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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. __)/*/
LG&E ENERGY CORP.
-----------------
(Name of Issuer)
Common Stock, without par value
-------------------------------
(Title of Class of Securities)
501917-10-8
-----------
(CUSIP Number)
George S. Brooks, II, Esq.
KU ENERGY CORPORATION
One Quality Street
Lexington, Kentucky 40507-1428
(606) 255-2100
With A Copy to:
Robert A. Yolles
Jones, Day, Reavis & Pogue
77 West Wacker
Chicago, Illinois 60601-1692
(312) 782-3939
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
May 20, 1997
------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [].
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
/*/The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the reminder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
KU Energy Corporation
61-1141273
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP/*/
(a) [ ]
(b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS/*/
WC, OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM
2(d) OR 2(c) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Kentucky
7. SOLE VOTING POWER
NUMBER OF 13,230,490
SHARES
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY
EACH 0
REPORTING
PERSON WITH 9. SOLE DISPOSITIVE POWER
13,230,490
10. SHARED DISPOSITIVE POWER
0
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
13,230,490
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES/*/ [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.9%
14. TYPE OF REPORTING PERSON/*/
CO
/*/SEE INSTRUCTIONS BEFORE FILLING OUT!
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Item 1. Security and Issuer.
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This statement relates to the common stock, without par value (the "LG&E
Energy Common Stock"), of LG&E Energy Corp., a Kentucky corporation ("LG&E
Energy"). The principal executive office of LG&E Energy is located at 220 West
Main Street, Louisville, Kentucky 40232.
Item 2. Identity and Background.
------------------------
(a)-(c) This statement is being filed by KU Energy Corporation, a Kentucky
corporation ("KU Energy"). The principal executive office of KU Energy is
located at One Quality Street, Lexington, Kentucky 40507-1428. KU Energy is the
parent company of Kentucky Utilities Company, a Kentucky and Virginia
corporation ("Kentucky Utilities"), which is the operating utility subsidiary of
KU Energy.
Pursuant to General Instruction "C" for Schedule 13D, the attached Annex 1
to this statement sets forth certain information concerning all of the executive
officers and directors of KU Energy. The contents of Annex 1 are incorporated
herein by reference.
(d) During the last five years, neither KU Energy nor, to the best of KU
Energy's knowledge, any of the executive officers or directors of KU Energy
named in Annex 1 has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
(e) During the last five years, neither KU Energy nor, to the best of KU
Energy's knowledge, any of the executive officers or directors of KU Energy
named in Annex 1 has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
(f) All of the individuals identified in Item 2 are citizens of the United
States.
Item 3. Source and Amount of Funds or Other Consideration.
-------------------------------------------------
Concurrent with entering into the Merger Agreement (as defined in Item 4
below), KU Energy and LG&E Energy entered into the LG&E Energy Stock Option
Agreement (as defined in Item 4 below), whereby KU Energy has the right to
purchase up to 13,230,490 shares of the LG&E Energy Common Stock upon the terms
and subject to the conditions of the LG&E Energy Stock Option Agreement. As of
the date of this statement, none of the triggering events permitting exercise of
the stock option provided for in the LG&E Energy Stock Option Agreement has
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occurred. In the event that the stock option becomes exercisable under the LG&E
Energy Stock Option Agreement and KU Energy wishes to purchase for cash the LG&E
Energy Common Stock subject thereto, KU Energy will fund the exercise price from
working capital or through other sources, which could include borrowings.
Item 4. Purpose of Transaction
----------------------
On May 20, 1997, KU Energy and LG&E Energy entered into an Agreement and
Plan of Merger (the "Merger Agreement") providing for a merger of KU Energy and
LG&E Energy. Pursuant to the Merger Agreement, KU Energy will be merged with
and into LG&E Energy, with LG&E Energy as the surviving corporation (the
"Merger"). The Merger, which was unanimously approved by the Boards of
Directors of KU Energy and LG&E Energy, is expected to close shortly after all
of the conditions to consummation of the Merger, including the receipt of all
applicable regulatory and shareholder approvals, are met or waived.
The Merger Agreement and the related Stock Option Agreements (as defined in
Item 4 below) are incorporated herein by reference to Exhibits 2, 99.1 and 99.2
to the Current Report on Form 8-K, dated May 30, 1997, filed by KU Energy and
Kentucky Utilities with the Securities and Exchange Commission (the
"Commission") on such date. The joint press release issued in connection with
the Merger Agreement is incorporated herein by reference to Exhibit 99.1 to the
Current Report on Form 8-K, dated May 21, 1997, filed by KU Energy and Kentucky
Utilities with the Commission on such date. The descriptions of the Merger
Agreement and the Stock Option Agreements set forth herein do not purport to be
complete and are qualified in their entirety by the provisions of the Merger
Agreements and the Stock Option Agreements.
As a result of the Merger, LG&E Energy, which is the parent of Louisville
Gas & Electric Company, a Kentucky Corporation ("LG&E Utility"), will become the
parent company of Kentucky Utilities. The operating utility subsidiaries (LG&E
Utility and Kentucky Utilities) will remain separate companies and will continue
to serve customers in Kentucky and Virginia under their present names. The
preferred stock and debt securities of the operating utility subsidiaries will
not be affected by the Merger. Present nonutility operations of LG&E Energy
will be unaffected. The nonutility subsidiaries of KU Energy will become
subsidiaries of LG&E Energy.
Under the terms of the Merger Agreement, each outstanding share of the
common stock, without par value, of KU Energy ("KU Energy Common Stock") (other
than shares with respect to which dissenters' rights are perfected under
applicable state law), together with the associated KU Energy stock purchase
rights, will be converted into the right to receive 1.67 shares of LG&E Energy
Common Stock, together with the associated LG&E Energy stock purchase rights. A
holder of KU Energy Common Stock who
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would otherwise have been entitled to a fractional share of LG&E Energy Common
Stock will be entitled to receive a cash payment in lieu of such fractional
share. The outstanding shares of LG&E Energy Common Stock will remain unchanged
and outstanding. As of May 16, 1997, there were 37,817,878 shares of KU Energy
Common Stock outstanding and 66,484,875 shares of LG&E Energy Common Stock
outstanding. Based on such capitalization, upon consummation of the Merger,
51.3% of the outstanding LG&E Energy Common Stock will be owned by the
shareholders of LG&E Energy prior to the Merger and 48.7% will be owned by
former KU Energy shareholders.
The Merger is subject to customary closing conditions, including, without
limitation, the approval of the holders of a majority of the outstanding shares
of each of the LG&E Energy Common Stock and the KU Energy Common Stock, the
receipt of all necessary governmental approvals and the making of all necessary
governmental filings, including approvals of various regulators in Kentucky and
Virginia under state utility laws, the approval of the Federal Energy Regulatory
Commission under the Federal Power Act, the approval of the Commission under the
Public Utility Holding Company Act of 1935, and the filing of requisite
notifications with the Federal Trade Commission and the Department of Justice
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and
the expiration of all applicable waiting periods thereunder. The Merger is also
subject to the receipt of opinions of counsel that the Merger will qualify as a
tax-free reorganization and assurances from the parties' independent accountants
that the Merger will qualify as a pooling of interests for accounting purposes.
In addition, the Merger is conditioned upon the effectiveness of a registration
statement to be filed with the Commission with respect to the shares of LG&E
Energy Common Stock to be issued in the Merger and the approval for listing of
such shares on the New York Stock Exchange. It is anticipated that LG&E Energy,
as parent of Kentucky Utilities and LG&E Utility, will continue to be an exempt
holding company under the Public Utility Holding Company Act of 1935.
Shareholder meetings to vote upon approval of the Merger will be convened as
soon as practicable and are expected to be held later in 1997.
Simultaneously with the execution and delivery of the Merger Agreement, KU
Energy and LG&E Energy also entered into reciprocal stock option agreements (the
"KU Energy Stock Option Agreement" and the "LG&E Energy Stock Option Agreement",
collectively, the "Stock Option Agreements"). Pursuant to the Stock Option
Agreements, KU Energy and LG&E Energy each grant to the other an irrevocable
option to purchase up to 19.9% of the granting company's outstanding common
stock, at an exercise price per share equal to (i) in the case of LG&E Energy
Common Stock, $24.45 (which price per share equals the average of the daily
closing sales price per share of the LG&E Energy Common Stock on the New York
Stock Exchange during the ten-day period ending May 12, 1997) and (ii) in the
case of KU Energy Common Stock, $40.83
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(which price per share equals the exercise price per share of the option
covering LG&E Energy Common Stock multiplied by an exchange ratio of 1.67). The
option becomes exercisable if the Merger Agreement becomes terminable by either
KU Energy or LG&E Energy in circumstances that could entitle such party to
receive specified termination fees, generally as a result of the other party
becoming the subject of a third party tender offer or business combination
proposal.
If its option becomes exercisable, either KU Energy or LG&E Energy may
request the other party to repurchase all or part of its option at a price per
share equal to the spread between the exercise price and the highest average
trading price or the offered price in any business combination proposal. Under
the Merger Agreement, the aggregate amount of any termination fees and
transaction expenses payable, plus any amounts payable as a result of the
required repurchase of options, is limited to a maximum amount of $70 million.
Except as set forth in this Item 4, the Merger Agreement or the Stock
Option Agreements, neither KU Energy nor, to the best of KU Energy's knowledge,
any of the executive officers and directors of KU Energy named in Annex 1 has
any plans or proposals which relate to or which would result in any of the
actions specified in clauses (a) through (j) of Item 4 of this statement.
Item 5. Interest in Securities of the Issuer.
------------------------------------
(a)-(b) By reason of its execution of the LG&E Energy Stock Option
Agreement, pursuant to Rule 13d-3(d)(1)(i) promulgated under the Securities
Exchange Act of 1934, as amended, KU Energy may be deemed to have sole voting
and dispositive power with respect to the 13,230,490 shares of LG&E Energy
Common Stock subject to the LG&E Energy Stock Option Agreement and, accordingly,
may be deemed to beneficially own approximately 19.9% of the LG&E Energy Common
Stock outstanding, assuming exercise of the stock option. However, KU Energy
expressly disclaims any beneficial ownership of the shares of LG&E Energy Common
Stock which are obtainable by KU Energy upon exercise of the stock option,
because the stock option is exercisable only in the circumstances referred to in
Item 4 and as described in the LG&E Energy Stock Option Agreement, none of which
has occurred as of the date hereof. Furthermore, even if events did occur which
rendered such stock option exercisable, KU Energy believes it would be a
practical impossibility to obtain the regulatory approvals necessary to acquire
shares of LG&E Energy Common Stock pursuant to the stock option within 60 days.
Except as set forth above, neither KU Energy nor, to the best of KU
Energy's knowledge except as set forth in the following sentence, any of the
executive officers and directors of KU Energy named in Annex 1 owns any LG&E
Energy Common Stock. As of the day hereof, the following persons beneficially
owned LG&E Energy Common Stock: Michael R. Whitley, not more than 213 shares
held in LG&E Energy's dividend reinvestment plan pursuant to which dividends are
automatically reinvested each quarter; George S. Brooks, II, 600 shares; John T.
Newton, 600 shares.
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(c) Except as set forth above, neither KU Energy nor, to the best of KU
Energy's knowledge, any of the executive officers and directors of KU Energy
named in Annex 1 has effected any transaction in the LG&E Energy Common Stock
during the past 60 days.
(d) So long as KU Energy has not purchased the LG&E Energy Common Stock
subject to the LG&E Energy Stock Option Agreement, KU Energy does not have the
right to receive or the power to direct the receipt of dividends from, or the
proceeds from the sale of, any of the LG&E Energy Common Stock.
(e) Inapplicable.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the
Issuer
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The Merger Agreement contains certain customary restrictions on the conduct
of the business of KU Energy and LG&E Energy pending the Merger, including
certain customary restrictions relating to the LG&E Energy Common Stock. Except
as provided in the Merger Agreement, the LG&E Energy Stock Option Agreement or
as set forth herein, neither KU Energy nor, to the best of KU Energy's
knowledge, any of the executive officers and directors of KU Energy named in
Annex 1 has any contracts, arrangements, understandings or relationships (legal
or otherwise), with any person with respect to any securities of LG&E Energy,
including, but not limited to, transfer or voting of any securities, finder's
fees, joint ventures, loan or option arrangements, puts or calls, guarantees of
profits, division of profits or losses, or the giving or withholding of proxies.
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Item 7. Material to be Filed as Exhibits.
Exhibit Description
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2 Agreement and Plan of Merger,
dated as of May 20, 1997,
by and between KU Energy and
LG&E Energy (Incorporated by
reference to Exhibit 2 to KU
Energy (Commission File No. 1-10944)
and Kentucky Utilities (Commission File
No. 1-3464) Current Report on
Form 8-K, filed with the Commission
on May 30, 1997).
99.1 Joint Press Release, dated
May 21, 1997, of KU Energy
and LG&E Energy (Incorporated by
reference to Exhibit 99.1 to KU
Energy (Commission File No. 1-10944)
and Kentucky Utilities (Commission File
No. 1-3464) Current Report on
Form 8-K, filed with the Commission
on May 21, 1997).
99.2 KU Energy Stock Option Agreement, dated
as of May 20, 1997, by and
between KU Energy and LG&E
Energy (Incorporated by
reference to Exhibit 99.1 to KU
Energy (Commission File No. 1-10944)
and Kentucky Utilities (Commission File
No. 1-3464) Current Report on
Form 8-K, filed with the Commission
on May 30, 1997).
99.3 LG&E Energy Stock Option Agreement, dated
as of May 20, 1997, by and
between LG&E Energy and KU
Energy (Incorporated by
reference to Exhibit 99.2 to KU
Energy (Commission File No. 1-10944)
and Kentucky Utilities (Commission File
No. 1-3464) Current Report on
Form 8-K, filed with the Commission
on May 30, 1997).
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SIGNATURE
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After reasonable inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
KU ENERGY CORPORATION
By: /s/ Michael D. Robinson
-----------------------
Name: Michael D. Robinson
Title: Controller
Dated: May 30, 1997
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INDEX TO EXHIBITS
Exhibit Description
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2 Agreement and Plan of Merger,
dated as of May 20, 1997,
by and between KU Energy and
LG&E Energy (Incorporated by
reference to Exhibit 2 to KU
Energy (Commission File No. 1-10944)
and Kentucky Utilities (Commission File
No. 1-3464) Current Report on
Form 8-K, filed with the Commission
on May 30, 1997).
99.1 Joint Press Release, dated
May 21, 1997, of KU Energy
and LG&E Energy (Incorporated by
reference to Exhibit 99.1 to KU
Energy (Commission File No. 1-10944)
and Kentucky Utilities (Commission File
No. 1-3464) Current Report on
Form 8-K, filed with the Commission
on May 21, 1997).
99.2 KU Energy Stock Option Agreement, dated
as of May 20, 1997, by and
between KU Energy and LG&E
Energy (Incorporated by
reference to Exhibit 99.1 to KU
Energy (Commission File No. 1-10944)
and Kentucky Utilities (Commission File
No. 1-3464) Current Report on
Form 8-K, filed with the Commission
on May 30, 1997).
99.3 LG&E Energy Stock Option Agreement, dated
as of May 20, 1997, by and
between LG&E Energy and KU
Energy (Incorporated by
reference to Exhibit 99.2 to KU
Energy (Commission File No. 1-10944)
and Kentucky Utilities (Commission File
No. 1-3464) Current Report on
Form 8-K, filed with the Commission
on May 30, 1997).
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Annex 1
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Set forth below are the names, titles and present principal occupations for
each of the executive officers and directors of KU Energy. The business address
for each of the following individuals is One Quality Street, Lexington, Kentucky
40507.
<TABLE>
<CAPTION>
Name Title Present Principal Occupation
- ---- ----- ----------------------------
<S> <C> <C>
Michael R. Whitley Chairman, President and Chairman, President and Chief
Chief Executive Officer Executive Officer of KU Energy and
Kentucky Utilities
O.M. Goodlett Senior Vice President Senior Vice President, Finance and
Administration and Chief Financial
Officer of KU Energy and Kentucky
Utilities
James W. Tipton Senior Vice President Senior Vice President, Nonutility
Activities of KU Energy
George S. Brooks II Secretary General Counsel and Corporate
Secretary of KU Energy and Kentucky
Utilities
William N. English Treasurer Treasurer of KU Energy and
Kentucky Utilities
Michael D. Robinson Controller Controller of KU Energy and
Kentucky Utilities
Mira S. Ball Director Secretary-Treasurer and Chief
Financial Officer of Ball Homes, Inc.,
a single-family residential developer
and property management company
Carol M. Gatton Director Chairman of Area Bancshares, Inc., a
bank holding company
Harry M. Hoe Director President and Director of J.R. Hoe &
Sons, Inc., a foundry and casting
company
Milton W. Hudson Director Economic Consultant, Washington,
D.C.
John T. Newton Director Former Chairman and Chief
Executive Officer of KU Energy
Frank V. Ramsey, Jr. Director President and Director of Dixon Bank
William L. Rouse, Jr. Director Former Chairman, Chief Executive
Officer and Director of First Security
Corporation of Kentucky, a multi-
bank holding company
Charles L. Shearer Director President of Transylvania University
Lee T. Todd, Jr. Director President and Chief Executive Officer
of DataBeam, Inc.
</TABLE>
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