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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
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
[X] Definitive Additional Materials
[ ] 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)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $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:
(5) Total fee paid:
[X] Fee paid previously with preliminary materials.
[ ] 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 statement 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:
####
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Script for Merrill Lynch "Shout-Down"
Thursday, July 16th, 12:30 CDT
Drue Jennings Presenting
Good afternoon. I am Drue Jennings, Chairman, CEO and President
of Kansas City Power & Light Company. Thank you very much for
allowing me a few minutes to talk about our proposed combination
with Western Resources.
Forward Looking Statement
Our discussion this afternoon will contain some forward-looking
statements relating to the plans and objectives of Western
Resources and Westar Energy which are subject to numerous risks
and uncertainties. Additional information concerning these risk
factors can be found in the Joint Proxy Statement/Prospectus
dated June 9, 1998, which has been provided to all shareholders.
Restructured Merger Agreement
On March 19, 1998, Kansas City Power & Light Company and Western
Resources announced a restructuring of their merger agreement,
resulting in the formation of a new electric company, Westar
Energy. KCPL shareowners will receive stock in Westar Energy as
well as Western Resources. Westar Energy will have one million
electric customers, $8.2 billion in assets, 8,000 MW of electric
generation resources and provide an array of innovative value-
added products and services. We are very excited to be moving
our company closer to this combination with Western Resources by
bringing this proposal to our shareholders for a vote on July
30th.
This unique, creative approach we have taken with this
transaction brings to our shareholders the predictable earnings
of a regulated electric company and also makes them shareowners
in Western Resources, a diversified consumer services company
with a strong growth profile. In addition, the combination of
Westar Energy and Western Resources stock received will provide a
consistent stream of dividends from diversified sources.
Westar Energy will be headquartered in Kansas City, Missouri and
traded on the New York Stock Exchange. Under the new agreement,
for each share of KCPL common stock owned, shareowners will
receive a fractional share of Western Resources common stock
worth not less than $21.50 and not more than $26.50, pursuant to
a collar adjustment mechanism. Western Resources' current annual
dividend is $2.14 per share. In addition, one share of Westar
Energy will be received estimated by KCPL and Western Resources
to be worth approximately $10 to $12 per share. This estimate is
based on the assumption that the dividend for the first year of
operation is $0.72 and assumes a normal electric utility payout
ratio. Upon completion of the transaction, KCPL shareowners will
own 19.1% of Westar Energy and approximately 35% of Western
Resources, based on the current Western Resources' stock price.
Western Resources, as a holding company will own 80.1% of Westar
Energy, 100% of KLT Inc.,
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KCPL's nonregulated business and Western Resources will maintain
its current ownership interests in monitored security, gas and
other businesses.
Our Vision for Westar Energy
Our business plans for Westar Energy are simple. We want to grow
the business, enhance shareholder value and improve customer
service in this new competitive environment. Westar plans to
grow the business include expanding the geographic footprint by
growing the customer base and generation, continuing to be a low-
cost energy provider and reducing costs further through
reorganization and economies of scale. Our plans include
becoming a strong marketing presence by offering an array of
value-added products and services that will help retain as well
as grow our customer base.
Benefits of the Merger
We believe the creation of Westar Energy results in several
strategic benefits:
- - Three established, successful utilities are uniting to
create a larger utility better positioned to serve customers'
needs in a competitive marketplace.
- - By combining KCPL, KGE and KPL's synergies of size,
resources and talent, Westar Energy should quickly become a
leader in the transformed electric utility industry.
- - KCPL and Western Resources shares share a common vision of
creating value for shareowners through a diversified portfolio of
investments.
- - This unique and innovative transaction allows shareholders
to reap the benefits of a regulated electric company while also
becoming shareholders in Western Resources.
The combination with Western Resources also offers several
financial benefits including:
- - Significant potential synergies and cost savings - cost
savings are estimated at $905 million over the first 10 years
- - Share price premium for KCPL shareholders reflecting a
fractional share of Western Resources worth between $21.50 and
$26.50 and one share of Westar Energy valued between $10 and $12
as discussed previously.
- - Increased opportunities for expansion into nonregulated
products and diverse geographic markets
- - Greater financial strength for the combined entities.
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- - Concentration of electric utility operations into a single
entity focusing on that line of business
Regulatory Matters
Applications before the Missouri and Kansas commissions have been
filed and we expect to file an application with the Federal
Energy Regulatory Commission within the next few weeks. It is
hoped that the combination will be completed by mid-year 1999.
Significant rate reductions recently have been implemented or
agreed to for KCPL, KGE and KPL in both Missouri and Kansas in
anticipation of a merger. Therefore, no additional rate
reductions were proposed in the Missouri and Kansas filings. A
mechanism to share merger savings with customers was proposed
which is based on the amount of merger savings actually achieved
and upon the level of Westar's earnings.
Why Approve the Combination
We ask you to advise your clients who hold KCPL stock to vote for
this combination for the following reasons:
- - The electric utility industry is being transformed by
consumer demand and legislative reforms leading to increased
competition - this combination will permit KCPL shareholders to
participate in a more diversified holding company, Western
Resources and a regulated electric utility, Westar Energy.
- - KCPL shareholders will have a high degree of flexibility in
holding investments in Western Resources and Westar.
- - Both KCPL and Western Resources have a track record of
creating superior shareholder value.
- - Significant synergies and cost savings are anticipated.
- - KCPL shareholders can expect a share price premium and
consistent stream of dividends from diversified sources
KCPL's Board of Directors has carefully reviewed and approved
this combination and urges our shareholders to vote "FOR" the
proposal. Because approval by 67% of all outstanding shares is
necessary to approve this proposal, we urge you to remind your
clients to vote their proxy card.
Thank you very much for the opportunity to address Merrill
Lynch's financial consultants. If you have any questions, please
call a KCPL representative at 800-245-5275.
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[Western logo] [KCPL logo]
MEDIA CONTACTS: MEDIA CONTACTS:
Michel' J. Philipp (785) 575-1927 Phyllis Desbien (816) 556-2903
INVESTOR CONTACT: INVESTOR CONTACT:
Bruce Burns (785) 575-8227 David Myers (816) 556-2312
JOINT NEWS RELEASE
ISS ISSUES REPORT,
RECOMMENDS VOTE FOR MERGER AGREEMENT
TOPEKA, Kansas, and KANSAS CITY, Missouri, July 16, 1998 -
Institutional Shareholder Services (ISS), one of the most widely followed
independent organizations specializing in proxy analysis, late yesterday
recommended a vote FOR the merger of Western Resources (NYSE:WR) and
Kansas City Power & Light Company (NYSE:KLT).
Under the agreement, a new company - Westar Energy - will be created
from the KGE and KPL electric operations of Western Resources and the
electric operations of KCPL. Each KCPL shareowner will receive $23.50
worth of Western Resources common stock, subject to a collar mechanism,
and one share of Westar Energy common stock, anticipated to have an
approximate value between $10 and $12 per share.*
In its report, ISS concluded that based on the favorable pricing, the
strategic merits of the transaction, the increased dividend for KCPL
shareholders, and the fairness opinions rendered by the financial advisors
of both companies, ISS believes the merger agreement warrants shareholder
support.
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p 2 - ISS RECOMMENDATION
Among other items in the report, ISS told its membership:
- - The successive collar steps in the amended agreement are designed to
protect both Western Resources' and KCPL's shareholders from any
price swings that may occur during the regulatory process.
- - Based on Western Resources' most recent closing price, the offer
would be $23.50 and the exchange ratio would be 0.5930. Including
the estimated value of the Westar shares, the acquisition would
provide a market premium of between 17 and 24 percent over KCPL's
closing price the day before the original merger agreement (Feb. 6,
1997).
- - Following the merger and creation of Westar Energy, KCPL shareowners
should realize a 23 percent increase in their annual dividend
payment.
Western Resources and KCPL have scheduled shareowner meetings for
July 30 to approve the merger agreement.
-30-
Western Resources (NYSE:WR) is a consumer services company with
interests in monitored security and energy. The company has total assets
of more than $7 billion, including security company holdings through
ownership of Protection One (NASDAQ:ALRM), which has more than 1 million
security customers in 48 states. Its utilities, KPL and KGE, provide
electric service to approximately 614,000 customers in Kansas. Through its
ownership in ONEOK Inc. (NYSE:OKE), a Tulsa-based natural gas company,
Western Resources has a 45 percent interest in the eighth largest natural
gas distribution company in the nation, serving more than 1 million
customers. Through its other subsidiaries, Westar Capital and The Wing
Group, the company participates in energy-related investments in the
continental United States and offshore.
For more information about Western Resources and its operating
companies, visit us on the Internet at http://www.wstnres.com.
Kansas City Power & Light Company (NYSE:KLT) provides electric power
to a growing and diversified service territory encompassing metropolitan
Kansas City, parts of eastern Kansas and western Missouri. KCPL is a low-
cost producer and leader in fuel procurement and plant technology. KLT
Inc., a wholly owned subsidiary of KCPL, pursues opportunities in
nonregulated, primarily energy-related ventures.
For more information about KCPL, visit http://www.kcpl.com.
*There can be no assurance as to the actual price at which Westar
Energy common stock will trade once listed on the NYSE.
Forward-Looking Statements: Certain matters discussed in this news
release are "forward-looking statements." The Private Securities
Litigation Reform Act of 1995 has established that these statements
qualify for safe harbors from liability. Forward-looking statements may
include words like we "believe", "anticipate," "expect" or words of
similar meaning. Forward-looking statements describe our future plans,
objectives, expectations, or goals. Such statements address future events
and conditions concerning capital expenditures, earnings, litigation, rate
and other regulatory matters, possible corporate restructurings, mergers,
acquisitions, dispositions, liquidity and capital resources, interest and
dividend rates, environmental matters, changing weather, nuclear
operations, and accounting matters. What happens in each case could vary
materially from what we expect because of such things as electric utility
deregulation, including ongoing state and federal activities; future
economic conditions; legislative developments; our regulatory and
competitive markets; and other circumstances affecting anticipated
operations, revenues and costs.
See the companies' joint proxy statement/prospectus on form S-4 dated
June 9, 1998 ( registration number 333-56369; 333-56369-01) for additional
discussion on factors affecting the transaction.
