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 (Date of Earliest Event Reported) May 7, 1996
Cinergy Corp.
(Exact Name of Registrant as Specified in its Charter)
Delaware 1-11377 31-1385023
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
139 East Fourth Street, Cincinnati, Ohio 45202
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including area code (513) 381-2000
<PAGE>
ITEM 5. OTHER EVENTS.
Reference is made to the joint press release of Cinergy Corp. and General
Public Utilities Corporation, dated May 7, 1996, announcing an agreement
with the Board of Directors of Midlands Electricity plc (Midlands) to offer
to acquire Midlands, a copy of which is attached hereto as Exhibit 20 and
is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit
Designation Nature of Exhibit
20 Joint press release of Cinergy Corp. and
General Public Utilities Corporation, dated
May 7, 1996.
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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 hereunto duly authorized.
Cinergy Corp.
(Registrant)
Date: May 7, 1996 By: /s/ Charles J. Winger
Charles J. Winger,
Comptroller
(Signature)
Exhibit 20
FOR CINERGY:
News contact: Steve Brash 513-287-2226 (w) 513-231-6895 (h)
Angeline Protogere 317-838-1338 (w) 317-298-3090 (h)
Investor contact: Renae Conley 513-287-4009
Felicia Ramstein 513-287-4348
FOR GPU:
Contact: John T. Fidler 201-263-6479
FOR IMMEDIATE RELEASE - MAY 7, 1996
CINERGY AND GPU OFFER TO ACQUIRE BRITISH ELECTRIC COMPANY
CINCINNATI - Cinergy Corp. and General Public Utilities Corporation have
jointly agreed with the Board of Directors of Midlands Electricity plc in
the United Kingdom to offer to acquire Midlands, the companies' chief
executives announced today.
Under the agreement, GPU and Cinergy, which have formed Avon Energy
Partners plc, are offering $6.60 per share for the stock of Midlands, a
value of $2.59 billion. The Cinergy, GPU and Midlands' boards approved the
transaction on Monday. Midlands is a British Regional Electric Company
(REC) which distributes and supplies electricity in England and generates
electricity both in England and internationally.
As is usual under the UK practice, the offer will become unconditional upon
acceptance by the holders of 90 percent of the shares of Midlands, upon
satisfaction of certain other conditions. It may be made unconditional by
Avon upon acceptance by the holders of a majority of the shares.
(more)
<PAGE>
Page 2. Cinergy, GPU to acquire British electric company
James R. Leva, GPU chairman, president and chief executive officer, will be
the chairman of Avon Energy Partners. James E. Rogers, Cinergy vice
chairman, president and chief executive officer, will be vice chairman of
Avon Energy Partners and will rotate to chairman next year. Mike Hughes,
Midlands chief executive, has agreed to continue in that capacity.
Speaking on behalf of Avon Energy Partners, Leva said, "This association of
three very large and progressive electric companies provides a base for
improved service to the customers of Midlands, Cinergy and GPU. It also
facilitates the growth of the international business activities of each
company. Jim Rogers and I see this partnership as an important and
valuable asset for our respective shareholders, as well."
On behalf of GPU, Leva said, "This move demonstrates how serious GPU is
about growing our business, and marks our second joint acquisition of an
electricity distribution business overseas. This transaction will
strengthen GPU's position as a leader in an increasingly competitive - and
increasingly global - energy marketplace.
"Our previous international partnerships in South America and Australia
have taught us how important such collaborations are becoming in a rapidly
changing electric utility industry. Growth for GPU means enhanced value
for its shareholders and expanded opportunities for its customers as
competition becomes more heated," Leva added.
Speaking on behalf of Cinergy, Rogers said, "We believe this transaction
will provide value for both our shareholders and customers. Our investment
in Midlands gives us an opportunity for growth in a progressive regulatory
environment that offers incentives for efficient management."
(more)
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Page 3. Cinergy, GPU to acquire British electric company
"While Cinergy has been a leader in the drive for competition here, we have
a lot to learn from privatization and customer choice in the UK. They are
already differentiating products and services for customers, developing
sophisticated multi-rate tariffs, implementing new metering technology, and
providing proactive customer marketing and one-stop service for all
utilities. Our customers will benefit from having an electric utility that
knows first-hand what it means to serve customers who can choose their
electric supplier," he added.
Headquartered in Birmingham, England, Midlands is one of 12 RECs in the
United Kingdom and serves 2.2 million customers in an area with a total
population of five million. Through aggressive management, it has been
able to reduce the price of electricity by 15% in real terms since 1991 and
has not raised prices in three years. It has also made significant
investments in the efficiency and reliability of its distribution system.
The UK RECs were created when the government-owned electric supply industry
was privatized in 1990, and five have already been acquired by other
entities. In addition to the RECs, the electric generating system was also
privatized, while the transmission grid remains regulated. The UK is ahead
of the US in deregulation of the electric industry. By 1998, all customers
in the UK will be able to choose their electric suppliers. In the US,
generally only wholesale customers are now able to choose their electric
suppliers.
Merrill Lynch International and BZW served as financial advisors to Avon
Energy Partners. Financing for the purchase has been arranged by BZW and
Chase Investment Bank Ltd.
(more)
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Page 4. Cinergy, GPU to acquire British electric company
GPU will acquire its half of Midlands through its Energy Initiatives Group,
which owns, operates and invests in electric facilities domestically and
abroad. Energy Initiatives now has holdings in five US states and four
foreign countries: Bolivia, Canada, Colombia, and Australia. GPU will
invest $500 million in the venture funded by a combination of debt and
future sales of common stock.
Cinergy's 50% share of the purchase of Midlands will be structured through
a subsidiary under Cinergy Investments, Inc., the company's unregulated
business arm. Rates charged by Cinergy's utility operating companies, The
Cincinnati Gas & Electric Company and PSI Energy, Inc., and by GPU's
operating utility companies, Metropolitan Edison, Pennsylvania Electric and
Jersey Central Power & Light, will not be affected by the transaction.
With 1995 revenues of $3.8 billion, GPU (NYSE:GPU) is among the 20 largest
electric utility systems in the US. Its three operating utility
subsidiaries - Metropolitan Edison, Pennsylvania Electric and Jersey
Central Power & Light - serve some 2 million customers in Pennsylvania and
New Jersey.
In addition to the Energy Initiatives Group, GPU's other subsidiaries are
GPU Generation, which operates the System's fossil-fueled and hydroelectric
generating facilities; GPU Nuclear, which operates the System's nuclear
facilities, and GPU Service, a service company.
(more)
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Page 5. Cinergy, GPU to acquire British electric company
Cinergy (NYSE:CIN) is the 13th largest investor-owned electric utility in
the US in terms of owned generating capacity and had revenues of $3.03
billion in 1995. The company was created in 1994 through the combination
of The Cincinnati Gas & Electric Company and PSI Resources, Inc., and was
the first merger of two low-cost utilities after the enactment of the
Energy Policy Act of 1992. Its operating companies serve 1.3 million
electric and 434,000 gas customers in Ohio, Indiana, and Kentucky.
Messrs. Leva and Rogers will be available at 12:30 p.m. EDT for a press
conference call for US media. The toll-free number to dial is 1-800-210-
9006.
###
The Offer to Purchase shares of Midlands Electricity plc will not be made,
directly or indirectly, in or into, or by use of the mails or by any other
means or instrumentality (including without limitation, facsimile
transmissions, telex or telephone) of interstate or foreign commerce of, or
any facilities of a national securities exchange of, the United States and
will not be capable of acceptance by any such use, means, instrumentality
or facilities within the United States. Nothing herein shall be deemed to
constitute an offer to purchase shares of Midlands Electricity plc from
persons in the United States.
