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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of report (date of earliest event reported):
December 7, 1998
PACIFICORP
(Exact name of registrant as specified in its charter)
State of Oregon 1-5152 93-0246090
(State of Incorporation) (Commission (I.R.S. Employer
File No.) Identification No.)
700 N.E. Multnomah, Suite 1600, Portland, Oregon 97232-4116
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(503) 813-7200
No Change
(Former Name or Former Address, if changed since last report)
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Item 5. OTHER EVENTS
Information contained in the news release of PacifiCorp issued on
December 7, 1998 concerning a merger agreement between the Company, Scottish
Power plc and NA General Partnership, a wholly owned subsidiary of Scottish
Power plc.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibit.
99. PacifiCorp news release issued December 7, 1998.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PACIFICORP
(Registrant)
By: ROBERT R. DALLEY
__________________________________
Robert R. Dalley
Controller
(Chief Accounting Officer)
Date: December 8, 1998
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INDEX TO EXHIBITS
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EXHIBIT DESCRIPTION PAGE
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99 PacifiCorp news release issued December 7, 1998.
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EXHIBIT 99
_____________________________________________________________________________
PACIFICORP NEWS RELEASE
_____________________________________________________________________________
SCOTTISHPOWER AND PACIFICORP ANNOUNCE
MERGER AGREEMENT
Glasgow, Scotland and Portland, Oregon, December 7, 1998 - ScottishPower
(SPW - LN; SPI - NYSE), a leading United Kingdom multi-utility, and PacifiCorp
(PPW - NYSE), the western United States electric utility, today announced a
definitive agreement to merge the two companies.
Under the terms of the agreement, each PacifiCorp share will be
exchanged tax-free for 0.58 American Depositary Receipts or 2.32 ordinary
shares of ScottishPower. Before allowance for any buyback, this will give
ScottishPower shareholders approximately 64% and current PacifiCorp
shareholders approximately 36% ownership in the combined group.
Based on a share price of 650p, the ScottishPower reference share price
used in negotiations, the merger terms imply a price per PacifiCorp share of
$25 1/8. Based on the closing price of ScottishPower on December 4, 1998, the
last business day prior to this announcement, the merger terms imply a value
for the equity of PacifiCorp of $7.9 billion.
The combined company, which will be known as ScottishPower, will have
some 7 million customers and 23,500 employees worldwide. It will be
headquartered in Glasgow. PacifiCorp will continue to operate under its
current name and the combined group's U.S. head office will be in Portland,
Oregon.
PacifiCorp's Chairman and Chief Executive Officer Keith McKennon, said,
"We believe this merger is in the best interests of our customers and delivers
good value to our shareholders. PacifiCorp has a proud history of service to
our customers at prices well below the national average.
"With ScottishPower, we will be able to pursue more effectively our
strategy of concentrating on our core electricity business, improving
performance and efficiency and increasing service levels for our customers."
ScottishPower's Chief Executive Officer Ian Robinson, said, "PacifiCorp
is an ideal partner for ScottishPower. The company combines an attractive
asset base and customer profile with a core utility business offering
substantial scope for improved efficiency. It is vertically integrated and in
an economically attractive region.
"ScottishPower believes that it will create significant value for
shareholders by transferring its proven skills in improving customer service
and reducing costs to PacifiCorp's businesses."
The merger is expected to enhance ScottishPower's earnings per share
before goodwill amortization from the first full year following the close of
the transaction.
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ScottishPower's senior management in the enlarged company structure will
remain in place. Murray Stuart will continue to be Chairman of ScottishPower,
Robinson will be Chief Executive and Ian Russell will be Deputy Chief
Executive and Finance Director.
Alan Richardson, currently Managing Director, Power Systems at
ScottishPower, will become the new Chief Executive Officer of PacifiCorp.
Richard O'Brien will become President and continue as Chief Operating Officer
of PacifiCorp.
McKennon, currently Chairman, Chief Executive Officer and President of
PacifiCorp, will join the ScottishPower board as deputy Chairman, together
with two non-executive directors from PacifiCorp. After completion of the
transaction, the board of the combined group will consist of 13 directors.
The PacifiCorp board will be reconstituted as an executive only board,
chaired by Robinson, with ScottishPower having the majority of seats. A
PacifiCorp advisory board will be established to foster continuing strong
links to the local communities.
An interim Joint Executive Committee, jointly chaired by Robinson and
McKennon will be established to ensure a smooth transition in the period
between announcement and closing.
While ScottishPower does expect some workforce reductions after
completion of the merger, ScottishPower has a strong commitment to working in
partnership with employees and work groups represented by unions and believes
that employees are key stakeholders in the combined company's future success.
ScottishPower will seek to minimize workforce effects of the merger, primarily
through reduced hiring, attrition, employee re-training and appropriate
separation programs. All union contracts will be honored.
The merger is subject to approval by the shareholders of both companies,
the U.S. Federal Energy Regulatory Commission, the regulatory commissions in
certain of the states served by PacifiCorp and Australian regulatory
authorities. It is also subject to clearance under the provisions of the
Hart-Scott-Rodino Antitrust Improvements Act. The companies expect to have
shareholder meetings in the Spring of 1999. The transaction is expected to
close during the Fall of 1999.
The merger agreement provides for a fee of $250 million to be paid by
either company if the agreement is terminated under certain circumstances.
ScottishPower's ordinary shares will continue to be listed in London and
ScottishPower's American Depositary Receipts, each representing four ordinary
shares, will continue to be listed in New York. PacifiCorp shareholders can
choose whether they receive ADRs or ordinary shares of ScottishPower.
The aggregate value of PacifiCorp is $12.8 billion including the
assumption of $4.9 billion in net debt.
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ScottishPower intends to implement a share buyback program of up to
approximately $835 million following approval by both sets of shareholders,
but prior to completion of the transaction. The PacifiCorp $750 million share
repurchase program previously announced will not be pursued. No shares have
been repurchased under the program.
ScottishPower's stated aim is to achieve 7-8 percent real dividend
growth annually until at least the UK regulatory reviews in the year 2000.
The rate of dividend growth will be reviewed in light of the outcome of these
regulatory reviews. Following completion of the transaction, ScottishPower
intends to move to quarterly reporting and payment of quarterly dividends.
Commenting on the merger, McKennon said, "As part of ScottishPower, we
have an exciting future with the opportunity to take the best from both our
businesses and apply them in the UK, the U.S. and Australia."
Robinson commented, "We share a strong commitment to the communities we
serve and are demonstrating this through a $5 million contribution to the
PacifiCorp Foundation. We have both invested significant resources to enhance
the environment, through energy efficiency programs and our commitment to such
green resources as wind power."
ScottishPower, a leading UK multi-utility company, has a proven track
record of delivering value to shareholders through improving operating
efficiencies and integrating acquisitions. ScottishPower serves 5 million
customers - about one in five British households. The company's activities
span the generation, transmission, distribution and supply of electricity, gas
supply, water and wastewater services and telecommunications. ScottishPower
is one of the largest industrial groups in the UK with a market capitalization
of $13.5 billion.
PacifiCorp serves 1.4 million electricity customers in Oregon, Utah,
Wyoming, Washington, Idaho and California. It has one of the most extensive
transmission systems in the U.S. and owns 8,300 megawatts of low-cost thermal
and hydroelectric generation. PacifiCorp also serves 550,000 electricity
customers in the Australian states of Victoria and New South Wales.
In addition to its regulated U.S. retail electricity business,
PacifiCorp is the largest investor-owned utility in the wholesale power market
in the West, selling bulk power to more than 60 utilities.
All currency conversions between Pounds Sterling and US dollars have
been made at a rate of pound sterling 1.00 = $1.67.
ScottishPower has been advised by Morgan Stanley & Co. Limited and
PacifiCorp has been advised by Salomon Smith Barney International.
###
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INQUIRIES:
SCOTTISH POWER PLC (44 141) 248 8200 / (44 171) 224 0303
Ian Robinson Chief Executive
Ian Russell Deputy Chief Executive and Finance Director
Colin McSeveny Media Manager
Andrew Grant Brunswick Group (44 171) 404 5959
PACIFICORP
Keith McKennon Chairman, Chief Executive Officer and President
Richard O'Brien Chief Operating Officer
FOR INVESTORS
Scott Hibbs (503) 813 7222
Angela Hult (503) 813 7234
FOR MEDIA
Leslie Carlson (503) 813 7282
Dave Kvamme (503) 813 7279
