<PAGE>1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
MAGMA POWER COMPANY
(Name of Registrant as Specified in its Charter)
CALIFORNIA ENERGY COMPANY, INC.
CE ACQUISITION COMPANY, INC.
(Name of Person Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[ ] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-
6(i)(2).
[X] $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:
(4) Proposed maximum aggregate value of transaction:
[ ] 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 number, or the form or schedule and the date of its
filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
<PAGE>2
IMPORTANT
PLEASE VOTE THE GREEN CARD TODAY
Dear Fellow Magma Stockholder:
Seven weeks have passed since California Energy Company, Inc. (New York
Stock Exchange Symbol: CE) ("CECI") proposed to acquire all the outstanding
shares of Magma Power Company ("Magma") at a significant premium to market.
Since that date, Magma has refused to enter into any negotiations with us
regarding our proposal--but they have adopted a Poison Pill, enacted lucrative
Golden Parachutes and eliminated the right of stockholders to act by written
consent.
We are requesting the support of stockholders to call a Special Meeting
in order to proceed with our proposed acquisition of Magma for $38.50 per
share. By signing, dating and promptly returning the enclosed GREEN card, you
will be exercising one of your few remaining rights to let the company know
that you, not management, are Magma's true owners.
THE DEADLINE FOR RETURNING THE GREEN CARD IS
FRIDAY, DECEMBER 2, 1994.
Unless Magma has signed a definitive merger agreement with CECI by
December 2, 1994, or stockholders have returned GREEN cards sufficient to call
a Special Meeting, we intend to terminate our Offer and solicitation--and
analysts have warned that the stock price could plummet to the pre-offer level
of $27.50.
As you know, on September 19, 1994 CECI proposed to acquire all the
outstanding shares of Magma and ON OCTOBER 21, 1994 CECI INCREASED ITS OFFER
TO $38.50 PER SHARE, consisting of $28.50 in cash and $10 in CECI stock. Our
price of $38.50 per share represents an $11 per share, or 40% premium over the
closing trading price on September 19th. This price represents CECI's best
offer and we believe it fully and fairly values all of Magma's existing
operational, construction and development projects. Moreover, CECI believes it
is uniquely positioned to provide Magma stockholders this full value because
of the significant synergies and cost savings which we expect to result from a
consolidation of the businesses.
CECI's position is simple:
- - We are offering $38.50 per share in value to Magma stockholders compared
to a pre-offer price of $27.50, a premium of $11 per share, or 40%. Magma
has not produced any alternative to deliver comparable value to its
stockholders.
- - Our offer is not subject to any significant contingencies. First, we have
full, committed financing in place to complete our offer--$500 million of
bank financing and over $300 million of cash on our balance sheet.
Second, our Board and largest shareholder, Peter Kiewit Sons', Inc. which
owns 43% of CECI, have already approved the acquisition.
- - We propose that Magma enter into a merger agreement that provides all
stockholders with the same consideration of $38.50 per share, consisting
of $28.50 per share in cash and $10 per share in CECI stock. Our current
two-step offer followed Magma's refusal to negotiate and their adoption
of anti-takeover provisions which we believe are not in the best interest
of Magma's stockholders.
- - We have extended our tender offer and special meeting request
solicitation to December 2, 1994, which will result in Magma and its
financial advisors having had over 11 weeks to present to stockholders a
viable alternative that provides more value than our fully-financed
<PAGE>3
$38.50 per share Offer.
- - We have put our best offer on the table and intend to withdraw our $38.50
per share acquisition proposal if Magma does not sign a merger agreement
with CECI or if Magma stockholders fail to sign sufficient requests to
call a Special Meeting by December 2, 1994.
- - Analysts have warned that Magma's share price could plummet back to the
pre-offer $27.50 trading level if we withdraw our $38.50 per share offer.
- - CECI believes the combined companies will be better positioned to compete
effectively in the increasingly competitive IPP industry as we expand
globally and go "head to head" with larger, foreign competitors.
- - CECI's management team is highly capable and has demonstrated success in
developing and constructing projects and in closing the financing for
international projects. In 1994, CECI closed financing and commenced
construction on two (2) Philippine projects aggregating 300 MW.
- - Since our initial offer, CECI has been award 450 MW of additional
projects in the Philippines (100 MW Casecnan Project) and Indonesia (350
MW Bali Project)--while Magma has announced the loss of its 150 MW Karaha
project in Indonesia.
- - Peter Kiewit Sons', Inc., a $2.2 billion construction, mining and
telecommunications company (which has been in the turnkey construction
business since 1884) is a joint venture partner on international
projects. Kiewit's strong balance sheet, extensive construction
experience and international reputation are a significant asset to CECI.
We encourage you to read the October 1994 cover story in Forbes magazine
indicating Forbes and Warren Buffet, one of America's most successful
investors, believe Kiewit is one of the best run companies in America.
If sufficient stockholder support is obtained to call a Special Meeting,
we will be following up by mailing to you a proxy statement and proxy card
asking for your support to expand the size of Magma's Board and to elect new
directors to the vacancies thereby created who will be committed to entering
into negotiations for the sale of the company.
We urge you to SIGN, DATE and MAIL your GREEN request card today. Thank
you.
Sincerely,
/s/ David L. Sokol
David L. Sokol
Chairman, President and
Chief Executive Officer
November 4, 1994
<PAGE>4
If you have questions or need assistance
in voting your GREEN card please contact:
Logo of MacKenzie Partners, Inc.
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (call collect)
or
Call Toll Free (800) 322-2885
<PAGE>5
VOTE "REQUEST" ON THE GREEN CARD TO CALL
THE SPECIAL MEETING OF MAGMA POWER COMPANY
