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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): December 19, 1997
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EASTERN ENTERPRISES
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(Exact name of registrant as specified in its charter)
Massachusetts 1-2297 04-1270730
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(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
9 Riverside Road, Weston, Massachusetts 02193
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (781) 647-2300
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None
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(Former name or former address, if changed since last report)
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Item 1 through 4 and Items 6, 7(a) and (b), 8 and 9. Not Applicable.
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Item 5. Other Events
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Incorporated herewith is one PRESS RELEASE attached hereto as Exhibit
99.1.
Item 7. Financial Statements and Exhibits
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(c) Exhibits
99.1 -- PRESS RELEASE
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SIGNATURE
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.
EASTERN ENTERPRISES
Date: December 23, 1997 By /s/ Walter J. Flaherty
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Walter J. Flaherty
Senior Vice President and CFO
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EXHIBIT INDEX
Exhibits Page
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99.1 -- Press Release 5
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EXHIBIT 99.1
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EASTERN ENTERPRISES AGREES TO ACQUIRE
ESSEX COUNTY GAS COMPANY
Weston and Amesbury, MA. -- December 22, 1997-- Eastern Enterprises (NYSE:
EFU) and Essex County Gas Company (NASDAQ: ECGC) jointly announced today that
the companies have reached a definitive agreement which provides for the
acquisition by merger of Essex County Gas by Eastern in a tax free, stock-for-
stock transaction. Based on shares outstanding as of December 1, 1997, the
transaction has an equity value of $80.5 million, or $47.50 per share, based
upon the average closing price of Eastern common stock over the 10 day trading
period ended December 16, 1997.
This merger of Eastern and Essex County Gas, to be accounted for as a
pooling of interests, has been approved by both companies' boards. After the
merger, Essex County Gas will operate as a wholly-owned subsidiary of Eastern
and as a sister company of Boston Gas Company, Eastern's gas distribution
company.
Under the terms of the merger agreement, one share of Essex County Gas
Company Common Stock will be exchanged for approximately 1.184 shares of Eastern
Enterprises Common Stock, resulting in a multiple of 2.26x Essex County Gas'
book value. The actual number of Eastern shares to be issued will be adjusted
to provide that the value of the Eastern common stock to be issued for each
Essex County Gas share will not be less than $45.00 nor more than $50.00, based
upon the average market price during a specified period prior to closing. Using
Friday's closing price of Eastern's common
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stock of $41.6875 per share, the number of shares would approximate 1.9
million. Based upon an exchange ratio of 1.184 Eastern shares and Eastern's
current indicated annual dividend of $1.64 per share, Essex County Gas'
shareholders would receive an effective dividend increase of approximately 16%
to $1.94 per share upon completion of the merger.
J. Atwood Ives, Eastern chairman and chief executive officer commented, "We
welcome Essex County Gas to the family of Eastern companies. We continue to
believe that deregulation provides significant customer and shareholder
incentives for consolidation of gas distribution companies. Eastern
shareholders will benefit from merger-related savings and the potential for
enhanced value going forward. We believe this transaction will not be dilutive
to Eastern's earnings.
"The acquisition of Essex County Gas by Eastern will create opportunities
for cost savings and efficiencies through the integration of their operations
with those of Boston Gas," stated Mr. Ives. "Proposed new rates for Essex
County Gas customers are expected to be filed with the Massachusetts Department
of Telecommunications and Energy ("MDTE"), formerly the Department of Public
Utilities, shortly. These new rates, subject to MDTE approval, are expected to
result in as much as a 5% rate reduction in customers' bills."
Philip H. Reardon, Essex County Gas Company president and chief executive
officer, commented, "This is an excellent transaction for our shareholders and
our customers. Essex County Gas shareholders receive a significant premium for
their shares and Essex County Gas customers will also benefit from the merger,
as rates are lowered to take advantage of the economies of scale brought about
by the integration with Eastern
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and Boston Gas operations."
The transaction is expected to close by mid-year 1998, subject to the
receipt of satisfactory regulatory approvals and the approval of Essex County
Gas shareholders.
Essex County Gas Company, based in Amesbury, Massachusetts, is a local
distribution company serving over 42,000 customers in 17 cities and towns in
Northern Massachusetts which are contiguous to towns served by Boston Gas. In
its fiscal year ended August 31, 1997, Essex earned $2.38 per share on operating
revenues of $53.5 million.
Eastern Enterprises owns and operates Boston Gas Company, New England's
largest distributor of natural gas, serving 525,000 residential, commercial and
industrial customers in Boston and 73 other eastern and central Massachusetts
communities, and Midland Enterprises Inc., the leading carrier of coal and a
major carrier of other dry bulk cargoes on the nation's inland waterways, with a
fleet of 2,310 barges and 87 towboats. Headquartered in Cincinnati, Ohio,
Midland provides low-cost marine transportation to much of the country's major
industrial and agricultural region.
This release and other company reports and statements issued or made from
time to time contain certain "forward-looking statements" concerning projected
future financial performance, expected plans or future operations. Eastern
cautions that actual results and developments may differ materially from such
projections or expectations.
Investors should be aware of important factors that could cause actual
results to differ materially from the forward-looking projections or
expectations. These factors include, but are not limited to:
. the effect of strategic initiatives on earnings and cash flow,
. temperatures above or below normal in Boston Gas Company's service area,
. changes in market conditions for barge transportation,
. adverse weather and operating conditions on the inland waterways,
. changes in interest rates,
. regulatory and court decisions, and
. developments with respect to Eastern's previously-disclosed
environmental and
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Coal Act liabilities.
All of these factors are difficult to predict and are generally beyond the
control of the Company.
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Eastern Enterprises' press releases are available via fax by calling,
toll-free, 1-800-311-4607 or on the Internet at Eastern's Home Page on
the World Wide Web: http://www.efu.com.
Information regarding Essex County Gas Company can be found on the Internet
at http://www.essexgas.com
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