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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1
AMENDMENT NO. 6
(TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934)
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NEW YORK STATE ELECTRIC & GAS CORPORATION
(Subject Company)
CALENERGY COMPANY, INC.
CE ELECTRIC (NY), INC.
(Bidder)
COMMON STOCK, PAR VALUE $6.66 2/3 PER SHARE
(Title of Class of Securities)
649840105
(CUSIP Number of Class of Securities)
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STEVEN A. MCARTHUR, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
CALENERGY COMPANY, INC.
302 SOUTH 36TH STREET, SUITE 400
OMAHA, NEBRASKA 68131
(402) 341-4500
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidder)
Copies to:
PETER J. HANLON, ESQ.
MICHAEL A. SCHWARTZ, ESQ.
WILLKIE FARR & GALLAGHER
ONE CITICORP CENTER
153 EAST 53RD STREET
NEW YORK, NEW YORK 10022
(212) 821-8000
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CalEnergy Company, Inc., a Delaware corporation ("CalEnergy"), and CE
Electric (NY), Inc., a New York corporation and a wholly owned subsidiary of
CalEnergy (the "Purchaser"), hereby amend and supplement their Statement on
Schedule 14D-1 ("Schedule 14D-1") filed with the Securities and Exchange
Commission (the "Commission") on July 18, 1997, as amended by Amendment Nos.
1, 2, 3, 4 and 5, with respect to the Purchaser's offer to purchase 6,540,670
shares of Common Stock, par value $6.66-2/3 per share (the "Shares"), of New
York State Electric & Gas Corporation, a New York corporation ("NYSEG"), upon
the terms and subject to the conditions set forth in the Offer to Purchase,
dated July 18, 1997 (the "Offer to Purchase") and the related Letter of
Transmittal.
Unless otherwise indicated herein, each capitalized term used but not
defined herein shall have the meaning assigned to such term in the Schedule
14D-1.
Item 11. Material To Be Filed as Exhibits.
(a)(15) Advertisement run on or about August 6, 1997 by CalEnergy
Company, Inc. in selected newspapers within New York State
Electric & Gas Corporation's service territory.
(a)(16) Presentation Materials, dated August 6, 1997, prepared by
CalEnergy Company, Inc.
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Signatures
After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: August 6, 1997
CE ELECTRIC (NY), INC.
By:/s/ Steven A. McArthur
---------------------------------
Steven A. McArthur, Esq.
Senior Vice President
General Counsel and Secretary
CALENERGY COMPANY, INC.
By: /s/ Steven A. McArthur
---------------------------------
Steven A. McArthur, Esq.
Senior Vice President
General Counsel and Secretary
-2-
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EXHIBIT INDEX
Page No.
Exhibit in Sequentially
No. Description Numbered Schedule
- ------- ----------- -----------------
(a)(15) Advertisement run on or about August 6, 1997 by
CalEnergy Company, Inc. in selected newspapers
within New York State Electric & Gas
Corporation's service territory.
(a)(16) Presentation Materials, dated August 6, 1997,
prepared by CalEnergy Company, Inc.
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TO ALL NEW YORK STATE ELECTRIC & GAS CUSTOMERS AND SHAREHOLDERS:
- ----------------------------------------------------------------
A CALENERGY-NYSEG COMBINATION...
A GROWTH OPPORTUNITY FOR NEW YORK
CalEnergy's merger proposal to combine with NYSEG is about
opportunity and growth. We believe that as deregulation of
the New York energy market unfolds, a combination of
CalEnergy's and NYSEG's skills will position NYSEG to thrive
in the increasingly competitive energy markets, while
providing significant benefits to NYSEG's customers,
employees and shareholders, as well as the communities it
serves.
In an effort to keep everyone fully informed, here are
answers to some questions regarding our merger proposal.
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Q& A
WHY IS A COMBINED CALENERGY-NYSEG GOOD
FOR NYSEG CUSTOMERS?
We believe NYSEG's customers will do better with CalEnergy.
We are confident that a combination with CalEnergy would
result in lower rates for all customers than NYSEG could
provide on its own, while providing you with the same
reliable energy services to which you are accustomed.
CalEnergy has never had the luxury of being a monopoly, and
therefore expects to bring a fresh competitive focus to
NYSEG's transition to the deregulated environment and to
meeting the competitive challenges it faces.
WILL NYSEG CUSTOMERS NOTICE A CHANGE IN SERVICE WITH A
CALENERGY-NYSEG COMBINATION?
No. As a NYSEG customer, you'll still receive the same safe,
reliable energy services you've come to expect. NYSEG's
current employees would continue to provide the same
services to every home, business, school and hospital that
NYSEG serves.
WHAT WILL A COMBINATION OF THESE TWO COMPANIES MEAN FOR
NYSEG EMPLOYEES?
NYSEG employees will continue to operate NYSEG, and NYSEG's
corporate headquarters will remain in Binghamton. We
anticipate that NYSEG employees will see enhanced career
opportunities from being part of a larger worldwide
organization.
HOW WILL THIS COMBINATION AFFECT DEREGULATION IN THE
ELECTRIC ENERGY INDUSTRY?
We believe CalEnergy has already begun to institute change
in New York. For two years, NYSEG has protected its monopoly
and battled the New York Public Service Commission (PSC)
tooth and nail to implement rate increases; yet, in less
than two weeks from the time we made our offer and began
rate reduction discussions, NYSEG did an abrupt about-face
and reached an agreement in principle with the PSC staff.
This timing is obviously no coincidence.
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IS A COMPANY FROM NEBRASKA WILLING TO MAKE A COMMITMENT TO
NEW YORK?
Most definitely. In fact, CalEnergy intends to reincorporate
in New York and position NYSEG as a base from which to build
a substantial regional energy business. CalEnergy is a
dependable business partner with a history of making
positive contributions in the communities we serve.
Together, CalEnergy and NYSEG will be an integral part of
the community by providing jobs, economic development
assistance and civic, charitable and educational support.
WHY IS THIS OPPORTUNITY GOOD FOR NEW YORK?
Lower electric rates. In fact, lower rates will contribute
to New York's economic vitality. CalEnergy welcomes
deregulation and views increased competition as beneficial
not just to ratepayers, but to the larger New York community
as well.
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A CALENERGY-NYSEG COMBINATION...
THE RIGHT OPPORTUNITY AT THE RIGHT TIME
If you have any questions or need any assistance in tendering your NYSEG
shares, please call
MACKENZIE PARTNERS, INC.
TOLL-FREE AT (800) 322-2885.
On July 18, 1997, CE Electric (NY), Inc., a subsidiary of CalEnergy, commenced
a cash tender offer for 6,540,670 common shares of NYSEG at a price of $24.50
per share. The tender offer is scheduled to expire at 12:00 midnight, New York
City time, on Thursday, August 14, 1997, unless extended.
August 6, 1997
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[CalEnergy Company, Inc. logo appears here.]
CalEnergy Company, Inc.
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CalEnergy Company, Inc.
Business Overview
o Founded in 1971
o Early entrant in the competitive generation market. Focused
low-cost/reliable service strategy
o Largest independent geothermal power producer in the world
o Actively engaged in the development, acquisition and operation of
environmentally-responsible independent power production facilities:
o Geothermal
o Natural Gas
o Other
o Approximately 3,250 MW net capacity (2,163 MW net owned interest)
o Through Northern Electric, a U.K. regional electricity company, CE
provides electric distribution, electric and gas supply, and power
marketing to over 1.4 million customers
o Headquartered in Omaha, Nebraska
o Market capitalization: $2.5 billion
Operating Profile
[World map with CalEnergy Company, Inc. operating and development sites
appears here.]
North America Europe Asia
- ------------- ------ ----
California United Kingdom Philippines
New York Poland Indonesia
Pennsylvania Hungary
Texas
Arizona
Utah
Nevada
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CalEnergy's Growth Story
Share Price Assets
[Chart of CalEnergy Company, [Chart of CalEnergy Company,
Inc. Share Price from Inc. Assets from 1990
January 2, 1990 until through 1997 appears here.]
July 29, 1997 appears here.]
3
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CalEnergy's Growth Story
Financial Highlights
[Chart of Revenue, Net Income and Market Capitalization of CalEnergy Company,
Inc. in 1990 and 1997 appears here.]
4
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1996 Accomplishments
o U.S. -- Increased output and improved margins
o Geothermal output and production costs optimized
o Continued technological innovations
o Asia -- Commenced operations and continued expansion
o Philippines: 191 MW completed ahead of schedule/
under budget
o Indonesia: 55 MW under construction; 215 MW
pre-construction
o Completed accretive strategic acquisitions totaling $1.6 billion
o Northern
o Falcon Seaboard
o EME Imperial Valley
o Financial -- Strong growth and increased profitability
o Revenues up 45%, EBITDA up 42% and Net Income up 48%
o 62% increase in book equity
o 117% increase in market capitalization
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Strategic Accretive Acquisitions -- A Foundation for Growth
Northern Electric
January 1997
$1.6 Billion
Imperial Valley Partnership Interest
April 1996
$70 Million
Falcon Seaboard
August 1996
$226 Million
Magma Power Company
January 1995
$958 Million
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Strategic Vision
Mission: To become a leading global provider of a full range of energy
products and services.
Opportunity:
Vast Market Potential Gas and electric revenues are 5x
telecoms revenues
Deregulation Opportunities United States (2-3 years)
International Expansion Broaden and expand operations in
Asia and Europe
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CalEnergy's Differentiating Strategy
o Be Low-Cost Provider of Reliable Service
o Ensure High Customer Satisfaction
o Utilize Disciplined Financial Analysis and Careful Risk Management to
Selectively Filter Opportunities
o Deliver Products On-Time and Within Budget
o Require Industry "Best-Practices" for Safety
o Provide Beneficial Environmental Solutions
o Expand Skills of Management and Staff
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Selection of NYSEG
Strategic fit
Diversification of distribution customers
Opportunity to Enhance Business
Competitive focus
Growing gas business
Opportunity to lower costs
Enhanced Growth Opportunities
Platform for expansion into New York and other regional
energy markets
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NYSEG Service Territory
Demographic
Area: 19,600 square miles
Population: 2.4 million
Customers: 808,000 electric
238,000 natural gas
Units Distributed:
Electric 21,130 megawatt hours
Gas 61,542 dekatherms
[Map of New York State with NYSEG service territories for electric, natural
gas and electric and natural gas labeled appears here.]
[Pie charts indicating the sources of NYSEG revenue appears here.]
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CalEnergy/NYSEG Comparison
<TABLE>
<S> <C>
MWHs Sold By Customer Demographics
- --------------------- ------------
CalEnergy NYSEG CalEnergy NYSEG
- -------------------------------------------------- -----------------------------------------------------------
Residential 4,811 5,393 Area (square
Commercial 3,570 3,430 miles) 8,972 19,600
Industrial 6,466 2,992 Population
Other 475 1,401 (millions) 3.2 2.4
------ ----- Number of
TOTAL 15,322 13,216 customers
Electric 1,456,000 808,000
Gas -0- 238,000
Capacity (MW) Operational Information
- ------------- -----------------------
CalEnergy NYSEG CalEnergy NYSEG
- -------------------------------------------------- -----------------------------------------------------------
Coal -0- 2,236 Number of employees 4,400 4,114
Hydro 52 62 Customer density
Nuclear -0- 206 (cust/sq. mile) 167 53
Geothermal 1,430 -0- Overhead circuits
Gas 714 -0- (miles) 10,743 16,287
----- ----- Underground circuits
TOTAL 2,196 2,504 (miles) 15,099 3,777
</TABLE>
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<PAGE>
CalEnergy's Offer for NYSEG Shareholders
9.9% Tender Offer
o $24.50 per share in cash
o No financing conditions
o No regulatory approvals
o Expires August 14th, unless extended
Consensual Merger
o $27.50 per share in cash
o Fully underwritten financing commitment
o Subject to regulatory approvals:
- New York PSC
- FERC
- NRC
- Pennsylvania PUC
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NYSEG's Response
o Deny Shareholders/Entrench Management
o Rejected as "not real" a proposal that they have refused to
discuss
o Agreed to a rate plan that offers no cut to residential
customers
o Ignored a 32% share price cash premium after 5 years of
diminishing shareholder value during the biggest bull market
in recent history
o Pre-funded $52 million in "Golden Parachutes"
o Refused to provide NYSEG shareholders list
o Commenced "nuisance" lawsuit
Shareholders can send a clear signal to NYSEG's management by tendering their
shares to CalEnergy's $24.50 tender offer
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NYSEG Response
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Cost to Shareholders of NYSEG's Recent Actions
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ESTIMATED COSTS
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NYSEG
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Golden Parachutes $52,000,000
Legal/Litigation 4,000,000
P.R./Advertising 1,500,000
Printing 1,500,000
Goldman, Sachs (sale) 9,000,000
Morgan Stanley (sale) 9,000,000
Roadshow 25,000
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Combined Total Pretax Cost $77,025,000
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Is this really in the Best Interests of NYSEG Shareholders?
14
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NYSEG's Record of Shareholder Returns
[Chart depicting shareholders returns for CalEnergy, NYSEG and the S&P
Utilities Index appears here.]
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NYSEG Performance Record
[Chart depicting cumulative shareholder losses from NYSEG non-regulated
investments from 1992 through 1996 appears here.]
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How CalEnergy Will Operate NYSEG
Focus on Low-cost, High-Quality Service
o CalEnergy has developed a strong reputation for being a low-cost,
highly reliable service provider
o We plan to be at the "efficiency frontier" and become a leading
competitor for the benefit of our customers
Aggressive Competitor in Supply Business
o We view distribution as a growth opportunity and plan to expand NYSEG's
business in this sector
o We have no existing distribution business in New York and plan to
compete aggressively as deregulation unfolds
Retention of Jobs
o Ownership change only
o Expanded global employment opportunities
New Management Perspectives
o Innovative management practice
o Growth orientation
o Expansion opportunities
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CalEnergy Regulatory Strategy
o NY PSC Focuses on effects of mergers on rates, service
quality and competition
o CalEnergy will work with the PSC to provide rate
cuts for all classes of NYSEG customers.
o Service - CalEnergy experienced in providing high
quality distribution service through Northern
Electric
- CalEnergy, not NYSEG, has experience with
managing retail competition
o Competition - CalEnergy will divest fossil generation
- CalEnergy plans to support, not fight, NY PSC
restructuring of electric markets to open them
to competition
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CalEnergy Regulatory Strategy
o CalEnergy acquisition of NYSEG presents no issues of concern
to FERC or NRC
o FERC - We believe the merger will have no affect on
competition in wholesale markets, wholesale rates or
regulatory effectiveness
o NRC - CalEnergy is not controlled by foreign interests and
because NYSEG will be retained as stand-alone utility, we
believe no concerns should be raised about financial
responsibility for nuclear operations or decommissioning
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