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): May 7, 1996
GENERAL PUBLIC UTILITIES CORPORATION
(Exact name of registrant as specified in charter)
Pennsylvania 1-6047 13-5516589
(State or other (Commission (IRS employer
jurisdiction of file number) identification no.)
incorporation)
100 Interpace Parkway, Parsippany, New Jersey 07054
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (201) 263-6500
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ITEM 5. OTHER EVENTS
On May 7, 1996, the Corporation and Cinergy Corp.
("Cinergy") announced that they had jointly agreed with the Board
of Directors of Midlands Electricity plc ("Midlands"), a British
regional electric company ("REC"), to make an offer to acquire
the outstanding shares of Midlands.
The Corporation and Cinergy, through wholly-owned
subsidiaries, have formed Avon Energy Partners Holdings, a UK
unlimited liability company in which they each own a 50%
interest. Avon's wholly-owned subsidiary is offering $6.60 per
share for the shares of Midlands, or a total of $2.59 billion.
Of this amount, the Corporation and Cinergy expect to provide
approximately $500 million each of equity funding, with the
balance being provided to Avon through a non-recourse term and
revolving credit loan being provided by Barclays Bank PLC and
Chase Manhattan Bank. The Corporation has arranged for its
portion of the equity financing through a new 350 million pounds
(Sterling) term loan facility to EI UK Holdings, Inc., a newly
formed subsidiary which will own the Corporation's interest in
Avon. The Corporation has unconditionally guaranteed this
facility.
As is usual under United Kingdom practice, Avon's offer
will become unconditional upon acceptance by the holders of 90%
of the shares of Midlands and upon satisfaction of certain other
conditions. It may, however, be made unconditional by Avon upon
acceptance by the holders of a majority of the shares.
Midlands, which was created along with other RECs when
the government-owned electric system was privatized in 1990,
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distributes and supplies electricity to over 2 million customers
in England and generates electricity both in England and inter-
nationally.
A copy of GPU's related news release is annexed as an
exhibit.
ITEM 6. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
(c) Exhibits
1. GPU News Release, dated May 7, 1996.
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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 THEREUNTO DULY
AUTHORIZED.
GENERAL PUBLIC UTILITIES CORPORATION
By:______________________________
T. G. Howson, Vice President
and Treasurer
Date: May 8, 1996<PAGE>
EXHIBIT TO BE FILED BY EDGAR
Exhibit:
1. GPU News Release, dated May 7, 1996.<PAGE>
Exhibit 1
(GPU CORP NEWS RELEASE LETTERHEAD)
Further Information: Release Date:
GPU: John T. Fidler
201-263-6479 5/7/96
Cinergy: Steve Brash, Media 96-013
513-287-2226
Renae Conley, Investors
513-287-4009
CINERGY AND GPU OFFER TO ACQUIRE BRITISH ELECTRIC COMPANY
Parsippany, N.J., May 7, 1996 -- Cinergy Corp. and General
Public Utilities Corporation have jointly agreed with the Board
of Directors of Midlands Electricity plc in the United Kingdom to
offer to acquire Midlands, the companies' chief executives
announced today.
Under the agreement, GPU and Cinergy, which have formed
Avon Energy Partners plc, are offering $6.60 per share for the
stock of Midlands, a value of $2.59 billion. The Cinergy, GPU
and Midlands boards approved the transaction on Monday. Midlands
is a British Regional Electric Company (REC) which distributes
and supplies electricity in England and generates electricity
both in England and internationally.
As is usual under UK practice, the offer will become
unconditional upon acceptance by the holders of 90 percent of the
shares of Midlands, and upon the satisfaction of certain other
conditions. It may be made unconditional by Avon upon acceptance
by the holders of a majority of the shares.
<PAGE>
James R. Leva, GPU chairman, president and chief executive
officer, will be chairman of Avon Energy Partners. James E.
Rogers, Cinergy vice chairman, president and chief executive
officer, will be vice chairman of Avon and will become chairman
next year. Mike Hughes, Midlands' chief executive, has agreed to
continue in that capacity.
Speaking on behalf of Avon Energy Partners, Leva said, "This
association of three very large and progressive electric
companies provides a base for improved service to the customers
of Midlands, Cinergy and GPU. It also facilitates the growth of
the international business activities of each company. Jim
Rogers and I see this partnership as an important and valuable
asset for our respective shareholders, as well."
On behalf of GPU, Leva said, "This move demonstrates how
serious GPU is about growing our business, and marks our second
joint acquisition of an electricity distribution business
overseas. This transaction will strengthen GPU's position as a
leader in an increasingly competitive -- and increasingly global
-- energy marketplace.
"Our previous international partnerships in South America
and Australia have taught us how important such collaborations
are becoming in a rapidly changing electric utility industry.
Growth for GPU means enhanced value for its shareholders and
expanded opportunities for its customers as competition becomes
more heated," Leva added.
Speaking on behalf of Cinergy, Rogers said, "We believe this
transaction will provide value for both our shareholders and
customers. Our investment in Midlands gives us an opportunity
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for growth in a progressive regulatory environment that offers
incentives for efficient management.
"While Cinergy has been a leader for the drive in
competition here, we have a lot to learn from privatization and
customer choice in the United Kingdom. They are already
differentiating products and services for customers, developing
sophisticated multi-rate tariffs, implementing new metering
technology and providing proactive customer marketing and one-
stop service for all utilities. Our customers will benefit from
having an electric utility that knows first-hand what it means to
serve customers who can choose their electric supplier," Rogers
added.
Headquartered in Birmingham, England, Midlands is one of 12
RECs in the United Kingdom and serves 2.2 million customers in an
area with a population of five million. Through aggressive
management, it has been able to reduce the price of electricity
by 15 percent in real terms since 1991 and has not raised prices
in three years. It has also made significant investments in the
efficiency and reliability of its distribution system.
The UK RECs were created when the government-owned electric
system was privatized in 1990, and five have already been
acquired by other entities. In addition to the RECs, the
electric generating system was also privatized, but the
transmission system remains regulated. The UK is ahead of the US
in deregulation of the electric industry. By 1998, all customers
in the UK will be able to choose their electric supplier. In the
US, generally only large wholesale customers are now able to
choose their electric suppliers.
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Merrill-Lynch International and BZW serve as financial
advisers to Avon Energy Partners. Financing for the purchase has
been arranged by BZW and Chase Investment Bank, Ltd.
GPU will acquire its half of Midlands through its Energy
Initiatives Group, which owns, operates and invests in electric
facilities domestically and abroad. Energy Initiatives has
holdings in five US states and four foreign countries: Bolivia,
Canada, Colombia and Australia. GPU will invest $500 million in
the venture, to be funded by a combination of debt and future
sales of common stock.
Cinergy's 50 percent share of the purchase will be
structured through a subsidiary under Cinergy Investments, Inc.,
the company's unregulated business arm. Rates charged by
Cinergy's utility operating companies, The Cincinnati Gas &
Electric Company and PSI Energy, Inc., and by GPU's operating
utility companies, Metropolitan Edison, Pennsylvania Electric and
Jersey Central Power & Light, will not be affected by the
transaction.
With 1995 revenues of $3.8 billion, GPU (NYSE:GPU) is among
the 20 largest electric utility systems in the US. Its three
operating utility subsidiaries -- Metropolitan Edison,
Pennsylvania Electric and Jersey Central Power & Light -- serve
some 2 million customers in Pennsylvania and New Jersey.
In addition to the Energy Initiatives Group, GPU's other
subsidiaries are GPU Generation, which operates the System's
fossil-fueled and hydroelectric generating facilities; GPU
Nuclear, which operates the System's nuclear facilities, and GPU
Service, a service company.
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Cinergy (NYSE:CIN) is the 13th largest investor-owned
electric utility in the US in terms of owned generating capacity
and had revenues of $3.03 billion in 1995. The company was
created in 1994 through the combination of The Cincinnati Gas &
Electric Company and PSI Resources, Inc., and was the first
merger of two low-cost utilities after the enactment of the
Energy Policy Act of 1992. The operating companies serve 1.3
million electric and 430,000 gas customers in Ohio, Indiana and
Kentucky.
###
Messrs. Leva and Rogers will be available at 12:30 p.m. EDT
for a press conference call for US media. The toll-free number
to dial is 1-800-210-9006.
###
The offer to purchase shares of Midlands Electricity plc will not
be made, directly or indirectly, in or into, or by use of the
mails or any means or instrumentality (including without
limitation, facsimile transmissions, telex or telephone) of
interstate or foreign commerce of, or any facilities of a
national securities exchange of, the United States and will not
be capable of acceptance by any such use, means, instrumentality
or facilities within the United States. Nothing herein shall be
deemed to constitute an offer to purchase shares of Midlands
Electricity plc from persons in the United States.
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