_____________________________________________________________________________
_____________________________________________________________________________
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): June 29, 2000
_________________________
BANGOR HYDRO-ELECTRIC COMPANY
-----------------------------
(Exact Name of Registrant as Specified in its Charter)
MAINE 0-505 01-0024370
----- -------- ---------------
(State of Incorporation) (Commission File Number) (IRS Employer
Identification No.)
33 STATE STREET, BANGOR, MAINE 04401
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: 207-945-5621
_____________________________________________________________________________
_____________________________________________________________________________
ITEM 5. OTHER EVENTS.
On June 29, 2000, Bangor Hydro-Electric Company, a Maine corporation
(the "Company") and NS Power Holdings Incorporated, a Nova Scotia company
("NS Power"), entered into an Agreement and Plan of Merger dated as of June
29, 2000 (the "Merger Agreement"), providing for a merger transaction
between the Company and a wholly-owned indirect subsidiary of NS Power. The
Merger Agreement and a related press release issued by the Company are filed
as Exhibits 2.1 and 99.1, respectively, and are incorporated herein by
reference. The description of the Merger Agreement set forth herein is
qualified in its entirety by the provisions of the Merger Agreement.
Pursuant to the Merger Agreement, Merger Sub, a to-be-formed United
States subsidiary of NS Power, will merge with and into the Company (the
"Merger"). The Company will be the surviving entity (the "Surviving
Corporation"). The Merger, which was unanimously approved by the Board of
Directors of the Company, is expected to occur shortly after all of the
conditions to the consummation of the Merger, including the receipt of
certain regulatory approvals, are met or waived. The Company expects that
the Merger can be consummated within 9 to 12 months. A meeting of the
Company's shareholders to vote upon the Merger will be convened as soon as
practicable.
Under the terms of the Merger Agreement, (i) each outstanding share of
common stock of Merger Sub will be converted into one share of common stock
of the Surviving Corporation, (ii) each outstanding share of preferred stock
of the Company (the "Company Preferred Stock") will remain outstanding as
one share of preferred stock of the Surviving Corporation, and (iii) each
outstanding share of common stock of the Company (the "Company Common
Stock") other than Dissenting Shares (as defined in the Merger Agreement) or
shares owned by the Company as treasury shares, or by NS Power, if any, will
be converted into the right to receive U.S. $26.50 in cash (the "Per Share
Amount"), as such amount may be adjusted in accordance with the Merger
Agreement (the "Merger Consideration"). Holders of the Company's warrants
outstanding at the effective time of the Merger will thereafter be entitled
to receive, upon exercise of each warrant, the Merger Consideration less the
exercise price. If the closing of the Merger does not occur on or prior to
June 29, 2001, and all conditions to closing have been satisfied or are
capable of being satisfied except for the receipt by NS Power of (A) the
necessary authorizations from the Securities and Exchange Commission (the
"Commission") under the Public Utility Holding Company Act of 1935, as
amended (the "1935 Act"), and/or (B) any other necessary governmental
approvals to be obtained by NS Power, then the Per Share Amount shall be
increased by an amount equal to U.S. $0.003 for each day after such date up
to and including the day which is one day prior to the closing of the Merger.
The Merger is subject to certain customary closing conditions, including
approval by a majority of the votes entitled to be cast by all holders of
Company Common Stock and Company Preferred Stock, voting together as a class,
and the receipt of all necessary governmental authorizations. These include
appropriate authorizations from the Maine Public Utilities Commission, the
Commission under the 1935 Act and the Federal Energy Regulatory Commission,
and the filing of the requisite notification 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 the
applicable waiting period thereunder.
The Merger Agreement contains certain covenants of the parties pending
the consummation of the Merger. Subject to certain qualifications, the
Company and its subsidiaries must carry on their respective businesses in the
ordinary course consistent with good utility practice or other practice, as
applicable, in substantially the same manner as before; preserve intact their
business organizations and goodwill, preserve the goodwill and relationships
with customers, suppliers and others having significant dealings with them;
keep available the services of their present officers and employees as a
group; maintain their material properties and assets in as good repair and
condition as at present; and comply in all material respects with all
applicable laws, orders and regulations.
The Merger Agreement contains restrictions on the declaration of
dividends by the Company and its subsidiaries, although the Company's
subsidiaries are permitted to declare and pay dividends to the Company, and
the Company is permitted to declare and pay (i) its regular dividends on
Company Preferred Stock, and (ii) its current regular quarterly dividends on
Company Common Stock. In addition, beginning on the first regular quarterly
dividend payment date in 2001, the Company may increase the rate of its
regular quarterly dividends up to $0.25 per quarter. If the Merger does not
become effective between a record date and payment date of a regular
quarterly dividend, the Company may declare and pay a special dividend on
Company Common Stock, at the then current quarterly rate, for the period
between such payment date and a special record date prior to the date the
Merger becomes effective.
The Merger Agreement also contains restrictions on, among other things,
repurchasing or acquiring capital stock, issuing equity securities, amending
the articles of organization or by-laws of the Company and its subsidiaries,
acquisitions, capital expenditures, dispositions, incurrence or guarantees of
indebtedness, modification of employee compensation and benefits, changes in
accounting methods, and modifying, amending, terminating or renewing material
contracts and waiving, releasing or assigning material rights and claims of
the Company and its subsidiaries against third parties.
The Merger Agreement prevents the Company and its subsidiaries and
representatives from knowingly encouraging, initiating or soliciting,
directly or indirectly, any inquiry, proposal or offer, or engaging in
discussions or negotiations with, or providing non-public information to, any
third party relating to a business combination proposal, and requires the
Company to terminate immediately any existing solicitation, initiation,
encouragement, activity, discussions or negotiations and notify NS Power of
any inquiry, offer or proposal received by the Company relating to a business
combination proposal. The Company may, however, prior to the Company
shareholders' approval of the Merger, engage in discussions or negotiations
with, and provide information to, a third party who, without solicitation on
the part of the Company or its subsidiaries or representatives, seeks to
initiate discussions or negotiations, but only to the extent that (i) the
third party has made an Alternative Proposal (as defined in the Merger
Agreement) that, in the good faith judgment of the Board of Directors of the
Company, is likely to be more favorable to the Company's shareholders than
the Merger, and has demonstrated that it will have adequate sources of
financing to consummate such Alternative Proposal, and (ii) the Board of
Directors of the Company concludes in good faith, based upon such matters it
deems relevant and the advice of outside counsel, that such actions are
necessary for the Board of Directors to act in a manner consistent with its
fiduciary duties to shareholders under applicable law. Prior to furnishing
any information to, or entering into any discussions or negotiations with,
such third party, the Company must promptly notify NS Power in writing of
such intention to furnish information or enter into discussions or
negotiations (identifying the third party and the material terms of its
proposal) and enter into a confidentiality agreement with such third party.
The Company may also, prior to the Company shareholders' approval of the
Merger, terminate the Merger Agreement in order to accept an Alternative
Proposal (in which case, the termination fee described below would be
payable). However, before so terminating, the Company and its financial and
legal advisors must negotiate with NS Power to adjust the terms and
conditions of the Merger Agreement so as to enable the Company to proceed
with the Merger, and the Board of Directors of the Company must determine
based on the advice of outside counsel with respect to its fiduciary duties
that notwithstanding a binding commitment to consummate the Merger Agreement
and notwithstanding all concessions that may be offered by NS Power in
further negotiations with the Company, it is necessary pursuant to its
fiduciary duties that the directors reconsider the Company's commitment under
the Merger Agreement as a result of such Alternative Proposal.
The Merger Agreement may be terminated under certain circumstances,
including: (i) by mutual written agreement of the Boards of Directors of the
Company and NS Power; (ii) by either the Company or NS Power if the Merger
has not been effected on or before June 29, 2001 (the "Initial Termination
Date"), provided, that if all conditions to closing are satisfied except for
the receipt of governmental approvals, the Initial Termination Date will be
extended to December 29, 2001; (iii) by either the Company or NS Power if the
Company shareholders' approval of the Merger has not been obtained at a
Company Special Meeting (as defined in the Merger Agreement), or any
adjournments thereof; and (iv) by either the Company or NS Power if any law,
order, rule or regulation is adopted or issued which effectively prohibits
the Merger, or any final order, judgment or decree of a court permanently
restrains, enjoins or prohibits the Merger. In addition, the Company may
terminate the Merger Agreement: (i) under certain circumstances, in order to
accept an Alternative Proposal (subject to the limitations and procedures
described above and to payment of the termination fee described below); or
(ii) if there has been a breach of NS Power's representations and warranties
that would or would reasonably be expected to result in a material adverse
effect on NS Power or a material breach by NS Power of its agreements or
covenants under the Merger Agreement and any such breach or failure has not
been cured. NS Power may terminate the Merger Agreement if: (i) the Board of
Directors of the Company withdraws or modifies its approval or recommendation
of the Merger Agreement in any manner adverse to NS Power; (ii) the Board of
Directors of the Company approves or recommends an Alternative Proposal; or
(iii) there has been a material breach of the Company's representations and
warranties that would or would reasonably be expected to result in a material
adverse effect on the Company or a material breach by the Company of its
agreements or covenants under the Merger Agreement and any such breach or
failure has not been cured.
The Company will pay NS Power a termination fee of $9.0 million plus up
to $1.5 million for reimbursement of documented out-of-pocket expenses: (i)
if the Company terminates the Merger Agreement, as described above, because
the Company became the target of a third party Alternative Proposal, and the
Board of Directors of the Company determined in good faith and based upon the
advice of outside counsel with respect to its fiduciary duties that
termination was necessary for the Board of Directors to act consistently with
its fiduciary duties to shareholders under applicable law; or (ii) if, at a
time when an Alternative Proposal is pending, the Merger Agreement is
terminated (A) by NS Power because the Company shareholders' approval of the
Merger was not obtained, (B) by NS Power on account of the Board of Directors
of the Company withdrawing or modifying its approval or recommendation of the
Merger Agreement in a manner adverse to NS Power, or approving or
recommending an Alternative Proposal, or (C) by the Company on account of the
Merger not becoming effective by the Initial Termination Date or any
extension thereof as permitted under the Merger Agreement, provided, that in
the case of (ii)(A), (B) or (C), the Company enters into a definitive
agreement with respect to such Alternative Proposal within one (1) year of
such termination.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
The following exhibits are filed as part of this report:
2.1 Agreement and Plan of Merger, dated as of June 29, 2000, by and among
Bangor Hydro-Electric Company and NS Power Holdings Incorporated.
99.1 Press Release dated June 30, 2000.
SIGNATURE
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.
Dated: July 13, 2000
BANGOR HYDRO-ELECTRIC COMPANY
By: /s/ Frederick S. Samp
_________________________
Frederick S. Samp
Vice President-Finance & Law and
Chief Financial Officer
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
____________________________________________________________________________
2.1 Agreement and Plan of Merger, dated as of June 29, 2000, by and among
Bangor Hydro-Electric Company and NS Power Holdings Incorporated.
99.1 Press Release dated June 30, 2000.
