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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1
AMENDMENT NO. 1
(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, 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 (the "Company"), 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 3. Past Contacts, Transactions or Negotiations with the Subject Company.
The information set forth in Item 3(b) is hereby amended and
supplemented by the following:
On July 24, 1997, CalEnergy issued a press release setting forth the
text of a letter sent by David L. Sokol, Chairman and Chief Executive Officer
of CalEnergy, to the Board of Directors of the Company regarding the benefits
of CalEnergy's merger proposal to the Company, its shareholders and customers,
and the local communities. A copy of such press release is attached hereto as
Exhibit (a)(10) and incorporated herein by reference.
Item 11. Material To Be Filed as Exhibits.
(a)(10) Text of Press Release, dated July 24, 1997, issued 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: July 24, 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
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EXHIBIT INDEX
Page No.
Exhibit in Sequentially
No. Description Numbered Schedule
- ------- ----------- ------------------
(a)(10) Text of Press Release, dated July 24, 1997,
issued by CalEnergy Company, Inc.
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FOR IMMEDIATE RELEASE
Contacts:
Patti J. McAtee
Director, Corporate Communications
(402) 341-4500
Joele Frank
Abernathy MacGregor Group Inc.
(212) 371-5999
CALENERGY SENDS LETTER TO NYSEG BOARD
New York, New York, July 24, 1997, CalEnergy Company, Inc.
("CalEnergy") (NYSE, PSE AND LSE symbol: CE) announced today that David L.
Sokol, Chairman and Chief Executive Officer of CalEnergy, sent the following
letter to the Board of Directors of NYSEG:
"July 24, 1997
Board of Directors
New York State Electric & Gas Corporation
c/o Mr. Wesley W. von Schack
Chairman, President and
Chief Executive Officer
4500 Vestal Parkway East
Binghamton, NY 13902-3607
Fax: 607-729-3318
Dear Members of the Board of Directors of New York State Electric &
Gas Corporation:
I am writing in advance of your upcoming board meeting to
reiterate the benefits of CalEnergy Company, Inc.'s ("CalEnergy")
merger proposal to New York State Electric & Gas Corporation
("NYSEG"), which was set out in a letter to Mr. von Schack on July 15,
1997. I regret not having been provided the opportunity to meet with
Board members personally as part of your deliberations to date.
However, I would welcome an invitation to meet with the Board and I am
ready to travel to Binghamton to do so immediately and to answer any
questions Board members may have regarding CalEnergy or our merger
proposal in order that you may fully inform yourselves in developing
your recommendation to shareholders.
Although it can hardly replace a face to face discussion,
where important issues can be explored in the depth they deserve, I
offer the following overview of some of the many significant benefits
which our proposed combination of CalEnergy and NYSEG offers to all of
NYSEG's
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constituencies: shareholders, customers, employees and local
communities.
Shareholders. We believe our proposal is financially compelling to
NYSEG shareholders. Our $27.50 per share merger proposal represents a
31.74% premium above the NYSEG $20 7/8 per share NYSE closing price on
June 30, 1997 (the day immediately preceding the day on which we first
commenced our open market purchases of NYSEG Common Stock). Since we
announced our tender offer for 9.9% of NYSEG's Common Stock, a number
of NYSEG's large shareholders have contacted us to express support for
our initiative and to state their preference for an active dialogue
between the two companies. Our cash offer allows shareholders to
realize a full and fair price for their shares notwithstanding the
significant uncertainties facing NYSEG and its business today. We
reiterate that we remain willing to consider alternative forms of
consideration (such as CalEnergy Common Stock) in the context of a
negotiated transaction if the Board believes that would be attractive
to NYSEG shareholders.
Customers. We have met with a variety of key groups in the regulatory
process since we announced our offer, including representatives of the
Governor's office, the New York legislature, the New York Public
Service Commission, the Federal Energy Regulatory Commission, members
of the New York Congressional delegation, consumer groups and several
of NYSEG's large industrial customers. These meetings have been very
constructive and encouraging. As a result, we are more than ever
committed to working with each of these parties to speed the
transition to competition in the New York energy market, and to
provide meaningful rate reductions for all NYSEG's customer classes.
We would, of course, much prefer to approach these parties together
with NYSEG's management in the context of a consensual transaction.
Employees. We intend to build on, and add to, NYSEG's strengths. As
with our acquisition of Northern Electric plc last year, existing
NYSEG employees and management will continue to operate NYSEG as a
distinct operating unit of CalEnergy. As we are not a U.S. utility, we
have no duplicate functions that would need to be rationalized as a
result of our merger. We recognize, as you have, that with
deregulation of the New York energy market, the pressure to compete
and lower costs will inevitably result in a changing work environment
for employees. However, we would intend to harness our combined skills
to aggressively expand NYSEG's business in a competitive environment.
CalEnergy is a growth company that has increased the number of its
employees tenfold over the last five years. We will incorporate
CalEnergy in New York as part of this transaction and will retain
NYSEG's existing corporate headquarters and will use NYSEG as a base
to build and
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expand a substantial regional energy business as competition unfolds.
The benefits to NYSEG's employees of being part of a growth company
should be clear, but once again we would welcome the opportunity to
discuss our vision for the merged companies in person.
Local Communities. CalEnergy is a dependable business partner,
committed to making positive contributions in the communities we
serve. We actively support numerous local community charities and the
arts, and are active in educational organizations, community safety
programs and local environmental activities. Consistent with our
policy of good corporate citizenship, we look forward to continuing
these practices in New York State.
We have evidenced our commitment to NYSEG's shareholders and
other constituencies in this transaction by commencing our cash tender
for 9.9% of NYSEG's common stock, an investment of $160 million.
However, as we have previously stated, our strong preference is to
negotiate on a consensual basis to reach agreement on our merger
proposal. We are prepared to commit all necessary resources to work
with you in promptly completing this transaction, and hope that you
are willing to commence the discussions which many of your large
shareholders clearly favor. We certainly hope that you would prefer to
have your management and advisers meet with us rather than waste
shareholder funds engaging in unproductive defensive actions and in
further escalating the public rhetoric attacking our proposal that
unfortunately has been initiated even before the Board has completed
its deliberations. However, if you decide not to enter into
discussions with us, we reiterate our view and the view of a number of
your large shareholders, that the Board ought to permit NYSEG's
shareholders to freely decide for themselves on the merits of our 32%
premium cash offer rather than taking any action which would hinder
the shareholders' ability to express their views.
I look forward to having the opportunity to meet with the
Board to discuss our merger proposal.
Sincerely,
/s/David L. Sokol
Chairman and Chief Executive Officer
CalEnergy Company, Inc.
CE Electric (NY), Inc.
CalEnergy, which manages and owns interests in over 5,000 net
MW of power generation facilities in operation, construction and
development worldwide, currently operates 19 generating facilities and
also supplies and distributes electricity to 1.5 million customers.
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