Filed by: Public Service Company of New Mexico
pursuant to Rule 425 under the Securities Act
of 1933 and deemed filed pursuant to Rule 14a-12
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of the Securities Exchange Act of 1934
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Public Service Company of New Mexico Commission File No.: 1-6986
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Western Resources, Inc. Commission File No.: 1-3523
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Subject Company: Western Resources, Inc.
Dear Fellow Shareholder,
I am very pleased to announce that PNM has entered into an agreement to acquire
the electric utility operations of Western Resources, serving more than 600,000
retail customers in Topeka, Wichita, the suburbs of Kansas City and much of
eastern Kansas.
This combination will create a single, multi-regional energy company with the
scale and scope needed to compete successfully in today's marketplace. Our new
company will have:
o more than 1 million retail electric customers and 400,000 retail gas customers
in two states,
o generating capacity of more than 7,000 megawatts, strategically
located in Arizona, New Mexico and Kansas, and
o a combined work force of over
5,000 employees.
This combination is about growth and opportunity, particularly in the wholesale
power business, where we see the potential for significant revenue and earnings
growth by giving us access to key Midwestern markets.
I strongly believe that, together, PNM and Western Resources will be able to
deliver tangible benefits to our employees, our customers and especially you,
our shareholders, beyond what either company could provide by itself.
Although this proposal has been approved by both the PNM Board of Directors and
the Western Resources Board of Directors, before it can be finalized it must
also be approved by shareholders in both companies and by a number of state and
federal regulatory agencies.
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Before we ask you to vote to approve this combination, we will provide you with
more detailed information on the transaction and its impact on your investment.
In the meantime, to learn more about our plans for PNM's future, please call our
shareholder information line at 800-840-0766 or visit the PNM website at pnm.com
Thank you for your continued confidence in PNM.
Sincerely,
Jeff Sterba
Chairman, President
And Chief Executive Officer
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This update contains forward-looking statements within the meaning of the "safe
harbor" provisions of the United States Private Securities Litigation Reform Act
of 1995. Investors are cautioned that such forward-looking statements with
respect to revenues, earnings, performance, strategies, prospects and other
aspects of the businesses of PNM and Western Resources and with respect to the
benefits of the transaction are based on current expectations that are subject
to risk and uncertainties. Such statements are based upon the current beliefs
and expectations of the management of PNM and Western Resources. A number of
factors could cause actual results or outcomes to differ materially from those
indicated by such forward-looking statements. These factors include, but are not
limited to, risks and uncertainties relating to: the possibility that
shareholders of PNM and/or Western Resources will not approve the transaction,
the risks that the businesses will not be integrated successfully, the risk that
the benefits of the transaction may not be fully realized or may take longer to
realize than expected, disruption from the transaction making it more difficult
to maintain relationships with clients, employees, suppliers or other third
parties, conditions in the financial markets relevant to the proposed
transaction, the receipt of regulatory and other approvals of the transaction,
that future circumstances could cause business decisions or accounting treatment
to be decided differently than now intended, changes in laws or regulations,
changing governmental policies and regulatory actions with respect to allowed
rates of return on equity and equity ratio limits, industry and rate structure,
stranded cost recovery, operation of nuclear power facilities, acquisition,
disposal, depreciation and amortization of assets and facilities, operation and
construction of plant facilities, recovery of fuel and purchased power costs,
decommissioning costs, present or prospective wholesale and retail competition
(including retail wheeling and transmission costs), political and economic
risks, changes in and compliance with environmental and safety laws and
policies, weather conditions (including natural disasters such as tornadoes),
population growth rates and demographic patterns, competition for retail and
wholesale customers, availability, pricing and transportation of fuel and other
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energy commodities, market demand for energy from plants or facilities, changes
in tax rates or policies or in rates of inflation or in accounting standards,
unanticipated delays or changes in costs for capital projects, unanticipated
changes in operating expenses and capital expenditures, capital market
conditions, competition for new energy development opportunities and legal and
administrative proceedings (whether civil, such as environmental, or criminal)
and settlements, the outcome of Protection One accounting issues reviewed by the
SEC staff as disclosed in previous Western Resources SEC filings, the impact of
Protection One's financial condition on Western Resources' consolidated results,
and other factors. PNM and Western Resources disclaim any obligation to update
any forward-looking statements as a result of developments occurring after the
date of this update. Readers are referred to PNM's and Western Resources' most
recent reports filed with the Securities and Exchange Commission.
Additional Information
In connection with the proposed transaction, PNM and Western Resources will file
a joint proxy statement / prospectus with the Securities and Exchange
Commission. INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE JOINT PROXY
STATEMENT / PROSPECTUS WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN
IMPORTANT INFORMATION. Investors and security holders may obtain a free copy of
the joint proxy statement / prospectus (when available) and other documents
filed by PNM and Western Resources with the SEC at the SEC's web site at
http://www.sec.gov. Free copies of the joint proxy statement / prospectus, when
available, and each company's other filings with the SEC may also be obtained
from the respective companies. Free copies of PNM's filings may be obtained by
directing a request to PNM, Alvarado Square, Albuquerque, New Mexico 87158.
Phone: (800) 545-4425. Free copies of Western Resources' filings may be obtained
by directing a request to Western Resources, P.O. Box 889, Topeka, Kansas
66601-0889. Phone: (800) 527-2495.
Participants in Solicitation
PNM, Western Resources and certain of their respective directors, executive
officers and other members of their management and employees, each of whom may
be considered participants in this transaction under applicable securities laws,
may be soliciting proxies from their respective stockholders in favor of the
transaction. Information concerning PNM's directors and executive officers
participating in the solicitation is set forth in PNM's Annual Report on Form
10-K filed with the Commission on March 9, 2000 and information concerning
Western Resources' directors and executive officers participating in the
solicitation is set forth in Western Resources' Annual Report on Form 10-K filed
with the Commission on March 29, 2000 and amended on April 3, 2000. Certain
directors and executive officers of PNM and Western Resources may have direct or
indirect interests in the transaction due to securities holdings, vesting of
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options, and rights to severance payments if their employment is terminated
following the transaction. In addition, directors and officers, after the
transaction, will be indemnified by PNM and Western Resources, and benefit from
insurance coverage for liabilities that may arise from their service as
directors and officers of PNM or Western Resources prior to the transaction.
Additional information regarding PNM's and Western Resources' respective
participants in the solicitation will be contained in the joint proxy
statement/prospectus.
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