----------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1
Tender Offer Statement
Pursuant to Section 14(d)(1) of the Securities Exchange Act of 1934
(Amendment No. 2)
THE ENERGY GROUP PLC
(Name of Subject Company)
PACIFICORP ACQUISITIONS
PACIFICORP
(Bidders)
Ordinary Shares of 10p Each and
American Depositary Shares, Each Representing 4 Ordinary Shares
and Evidenced by American Depositary Receipts
(Title of Class of Securities)
292691 10 2
(CUSIP Number of Class of Securities)
Richard T. O'Brien
PacifiCorp
Port of Portland Building, Suite 1600
700 NE Multnomah
Portland, Oregon 97232
(503) 731-2000
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidder)
Copy to:
Stuart W. Chestler
Stoel Rives LLP
900 SW Fifth Avenue, Suite 2300
Portland, Oregon 97204-1268
(503) 294-9500
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14D-1
- --------------------------------------------------------------------------------
1. Name of reporting person
PacifiCorp Acquisitions
- --------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group (a) ___
(b) ___
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Sources of Funds
AF, BK
- --------------------------------------------------------------------------------
5. Check box if disclosure of legal proceedings is required pursuant
to Items 2(e) OR 2(f) ___
- --------------------------------------------------------------------------------
6. Citizenship or place of organization
England and Wales
- --------------------------------------------------------------------------------
7. Aggregate amount beneficially owned by each reporting person
None (0)
- --------------------------------------------------------------------------------
8. Check box if the aggregate amount in row (7) excludes certain shares
___
- --------------------------------------------------------------------------------
9. Percent of class represented by amount in row (7)
None (0)
- --------------------------------------------------------------------------------
10. Type of reporting person
CO
- --------------------------------------------------------------------------------
2
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14D-1
- --------------------------------------------------------------------------------
1. Name of reporting person
PacifiCorp
- --------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group (a) ___
(b) ___
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Sources of Funds
BK
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5. Check box if disclosure of legal proceedings is required pursuant
to Items 2(e) OR 2(f) ___
- --------------------------------------------------------------------------------
6. Citizenship or place of organization
Oregon
- --------------------------------------------------------------------------------
7. Aggregate amount beneficially owned by each reporting person
None (0)
- --------------------------------------------------------------------------------
8. Check box if the aggregate amount in row (7) excludes certain shares
___
- --------------------------------------------------------------------------------
9. Percent of class represented by amount in row (7)
None (0)
- --------------------------------------------------------------------------------
10. Type of reporting person
CO
- --------------------------------------------------------------------------------
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PacifiCorp Acquisitions and PacifiCorp hereby amend and supplement their
Tender Offer Statement on Schedule 14D-1 (the "Statement"), originally filed on
February 6, 1998, with respect to their offer to purchase all outstanding
Ordinary Shares of 10p each and American Depositary Shares, each representing 4
Ordinary Shares and evidenced by American Depositary Receipts, of The Energy
Group PLC, a public limited company organized under the laws of England and
Wales, as set forth in this Amendment No. 2. Capitalized terms not defined
herein have the meanings assigned thereto in the Statement.
Item 10. Additional Information.
(b) and (c) On February 18, 1998, PacifiCorp issued a press release, a copy
of which is attached hereto as Exhibit (a)(14) and is incorporated herein by
reference, regarding the acceptance by the Federal Trade Commission of a Consent
Order agreed to by PacifiCorp and The Energy Group PLC. A copy of the Consent
Order is attached hereto as Exhibit (c)(2) and is incorporated herein by
reference. A copy of the Letter Agreement between PacifiCorp and The Energy
Group setting forth the actions that PacifiCorp will take with respect to the
Consent Order if the Offer lapses, is withdrawn or terminates is attached hereto
as Exhibit (c)(3) and is incorporated herein by reference.
Item 11. Material to Be Filed as Exhibits.
(a)(14) Press Release, dated February 18, 1998.
(c)(2) Form of Agreement Containing Consent Order.
(c)(3) Letter Agreement between PacifiCorp and The Energy Group PLC.
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SIGNATURES
After due inquiry and to the best of their knowledge and belief, each of
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
Dated: February 18, 1998
PACIFICORP ACQUISITIONS
By W.E. PERESSINI
--------------------------------------
W.E. Peressini
Deputy Chief Finance Officer
PACIFICORP
By W.E. PERESSINI
--------------------------------------
W.E. Peressini
Vice President and Treasurer
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EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT
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(a)(14) Press Release, dated February 18, 1998.
(c)(2) Form of Agreement Containing Consent Order.
(c)(3) Letter Agreement between PacifiCorp and The Energy Group PLC.
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Exhibit (a)(14)
PacifiCorp Announces FTC Clearance of TEG Tender
Offer
PORTLAND, Ore., Feb. 18 -- PacifiCorp (NYSE: PPW) today announced that the U.S.
Federal Trade Commission has cleared the Company's cash tender offer for
London-based The Energy Group (NYSE: TEG; LSE) by terminating the waiting period
under the Hart-Scott-Rodino Antitrust Improvement Act.
The FTC action came seven months after PacifiCorp sought Hart-Scott-Rodino
clearance following its initial bid for The Energy Group.
All specific regulatory approvals which PacifiCorp has been seeking and which
are conditions to the offer have now been obtained.
Two weeks ago FERC approved the sale of certain FERC jurisdictional assets of
Citizens Power, a U.S. subsidiary of TEG, to Lehman Brothers Holdings, Inc.
FERC's approval was a regulatory condition of PacifiCorp's offer to acquire TEG.
In December, the UK government cleared the transaction, following a six-month
inquiry by the Monopolies and Mergers Commission and the Department of Trade and
Industry.
PacifiCorp's renewed offer to acquire all outstanding shares of TEG was mailed
to holders of TEG shares on Friday, February 6. The first closing date of the
offer is March 9.
The FTC action today came after PacifiCorp and TEG agreed to a consent order
with the FTC requiring the sale of two Arizona mines owned by Peabody Holdings,
another U.S.
subsidiary of TEG.
The consent order also requires PacifiCorp to restrict access within the
combined company to certain non-public information concerning Peabody customers.
The consent order will be published by the FTC for public comment and will not
be made final until after a 60-day public comment period. PacifiCorp's tender
offer for TEG shares is not conditional on final approval of the consent order.
PacifiCorp, one of the lowest-cost electricity producers in the United States,
is a multinational energy company with 1.4 million retail electric customers in
the western United States and 550,000 customers in the State of Victoria,
Australia. PacifiCorp, which has more than 10,000 megawatts of generation
capacity, also is the largest investor-owned bulk power marketer in the western
U.S., and is an active electricity and gas marketer in the eastern U.S.
Exhibit (c)(2)
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
- -------------------------------------------|
In the Matter of |
|
PACIFICORP, |
a corporation, |
|
THE ENERGY GROUP PLC, | File No. 971-0091
a public limited liability company, |
|
PEABODY HOLDING COMPANY, INC., |
a corporation, and |
|
PEABODY WESTERN COAL COMPANY, |
a corporation. |
- -------------------------------------------|
AGREEMENT CONTAINING CONSENT ORDER
The Federal Trade Commission ("Commission"), having initiated an
investigation of the acquisition by PacifiCorp of 100 percent of the voting
securities of The Energy Group PLC, which controls Peabody Holding Company, Inc.
and its wholly-owned subsidiary Peabody Western Coal Company, and it now
appearing that PacifiCorp, The Energy Group PLC, Peabody Holding Company, Inc.,
and Peabody Western Coal Company, hereinafter sometimes referred to as the
"proposed respondents," are willing to enter into an agreement containing an
Order requiring the proposed respondents to divest certain stock and assets and
to cease and desist from certain conduct, as well as providing for other relief:
IT IS HEREBY AGREED by and between the proposed respondents, by their duly
authorized officers and attorneys, and counsel for the Commission that:
1. Proposed respondent PacifiCorp is a corporation organized, existing and
doing business under and by virtue of the laws of Oregon, with its office and
principal place of business located at 700 N.E. Multnomah, Suite 1600, Portland,
Oregon, 97232-4116.
2. Proposed respondent The Energy Group PLC is a public limited liability
company organized, existing and doing business under and by virtue of the laws
of England and Wales, with its office and principal place of business located at
117 Piccadilly, London,
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W1V 9FJ, England. The Energy Group controls proposed respondent Peabody Holding
Company, Inc.
3. Proposed respondent Peabody Holding Company, Inc. is a corporation
organized, existing and doing business under and by virtue of the laws of New
York, with its office and principal place of business located at 701 Market
Street, Suite 700, St. Louis, Missouri 63101-1826.
4. Proposed respondent Peabody Western Coal Company is a corporation
organized, existing and doing business under and by virtue of the laws of
Delaware, with its office and principal place of business located at 1300 S.
Yale, Flagstaff, Arizona, 86001.
5. The proposed respondents admit all the jurisdictional facts set forth in
the draft of complaint here attached.
6. The proposed respondents waive:
a. any further procedural steps;
b. the requirement that the Commission's decision contain a statement
of findings of fact and conclusions of law;
c. all rights to seek judicial review or otherwise to challenge or
contest the validity of the Order entered pursuant to this agreement; and
d. any claim under the Equal Access to Justice Act.
7. This agreement is for settlement purposes only and does not constitute
an admission by the proposed respondents that the law has been violated as
alleged in the draft of complaint here attached or that the facts as alleged in
the draft complaint, other than jurisdictional facts, are true.
8. This agreement shall not become part of the public record of the
proceeding unless and until it is accepted by the Commission. If this agreement
is accepted by the Commission, it, together with the draft of complaint
contemplated thereby, will be placed on the public record for a period of sixty
(60) days and information with respect thereto will be publicly released. The
Commission thereafter may either withdraw its acceptance of this agreement and
so notify the proposed respondents, in which event it will take such action as
it may consider appropriate, or issue and serve its complaint (in such form as
the circumstances may require) and decision, in disposition of the proceeding.
9. This agreement contemplates that, if it is accepted by the Commission,
and if such acceptance is not subsequently withdrawn by the Commission pursuant
to the provisions of Commission Rule 2.34, 16 C.F.R. ss. 2.34, the Commission
may, without further notice to
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the proposed respondents, (1) issue its complaint, corresponding in form and
substance with the attached draft of complaint, and its decision containing the
following Order to divest certain stock and assets and to cease and desist from
certain conduct in disposition of the proceeding and (2) make information public
with respect thereto. When so entered, the Order shall have the same force and
effect, and may be altered, modified or set aside in the same manner and within
the same time as provided by statute for other orders. The Order shall become
final upon service. Delivery by U.S. Postal Service of the complaint and
decision containing the agreed-to Order to counsel for the proposed respondents
or any other person residing in the United States that the proposed respondents
designate by notice in writing to the Secretary, Federal Trade Commission, shall
constitute service. Proposed respondents waive any right they may have to any
other manner of service. The complaint may be used in construing the terms of
the Order, and no agreement, understanding, representation, or interpretation
not contained in the Order or this agreement may be used to vary or contradict
the terms of the Order.
10. Within ten (10) days after the date this agreement is signed by the
proposed respondents, and every thirty (30) days thereafter until the proposed
respondents make their first verified written reports pursuant to Paragraph VI
of the proposed Order, when and if entered, the proposed respondents shall
submit to the Commission initial reports pursuant to Commission Rule 2.33, 16
C.F.R. ss. 2.33, setting forth in detail the manner and form in which PacifiCorp
is complying with the Agreement to Hold Separate signed by PacifiCorp, and in
the manner described in Paragraph VI of the attached proposed Order, setting
forth in detail the manner and form in which the proposed respondents are
attempting to satisfy the cease and desist requirements described in Paragraphs
IV and V and the divestiture requirements described in Paragraph II of the
attached proposed Order.
11. By signing this agreement, proposed respondents represent that they can
accomplish the full relief contemplated by this agreement.
12. Proposed respondents have read the proposed complaint and Order
contemplated hereby. Proposed respondents understand that once the Order has
been issued, they will be required to file one or more compliance reports
showing that they have fully complied with the Order. Proposed respondents agree
to comply with Paragraphs II, IV and V of the proposed order from the date they
sign this agreement. Proposed respondents further understand that they may be
liable for civil penalties in the amount provided by law for each violation of
the Order after it becomes final.
ORDER
I
IT IS ORDERED that, as used in this Order, the following definitions shall
apply:
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A. "PacifiCorp" means PacifiCorp, its directors, officers, employees,
agents and representatives, predecessors, successors, and assigns; its
subsidiaries, divisions, groups and affiliates controlled by PacifiCorp, and the
respective directors, officers, employees, agents, and representatives,
successors, and assigns of each.
B. "The Energy Group PLC" or "TEG" means The Energy Group PLC, its
directors, officers, employees, agents and representatives, predecessors,
successors, and assigns; its subsidiaries, divisions, groups and affiliates
controlled by The Energy Group PLC, and the respective directors, officers,
employees, agents, and representatives, successors, and assigns of each.
C. "Peabody Holding Company, Inc." or "Peabody" means Peabody Holding
Company, Inc., its directors, officers, employees, agents and representatives,
predecessors, successors, and assigns; its subsidiaries, divisions, groups and
affiliates controlled by Peabody Holding Company, Inc., and the respective
directors, officers, employees, agents, and representatives, successors, and
assigns of each.
D. "Peabody Western Coal Company" or "PWCC" means Peabody Western Coal
Company, its directors, officers, employees, agents and representatives,
predecessors, successors, and assigns; its subsidiaries, divisions, groups and
affiliates controlled by Peabody Western Coal Company, and the respective
directors, officers, employees, agents, and representatives, successors, and
assigns of each.
E. "Respondents" means PacifiCorp, The Energy Group PLC, Peabody Holding
Company, Inc., and Peabody Western Coal Company, individually and collectively.
F. "Commission" means the Federal Trade Commission.
G. "Citizens Power" means Citizens Power LLC.
H. "Coal" means steam coal, including bituminous and subbituminous coal,
used as a fuel source for the production of electricity in coal-fired power
plants.
I. "Coal-fired power plant" means an electricity generating facility that
uses coal as its fuel source.
J. "NGS" means the Navajo Generating Station, a coal-fired power plant
located near Page, Arizona.
K. "NGS Owners" means, individually and collectively, the fractional
interest owners of NGS. On the date of this agreement, the NGS Owners are the
Salt River Agricultural Improvement and Power District, the Los Angeles
Department of Water and Power, the Arizona Public Service Company, Nevada Power
Company, and Tucson Electric Power Company.
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L. "Navajo CSA" means the Amended Navajo Station Supply Agreement, dated
February 18, 1977, pursuant to which PWCC supplies coal to NGS.
M. "Mohave" means the Mohave Generating Station, a coal-fired power plant
located near Laughlin, Nevada.
N. "Mohave Owners" means, individually and collectively, the fractional
interest owners of Mohave. On the date of this agreement, the Mohave Owners are
Southern California Edison Company, the Los Angeles Department of Water and
Power, Nevada Power Company, and the Salt River Agricultural Improvement and
Power District.
O. "Mohave CSA" means the Amended Mohave Station Supply Agreement, dated
May 26, 1976, pursuant to which PWCC supplies coal to Mohave.
P. "Kayenta Mine" means the coal mine located on the Navajo-Hopi Indian
Reservations in Arizona, owned by PWCC and operated by PWCC's Arizona Business
Unit, and which supplies coal to NGS.
Q. "Black Mesa Mine" means the coal mine located on the Navajo-Hopi Indian
Reservations in Arizona, owned by PWCC and operated by PWCC's Arizona Business
Unit, and which supplies coal to Mohave.
R. "Seneca Mine" means the coal mine located near Hayden, Colorado, owned
by Seneca Coal Company and managed by PWCC.
S. "Big Sky Mine" means the coal mine located near Colstrip, Montana, owned
by Big Sky Coal Company and managed by PWCC.
T. "Non-Public Information" means any information not in the public domain
regarding a Peabody Customer obtained by PWCC or by any company owned by Peabody
in connection with the supply of coal to such Peabody Customer, including but
not limited to information related to coal costs; transportation costs; coal
quality; production capacity, utilization, or scheduling; and anticipated and
unanticipated shutdowns. Non-public Information shall not include information
that falls within the public domain through no violation of this Order by
Peabody.
U. "Peabody Customer" means any customer who has entered into a contract to
purchase coal from Peabody having a duration of one year or longer or who has
purchased over one million tons of coal from Peabody in the preceding calendar
year.
V "The Acquisition" means the acquisition by PacifiCorp of more than 5% of
the voting securities of TEG.
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W "Acquisition Date" means the date on which PacifiCorp acquires more than
5% of the voting securities of TEG.
X. "Control Date" means the date on which PacifiCorp acquires control of
TEG.
II
IT IS FURTHER ORDERED that:
A. PacifiCorp shall divest, absolutely and in good faith, no later than
nine (9) months after the Acquisition Date, PWCC as a fully viable and
competitive ongoing business and including all assets associated with PWCC as of
January 1, 1998, provided, however, PacifiCorp may exclude from such assets the
Seneca Mine, the Big Sky Mine, PWCC's right to manage the Seneca Mine and the
Big Sky Mine, and the "Peabody" name; and shall also divest such additional,
ancillary assets and businesses and effect such arrangements as are necessary to
assure the marketability and the viability and competitiveness of PWCC.
B. If within thirty (30) days of receiving notice from PacifiCorp that
PacifiCorp proposes to divest PWCC to a named acquirer approved, or which
becomes approved, by the Commission, the Mohave Owners or NGS Owners do not
consent to the transfer of PWCC to such acquirer, the period of nine (9) months
as specified in Paragraph II.A. shall be extended to expire on the earlier of
March 1, 2000, or sixty (60) days following the date on which
1. the NGS Owners and Mohave Owners notify PacifiCorp, in writing, that
they elect to exercise the right of first refusal with respect to
PacifiCorp's proposed sale of PWCC to such acquirer; or
2. the NGS Owners and Mohave Owners notify PacifiCorp, in writing, that
they decline to exercise any right of first refusal they may have with
respect to PacifiCorp's proposed sale of PWCC to such acquirer.
C. Provided further, that if at the instance of the NGS Owners or the
Mohave Owners over the opposition of PacifiCorp, PacifiCorp is enjoined or
otherwise prohibited by court order from divesting PWCC, the Kayenta Mine, or
the Black Mesa Mine, PacifiCorp shall promptly give written notice of such order
to the Commission, whereupon the period within which PacifiCorp shall divest, as
applicable, PWCC, the Kayenta Mine, or the Black Mesa Mine, under Paragraphs
II.A. or II.B. of this Order, shall be extended to the earlier of (a) one year
from the expiration of the time specified in Paragraphs II.A. and II.B. of this
Order; or (b) ninety (90) days after the injunction or other order expires.
PacifiCorp shall take all reasonable action as required to obtain from the court
release from such injunction or order.
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D. PacifiCorp shall divest PWCC only to an acquirer or acquirers that
receive the prior approval of the Commission and only in a manner that receives
the prior approval of the Commission. The purpose of the divestiture of PWCC is
to ensure the continuation of PWCC as an ongoing, viable, and competitive
business engaged in the mining, production, and sale of coal and to remedy the
lessening of competition resulting from the acquisition as alleged in the
Commission's complaint.
E. Should any transfer of the Mohave CSA, the Navajo CSA, any other
agreement, contract, mineral lease, or license required by Paragraph II.A. of
this Order not be possible after reasonable effort by PacifiCorp due to a person
other than a party to this Order withholding its consent to the transfer,
PacifiCorp shall enter into such subcontracts, sublicenses or other agreement
with PWCC or the acquirer thereof as necessary to realize the same effect as
such transfer. PacifiCorp shall submit a copy of each such subcontract,
sublicense, or agreement with its compliance reports to the Commission pursuant
to Paragraphs VI. and VII. of this Order.
F. Pending divestiture of PWCC, Respondents shall take such actions as are
reasonably necessary to maintain the viability, competitiveness, and
marketability of PWCC and to prevent the destruction, removal, wasting,
deterioration, or impairment of PWCC.
G. PacifiCorp shall comply with all terms of the Agreement to Hold
Separate, attached to this Order and made a part hereof as Appendix I. Said
Agreement shall continue in effect until such time as PacifiCorp has divested
PWCC or until such other time as the Agreement to Hold Separate provides.
H. If PacifiCorp has not acquired more than 5% of the voting securities of
TEG within six (6) months of the date the Order becomes final, then it will
divest all voting securities of TEG in excess of $15 million, as valued under
the Hart-Scott-Rodino Rules, within one year after the date the Order becomes
final. The divestiture shall be made only to an acquirer that receives the prior
approval of the Commission, and only in a manner that receives the prior
approval of the Commission, provided, however, that no Commission approval shall
be required for tendering the shares in a tender offer for shares of TEG or for
selling the shares on a securities exchange where the voting securities are
listed for sale.
III
IT IS FURTHER ORDERED that:
A. If PacifiCorp has not divested, absolutely and in good faith and with
the Commission's prior approval, PWCC within the time required by Paragraph
II.A. of this Order or within such additional time as may be allowed in
Paragraphs II.B. or II.C. of this Order or the voting securities of TEG within
the time required by Paragraph II.H., then the Commission may appoint a trustee
to divest PWCC, or the voting securities, as the case may
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be. The trustee shall have all rights and powers necessary to permit the trustee
to effect the divestiture of PWCC or the voting securities, as the case may be,
and to divest such ancillary assets, and to effect such arrangements, as
necessary to assure the viability, competitiveness, and marketability of PWCC or
the voting securities, as the case may be, so as to expeditiously accomplish the
remedial purposes of this Order. In the event the Commission or the Attorney
General brings an action pursuant to Section 5(l) of the Federal Trade
Commission Act, 15 U.S.C. ss. 45(l), or any other statute enforced by the
Commission, PacifiCorp shall consent to the appointment of a trustee in such
action. Neither the appointment of a trustee nor a decision not to appoint a
trustee under this Paragraph shall preclude the Commission or the Attorney
General from seeking civil penalties or any other relief (including, but not
limited to, a court-appointed trustee) pursuant to the Federal Trade Commission
Act or any other statute, for any failure by any of the Respondents to comply
with this Order.
B. If a trustee is appointed by the Commission or a court pursuant to
Paragraph III.A. of this Order, PacifiCorp shall consent to the following terms
and conditions regarding the trustee's powers, duties, authority, and
responsibilities:
1. The Commission shall select the trustee, subject to the consent of
PacifiCorp, which consent shall not be unreasonably withheld. The trustee
shall be a person with experience and expertise in acquisitions and
divestitures, including, if practicable, experience and expertise in
acquisitions and divestitures of coal mines. If PacifiCorp has not opposed,
in writing, including the reasons for opposing, the selection of any
proposed trustee within ten (10) days after notice by the staff of the
Commission to PacifiCorp of the identity of any proposed trustee,
PacifiCorp shall be deemed to have consented to the selection of the
proposed trustee.
2. Subject to the prior approval of the Commission, the trustee shall
have the exclusive power and authority to divest PWCC or the voting
securities, as the case may be, and shall have the power to divest such
ancillary assets, and to effect such arrangements, as necessary to assure
the viability, competitiveness, and marketability of PWCC or the voting
securities, as the case may be, so as to expeditiously accomplish the
divestiture required by this Order.
3. Within ten (10) days after appointment of the trustee, PacifiCorp
shall execute a trust agreement that, subject to the prior approval of the
Commission (and, in the case of a court-appointed trustee, of the court),
transfers to the trustee all rights and powers necessary to effect the
divestiture as required by this order.
4. The trustee shall have twelve (12) months to accomplish the
divestiture required by this Order, which shall be subject to the prior
approval of the Commission. If, however, at the end of the twelve (12)
month period, the trustee has submitted a plan of divestiture or believes
that divestiture can be achieved within a reasonable time, the divestiture
period may be extended by the Commission (or, in the case of a
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court-appointed trustee, by the court); provided, however, the Commission
may extend this period for no more than two (2) additional terms of six (6)
months each.
5. The trustee shall have full and complete access to the personnel,
books, records, and facilities related to PWCC or Peabody Holding Company,
Inc., or to any other relevant information, as the trustee may request.
PacifiCorp shall develop such financial or other information as such
trustee may request and shall cooperate with the trustee. PacifiCorp shall
take no action to interfere with or impede the trustee's accomplishment of
the divestiture. Any delays in divestiture caused by PacifiCorp shall
extend the time for divestiture under this Paragraph III. in an amount
equal to the delay, as determined by the Commission (or, in the case of a
court-appointed trustee, by the court).
6. The trustee shall use his or her best efforts to negotiate
expeditiously the most favorable price and terms available in each contract
that is submitted to the Commission, subject to PacifiCorp's absolute and
unconditional obligation to divest at no minimum price. The divestiture
shall be made in the manner, and to the acquirer or acquirers, as set out
in Paragraph II. of this Order; provided, however, if the trustee receives
bona fide offers from more than one acquiring entity, and if the Commission
approves more than one such acquiring entity, then the trustee shall divest
to the acquiring entity or entities selected by PacifiCorp from among those
approved by the Commission.
7. The trustee shall serve, without bond or other security, at the cost
and expense of PacifiCorp, on such reasonable and customary terms and
conditions as the Commission or a court may set. The trustee shall have
authority to employ, at the cost and expense of PacifiCorp, such
consultants, accountants, attorneys, investment bankers, business brokers,
appraisers, and other representatives and assistants as are necessary to
carry out the trustee's duties and responsibilities. The trustee shall
account for all monies derived from the divestiture and all expenses
incurred. After approval by the Commission (and, in the case of a
court-appointed trustee, by the court), of the account of the trustee,
including fees for his or her services, all remaining monies shall be paid
at the direction of PacifiCorp and the trustee's power shall be terminated.
The trustee's compensation shall be based at least in significant part on a
commission arrangement (based on sales price) contingent on the trustee's
accomplishing the divestiture required by this Order.
8. PacifiCorp shall indemnify the trustee and hold the trustee harmless
against any losses, claims, damages, liabilities, or expenses arising out
of, or in connection with, the performance of the trustee's duties,
including all reasonable fees of counsel and other expenses incurred in
connection with the preparation for, or defense of any claim, whether or
not resulting in any liability, except to the extent that such liabilities,
losses, damages, claims, or expenses result from misfeasance, gross
negligence, recklessness, willful or wanton acts, or bad faith by the
trustee.
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9. If the trustee ceases to act or fails to act diligently, a
substitute trustee shall be appointed in the same manner as provided in
Paragraph III. of this Order.
10. The Commission (or, in the case of a court-appointed trustee, the
court) may on its own initiative or at the request of the trustee issue
such additional orders or directions as may be necessary or appropriate to
accomplish the divestiture required by this Order.
11. The trustee shall have no obligation or authority to operate or
maintain PWCC or Peabody Holding Company, Inc.
12. The trustee shall report in writing to PacifiCorp and the
Commission every thirty (30) days concerning the trustee's efforts to
accomplish the divestiture.
IV
IT IS FURTHER ORDERED that:
A. Prior to the Control Date and continuing for sixty (60) days after the
Control Date, Peabody and PWCC shall not, absent the prior written consent of
the proprietor of Non-Public Information, provide, disclose, or otherwise make
available to PacifiCorp any Non-Public Information;
B. Prior to the Control Date and continuing for sixty (60) days after the
Control Date, PacifiCorp shall not, absent the prior written consent of the
proprietor of Non-Public Information, receive or use any Non-Public Information;
C. Effective as of the Control Date, Peabody and PWCC shall not provide,
disclose, or otherwise make available to any other part of the merged company,
including but not limited to Citizens Power, any Non-Public Information
regarding a Peabody Customer who has notified PacifiCorp or Peabody in writing
that it objects to such disclosure;
D. Effective as of the Control Date, Peabody and PWCC shall use any
Non-Public Information either may obtain only in their respective capacities as
suppliers of coal if the proprietor of the Non-Public Information has notified
PacifiCorp or Peabody in writing that it objects to any other use; and.
E. Effective as of the Control Date, PacifiCorp, excluding Peabody but then
including Citizens Power, shall not receive or use any Non-Public Information
regarding a Peabody Customer who has notified PacifiCorp or Peabody in writing
that it objects to such receipt or use.
10
<PAGE>
F. Any Peabody Customer who has notified PacifiCorp or Peabody that it
objects to disclosure or use of Non-Public Information pursuant to this
Paragraph IV may at any time withdraw such objection, in whole or in part, by
written notice to PacifiCorp or Peabody.
V
IT IS FURTHER ORDERED that Respondents shall deliver, within ten (10) days
following the Control Date, a copy of this Order to all Peabody Customers.
Immediately upon signing this agreement, Respondents will begin to operate under
the provisions contained in Paragraph IV. of this Order, and continue to do so
until the expiration of this Order.
VI
IT IS FURTHER ORDERED that within thirty (30) days after the date this
Order becomes final, and every thirty (30) days thereafter until PacifiCorp has
fully complied with the provisions of Paragraphs II. and III. of this Order,
PacifiCorp shall submit to the Commission verified written reports setting forth
in detail the manner and form in which PacifiCorp intends to comply, is
complying, and has complied with Paragraphs II. and III. of this Order.
PacifiCorp shall include in its compliance reports, among other things that are
required from time to time, a full description of the efforts being made to
comply with Paragraphs II. and III. of the Order, including a description of all
substantive contacts or negotiations for the divestiture and the identity of all
parties that have contacted PacifiCorp or that have been contacted by
PacifiCorp. PacifiCorp shall include in its compliance reports copies of all
written communications to and from such parties, all internal memoranda, and all
reports and recommendations concerning divestiture.
VII
IT IS FURTHER ORDERED that within thirty (30) days from the date this Order
becomes final, one (1) year from the date this Order becomes final, annually for
the next nine (9) years on the anniversary of the date this Order becomes final,
and at such other times as the Commission may require, Respondents shall file a
verified written report with the Commission setting forth in detail the manner
and form in which they have complied and are complying with Paragraphs IV. and
V. of this Order.
VIII
IT IS FURTHER ORDERED that Respondents shall notify the Commission at least
thirty (30) days prior to any proposed change in the corporate Respondents, such
as dissolution, assignment, sale resulting in the emergence of a successor
corporation, the
11
<PAGE>
creation or dissolution of subsidiaries, or any other change in PacifiCorp, The
Energy Group PLC, Peabody Holding Company, Inc., and Peabody Western Coal
Company that may affect compliance obligations arising out of this Order.
IX
IT IS FURTHER ORDERED that, for the purpose of determining or securing
compliance with this Order, Respondents shall permit any duly authorized
representatives of the Commission:
A. During office hours and in the presence of counsel, access to all
facilities and access to inspect and copy all books, ledgers, accounts,
correspondence, memoranda and other records and documents in the possession
or under the control of Respondents relating to any matters contained in
this Order; and
B. Upon five (5) days notice to Respondents, and without restraint or
interference, to interview officers, employees, or agents of Respondents.
X
IT IS FURTHER ORDERED that this Order shall expire upon the earlier of ten
(10) years after the date on which the order becomes final or thirty (30) days
after PacifiCorp (1) sells all voting securities of TEG in excess of $15
million, as valued under the Hart-Scott-Rodino Rules, and (2) gives the
Commission written notification that it has abandoned the Acquisition and
withdraws its notification under 16 C.F.R. ss. 803.1 with respect to the
Acquisition.
Signed this ___ day of February, 1998.
FEDERAL TRADE COMMISSION PACIFICORP
By: By: DENNIS P. STEINBERG
------------------------------- -------------------------------
Rhett R. Krulla Dennis P. Steinberg
Senior Litigator
Bureau of Competition
THE ENERGY GROUP
By: By: IRL ENGELHARDT
------------------------------ -------------------------------
Steven L. Wilensky Irl Engelhardt
Attorney
Bureau of Competition
12
<PAGE>
PEABODY HOLDING COMPANY,
INC.
By: IRL ENGELHARDT
-------------------------------
Irl Engelhardt
PEABODY WESTERN COAL
COMPANY
By: W. HOWARD CARSON
-------------------------------
W. Howard Carson
Approved:
E. WALTER VAN VALKENBURG
- ---------------------------------- -------------------------------
Joseph G. Krauss E. Walter Van Valkenburg
Assistant Director Counsel for PacifiCorp
Bureau of Competition Stoel Rives LLP
900 S.W. Fifth Avenue
Portland, OR 97210
DEBRA J. PEARLSTEIN
- ---------------------------------- -------------------------------
William J. Baer Debra J. Pearlstein
Director Counsel for The Energy Group PLC,
Bureau of Competition Peabody Holding Company, Inc. and
Peabody Western Coal Company
Weil, Gotshal & Manges LLP.
767 Fifth Avenue
New York, NY 10153
13
<PAGE>
APPENDIX I
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
- -------------------------------------------|
In the Matter of |
|
PACIFICORP, |
a corporation, |
|
THE ENERGY GROUP PLC, | File No. 971-0091
a public limited liability company, |
|
PEABODY HOLDING COMPANY, INC., |
a corporation, and |
|
PEABODY WESTERN COAL COMPANY, |
a corporation. |
- -------------------------------------------|
AGREEMENT TO HOLD SEPARATE
This Agreement to Hold Separate ("Hold Separate Agreement") is by and
between PacifiCorp, a corporation organized, existing, and doing business under
and by virtue of the laws of Oregon, with its office and principal place of
business located at 700 N.E. Multnomah, Suite 1600, Portland, Oregon,
97232-4116; and the Federal Trade Commission (the "Commission"), an independent
agency of the United States Government, established under the Federal Trade
Commission Act of 1914, 15 U.S.C. ss. 41, et seq. (collectively, the "Parties").
PREMISES
WHEREAS, on June 13, 1997, PacifiCorp announced a cash tender offer to
acquire all of the outstanding shares of The Energy Group PLC (the
"Acquisition"); and
WHEREAS, PacifiCorp is engaged in the generation of electricity, the
transmission of electricity, wholesale electricity sales, and retail electricity
sale, and
<PAGE>
WHEREAS, The Energy Group PLC ("TEG"), through its subsidiary Peabody
Holding Company, Inc. ("Peabody") owns all of the voting securities of Peabody
Western Coal Company ("PWCC");
WHEREAS, the Commission is now investigating the Acquisition to determine
whether it would violate any of the statutes enforced by the Commission; and
WHEREAS, if the Commission accepts the attached Agreement Containing
Consent Order, which would require the divestiture of PWCC, and Respondents to
cease and desist from certain conduct, the Commission must place the Consent
Order on the public record for a period of at least sixty (60) days and may
subsequently withdraw such acceptance pursuant to the provisions of Section 2.34
of the Commission's Rules; and
WHEREAS, the Commission is concerned that if an understanding is not
reached, preserving the status quo ante of PWCC as defined in Paragraph I.D. of
the Consent Order during the period prior to the final acceptance and issuance
of the Consent Order by the Commission (after the 60-day public comment period),
divestiture resulting from any proceeding challenging the legality of the
Acquisition might not be possible, or might be less than an effective remedy;
and
WHEREAS, the Commission is concerned that if the Acquisition is
consummated, it will be necessary to preserve the Commission's ability to
require the divestiture of PWCC, as described in Paragraph I.D. of the Consent
Order, and the Commission's right to have PWCC continue as a viable competitor
independent of PacifiCorp ; and
WHEREAS, if the Commission determines to finally accept the consent Order,
it is necessary to hold separate PWCC to protect interim competition pending
divestiture or other relief; and
WHEREAS, the purpose of the Hold Separate Agreement and the Consent Order
is:
1. to preserve PWCC as a viable and competitive, independent business
pending the divestiture required by the Consent Order;
2. to remedy any anticompetitive effects of the Acquisition; and
3. to preserve PWCC as an ongoing and competitive entity engaged in the
same business in which it is presently engaged until divestiture is
achieved; and
WHEREAS, PacifiCorp's entering into this Hold Separate Agreement shall in
no way be construed as an admission by PacifiCorp that the Acquisition is
illegal; and
WHEREAS, PacifiCorp understands that no act or transaction contemplated by
this Hold Separate Agreement shall be deemed immune or exempt from the
provisions of the
2
<PAGE>
antitrust laws or the Federal Trade Commission Act by reason of anything
contained in this Hold Separate Agreement.
NOW, THEREFORE, upon understanding that the Commission has not yet
determined whether the Acquisition will be challenged, and in consideration of
the Commission's agreement that at the time it accepts the Consent order for
public comment it will grant early termination of the Hart-Scott-Rodino waiting
period, the Parties agree as follows:
1. PacifiCorp agrees that from the date PacifiCorp acquires control of TEG
("Control Date") until the earliest of the dates listed in Paragraphs 1.a, 1.b
or 1.c, PacifiCorp, then including TEG, Peabody and PWCC, each will comply with
the provisions of this Agreement:
a. ten (10) days after the Commission withdraws its acceptance of
the Consent Order pursuant to the provisions of Section 2.34 of
the Commission's Rules; or
b. the day after the divestiture required by the Consent Order has
been completed; or
c. Expiration of the Consent Order.
2. PacifiCorp agrees to execute and be bound by the attached Consent Order
and to comply, from the date this Hold Separate Agreement is accepted by the
Commission for public comment, with the provisions of the Consent Order as if it
were final.
3. The terms capitalized herein shall have the same definitions as in the
Consent Order.
4. To ensure the complete independence and viability of PWCC and to ensure
that no competitive information is exchanged between PWCC and PacifiCorp or
Peabody and PacifiCorp, PacifiCorp agrees that from the Control Date until the
earliest of the dates listed in Paragraphs 1.a, 1.b, or 1.c, PacifiCorp, then
including TEG and Peabody, shall hold PWCC as it is constituted separate and
apart on the following conditions:
a. PWCC shall be held separate and apart and shall be operated
independently of PacifiCorp, TEG and Peabody (meaning here and
hereinafter, PacifiCorp, TEG and Peabody excluding PWCC and
excluding all personnel connected with PWCC as of the date this
Hold Separate Agreement was signed) except to the extent that
PacifiCorp, TEG and Peabody must exercise direction and control
over PWCC to assure compliance with this Hold Separate Agreement
or the Consent Order and except as otherwise permitted by this
Agreement.
3
<PAGE>
b. PacifiCorp, TEG and Peabody shall maintain the marketability,
viability, and competitiveness of PWCC and shall not cause or
permit the destruction, removal, wasting, deterioration, or
impairment of PWCC except in the ordinary course of business and
except for ordinary wear and tear, and it shall not sell,
transfer, encumber (other than in the normal course of business),
or otherwise impair the marketability, viability or
competitiveness of PWCC.
c. PacifiCorp shall appoint a knowledgeable person from among the
top management of PWCC to manage and maintain PWCC on a day to
day basis during the term of the Hold Separate Agreement. The
manager shall have exclusive management and control of PWCC, and
shall manage PWCC independently of PacifiCorp's other businesses.
d. PacifiCorp shall elect a new five-person board of directors of
PWCC ("New Board") prior to, or concurrently with, transfer of
the TEG shares to PacifiCorp. PacifiCorp may elect the directors
to the New Board; provided, however, that such New Board shall
consist of at least two outside directors neither previously nor
currently employed by PacifiCorp; one officer of PWCC; and a
maximum of two PacifiCorp financial officers or comparable
knowledgeable persons who have no direct involvement with
PacifiCorp's electric operations. Except for the PacifiCorp
directors, PacifiCorp shall not permit any officer, employee, or
agent of PacifiCorp, TEG or Peabody also to be an officer,
employee or agent of PWCC. Each director shall enter into a
confidentiality agreement agreeing to be bound by the terms and
conditions set forth in Attachment A, appended to this Hold
Separate Agreement. The Board shall meet monthly during the
course of the Hold Separate Agreement, and as otherwise
necessary. Meetings of the Board during the term of the Hold
Separate Agreement shall be audio recorded, and the recording
shall be retained for two (2) years after the termination of the
Hold Separate Agreement.
e. All material transactions, out of the ordinary course of business
and not precluded by Paragraph 4 hereof, shall be subject to a
majority vote of the PWCC Board of Directors.
f. PacifiCorp, TEG and Peabody shall not exercise direction or
control over, or influence directly or indirectly, PWCC;
provided, however, that PacifiCorp may exercise such direction
and control over PWCC as is necessary to assure compliance with
this Hold Separate Agreement, the Consent Order and with all
applicable laws and as otherwise provided in this Hold Separate
Agreement.
4
<PAGE>
g. Except as required by law, and except to the extent that
necessary information is exchanged in the course of defending
investigations or litigation, obtaining legal advice, complying
with this Hold Separate Agreement or the Consent Order or
negotiating agreements to divest assets, PacifiCorp, TEG and
Peabody shall not receive or have access to, or the use of, any
material confidential information of PWCC, nor shall PWCC receive
or have access to, or the use of, any material confidential
information about PacifiCorp. Peabody may receive on a regular
basis from PWCC aggregate financial information necessary and
essential to allow PacifiCorp to file financial reports, tax
returns, and personnel reports. Any such information that is
obtained pursuant to this subparagraph shall be used only for the
purposes set forth in this subparagraph. ("Material confidential
information," as used herein, means competitively sensitive or
proprietary information, including, but not limited to,
information concerning sales of coal to PWCC customers, not
independently known to:
1. PacifiCorp, with regard to PWCC from sources other than PWCC
or its employees or Directors; or
2. The Directors or PWCC or its employees, with regard to
PacifiCorp, from sources other than PacifiCorp.)
h. Except as is permitted by this Hold Separate Agreement, the
PacifiCorp Directors shall not receive any PWCC material
confidential information and shall not disclose any such
information obtained through their involvement with PWCC to
PacifiCorp or use it to obtain any advantage for PacifiCorp. The
PacifiCorp Directors shall participate in matters that come
before the Board only for the limited purpose of considering any
capital investment of over $500,000, approving any proposed
budget and operating plans, authorizing dividends and repayment
of loans consistent with the provisions hereof, reviewing
material transactions, and carrying out PacifiCorp's
responsibilities under the Hold Separate Agreement and the
Consent Agreement. Except as permitted by the Hold Separate
Agreement, the PacifiCorp Directors shall not participate in any
matter, or attempt to influence the votes of the other directors
on the PWCC Board with respect to matters that would involve a
conflict of interest between PacifiCorp and PWCC.
i. PacifiCorp shall not remove members of the PWCC Board except for
cause. PacifiCorp shall not change the composition of the
management of PWCC, except that the Board of Directors shall have
the power to
5
<PAGE>
remove management employees for unsatisfactory performance or for
cause.
j. PacifiCorp and Peabody shall take such actions as are reasonably
necessary to provide tax, accounting, data processing and other
support services to PWCC as are provided by Peabody as of the
date of this Hold Separate Agreement. Such PacifiCorp or Peabody
personnel must retain and maintain all material confidential
information relating to PWCC on a confidential basis and, except
as is permitted by this Hold Separate Agreement, such persons
shall be prohibited from providing, discussing, exchanging,
circulating, or otherwise furnishing any such information to or
with any other person whose employment involves any other
PacifiCorp business. Such PacifiCorp or Peabody personnel shall
also execute a confidentiality agreement prohibiting the
disclosure of any material confidential information concerning
PWCC.
k. PWCC shall be staffed with sufficient employees to maintain the
viability and competitiveness of PWCC, which employees shall be
PWCC employees and may also be hired from sources other than
PacifiCorp. Each management employee of PWCC shall execute a
confidentiality agreement prohibiting the disclosure of any
material confidential information concerning PWCC. During the
period of this Hold Separate Agreement, PacifiCorp, TEG and
Peabody shall not make offers of employment to, or transfer the
position of, any person employed by PWCC or Peabody in connection
with PWCC or whose principal duties, during the year prior to the
date of the signing of this Hold Separate Agreement, related to
the management or operation of PWCC (except for any employee of
PWCC whose employment by PWCC is terminated without such
employee's consent). Nothing in this agreement shall be construed
to prevent any employee of TEG or Peabody whose principal duties,
during the year prior to the date of the signing of this Hold
Separate Agreement, related to the management or operation of
PWCC, from continuing in such a position during the period of the
Hold Separate Agreement. PacifiCorp and Peabody shall encourage
and facilitate employment by PWCC of such employees; shall not
offer any incentive to such employees to decline employment with
PWCC or accept other employment in PacifiCorp, or Peabody; and
shall remove any impediments that may deter such employees from
accepting employment with PWCC.
l. PacifiCorp shall circulate to the management employees of PWCC
and appropriately display a notice of this Hold Separate
Agreement and Consent Order in the form attached hereto as
Attachment A.
6
<PAGE>
m. PacifiCorp shall ensure that PWCC has sufficient working capital
to operate at a level not less than one hundred twenty percent
(120%) of the rate of operation in effect during the twelve (12)
months preceding the date of this Hold Separate Agreement.
Peabody shall have the right to cause PWCC to declare dividends
on a monthly basis equal to PWCC's excess cash not required for
such working capital.
n. The PWCC Directors shall serve at the cost and expense of
PacifiCorp. PacifiCorp shall indemnify the PWCC Directors against
any losses or claims of any kind that might arise out of their
involvement under this Hold Separate Agreement, except to the
extent that such losses or claims result from misfeasance, gross
negligence, willful or wanton acts, or bad faith by the PWCC
Directors.
o. The PWCC Directors shall have access to and be informed about all
companies who inquire about, seek or propose to buy PWCC.
p. Notwithstanding the provisions of Paragraph 3.g., companies who
undertake a due diligence process in the course of negotiations
to purchase PWCC, or any part thereof, may be accompanied and
assisted by either or both of the PacifiCorp Directors, in
addition to appropriate PWCC employees selected by the PWCC Board
of Directors. The PacifiCorp Directors may delegate tasks
relating to such due diligence to attorneys, accountants and/or
other financial employees of PacifiCorp who are not directly
engaged in the PacifiCorp electric generation operations;
provided, however, that such PacifiCorp employees, accountants
and attorneys shall execute a confidentiality agreement
prohibiting the disclosure of any PWCC material confidential
information.
5. Except as otherwise provided in the Consent Order or this Hold Separate
Agreement, as required for the purpose of tax return preparation, compliance
with any law or request from a revenue authority, or to the extent that
necessary information is exchanged in the course of evaluating and consummating
the Acquisition, defending government investigations or litigation, or
negotiating to dispose of assets, PacifiCorp shall ensure that from and after
the Control Date, PWCC shall not provide, disclose or otherwise make available
to PacifiCorp, TEG or Peabody any material confidential information. Provided,
however, that nothing in this Agreement shall limit or prohibit PacifiCorp and
PWCC from doing business on a nondiscriminatory basis with each other or with
any entity in which PacifiCorp or PWCC has an interest.
6. To the extent that this Hold Separate Agreement or the Consent Order
requires PacifiCorp to take, or prohibits PacifiCorp from taking, certain
actions that otherwise may be required or prohibited by contract, PacifiCorp
shall abide by the terms of this Hold Separate
7
<PAGE>
Agreement and the Consent Order and shall not assert as a defense such contract
rights in a civil penalty action brought by the Commission to enforce the terms
of this Hold Separate Agreement or the Consent Order.
7. Should the Federal Trade Commission seek in any proceeding to compel
PacifiCorp (meaning here and hereinafter PacifiCorp including PWCC) to divest
itself of PWCC or to seek any other injunctive or equitable relief for any
failure to comply with the Consent Order or this Hold Separate Agreement, or in
any way relating to the Acquisition, PacifiCorp shall not raise any objection
based upon the expiration of the applicable Hart-Scott-Rodino Antitrust
Improvements Act waiting period or the fact that the Commission has permitted
the Acquisition. PacifiCorp also waives all rights to contest the validity of
this Agreement.
8. For the purpose of determining or securing compliance with this
Agreement, subject to any legally recognized privilege, and upon written request
with reasonable notice to PacifiCorp made to its principal office, PacifiCorp
(and after the Control Date, PacifiCorp including TEG and Peabody) shall permit
any duly authorized representative or representatives of the Commission:
a. During the office hours of PacifiCorp, and in the presence of
counsel, access to all facilities and access to inspect and copy
all books, ledgers, accounts, correspondence, memoranda, and
other records and documents in the possession or under the
control of PacifiCorp relating to compliance with this Agreement;
and
b. Upon five (5) days notice to PacifiCorp and without restraint or
interference from it, to interview officers or employees of
PacifiCorp who may have counsel present, regarding any such
matters.
9. This Hold Separate Agreement shall terminate and shall have no further
effect thirty (30) days after PacifiCorp gives the Commission written
notification that it has abandoned the Acquisition and withdraws its
notification under 16 C.F.R. ss. 803.1 with respect to the Acquisition.
8
<PAGE>
10. This Hold Separate Agreement shall not be binding on the Commission
until it is approved by the Commission.
Dated: February __, 1998
PACIFICORP
By: DENNIS P. STEINBERG
----------------------------
Dennis P. Steinberg
FEDERAL TRADE COMMISSION
By:
----------------------------
Deborah A. Valentine
General Counsel
9
<PAGE>
ATTACHMENT A
NOTICE OF DIVESTITURE AND
REOUIREMENT FOR CONFIDENTIALITY
-------------------------------
PacifiCorp and The Energy Group PLC ("TEG") have entered into a Consent
Agreement and Agreement to Hold Separate with the Federal Trade Commission
("Commission") relating to the divestiture of the Peabody Western Coal Company
("PWCC"). Until after the Commission's Order becomes final and PWCC is divested,
PWCC must be managed and maintained as a separate, ongoing business, independent
of all other TEG businesses. All competitive information relating to PWCC must
be retained and maintained by the persons involved in PWCC on a confidential
basis and such persons shall be prohibited from providing, discussing,
exchanging, circulating, or otherwise furnishing any such information to or with
any other person whose employment or agency involves any other TEG business.
Similarly, all such persons involved in any other TEG business shall be
prohibited from providing, discussing, exchanging, circulating or otherwise
furnishing competitive information about such business to or with any person
whose employment or agency involves PWCC.
Any violation of the Consent Agreement or the Agreement to Hold Separate,
incorporated by reference as part of the Consent Order, may subject TEG to civil
penalties and other relief as provided by law.
Exhibit (c)(3)
700 NE Multnomah
Portland, Oregon 97232
(503) 731-2000
FAX (503) 731-2199
PACIFICORP
The Energy Group plc
117 Piccadilly
London, W1V 9FJ
England
Gentlemen:
In consideration of execution by The Energy Group PLC ("TEG"), Peabody
Holding Company, Inc., and Peabody Western Coal Company of the Agreement
Containing Consent Order ("Consent Agreement") with the Federal Trade Commission
("FTC") in connection with PacifiCorp's proposed offer to acquire all of the
outstanding shares of TEG (the "Offer"), PacifiCorp agrees that if the Offer
lapses, is withdrawn by PacifiCorp, or terminates, PacifiCorp will provide the
FTC with the notice required under Paragraph X of the Consent Agreement, will
sell all voting securities of TEG in excess of $15 million as valued under the
Hart-Scott-Rodino Rules, and will withdraw its notification under 16 CFR ss.
803.1 with respect to the Offer within 90 days after the date the Offer lapses,
is withdrawn, or terminates.
Very truly yours,
RICHARD T. O'BRIEN
-----------------------------------------
Richard T. O'Brien
Senior Vice President and
Chief Financial Officer
