- --------------------------------------------------------------------------------
SCHEDULE 14A
(Rule 14A-101)
Information Required in Proxy Statement
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only
[ ] Definitive Proxy Statement (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[X] Soliciting Material Pursuant to Rule 14a-11 (c)
or Rule 14a-12
IES INDUSTRIES INC.
(Name of Registrant as Specified in Its Charter)
MIDAMERICAN ENERGY COMPANY
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item
22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[X] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
- --------------------------------------------------------------------------------
-1-
<PAGE>
[The following is a press release by MidAmerican Energy issued to the public]
MidAmerican News Release
Energy
Contacts:
Keith Hartje(Media)
(515) 281-2575
Sue Rozeman(Investors)
(515) 281-2250
Chuck Burgess/Adam Miller
The Abernathy MacGregor Group
(212) 371-5999
MIDAMERICAN ENERGY COMPANY RELEASES OCTOBER 1995
CORRESPONDENCE WITH IES INDUSTRIES
-------------------------------------
DES MOINES, IA (August 6, 1996)--MidAmerican Energy Company (NYSE:MEC) today
released the correspondence it had with IES Industries (NYSE: IES) prior to
MidAmerican Energy's $1.17 billion merger proposal on August 4, 1996.
MidAmerican's proposal calls for a cash and stock merger with IES, comprised of
40% cash and 60% MidAmerican common stock. IES common shareholders receiving
cash will receive $39 per share of MidAmerican common stock per share of IES
common stock. A MidAmerican/IES combination would provide shareholders of IES a
21% premium over the value of the consideration they would receive in a proposed
merger with WPL Holdings and Interstate Power Co., based on closing stock prices
on August 2, 1996, along with a 42% dividend increase over the dividend proposed
in the Wisconsin transaction.
The Full text of the correspondence follows.
<PAGE>
SHARES OF IES INDUSTRIES INC. ("IES')
COMMON STOCK HELD BY MIDAMERICAN ENERGY COMPANY ("MIDAMERICAN"),
ITS DIRECTORS AND EXECUTIVE OFFICERS AND CERTAIN EMPLOYEES, OTHER
REPRESENTATIVES OF MIDAMERICAN AND
CERTAIN OTHER PERSONS WHO MAY SOLICIT PROXIES, AND
CERTAIN TRANSACTIONS BETWEEN ANY OF THEM AND IES
MidAmerican may solicit proxies against the IES/WPL Holdings,
Inc./Interstate Power Company merger. The participants in this solicitation may
include MidAmerican, the directors of MidAmerican (John W. Aalfs, Stanley J.
Bright, Robert A. Burnett, Ross D. Christensen, Russell E. Christiansen, John W.
Colloton, Frank S. Cottrell, Jack W. Eugster, Mel Foster, Jr., Nolden Gentry,
James M. Hoak, Jr., Richard L. Lawson, Robert L. Peterson, Nancy L. Seifert, W.
Scott Tinsman, Leonard L. Woodruff), and the following executive officers and
employees of MidAmerican or its subsidiaries: Phil G. Lindner (Group VP Corp.
Services and Chief Financial Officer), John A. Rasmussen (Group VP and General
Counsel), Ron W. Stepien (VP Strategic Planning & Corp. Dev.), Larry M. Smith
(Controller), Paul J. Leighton (VP & Corporate Secretary), J. Sue Rozema (VP
Investor Relations), Keith D. Hartje (Mgr. Corp. Communications), Alan L. Wells
(Mgr. Corp. Dev. & Strategy), Jack L. Alexander (Manager Human Resources), Bev
A. Wharton (President Gas Division), Lynn K. Vorbrich (President Electric
Division), Dave J. Levy (VP & Chief Information Officer), Charlene A. Osier
(Mgr. Shareholder Services), Paul A. Bjork (Shareholder Admin.), Jackie A.
Fulhart (Senior Shareholder Analyst), Marv E. Kingery (Shareholder Analyst), L.
Jene Spurgin (IR Coordinator), Tom C. Foster (Finance & Investment Admin.), Jim
C. Galt (Mgr. Financial Planning), Rick T. Tunning (Mgr. Corp. Acctg.), John P.
Palmolea (Sr. Accountant), Merlyn F. Wiese (Senior Financial Analyst), Jim C.
Parker (Senior Bulk Power Engineer), Jim J. Howard (VP Gas Admin. Services),
Patrick A. Kirchner (Attorney), Maureen E. Sammon (Mgr. Benefits), Dave C. Caris
(Manager Governmental Affairs), Garry W. Osborne (Strategic Planner), George L.
Phillips (Mgr. Corp. Performance), Tom C. Watt (Mgr. Waterloo District), Ginger
A. Dasso (Mgr. Mississippi Valley), Greg B. Elden (Mgr. Siouxland District), Bob
L. Lester (Mgr. Des Moines District), Les A. Juon (Mgr. Sioux City District),
John A. Harvey (Mgr. Distribution Operations Support), Annette J. Johnston (Mgr.
Customer Support), Chris M. Swanson (Mgr. Cedar Valley District), Ron E. Unser
(Mgr. Quad Cities District), Jeanette I. Lose (Mgr. Credit), Barb J. Anderson
(Executive Assistant), Bill G. Stowe (Mgr. Electric Operations), Dave L.Graham
(Mgr. Electric Energy Services), Jim E. Wilson (Mgr. Regulatory Affairs), Chuck
H. Golliher (Mgr. Purchasing), Sally A. Robinson (Supv. Office Services), John
F. McCarroll (Media and IR Coordinator), Kim K. Koster (Regional Communications
Coordinator), Kelly I. Sankey (Customer Communications Coordinator), Tim D.
Grabinsky (Regional Communications Coordinator), Jodi E. Bacon (Manager HR
Communications), Suzan M. Stewart (Mgr. Attorney Gas Law Dept.), Chuck R.
Montgomery (Sr. Attorney), Steve R. Weiss (Sr. Attorney), Terry R. Fox
(Attorney), J. Chris Cook (Attorney), Barb A. Pollastrini (Employee
Communications Coordinator), Karen P. Johnson (Communications Specialist), Mary
C. Nelson (Labor Relations Attorney), Janet H. Trentmann (Corporate HR
Consultant), Tom Sweeney (Supv. Employment & Development), Gary Richardson (Mgr.
Electric Operations), John J. Cappello (VP Marketing).
As of the date of this communication, MidAmerican had no security
holdings in IES. Regina Rae Huggins, a person who will solicit proxies, is the
beneficial owner of four (4) shares of common stock, no par value, of IES (the
"IES" Common Stock"). John W. Colloton's wife is the beneficial owner of 250
shares of IES Common Stock with respect to which Mr. Colloton disclaims any
beneficial ownership. Leonard L. Woodruff is the beneficial owner of 100 shares
of IES Common Stock. Jackie A. Fulhart owns 305 shares of IES Common Stock.
Chris M. Swanson's wife owns 12 shares of IES Common Stock.
<PAGE>
Other than as set forth herein, as of the date of the communication,
neither MidAmerican nor any of its directors, executive officers or other
representatives or employees of MidAmerican, or other persons known to
MidAmerican, who may solicit proxies has any security holdings in IES except
that MidAmerican has not yet been able to obtain any information with respect to
the security holdings of IES, if any, of Paul A. Bjork, Marv E. Kingery, Ginger
A. Dasso, Bob L. Lester, Chuck H. Golliher, Sally A. Robinson, Kim K. Koster,
Chuck R. Montgomery, Steve R. Weiss or John J. Cappello. MidAmerican disclaims
beneficial ownership of any securities of IES held by any pension plan of
MidAmerican or by any affiliate of MidAmerican.
Although Dillon Read & Co. Inc. ("Dillon Read"), financial advisors to
MidAmerican, do not admit that they or any of their directors, officers,
employees or affiliates are a "participant," as defined in Schedule 14A
promulgated under the Securities Exchange Act of 1934 by the Securities and
Exchange Commission, or that such Schedule 14A requires the disclosure of
certain information concerning Dillon Read, Ken Crews (Managing Director), James
Hunt (Managing Director), Jeff Miller (Vice President), Jason Sweet (Managing
Director), Forest Williams (Analyst), Jim Brandi (Managing Director), and Elliot
Merrill (Analyst), in each case of Dillon Read, who may assist MidAmerican in
such a solicitation. Dillon Read engages in a full range of investment banking,
securities trading, market-making and brokerage services for institutional and
individual clients. In the normal course of their business, Dillon Read may
trade securities of IES for their own account and the account of their customers
and, accordingly, may at any time hold a long or short position in such
securities. As of the most recent practicable date prior to the date hereof as
such information was available, Dillon Read did not hold any securities of IES.
Except as disclosed above, to the knowledge of MidAmerican, none of
MidAmerican, the directors or executive officers of MidAmerican or the employees
or other representatives of MidAmerican named above has any interest, direct or
indirect, by security holdings or otherwise, in IES.
<PAGE>
[Letterhead of MidAmerican Energy Company]
October 3, 1995
CONFIDENTIAL
------------
Mr. Lee Liu
Chairman and CEO
IES Utilities Inc.
200 First Street, SE
Cedar Rapids, Iowa 52406
Dear Lee:
You will recall the conversation we had following the August meeting of
the McLeod Board in Cedar Rapids. I have discussed our conversation with Stan
Bright and he shares my thoughts. You and I were both somewhat rushed so we wish
to take this opportunity to express our conviction that combining our two
companies will result in significant savings and benefits.
As I recall, you indicated that your Board of Directors wanted you to
concentrate on your restructuring of IES, and that a discussion between us was
not timely. We would urge you to consider a strategic restructuring process
through a combination of IES with MidAmerican Energy Company as part of your
strategy. We have shared these thoughts with the Executive Committee of our
Board. They have expressed great enthusiasm for the combination we are proposing
and we assume your Directors will also be enthusiastic.
The activity around us with the NSP/Wisconsin Electric and Union
Electric/Central Illinois merger announcements brings close to home the arrival
of some very large players in the upper midwest as mergers have begun to
transcend state boundaries and contiguous service territories.
When discussions were held to consider exchange of properties between IPS
and IES, it was apparent that there are significant opportunities for increased
efficiencies because of overlapping and contiguous service territories. A strong
Iowa-based utility resulting from the combination of our current companies can
bring much greater value to our customers and our shareholders. We can continue
to have a major impact on the economy of Iowa
<PAGE>
Mr. Lee Liu
October 3, 1995
Page Two
and make sure that we play an integral part in the growth of existing industry
as well as attracting new business.
Our two companies have a strong utility infrastructure, competitive
electric production costs, and a highly efficient delivery system. With the
restructuring each of us are going through we should be poised for very strong
performance in creation of value. MidAmerican Energy has identified well over
$500 million of savings and has already begun to realize these benefits. These
results are indicative of the magnitude of the potential benefits we could
expect to realize by concluding the suggested transaction.
We believe a combination of our two fine companies is the right thing to
do and that discussions would lead to a concluded transaction. Our discussion
should consider the strategic vision we each have for our companies as well as
the basic principles that would be necessary for us to consider moving forward.
We are prepared to move very quickly to reach an agreement and to conclude a
transaction. Both companies have a proven track record in these types of
transactions.
As you know, we have demonstrated a strong commitment to the communities
we serve and to economic development throughout our service territory. We
observe a similar commitment at IES.
Lee, your leadership has been appropriately recognized in Cedar Rapids and
throughout Iowa because of the strong support you have given to Iowa business
development. It is our opinion that a combination of our companies would further
enhance that support and your leadership.
If we seem impatient, it is because of a sense of urgency that is enhanced
with each major utility merger announcement. When the dust settles we would like
to see an Iowa-based utility emerge as a strong regional force in the industry.
We will give you a call to set up this meeting.
Sincerely,
/s/ Russell Christiansen
/s/ Stanley J. Bright
<PAGE>
[Letterhead of IES Industries]
IES Industries Inc.
200 First Street S.E.
P.O. Box 351
Cedar Rapids, IA 52406-0351
Telephone 319 398-4411
Fax 319 398-4483
Lee Liu
Chairman of the Board, President
and Chief Executive Officer
October 6, 1995
Mr. Russell E. Christiansen
Mr. Stanley P. Bright
MidAmerican Energy Company
P.O. Box 9244
666 Grand Avenue
Des Moines, IA 50306-9244
Dear Russ and Stan:
Thank you for your letter of October 3, 1995 and your kind comments about me and
IES Industries Inc. I have discussed your letter with members of our Board of
Directors. At this time, our company is not interested in entering into
discussion with you relative to a possible combination transaction. Should these
circumstances change, please be assured that I will contact you.
Sincerely
s/s Lee Liu
<PAGE>
[Letterhead of MidAmerican Energy Company]
MidAmerican Energy Company
666 Grand Avenue
P.O. Box 657
Des Moines, Iowa 50303-0657
October 10, 1995
Mr. Lee Liu
Chairman and CEO
IES Industries
200 First Street, SE
Cedar Rapids, Iowa 52406
Dear Lee:
We appreciate your prompt response to our letter of October 3. We
understand the decision that you and members of your Board have reached not to
enter into discussions with us relative to a possible combination of our two
companies at this time. We are encouraged by your willingness to discuss a
merger if circumstances change.
Our keen interest in having discussions with you at the earliest possible
time reflects our deep conviction that a combination of IES and MidAmerican
would create great value for the shareholders of our two companies. Thus, we
will continue to review and analyze the benefits of the merger we have proposed.
As we complete this work we will be in a position to discuss our proposal with
you.
Sincerely,
/s/ Russel Christiansen
/s/ Stanley J. Bright
<PAGE>
[LETTERHEAD OF MIDAMERICAN ENERGY]
MidAmerican Energy Company
666 Grand Avenue
P.O. Box 657
Des Moines, Iowa 50303-0657
CONFIDENTIAL
October 23, 1995
Mr. Lee Liu
Chairman and CEO
IES Industries Inc.
200 First Street, SE
Cedar Rapids, IA 52406
Dear Lee:
As indicated in our October 10, 1995 letter to you, we have been reviewing
and analyzing the potential benefits that would result from merging our two
companies. Our initial review, using publicly available information, confirms
our belief that combining IES and MidAmerican makes good sense. Shareholders,
customers and communities served will derive great benefits from such a
combination.
The experience we have gained through our past successful mergers has
demonstrated to us the value of informal discussions prior to serious
negotiations of key merger issues. Such discussions between Chief Executive
Officers generally result in an understanding of the vision and expectations as
well as the strategy of each organization. As a result, it is possible to
develop the underlying principles that ultimately guide the way to a successful
merger. Although we have been disappointed that we have not had an opportunity
for such discussions with you, we remain firmly convinced that the combination
of our two companies to form a strong gas and electric utility is the right
thing to do.
Here is our reasoning:
* There are very significant opportunities for increased efficiencies
because of our contiguous and overlapping service territories. Our
common presence as energy service providers in Cedar Rapids,Ottumwa,
Storm Lake, Carroll, and other Iowa communities present many
opportunities for savings. See attached map.
<PAGE>
Mr. Lee Liu
October 23, 1995
Page Two
* Our generation facilities are strategically located and supported by
a strong transmission system that would integrate into a low-cost
highly reliable electric energy supply for all of the customers of
IES and MidAmerican.
* Our common focus on meeting the full energy needs of customers will
enable us to jointly develop additional products and services which
will be the foundation of success in the new, competitive market.
* The gas distribution systems' geographic locations are situated to
provide optimum service response time for emergency and routine
customer service.
* Electric distribution service centers for our rural and small
communities could be strategically located to improve customer
service response time at lower cost.
* These factors, as well as a number of others, lead us to the
conclusion that our merged company would be a strong and highly
competitive total energy provider for the region.
As you can see, a unilateral assessment with the benefit of external legal
and investment advisors of the benefits of a merger creates an impressive list
of opportunities. We know that you and your team could quickly add many more
opportunities to the list.
Based upon these points, and those we have mentioned in our letters to you
of October 3 and 10, 1995 (copies attached), we believe it is appropriate for us
to become more specific and definitive. Thus, on behalf of the Board of
Directors of MidAmerican Energy Company, we ask that you request your Board
grant us permission to make the following offer:
* MidAmerican and IES merge our two organizations after receipt of all
appropriate approvals.
* The transaction be structured as a merger of equals, recognizing
appropriate differences in size, market value of common stock, total
assets, etc.
<PAGE>
Mr. Lee Liu
October 23, 1995
Page Three
* The exchange ratio of common stock be established to provide a
premium to IES shareholders of 15% over its $26.875 market value at
closing on October 20, 1995. (Values are premised and conditioned on
29,290,660 outstanding shares of IES common stock.) The exchange
ratio would also result in higher dividends, greater earnings per
share and a lower payout ratio for the IES common shareholders.
* The combined company will continue to maintain a significant and
appropriate presence in Cedar Rapids.
* IES shareholders will have appropriate representation on the Board
of Directors.
* The structure of the company could be organized as an exempt holding
company.
* We would begin immediately to negotiate a definitive agreement, with
terms and conditions as the respective parties deem appropriate.
* Our proposal is conditioned upon completion of due diligence
satisfactory to each party.
* This proposal may be withdrawn by MidAmerican Energy Company at any
time.
Our request is made in the spirit of a genuine belief that IES and
MidAmerican Energy Company have an extraordinary and timely opportunity to build
on our mutual strengths. Because of our contiguous and overlapping service
territories, this combination produces unique opportunity for both IES and
MidAmerican Energy.
Lee, we urge you to meet with us to discuss our request. We are convinced
that meaningful discussion will result in a dynamic new enterprise that will
provide outstanding value to our customers and our shareholders.
Sincerely,
/s/ Russell E. Christiansen
/s/ Stanley J. Bright
<PAGE>
[LETTERHEAD OF IES INDUSTRIES]
200 First Street S.E.
P.O. Box 351
Cedar Rapids, IA 52406-0351
Telephone (319) 398-4411
FAX (319) 398-4483
Lee Liu
Chairman of the Board, President
And Chief Executive Officer
October 26, 1995
Mr. Russell E. Christiansen
Mr. Stanley P. Bright
MidAmerican Energy Company
P.O. Box 9244
666 Grand Avenue
Des Moines, IA 50306-9244
Dear Russ and Stan:
In view of our earlier correspondence, I was somewhat surprised to receive your
letter of October 23, 1995. However, please be advised that our Board of
Directors will consider the matters raised by your letter at its next regular
meeting in early November. I will contact you after that time. Until then, we
are not interested in participating with you in any discussions relating to a
business combination transaction.
Very truly yours,
/s/ Lee Liu
<PAGE>
