SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): August 12, 1999
Commission Registrant, State of Incorporation, I.R.S. Employer
File Number Address and Telephone Number Identification No.
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1-6047 GPU, Inc. 13-5516989
(a Pennsylvania corporation)
300 Madison Avenue
Morristown, New Jersey 07962-1911
Telephone (973) 455-8200
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ITEM 5. OTHER EVENTS.
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On August 12, 1999, GPU, Inc. (GPU) announced that OFGEM, the electric and
gas regulator in the United Kingdom, had issued a draft proposal suggesting that
GPU's wholly-owned regional electric distributor, Midlands Electricity plc,
could receive net rate reductions of between 22% to 27% beginning next Spring.
These proposed reductions will become the basis for further consultations
leading to final rate determinations in November 1999. GPU believes that the
proposed level of reductions is excessive and would reduce the level of customer
service and threaten Midlands' ability to make future capital investments.
There can be no assurance of the outcome of this matter.
Separately, GPU also announced that due to the recent decline in the price
of GPU, Inc. common stock, GPU was immediately resuming its common stock
repurchase program which it temporarily suspended in July. GPU has repurchased
$102 million of its common stock under the program initiated in January 1999
when GPU's board of directors authorized repurchases of up to $350 million.
A copy of GPU's related news release is annexed as an exhibit.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
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(c) Exhibit
1. GPU News Release, dated August 12, 1999.
<PAGE>
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.
GPU, INC.
By: /s/ T. G. Howson
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T. G. Howson, Vice President
and Treasurer
Date: August 13, 1999
EXHIBIT TO BE FILED BY EDGAR
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(c) 1 GPU News Release, dated August 12, 1999.
Exhibit (c) 1
GPU News Release
August 12, 1999
GPU Expresses Disappointment at the United Kingdom Regulator Proposal,
Comments on Recent Stock Price Decline and Resumes Share Repurchase
MORRISTOWN, N.J. - August 12, 1999 - GPU, Inc. expressed disappointment at the
base rate reductions proposed today by OFGEM, the electricity and gas regulator
of the United Kingdom (UK). The company also commented on the recent decline in
its stock and announced that it was resuming a stock repurchase plan that it
initiated early this year.
The UK regulator's draft proposal suggested that GPU's wholly owned, UK
based regional electric distributor, Midlands Electricity, plc, could receive
rate reductions of between 22 percent and 27 percent next spring. (The regulator
called for rate reductions of 26 to 31 percent which include a 4 percent
reduction related to the unbundling of customer metering that will not impact
net income.) The proposed reductions will become the basis of further
consultation leading to final rate determinations to be announced in November.
GPU Chief Financial Officer Bruce L. Levy expressed the view that OFGEM
had been overly aggressive. "The severity of the rate cuts proposed throughout
the industry will reduce confidence in the electric sector," said Levy.
"Regarding Midlands specifically, the cuts proposed by the UK regulator
would lead to reduced customer service levels, especially to rural customers;
they would affect jobs, and threaten Midlands' ability to fund future capital
investments," said Levy. "I recognize that under the rules of the UK regulatory
system, this consultation document is part of a process leading to final
recommendations in November. I am confident the regulator will reach a sensible
conclusion and reduce the severity of the proposed cuts."
Levy also commented on the recent decline in the market price of GPU
common stock. Just prior to GPU's most recent ex-dividend date the common stock
was trading at almost $42 per share. In recent days it has closed as low as
$34.88 per share.
"The decline, resulting from the combined effects of increased ex-dividend
trading, investor concerns over future earnings and a general increase in
interest rates, has driven the stock to a price level well below its value,"
said Levy. "To capitalize on this unusual circumstance we will immediately
resume our share repurchase program."
The program was initiated in January after the GPU board of directors
authorized stock repurchases of up to $350 million. GPU repurchased $102 million
of common stock at an average price of $39.21 in the first half of the year but
temporarily suspended the repurchase program.
Levy further noted that throughout its worldwide operation GPU is
committed to providing reliable service to its customers and providing increased
value to its shareholders. Seeking a proper resolution to the UK price reset and
resuming the share repurchase will further those goals.
GPU, Inc. (NYSE:GPU), headquartered in Morristown, N.J., is a registered
utility holding company. GPU International Group develops, owns and operates
transmission and distribution facilities overseas and generating plants both in
the United States and abroad. GPU's three domestic operating utility
subsidiaries--Jersey Central Power & Light Company, Metropolitan Edison Company
and Pennsylvania Electric Company--do business under the trade name of GPU
Energy and serve approximately two million customers in a service area
encompassing about half the land areas of New Jersey and Pennsylvania. GPU's
other subsidiaries include: GPU Advanced Resources, Inc., GPU Generation, Inc.,
GPU Nuclear, Inc., GPU Service, Inc. and GPU Telcom Services, Inc.
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Contacts:
GPU, Inc., Morristown, N.J.
News Contact: Jeff Dennard, 973-455-8333
(http://www.gpu.com)
