Printer Friendly

CG&E and PSI BOARDS AGREE TO HOLDING COMPANY STRUCTURE FOR STRATEGIC ALLIANCE

 CINCINNATI, and PLAINFIELD, Ind., July 2 /PRNewswire/ -- The Cincinnati Gas & Electric Company (NYSE: CIN) and PSI Resources, Inc. (NYSE: PIN) announced today that the boards of directors of both companies have agreed to a holding company structure for their strategic alliance. Under this structure, CG&E and PSI Energy Inc. will become operating subsidiaries of a holding company called CINergy Corp.
 PSI Energy will continue as an Indiana corporation headquartered in Plainfield and CG&E will continue as an Ohio corporation headquartered in Cincinnati. Union Light, Heat and Power Company will remain a subsidiary of CG&E. CINergy will be incorporated in Delaware and will be registered under the Public Utility Holding Company Act of 1935. The companies noted that other than the changes in structure, the terms and conditions of the strategic alliance remain essentially unchanged.
 "We remain committed to the strategic alliance created in the merger of CG&E and PSI and believe that the benefits of the combination can be achieved through the holding company structure," said CG&E Chairman, President and Chief Executive Officer, Jackson H. Randolph and PSI Resources Chairman, President, and Chief Executive Officer, James E. Rogers. "The range of cost savings from the holding company structure will be virtually the same as under the original merger, as will the opportunity for improved earnings and increased dividends for shareholders," they added.
 Previously announced exchange ratios remain the same. Each common share of CG&E would be converted to one common share of CINergy and each common share of PSI would be converted to .909 common share of CINergy. The outstanding preferred stock of CG&E and PSI Energy, Inc., the principal subsidiary of PSI Resources, would not be affected. The transaction is expected to be tax-free to CG&E and PSI shareholders.
 The holding company structure was agreed to in response to a ruling last week by the Indiana Utility Regulatory Commission (IURC). CG&E and PSI are reviewing the extent to which the regulatory approvals required under the previous structure remain applicable to the restructured transaction.
 CG&E and PSI recognize that the divestiture of CG&E's gas operations is a possibility under a registered holding company, but will seek approval of the Securities and Exchange Commission (SEC) to maintain the gas portion of the business. However, divestiture if ordered, would occur after the closing of the CINergy strategic alliance. Thereafter, historically it has taken several years to accomplish.
 Randolph and Rogers said "As a registered holding company, CINergy will join the ranks of successful utilities which operate under this structure."
 The participants in this solicitation are as follows: The Cincinnati Gas & Electric Company ("CG&E"); the following directors of CG&E: Neil A. Armstrong, Oliver W. Birckhead, Clement L. Buenger, C. Robert Everman, George C. Juilfs, Thomas E. Petry, Jackson H. Randolph, Jane L. Rees, Ph.D., John J. Schiff, Jr., Dudley S. Taft, and Oliver W. Waddell; the following officers of CG&E: Donald R. Blum, Terry E. Bruck, Donald C. Funke, Daniel R. Herche, Donald I. Marshall, James J. Mayer, Stephen G. Salay, William L. Sheafer, George H. Stinson, W. Denis Waymire, and Robert P. Wiwi; the following employees of CG&E: Kim Adams, Robert Andriot, Bradley Arnett, Wendy Aumiller, Wendy Beckelhymer, Cheryl Braun, Mark Chastain, Carlton Chavis, Elizabeth Cooley, G. Roger Daniel, William Dehmer, Bonnie Doherty, Jeff Dorsey, William Evers, C. Robert Hetterick, Robin LaBare, James Lance, David Lloyd, James Mosley, Teresa O'Neill, Larry Riffe, Judy Ross, and Daphne Watts; the following employees of Morgan Stanley & Co. Incorporated: R. Bradford Evans, John H. Huneke, Marko C. Remec, Caren Byrd, Jay D. Hatfield, John B. Ehrenkranz, and Gary E. Brody. As of Dec. 31, 1992, all of the above persons taken as a whole own less than 1 percent of the outstanding shares of CG&E common stock in the aggregate and none of the outstanding shares of CG&E preferred stock.
 The merger agreement provides that, upon consummation of the merger, CINergy's Board of Directors will consist of 19 persons with ten persons designated by CG&E.
 In connection with the merger agreement, Jackson H. Randolph, currently the chairman, president and chief executive officer of CG&E, entered into an employment agreement with CINergy Corp. CG&E, PSI Resources, Inc. and PSI Energy, Inc., effective upon consummation of the merger, which provides for Mr. Randolph to serve as chief executive officer of CINergy until Nov. 30, 1995 and as chairman of the board of CINergy until Nov. 30, 2000. In addition, all of the officers listed above have entered into severance agreements with CG&E providing for cash severance payments under certain circumstances following the merger, including certain situations involving the actual or constructive termination of employment following the merger.
 CINergy has agreed to indemnify, to the fullest extent not prohibited by law, the present and former officers and directors for CG&E, including the CG&E officers and directors listed above, against certain liabilities arising out of or pertaining to actions or omissions occuring at or prior to the consummation of the merger that arise from or are based on services as an officer or director that arise from or pertain to the transactions contemplated by the merger agreement, and to maintain the current policies of directors' and officers' liability insurance held by CG&E for a period of not less than six years after the merger.
 The participants in this solicitation include PSI Resources, Inc. ("PSI"), the following directors: James E. Rogers, James K. Baker, Hugh A. Barker, Michael G. Browning, Kenneth M. Duberstein, Stuart E. Eizenstat, Shelton M. Hannig, John A. Hillenbrand, II, Emerson Kampen, John M. Mutz, Melvin Perelman, Shirley Shideler, Van P. Smith, Robert L.
Thompson. Employee participants include J.W. Leonard, Larry Thomas,


Renae Conley, Mark Campbell, Cheryl Foley, Georgia Pool, Linda Walker, Mike Goss, Angeline Protogere and Pam Chapman. All such persons and those listed below are deemed to own beneficially less than 2 percent of the outstanding shares of PSI's common stock in the aggregate. CINergy Corp. ("CINergy"), PSI, PSI Energy, Inc. ("PSI Energy") and The Cincinnati Gas & Electric Company ("CG&E") have entered into an employment agreement with Mr. Rogers which will become effective at the effective time ("effective time") of the merger among PSI, PSI Energy and CG&E ("merger"). Mr. Rogers' employment agreement amends his existing employment agreement with PSI and PSI Energy. Under certain benefit plans, severance arrangements and other employment agreements maintained, or entered into, by PSI or PSI Energy, certain benefits may become vested or accelerated in connection with the merger with respect to Messrs. Rogers and other directors of PSI and the other participants. To the extent, if any, not provided by an existing right of indemnification or other agreement or policy, during the period commencing on the effective time and continuing for not less than six years thereafter, CINergy shall, to the fullest extent not prohibited by applicable law, have certain indemnification obligations to the participants with respect to matters arising at or prior to the effective time in connection with the transaction contemplated by the Merger. PSI has the right to designate 9 of the 19 directors of CINergy Corp., one of whom will be Mr. Rogers. For further description of the foregoing interests, see the preliminary joint proxy statement of CG&E, PSI and PSI Energy, dated March 25, 1993, a copy of which has been publicly filed with the Securities and Exchange Commission. PSI has retained Philip O'Connor, Ph.D. to provide regulatory advice in connection with the IPALCO offer and Mr. O'Connor may be a participant in this solicitation.
 Additional employees who may be participants: Sharon Acton, Jerry Banks, David Bell, Jim Benning, Lane Birch, Lee Bowman, Bill Cowen, Ralph Craig, Duejean Garrett, Joe Hale, Butch Hancock, Steve Harkness, Nisa Hensley, Dave Hoffman, Boyd Hoff, Bob Hutchings, Harold Isaacs, Dale Justis, Bruce Kirkland, Lisa Kobe, Jerry Liggett, Dan Mahan, Jim Marshall, Jay McCoskey, Don Merk, Joe Messick, Pat More, Dana Moses, Mike Newman, Jon Noland, Rob Norris, Dave Olmstead, Leigh Pefley, Eric Pierce, Will Prather, Stan Pugh, Jack Purvis, Bill Quayle, Bernie Roberts, Bill Roberts, Bruce Rose, Mike Sample, Chuck Session, Jim Stanley, George Steier, Jr., Rhea Stewart, Don Storck, John Stowell, Daryl Teed, Kipper Tew, Greg Troxell, Jim Turner, Tom Van Paris, Patty Walker, Howard Williams, Jim Willis, Chuck Winger. No participant individually owns more than 1 percent of the outstanding shares of PSI's common stock.
 -0- 7/2/93
 /CONTACT: Steven L. Brash, media, 513-287-2226 or 513-231-6895 after 6 p.m., or James R. Mosley, analysts, 513-287-2367, or William L. Sheafer, 513-287-3852, all of CG&E, or Angeline Protogere, media, 317-838-1338 or 317-298-3090 after 6 p.m., or Renae Conley, analysts, 317-838-1157, both of PSI, or Joele Frank, 212-880-5265, or Peter Stack, 212-880-5274, both of Ogilvy Adams & Rinehart, for CG&E and PSI/
 (PIN CIN)


CO: PSI Resources, Inc.; Cincinnati Gas & Electric Company ST: Ohio, Indiana IN: UTI SU:

TM -- NY047 -- 8321 07/02/93 17:05 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Jul 2, 1993
Words:1501
Previous Article:VALCOR, INC. AND VALHI, INC. DEBT ISSUES RATED BY DUFF & PHELPS
Next Article:AMERICAN STOCK EXCHANGE DAILY REPORT
Topics:


Related Articles
IPALCO ENTERPRISES, INC., ANNOUNCES OFFER TO PURCHASE PSI RESOURCES, INC. FOR $26.50 PER SHARE IN CASH AND STOCK
IPALCO ASKS COURT TO ORDER PSI TO HOLD SHAREHOLDERS MEETING
OHIO IBEW ENDORSES CINERGY MERGER
CINCINNATI CITY COUNCIL UNANIMOUSLY ENDORSES CINERGY
IPALCO RESPONDS TO PUBLIC UTILITIES COMMISSION OF OHIO PROTEST FILING IN PSI AND CG&E FEDERAL ENERGY REGULATORY COMMISSION PROCEEDING
IPALCO ISSUES STATEMENT REGARDING CITIZENS ACTION COALITION OF INDIANA'S PROTEST FILING IN CG&E/PSI FERC PROCEEDING
IPALCO STATEMENT ON ACTION BY THE FEDERAL ENERGY REGULATORY COMMISSION
CG&E, PSI ANNOUNCE INCREASED OFFER CONTINGENT ON ELECTION OF PSI DIRECTORS
IPALCO ENTERPRISES INCREASES OFFER TO PURCHASE PSI RESOURCES TO $30.50 PER SHARE
CG&E SAYS CINERGY IS THE ONLY REAL OFFER FOR PSI

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters