- --------------------------------------------------------------------------------
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 27, 1996
REGISTRATION NO. 333-10405
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
PRE-EFFECTIVE
AMENDMENT NO. 6
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
MIDAMERICAN ENERGY COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
IOWA 4924 42-1425214
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION
NUMBER)
</TABLE>
666 GRAND AVENUE
P.O. BOX 657
DES MOINES, IA 50303-0657
(515) 242-4300
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
-------------------------
PHILIP G. LINDNER
GROUP VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
MIDAMERICAN ENERGY COMPANY
666 GRAND AVENUE
P.O. BOX 657
DES MOINES, IA 50303-0657
(515) 242-4300
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
-------------------------
Copies to:
DAVID M. KIES
JOSEPH B. FRUMKIN
SULLIVAN & CROMWELL
125 BROAD STREET
NEW YORK, NEW YORK 10004
-------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON
AS PRACTICABLE AFTER THE CONSUMMATION OF THE BUSINESS COMBINATION TRANSACTION
DESCRIBED HEREIN.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
-------------------------
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
- ------------------------------------------------------
PROPOSED
MAXIMUM PROPOSED
OFFERING MAXIMUM
TITLE OF EACH CLASS PRICE PER AGGREGATE
OF SECURITIES TO BE AMOUNT TO BE SHARE OF OFFERING AMOUNT OF
REGISTERED REGISTERED COMMON STOCK PRICE REGISTRATION FEE
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
Common stock, Not
no par value 42,122,473 applicable $594,759,971 $205,090(1)
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Previously paid.
-------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PRUSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AMENDMENT TO REGISTRATION STATEMENT
The Registrant hereby amends the Registration Statement to incorporate
the exhibit or exhibits filed herewith and to add the following item or items to
Item 21. See "Incorporation of Certain Information by Reference" in the Proxy
Statement contained in the Registration Statement.
Exhibit Description
99(q) Letter Accompanying Proxy Material
99(r) MidAmerican New Release
99(s) NATWEST MidAmerican News Release
99(t) Letter to Employees
99(u) Open Letter to Employees of IES
99(v) Important Message for IES Shareholders
99(w) MidAmerican Energy Newspaper Ad, Plain-Truth Facts
99(x) Newspaper Ad, Questions Shareholders Should Ask
99(y) August 27, 1996 Slide Presentation
99.5(b) Opinion of Bruder, Gentile & Marcoux
99.23(e) August 25, 1996 Consent
Signatures
Pursuant to the requirements of the Securities Act, the registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Des Moines, State of
Iowa, on the 27th day of August, 1996.
MIDAMERICAN ENERGY COMPANY
By /s/ S. J. BRIGHT
-----------------------------
S. J. Bright
President, Chief Executive
Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1933,
this report has been signed below by the following persons in the capacities
indicated, on the date set forth above.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------- ------------------------------
<C> <S>
/s/ R. E. CHRISTIANSEN* Chairman of the Board of Directors
- ----------------------------------- and Director
R. E. Christiansen
/s/ S. J. BRIGHT President, Chief Executive Officer
- ----------------------------------- and Director
S. J. Bright
/s/ P. G. LINDNER Group Vice President and Chief
- ----------------------------------- Financial Officer (Principal
P. G. Lindner Accounting Officer)
<PAGE>
/s/ J. W. AALFS* Director
- -----------------------------------
J. W. Aalfs
/s/ R. A. BURNETT* Director
- -----------------------------------
R. A. Burnett
/s/ R. D. CHRISTENSEN* Director
- -----------------------------------
R. D. Christensen
/s/ J. W. COLLOTON* Director
- -----------------------------------
J. W. Colloton
/s/ F. S. COTTRELL* Director
- -----------------------------------
F. S. Cottrell
/s/ J. W. EUGSTER* Director
- -----------------------------------
J. W. Eugster
/s/ M. FOSTER, JR.* Director
- -----------------------------------
M. Foster, Jr.
/s/ N. GENTRY* Director
- -----------------------------------
N. Gentry
/s/ J. M. HOAK, JR.* Director
- -----------------------------------
J. M. Hoak, Jr.
s/s R. L. LAWSON* Director
- -----------------------------------
R. L. Lawson
/s/ R. L. PETERSON* Director
- -----------------------------------
R. L. Peterson
<PAGE>
/s/ N. L. SEIFERT* Director
- -----------------------------------
N. L. Seifert
/s/ W. S. TINSMAN Director
- -----------------------------------
W. S. Tinsman
/s/ L. L. WOODRUFF* Director
- -----------------------------------
L. L. Woodruff
*By: /s/ P. J. LEIGHTON
- -----------------------------------
(P. J. Leighton
as Attorney-in-fact of
the persons indicated)
</TABLE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- --------------------------------------------------------------------------------
<C> <S>
99(q) Letter Accompanying Proxy Material
99(r) MidAmerican New Release
99(s) NATWEST MidAmerican News Release
99(t) Letter to Employees
99(u) Open Letter to Employees of IES
99(v) Important Message for IES Shareholders
99(w) MidAmerican Energy Newspaper Ad, Plain-Truth Facts
99(x) Newspaper Ad, Questions Shareholders Should Ask
99(y) August 27, 1996 Slide Presentation
99.5(b) Opinion of Bruder, Gentile & Marcoux
99.23(e) August 25, 1996 Consent
</TABLE>
-1-
Exhibit 99(q)
[Letter accompanying proxy materials mailed to IES Shareholders who hold shares
in "street" name]
[MidAmerican Energy Company Letterhead]
August 26, 1996
Dear IES Shareholder:
Enclosed please find materials recently forwarded to IES Industries
shareholders by MidAmerican Energy Company. You should be receiving this
material shortly from the broker or bank where you hold your shares. As
distribution of proxy materials can sometimes be delayed, we thought you would
appreciate receiving a copy of this material promptly.
If you have questions regarding MidAmerican Energy's merger proposal,
please call us toll-free at 1-888-776-4692. You may also contact your broker on
this important matter.
IES's Annual Meeting, scheduled for September 5, is only days from now
and your vote is important. To preserve your opportunity to consider the
MidAmerican merger proposal which offers you greater value, you should vote
AGAINST the Wisconsin deal. Please instruct your broker to execute a BLUE proxy
card on your behalf voting AGAINST the Wisconsin deal. You should also return
your BLUE proxy card by mail upon receipt to make sure that your shares are
voted.
Thank you for your interest and your prompt attention to this matter.
Sincerely,
/s/ J. Sue Rozema
J. SUE ROZEMA
MidAmerican has filed with the Securities and Exchange Commission a
proxy statement and other materials relating to the solicitation of proxies
against the Proposed Wisconsin Transaction and that proxy statement and the
other materials are incorporated herein by reference.
Exhibit 99(r)
[MidAmerican Energy News Release]
Contact: Keith Hartje (Media) Sue Rozema (Investors) Chuck Burgess/Adam Miller
(515)281-2575 (515)281-2250 Abernathy MacGregor Group
(212)371-5999
For Release: IMMEDIATELY
MIDAMERICAN FILES FOR MERGER APPROVAL WITH FERC
__________________________________________
(DES MOINES, IOWA--Aug. 26, 1996) As part of its plan for rapid regulatory
approval of its proposed merger with IES Industries, MidAmerican Energy today
filed its application for merger approval with the Federal Energy Regulatory
Commission (FERC).
MidAmerican's application comes only twenty-one days following the company's
announcement of its intention to solicit proxies from IES shareholders against
the plan of IES, WPL Holdings Co. and Interstate Power Company to merge in a
three-company, four state transaction.
"This prompt filing demonstrates our ability to move quickly to obtain all
necessary regulatory approvals for the successful completion of the proposed
merger," said Stan Bright, president and CEO of MidAmerican. "This is a major
step toward our goal of rapidly completing the MidAmerican/IES merger. All other
regulatory filings necessary for merger approval will be made within one month
following the signing of a merger agreement with IES."
The merger application contains the testimony of economist Dr. William
Hieronymus, of Putnam, Hayes and Bartlett. According to Dr. Hieronymus, the
proposed merger will have no material adverse effect on competition in any
relevant market. Based upon this testimony, MidAmerican will ask that the FERC
approve the merger without a hearing.
In its application, MidAmerican proposes to freeze electric prices for the
wholesale customers of both MidAmerican and IES for four years. MidAmerican also
proposes a one-year freeze on electric transmission prices for customers who
take advantage of the company's open access transmission tariff.
MidAmerican's point-to-point electric transmission prices are approximately 30%
lower than current IES transmission prices. Upon completion of the merger, these
lower prices would be available to IES transmission customers.
"The cost savings associated with the merger will allow us to offer significant
price advantages to our wholesale customers and to the users of our electric
transmission system," said Mr. Bright. "These savings at the wholesale level
will translate into lower electric costs for the retail customers of municipal
utilities and rural electric cooperatives who do business with us." MidAmerican
previously announced it has filed a plan with the Iowa Utilities Board that
would reduce or freeze prices for its retail electric customers in Iowa
through the year 2001.
MidAmerican Energy Company, Iowa's largest utility, serves 635,000 electric
customers and 600,000 natural gas customers in Iowa, Illinois, South Dakota and
Nebraska. The Company is headquartered in Des Moines. Information on MidAmerican
is available on the Internet at http://www.midamerican.com.
# # #
MidAmerican has filed with the Securities and Exchange Commission a proxy
statement and other materials relating to the solicitation of proxies against
the proposed IES/WPL/Interstate transaction and that proxy statement and the
other materials are incorporated herein by reference.
Exhibit 99(s)
[MidAmerican Energy News Release]
Contact: Keith Hartje (Media) Sue Rozema (Investors) Chuck Burgess/Adam Miller
(515)281-2575 (515)281-2250 Abernathy MacGregor Group
(212)371-5999
For Release: IMMEDIATELY
NATWEST SECURITIES RECOMMENDS THAT IES INDUSTRIES SHAREHOLDERS VOTE
AGAINST THE WISCONSIN DEAL
(DES MOINES, IOWA--Aug. 26, 1996) NatWest Securities Corp. has recommended
to shareholders of IES Industries Inc (nyse:ies) that they vote against the
proposed merger with WPL Holdings, Inc. and Interstate Power Company (the
"Wisconsin deal"). NatWest also recommends that IES shareholders support the
alternative merger proposed by MidAmerican Energy Company (NYSE:MEC)
Edward Tirello, Jr., a respected utility industry analyst for NatWest
Securities, wrote in his report, "IES has provided no compelling reasons for its
rejection of the MEC offer.... We recommend that shareholders vote against the
WPH proposal and in favor of MEC's proposal."
MidAmerican's proposal calls for a cash and stock merger with IES, comprised of
up to 40% cash and 60% MidAmerican common stock. IES shareholders receiving cash
will receive $39.00 per share and IES shareholders receiving stock will receive
2.346 shares of MidAmerican common stock per share of IES common stock. A
MidAmerican/IES combination would provide shareholders of IES $3.39 more per
share than the value of the consideration they would receive in the Wisconsin
transaction (blended value based on closing stock prices on August 23, 1996).
The MidAmerican proposal also offers IES shareholders a 25% dividend increase
over the dividend proposed in the Wisconsin transaction.
MidAmerican Energy Company, Iowa's largest utility, serves 635,000 electric
customers and 600,000 natural gas customers in Iowa, Illinois, South Dakota and
Nebraska. The Company is headquartered in Des Moines. Information about
MidAmerican is available on the Internet at http://www.midamerican.com.
# # #
Exhibit 99(t)
[MidAmerican Energy Company Letterhead]
August 26, 1996
Dear Fellow Employee:
You've been doing a great job in your efforts to defeat the Wisconsin deal! Many
of you have volunteered to call IES shareholders while others have been
supporting those efforts by filling in for employees working at the shareholder
call centers. Thank you for your hard work.
Your efforts have been productive. Initial reports from call centers are very
positive. IES shareholders particularly appreciate calls from MidAmerican
employees rather than from professional solicitors calling from New York, as IES
is doing. Of IES shareholders who indicate that they have decided, the majority
are against the Wisconsin deal. This is extremely good news for us.
Our work this week will be critical to our success. We will continue contacting
individual and institutional IES shareholders throughout the week. Another
letter will be sent to IES shareholders on Tuesday, and community meetings in
many towns served by IES will take place starting on Wednesday. Television and
newspaper ads will run throughout the week.
You've probably seen IES advertisements attacking MidAmerican and our ability to
deliver the benefits of the merger. We think that's merely an attempt by IES to
distract people from the simple fact that MidAmerican's offer is so clearly
superior.
Unfortunately, IES has also portrayed our merger proposal as hostile. Please do
not regard this proposal as hostile in any way. We are simply trying to do what
we believe is best for the shareholders, customers and employees of both
MidAmerican and IES. We will continue this positive focus in our communications
to IES shareholders.
Many of you have told us that you have spoken with IES employees who are
supportive of our proposal and curious about MidAmerican's employee benefits. In
response to this, we've published an open letter to IES employees and have
established a toll-free telephone number for IES employees to call to inquire
about benefits currently available to MidAmerican employees. This toll-free
phone line will be staffed by our human resources employees.
Thank you for your great work and your dedication to this important effort.
Sincerely,
/s/ Stan Bright
Stan Bright
Exhibit 99(u)
[MidAmerican Energy Company Letterhead]
August 25, 1996
AN OPEN LETTER TO THE EMPLOYEES OF IES INDUSTRIES
Dear IES Employee:
Over the years, many employees of IES Industries and MidAmerican Energy have
come to know and respect one another through their social and professional
contacts. We share a common goal - to provide exceptional service to our
customers. In pursuit of that goal we have exchanged crews, equipment and
knowledge to help one another recover from natural disasters, and we've jointly
planned and built energy facilities to insure a reliable energy supply for all
Iowans.
We now find ourselves in the situation of advocating competing merger proposals.
Each of us will do our best in this effort, and IES shareholders will decide
which offer they prefer.
Many of you have indicated your personal support of the MidAmerican proposal and
have asked questions about benefits available to employees of MidAmerican. To
respond to your questions we have established a toll-free telephone number,
1-800-456-2287, staffed by our human resources employees during normal business
hours. Please feel free to call this number with questions you may have about
MidAmerican Energy Company.
Finally, I want to speak directly to the issue that concerns you and your
families the most - job security. I am aware that IES has been engaged in a
downsizing and re-engineering process that has caused some anxiety and
uncertainty among IES employees. We have indicated that a merger of our
companies would result in employment adjustments of approximately 450 positions.
Any job reductions would be dispersed throughout the state. I want to assure you
that these adjustments would be accomplished through attrition and other
voluntary methods. We do not anticipate layoffs being required in the proposed
merged company. We have already started to restrict filling open positions at
MidAmerican in order to honor these commitments. The merged company would have a
very sizable number of employees in Cedar Rapids, and the IES Tower would
continue to be the primary office location for those employees.
We hope that we will soon be able to talk directly to your board of directors
about our merger proposal.
Sincerely
/s/ Stan Bright
Stan Bright
President and CEO
Exhibit 99(v)
[Newspaper advertisement appearing in the August 27, 1996 Wall Street Journal]
An Important Message For
IES Industries Shareholders
Time Is Money
Our FERC Filing Brings Us Neck And Neck
In The Race To Obtain Regulatory Approval.
Don't be swayed by IES' attempts to distract you from an honest comparison of
the MidAmerican proposal and the Wisconsin deal. The regulatory structure of
MidAmerican's merger proposal closely resembles its two previous mergers, each
of which was completed in less than 12 months. We are confident we can complete
a merger with IES within that same time frame after signing a definitive merger
agreement.
We Believe A MidAmerican/IES Merger Could Be Completed In Less Than 12 Months
The sooner a merger is completed, the sooner you can get your MidAmerican shares
(with a 25% higher dividend) or $39 per share in cash. The MidAmerican proposal
could be completed as early as the Wisconsin deal--if not earlier. The Wisconsin
deal is a complex three-way, four-state transaction that requires approval from
more regulatory bodies than the MidAmerican proposal. Plus, the three companies
in the Wisconsin deal lack direct transmission interconnection. The Wisconsin
deal was announced in November, 1996, more than nine months ago, and they have
yet to receive approval from a single regulatory agency. Meanwhile, only 21 days
after announcing our merger proposal, we have already filed an application with
the Federal Energy Regulatory Commission (FERC) for approval of our proposed
merger.
Compare the regulatory approvals each transaction needs:
The Wisconsin Deal Needs: MidAmerican's Proposal Needs:
*Federal Energy Regulatory Commission *Federal Energy Regulatory Commission
*Iowa Utilities Board *Iowa Utilities Board
*Illinois Commerce Commission *Illinois Commerce Commission
*Nuclear Regulatory Commission *Nuclear Regulatory Commission
*Wisconsin Public Services Commission
*Minnesota Public Utilities Commission
*Securities and Exchange Commission
But don't just take our word for it. Read what George Bruder, a recognized
expert in FERC proceedings and a former President of the Federal Energy Bar
Association, wrote in an August 25, 1996 letter to IES shareholders (the full
text of Mr. Bruder's letter is available by calling 1- 888-776-4692).*
"I find no basis on which to conclude that the Federal Energy
Regulatory Commission is more likely to consider and decide either application
earlier than the other application, and I conclude that the two applications
likely will be decided in the same time frame."
<PAGE>
Still More Value
We believe MidAmerican's proposal still provides more value for IES
shareholders. Our proposal offers you a dividend 25% higher than the dividend in
the Wisconsin deal. Only our proposal would give you $3.39 more per IES share,
based on closing stock prices on August 23, 1996. And only our proposal would
give you an optional cash election worth $39 per IES share. The choice is
yours.**
Dividend Per IES Share Value Per IES Share
[Bar Graph] [Bar Graph]+
The MidAmerican Proposal:
Greater Value, Proven Track Record, Fewer Regulatory Hurdles!
To support the MidAmerican proposal, check the "Against" box, then sign, date
and mail your BLUE proxy today. We urge you NOT to return any green or white
proxy sent to you by IES. If you have already returned your IES proxy, you can
still change your vote. Only the latest-dated proxy will count. Time is short,
so please act today.
Vote AGAINST The Wisconsin Deal
IMPORTANT
For more information about the MidAmerican Energy merger proposal, please call
this toll-free phone number: 1-888-PRO-IOWA/1-888-776-4692
[MidAmerican Energy Logo] August 27, 1996
MidAmerican has filed with the Securities and Exchange Commission a proxy
statement and other materials relating to the solicitation of proxies against
the proposed IES/WPL/Interstate transaction and that proxy statement and the
other materials are incorporated herein by reference.
* Mr. Bruder has performed legal consulting services in the past for a
predecessor company of MidAmerican Energy.
** If holders of more than 40% of the total IES shares choose to receive cash,
then all shareholders who elected to receive all cash will receive the same
combination of cash and stock. If you get a combination of cash and stock,
the stock portion will be entirely tax-free.
+ Based on August 23, 1996 closing stock prices. Blended value of MidAmerican
proposal based on 40% cash worth $39 per IES share and 60% MidAmerican common
stock worth $37.83 per IES share.
Exhibit 99(w)
[Newspaper advertisement published in Iowa newspapers on August 27, 1996]
********************************************************************************
Here are some plain-truth
facts that IES hopes
you'll ignore
********************************************************************************
In a desperate effort to keep their Wisconsin deal from
coming apart, IES is attacking MidAmerican Energy Company. Yet
no matter how hard they try,
they can't overcome these facts about our merger proposal:
1 Our dividend is better.
MidAmerican's proposal would pay IES shareholders $2.82 per current IES share
vs. only $2.25 in the Wisconsin deal.* That's a 25% difference, yet IES is
hoping you'll overlook this fact and accept a lower dividend for your shares.
Who's kidding whom?
And, even if IES were able to grow their future dividends by 1% per
year, as suggested by a Wisconsin analyst, they wouldn't be able to match the
$2.82 dividend MidAmerican is offering now...for 23 years!
2 Our dividend is secure.
For the twelve months ending June 30, 1996, MidAmerican's earnings exceeded its
dividend by more than 18%!
What's more, the savings we expect from a MidAmerican-IES merger will
more than offset the cost of any new debt we may take on to accomplish that
merger.
3 We are financially sound.
MidAmerican Energy has an A+ rating from Standard & Poor's. That's higher than
IES' current S&P rating.
We intend to pay down debt after the merger. MidAmerican has $750
million in non- utility assets that we're looking to redeploy into utility
service and communications businesses, including the proposed merger with IES.
The bottom line is this. MidAmerican Energy is a strong,
Iowa-based company, with a proposal that offers more to IES
shareholders. Yet IES hopes you'll ignore the
facts so they can push ahead with their Wisconsin deal.
It's your choice...the higher-value MidAmerican proposal or the
less-for-your-money Wisconsin deal. Your vote will help determine which
direction IES takes.
********************************************************************************
Vote AGAINST the Wisconsin Deal
IES shareholders have been sent proxy materials, including a BLUE proxy, by
MidAmerican Energy. Check the "Against" box; sign, date and mail the BLUE proxy
as soon as possible. We urge you not to return any green or white proxies sent
to you by IES. If you have already returned your IES proxy, we urge you the
change your vote and vote AGAINST the Wisconsin deal by sending in the BLUE
proxy. Only the latest-dated proxy will count. For more information about
MidAmerican's merger proposal, call this toll-free number:
1-888-PRO-IOWA (1-888-776-4692)
********************************************************************************
<PAGE>
[MidAmerican Energy Logo]
*Amounts are based on a MidAmerican dividend of $1.20 and a conversion ratio of
2.346 shares of MidAmerican common stock per share of IES common stock; WPL
dividend of $1.97 and conversion rate of 1.14 shares of WPL common stock per
share of IES common stock.
MidAmerican has filed with the Securities and Exchange Commission a proxy
statement and other materials relating to the solicitation of proxies against
the proposal IES/WPL/Interstate transaction and thet proxy statement and other
materials are incorporated herein by reference.
Exhibit 99(x)
[Newspaper Advertisement Published in Iowa Newspapers on August 27, 1996]
Here are some questions
IES shareholders
should be asking
IES hasn't told its shareholders the whole story about the Wisconsin deal
they're trying to push through.
If you're an IES shareholder, you should ask for answers to these questions:
1. Why didn't IES tell its shareholders it had a better offer from MidAmerican
Energy back in October 1995 before it agreed to sell out to a Wisconsin company
at a price considerably less than what the company is worth? Now, they're again
rejecting our superior offer.
2. Why did the IES Board twice vote for deals reducing dividends for IES
shareholders, and only sweetened the deal when MidAmerican came along with its
higher-value proposal? And if IES gets a go-ahead for the Wisconsin deal, what
will happen to your dividend then?
3. Why is IES glossing over the complexity of the Wisconsin deal? After 10
months, a corporate structure has yet to be defined! Is the Wisconsin merger so
complex that IES will have to become a Wisconsin corporation and a Wisconsin
water utility?
4. Why does IES continue to reject MidAmerican's merger proposal? You should
also ask why the IES Board of Directors, at a meeting held just last week,
approved additional increases to the "Golden Parachutes" totaling $1.3 million
in salaries and benefits for certain IES executives?
Just whose money is that anyway?
Shareholders, don't let IES rush you into their Wisconsin deal without answering
these questions. Because the answers will affect you and your financial future.
Vote AGAINST the Wisconsin Deal
IES shareholders have been sent proxy materials, including a BLUE proxy, by
MidAmerican Energy. Check the "Against" box; sign, date and mail the BLUE proxy
as soon as possible. We urge you not to return any green or white proxies sent
to you by IES. If you have already returned your IES proxy, we urge you to
change your vote and vote AGAINST the Wisconsin deal by sending in the BLUE
proxy. Only the latest-dated proxy will count. For more information about
MidAmerican's merger proposal, call this toll-free number:
1-888-PRO-IOWA (1-888-776-4692)
[MidAmerican Energy logo]
MidAmerican has filed with the Securities and Exchange Commission a proxy
statement and other materials relating to the solicitation of proxies against
the proposed IES/WPL/Interstate transaction and that proxy statement and other
materials are incorporated herein by reference.
Exhibit 99(y)
[The following slides were included in slide presentations made by MidAmerican
executives to institutional investor analysts in Boston, Massachusetts on August
27, 1996.]
[Overview of Proposed IES Merger]
[Slide #1]
MIDAMERICAN ENERGY
COMPANY
OVERVIEW OF PROPOSED IES MERGER
AUGUST 1996
[MidAmerican Energy Logo]
<PAGE>
[Slide #2]
Forward-Looking Statements
From time to time during this presentation, we will make
forward-looking statements.
* These statements may include:
- Cost reduction strategies and anticipated outcomes
- Pricing strategies
- Changes in utility industry
- Planned capital expenditures
- Financing needs and availability
- Future plans and strategies
- Anticipated events
* These statements are subject to risks and uncertainties
- Results could differ from those expressed in statements
* Some of these risks and uncertainties include:
- General economic conditions
- Competition factors
- Regulatory actions
- Potential weather effects on sales and revenue
- Others
[MidAmerican Energy Logo]
<PAGE>
[Slide #3]
MidAmerican Energy Company
* Gas and electric utility with unregulated subsidiaries
* Strategic intent is to be a regional energy and
communications provider
* Serve over 630,000 electric customers and nearly 600,000
gas customers in Iowa, Illinois, South Dakota and Nebraska
[MidAmerican Energy Logo]
<PAGE>
[Slide #4]
Merger Experience
1990 Midwest Energy and Iowa Resources
Midwest Resources
- First Iowa utility merger, completed without FERC approval
- Community presence model developed
[MidAmerican Energy Logo]
<PAGE>
[Slide #5]
Merger Experience
(Continued)
1995 Midwest Resources and IIGE
MidAmerican Energy Company
- Fastest modern utility merger to date - 11 months - First multi-state ICC
merger approval - First market based pricing plan in Iowa or Illinois
[MidAmerican Energy Logo]
<PAGE>
[Slide #6]
MidAmerican Financial Profile
(millions)
Balance Sheet 6/30/96 12/31/95
Net Plant $2,631.5 $2,654.5
Purchase Power contract 209.2 212.1
Current Assets 312.9 409.8
Investments 869.2 826.5
Other Assets 409.9 420.5
Total Assets $4,432.7 $4,523.5
[MidAmerican Energy Logo]
<PAGE>
[Slide #7]
MidAmerican Financial Profile (cont.)
(millions)
Balance Sheet (cont.) 6/30/96 12/31/95
Common Equity $1,242.6 $1,225.7
Preferred Stock 128.6 139.9
Long-Term Debt 1,405.4 1,403.3
Current Liabilities 481.0 575.4
Deferred Taxes 750.4 746.6
Purchase Power Contract 112.7 112.7
Other Liabilities 312.1 319.8
Total Capitalization & Liabilities $4,432.7 $4,523.5
[MidAmerican Energy Logo]
<PAGE>
[Slide #8]
MidAmerican Financial Profile (cont.)
(millions)
Income Statement 12 months ending 6/30/96 12 months ending 12/31/95
Utility Revenues $1,607.5 $1,554.2
Utility Expenses (1,268.9) (1,249.6)
Utility Operating Income $338.6 $304.6
Unregulated 2.8 (3.5)
Operating Income $341.4 $301.1
Other Income 10.4 11.7
Interest (112.6) (114.4)
Income Taxes (89.3) (68.0)
Discontinued Operations 0.8 0.4
Net Income $150.8 $130.8
Preferred Dividends (8.2) (8.1)
Net Income Common $142.6 $122.8
[MidAmerican Energy Logo]
<PAGE>
[Slide #9]
MidAmerican Financial Profile (cont.)
(millions)
Income Statement 12 months ending 6/30/96 12 months ending 12/31/95
Net Income $142.6 $122.8
Average Shares Outstanding 100.8 100.4
Earnings per Share $1.42* $1.22**
Dividends per Share $1.20 $1.20
* Includes $0.20/share of one-time merger costs, $0.10/share of non-utility
asset revaluation, and approximately $0.15/share of increased earnings due
to unusually warm weather. Would be $1.57 without these items.
** Includes $0.24/share of one-time merger costs, $0.10/share of non-utility
asset revaluation, and approximately $0.15/share of increased earnings due
to unusually warm weather. Would be $1.41 without these items.
[MidAmerican Energy Logo]
<PAGE>
[Slide #10]
MidAmerican Financial Profile (cont.)
Bond Rating
Moody's A2
S & P A+
Capitalization Ratios 6/30/96
Common Equity 44.8%
Preferred 4.6%
Long Term Debt 50.6%
[MidAmerican Energy Logo]
<PAGE>
[Slide #11]
Generation Profile
* 4,311 MW of capacity
* Balanced supply mix (as a % of generation)
- Coal 77%
- Nuclear 22%
- Oil/Gas 1%
* Minimal Clean Air Act exposure
* 25% owner of Quad-Cities Nuclear Power Station
* Purchase 50% of the energy of Cooper Nuclear Station
[MidAmerican Energy Logo]
<PAGE>
[Slide #12]
Recent Activities
Corporate
* Filed for approvals to form an Exempt Holding Company with the
following subsidiaries; - MidAmerican Energy (utility operations) -
MidAmerican Capital (unregulated) - Midwest Capital (regional business
development)
* IES merger proposal
[MidAmerican Energy Logo]
<PAGE>
[Slide #13]
Recent Activities (cont.)
Utility Operations
* Electric Pricing Plan filed in Illinois and Iowa - Immediate
residential price reductions for customers above
market proxy
- Annual price reductions thereafter, declining to market proxy -
Flexibility to negotiate commercial and industrial rates - Eliminates
fuel adjustment clause - ROE deadband between 9% and 12.5% - Earnings
over 12.5 % used to accelerate recovery of regulatory
assets, fund customer service improvements, or improve
earnings
- Orders expected by year-end
[MidAmerican Energy Logo]
<PAGE>
[Slide #14]
Recent Activities (cont.)
Utility Operations (cont.)
* OCA Show Cause proceeding in Iowa
- Not yet set for hearing
- Petitioned IUB to reject the case, or consolidate with Pricing
Proposal docket
* Decision on consolidation expected by August 30, 1996
[MidAmerican Energy Logo]
=<PAGE>
[Slide #15]
Recent Activities (cont.)
Unregulated
* Restructured into MidAmerican Capital with
InterCoast Energy subsidiary
* Initiated IPO of InterCoast Energy, but canceled due to
general market conditions
* Retained Dillon Read to evaluate alternatives,
including possible divestiture
[MidAmerican Energy Logo]
<PAGE>
[Slide #16]
MEC Strategic Development
Mid 1994 Merge for size, low cost, financial strength
Mid 1995 Achieve merger savings and utility operational success
Enhance unregulated performance
Late 1995 Enhance utility performance
Restructure unregulated unit
Develop market centered competitive company
Mid 1996 Maximize utility cash flow and optimize earnings
Align unregulated business to market strategy
Assess mergers based on competitive advantage
[MidAmerican Energy Logo]
<PAGE>
[Slide #17]
MEC - IES Merger Transaction
* Unique strategic and operational fit
* Substantial opportunity for synergies
* Financially compelling offer for shareholders
* Ability to quickly consummate a combination
* Creates powerful regional provider of energy and communications
products and services
* Everybody wins: shareholders, customers and employees
[MidAmerican Energy Logo]
<PAGE>
[Slide #18]
Company Comparisons - 1995
MidAmerican IES Combined
Headquarters Des Moines, IA Cedar Rapids, IA Des Moines, IA
Assets $4.50 B $2.00 B $6.50 B
Revenue $1.72 B $0.85 B $2.57 B
Earnings $123 M $64 M $187 M
Equity Market $1,612 M $997 M $2,609 M
Value*
MW Capacity 4,311 MW 2,080 MW 6,391 MW
Customers
Electric 631,000 332,000 963,000
Gas 595,000 173,000 768,000
*August 9, 1996
[MidAmerican Energy Logo]
<PAGE>
[Slide #19]
MidAmerican's Proposed Merger
With IES Industries
* Exchange ratio of 2.346 MidAmerican shares for each
IES share in a tax-free exchange
- Common Stock election available to all
* Cash election of $39 per IES share, subject to a
maximum of 40% of outstanding shares
- If cash election is oversubscribed, cash will be prorated
* IES shareholders can elect cash or common stock for
each share
[MidAmerican Energy Logo]
<PAGE>
[Slide #20]
Financial Considerations
* MidAmerican's proposal is compelling and
demonstrably superior
- 31% premium to IES market price (before announcement)
- 6% premium to revised Wisconsin transaction
- 25% higher dividend than the Wisconsin Transaction ($2.82
vs. $2.25)
- Election to receive stock or cash
[MidAmerican Energy Logo]
<PAGE>
[Slide #21]
Pre-Offer Communication
August 1993 IES - IIGE discussion
August 1995 Verbal contact
October 1995 Written correspondence including
request to make proposal
November 1995 Wisconsin deal announced
[MidAmerican Energy Logo]
<PAGE>
[Slide #22]
Strategic Elements of Combination
* Natural Fit
- System integration relatively seamless
- Joint ownership of 1,078 megawatts of generation
- No new regulatory jurisdictions
- Similar production costs and rates
- Contiguous and overlapping territory spans most of Iowa
[MidAmerican Energy Logo]
<PAGE>
[Slide #23]
Strategic Elements of Combination
[GRAPHIC]
Geographical map of State of Iowa depicting MidAmerican Energy Service Area, IES
Industries Service Area and Service Area Overlaps.
[MidAmerican Logo]
<PAGE>
[Slide #24]
Strategic Elements of Combination
* Synergy opportunities would benefit customers and
shareholders alike
- Preliminary savings estimate $655 million over 10 years
[MidAmerican Energy Logo]
<PAGE>
[Slide #25]
Preliminary Cost Savings
1998 - 2007 Time Frame
[PIE CHART]
Corporate/Administrative $117M
Purchasing Economics $86M
System Optimization $132M
Labor $349M
440 people - 7.6% of 5800 total
Estimated 10 year savings over $655 million* * net of $29 million of costs to
achieve savings
* Virtually all operating cost savings
* Based entirely on public information
* MidAmerican projected approximately $30
million annual O&M savings in its 1994
merger announcement. Has actually
achieved $50 million in estimated savings
* Estimate is conservative - not out of
line with other transactions
* Over 90% O & M vs. capital
[MidAmerican Logo]
<PAGE>
[Slide #26]
Strategic Elements of Combination
* Merged entity would have resources to focus on core business
- Redeployment of non-strategic, unregulated assets which
do not meet performance criteria
- Proceeds from potential sale, if sufficient, may be used for
non-utility investment, debt repayment or stock buy-back
[MidAmerican Energy Logo]
<PAGE>
[Slide #27]
Strategic Elements of Combination
* Combined company could more aggressively pursue
strategy in a competitive environment
- Natural linkage of telecommunication with electric products
and services
- Financial ability to develop and invest in products and
services which complement the core business
- Low cost production status reduces competitive risks
[MidAmerican Energy Logo]
<PAGE>
[Slide #28]
McLeod Inc.
* Iowa based full service regional telecommunications company
* Management team from prior Telecom USA company. Sold to MCI in
1990 for $1.25 billion.
* McLeod IPO @$20/share in May, 1996. Current price $28/share * Market
capitalization of approximately $1.2 billion * Merged company will hold
approximately 41% of total shares * Carrying value for MidAmerican is
approximately $36M
[MidAmerican Energy Logo]
<PAGE>
[Slide #29]
Transaction Funding
* Cash consideration will initially be funded with short-term debt *
MidAmerican debt will be reduced through a structured process of
redeploying unregulated assets and replacement with tax exempt
preferred stock
* Unregulated assets of the combined company are nearly $900
million, excluding McLeod
* Alternatives include:
- InterCoast Energy sale - expected to yield over $180 million after tax
- Preferred portfolio liquidation could yield over $230 million - Tax
exempt preferred stock - MidAmerican was evaluating the
issuance of up to $200 million, prior to announcement of the IES
merger
- New Zealand utility sale - expected to generate $25 million - Other -
the combined company will still have nearly $500 million
of non-utility assets, excluding McLeod, which will be evaluated
and potentially restructured
[MidAmerican Energy Logo]
<PAGE>
[Slide #30]
Pro Forma Cash Flow Impact
($ millions, except per share)
IES cash flow (latest twelve months 6/30/96) $206
Interest expense on new debt (18)
Acquired cash flow $188
MEC cash flow (latest 12 twelve months 6/30/96) 435
After-tax synergies to shareholders 19
Combined cash flow $642
Combined shares outstanding (million) 142
Pro forma per share -operating cash flow $4.51 per share
-dividend $1.20 per share
Notes: Assumes 40% of total consideration is cash.
Assumes $65 million synergies are split 50/50 between customers and
shareholders. Based on after-tax cash flow from operations, exclusive
of non-recurring items.
{MidAmerican Energy Logo]
<PAGE>
[Slide #31]
Unrecognized Value*1
Pro forma cash flow per share $4.51
Typical midwest utility multiple*2 5-6 times
$22.54-$27.06
Pro forma McLeod holding $497 million
Pro forma shares outstanding (million) 142
Pro forma McLeod holdings per share $3.49
Total implied value per share $26.03 - 30.55
*1 Based upon free cash flow and investment holding valuations; both approaches
readily recognized in the financial community.
*2 Example based on cash Examples: Illinova 5.1x
flow for the 12 months Western Resources 5.0x
ended March 31, 1996 NIPSCO 5.8x
[MidAmerican Energy Logo]
<PAGE>
[Slide #32]
Merger Timing - Regulatory Realities
* Strong MEC track record of rapid merger approval
* Easier application process
- No Wisconsin or Minnesota approvals required
- Merger climate good in Iowa
- Avoid Registered Holding Company issue
[MidAmerican Energy Log]
<PAGE>
[Slide #33]
Merger Announcement Date
WPH-IES-IPW November 11, 1995
MidAmerican-IES August 4, 1996
[MidAmerican Energy Logo]
<PAGE>
[Slide #34]
FERC Approvals
Transaction Filing Date Status
WPH-IES-IPW July 29, 1996* Hearing not set
MidAmerican-IES August 26, 1996 TBD
[MidAmerican Energy Logo]
<PAGE>
[Slide #35]
NRC Application
Transaction Filing Date Status
WPH-IES-IPW No action ----
MidAmerican-IES No action ----
[MidAmerican Energy Logo]
<PAGE>
[Slide #36]
Iowa Application
Transaction Filing Date Status
WPH-IES-IPW March 1, 1996; To be filed
withdrawn May 6, 1996
MidAmerican-IES 1 month after agreement To be filed
[MidAmerican Energy Logo]
<PAGE>
[Slide #37]
Wisconsin Application
Transaction Filing Date Status
WPH-IES-IPW March 1, 1996 Hearing not scheduled
Anticipated March,
1997
MidAmerican-IES N/A N/A
[MidAmerican Energy Logo]
<PAGE>
[Slide #38]
Minnesota Application
Transaction Filing Date Status
WPH-IES-IPW March 1996 Hearing not yet
scheduled
MidAmerican-IES N/A N/A
[MidAmerican Energy Logo]
<PAGE>
[Slide #39]
Merger Timing - Regulatory Realities
* Strong MEC track record of rapid merger approval
* Easier application process
- No Wisconsin or Minnesota approvals required
- Merger climate good in Iowa
- Avoid Registered Holding Company issue
* Fully integrated system
[MidAmerican Energy Log]
<PAGE>
[Slide #40]
345 kV Transmission System
[GRAPHIC]
Geographical map of Iowa and parts of neighboring States showing MidAmerican's
345 kV transmission system in comparison with IES', Interstate's and other
transmission systems within Iowa and such States.
[MidAmerican Logo]
<PAGE>
[Slide #41]
MEC-IES Merger Transaction
* Unique strategic and operational fit * Substantial opportunity for synergies *
Financially compelling offer for shareholders * Ability to quickly consummate a
combination * Creates powerful regional provider of energy and
communications products and services
* Everybody wins: shareholders, customers and employees
{MidAmerican Energy Logo]
<PAGE>
[Slide #42]
This is a unique strategic opportunity for
MidAmerican.
Our commitment is unwavering.
[MidAmerican Energy Logo]
Exhibit 5.(b)
[Bruder, Gentile & Marcoux letterhead]
August 25, 1996
Mr. John A. Rasmussen, Jr.
Group Vice President
And General Counsel
MidAmerican Energy Company
2900 Ruan Center
666 Grand Avenue
P.O. Box 657
Des Moines, Iowa 50303
Dear Mr. Rasmussen:
I have reviewed the application to the Federal Energy Regulatory Commission
("Commission") for authorization to merge IES Utilities, Inc., Interstate Power
Co., Wisconsin Power & Light Co., South Beloit Water, Gas & Electric Co.,
Heartland Energy Services and Industrial Energy Applications. If further have
reviewed the competing application of MidAmerican Energy Company and MidAmerican
Energy Holdings Company ("MidAmerican") to merge with IES Utilities to be filed
on August 26, 1996. You have requested an opinion on whether the Commission (1)
is likely to act first on the merits of the IES Utilities application as the
earlier-filed application of (2) is likely to act simultaneously on the merits
of the two applications.
The IES Utilities application was filed on March 1, 1996, and has been
twice supplemented, most recently on July 29, 1996. The Commission has not yet
set the IES Utilities application for hearing. The MidAmerican application is to
be filed on August 26, 1996, some four week after the last supplement to the IES
Utilities application. Because the two applications are competing, mutually
exclusive applications, and further because the IES Utilities application is not
materially more advanced in its procedural schedule than the MidAmerican
application, I conclude that the Commission is likely to consider and decide the
two applications simultaneously.
Further, I find no basis on which to conclude that the Commission is more
likely to consider and decide either application earlier than the other
application, and I conclude that the two applications likely will be decided in
the same time frame if the Commission does not consider and decide the
applications simultaneously. In the event that the applications are consolidated
for hearing, the Commission's decision on both applications of course would be
issued simultaneously.
The above conclusions are the product of judgment as to the Commission's
likely action and, needless to say, do not purpose to express with certainty
what that action will be.
I note that quite a number of years ago, I performed very minor legal
consultation services on a hydroelectric matter for a predecessor company of
MidAmerican. Also, this firm represents, in other matters, two intervenors in
the proceedings on the IES Utilities application. One of these intervenors
expresses no position on the application and the other raises issues and
requests a hearing. The firm has done no work for either regarding the IES
Utilities merger.
Very truly yours,
/s/ George F. Bruder
George F. Bruder
GFB:jm
Exhibit 23(e)
CONSENT OF GEORGE F. BRUDER
As legal counsel, I hereby give consent to the filing of my opinion letter
dated August 25, 1996 as an Exhibit to the Registration Statement on Form S-4
MidAmerican Energy Company and to all references to me included therein or made
a part thereof.
/s/ George F. Bruder
--------------------
George F. Bruder
Washington, D.C.
August 25, 1996
