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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-9
(AMENDMENT NO. 9)
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(D)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934
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MAGMA POWER COMPANY
(Name of Subject Company)
MAGMA POWER COMPANY
(Name of Person(s) Filing Statement)
COMMON STOCK, PAR VALUE $0.10 PER SHARE
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
(Title of Class of Securities)
0005591941
(CUSIP number of Class of Securities)
JON R. PEELE, ESQ.
Executive Vice President, Secretary and General Counsel
MAGMA POWER COMPANY
4365 EXECUTIVE DRIVE, SUITE 900
SAN DIEGO, CALIFORNIA 92121
(619) 622-7800
(Name, address and telephone number of person authorized to receive notice and
communications on behalf of the person(s) filing statement)
Copies to:
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Michael J. Kennedy, Esq. David W. Heleniak, Esq.
SHEARMAN & STERLING SHEARMAN & STERLING
555 California Street 599 Lexington Avenue
San Francisco, California 94104 New York, New York 10022
(415) 616-1100 (212) 848-4000
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This Amendment No. 9 amends and supplements the Solicitation/Recommendation
Statement on Schedule 14D-9, dated October 11, 1994, as amended (the "Schedule
14D-9"), filed by Magma Power Company, a Nevada corporation ("Magma" or the
"Company"), relating to the tender offer disclosed in a Tender Offer Statement
on Schedule 14D-1, dated October 6, 1994, as amended and supplemented through
the date hereof, of CE Acquisition Company, Inc., a Delaware corporation (the
"Purchaser") and a wholly owned subsidiary of California Energy Company, Inc.,
a Delaware corporation ("California Energy"), to purchase 12,400,000 Shares at
a price of $38.50 per Share net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated October 6,
1994, as supplemented on October 26, 1994, and as amended through the date
hereof, and the related Letter of Transmittal as amended and supplemented
through the date hereof (the "Revised Offer"). Capitalized terms used and not
defined herein shall have the meanings sets forth in the Schedule 14D-9.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
Item 9 is hereby amended and supplemented by adding thereto the following:
Exhibit 30 -- Press Release of the Company, dated November 14, 1994.
2
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct.
MAGMA POWER COMPANY
By: /s/ Jon R. Peele
___________________________________
Name: Jon R. Peele
Title: Executive Vice President,
Secretary and General
Counsel
Dated: November 14, 1994
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INDEX TO EXHIBITS
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SEQUENTIAL
PAGE
EXHIBITS DESCRIPTION NUMBER
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Exhibit 30 --Press Release of the Company, dated
November 14, 1994
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[LETTERHEAD OF MAGMA POWER COMPANY]
NEWS RELEASE CONTACT: Thomas Davies
FOR IMMEDIATE RELEASE Andrea Bergofin
Kekst & Company
(212) 593-2655
MAGMA POWER SENDS LETTER TO CALIFORNIA ENERGY
San Diego, California, November 14, 1994 ... Magma Power Company
(NASDAQ NNM:MGMA) sent the following letter to David L. Sokol, Chairman,
President and Chief Executive Officer of California Energy Company, Inc., today:
Dear David:
We at Magma Power are disappointed in your letter of November 10 in
which you refuse to provide us access to confidential information regarding
California Energy subject to the signed confidentiality agreement that we
provided to you. We are also disappointed in your refusal to sign the
confidentiality agreement that all other interested parties have signed in order
to gain access to Magma confidential information. I must repeat what the Magma
team has told California Energy numerous times. In order to maintain a level
playing field, we must insist that you agree to be bound by the same terms and
conditions that other interested parties have accepted - - including customary
standstill provisions.
In this regard I note that both your offer and your financing are
conditioned on the Magma Board agreeing to enter into a merger agreement with
California Energy. Since you are not prepared to pursue your offer without the
Magma Board's agreement, your public attacks on Magma's refusal to give you
confidential information without an appropriate standstill are disingenuous at
best.
Furthermore, as you well know, our Board of Directors has determined
to explore all alternatives to further the best interests of Magma's
stockholders, including the possible sale of the Company. However, your
current $38.50 cash and stock offer is inadequate and not in the best interests
of stockholders, and we therefore see no reason to treat you differently from
other interested parties.
In reference to your letter of November 10 in which you refused our
request that California Energy provide us with confidential information
necessary for Magma to evaluate California Energy, you must recognize that your
offer contemplates Magma stockholders investing more than $240 million in
California Energy. We fail to see how you could expect the Magma Board to
endorse this magnitude of investment without being given an opportunity to
conduct due diligence on California Energy's business.
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For you to decline our request for due diligence on California Energy
and decline our request to meet with you regarding California Energy and then
accuse us of dragging our feet is inexcusable. The Magma Board must and will
fulfill its responsibilities to stockholders by exploring all alternative
transactions. We intend to secure absolutely the best result for our
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stockholders. In this connection I once again enclose a signed confidentiality
agreement in favor of California Energy and request that you execute it so that
we can commence our due diligence of your company.
By way of conclusion, I reiterate our offer to make available to
California Energy confidential information on the same terms and conditions as
we are making it available to other interested parties.
Sincerely,
Paul M. Pankratz
Chairman
# # #
The following information is provided pursuant to Section 14(a) of the
Securities Exchange Act of 1934, as amended, and Rule 14a-11(b)(2) thereto. The
participants in the solicitation are Magma Power Company, the following
directors and others, who in the aggregate are deemed to beneficially own
approximately 2.1% of the outstanding common shares of Magma common stock: James
D. Shepard, Paul M. Pankratz, Thomas C. Hinrichs, Ralph W. Boeker, Louis A.
Simpson, John D. Roach, Roger L. Kesseler, Lester L. Coleman, William R. Knee,
Bent Petersen, and J. Pedro Reinhard, and Jon R. Peele, Wallace C. Dieckmann,
Kenneth J. Kerr, and Trond Aschehoug. No participant individually owns more than
1% of the outstanding shares of Magma's common stock. Messrs. Kesseler, Knee and
Reinhard are employees of The Dow Chemical Company ("Dow"). Dow is the
beneficial owner of 5,032,430 shares of Magma's common stock, of which 4,000,005
shares are held in escrow to satisfy certain exchange rights under an existing
Dow note indenture. Dow retains the right to vote the shares placed in escrow.
In addition, the Company is a party to a technical services agreement with Dow
pursuant to which the Company has made payments for technical services in the
amounts of $575,000 for 1993 and has agreed to make payments of $550,000 for
1994 and thereafter in annual amounts reduced by $50,000 each year to $300,000
for 1999. The Company is also a party to an engineering and construction
management services agreement with Dow Engineering Company. The Company believes
that the technical services agreement and the engineering and construction
management services agreement are on terms at least as favorable to the Company
as would be available from an unaffiliated third party. Mr. Shepard is a
co-trustee of the B.C. McCabe Foundation (the "Foundation"), which beneficially
owns 2,752,641 shares of Magma's common stock. Mr. Shepard disclaims beneficial
ownership of such shares.
