SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
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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
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[ ] Soliciting Material Pursuant to Rule 240.14a-11(c) or Rule
240.14a-12
KANSAS CITY POWER & LIGHT COMPANY
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
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Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
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[Excerpt from script for KCPL employee information hotline
bulletin issued August 7, 1996]
Kansas City Power & Light announced yesterday that it has
rescheduled its Special Meeting of Shareholders to vote on the
strategic merger with UtiliCorp United Inc. for Friday, August
16, 1996.
Chairman of the Board, President and Chief Executive Officer
Drue Jennings said, "Nothing has changed regarding the
fundamental benefits of the KCPL/UtiliCorp merger and we look
forward to giving KCPL shareholders the opportunity to vote on
the merger. A KCPL/UtiliCorp combination will match KCPL's
experience and strength in regulated businesses with UtiliCorp's
strength in unregulated businesses. This uniquely positions the
combined company to meet the challenges of the changing energy
market. The resolve of the Board remains firm: Western's
ability to pay dividends at its promised rate is not credible to
KCPL -- as Western would be required to use in 1998 more than 90%
of its earnings on a going forward basis to cover dividend
payments.
"It remains KCPL's position that the merger as restructured
on May 20, 1996 does not require a two-thirds vote but rather
requires the approval of a majority of those shares voting at a
meeting. Quite frankly, we are both surprised and disappointed
with the District Court's ruling, which, if it remains in effect,
would permit a relatively small minority (including shares not
even voted) to thwart the wishes of the holders of a substantial
majority of KCPL shares."
The Special Meeting will take place at the Westin Crown
Center Hotel in Kansas City at 10:00 a.m.
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<PAGE>
August 7, 1996
Mr. David Anderson
UMB Bank, N.A.
P.O. Box 419692
Kansas City, Missouri 64141-6692
Dear Mr. Anderson:
We understand that you have received a letter from Western
Resources, Inc. ("Western") urging you "to exercise your
fiduciary duties" by voting against the proposed merger of Kansas
City Power & Light Company ("KCPL") and UtiliCorp United Inc.
("UtiliCorp"). Unlike Western, we will not presume to instruct
you as to your fiduciary duties with regard to the vote on the
KCPL/UtiliCorp merger which is now scheduled for Friday, August
16. However, we believe that there are a number of good economic
reasons why you should vote "FOR" the KCPL/UtiliCorp merger.
These reasons were stated in KCPL's Proxy Statement, dated June
26, 1996, KCPL's Solicitation/Recommendation Statement on
Schedule 14D-9, dated July 9, 1996, and KCPL/UtiliCorp's Guide to
the Merger (as revised), each of which you should have received.
In addition, you may wish to consider the following:
- - We believe that Western's recently announced proposed rate
reduction settlement is not good news for KCPL shareholders.
Under the terms of this proposed settlement, Western will
lose more than $300 million in revenue over the next five
years. Despite Western's assertions to the contrary, we
believe that the proposed rate reduction settlement will
impact Western's future earnings.
- - Under the terms of Western's proposed rate reduction
settlement, we believe that Western would be required to use
in 1998 more than 90% of its earnings on a going forward
basis to cover dividend payments.
- - We believe that Western's estimates of the savings resulting
from a KCPL/Western combination are vastly overstated. For
example, we believe that Western's estimate of the savings
in the first year of a KCPL/Western combination is overstated
by approximately $23.5 million (on a pre-tax basis),
which is 33% of Western's total estimate of first-year merger
savings. In addition, we believe that Western's assumptions
about how much of any merger savings it will be allowed to
retain are contrary to applicable precedent.(1) We believe
that Western's overstatement of merger savings and its faulty
assumptions with respect to how much of any merger savings it
will be allowed to retain will further impact Western's
earnings and its ability to pay promised dividends.
- - A combined KCPL/Western entity would own 94% of the Wolf
Creek nuclear plant, concentrating a significant amount of
capital and risk in a single asset. In contrast, a
KCPL/UtiliCorp entity would own only 47% of Wolf Creek.
- - We believe that a KCPL/UtiliCorp entity would offer long-
term growth opportunities for KCPL's shareholders which are
superior to those offered by a KCPL/Western entity. Unlike
a KCPL/Western entity which would have a projected 90% dividend
payout ratio and a substantial portion of its capital tied up
in the Wolf Creek nuclear plant, we believe a KCPL/UtiliCorp
entity would have the financial flexibility to pursue its
strategy of growing earnings and dividends through investments
in unregulated energy-related businesses.
- - The KCPL/UtiliCorp transaction is the only transaction which
has been approved by KCPL's Board of Directors.
- - It was announced on August 1, that regulators in West
Virginia had unanimously approved the KCPL/UtiliCorp merger
without condition and that regulators in Iowa had determined
that once UtiliCorp shareholders approve the merger, a
formal hearing on the matter "is unnecessary."
You should also know that a number of independent industry
analysts have supported KCPL's proposed merger with UtiliCorp.
These analysts have made the following comments:
J.P. MORGAN SECURITIES, JULY 23, 1996
[T]he assumptions needed to make the WR offer and all
its component parts a realization seem to be a bit
aggressive and are somewhat questionable. Moreover, the
long-term strategic benefits and growth opportunities
created by a UCU/KLT merger appear greater.
ROBERT W. BAIRD & CO., JULY 19, 1996
[T]he long and bumpy road this [KCPL/Western] merger
would face raises significant uncertainties concerning the
true value of WR's bid. If shareholders do not approve a
UCU/KLT merger, we do not believe the KLT board will support
a combination with WR, keeping the tone of the courting
relationship very unfriendly. Since friendly utility combinations
are moving at a snail's pace, we expect an unfriendly merger to
move at a glacial speed.
PAINEWEBBER, JULY 16, 1996
We believe that the proposed UtiliCorp and KCPL merger
presents an attractive opportunity for both companies to
significantly enhance their growth prospects. UtiliCorp has
been a market leader in international projects while
developing a successful energy marketing affiliate. Coupled
with KCPL's financial strength, urban service territory and
generation experience, the new company should be well
positioned for the changes embracing the energy markets.
We would be happy to discuss with you these issues or any
other questions you may have concerning the proposed
KCPL/UtiliCorp merger and Western's hostile offer. I can be
contacted at (816) 556-2555.
Very truly yours,
/s/John DeStefano
John DeStefano
Senior Vice President-Finance,
Treasurer and Chief Financial Officer
JJD:gcb
cc: Mark Herman - (UMB Bank, n.a.)
_______________________________
(1) The Kansas Corporation Commission, in its order authorizing
the merger of Kansas Gas and Electric Company and Western's
predecessor, Kansas Power and Light Co., required merger
savings (over and above an acquisition adjustment that is
inapplicable here) to be shared equally (50-50) between
shareholders and customers. In addition, the staff of the
Missouri Public Service Commission, in the pending Union
Electric/CIPSCO merger, is recommending an equal (50-50)
sharing of merger savings between shareholders and
customers. Western will need the approval of both of these
regulatory agencies for any merger with KCPL.