UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
January 7, 2000
(Date of earliest
event reported)
PECO ENERGY COMPANY
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 1-1401 23-0970240
(State or other (Commission (IRS Employer
jurisdiction of file number) Identification
incorporation) Number)
230l Market Street, Philadelphia, Pennsylvania 19101
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(215) 841-4000
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Item 5. Other Events
On January 7, 2000, the Company issued the following press release:
PECO ENERGY AND UNICOM AGREE TO ACCELERATE REPURCHASE OF $1.5 BILLION
IN STOCK AND ADJUST SHAREHOLDER CONSIDERATION
Chicago, IL and Philadelphia, PA--Unicom Corporation (NYSE: UCM) and PECO
Energy Company (NYSE: PE) today announced that their respective Boards of
Directors have approved the accelerated repurchase of $1.5 billion in stock
prior to the closing of their previously announced merger. The acceleration
takes advantage of the companies' lower current stock prices. Additionally, the
Boards adjusted the consideration to be received by shareholders in the merger
forming Exelon Corporation.
Unicom intends to repurchase approximately $1.0 billion of its outstanding
shares and PECO Energy intends to repurchase approximately $500 million of its
outstanding shares prior to closing. At closing, Unicom shareholders will
receive 0.875 shares of Exelon common stock and $3.00 in cash for each of their
shares of Unicom common stock; the cash consideration component totals
approximately $500 million. PECO Energy shareholders will receive one share of
Exelon common stock for each share of PECO Energy common stock that they own.
The cash election feature of the transaction has been eliminated. Overall, the
revised merger consideration is designed to be comparable to that of the
original agreement.
"Shareholders are getting enhanced value in Exelon, while retaining the
benefits of the original agreement. These pre-closing stock repurchases reflect
our belief that Unicom and PECO Energy represent tremendous values at current
stock prices, and our certainty in the success of this merger of equals," said
Unicom Chairman, President and CEO John W. Rowe.
"Even as we pursue regulatory approvals, we continue to take advantage of
opportunities to increase shareholder value. We believe that these steps will
have a positive effect on Exelon's earnings per share and not change the
anticipated closing date of the merger," added Corbin A. McNeill, Jr., Chairman,
President and CEO of PECO Energy.
These actions by the Boards relate only to the stock repurchase and
shareholder consideration aspects of the merger. The revised consideration
results in an increase from $1.5 billion to $2.0 billion in the amount of cash
used to reduce outstanding shares. Further, the revision may result in a
reduction in merger-related goodwill for accounting purposes. Financial advisors
to each company have delivered fairness opinions in light of the revised
transaction.
<PAGE>
The other elements of the PECO Energy and Unicom merger remain unchanged,
including provisions regarding Board and senior management composition,
headquarters and the corporate structure of the transaction.
PECO Energy Company is an electric and gas utility with 6,500 employees
serving 1.5 million electric customers in the five-county Philadelphia region
and more than 400,000 natural gas customers. It has aggressively forged into the
deregulated marketplace, trading wholesale power 24 hours a day in 47 states and
Canada, purchasing and operating nuclear generation and establishing unregulated
ventures in retail energy sales, telecommunications and utility infrastructure
management.
Based in Chicago, Unicom Corporation is the parent of Commonwealth Edison
Company ("ComEd"), which provides electric service across northern Illinois,
serving approximately 3.4 million customers or 70 percent of the state's
population. ComEd has the largest nuclear fleet in the country, with a total of
9,400 megawatts from 10 generating units at five sites. With more than $7
billion in revenues in 1998 and nearly 15,000 employees, Unicom is also the
parent of Unicom Enterprises, Inc., the holding company for its unregulated
subsidiaries.
This press release contains certain forward-looking statements within the
meaning of the safe-harbor provisions of the Securities Exchange Act of 1934;
these forward-looking statements are subject to various risks and uncertainties.
The factors that could cause actual results to differ materially from the
projections, forecasts, estimates and expectations discussed herein may include
factors that are beyond the companies' ability to control or estimate precisely,
such as estimates of future market conditions, the behavior of other market
participants and the actions of Federal and State regulators. Other factors
include, but are not limited to, actions in the financial markets, weather
conditions, economic conditions in the two companies' service territories,
fluctuations in energy-related commodity prices, conversion activity, other
marketing efforts and other uncertainties. Other risk factors are detailed from
time to time in the two companies' SEC reports. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
the date of this press release. The companies do not undertake any obligation to
publicly release any revisions to these forward-looking statements to reflect
events or circumstances after the date of this press release.
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SIGNATURES
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 hereunto duly authorized.
PECO ENERGY COMPANY
\S\ Jean H. Gibson
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Vice President & Controller
January 7, 2000
