After months of trying, which included the derailment by Western Resources of the proposed merger of UtiliCorp United and Kansas City Power & Light Co., the boards of directors of Western Resources and Kansas City P&L have approved a merger of the two companies in a stock-for-stock transaction valued at $2 billion. If approved by the necessary regulatory authorities, the new company would have $9.5 billion in assets, $3 billion in annual revenues and more than 8,000 MW of electric generation.
Meanwhile, UtiliCorp has filed a lawsuit in Jackson County Circuit Court, Missouri, seeking $53 million in damages from Kansas City P&L under the terms of their joint merger agreement. According to UtiliCorp, it is the second and final action required of Kansas City P&L due to the merger's failure. That utility already had paid an initial $5 million in September 1996 when its shareholders failed to endorse the merger. UtiliCorp claims the additional payment was triggered by the intent to merge with Western Resources.
Drue Jennings, Kansas City P&L board chairman, president, and CEO, pointed out the benefits of the proposed merger. "An increase in per share price, our mutual commitment to no employee layoffs, and long-range cost savings of $1 billion during 10 years exemplify what our two companies can do together immediately," Jennings said.
John E. Hayes, Jr. would remain in his current position as chairman of the board and CEO of Western Resources. Jennings would become vice chairman of the board of Western Resources and become responsible for electric utility operations of the combined company.