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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1
AMENDMENT NO. 2
(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 No. 1,
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 10. Additional Information.
The information set forth in Item 10(f) is hereby amended and
supplemented by the following:
On July 30, 1997, CalEnergy issued a press release regarding the
decision by the NYSEG's Board of Directors to reject the Offer and not pursue
CalEnergy's invitation to negotiate a merger in which CalEnergy would acquire
all of the Shares at $27.50 per Share. A copy of the press release is attached
hereto as Exhibit (a)(11) and incorporated herein by reference.
Item 11. Material To Be Filed as Exhibits.
(a)(11) Text of Press Release, dated July 30, 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 30, 1997
CE ELECTRIC (NY), INC.
By: /s/ Steven A. McArthur
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Steven A. McArthur, Esq.
Senior Vice President
General Counsel and Secretary
CALENERGY COMPANY, INC.
By: /s/ Steven A. McArthur
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Steven A. McArthur, Esq.
Senior Vice President
General Counsel and Secretary
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EXHIBIT INDEX
Exhibit Description Page No.
No. ----------- in Sequentially
- - ------- Numbered Schedule
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(a)(11) Text of Press Release, dated July 30, 1997,
issued by CalEnergy Company, Inc.
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EXHIBIT (a)(11)
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FOR IMMEDIATE RELEASE
Contacts:
Patti J. McAtee Joele Frank
Director, Corporate Communications Abernathy MacGregor Group
(402) 341-4500 (212) 371-5999
CALENERGY MOVES FORWARD ON NYSEG ACQUISITION PLAN AND
URGES SHAREHOLDERS TO SEND MESSAGE TO NYSEG BOARD
NYSEG BOARD ACTION ATTEMPTS TO DENY SHAREHOLDERS
A 32% CASH PREMIUM
New York, New York, July 30, 1997, CalEnergy Company, Inc.
("CalEnergy") (NYSE, PSE and LSE symbol: CE) today gave the following statement
in response to New York State Electric & Gas Corporation's ("NYSEG") (NYSE
symbol: NGE) rejection of its cash tender offer for 6,540,670 common shares of
NYSEG at a price of $24.50 per share and decision not to pursue cash merger
negotiations at $27.50 per share.
David L. Sokol, Chairman and Chief Executive Officer of CalEnergy,
said, "We are disappointed that the NYSEG Board has rejected our offer.
However, we intend to pursue this transaction in spite of the Board's decision,
complete our 9.9% tender offer and move forward aggressively on our NYSEG
acquisition plan. It is unfortunate that the NYSEG Board is attempting to deny
shareholders, customers and employees of NYSEG, as well as the communities it
serves, the significant benefits this combination would bring.
"Our first step tender offer provides NYSEG shareholders the certainty
of $24.50 in cash now and this provides NYSEG shareholders the ability to send
a message to the NYSEG board that a consensual merger should be negotiated.
"The NYSEG Board apparently believes that shareholders of NYSEG should
not be permitted to decide for themselves whether to accept a substantial cash
premium for their NYSEG shares. Our cash merger proposal of $27.50 for each
outstanding share of NYSEG common stock would give NYSEG shareholders a 32%
premium above the closing price of $20 7/8 per share on June 30, 1997 -- the
day immediately preceding the commencement of CalEnergy's open market purchases
of NYSEG common stock," Mr. Sokol continued.
"Frankly, it defies logic that NYSEG would summarily dismiss our cash
premium offer when, during one of the biggest bull-markets this country has
ever seen, its shareholders have suffered through a 32% decline in the price of
their NYSEG stock from July 31, 1992 to June 30, 1997 and a dividend cut in
1994.
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One can only conclude that the board and management of NYSEG are attempting to
preserve their own self interest given that they have not even taken the
trouble to discuss the terms of our cash merger proposal with us and apparently
don't believe that soliciting the views of their own shareholders is important.
We believe NYSEG shareholders deserve better."
"Today's announcement is a perfect example of what a competitive
company like CalEnergy can do to institute change," said Mr. Sokol. "For two
years, NYSEG has protected its monopoly and battled the 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 discussions of rate
reductions with the PSC and NYSEG customers, NYSEG suddenly changed course and
reached an agreement in principle with the PSC. This timing is obviously no
coincidence. It vividly demonstrates the difference between a monopoly's
reactive approach and CalEnergy's pro-active approach to competition. We have
never had the luxury of being a monopoly, and therefore we don't think like
one. Rather than retreating to defend a shrinking monopoly franchise, we would
expect to bring a helpful competitive focus to NYSEG's transition to the
deregulated environment and in meeting the competitive challenges it faces. We
believe NYSEG's shareholders, customers, employees and communities would do
better with CalEnergy.
"It is disingenuous to question CalEnergy's ability to run a regulated
utility because CalEnergy presently operates Northern Electric plc in the U.K.,
a distribution utility with a larger customer base than NYSEG. Further, under a
CalEnergy - NYSEG combination, NYSEG will still be operated by the same NYSEG
employees and NYSEG customers will still receive the same safe, reliable energy
services to which they are accustomed. We would retain NYSEG's existing
corporate headquarters in Binghamton and would use NYSEG as a base to build and
expand a substantial regional energy business as competition unfolds. We have
no duplicate functions that would need to be rationalized as a result of our
merger," Mr. Sokol said.
"We also note that NYSEG is attempting to blame part of its problems
on its contract with the Saranac Partnership in which CalEnergy did not acquire
its minority economic interest until the acquisition of Falcon Seaboard in
1996," Mr. Sokol stated. "Customers should not be misled. The Saranac contract
price is based on PSC approved estimates of NYSEG's own future costs to produce
the same power. Further, I have spoken with NYSEG customers, and the prices
NYSEG currently charges are substantially in excess of what it pays for power
from Saranac. The time of the NYSEG board and management would be better spent
working together with CalEnergy to find creative solutions for the future,
rather than making excuses for the past.
"Another example of a monopoly approach to wasting time and funds is
the lawsuit NYSEG filed today, which further attempts to
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delay our offer. It is therefore no surprise in light of these entrenchment
tactics that a number of lawsuits have already been filed by NYSEG shareholders
against NYSEG's Board, alleging that the Board is breaching its fiduciary
duties to all shareholders," Mr. Sokol concluded.
On July 18, 1997, CalEnergy's wholly owned subsidiary CE Electric
(NY), Inc. formally commenced a cash tender offer for 6,540,670 common shares
of NYSEG at a price of $24.50 per share (which, together with shares already
owned by CalEnergy, represents the maximum number of shares the company can own
prior to obtaining regulatory approval for the merger). The tender offer is
scheduled to expire at 12:00 midnight, New York City time, on Thursday, August
14, 1997, unless extended.
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.
