SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: February 16, 1995
LG&E ENERGY CORP.
(Exact name of registrant as specified in its charter)
Kentucky 1-10568 61-1174555
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
220 West Main Street
P.O. Box 32030
Louisville, KY 40232
(Address of principal executive offices)
(502) 627-2000
(Registrant's telephone number)
Item 5. Other Events.
On February 10, 1995, LG&E Energy Corp. ("LG&E Energy") announced that it
reached definitive agreements with Hadson Corporation to purchase the Dallas-
based natural gas marketing, gathering and processing company for $143 million.
The acquisition involves Hadson Corporation and all of its subsidiaries,
including Hadson Gas Systems, Inc., its natural gas marketing subsidiary, as
well as the company's 1,300 miles of gas gathering systems, gas transmission
systems, and gas processing and storage facilities. Hadson has marketing
contracts and agreements with local distribution companies or industrial users
in 36 states. Santa Fe Energy Resources, Inc., and The Prudential Insurance
Company of America, which together own 65% of Hadson's common stock, have
agreed to sell all of their Hadson equity securities and long-term debt to a
subsidiary of LG&E Energy. The subsidiary will also acquire by merger all
remaining Hadson common stock at a price of $2.75 a share. The acquisition is
subject to necessary regulatory filings and approvals, and satisfaction of
certain other conditions. The companies expect to close the transaction
following Hadson's shareholders' meeting currently scheduled in the second
quarter of this year. The boards of both companies have unanimously approved
the transaction. LG&E Energy does not believe Hadson Corporation to be a
"significant subsidiary" under applicable SEC regulations, and therefore does
not expect to file additional financial information upon completion of the
transaction.
Item 7(c). Exhibits Filed.
Exhibit
Number Description
99.01 News Release dated February 10, 1995, announcing the
agreements reached between LG&E Energy Corp. and Hadson
Corporation for LG&E Energy to acquire the Dallas-based
natural gas marketing, gathering and processing company.
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 thereunto duly authorized.
LG&E ENERGY CORP.
Registrant
Date: February 16, 1995 /s/ Charles A. Markel, III
Charles A. Markel, III
Corporate Vice President, Finance
and Treasurer
(On behalf of the registrant in his
capacity as Principal Financial Officer)
LG&E Energy to Re-enter Natural Gas Marketing Business
With Agreement to Purchase Hadson Corp.
Louisville, KY - LG&E Energy Corp., a diversified utility holding company
with retail utility, power generation and marketing businesses, has reached
definitive agreements with Hadson Corporation to purchase the Dallas-based
natural gas marketing, gathering and processing company for $143 million.
The acquisition involves all Hadson Corporation subsidiaries, including
Hadson Gas Systems Inc., its natural gas marketing subsidiary, as well as the
company's 1,300 miles of gas gathering systems, gas transmission systems, and
gas processing and storage facilities.
Total 1994 combined revenues of Hadson Corporation and LG&E Energy Corp.
were approximately $1.5 billion.
Santa Fe Energy Resources, Inc., and The Prudential Insurance Company of
America, which together own approximately 65 percent of Hadson's common stock,
have agreed to sell all of their Hadson equity securities and long-term debt to
a subsidiary of LG&E Energy Corp. The subsidiary would also acquire all
remaining common stock of Hadson at a price of $2.75 per share.
"We believe that customers want to exercise more choice in purchasing
energy services and are seeking experienced companies that can offer an array
of both electric and gas energy solutions," said Roger Hale, Chairman and Chief
Executive Officer of LG&E Energy Corp. "This acquisition gives us the
opportunity to leverage our earlier experience in natural gas marketing with
our proven strengths in the electric power business."
The agreement marks LG&E Energy's second major venture into natural gas
marketing, following its 1992 acquisition and later sale of a partnership
interest in Natural Gas Clearinghouse.
Hadson owns and operates natural gas processing, gathering, and
transportation facilities in New Mexico, west Texas, Oklahoma and Montana.
Additionally, Hadson has marketing contracts and agreements with local
distribution companies or industrial users in 36 states. Hadson completed a
merger with a subsidiary of Santa Fe Energy Resources in December 1993 and
installed a new management team led by Greg Jenkins, President and CEO. In
1994, Hadson increased sales to its existing and growing base of utility,
municipal and industrial customers, marketing approximately one (1) billion
cubic feet of natural gas per day, nearly double its 1993 volume, while
achieving major improvements to its marketing margins.
The sale is subject to necessary regulatory filings and approvals, and
satisfaction of certain other conditions. The companies expect to close the
transaction following a meeting of Hadson shareholders anticipated during the
second quarter of this year. The boards of directors of both companies have
unanimously approved the transaction.
LG&E Energy Services Group President Ed Casey, who will oversee the
combined power generation and marketing business and the natural gas marketing
effort, said, "This is a very strategic acquisition at a time when the market
is transforming how energy services are delivered. Hadson's capabilities in
natural gas marketing, combined with our experience in power marketing,
position us well as a provider of integrated electric and gas services
nationally."
LG&E Energy believes this transaction will not have a material effect on
its earnings growth in the near term and will have a positive impact on future
earnings.
LG&E Energy is an exempt utility holding company with diverse energy
services businesses and groups, including Louisville Gas and Electric Company,
which focuses on retail gas and electric services in north central Kentucky,
and LG&E Energy Services, which manages all utility and non-utility generation,
markets wholesale power services throughout the U.S., and oversees power
project development and other energy investments, including wind-power
partnerships in Texas, Minnesota and California, and a natural gas-fired
project in Argentina.
# # #
