offer or,
where applicable, pursuant to the provisions of sections 428 to 430F of the
Companies Act:
a) no transfer of Loan Notes will be registered until each transferee has
delivered to TU Acquisitions a certificate in the prescribed form to the
effect that such transferee is not a US Person and is not acquiring, and will
not be holding, such Loan Notes for the account or benefit of a US Person or
with a view to the offer, sale or delivery, directly or indirectly, of such
Loan Notes in the United States, Canada, Australia or Japan, or to or for the
account or benefit of any US Person or any other person whom such transferee
has reason to believe is purchasing for the purpose of such offer, sale or
delivery;
b) payments of interest or principal in respect of the Loan Notes will not be
made to addresses in the United States, Canada, Australia or Japan;
c) documents of title in respect of the Loan Notes will not be sent to addresses
in the United States, Canada, Australia or Japan; and
d) registered addresses of holders of Loan Notes must be outside the United
States, Canada, Australia or Japan.
9. PRESCRIPTION
Noteholders will cease to be entitled to amounts in respect of interest which
remain unclaimed for a period of 12 years, and to amounts due in respect of
principal which remain unclaimed for a period of 12 years, in each case from the
date on which the relevant payment first becomes due, and such amounts shall
revert to TU Acquisitions.
10. FURTHER LOAN NOTES
Provision will be made in the Loan Note Instrument to enable TU Acquisitions to
make further issues of the Loan Notes so as to form a single series with the
Loan Notes issued pursuant to the Texas Utilities Offer or to carry such rights
as to interest, redemption and otherwise as TU Acquisitions may think fit.
Each Noteholder will have the right to acquire (by subscription at a nominal
value of an amount up to or equal to such Noteholder's holding of Notes)
additional loan notes to be issued by a subsidiary of TU Acquisitions (the
"Additional Notes") on terms and conditions substantially the same as those
applicable to the Loan Notes, except as follows:
a) the Additional Notes will not be issued before 31 December 2003;
b) the rate of interest will be 1.5 per cent. below the rate per annum described
in paragraph 2(b) above; and
c) the Additional Notes will not carry any right to acquire any additional
securities.
11. NO LISTING
No application has been made or is intended to be made to for the Loan Notes to
be listed or dealt in on any stock exchange.
12. EVENTS OF DEFAULT
Each Noteholder shall be entitled to require all or any part of the Loan Notes
held by him to be repaid at par together with accrued interest (subject to any
requirement to deduct any income tax therefrom) whilst any of the following is
continuing:
a) any principal or interest on any of the Loan Notes held by that Noteholder
shall fail to be paid in full within 30 days after the due date for payment
thereof;
20
<PAGE> 21
b) an order is made or an effective resolution is passed for the winding-up or
dissolution (or any equivalent procedure in any other jurisdiction) of TU
Acquisitions (other than for the purposes of an amalgamation or
reconstruction or a members' voluntary winding-up upon terms previously
approved by Extraordinary Resolution); or
c) an encumbrancer takes possession or a trustee, receiver or an administrator,
administrative receiver or similar officer is appointed of all or
substantially all of the undertaking of TU Acquisitions and such person has
not been paid out or discharged within 30 days.
13. SUBSTITUTION
The Loan Notes will contain provisions entitling TU Acquisitions, without the
consent of Noteholders, to substitute any of its subsidiaries or any holding
company or subsidiaries of such holding company resident in the United Kingdom
for tax purposes (other than Eastern or any of its subsidiaries) as the
principal debtor under the Loan Notes or to require all or any of the
Noteholders to exchange their Loan Notes for loan notes issued on the same terms
mutatis mutandis by any such company provided that (a) TU Acquisitions
guarantees such company's obligations thereunder; and (b) following such
substitution or exchange, the Loan Notes or (as the case may be) such loan notes
shall not contain a provision equivalent to this paragraph 13. References to TU
Acquisitions in this summary shall be construed accordingly. TU Acquisitions'
right to require substitution of such company as principal debtor (but not the
right to require exchange of the Loan Notes) will be exercisable only if prior
clearance has been obtained from the Inland Revenue to the effect that the
substitution will not be treated as a disposal of the Loan Notes for the
purposes of United Kingdom taxation of chargeable gains and TU Acquisitions'
right to require such an exchange will be exercisable only if the exchange will
fall within section 135 of the Taxation of Chargeable Gains Act 1992, and to the
extent relevant, clearance has been received from the Inland Revenue under
section 138 of that Act in respect of the exchange.
14. GOVERNING LAW
The Loan Notes and the Loan Note Instrument will be governed by and construed in
accordance with English Law.
21
<PAGE> 22
APPENDIX III
SOURCES AND BASES OF INFORMATION
1. The value of the fully diluted share capital of The Energy Group is based
upon 520,857,817 Energy Group Shares in issue on 27 February 1998 and
9,048,288 Energy Group Shares which could fall to be issued on exercise in
full of options and vesting of all outstanding awards granted under the
Energy Group Share Schemes.
2. The pro forma financial information in respect of The Energy Group for the
year ended 31 March 1997 is taken from the unaudited pro forma consolidated
profit and loss account set out in The Energy Group's report and accounts for
the six months ended 31 March 1997. The financial information in respect of
The Energy Group for the nine months ended 31 December 1997 is taken from the
unaudited results for the nine months ended 31 December 1997, as announced by
The Energy Group on 3 February 1998.
3. The financial information on the Peabody Coal Business for the nine months
ended 31 December 1997 is unaudited and is derived from the unaudited
financial results of The Energy Group for the nine months ended 31 December
1997.
4. The financial information on Texas Utilities for the year ended and as of 31
December 1997 is taken from Texas Utilities' Current Report on Form 8-K dated
26 February 1998.
5. The equity market capitalisation of Texas Utilities on 27 February 1998 is
calculated by reference to the closing price of the Texas Utilities common
stock on the NYSE Composite Tape on such date.
6. References in this announcement to "tons" are to short tons equal to 2,000
pounds.
22
<PAGE> 23
APPENDIX IV
DEFINITIONS
The following definitions apply throughout this announcement unless the context
requires otherwise or as is otherwise provided:
"ACQUISITION" The proposed acquisition of The Energy Group
pursuant to the Texas Utilities Offer
"BOARD" or "DIRECTORS" The Directors of Texas Utilities, TU Acquisitions
or The Energy Group, as the case may be, and
"Director" means any one of them
"BUSINESS DAY" Has the meaning given to it in Rule 14d-1 under the
Exchange Act
"CANADA" Canada, its provinces, territories and all areas
subject to its jurisdiction and any political
sub-division thereof
"CHASE MANHATTAN" Chase Manhattan plc
"CITIZENS POWER" Citizens Power LLC, previously named Citizens
Lehman Power L.L.C.
"CITY CODE" or "CODE" The City Code on Takeovers and Mergers of the
United Kingdom
"CLOSING PRICE" The closing middle market quotation of an Energy
Group Share as derived from the Official List
"COMPANIES ACT" The Companies Act 1985 (as amended) of Great
Britain
"CONDITIONS" The conditions of the Texas Utilities Offer
described in Appendix I and "Condition" means any
one of them
"DAILY OFFICIAL LIST" The London Stock Exchange Daily Official List
"DGES" The Director General of Electricity Supply of the
United Kingdom
"ENERGY GROUP ADRs" American Depositary Receipts evidencing Energy
Group ADSs
"ENERGY GROUP ADSs" American Depositary Shares issued in respect of
Energy Group Shares, each representing four Energy
Group Shares, as evidenced by Energy Group ADRs
"ENERGY GROUP LISTING
PARTICULARS" or "LISTING
PARTICULARS" The listing particulars relating to The Energy
Group dated 27 January 1997, published in
accordance with the Listing Rules
"ENERGY GROUP SECURITIES" Energy Group Shares and Energy Group ADSs
"ENERGY GROUP SHAREHOLDERS" Holders of Energy Group Shares (including Energy
Group Shares represented by Energy Group ADSs)
"ENERGY GROUP SHARES" Shares of 10p each in the share capital of The
Energy Group in issue or allotted or issued prior
to the date on which the Texas Utilities Offer
closes (or such earlier date, not being earlier
than the Initial Closing Date (as it may be
extended) as TU Acquisitions may, subject to the
Code, determine)
"ENERGY GROUP SHARE
SCHEMES" The Energy Group Executive Share Option Scheme, the
Energy Group Sharesave Scheme, the Energy Group
Long-term Incentive Plan and the Energy Group
Special Bonus Scheme
"EXCHANGE ACT" The US Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated
thereunder
23
<PAGE> 24
"FERC" The US Federal Energy Regulatory Commission
"INITIAL CLOSING DATE" 10.00 pm (London time), 5.00 pm (New York City
time) 20 Business Days after the date of the Offer
Document, unless and until TU Acquisitions, in its
discretion, shall have extended the Initial Offer
Period, in which case the term "Initial Closing
Date" shall mean the latest time and date at which
the Initial Offer Period, as so extended by TU
Acquisitions, will expire or, if earlier, the date
on which the Texas Utilities Offer becomes or is
declared wholly unconditional
"INITIAL OFFER PERIOD" The period from the date of the Offer Document to
and including the Initial Closing Date
"LAZARD" Lazard Brothers & Co., Limited and Lazard Freres &
Co., Limited
"LEHMAN BROTHERS" Lehman Brothers International (Europe)
"LEHMAN MERCHANT" Lehman Brothers Merchant Banking Partners II L.P.
"LISTING RULES" The rules and regulations made by the London Stock
Exchange under the Financial Services Act 1986
"LOAN NOTE ALTERNATIVE" The alternative under which Energy Group
Shareholders who validly accept the Texas Utilities
Offer will be entitled to elect to receive Loan
Notes instead of cash consideration otherwise
payable to them
"LOAN NOTES" The unsecured floating rate loan notes 1998/2004 of
L1 each of TU Acquisitions to be issued pursuant to
the Loan Note Alternative
"LONDON STOCK EXCHANGE" London Stock Exchange Limited
"MERRILL LYNCH" Merrill Lynch International
"MORGAN STANLEY" Morgan Stanley & Co. Limited
"NYSE" The New York Stock Exchange
"OFFER DOCUMENT" The document containing the Texas Utilities Offer
to be sent to holders of Energy Group Shares and
Energy Group ADSs
"ORIGINAL PACIFICORP OFFER" The offer made by PacifiCorp Acquisitions to
acquire the Energy Group Securities as announced on
13 June 1997
"PANEL" The Panel on Takeovers and Mergers of the United
Kingdom
"PEABODY COAL BUSINESS" The undertakings conducting the TEG Group's coal
business in the United States and Australia
including Peabody Holding Company, Inc. and its
subsidiaries, Lee Ranch Coal Company and Peabody
Holdings Pty. Limited and its subsidiaries, and
certain holding and related companies of such
companies, including Citizens Power
"PEABODY SALE" The sale of the Peabody Coal Business, details of
which are set out in paragraph 8 of this
announcement
"PEABODY SALE AGREEMENT" The agreement dated 2 March 1998 between The Energy
Group and P & L Coal Holdings Corporation for the
sale of the Peabody Coal Business
"RENEWED PACIFICORP OFFER" The offer made by PacifiCorp Acquisitions to
acquire the Energy Group Securities as announced on
3 February 1998
"SEC" The US Securities and Exchange Commission
24
<PAGE> 25
"SECURITIES ACT" The US Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder
"SUBSEQUENT OFFER PERIOD" The period following the Initial Closing Date
during which the Texas Utilities Offer remains open
for acceptance
"TEG GROUP" The Energy Group and its subsidiaries and
subsidiary undertakings for the time being and,
where the context permits, each of them
"TEXAS UTILITIES" Texas Utilities Company
"TEXAS UTILITIES GROUP" Texas Utilities and its subsidiaries and subsidiary
undertakings and, where the context permits, each
of them
"TEXAS UTILITIES OFFER" The recommended cash offer to be made by Lehman
Brothers and Merrill Lynch on behalf of TU
Acquisitions to acquire the Energy Group Shares
(including those represented by Energy Group ADSs)
and Energy Group ADSs as set out in this document
including, where the context permits and/or
requires, any subsequent revision, variation,
extension, or renewal of such offer
"THE ENERGY GROUP" The Energy Group PLC
"TU ACQUISITIONS" TU Acquisitions PLC
"UNITED KINGDOM" The United Kingdom of Great Britain and Northern
Ireland
"UNITED STATES" or "US" The United States of America, its territories and
possessions, any state of the United States of
America, the District of Columbia, and all other
areas subject to its jurisdiction
"US HSR ACT" The US Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and the rules and regulations
promulgated thereunder
"US PERSON" A US person as defined in Regulation S under the
United States Securities Act of 1933, as amended
"$" or "US DOLLAR" The lawful currency of the United States
"L" or "POUNDS STERLING" The lawful currency of the United Kingdom
END
25
<PAGE> 1
EXHIBIT 99(c)
TEXAS UTILITIES COMPANY
ENERGY PLAZA o 1601 BRYAN STREET o DALLAS, TEXAS 75201 o (214) 812-4600
News
Release
- --------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE
---------------------
INCREASED TEXAS UTILITIES OFFER FOR THE ENERGY GROUP
DALLAS, TEXAS - MARCH 3, 1998 - Texas Utilities Company (NYSE:TXU)
announces an increased offer of 840 pence per Energy Group share, a premium of
20 pence per Energy Group share to PacifiCorp's increased offer. Texas
Utilities is acquiring Energy Group shares in the United Kingdom market in
accordance with normal United Kingdom practice.
A further announcement, containing details of Texas Utilities'
increased offer will be made in due course.
Texas Utilities Company is an investor-owned holding company for
energy service companies engaged in domestic and international electric and
natural gas utility services, energy marketing, telecommunications, and other
energy-related services.
- E N D -
FOR ADDITIONAL INFORMATION
FINANCIAL COMMUNITY CONTACT: DAVID ANDERSON TIM HOGAN
214/812-4641 OR 214/812-2756
[email protected] [email protected]
GENERAL NEWS MEDIA CONTACT: CAROL PETERS 214-812-5924
JOAN HUNTER 214-812-4071
<PAGE> 1
EXHIBIT 99(d)
[TEXAS UTILITIES COMPANY LOGO] NEWS RELEASE
- -------------------------------------------------------------------------------
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION
IN OR INTO CANADA, AUSTRALIA OR JAPAN.
3 MARCH 1998
TEXAS UTILITIES COMPANY
-----------------------
OFFER FOR
THE ENERGY GROUP PLC
INCREASED TEXAS UTILITIES OFFER
Texas Utilities announces an increased offer of 840 pence per Energy
Group Share, a premium of 20 pence per Energy Group Share to Pacificorp's
increased offer. Texas Utilities has this morning acquired Energy Group
Shares in the market at this price.
A further announcement, containing details of Texas Utilities' increased
offer will be made in due course.
Enquiries:
TEXAS UTILITIES COMPANY
David Anderson (Investor) Telephone: +1-214-812 4641
Joan Hunter (Press) Telephone: +1-214-812 4071
LEHMAN BROTHERS INTERNATIONAL Telephone: +44-171-601 0011
Richard Collier
Anthony Fobel
MERRILL LYNCH INTERNATIONAL Telephone: +44-171-628 1000
Justin Dowley
Lewis Lee
FINANCIAL DYNAMICS Telephone: +44-171-831 3113
Nick Miles
Andrew Dowler
The definitions set out in the announcement dated 2 March 1998 of the
Texas Utilities Offer apply in this announcement. Texas Utilities'
increased offer will not be made, directly or indirectly, in or into
Canada, Australia or Japan. Accordingly, copies of this announcement
are not being, and must not be, mailed or otherwise distributed or sent
in or into Canada, Australia or Japan.
Lehman Brothers and Merrill Lynch, which are regulated in the United
Kingdom by The Securities and Futures Authority Limited, are acting
for Texas Utilities and TU Acquisitions and no one else in connection
with the Texas Utilities' increased offer and will not be responsible to
anyone other than Texas Utilities and TU Acquisitions for providing the
protections afforded to their respective customers or for providing
advice in relation to the Texas Utilities' increased offer or any other
matter referred to herein. Lehman Brothers and Merrill Lynch will be
acting through Lehman Brothers Inc. and Merrill Lynch & Co.,
respectively, for the purposes of making the Texas Utilities' increased
offer in the United States.
END
<PAGE> 1
EXHIBIT 99(e)
TEXAS UTILITIES COMPANY
ENERGY PLAZA o 1601 BRYAN STREET o DALLAS, TEXAS 75201 o (214) 812-4600
News
Release
- --------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE
---------------------
TEXAS UTILITIES ACQUIRES 13.9% OF THE ENERGY GROUP
DALLAS, TEXAS - MARCH 3, 1998 - Texas Utilities Company (NYSE:TXU)
announces that is has today acquired 72,560,178 Energy Group Shares
(NYSE/LSE:TEG) at 840 pence per share, representing approximately 13.9% of The
Energy Group's issued share capital.
In conjunction with the increase in Texas Utilities' cash offer to 840
pence per Energy Group share (US $13.86) and L.33.60 per American Depository
Share (ADS) (US $55.44), Texas Utilities confirms that it would increase the
value of the proposed limited share alternative to 865 pence (US $14.27) for
each Energy Group Share and L.34.60 per ADS (US $57.09) on the same basis as
set out in the announcement dated March 2, 1998 of the Texas Utilities Offer.
With regard to the Peabody Coal Business, Texas Utilities confirms
that, contrary to suggestions otherwise, the Peabody Sale to Lehman Merchant is
subject only to certain regulatory consents and, inter alia, to Texas
Utilities' increased offer becoming or being declared unconditional in all
respects and does not require the approval of holders of Energy Group
Securities in general meeting.
Erle Nye, Chairman and Chief Executive of Texas Utilities, said: "The
revised offer price and these purchases not only demonstrate our commitment to
acquire The Energy Group but also underline our expectation that all consents
and confirmations relating to the Texas Utilities Offer and the Peabody Sale
will be obtained within the normal timetable for an offer in the United
Kingdom."
Texas Utilities Company is an investor-owned holding company for
energy service companies engaged in domestic and international electric and
natural gas utility services, energy marketing, telecommunications, and other
energy-related services.
- E N D -
FOR ADDITIONAL INFORMATION CONTACT: DAVID ANDERSON TIM HOGAN
214/812-4641 OR 214/812-2756
[email protected] [email protected]
GENERAL NEWS MEDIA CONTACT: CAROL PETERS 214-812-5924
JOAN HUNTER 214-812-4071
<PAGE> 1
EXHIBIT 99(f)
[TEXAS UTILITIES COMPANY LOGO] NEWS RELEASE
- -------------------------------------------------------------------------------
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION
IN OR INTO CANADA, AUSTRALIA OR JAPAN.
3 MARCH 1998
TEXAS UTILITIES COMPANY
-----------------------
OFFER FOR
THE ENERGY GROUP PLC
TEXAS UTILITIES ACQUIRES 13.9 PERCENT OF THE ENERGY GROUP
Texas Utilities announces that it has today acquired 72,560,178 Energy
Group Shares at 840 pence per share, representing approximately 13.9 per
cent of the Energy Group's issued share capital.
In conjunction with the increase in Texas Utilities' cash offer to 840
pence per Energy Group Share, Texas Utilities confirms that it would
increase the value of the proposed limited share alternative to 865
pence for each Energy Group Share on the same basis as set out in the
announcement dated 2 March 1998 of the Texas Utilities Offer.
With regard to the Peabody Coal Business, Texas Utilities confirms that,
contrary to suggestions otherwise, the Peabody Sale to Lehman Merchant
is subject only to certain regulatory consents and, inter alia, to Texas
Utilities' increased offer becoming or being declared unconditional in
all respects and does not require the approval of holders of Energy
Group Securities in general meeting.
Erle Nye, Chairman and Chief Executive of Texas Utilities, said:
"The revised offer price and these purchases not only demonstrate our
commitment to acquire The Energy Group but also underline our
expectation that all consents and confirmations relating to the Texas
Utilities Offer and the Peabody Sale will be obtained within the normal
timetable for an offer in the United Kingdom."
Enquiries:
TEXAS UTILITIES COMPANY
David Anderson (Investors) Telephone: +1-214-812-4641
Joan Hunter (Press) Telephone: +1-214-812-4071
LEHMAN BROTHERS INTERNATIONAL Telephone: +44-171-601-0011
Richard Collier
Anthony Fobel
MERRILL LYNCH INTERNATIONAL Telephone: +44-171-628-1000
Justin Dowley
Lewis Lee
Martin Falkner
<PAGE> 2
MERRILL LYNCH CORPORATE BROKING Telephone: +44-171-772 1000
Mike Gibson
Stephen Robinson
FINANCIAL DYNAMICS Telephone: +44-171-831 3113
Nick Miles
Andrew Dowler
The definitions set out in the announcement dated 2 March 1998 of the
Texas Utilities Offer apply in this announcement. Texas Utilities'
increased offer will not be made, directly or indirectly, in or into
Canada, Australia or Japan. Accordingly, copies of this announcement
are not being, and must not be, mailed or otherwise distributed or sent
in or into Canada, Australia or Japan.
Lehman Brothers and Merrill Lynch, which are regulated in the United
Kingdom by the Securities and Futures Authority Limited, are acting for
Texas Utilities and TU Acquisitions and no one else in connection with
the Texas Utilities' increased offer and will not be responsible to
anyone other than Texas Utilities and TU Acquisitions for providing the
protections afforded to their respective customers or for providing
advice in relation to the Texas Utilities' increased offer or any other
matter referred to herein. Lehman Brothers and Merrill Lynch will be
acting through Lehman Brothers Inc. and Merrill Lynch & Co.,
respectively, for the purposes of making the Texas Utilities' increased
offer in the United States.
END
<PAGE> 1
EXHIBIT 99(g)
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION
IN OR INTO CANADA, JAPAN OR AUSTRALIA
5 March 1998
TEXAS UTILITIES COMPANY
-----------------------
INCREASED CASH OFFER FOR
THE ENERGY GROUP PLC
1. THE INCREASED TEXAS UTILITIES OFFER
The Board of Texas Utilities announces the terms of the increased cash offer
for The Energy Group announced on 3 March 1998. The Increased Texas Utilities
Offer will be made by Lehman Brothers and Merrill Lynch on behalf of TU
Acquisitions, a wholly-owned subsidiary of Texas Utilities, on the following
basis:
<TABLE>
<S> <C>
For each Energy Group Share 840 pence; and
For each Energy Group ADS L.33.60
</TABLE>
representing a premium of 20 pence per Energy Group Share to PacifiCorp's
Increased offer.
The Increased Texas Utilities Offer values the fully diluted share capital of
The Energy Group at approximately L.4.45 billion (assuming the exercise in full
of all outstanding options and the vesting of all outstanding awards under the
Energy Group Share Schemes) and includes a full Loan Note Alternative.
Subject to the SEC declaring the relevant documentation effective by not later
than 18 Business Days after the date of the Offer Document (or such later date
as Texas Utilities may determine), Texas Utilities will also make available a
limited share alternative with a value equal to 865 pence for each Energy Group
Share and L.34.60 for each Energy Group ADS determined as, and subject to the
limitations, set out in paragraph 3 below.
In demonstration of its commitment to acquire The Energy Group and to underline
its expectation that all consents and confirmations relating to the Increased
Texas Utilities Offer and the Peabody Sale will be obtained within the normal
timetable for an offer in the United Kingdom, Texas Utilities has acquired
77,500,000 Energy Group Shares, representing approximately 14.9 per cent. of
The Energy Group's issued share capital.
With regard to the Peabody Coal Business, the Peabody Sale to Lehman Merchant
is subject only to certain regulatory consents and, inter alia, to the
Increased Texas Utilities Offer becoming or being declared unconditional in all
respects and does not require the approval of holders of Energy Group
Securities in general meeting.
HOLDERS OF ENERGY GROUP SECURITIES WHO HAVE ALREADY ACCEPTED PACIFICORP'S OFFER
MAY WITHDRAW THEIR ACCEPTANCES AT ANY TIME UNTIL PACIFICORP'S INCREASED OFFER
BECOMES OR IS DECLARED WHOLLY UNCONDITIONAL.
<PAGE> 2
Texas Utilities expects the transaction to be earnings and cash flow enhancing
in the first complete year following completion of the Acquisition and
thereafter (prior to considering any synergy or other benefits that the
transaction may give rise to). This statement should not be interpreted to
mean that the future earnings per share of Texas Utilities, as enlarged by the
acquisition of The Energy Group, will necessarily be greater than the
historical published earnings per share of Texas Utilities.
The Increased Texas Utilities Offer will be subject to the Conditions referred
to in paragraph 6(a) below.
2. LOAN NOTE ALTERNATIVE
A Loan Note Alternative will be available to holders of Energy Group Shares
(other than persons who are citizens or residents of the United States and
certain other overseas shareholders) who validly accept the Increased Texas
Utilities Offer on the basis of, for every L.1 of cash otherwise payable under
the Increased Texas Utilities Offer, L.1 nominal of Loan Notes, subject to
aggregate valid elections being received, on or before the date on which the
Increased Texas Utilities Offer becomes or is declared unconditional in all
respects, for in excess of L.1 million nominal value of Loan Notes. If
insufficient elections are received, holders of Energy Group Shares who elect
for the Loan Note Alternative will instead receive cash in accordance with the
terms of the Increased Texas Utilities Offer. Subject as aforesaid, the Loan
Note Alternative will remain open for as long as the Increased Texas Utilities
Offer is open for acceptance. The interest rate on the Loan Notes will be
calculated as described in paragraph 2 of appendix II to the Original Texas
Utilities Offer Announcement.
Merrill Lynch, as broker to the Increased Texas Utilities Offer, has advised
that, based on market conditions on 4 March 1998 (the latest practicable date
prior to this announcement), in its opinion, if the Loan Notes had then been in
issue, the value of each L.1 nominal of Loan Notes would have been
approximately 98 pence.
In considering the Loan Note Alternative, holders of Energy Group Shares should
note that the obligations of the issuer of the Loan Notes are not guaranteed or
secured.
A summary of the terms of the Loan Notes is set out in appendix II to the
Original Texas Utilities Offer Announcement (all references to the Texas
Utilities Offer in such appendix II being treated for this purpose as
references to the Increased Texas Utilities Offer).
3. PROPOSED LIMITED SHARE ALTERNATIVE
Subject to the SEC declaring the relevant documentation effective by not later
than 18 Business Days after the date of the Offer Document (or such later date
as Texas Utilities may determine), Texas Utilities will make available to
holders of Energy Group Securities a limited share alternative.
The Board of Texas Utilities announced on 3 March 1998 that it would increase
the value of the proposed share alternative. Accordingly, under the share
alternative, holders of Energy Group Securities would be entitled to receive
new shares of Texas Utilities common stock with a value equal to 865 pence for
each Energy Group Share and L.34.60 for each Energy Group ADS, in each case
based on the average of the closing prices of Texas Utilities common stock on
the NYSE on the 20 consecutive dealing days ending on the third dealing day
prior to the date TU Acquisitions intends to declare the Increased Texas
Utilities Offer unconditional in all respects, and the US$/L. sterling exchange
rate on such date; provided
2
<PAGE> 3
that the maximum number of new shares of Texas Utilities common stock which may
be issued with respect to each Energy Group Share and each Energy Group ADS
shall be 0.390 and 1.560, respectively.
The share alternative, if not included in the Offer Document, would be made
available by means of a revised offer which would be posted to holders of Energy
Group Securities immediately following the relevant documentation being declared
effective by the SEC. The share alternative would be available only in respect
of a maximum of 20 per cent. of all Energy Group Shares (including Energy Group
Shares represented by Energy Group ADSs) acquired pursuant to the Increased
Texas Utilities Offer or otherwise. To the extent that actual, and in certain
circumstances potential, elections for the share alternative exceed that
maximum, elections would be scaled down on a pro rata basis.
THE AVAILABILITY OR OTHERWISE OF A SHARE ALTERNATIVE WILL NOT AFFECT THE
ABILITY OF HOLDERS OF ENERGY GROUP SECURITIES TO ACCEPT THE INCREASED TEXAS
UTILITIES OFFER FOR CASH.
4. FINANCING
TU Acquisitions has arranged appropriate financing in connection with the
Increased Texas Utilities Offer. Texas Utilities and other wholly-owned
subsidiaries of Texas Utilities have arranged their own funding to assist in TU
Acquisitions' financing of the Increased Texas Utilities Offer.
5. HOLDINGS IN THE ENERGY GROUP
Neither TU Acquisitions, nor Texas Utilities, nor any of their respective
Directors, nor, so far as TU Acquisitions is aware, any party acting in concert
with TU Acquisitions, owns or controls any Energy Group Securities or holds any
options to purchase Energy Group Securities or holds any derivatives referenced
to Energy Group Securities, other than as set out below:
(a) TU Acquisitions beneficially owns 77,500,000 Energy Group Shares,
representing approximately 14.9 per cent. of The Energy Group's issued
share capital; and
(b) as at 3 March 1998 (the latest practical date prior to this announcement):
(i) Erle Nye, Chairman and Chief Executive of Texas Utilities, held 25
Energy Group ADRs;
(ii) Lehman Brothers was interested in 489,777 Energy Group Shares, held
as constituents of various baskets of securities;
(iii) Merrill Lynch & Co., Inc. and its affiliates were interested in
10,515,360 Energy Group Shares, representing approximately 2.0 per
cent. of The Energy Group's issued share capital; and
(iv) the Retirement Plan for Employees of the Texas Utilities Company
System held 24,375 Energy Group ADRs.
Lehman Merchant has agreed that neither it nor any subsidiary or affiliate will
directly or indirectly be involved in, inter alia, acquiring an interest in
Energy Group Securities as referred to above for so long as Texas Utilities and
Lehman Merchant are regarded by the Panel as acting in concert as regards The
Energy Group.
3
<PAGE> 4
6. GENERAL
(a) The Increased Texas Utilities Offer will comply with the rules and
regulations of the City Code and with US federal securities laws (except
to the extent that exemptive relief has been granted by the SEC) and the
rules and regulations made thereunder, will be governed by English law and
be subject to the jurisdiction of the courts of England and the Conditions
set out in appendix I to the Original Texas Utilities Offer Announcement
save that all references in such Conditions to the Texas Utilities Offer
shall be deemed to be references to the Increased Texas Utilities Offer.
The other provisions of appendix I to the Original Texas Utilities Offer
Announcement (set out below Condition (m) in that appendix) will also
apply to the Increased Texas Utilities Offer, save that all references in
such provisions to the Texas Utilities Offer shall be deemed to be
references to the Increased Texas Utilities Offer.
(b) Paragraphs 5 to 11 inclusive of the Original Texas Utilities Offer
Announcement (dealing with regulation, information on Texas Utilities and
The Energy Group, the Peabody Sale, reasons for the offer, The Energy
Group Share Schemes and management and employees) apply equally to the
Increased Texas Utilities Offer as to the original Texas Utilities Offer
as though all references in such paragraphs to the Texas Utilities Offer
were references to the Increased Texas Utilities Offer (save that in the
third paragraph of paragraph 10 of the Original Texas Utilities
Announcement the reference to 810 pence should be treated as being a
reference to 840 pence).
(c) Lehman Brothers and Merrill Lynch, which are regulated in the United
Kingdom by The Securities and Futures Authority Limited, are acting for
Texas Utilities and TU Acquisitions and no one else in connection with the
Increased Texas Utilities Offer and will not be responsible to anyone
other than Texas Utilities and TU Acquisitions for providing the
protections afforded to their respective customers or for providing advice
in relation to the Increased Texas Utilities Offer or any other matter
referred to herein.
(d) The Offer Document will be posted in due course.
(e) The value of the fully diluted share capital of The Energy Group is based
upon 520,857,817 Energy Group Shares in issue on 27 February 1998 and
9,048,288 Energy Group Shares which could fall to be issued on exercise in
full of options and vesting of all outstanding awards granted under the
Energy Group Share Schemes.
(f) Energy Group Securities will be acquired by TU Acquisitions fully paid and
free from all liens, equities, charges, encumbrances and other interests
and, together with all rights now or hereafter attaching thereto,
including without limitation the right to receive and retain all dividends
and other distributions declared, made or paid hereafter.
(g) The Initial Offer Period is expected to expire at 10.00 pm (London time),
5.00 pm (New York City time) on the 20th Business Day from the date of the
Offer Document, unless extended. At the conclusion of the Initial Offer
Period, including any extension thereof, the Increased Texas Utilities
Offer, if wholly unconditional, will be extended for a Subsequent Offer
Period of at least 14 calendar days. Holders of Energy Group Securities
will have withdrawal rights during the Initial Offer Period, including any
extension thereof, but not during the Subsequent Offer Period, including
any extension thereof.
4
<PAGE> 5
(h) The Increased Texas Utilities Offer will not be made, directly or
indirectly, in or into Canada, Australia or Japan. Accordingly, copies of
this announcement are not being, and must not be, mailed or otherwise
distributed or sent in or into Canada, Japan or Australia.
(i) The Loan Notes to be issued pursuant to the Increased Texas Utilities
Offer have not been, nor will be, registered under the Securities Act or
under any relevant securities laws of any state or district of the United
States, will not be the subject of a prospectus under the securities laws
of any province of Canada and will not be registered under any relevant
securities laws of any other country. The Loan Notes are not to be
offered, sold or delivered, directly or indirectly, in or into the United
States, Canada, Japan or Australia.
(j) This announcement does not constitute an offer or invitation to purchase
any securities.
(k) The definitions set out in appendix IV to the Original Texas Utilities
Offer Announcement, together with those set out below, apply throughout
this announcement (including those parts of the Original Texas Utilities
Offer Announcement which are cross-referred to in this announcement)
unless the context requires otherwise or as is otherwise provided, save
that for the purposes of this announcement all references in such appendix
IV to the Texas Utilities Offer (other than the defined term itself) shall
be deemed to be references to the Increased Texas Utilities Offer:
"INCREASED TEXAS The cash offer to be made by Lehman Brothers and
UTILITIES OFFER" Merrill Lynch on Behalf of TU Acquisitions to
acquire the Energy Group Shares (including those
represented by Energy Group ADSs) and Energy
Group ADSs as set out in this announcement,
including, where the context permits and/or
requires, any subsequent revision, variation, or
renewal of such offer
"ORIGINAL TEXAS The announcement by the Boards of Texas
UTILITIES OFFER Utilities and The Energy Group released on 2
ANNOUNCEMENT" March 1998
ENQUIRIES:
TEXAS UTILITIES COMPANY
David Anderson (Investors) Telephone: 1-214-812 4641
Joan Hunter (Press) Telephone: 1-214-812 4071
LEHMAN BROTHERS INTERNATIONAL (EUROPE) Telephone: 44-171-601 0011
Richard Collier
Anthony Fobel
MERRILL LYNCH INTERNATIONAL Telephone: 44-171-628 1000
Justin Dowley
Lewis Lee
Martin Falkner
MERRILL LYNCH INTERNATIONAL CORPORATE BROKING Telephone: 44-171-772 1000
Mike Gibson
Stephen Robinson
FINANCIAL DYNAMICS Telephone: 44-171-831 3113
Nick Miles
Andrew Dowler
END
5
