SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of
the Commission Only (as
permitted by Rule 14a-
6(e)(2))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
WPL HOLDINGS, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-
11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on
which the filing fee is calculated and state how it was
determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[X] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
1) Amount Previously Paid: $500,063
2) Form, Schedule or Registration Statement No.: Preliminary proxy
materials of WPL Holdings, Inc., IES Industries Inc. and
Interstate Power Company, Joint Registration Statement on
Form S-4 of WPL Holdings, Inc. and Interstate Power Company
(Registration No. 333-07931) and Joint Registration Statement on
Form S-4 of WPL Holdings, Inc. and Interstate Power Company
(Registration No. 333-10401).
3) Filing Party: WPL Holdings, Inc., IES Industries Inc. and
Interstate Power Company.
4) Date Filed: January 18, 1996, July 11, 1996 and August 19,
1996.
<PAGE>
[The following is the voice-mail message Erroll B. Davis, Jr., President
and Chief Executive Officer of WPL Holdings, Inc., broadcast to all WPL
Holdings, Inc. employees on August 23, 1996 and which will be distributed
to employees in print during the week of August 26, 1996.]
ERROLL VOICE-MAIL MESSAGE / FRIDAY, AUGUST 23
This is Erroll Davis with a message to all WPL Holdings employees.
As another week comes to an end, I thought this might be a good time for a
brief update on the pace of developments regarding our merger proposal
with IES Industries and Interstate Power Company.
While much work remains to be done in the two weeks remaining before our
annual shareowners' meeting, IES, Interstate Power and WPL Holdings
continue to move aggressively toward a common goal -- the combination of
our three companies under the Interstate Energy Corporation umbrella.
Once again, the rapidly changing nature of the energy marketplace
validates the critical strategic value this three-way alliance offers for
our customers, shareowners and employees.
In a concerted effort to share the Interstate Energy Corporation story
with shareowners and the public at large, executives from all three merger
partners visited this week with newspaper reporters, business editors and
publishers in Cedar Rapids, Des Moines, Madison and Milwaukee.
Among the items we discussed with the newspapers was the very strong
endorsement of our three-way merger by Robert W. Baird & Company, a
regional investment banking firm that advises investor clients across the
Midwest.
Earlier today, IES Chairman Lee Liu, Interstate Power Executive Vice
President Mike Chase and I traveled to Boston.
There, we gave what I believe was a compelling financial presentation on
our merger proposal before a group of analysts from Boston-based
institutional investors such as Fidelity, John Hancock, Putnam and other
firms that own stock in our three utility companies.
Next week, we plan to make a similar presentation with local retail
brokerage firms located throughout the Midwest.
I also want to alert those of you who own stock in WPL Holdings to watch
your mail over the next few days for new proxy materials.
If you in fact own WPL Holdings shares, please pay close attention to
these instructions.
First, the Board of Directors of WPL Holdings recommends that shareowners
vote FOR the three-way merger proposal.
Second, the proxy materials you will soon receive are only being
distributed because of the change in the stock-exchange ratio announced
last Friday by the three merger partners.
Proxy materials for shares owned through your 401(k) retirement plan will
be distributed at work beginning on Monday and will include a cherry-color
proxy card.
Proxy materials for all other shares will be sent to you by first-class
mail and will include a lavender-color proxy card.
IF YOU HAVE ALREADY MAILED BACK THE PROXY CARD THAT CAME WITH THE ORIGINAL
PROXY MATERIALS, AND YOU ARE SATISFIED WITH YOUR VOTE, YOU DO NOT NEED TO
SEND IN ANOTHER PROXY CARD.
If, on the other hand, you just haven't gotten around to filling out the
original proxy card, please keep an eye out for the new proxy materials
and send the proxy cards in as soon as possible.
Your 401(k) proxy card will be cherry colored and your regular account
proxy card will be lavender.
If you have multiple accounts, please make sure you vote all of your
accounts.
Finally, any questions concerning the proxy materials should be directed
to our Shareowner Services Department at extension 3110 or, from outside
the company, at 1-800-356-5343.
As always, a printed copy of this message will be distributed to employees
early next week.
Again, thank you for your continuing support during this period of
tremendous change.
In the meantime, please keep working safely and have a very pleasant
weekend.
Thank you.
<PAGE>
[The following Questions and Answers sheet will be distributed to
employees of WPL Holdings, Inc. during the week of August 26, 1996 with
the printed version of Mr. Davis' August 23, 1996 voice mail message.]
QUESTIONS AND ANSWERS FOR EMPLOYEES
Q: Does the new stock-exchange ratio mean that WPL Holdings is
mortgaging its future to preserve the three-way merger agreement with IES
Industries and Interstate Power Co.?
A: No. The WPL Holdings Board of Directors approved the new stock-
exchange ratio because the three-way merger will provide significantly
greater strategic value for customers, shareowners and employees. By
combining as Interstate Energy Corp., the three utility companies will not
only operate more cost-effectively, but will also be better positioned to
develop and market the kind of energy products and services customers will
demand in an increasingly competitive marketplace.
Q: What advice are investment brokers providing to IES shareowners with
respect to the two merger proposals?
A: In an Aug. 19 report, Robert W. Baird & Co., a regional investment
banking firm, advises IES shareowners to "pass up the potential near-term
benefits" offered by the MidAmerican proposal and join the Interstate
Energy Corp. team, "a team we believe offers superior long-term returns to
shareholders and has the higher probability of receiving regulatory
approval in the next eight months."
Q: What is the status of the MidAmerican Energy Co. offer to acquire IES
Industries?
A: The MidAmerican offer was rejected on Aug. 15 by the IES board of
directors. In turn, MidAmerican sent out its own set of proxy materials
to IES shareowners, asking that IES shareowners reject the three-way
Interstate Energy Corp. merger agreement.
Q: Is it true that MidAmerican made an inaccurate public statement about
the Interstate Energy Corp. proposal?
A: Yes. On Aug. 20, MidAmerican issued a news release reporting that
the Wisconsin Public Service Commission filed a protest against the
Interstate Energy Corp. transaction with the Federal Energy Regulatory
Commission. The next morning, MidAmerican issued a retraction, confessing
that it had mistakenly referred to the Wisconsin Public Service Commission
when, in fact, the Green Bay-based utility company Wisconsin Public
Service Corp. actually filed the protest at FERC.
As reported by The Electricity Daily (Aug. 22, 1996), WP&L Senior
Vice President Nino Amato accused MidAmerican of "a blatant disinformation
campaign with the financial community and the media."
<PAGE>
[The following is the slide presentation given, or to be given, by Erroll
B. Davis, Jr., President and Chief Executive Officer of WPL Holdings,
Inc., Lee Liu, Chairman of the Board, President and Chief Executive
Officer of IES Industries Inc., and Michael R. Chase, Executive Vice
President of Interstate Power Company, to institutional securities
analysts and to retail brokerage firms starting on August 23, 1996.]
Interstate Energy Corporation
[Map of United States with Interstate Energy Corporation ("IEC") service
area highlighted]
<PAGE>
STRATEGY FOR THE FUTURE
[Four state map of INTERSTATE
Minnesota, Wisconsin, Iowa ENERGY
and Illinois with IEC CORPORATION
service area highlighted]
[ ] Operating Revenues of
Nearly $2 Billion
[ ] Assets - $4.5 Billion
[ ] Market Capitalization
- In Excess of $2
Billion
[ ] 34th in National
Ranking of Utility
Holding Co.s
[ ] More Than 850,000
[ ] WP&L Electric Customers
[ ] IES Utilities Inc. [ ] More Than 360,000 Gas
[ ] Interstate Power Co. Customers
<PAGE>
STRATEGIC ADVANTAGES OF MERGER
[ ] Drive low-cost operations even lower
[ ] Expand customer base
[ ] Growing
[ ] Diversified
[ ] Regional
[ ] Aggressive management - shared vision of the future
[ ] Building on a strong financial base
<PAGE>
MERGER MOMENTUM BUILDING
[ ] Planning since May 1995
[ ] Shared values and vision
[ ] Strategic plans in place
[ ] Business units structured
<PAGE>
IEC CORE BUSINESSES
IEC
Madison Wisconsin
Energy Energy Diversified
Production Marketing Businesses
& Delivery
Madison Cedar Rapids Cedar Rapids
Wisconsin Iowa Iowa
Administrative
Services
Dubuque, Iowa
<PAGE>
REQUIRED APPROVALS ON SCHEDULE
[ ] Shareowners - 9/5/96
[ ] Department of Justice - review completed (7/96)
[ ] FERC - initial filing complete (7/96), review pending
[ ] SEC (PUHCA) - application filed (7/96), review pending
<PAGE>
REQUIRED APPROVALS ON SCHEDULE
State Date Filed Status
Illinois 3/96 Hearings 11/96
Iowa 10/96 Expected Order 12/96
Minnesota 3/96 Review Pending
Wisconsin 3/96 Expected Order 2Q/97
<PAGE>
WHY IEC MERGER vs. MidAm TAKEOVER
[ ] Stronger competitive position
[ ] Financially stronger company
[ ] Superior transaction
<PAGE>
STRONGER COMPETITIVE POSITION
[ ] Better access to regional markets
[ ] Higher synergies ($749 million vs. $655 million) support lower rates
[ ] Lower production costs
[ ] Lower stranded investment risk
<PAGE>
AVERAGE INDUSTRIAL CUSTOMER
CHARGE PER Kwh
[Bar graph showing average industrial customer charge per Kwh for WP&L
(3.63 cents per Kwh), IPC (3.72 cents per Kwh), IES (3.88 cents per Kwh)
and MidAm (4.04 cents per Kwh).]
Source: EEI Industrial Ranking 1995
<PAGE>
PRODUCTION COSTS - CENTS PER Kwh
1994(a)
Total
IES 3.10 cents
WPH 2.58 cents
MEC
IIGE 3.68 cents
MID RES 3.12 cents
(a) Goldman Sachs Electric Utilities, U.S. Research,
February 1996.
<PAGE>
STRANDED COST COMPARISON
$ Millions Percent of Equity
WPL Holdings, Inc. 0
Interstate Power Co. 48 6.0%
-----
48
MidAmerican Energy 172 14.0%
Source: Moody's Special Comment - August 1995
<PAGE>
FINANCIALLY STRONGER
COMPANY
<PAGE>
IES PARTNERS HAVE HIGHER
CREDIT QUALITY
Moody's S & P
IES A2 A
WP&L Aa2 AA
IPC A1 A+
MidAm A2 A+
<PAGE>
LESS LEVERAGE
PROFORMA % OF DEBT IN CAPITAL STRUCTURE (6/30/96)
MidAm Purchase 59%
IEC 49%
Source: Company SEC Filings
<PAGE>
BETTER DIVIDEND GROWTH
[Line graph showing dividends declared per share (in dollars) for WPH,
IES, IPC and MidAm from 1991 through 1995]
<PAGE>
CUMULATIVE SHAREOWNER RETURN
1988 - 1995
[Line graph showing cumulative shareowner return (in dollars) for WPH,
IES, IPC, IRES and ME from 1988 through 1995]
<PAGE>
PROFORMA DIVIDEND PAYOUT RATIOS
MidAm Combination
(40% Cash)
12 Mo. ended 12/31/95 109%
(100% Stock)
12 Mo. ended 12/31/95 119%
Source: SEC Filings of Companies
<PAGE>
SUPERIOR TRANSACTION
[ ] Growth vs. divestiture
[ ] Faster, more certain approvals
[ ] Pooling vs. purchase accounting
[ ] No financings required
<PAGE>
IEC GROWTH
[Pie chart showing the following]
Energy Generation
GENCO
Railroads
Oil & Gas
Other Core Energy
Businesses Marketing
- McLeod & Delivery
- RMT - Utilities
- IEA/HEG
<PAGE>
MidAm DIVESTITURE
[Pie chart showing the following]
Energy Generation
GENCO
Railroads [stricken out]
Oil & Gas [stricken out]
Other Core Energy
Businesses Marketing
- McLeod [stricken out] & Delivery
- RMT - Utilities
- IEA/HEG [stricken out]
<PAGE>
SUPERIOR TRANSACTION
[ ] Growth vs. divestiture
[ ] Faster, more certain approvals
[ ] Pooling vs. purchase accounting
[ ] No financings required
<PAGE>
SUMMARY
[ ] IEC is a more effective competitor
[ ] Long term growth and diversification favor IEC
[ ] IEC financially stronger
[ ] IEC has higher probability of successful and timely closing
[ ] Proven track record vs. promises
[ ] IEC better balanced for shareowners, customers, employees and
communities
