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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:
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<PAGE>
[The following information is training material for individuals answering
1-888-PRO-IOWA]
TRAINING DOCUMENTS
Item 1 Contact Information
Item 2 General Information
Item 3 Benefits of Merger
Item 4 Chronology
Item 5 Basic Numbers
Item 6 Steps to Vote Proxy
Item 7 Regulatory Approval
Item 8 Customer Benefits
Item 9 Q&A/General Information
<PAGE>
Contact Information
Date: _______________ MEC Representative: _______________
All personal information is optional. However, if they want us to send them
information and they are not a registered shareholder (i.e. their stock is held
in a street name) we must have their name and address.
Name: ________________________ Shareholder Information:
Phone: ________________________ Company # of shares Registered/
(Home phone if applicable) street
________________________ MEC _____ __________ __________
(Office phone if applicable)
FAX: ________________________ IES _____ __________ __________
Address: ________________________ Other ___ __________ __________
________________________
Response: Positive __________ Negative __________ Neutral __________
Add to mailing list to receive IES shareholder information from MidAmerican:
Yes_____ No _____ (If yes, make sure you get complete address.)
Comments: ______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Issues/Concerns: _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Follow-up Action Required: _____________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Return completed forms to Jim Parker or Sally Robinson.
08/11/96
<PAGE>
General Information
1. Answer the phone "Good Morning/Afternoon, MidAmerican Energy."
A. Be positive.
B. Be calm.
2. Ask if caller is IES shareholder. Don't press for details but indicate, "I
can answer your questions better if I know if you're an IES or MidAmerican
shareholder." (Don't ask for name until end of conversation.)
A. If a media call, refer call to Keith Hartje at 281-2575.
B. If a financial call, take information on form with name and phone
number and indicate someone will call them back.
C. If a shareholder, continue.
3. Many calls may come from IES employees, customers, lawyers, etc.
Answer best you can but be careful of providing too much information.
4. If don't know answer, do NOT speculate or give opinions. Say, "I don't
know the answer to that question. Someone will get back to you." Complete
form with name and phone number and specific question(s).
5. At completion of call, ask if they are a registered IES shareholder that
receives proxy materials directly (not through broker). If not, ask if
would like to receive information MidAmerican is sending to IES
shareholders. Complete form with name, address, and any comments.
6. Provide forms to Jim Parker or Sally Robinson.
<PAGE>
BENEFITS OF THE MERGER
BENEFITS FOR IES SHAREHOLDERS
* Bigger premium for IES shareholders - 31% premium
* Increase in dividend rate - 34% increase
* Contiguous and overlapping service territories - greater efficiency
operational
* Maintain Iowa headquarters
* Estimated $500 million savings over 10 years
BENEFITS FOR MIDAMERICAN SHAREHOLDERS
* Larger, stronger, more competitive company
* Positions MidAmerican to be a better, more competitive utility in Iowa,
Nebraska, South Dakota, Illinois
* Want to be supplier and distributor of choice
* Maintain Iowa headquarters
* Contiguous and overlapping service territories - greater efficiency
operational
* Estimated $500 million savings over 10 years
* Iowa focused economic development effort
<PAGE>
CHRONOLOGY
November 1990 Iowa Resources merged with Midwest Energy to
form Midwest Resources.
July 1995 Midwest Resources merged with Iowa-Illinois
to form MidAmerican Energy.
October 3, 1995 Russ Christiansen/Stan Bright letter to
Lee Liu expressing interest in combining
companies.
October 6, 1995 Lee Liu responded that IES is not interested.
October 10, 1995 Russ Christiansen/Stan Bright letter
again asking IES to discuss merger opportunities.
October 23, 1995 Russ Christiansen/Stan Bright letter sent to Lee
Liu outlining a merger proposal.
October 26, 1995 Lee Liu rejected proposal.
November 1995 IES announced merger with Wisconsin P&L and
Interstate.
August 1, 1996 August 1993 Standstill agreement expired. The
standstill areement prevented either party from
making a proposal to acquire directly or
indirectly, each other.
August 4, 1996 Stan Bright letter sent to Lee Liu
describing MidAMerican's merger proposal.
August 5, 1996 IES acknowledged MEC proposal - indicated
would respond in due course.
August 6, 1996 Filed preliminary proxy material with SEC.
Expect SEC review in approximately 10 days.
<PAGE>
August 9, 1996 Letter from Stan Bright to IES shareholders
explaining merger.
Week of August 19, 1996 Approximate date for MidAmerican to mail proxy
materials to IES registered shareholders.
September 5, 1996 IES shareholder meeting to vote on the
Wisconsin deal. If IES does not receive approval:
* MidAmerican will move forward with its
merger proposal;
* MidAmerican will have the opportunity to
fully present its proposal to IES
shareholders
* IES shareholders will have a future
opportunity to approve a MidAmerican/IES
merger
If the Wisconsin deal is approved IES shareholders
will not receive $39 per share.
<PAGE>
BASIC NUMBERS ASSOCIATED WITH THE TRANSACTION
Price of Stock:
MidAmerican is offering $39 per IES share based on the August 2, 1996, closing
price of MidAmerican of $16 5/8 (fluctuates daily based on stock price changes)
or 2.346 shares of MidAmerican stock but only 40% of IES shares may be exchanged
for cash. See below.
MidAmerican closing stock price on 8/2/96 =
$16 5/8 X 2.346 = $39
(conversion ratio)
IES shareholders can opt for cash or stock
* If less than 100% of IES shareholders choose cash, 40% pool of cash will
be prorated among those shareholders choosing cash.
* If they want cash, they are guaranteed at least 40% cash.
* If IES shareholders choose 100% stock, transaction is tax free.
If they choose cash, cash portion is taxable.
"We've been advised we cannot give any more tax information.
You'll need to contact you tax advisor."
Dividend
Current IES dividend = $2.10 Proposed dividend in the Wisconsin deal = $1.99
Proposed dividend in the MidAmerican Proposal = $2.82
The MidAmerican Proposal includes a proforma dividend of $2.82 per IES
share. This is a 42% increase over the Wisconsin deal and a 34% increase
over IES's current dividend rate.
<PAGE>
Calculated by:
$1.20 X 2.346 = $2.8152 or $2.82
(Current (Conversion ratio)
MidAmerican
dividend)
Dividends are not guaranteed or promised. NO company can guarantee a dividend in
the future.
<PAGE>
Value
IES stock price as of 8/2/96 = $29.75
Value of IES stock in the Wisconsin deal = $32.19
Value of IES stock in the MidAmerican Proposal = $39.00
(A 21% premium over the Wisconsin deal)
Examples
Shareholders with 100 shares of IES stock:
Current annual dividend = $210.00
Annual dividend in the Wisconsin deal = $199.00
Annual dividend in the MidAmerican Proposal = $282.00
If you own 100 shares of IES stock and opt for 100% stock:
100 shares IES X 2.346 = 234.60 shares of
MidAmerican stock
234.6 shares of MidAmerican X $1.20 = $281.52 (MidAmerican
(Current annual annual dividend)
MidAmerican dividend)
Compared to:
100 shares of IES X $2.10 = $210 (current annual IES dividend)
(Current annual
IES dividend)
Under the MidAmerican plan, you would receive $71.52 more annually. This
represents a 34% greater dividend.
<PAGE>
STEPS TO VOTE PROXY
1. If you have not yet returned your IES white or green proxy card, do not
send it in. Wait for MidAmerican Energy proxy material which should be
mailed the week of August 19.
2. When you receive the MidAmerican proxy material:
- On the BLUE proxy card vote AGAINST the approval and adoption of
the Wisconsin merger.
- Sign, date and mail the BLUE proxy card to MidAmerican Energy in the
return envelope enclosed with the proxy materials.
- It is very important that you sign and date the BLUE proxy card;
remember only the proxy card with the latest date will be counted.
3. If you have already returned your proxy card (could be green or white),
you can change your vote. Wait for proxy material from MidAmerican Energy
which should be mailed sometime the week of August 19. (Repeat Step 2.)
4. Make your views known to the IES Board of Directors.
<PAGE>
REQUIRED REGULATORY APPROVALS
Federal * Federal Energy Regulatory Commission
State * Iowa Utilities Board
* Illinois Commerce Commission
(The Wisconsin deal also requires the approval of the
Wisconsin Public Service Commission)
Filings will also be made with:
* Securities and Exchange Commission
* Federal Trade Commission under the Hart-Scott
Rodino Act
* Nuclear Regulatory Commission
We estimate the regulatory process can be completed within 12 months from the
time MidAmerican and IES reach an agreement to merge.
<PAGE>
WHAT'S IN IT FOR CUSTOMERS
* MidAmerican has proposed stable or declining electric prices for all
customers through 2001. MidAmerican's pricing proposal is currently on
file for approval by the Iowa Utilities Board. MidAmerican intends to
include IES customers in the pricing proposal if it is approved.
* MidAmerican's proposal would result in an Iowa-based company that would
have Iowa's best interest in mind.
<PAGE>
QUESTIONS AND ANSWERS
Q. What do you think the stock price or dividend will do?
A. We cannot speculate on future stock price or dividends. (Redirect
question to stock and dividend premium being offered.)
Q. Can you tell me specific information about my IES stock.
A. No, I do not have that information.
Q. Should I sell my stock?
A. We cannot give advice on whether or not to sell stock.
Q. What do you think earnings will do?
A. I can't comment on earnings. We expect over $500 million savings for a
combined MidAmerican/IES in the next 10 years.
Q. Why is the MidAmerican stock price down?
A. It isn't unusual in these kinds of transactions for market price movements
to occur. We believe most people will evaluate the transaction and will
see the benefits to MidAmerican and IES over the long term.
Q. Will MidAmerican change their name again?
A. No.
Q. Do MidAmerican shareholders have to exchange their stock?
A. No.
<PAGE>
Q. What tax implications are there?
A. If you opt for cash, it will be taxable. If you opt for stock, it is
non-taxable. Beyond that, you will need to consult your tax advisor.
Q. How is MidAmerican going to finance the transaction and where will you get
the money?
A. We expect to use debt to finance our proposal. We are confident that
there will be no problem in obtaining financing or in servicing the debt
with existing cash flows.
Q. Why is IES included, but Interstate is not?
A. Our proposal only includes IES. I don't have any other information.
Q. What is it going to take for the MidAmerican proposal to be successful?
A. A majority of IES outstanding shares must be voted against the Wisconsin
deal. Then MidAmerican will proceed with our proposal.
Q. What about the $40 million breakup fee that IES will pay if they don't
proceed with the Wisconsin deal?
A. The breakup fee is factored into our proposal, but we are reviewing the
fee.
Q. Why is IES expressing concerns about the MidAmerican proposal?
A. We can't speak for IES.
<PAGE>
[The following is an outline presentation of a flowchart for shareholder
question regarding cash or stock]
I. Does Shareholder want cash?
A. No.
1. Shareholder will receive 2.346 Shares of MidAmerican stock for each
share of IES Industries stock.
2. End
B. Yes.
1. Do more than 40% of IES shareholders want cash?
a. No.
- Shareholder will receive $39 per share of all shares of IES
Industries stock.
b. Yes.
- Cash distribution will be prorated based upon the number of IES
shareholders requesting cash
2. End
EXAMPLE
50% of IES shareholders choose the cash option, each shareholder selecting the
cash option will receive 0.40/0.50 = 80% cash and 20% stock.
% of shares % of shares % cash % stock
wanting wanting actually actually
cash stock received* received
10 90 100% 0%
20 80 100% 0%
30 70 100% 0%
40 60 100% 0%
50 50 80% 20%
60 40 67% 33%
70 30 57% 43%
80 20 50% 50%
90 10 44% 56%
100 0 40% 60%
*% of cash received by those shareholders wanting to receive cash
<PAGE>
[The following letter was mailed to IES Industries' shareholders.]
Dear IES Industries Shareholder:
On August 4, 1996 MidAmerican Energy Company proposed a merger to your
Board of Directors. This merger would provide you with a significant premium for
your shares and a substantial increase in your annual dividend as compared to
the current IES stock price and dividend and to the consideration and dividend
from the proposed transaction (the "Wisconsin Transaction") with WPL Holdings,
Inc. and Interstate Power Company.
Today, IES Industries announced that it will consider MidAmerican's merger
proposal and we are pleased that the IES Board of Directors has committed to
giving our merger proposal "full and thoughtful consideration." MidAmerican
Energy is anxious to enter into an agreement with IES which will allow us to
realize the advantages of a combination of our two companies. Based upon IES'
announcement, we are hopeful that IES will be open to discussions with us in
order to better understand our proposal.
Our proposal contemplates a cash and stock transaction valued at $39* per
IES share. Significantly, the proposal also includes a proforma dividend of
$2.82 per IES share, a 42% increase above the IES dividend level in the
Wisconsin Transaction. Compare MidAmerican's merger proposal to the one proposed
by your Board:
VALUE DIVIDENDS
IES Stock Price on 8/2/96 $29.75 Current IES Dividend $2.10
Value of IES stock in the Proposed IES Dividend in the
Wisconsin Transaction* $32.19 Wisconsin Transaction $1.99
Value of IES stock in Proposed IES Dividend in
MidAmerican's proposal* $39.00 MidAmerican's proposal $2.82
Added value of Added value of
MidAmerican's proposal +21% MidAmerican's proposal over +42%
over the Wisconsin Transaction* the Wisconsin Transaction*
We believe our merger proposal is financially superior and would create a
stronger company. Shareholders should consider that MidAmerican and IES have
much in common, including contiguous and, in some cases, overlapping service
areas. Please refer to the service area map on the back page of this letter. We
are hopeful that your Board of Directors, on behalf and in the interest of all
IES shareholders, will pursue this significant opportunity on a friendly,
negotiated basis.
On September 5, IES shareholders are scheduled to vote on the Wisconsin
Transaction. Because we are convinced that our proposed business combination
offers substantial benefits to MidAmerican as well as to IES, in addition to
being financially superior to the Wisconsin Transaction, we intend to ask you,
the IES shareholder, to reject that proposed merger and preserve your
opportunity to pursue the merger with MidAmerican.
* Based on August 2, 1996 closing stock prices.
<PAGE>
We urge you not to return any green or white proxy card sent to you by IES
regarding the Wisconsin Transaction. If you have already done so, you will soon
have the opportunity to change your vote by signing MidAmerican's BLUE proxy
card. We shortly will be mailing to you MidAmerican's proxy materials containing
further information about why our proposed merger is better for IES, its
shareholders, customers, employees, and the communities it serves and why you
should vote AGAINST the Wisconsin Transaction.
If you have any questions, please call us, toll free, at 1(888) 776-4692.
Thank you for your interest.
Sincerely,
RUSSELL E. CHRISTIANSEN STANLEY J. BRIGHT
Chairman of the Board President and
Chief Executive Officer
Descriptive presentation of utility service territories.
<PAGE>
[The following radio announcement was broadcast throughout Iowa beginning
August 12, 1996.]
ANNOUNCER:
Right now, shareholders of IES Industries are voting on a proposal to merge IES
with a Wisconsin-based utility company. If you're an IES shareholder, STOP
before you vote on the Wisconsin deal. Iowa-based MidAmerican Energy has made an
alternative merger proposal to IES. And, under that plan, everyone
benefits--customers, Iowa's economy, and, yes, you, the shareholders of IES. We
believe the MidAmerican plan is better for IES shareholders, because it offers
greater value for your IES shares, and a much higher dividend. When you have the
facts, we believe you'll agree MidAmerican Energy's proposal makes more sense
for IES shareholders.
Vote against the Wisconsin deal.
The participants in the proxy solicitation include MidAmerican, its directors
and executive officers, and certain employees of MidAmerican and Dillon Reed &
Company. Certain of the individual participants own small amounts of IES common
stock, and Dillon Read may have long or short positions in securities of IES in
the ordinary course of its business. IES shareholders, call toll-free
1-888-PRO-IOWA for more information.
<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: Philip G. Lindner (Group VP and
Chief Financial Officer), John A. Rasmussen (Group VP and General Counsel),
Ronald W. Stepien (Group VP), Larry M. Smith (Controller), Paul J. Leighton (VP
& Corporate Secretary), J. Sue Rozema (VP Investor Relations and Treasurer),
Keith D. Hartje (Mgr. Corp. Communications), Alan L. Wells (Mgr. Corp. Dev. &
Strategy), Jack L. Alexander (Manager Human Resources), Beverly A. Wharton
(President Gas Division), Lynn K. Vorbrich (President Electric Division), David
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.), James C. Galt (Mgr.
Financial Planning), Richard T. Tunning (Mgr. Corp. Acctg.), John P. Palmolea
(Sr. Accountant), Merlyn F. Wiese (Senior Financial Analyst), James C. Parker
(Senior Bulk Power Engineer), James J. Howard (VP Gas Admin. Services), Patrick
A. Kirchner (Attorney), Maureen E. Sammon (Mgr. Benefits), David C. Caris
(Manager Governmental Affairs), Garry W. Osborne (Strategic Planner), George L.
Phillips (Mgr. Corp. Performance), Thomas C. Watt (Mgr. Waterloo District),
Virginia A. Dasso (Mgr. Mississippi Valley), Greg B. Elden (Mgr. Siouxland
District), Robert L. Lester (Mgr. Des Moines District), Lester A. Juon (Mgr.
Sioux City District), John A. Harvey (Mgr. Distribution Operations Support),
Annette J. Johnston (Mgr. Customer Support), Christian M. Swanson (Mgr. Cedar
Valley District), Ron E. Unser (Mgr. Quad Cities District), Jeanette I. Lose
(Mgr. Credit), Barb J. Anderson (Executive Assistant), William G. Stowe (Mgr.
Electric Operations), David L. Graham (Mgr. Electric Energy Services), James 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. Grabinski (Regional Communications
Coordinator), Jodi E. Bacon (Manager HR Communications), Suzan M. Stewart (Mgr.
Attorney Gas Law Dept.), Charles R. Montgomery (Sr. Attorney), Steven R. Weiss
(Sr. Attorney), Terry R. Fox (Attorney), J. Christopher 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), Stephen E. Hollonbeck (Sr. VP Gas Operations), Stephen E. Shelton
(Sr. VP Electric Distribution), James R. Bull (VP Generation), Mark W. Roberts
(Mgr. Elec. Admin. Services), O. Dale Stevens (Mgr. Resource Planning), James
Averweg (Mgr. Transmission), William D. Leech (Mgr. Generation), Brent E. Gale
(VP Law & Reg. Affairs), Gregory C. Schaefer (Mgr. Elec. Rates & Regulation),
Taylor S. Davis (Attorney), Karen M. Huizenga (Attorney), Robert P. Jared
(Attorney), Randall B. Palmer (Attorney), Jean F. Stier (Shareholder
Representative), L.T. Smith (Mgr. Loess Hills District), John H. Wetzel
(Economic Development Consultant), Martha A. Matthews (MIS Analyst), David C.
Weiss (Customer Coordinator), Jeffrey J. Gust (Sr. Bulk Power Engineer), Richard
J. Singer (Mgr. Nuclear), James M. Howard (Customer Coordinator), Marcia L. Vest
(Acct. Assist.), John T. Holmes (IT Training Coord.), Deb L. Calvert (Economic
Development Consultant), Thomas H. Hutchins (Gas Engineer), Mark K. Etchen
(Supervisor Customer Coordination), Mary J. Brown (HR Analyst), Brian E. Johnson
(Mgr. State Gov't Relations), LeAnne
8-12-96(3)
<PAGE>
S. Turner (Customer Service), Robert M. Ockerman (Customer Coordinator),
Connie L. Schwab (Customer Service), Juanita F. Mosher (Customer Coordinator
Asst.), Robin B. Fortney (Sr. Environmental Coordinator), Deb J. Kraft
(Secretary), Dian E. Nowell (Records Mgmt. Assist.), Joel D. Krusemark (Gas
Technician), Mickey G. Sieren (Customer Service), Linda W. Ruble (Employee
Communications Coordinator), and John Meholovich.
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 is the beneficial owner of 305 shares of IES
Common Stock. Christian M. Swanson's wife is the beneficial owner of 12 shares
of IES Common Stock.
Other than as set forth herein, as of the date of this 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 Steve R. Weiss, John J. Cappello,
Stephen E. Hollonbeck, Stephen E. Shelton, James R. Bull, Brent E. Gale, Gregory
C. Schaefer, Taylor S. Davis, Karen M. Huizenga, Robert P. Jared, L.T. Smith,
John H. Wetzel, Martha A. Matthews, David C. Weiss, Jeffrey J. Gust, Richard J.
Singer, James M. Howard, Marcia L. Vest , John T. Holmes, Deb L. Calvert, Thomas
H. Hutchins, Mark K. Etchen, Mary J. Brown, Brian E. Johnson, LeAnne S. Turner,
Robert M. Ockerman, Connie L. Schwab, Juanita F. Mosher, Robin B. Fortney, Dian
E. Nowell, Joel D. Krusemark, Mickey G. Sieren, Linda W. Ruble or John
Meholovich. 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.
8-12-96(3)
<PAGE>
