BANGOR HYDRO-ELECTRIC COMPANY
OFFER TO PURCHASE FOR CASH ANY AND ALL OUTSTANDING SHARES OF ITS
7% SERIES OF PREFERRED STOCK FOR $115.00 PER SHARE
Bangor Hydro-Electric Company, a Maine corporation, invites its
shareholders to tender shares of its 7% Series of Preferred Stock, CUSIP No.
060077401, (the "preferred shares"), at a purchase price per share of
$115.00 per share, net to the seller in cash, upon the terms and subject to
the conditions set forth in this offer to purchase and the related letter of
transmittal (the "offer").
THE OFFER AND YOUR WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON THURSDAY, FEBRUARY 27, 2003,
UNLESS EXTENDED OR EARLIER TERMINATED.
FOR A DISCUSSION OF SOME OF THE SIGNIFICANT MATTERS THAT YOU SHOULD
CONSIDER BEFORE TENDERING YOUR PREFERRED SHARES, SEE SECTION 6, "SPECIAL
FACTORS".
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF PREFERRED
SHARES BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO OTHER CONDITIONS.
SEE SECTION 11.
OUR BOARD OF DIRECTORS HAS APPROVED THE OFFER. HOWEVER, SHAREHOLDERS
MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PREFERRED SHARES AND, IF SO,
HOW MANY PREFERRED SHARES TO TENDER. NEITHER WE NOR OUR EXECUTIVE OFFICERS
OR BOARD OF DIRECTORS MAKES ANY RECOMMENDATION AS TO WHETHER TO TENDER OR
REFRAIN FROM TENDERING PREFERRED SHARES.
This offer to purchase contains a summary of the important terms and
conditions of the offer, followed by a more detailed discussion. It also
contains answers to frequently asked questions.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS ANY SUCH COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF SUCH
TRANSACTION OR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN
THIS OFFER TO PURCHASE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
If you have questions about the offer, you can call Georgeson
Shareholder Communications Inc., the information agent for the offer, or
Georgeson Shareholder Securities Corporation, the dealer manager for the
offer, at the telephone numbers set forth on the back cover of this offer to
purchase. You can also obtain additional copies of this offer to purchase
and the related documentation from the information agent or your broker,
dealer, bank, trust company or other nominee.
The Dealer Manager for the Offer is:
GEORGESON SHAREHOLDER
TABLE OF CONTENTS
PAGE
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Summary Term Sheet............................................... 1
The Offer........................................................ 5
1. Terms of the Offer.......................................... 5
2. Acceptance for Payment and Payment.......................... 5
3. Procedure for Tendering Preferred Shares.................... 6
4. Withdrawal Rights........................................... 8
5. Expiration Date; Extension of Tender Period; Termination;
Amendment................................................... 8
6. Special Factors............................................. 9
7. Certain Information about the Preferred Shares.............. 13
8. Certain Information about Bangor Hydro...................... 13
9. Interest of Directors and Executive Officers; Transactions
and Arrangements Concerning Shares.......................... 15
10. Source and Amount of Funds.................................. 16
11. Conditions to the Offer..................................... 16
12. Certain Legal Matters; Regulatory Approvals................. 17
13. Material United States Federal Income Tax Consequences of
the Offer................................................... 17
14. Fees and Expenses........................................... 19
15. Miscellaneous............................................... 20
Schedule I -- Directors and Executive Officers................... I-1
IMPORTANT
If you hold your preferred shares through a broker, dealer or other
similar nominee, you must contact that nominee if you desire to tender your
preferred shares. If you hold your preferred shares yourself, you must
complete and sign the letter of transmittal included with this offer to
purchase in accordance with the instructions in the letter of transmittal
and this offer to purchase, and mail or deliver it, together with any other
required documents, to EquiServe Trust Company, N.A., which is acting as
depositary, and deliver the certificates for the tendered preferred shares
to the depositary.
There will be no guaranteed delivery procedures with respect to the
offer.
No authority has passed upon the accuracy or adequacy of this offer to
purchase, and no person has been authorized to give any information or to
make any representations, other than those contained in this offer to
purchase or in the accompanying letter of transmittal. If given or made,
such information or representations cannot be relied upon as having been
authorized by us, Georgeson Shareholder Communications Inc., Georgeson
Shareholder Securities Corporation or EquiServe Trust Company, N.A. The
delivery of this offer to purchase shall not, under any circumstances,
create any implication that the information contained herein is correct as
of any time subsequent to the date on the cover of this offer to purchase or
that there has been no change in the information contained in this offer to
purchase or in the affairs of Bangor Hydro since the date hereof.
YOU SHOULD READ THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL
CAREFULLY BEFORE MAKING A DECISION TO TENDER YOUR PREFERRED SHARES.
This offer to purchase and related documents do not constitute an
offer to buy or the solicitation of an offer to sell any of the preferred
shares under any circumstances or in any jurisdiction in which such offer or
solicitation is unlawful. In those jurisdictions where the securities, blue
sky or other laws require any offer to be made by a licensed broker or
dealer, the offer will be deemed to be made on our behalf by the dealer
manager or one or more registered brokers or dealers licensed under the laws
of such jurisdiction.
We are not aware of any jurisdiction where the making of the offer
violate applicable law. If we become aware of any jurisdiction where the
making of any offer violates applicable law, we will make a good faith
effort to comply with such law. If, after such good faith effort, we cannot
comply with such law, the applicable offer will not be made to the holders
of applicable preferred shares residing in such jurisdiction.
WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR
BEHALF AS TO WHETHER YOU SHOULD ELECT TO TENDER YOUR PREFERRED SHARES
PURSUANT TO AN OFFER. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN
THIS OFFER TO PURCHASE OR TO WHICH WE HAVE REFERRED YOU. IF ANYONE MAKES ANY
RECOMMENDATION OR REPRESENTATION TO YOU OR GIVES YOU ANY INFORMATION, YOU
MUST NOT RELY UPON THAT RECOMMENDATION, REPRESENTATION OR INFORMATION AS
HAVING BEEN AUTHORIZED BY US.
SUMMARY TERM SHEET
The following summarizes, in question and answer format, the material
terms of Bangor Hydro's offer to purchase the preferred shares. You should
read the remainder of this offer to purchase and the letter of transmittal
carefully because this summary term sheet may not include all of the
information that is important to you. Additional important information is
contained in the remainder of this offer to purchase and the letter of
transmittal.
Bangor Hydro is offering to purchase, in cash and without interest,
any and all of the outstanding shares of its 7% Series of Preferred Stock,
CUSIP No. 060077401, at a purchase prices of $115.00.
There are currently 25,000 shares of the 7% Series of Preferred Stock
outstanding.
Q. WHO IS OFFERING TO BUY MY PREFERRED SHARES?
A. Bangor Hydro-Electric Company, a Maine corporation, is offering to
purchase all of the preferred shares in its 7% Series of preferred stock in
a self-tender offer. We are engaged principally in the regulated energy
delivery business in the State of Maine. We provide electric service to
approximately 100,000 electric customers in eastern and central Maine. As of
September 30, 2002, Bangor Hydro owned assets worth $642.3 million,
including $246.9 million in net utility plant. See Section 8, "Certain
Information about Bangor Hydro."
Bangor Hydro was organized under the laws of Maine in 1924. Since
October, 2001, Bangor Hydro has been a wholly owned subsidiary of Emera,
Inc., which we refer to as Emera, as the result of a merger transaction
pursuant to which Emera acquired all of Bangor Hydro's outstanding shares of
common stock for cash.
Q. WHY ARE YOU OFFERING TO BUY THE PREFERRED SHARES?
A. The principal purpose of the redemption is to allow us to terminate the
registration under Section 12 of the Exchange Act of the preferred shares if
the series has fewer than 300 holders following the completion of the tender
offer and thus is eligible for termination, and to allow us to suspend our
obligation to file reports pursuant to Section 15(d) of the Exchange Act if
the total number of shareholders of Bangor Hydro is reduced below 300 and
Bangor Hydro thus is eligible for such suspension. On December 31, 2002, we
gave notices of redemption to the holders of our only other registered
securities, our 4% callable and 4 1/4% callable series of preferred stock,
such redemptions to occur on March 1, 2003.
The preparation, filing and distribution of reports prepared pursuant
to Section 15(d) of the Exchange Act is a relatively burdensome process for
purposes of maintaining an extremely small number of preferred shares in our
capitalization and we believe that the benefit of maintaining these shares
no longer justifies this cost. See Section 6, "Special Factors".
In addition, the market for the preferred shares is extremely illiquid.
During 2002, only 1,850 shares of the preferred shares traded as part of
only ten trades. The most recent trade occurred on October 22, 2002.
Further, we estimate that approximately 90% of the holders of the preferred
shares own less than 100 shares. The tender offer provides shareholders
with an opportunity to liquidate their shares at a price that exceeds the
historical trading price and is equivalent to or exceeds the price of
comparable preferred issues with greater liquidity. Current interest rate
conditions allow us to refinance this portion of our capitalization at rates
that do not materially affect our overall cost of capital. See Section 6,
"Special Factors".
Q. IF I DECIDE TO TENDER MY PREFERRED SHARES, WHAT IS THE FORM OF PAYMENT?
WILL I HAVE TO PAY ANY FEES OR COMMISSIONS?
A. Bangor Hydro is offering to pay the purchase price to you in cash.
If you tender your preferred shares to us, you will not have to pay
brokerage fees, commissions or similar expenses to Bangor Hydro, Georgeson
Shareholder Securities Corporation, as dealer manager, or Georgeson
Shareholder Communications Inc., as information agent.
If you own preferred shares through a broker or other nominee and your
broker tenders on your behalf, your broker or nominee may charge you a fee
for doing so. You should consult your broker or other nominee to determine
whether any charges will apply.
Q. IF I TENDER MY PREFERRED SHARES, WILL I STILL RECEIVE ANY DIVIDEND
PAYMENTS AFTER MY PREFERRED SHARES ARE PURCHASED?
A. We will make the regular quarterly dividend payment on shares of the 7%
series of preferred stock for the quarter ending December 31, 2002, as
declared by our board of directors, to all holders of the preferred shares.
In addition, we will pay a partial dividend for dividends accrued between
December 31, 2002 and the Expiration Date of the offer to holders whose
shares are tendered in response to the offer, including any extensions
thereof. Shares that are not tendered in response to the offer will
continue to receive regular quarterly dividends on a quarterly basis when
declared by the board of directors. See Section 7, "Certain Information
about the Preferred Shares."
Q. IF I DECIDE NOT TO TENDER MY PREFERRED SHARES, HOW WILL THE OFFER AFFECT
MY PREFERRED SHARES?
A. Because the preferred shares are publicly traded, if most of the
outstanding preferred shares of the 7% series are tendered in the applicable
offer and purchased by us, the liquidity of the trading market for the
remaining preferred shares of that series will likely be adversely affected
due to the smaller number of outstanding preferred shares available for
trading. As a result, the liquidity of those preferred shares and the
ability of a holder to get accurate market quotations for the preferred
shares could be significantly reduced as a result of the applicable offer.
See Section 6, "Special Factors."
Trading in the shares is already extremely light. As of the date of
this offer to purchase, the most recent trade in the preferred shares was on
October 22, 2002 at a price of $92.00. See Section 6, "Special Factors."
Our preferred shares are registered under the Securities Exchange Act
of 1934, as amended, or the Exchange Act, which requires, among other
things, that we furnish certain information to our shareholders and the
Securities and Exchange Commission, or the SEC. However, following the
offer, we expect to terminate the registration of the preferred shares if
the series has less than 300 shareholders of record. This deregistration of
a series of preferred shares would relieve us of any obligation to file
reports and other information with the SEC under the Exchange Act with
respect to that series of preferred shares. See Section 6, "Special
Factors."
If you do not tender your preferred shares, the offer will not affect
the terms of your preferred shares. Your preferred shares will continue to
be outstanding and will continue to be governed by their same terms. You
will be entitled to receive cumulative quarterly dividends, if and when
declared by our board of directors, at an annual rate of $7.00 per share per
year.
Q. DOES BANGOR HYDRO HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?
A. Yes. We will need approximately $2.9 million to purchase all of the
outstanding preferred shares pursuant to the offer and to pay related fees
and expenses. Funds for the purchase will be available from our internal
funds. See Section 10, "Source and Amount of Funds."
Q. IS BANGOR HYDRO'S FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER
MY PREFERRED SHARES?
A. No. Bangor Hydro does not believe that its financial condition is
relevant to your decision to tender preferred shares because the offer is
being made for all outstanding preferred shares solely for cash and is not
subject to any financing condition and the amount payable is not material in
relation to the financial resources of Bangor Hydro and its affiliates. See
Section 10, "Source and Amount of Funds."
If you decide not to tender your preferred shares, you will remain a
preferred shareholder of Bangor Hydro and, as is currently the case, our
financial condition will continue to be relevant to you in your capacity as
a preferred shareholder.
Q. HOW DO I TENDER MY PREFERRED SHARES?
A. If you wish to accept the offer to purchase your preferred shares, you
must do the following prior to the expiration date:
(i) if you are the holder of record of your preferred shares (e.g., if you
have the stock certificates), you must complete and sign the letter of
transmittal and send it with your preferred stock certificates to EquiServe
Trust Company, N.A., as the depositary for the offer;
(ii) if you are an institution participating in The Depository Trust
Company, or DTC, you may tender your preferred shares according to the
procedure for book-entry transfer described in Section 3, "Procedure
for Tendering Preferred Shares" (in which case, a confirmation of delivery
must also be received by the depositary); or
(iii) if you hold your preferred shares through a broker, dealer, commercial
bank, trust company or other nominee, you must contact them and give them
instructions to tender your preferred shares.
See Section 3, "Procedure for Tendering Preferred Shares."
Q. WHAT IS THE MARKET VALUE OF MY PREFERRED SHARES AS OF A RECENT DATE?
As of the date of this offer of purchase, the most recent trade of the
preferred shares was on October 22, 2002 at $92.00 per share. We recommend
that you obtain current market quotations for our preferred shares before
deciding whether to tender your preferred shares.
Q. HOW LONG DO I HAVE TO DECIDE TO TENDER IN THE OFFER?
A. You have until 5:00 P.M., New York City time, on Thursday, February 27,
2003, to tender your preferred shares in the offer. We urge you to tender
your preferred shares or instruct your broker or other nominee to tender
your preferred shares as soon as possible to ensure that your preferred
shares are included in the offer.
Q. CAN THE OFFER BE EXTENDED? HOW WILL I BE NOTIFIED IF THE OFFER IS
EXTENDED?
A. The offer can be extended, but we do not expect, at this time, to do so.
If we decide, in our sole discretion, to extend any offer as described in
Section 5, "Expiration Date; Extension of Tender Period; Termination;
Amendment," you will have an additional period of time during which you may
tender your preferred shares.
If we decide to extend an offer, we will inform EquiServe Trust
Company, N.A., the depositary for the offer, of that fact and will make an
announcement through a press release issued to the Dow Jones News Service of
the extension, not later than 9:00 A.M., New York City time, on the business
day after the day on which the applicable offer was scheduled to expire. See
Section 5, "Expiration Date; Extension of the Tender Period; Termination;
Amendment."
Q. HOW DO I WITHDRAW TENDERED SHARES? UNTIL WHAT TIME CAN I WITHDRAW
TENDERED SHARES?
A. You can withdraw the preferred shares you have tendered at any time until
the offer has expired. If an offer is extended, you can withdraw tendered
preferred shares until the expiration of the extension period, and we have
accepted the preferred shares for payment. You may also withdraw your
preferred shares after March 31, 2003 unless they have been accepted for
payment.
To withdraw preferred shares, you must deliver a written notice of
withdrawal, or a facsimile of one, indicating your name, the number of
preferred shares tendered, the number of preferred shares you wish to
withdraw and the name of the registered holder, to EquiServe Trust Company,
N.A. prior to the expiration of the offer. If your preferred shares were to
be tendered by book-entry transfer, the notice must identify the relevant
account number.
See Section 4, "Withdrawal Rights" for a more detailed discussion of
withdrawal procedures.
Q. WHAT DOES BANGOR HYDRO'S BOARD OF DIRECTORS THINK OF THE OFFER?
A. Our board of directors believes that the offer is fair to unaffiliated
holders of preferred shares and has unanimously approved the offer. See
Section 6, "Special Factors." While our board of directors has approved the
offer, it is not making any recommendation as to whether or not you should
tender your preferred shares. We believe that this is a personal investment
decision for our preferred shareholders. You must decide whether to tender
your preferred shares and, if so, how many preferred shares to tender.
Q. WHEN AND HOW WILL I BE PAID FOR MY TENDERED SHARES?
A. We will pay for all validly tendered and not validly withdrawn preferred
shares promptly after the expiration of the offer. We expect payment to be
made on March 5, 2003. We reserve the right, in our sole discretion and
subject to applicable law, to delay payment for preferred shares in order to
comply with applicable law.
We will pay for your validly tendered and not validly withdrawn
preferred shares by depositing the purchase price with the depositary, which
will act as your agent for purposes of receiving payments from us and
transmitting the payments to you. In all cases, payment representing
tendered preferred shares will be made only after timely confirmation of a
book-entry transfer or timely receipt by the depositary of certificates for
such preferred shares, plus in either case the applicable letter of
transmittal properly completed and duly executed and any other required
documents for such preferred shares.
See Section 3, "Procedure for Tendering Preferred Shares" and Section
2, "Acceptance for Payment and Payment."
Q. WHAT SHOULD I DO IF MY PREFERRED STOCK CERTIFICATES HAVE BEEN LOST,
STOLEN OR DESTROYED?
A. If your preferred stock certificates have been lost, stolen or
destroyed, you should contact the depositary EquiServe Trust Company, N.A.
at (800) 736-3001 to obtain instructions. See Section 3, "Procedure for
Tendering Preferred Shares."
Q. ARE THERE ANY CONDITIONS TO THE OFFER?
A. The offer is not conditioned on any minimum number of preferred shares
being tendered. There is no financing condition in the offer.
We can, however, terminate any offer, in our reasonable discretion, if,
among other things, any of the following has occurred:
- the threat or existence of a governmental or regulatory proceeding
challenging any offer or that could materially and adversely affect Bangor
Hydro;
- a suspension or limitation on trading securities generally, or a
significant decline in the price of our securities or securities generally,
changes in political, economic or financial conditions that could adversely
affect us or the trading of our stock, a banking moratorium or similar
action, war or other national calamity or the material worsening thereof; or
- other events that have or may result in a change in our business,
condition, income operations, stock ownership or prospects.
See Section 11, "Conditions to the Offer."
Q. HOW WILL I BE TAXED FOR U.S. FEDERAL INCOME TAX PURPOSES?
A. Your receipt of cash for preferred shares validly tendered in the offer
will be a taxable transaction for U.S. federal income tax purposes. If you
meet specified conditions, you will recognize gain or loss in an amount
equal to the difference between (1) the cash you receive in the offer and
(2) your adjusted tax basis in the preferred shares that you surrender in
the offer. That gain or loss will be a capital gain or loss if the preferred
shares are a capital asset in your hands, and will be a long term capital
gain or loss if you have held the preferred shares for more than one year at
the time the offer is completed.
The tax consequences of the offer to you may vary depending on your
particular facts and circumstances. See Section 13, "Material United States
Federal Income Tax Consequences of the Offer" for a more detailed discussion
of the tax treatment of the offer. We urge you to consult with your own tax
advisor as to the particular tax consequences to you of the offer.
Q. WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE OFFER?
A. Questions regarding the terms of the offer should be directed to
Georgeson Shareholder Communications Inc., the information agent for the
offer, at (866) 328-5445 (toll-free).
Requests for additional copies of this offer to purchase, any letter of
transmittal or any related documents and questions regarding the procedures
for tendering preferred shares should also be directed to Georgeson
Shareholder Communications Inc.
FORWARD-LOOKING STATEMENTS
Certain statements included in this offer to purchase, documents
referred to herein and reports and other documents we file with the SEC are
forward-looking statements that involve risk and uncertainty, including
Bangor Hydro's cash flow, the planned repayment of debt, and anticipated
results subsequent to its merger with Emera. These forward-looking
statements are based upon a number of assumptions. Actual future results and
developments may differ materially depending on a number of factors,
including regulatory changes either by the federal government or the Maine
Public Utilities Commission, including uncertainties regarding the ultimate
impact on Bangor Hydro as the regulated electric industry is further
restructured, the demand for electricity, operations at the New England
Independent System Operator including implementation of Federal Energy
Regulatory Commission Order 2000 and Standard Market Design, the effects of
weather, efforts made by Bangor Hydro to collect from customers, and the
economic conditions of Bangor Hydro's service territory.
THE OFFER
1. TERMS OF THE OFFER
On the terms and subject to the conditions set forth in the offer, we
will accept for payment and pay for all of the shares of its 7% Series of
Preferred Stock, CUSIP No. 060077401, that are validly tendered prior to the
expiration date and not validly withdrawn, at a cash purchase price per
share of $115.00.
No alternative, conditional or contingent tenders will be accepted.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT
We will accept for payment and pay for all preferred shares validly
tendered and not validly withdrawn promptly after the expiration of the
offer, subject to the satisfaction or waiver of the conditions set forth in
Section 11, "Conditions to the Offer." In addition, we reserve the right,
subject to compliance with Rule 13e-4(f)(5) under the Exchange Act, to delay
the acceptance for payment or payment for preferred shares in order to
comply in whole or in part with any applicable law. For a description of our
right to terminate the offer and not accept for payment or pay for preferred
shares or to delay acceptance for payment or payment for preferred shares,
see Section 5, "Expiration Date; Extension of Tender Period; Termination;
Amendment." For purposes of the offer, we shall be deemed to have accepted
for payment tendered preferred shares when, as and if we give oral or
written notice of our acceptance to the depositary. Any preferred shares
tendered and purchased in the offer will be retired.
We currently expect payment to be made on March 5, 2003. We will
pay the purchase price by depositing the purchase price with the depositary.
The depositary will act as your agent for the purpose of receiving payments
from us and transmitting such payments to you. In all cases, payment for
preferred shares accepted for payment pursuant to the offer will be made
only after timely receipt by the depositary of a confirmation of a book-
entry transfer of such preferred shares into the depositary's account at DTC
or certificates for such preferred shares, a properly completed and duly
executed letter of transmittal and any other required documents, as
discussed in Section 3, "Procedure for Tendering Preferred Shares". For a
description of the procedure for tendering preferred shares pursuant to the
offer, see Section 3, "Procedure for Tendering Preferred Shares." The
depositary will forward the consideration to the preferred shareholders.
Under no circumstances will we pay interest on the consideration paid for
preferred shares purchased pursuant to the offer.
If we increase the consideration to be paid for any series of
preferred shares pursuant to an offer, we will pay such increased
consideration for all preferred shares of that series purchased pursuant to
the applicable offer.
We reserve the right to transfer or assign to one or more of our
affiliates, in whole or from time to time in part, the right to purchase
preferred shares tendered pursuant to the offer, but any such transfer or
assignment will not relieve us of our obligations under the offer or
prejudice your rights to receive payment for preferred shares validly
tendered and accepted for payment.
All preferred shares not purchased, including preferred shares not
purchased due to improper tender, will be returned through book-entry
transfer to an account maintained at DTC or, if the preferred shares are
held in physical form, through delivery of certificates, without expense to
you, promptly following the expiration or termination of the offer.
If all conditions to the offer are satisfied or timely waived, we
will accept for payment and pay for all preferred shares validly tendered by
each shareholder prior to or on the date of expiration of the offer and not
validly withdrawn. The results of the offer will be announced by press
release promptly after the date of expiration of the offer.
We will pay all stock transfer taxes, if any, payable on the transfer
to us of preferred shares purchased pursuant to the offer. If, however, (a)
payment of the purchase price is to be made to any person other than the
registered holder, (b) preferred shares not tendered or rejected for
purchase are to be registered in the name of any person other than the
registered holder or (c) certificates representing tendered preferred shares
are registered in the name of any person other than the person signing the
applicable letter of transmittal, the amount of all stock transfer taxes, if
any (whether imposed on the registered holder, the other person or
otherwise), payable on account of the transfer to the other person, will be
deducted from the purchase price unless satisfactory evidence of the payment
of the stock transfer taxes, or exemption therefrom, is submitted. See
Instruction 6 of the letter of transmittal.
Any tendering shareholder or other payee who fails to complete fully
and sign the substitute Form W-9 included in the letter of transmittal, or,
in the case of a foreign individual, a Form W-8BEN, may be subject to
federal income or backup withholding tax on the gross proceeds paid to such
shareholder or other payee pursuant to the offer. See Section 3, "Procedure
for Tendering Preferred Shares" and Instruction 6 in the letter of
transmittal.
3. PROCEDURE FOR TENDERING PREFERRED SHARES
Tendering Shares. To validly tender your preferred shares in the
offer, you must do one of the following:
- if you are the holder of record of your preferred shares, you must send
to the depositary, or arrange for the depositary to receive (at the
address set forth on the back cover of this offer to purchase), prior to the
expiration date, the applicable letter of transmittal, properly
completed and executed, together with any required signature guarantees
and any other documents required by the letter of transmittal, and either
(a) send to the depositary, or arrange for the depositary to receive,
certificates for the preferred shares to be tendered or (b) effect delivery
of such preferred shares pursuant to the procedures for book-entry transfer
described below (in which case, a confirmation of delivery must also be
received by the depositary); or
- if a broker, dealer, commercial bank, trust company or other
nominee holds your preferred shares, you must contact them if you wish
to tender your preferred shares.
If you own preferred shares through a broker, dealer, commercial
bank, trust company or other nominee, they may charge you a fee in
connection with the tender of preferred shares on your behalf.
If your preferred stock certificates have been lost, stolen or
destroyed, you should contact the depositary to obtain instructions for
replacing the certificates and check the appropriate box in the applicable
letter of transmittal. Your tender with respect to lost, stolen or destroyed
certificates will not be valid until you have complied with these procedures
and a replacement certificate for the preferred shares has been delivered to
the depositary.
To properly tender, please use the enclosed letter of transmittal.
Guaranty procedures. If you desire to tender your preferred shares
and certificates representing such preferred shares are not immediately
available, or time will not permit your certificates or any other required
documents to reach the Depository before 5:00 p.m., New York City time, on
the Expiration Date, a tender may be validly effected if:
(a) The tender is made by or through a firm that is a member of a
registered national securities exchange or a member of the National
Association of Securities Dealers (the "NASD"), a commercial bank or trust
company having an office or correspondent in the United States or that is
otherwise an "eligible guarantor institution" within the meaning of Rule
17Ad-15 under the Exchange Act (collectively, "Eligible Institutions");
(b) Prior to 5:00 p.m., New York City time, on the Expiration Date,
the Depository receives from such Eligible Institution a properly completed
and duly executed guaranteed delivery form (by facsimile transmission,
mail or hand delivery), setting forth your name and address and the number
of preferred shares tendered, stating that the tender is being made
thereby and guaranteeing that, within three business days after the
Expiration Date, the certificates representing such preferred shares,
accompanied by a properly completed and duly executed Letter of
Transmittal and all other documents required by the Letter of Transmittal,
will be deposited by the Eligible Institution with the Depository; and
(c) The certificates for all tendered preferred shares, as well as a
properly completed and duly executed Letter of Transmittal and all other
documents required by the Letter of Transmittal, are received by the
Exchange Agent within five business days after the Expiration Date.
If you tender your preferred shares in accordance with the applicable
method of delivery described in this offer to purchase and the applicable
letter of transmittal, your tender will constitute a binding agreement
between you and Bangor Hydro upon the terms and subject to the conditions
of the offer.
THE METHOD OF DELIVERY OF PREFERRED SHARES AND ALL OTHER REQUIRED
DOCUMENTS IS AT YOUR OPTION AND RISK. IF DELIVERY IS BY MAIL, REGISTERED
MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
BECAUSE IT IS THE TIME OF RECEIPT, NOT THE TIME OF MAILING, WHICH DETERMINES
WHETHER A TENDER HAS BEEN MADE PRIOR TO THE EXPIRATION DATE, SUFFICIENT TIME
SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY.
FOR FURTHER INFORMATION IN TENDERING PREFERRED SHARES, CALL THE
INFORMATION AGENT OR THE DEALER MANAGER OR CONSULT YOUR BROKER FOR ASSISTANCE.
Book-Entry Delivery. The depositary will establish an account with
respect to the preferred shares at DTC for purposes of the offer within two
business days after the date of this offer to purchase, and any financial
institution that is a participant in the DTC system may make delivery of
preferred shares by causing DTC to transfer such preferred shares into the
depositary's account in accordance with the procedures of DTC.
The term "agent's message" means a message, transmitted by DTC to,
and received by, the depositary and forming a part of a book-entry
confirmation which states that DTC has received an express acknowledgment
from the participant in DTC tendering the preferred shares that are the
subject of such book-entry confirmation agreeing to be bound by the terms of
the applicable letter of transmittal and that we may enforce such agreement
against such participant.
Signature Guarantees. Except as otherwise provided below, all
signatures on a letter of transmittal must be guaranteed by a financial
institution (including most banks, savings and loan associations and
brokerage houses) that is a member of a recognized Medallion Program
approved by The Securities Transfer Association Inc., including the
Securities Transfer Agents Medallion Program (STAMP), the Stock Exchange
Medallion Program (SEMP) and the New York Stock Exchange, Inc. Medallion
Signature Program (MSP) (each an "eligible institution"). Signatures on a
letter of transmittal need not be guaranteed (i) if the letter of
transmittal is signed by the registered holder(s) of the preferred shares
tendered therewith and such holder(s) has/have not completed the box
entitled "Special Payment Instructions" or the box entitled "Special
Delivery Instructions" on the letter of transmittal or (ii) if such
preferred shares are tendered for the account of an eligible institution.
See Instructions 2, 3 and 4 of the letter of transmittal.
Validity. We will determine, in our sole discretion, all questions
as to the form of documents and the validity, eligibility (including time of
receipt) and acceptance for payment of any tender of preferred shares, and
our determination shall be final and binding. We reserve the absolute right
to reject any or all tenders of preferred shares that we determine not to be
in proper form or the acceptance for payment of or payment for which may, in
the opinion of our counsel, be unlawful. We also reserve the absolute right
to waive any defect or irregularity in any tender of preferred shares. No
tender of preferred shares will be deemed to have been validly made until
all defects or irregularities relating thereto have been cured or waived.
Our interpretation of the terms and conditions of the offer will be
final and binding. No person, including us, the dealer manager, the
depositary and information agent will be under any duty to give you notice
of any defect or irregularity in your tender or waive any such defect or
irregularity or incur any liability for failure to give any such notice.
Federal Backup Withholding Tax. Under the United States federal
backup withholding tax rules, 30% of the gross proceeds payable to a
shareholder or other payee in the offer must be withheld and remitted to the
United States Treasury unless the shareholder or other payee provides his,
her or its taxpayer identification number (employer identification number or
social security number) to the depositary and certifies under penalties of
perjury that such number is correct or otherwise establishes an exemption.
If the depositary is not provided with the correct taxpayer identification
number or another adequate basis for exemption, the holder may be subject to
certain penalties imposed by the Internal Revenue Service. Therefore, each
tendering shareholder should complete and sign the substitute Form W-9
included as part of the applicable letter of transmittal in order to provide
the information and certification necessary to avoid backup withholding,
unless such shareholder otherwise establishes to the satisfaction of the
depositary that the shareholder is not subject to backup withholding.
Certain shareholders (including, among others, all corporations and
certain foreign shareholders (in addition to foreign corporations)) are not
subject to these backup withholding rules. In order for a foreign
shareholder to qualify as an exempt recipient, that shareholder must submit
an IRS Form W-8BEN or a substitute Form W-8BEN (or such other IRS Form W-8
as is appropriate), signed under penalties of perjury, attesting to that
shareholder's exempt status. The applicable form can be obtained from the
depositary. See Instruction 6 of the letter of transmittal.
TO PREVENT FEDERAL BACKUP WITHHOLDING TAX EQUAL TO 30% OF THE GROSS
PAYMENTS MADE TO SHAREHOLDERS FOR PREFERRED SHARES PURCHASED IN THE OFFER,
EACH SHAREHOLDER WHO DOES NOT OTHERWISE ESTABLISH AN EXEMPTION FROM SUCH
WITHHOLDING MUST PROVIDE THE DEPOSITARY WITH THE SHAREHOLDER'S CORRECT
TAXPAYER IDENTIFICATION NUMBER AND PROVIDE OTHER INFORMATION BY COMPLETING
THE SUBSTITUTE FORM W-9 INCLUDED WITH THE APPLICABLE LETTER OF TRANSMITTAL.
For a discussion of material United States federal income tax
consequences to tendering shareholders, see Section 13, "Material United
States Federal Income Tax Consequences of the Offer."
4. WITHDRAWAL RIGHTS
Except as provided in this offer to purchase, tenders of preferred
shares pursuant to the offer are irrevocable. You may withdraw tenders of
preferred shares made pursuant to an offer at any time prior to the
expiration date (as it may be extended). In addition, you may withdraw any
tendered preferred shares after March 31, 2003, unless we have accepted your
preferred shares for payment. If we extend the period of time during which
an offer is open, or are delayed in accepting for payment or paying for
preferred shares pursuant to that offer for any reason, then, without
prejudice to our rights under the offer, the depositary may, on our behalf
and subject to your withdrawal rights, as set forth herein, retain all
preferred shares tendered.
To withdraw tendered preferred shares, (1) a written or facsimile
transmission notice of withdrawal with respect to the preferred shares must
be timely received by the depositary at one of its addresses set forth on
the back cover of this offer to purchase and (2) the notice of withdrawal
must specify (a) the name of the person who tendered the preferred shares to
be withdrawn, (b) the number of preferred shares to be withdrawn and (c) the
name of the registered holder of the preferred shares, if different from
that of the person who tendered such preferred shares.
If the preferred shares to be withdrawn have been delivered to the
depositary, a signed notice of withdrawal with (except in the case of
preferred shares tendered by an eligible institution) signatures guaranteed
by an eligible institution must be submitted prior to the release of such
preferred shares. In addition, such notice must specify, in the case of
preferred shares tendered by book-entry transfer, the name and number of the
account at DTC to be credited with the withdrawn preferred shares.
In the case of preferred shares tendered by delivery of certificates,
such notice must specify the name of the registered holder (if different
from that of the tendering shareholder) and the serial numbers shown on the
particular certificates representing the preferred shares to be withdrawn.
Withdrawals may not be rescinded, and preferred shares withdrawn will
thereafter be deemed not validly tendered for purposes of the offer.
However, withdrawn preferred shares may be tendered by again following one
of the procedures described in Section 3, "Procedure for Tendering Preferred
Shares" at any time prior to the expiration date.
We will determine, in our sole discretion, all questions as to the
form and validity (including time of receipt) of any notice of withdrawal,
and our determination shall be final and binding. None of us, the dealer
manager, the depositary, information agent or any other person will be under
any duty to give you notice of any defect or irregularity in any notice of
withdrawal or waive any such defect or irregularity or incur any liability
for failure to give any such notice.
5. EXPIRATION DATE; EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENT
With respect to any offer for a series of preferred shares,
"expiration date" means 5:00 P.M., New York City time, on February 27, 2003,
unless we extend the period of time for which an offer is open, in which
event "expiration date" means the latest time and date at which such offer,
as so extended, shall expire. We will make a public announcement of the
approximate number and percentage of preferred shares tendered as of the
expiration date no later than 9:00 A.M., New York City time, on the next
business day after the expiration date.
We expressly reserve the right, in our sole discretion, at any time
and from time to time, to extend the period of time during which any offer
is open and thereby delay acceptance for payment of, and payment for, any
preferred shares by giving oral or written notice of such extension to the
depositary and making a public announcement of the extension. We also
expressly reserve the right, in our sole discretion, to terminate any offer
and not accept for payment or pay for any preferred shares not already
accepted for payment or paid for or, subject to applicable law, to postpone
payment for the preferred shares upon the occurrence of any of the
conditions specified in Section 11, "Conditions to the Offer" by giving oral
or written notice of such termination or postponement to the depositary and
making a public announcement of the termination or postponement.
Subject to compliance with applicable law, we further reserve the
right, in our sole reasonable discretion, and regardless of whether any of
the events set forth in Section 11, "Conditions to the Offer" will occur or
are deemed by us to have occurred, to amend any offer in any respect. If we
make a material change in the terms of an offer or the information
concerning an offer, or if we waive a material condition of an offer, we
will extend such offer to the extent required by Rules 13e-4(d)(2) and 13e-
4(e)(3) under the Exchange Act. If (1) we increase or decrease the price to
be paid for any series of preferred shares or we decrease the number of
preferred shares being sought and (2) the applicable offer is scheduled to
expire at any time earlier than the expiration of a period ending on the
tenth business day from, and including, the date that notice of such
increase or decrease is first published, sent or given, we will extend such
offer, with regards to the affected series of preferred shares, until the
expiration of such period of ten business days from the date of publication
of such notice. If we make a material change to other terms of an offer or
to the information concerning an offer, or waive a material condition of an
offer, we will extend the applicable offer with regards to the affected
series of preferred shares, if required by applicable law, for a period of
five business days to allow you to consider the amended terms of the
applicable offer. Business day means any day other than Saturday, Sunday or
a federal holiday and shall consist of the time period from 12:01 A.M.
through 12:00 Midnight, New York City time.
Any extension, delay, termination, waiver or amendment will be
followed promptly by public announcement, in the case of an extension of an
offer to be made no later than 9:00 A.M., New York City time, on the next
business day after the previously scheduled expiration date. Any public
announcement made pursuant to an offer will be disseminated promptly to
shareholders in a manner reasonably designed to inform shareholders of such
change. Without limiting the manner in which we may choose to make any
public announcement, except as provided by applicable law, including Rules
13e-4(d)(2) and 13e-4(e)(3) under the Exchange Act, we shall have no
obligation to publish, advertise or otherwise communicate any such public
announcement other than by issuing a press release to the Dow Jones News
Service.
If we extend the time during which an offer is open, or if we are
delayed in accepting for payment of or payment for the preferred shares
pursuant to an offer for any reason, then, without prejudice to our rights
under the offer, the depositary may retain tendered preferred shares on our
behalf and those preferred shares may not be withdrawn except to the extent
tendering shareholders are entitled to withdrawal rights as described herein
under Section 4, "Withdrawal Rights." However, our ability to delay the
payment for the preferred shares that we have accepted for payment is
limited by Rule 13e-4(f)(5) under the Exchange Act, which requires that a
bidder pay the consideration offered or return the securities deposited by
or on behalf of shareholders promptly after the termination or withdrawal of
such bidder's offer.
6. SPECIAL FACTORS
Purpose of the Transaction. The principal purpose of the redemption
is to allow us to terminate the registration under Section 12 of the
Exchange Act of the preferred shares if the series has fewer than 300
holders following the completion of the tender offer and thus is eligible
for termination, and to allow us to suspend our obligation to file reports
pursuant to Section 15(d) of the Exchange Act if the total number of
shareholders of Bangor Hydro is reduced below 300 and Bangor Hydro thus is
eligible for such suspension. As of December 31, 2002, there were
approximately 900 individual holders of our 4%, 4 1/4% and its 7% series of
preferred stock. The total capital represented by the 7% Series of
preferred stock equaled $2,500,000, approximately 0.6% of our total
capitalization. On December 31, 2002, we gave notices of redemption to the
holders of our 4% and 4 1/4% series, each of which are callable, such
redemptions to occur on March 1, 2003. Thus, as of March 1, 2003, the 7%
Series will be our only securities registered under Section 12 of the
Exchange Act.
The preparation, filing and distribution of reports prepared pursuant
to Section 15(d) of the Exchange Act is a relatively burdensome process for
purposes of maintaining an extremely small number of preferred shares in our
capitalization and we believe that the benefits of maintaining these shares
no longer justifies this cost. Deregistration would not affect our
obligation to provide audited financial statements prepared in accordance
with GAAP to our lenders or to the Maine Public Utilities Commission and the
Federal Energy Regulatory Commission.
In addition, the market for the preferred shares is extremely
illiquid. During 2002, only 1,850 shares of the preferred shares traded as
part of only ten trades. The most recent trade occurred on October 22,
2002. Further, we estimate that approximately 90% of the holders of the
preferred shares own less than 100 shares. The tender offer provides
shareholders with an opportunity to liquidate their shares at a price that
exceeds the historical trading price and is equivalent to or exceeds the
price of comparable preferred issues with greater liquidity. Current
interest rate conditions allow us to refinance this portion of our
capitalization at rates that do not materially affect our overall cost of
capital.
The successful completion of the offers will have no effect on
Emera's percentage interest in the net book value and net earnings of Bangor
Hydro. If all shares of preferred stock are purchased in the offers, the
aggregate net book value of Bangor Hydro would not materially change.
Plans of Bangor Hydro after the Offer. If not all of the shares of
our outstanding preferred stock are tendered in the offer, we may in the
future repurchase additional preferred shares in the open market, private
transactions, tender offer or otherwise. Any such purchases may be on the
same terms as, or on terms more or less favorable to shareholders than, the
terms of the offer. However, Rule 13e-4 under the Exchange Act prohibits us
and our affiliates from purchasing any preferred shares, other than through
the offer, until at least ten business days after the expiration or
termination of the offer. Any possible future purchases by us will depend on
many factors, including the results of the offer, our business and financial
position and general economic and market conditions.
Except as disclosed in this offer to purchase, or as may occur in the
ordinary course of our business, we currently have no plans or proposals
that relate to or would result in:
- an extraordinary transaction, such as a merger, reorganization or
liquidation, involving us or any of our subsidiaries;
- a purchase, sale or transfer of a material amount of our assets or
the assets of any of our subsidiaries;
- any material change in our present dividend rate or policy for our
preferred shares;
- any material change in our present indebtedness or capitalization,
although we continue to evaluate the structure of our debt to ensure the
highest level of benefit to our investors and customers;
- any change in our present board of directors or management;
- any other material change in our corporate structure or business;
- the acquisition by any person of additional securities of ours or
the disposition of our securities; or
- any changes in our charter, bylaws or other governing instruments
or other actions that could impede the acquisition of control, although as
an indirect wholly owned subsidiary of Emera it is unlikely we would
experience a change of control that Emera did not initiate.
Following the offer, however, we intend to:
- terminate the registration under Section 12 of the Exchange Act of
the 7% Series of preferred stock if it has fewer than 300 holders and thus
is eligible for termination; and
- suspend our obligation to file reports pursuant to Section 15(d)
of the Exchange Act if the total number of shareholders of Bangor Hydro is
reduced below 300 and Bangor Hydro thus is eligible for such suspension.
Fairness of the Offer. The company believes that the offer is fair
to unaffiliated holders of the preferred shares. In evaluating the offer,
the company relied upon its knowledge of its business, financial condition
and prospects as well as upon the advice of its financial and legal
advisors.
A committee of the board of directors of Bangor Hydro, having been
delegated the authority to act on behalf of Bangor Hydro with respect to the
offer, considered the offer and believes that the offer is fair to
unaffiliated holders of each series of preferred shares and has unanimously
approved the offer. In making its determination about the fairness of the
offer, the committee considered a number of factors, including the
following:
- the relationship of the offer price for the preferred shares and
the historical market prices of the preferred shares;
- the purchase price for the preferred shares represents a premium
over recent historical market prices;
- the relationship of the offer price for the preferred shares and
the recent market price of a sample group of comparable preferred
issues in the utility sector which the company deemed to be reasonably
similar to ours based upon corporate credit ratings and other factors;
- the purchase price for the preferred shares is greater than the
equivalent recent market price of the sample group of comparable
preferred issues;
- the premium over the estimated value for the preferred shares was
similar to that offered in a recent tender offer for preferred shares by
another utility;
- the offer is not subject to a financing condition; and
- the purchase price to be received by the holders of each series of
preferred shares pursuant to the offer was fair from a financial point of
view to the unaffiliated holders.
The committee considered these factors as a whole and did not find it
practicable to, and did not, quantify, or otherwise assign relative weights
to these factors. The principal negative factor from Bangor Hydro's
perspective was the use of cash, but the committee believed that the cost
savings in retiring the preferred stock outweighed that negative factor and
that negative factor did not affect the fairness of the offer to the
unaffiliated shareholders. The principal negative factor from the standpoint
of the preferred shareholders was the possible absence of a trading market
following the completion of the offers. The committee did not believe that
fact was relevant in its determination of the fairness of the offers because
a preferred shareholder could either decide to accept the offer or to retain
the preferred stock on the same terms relating to dividends, liquidation
value and redemption and thus did not consider it in concluding that the
offers are fair to the unaffiliated shareholders from a financial point of
view.
The committee also believes that the offer is procedurally fair to
holders of the preferred shares in light of the following factors:
- you can determine individually whether to tender preferred shares
in the offer; and
- the offer allows you to sell your preferred shares without the
usual transaction costs associated with open market sales.
The committee considered these procedural factors as a whole and did
not find it practicable to, and did not, quantify or otherwise assign
relative weight to these factors.
The committee did not consider our net book value, our going concern
value or our liquidation value in making its determination that the offers
are fair to unaffiliated shareholders. Because preferred shareholders are
only entitled to receive dividends at the stated rate and the stated
liquidation value upon a liquidation of Bangor Hydro, the board did not
believe that factors relating to the equity value of Bangor Hydro were
relevant in determining the value of the preferred shares. The committee
also did not consider purchase prices paid in previous purchases of the
preferred shares within the past two years because there were no such
purchases within the past two years. Finally, the board did not consider
firm offers made by unaffiliated persons during the past two years for a
merger, consolidation, sale of all or substantially all of our assets or
purchase of Bangor Hydro's securities in a transaction that would give the
purchaser control because it believed that these factors are relevant only
to a change of control and the premium that might be paid to stockholders to
acquire control. The preferred shares do not participate in the growth in
equity value of Bangor Hydro.
The offer does not require the approval of any holders of preferred
shares. Two members of the board are not employees of Bangor Hydro, its
affiliates or entities affiliated with Emera. Neither of these members
served on the committee, however each of these directors voted to delegate
the matter to the committee and voted in favor of the appointment of those
members who did serve on the committee. We have not retained an
unaffiliated representative to act solely on behalf of the preferred
shareholders for the purposes of negotiating the terms of the offer, and we
have not made any provisions to grant preferred shareholders access to our
corporate files or the ability to obtain counsel or appraisal services at
our expense. We have not retained an unaffiliated representative for
purposes of preparing a report concerning the fairness of the transaction.
There are no appraisal rights available to holders of preferred shares in
connection with the offer.
Neither we, nor any of our directors or executive officers, nor any
of our affiliates, nor any other person who control us, nor any of their
executive officers or directors makes any recommendation to any shareholder
as to whether to tender all or any preferred shares. Each shareholder must
make his or her own decision whether to tender preferred shares and, if so,
how many preferred shares to tender.
Effect of the Offer on the Market for our Preferred Shares;
Registration under the Exchange Act. If you do not tender your preferred
shares, the offer will not affect the terms of your preferred shares. Your
preferred shares will continue to be outstanding and will continue to be
governed by their same terms. Any purchase of preferred shares by Bangor
Hydro in the offer will reduce the number of shares that trade publicly or
become available for purchase and/or sale and will likely reduce the number
of owners of the preferred shares. This could adversely affect the
liquidity, market value and ratings and increase the price volatility of the
preferred shares not purchased in the offer.
Equity securities which are less liquid because of a smaller
outstanding market value available for trading, or float, may command a
lower price than would comparable equity securities with a greater float.
Therefore, the market price for shares of a series of preferred shares that
are not tendered and purchased in the offer may be affected adversely to the
extent that the amount of shares of that series purchased in the offer
reduces the float. The reduced float of a series of preferred shares may
also make the trading price of the shares of that series that are not
tendered and accepted for payment more volatile. If an offer is completed
with respect to any series of preferred shares, there can be no assurance
that any trading market will exist for such series of preferred shares
following consummation of the applicable offer. To the extent a market
continues to exist following consummation of the offer for a series of
preferred shares, shares of that series may trade at a discount compared to
current trading, depending on the market for shares with similar features,
the performance of Bangor Hydro and other factors. There is no assurance
that an active market in the shares of a series will exist and no assurance
as to the prices at which the shares may trade following the offer.
The preferred shares are currently registered under the ExchangeAct.
Such registration may be terminated upon application by Bangor Hydro to the
SEC if there are fewer than 300 record holders. We intend to apply to the
SEC for termination of the registration of the preferred shares after the
offer is completed. Termination of such registration would make certain
provisions of the Exchange Act, such as the requirements of Rule 13e-3
thereunder with respect to "going private" transactions, no longer
applicable to such series of preferred shares. Termination of the Exchange
Act registration of the preferred shares would affect our obligation to file
annual and quarterly reports and special reports, and other information with
the SEC pursuant to the Exchange Act's reporting requirements because the
preferred shares will be, as of March 1, 2003, the only publicly traded
securities of Bangor Hydro. Bangor Hydro gave notices of redemption on
December 31, 2002 with respect to its only other two publicly traded series
of securities, its 4% and 4 1/4% series of preferred stock. These redemptions
will occur on March 1, 2003 and thereafter those series will be deregistered
by Bangor Hydro.
7. CERTAIN INFORMATION ABOUT THE PREFERRED SHARES
There are currently 25,000 shares of the 7% Series outstanding. The
25,000 shares were issued between 1910 and 1924 by the Bangor Street Railway
and Electric Company, a corporate predecessor of Bangor Hydro at $100.00 per
share and we received aggregate proceeds from the sale of $2,500,000.
The preferred shares are currently publicly traded on an "over-the-
counter" basis. The following table sets forth, for the quarters indicated,
the high and low sales prices for the preferred shares as reported by the
Dow Jones News Service.
High Low
---- ---
2002
- ----
First Quarter................ $92.00 $87.00
Second Quarter............... 90.00 88.75
Third Quarter................ No Trading Activity
Fourth Quarter............... 92.00 90.75
2003
- ----
First Quarter
(through January 21, 2003) No Trading Activity
If you do not tender your preferred shares, the offer will not affect
the terms of your preferred shares. Your preferred shares will continue to
be outstanding and will continue to be governed by their same terms.
We will make the regular quarterly dividend payment on shares of the
7% series of preferred stock for the quarter ending December 31, 2002, as
declared by our board of directors, to all holders of the preferred shares.
In addition, we will pay a partial dividend for dividends accrued between
December 31, 2002 and the Expiration Date of the offer to holders whose
shares are tendered in response to the offer, including any extensions
thereof. Shares that are not tendered in response to the offer will
continue to receive regular quarterly dividends on a quarterly basis when
declared by the board of directors. Bangor Hydro will cease to make
dividend payments on preferred shares purchased in the offer after the
Expiration Date of the offer.
Dividends on the preferred shares have customarily been paid in cash
following each January 1, April 1, July 1 and October 1.
You will be entitled to receive cumulative quarterly dividends as, if
and when declared by our board of directors at an annual rate of $7.00 per
share per year. The preferred shares are noncallable.
We have timely paid all quarterly dividends on each payment date
since the preferred shares were issued in the form of approximately $7.00 in
cash per share per year.
8. CERTAIN INFORMATION ABOUT BANGOR HYDRO
General. We are a Maine corporation with our principal offices at 33
State Street, Bangor, Maine 04401, telephone: (207) 945-5621. Our ultimate
parent company, Emera, is a corporation incorporated in Nova Scotia, Canada
with its principal offices at 1894 Barrington Street, Halifax, Nova Scotia
B3J 2A9, telephone: (902) 428-6250.
The name, business address, citizenship, present principal occupation
or employment and five-year employment history of each of our executive
officers and directors is set forth in Schedule I of this offer to purchase.
We were organized under the laws of Maine in 1924. We are engaged
principally in the regulated energy delivery business in the State of Maine.
We provide electric service to approximately 100,000 electric customers in
eastern and central Maine. As of September 30, 2002, Bangor Hydro owned
assets worth $642.3 million, including $246.9 million in net utility plant.
In June, 2000, Bangor Hydro entered into a merger agreement with
Emera, Inc. under which Emera would acquire Bangor Hydro, with all of Bangor
Hydro's outstanding shares of common stock being exchanged for cash. On
October 10, 2002, the merger was consummated and as a result of the merger,
all of the common stock of Bangor Hydro is now owned by Emera. Our debt and
preferred stock were not exchanged as part of the merger transaction and
continue as our obligations.
Summary Financial Information. The following tables set forth our
selected historical consolidated financial data derived from our audited and
unaudited consolidated financial statements previously filed with the SEC
under the Exchange Act. The following data should be read in conjunction
with our previously filed consolidated financial statements. ($ in 000's)
SUMMARY FINANCIAL INFORMATION
-----------------------------
(Unaudited)
Year Ended December 31, Nine Months Ending Sep. 30,
----------------------- ---------------------------
2001 2000 2002 2001
INCOME STATEMENT DATA:
- ----------------------
Operating Revenues $ 217,407 $ 212,337 $ 127,811 $ 165,777
Operating Expenses 193,790 185,913 109,952 148,882
------------------------ --------------------
Operating Income $ 23,617 $ 26,424 $ 17,859 $ 16,895
Other Income (Deductions) (654) 613 1,189 1,279
Interest Expense 14,273 15,935 9,954 10,729
------------------------ --------------------
Net Income $ 8,690 $ 11,102 $ 9,094 $ 7,445
======================== ====================
(Unaudited)
December 31, September 30,
------------ -------------
2001 2000 2002
BALANCE SHEET DATA:
- -------------------
ASSETS:
Net Utility Plant $ 241,883 $ 234,941 $ 241,652
Investments in Corporate
Joint Ventures 5,275 5,622 5,247
Other Investments 3,498 3,175 3,332
Funds Held by Trustees 22,695 22,696 21,537
Current Assets 38,790 53,482 29,334
Regulatory Assets and
Deferred Charges 366,104 212,304 341,221
------------------------ ---------
Total Assets $ 678,245 $ 532,220 $ 642,323
======================== =========
LIABILITIES & STOCKHOLDERS' EQUITY:
Capitalization:
Common Stock Investment $ 205,557 $ 137,420 $ 206,999
Preferred Stock 4,734 4,734 4,734
Long-term Debt 131,968 161,960 98,592
----------------------- ----------
Total Capitalization $ 342,259 $ 304,114 $ 310,325
Current Liabilities 78,957 51,001 95,483
Regulatory and Other Long-
term Liabilities 257,029 177,105 236,515
----------------------- ---------
Total Liabilities &
Stockholders' Equity $ 678,245 $ 532,220 $ 642,323
======================= =========
(Unaudited)
Year Ended December 31, 12 Months Ending Sep. 30,
----------------------- -------------------------
2001 2000 2002 2001
Ratio of Earnings to Fixed
Charges 1.97 2.15 2.16 2.04
======================= =========================
(Unaudited)
December 31, September 30,
------------ -------------
2001 2000 2002
Book Value per Share of
Preferred Stock $ 100.00 $ 100.00 $ 100.00
======================= =========================
You can obtain more financial information about us by referring to
the documents described below.
Where You Can Find More Information. Bangor Hydro files annual,
quarterly and special reports and other information with the SEC. Bangor
Hydro filed a statement relating to the offer on Schedule TO with the SEC.
Because the offer may be a "going-private" transaction, the Schedule TO
filed also includes information required by Rule 13e-3 under the Exchange
Act with respect to the offer. The Schedule TO and such reports and other
information contain additional information about Bangor Hydro. You may read
and copy any reports, statements or other information filed by Bangor Hydro
at the SEC's public reference room at 450 Fifth Street, N.W., Washington,
D.C. 20549. Please call the SEC at 1-800-732-0330 for further information on
the operation of this and other public reference rooms. These filings with
the SEC are also available to the public from commercial document retrieval
services and at the website maintained by the SEC located at:
"http://www.sec.gov."
Bangor Hydro will provide without charge to each person to whom a
copy of this offer to purchase has been delivered, upon request, a copy of
any or all of the documents that we have filed with the SEC, other than the
exhibits to such documents. You may request these documents by writing or
telephoning us at the following address or phone number: 33 State Street,
P.O. Box 932, Bangor, Maine 04402, Attention: Michael Whalen, telephone:
(207) 990-6988. We will provide the requested documents within one business
day of your request by first class mail or equally prompt means. The
information relating to Bangor Hydro contained in this offer to purchase
does not purport to be comprehensive and should be read together with the
information contained in the documents incorporated or deemed to be
incorporated by reference.
If you would like to request documents from Bangor Hydro, please do
so by February 17, 2003 to receive them before the expiration of the offer.
9. INTEREST OF DIRECTORS AND EXECUTIVE OFFICERS; TRANSACTIONS AND
ARRANGEMENTS CONCERNING SHARES
None of the officers or directors of Bangor Hydro own any of the
preferred shares. One Director of Emera, Robert S. Briggs, holds one share
of the preferred stock. Mr. Briggs presently intends to tender his share in
response to the offer. No other officer or director of Emera owns any of
the preferred shares. None of the affiliates or majority-owned subsidiaries
of Bangor Hydro or Emera own any of the preferred shares.
Based on our records and information provided to us by our directors,
executive officers, associates and subsidiaries and the directors, executive
officers, affiliates and subsidiaries of Emera, neither we, nor Emera, nor
any of our respective affiliate or majority-owned subsidiaries, nor, to the
best of our knowledge, any of our respective directors or executive officers
or those of our respective subsidiaries, have effected any transactions in
the preferred shares during the 60 days before February 3, 2003.
Except as otherwise described herein, neither we nor any person
controlling us nor, to our knowledge, any of our directors or executive
officers or those of Emera, is a party to any contract, arrangement,
understanding or relationship with any other person relating, directly or
indirectly, to any of our securities, including, but not limited to, any
contract, arrangement, understanding or relationship concerning the transfer
or the voting of any such securities, joint ventures, loan or option
arrangements, puts or calls, guarantees of loans, guarantees against loss or
the giving or withholding of proxies, consents or authorizations.
10. SOURCE AND AMOUNT OF FUNDS
We will need approximately $2.9 million to purchase all of the
preferred shares pursuant to the offer and to pay related fees and expenses,
assuming a tender of 100% of the outstanding preferred shares. It is
anticipated that such funds will be available from a combination of our
internal funds and internal funds of our parent company or other affiliates.
There are no material conditions to the financing.
Because the only consideration in the offer is cash and the offer is
being made for all outstanding preferred shares, and in view of the absence
of a financing condition and the amount of consideration payable in relation
to the financial capacity of Bangor Hydro, Bangor Hydro's financial
condition is not material to a decision by a holder of preferred shares
whether to tender preferred shares.
If you decide not to tender your preferred shares, you will remain a
preferred shareholder of Bangor Hydro and, as is currently the case, our
financial condition will continue to be relevant to you in your capacity as
a preferred shareholder.
11. CONDITIONS TO THE OFFER
Notwithstanding any other provision of the offer, we will not be
required to accept for payment or pay for any preferred shares tendered, and
may terminate or amend and may postpone, subject to the requirements of the
Exchange Act for prompt payment for or return of shares tendered, the
acceptance for payment of preferred shares tendered, if at any time after
January 31, 2003 and at or before the time when we have accepted for payment
all preferred shares validly tendered, any of the following shall have
occurred:
1. There shall have been any action threatened, pending or taken,
or approval withheld, or any statute, rule, regulation, judgment, order or
injunction threatened, proposed, sought, promulgated, enacted, entered,
amended, enforced or deemed to be applicable to any offer or to us or any of
our subsidiaries, by any legislative body, court, authority, government or
governmental agency, authority or tribunal which, in our sole judgment,
would or could or might directly or indirectly (i) make the acceptance for
payment of, or payment for, some or all of the preferred shares illegal or
otherwise restrict or prohibit consummation of any offer, (ii) delay or
restrict our ability or render us unable to accept for payment or pay for
some or all of the preferred shares, (iii) materially impair the
contemplated benefits of any offer to us or (iv) in our reasonable judgment,
materially and adversely affect the business, condition (financial or
otherwise), income, operations or prospects of us and our subsidiaries,
taken as a whole, or otherwise materially impair in any way the contemplated
future conduct of our business or the business of any of our subsidiaries or
any offer's contemplated benefits to us;
2. There shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on any national
securities exchange or in the over-the-counter market, (ii) any significant
decline in the market price of our preferred stock or in the general level
of market prices of equity securities in the United States or abroad, (iii)
any change in the general political, market, economic or financial condition
in the United States or abroad that could have a material adverse effect on
our business, condition (financial or otherwise), income, operations, stock
ownership, prospects or ability to obtain financing generally or the trading
in our stock, (iv) the declaration of a banking moratorium or any suspension
of payments in respect of banks in the United States or any limitation on,
or any event which, in our reasonable judgment, might affect the extension
of credit by lending institutions in the United States, (v) the commencement
of a war, armed hostilities or other international or national calamity
directly or indirectly involving the United States or (vi) in the case of
any of the foregoing existing at the time of the commencement of the offer,
in our reasonable judgment, a material acceleration or worsening thereof; or
3. There shall have occurred any event or events that has
resulted, or may in our reasonable judgment result, directly or indirectly,
in an actual or threatened change in the business, condition (financial or
otherwise), income, operations, stock ownership or prospects of us and our
subsidiaries; and, in our reasonable judgment, such event or events make it
undesirable or inadvisable to proceed with any offer or with such acceptance
for payment.
The foregoing conditions are for our benefit and we may assert them
regardless of the circumstances, including any action or inaction on our
part giving rise to any of these conditions, and we may waive any such
condition, in whole or in part, at any time and from time to time in our
discretion prior to the expiration date. Our failure at any time to exercise
any of the foregoing rights shall not be deemed a waiver of the right and
each of these rights shall be deemed an ongoing right which may be asserted
at any time and from time to time. Any determination by us concerning the
events described above will be final and binding on all parties.
All conditions will be satisfied or waived prior to the expiration
date.
12. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS
We are not aware of any license or regulatory permit that appears to
be material to our business that might be adversely affected by our
acquisition of the preferred shares as contemplated in the offer or, except
as noted below, of any approval or other action by any government or
governmental, administrative or regulatory authority or agency, domestic or
foreign, that would be required for our acquisition or ownership of
preferred shares as contemplated by the offer. Because Bangor Hydro believed
that it may require the approval of the Maine Public Utilities Commission
(the "MPUC") pursuant to Title 35-A, Section 910 of the Maine Revised
Statutes to reduce its capital stock, Bangor Hydro obtained such approval to
redeem all or any portion of its preferred stock by call or tender offer
pursuant to MPUC order dated December 23, 2002 in MPUC Docket No. 2002-771.
Should any additional approval or other action be required, we currently
contemplate that we will seek such approval or other action. We cannot
predict whether we may determine that we are required to delay the
acceptance for payment of, or payment for, preferred shares tendered in the
offer pending the outcome of any such matter. There can be no assurance that
any such approval or other action, if needed, would be obtained at all or
without substantial conditions or that the failure to obtain any such
approval or other action might not result in adverse consequences to our
business. Our obligations under the offer to accept for payment and pay for
preferred shares are subject to certain conditions. See Section 11,
"Conditions to the Offer."
13. MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE OFFER
The following discussion summarizes the material U.S. federal income
tax considerations that are generally applicable to United States holders of
preferred shares who tender such preferred shares for cash pursuant to the
offer.
You should be aware that this discussion does not deal with all
federal income tax considerations that may be relevant to particular
shareholders in light of their individual circumstances. In particular, this
discussion does not address the tax consequences of the offer to holders of
the preferred shares who are dealers in securities, are foreign persons, do
not hold their preferred shares as capital assets, or hold their preferred
shares as part of an integrated investment comprised of the preferred shares
and one or more other positions. Nor does this discussion address the tax
consequences of the offer to any person under foreign, state or local tax
laws.
In addition, this discussion does not address the tax consequences of
any transactions other than the offer. For example, it does not address the
tax consequences of the payment of dividends that will be made for the
quarter ending December 31, 2002 or of any dividends declared or paid
thereafter. However, corporate holders should note that if our offer to
purchase were deemed to give such holders an option to sell preferred
shares, or if our offer combined with a holder's tender of shares were
deemed to be a contract to sell such shares, the holder's holding period for
purposes of the dividends received deduction would not include any date on
which the option or contract was outstanding. In that case, a corporate
holder which tendered its shares pursuant to the offer would not meet the
holding period requirements necessary to be able to claim the dividends
received deduction with respect to the dividend that will be paid on March
31, 2002 (and a corporate holder which did not tender its shares might also
not meet such holding period requirements). YOU ARE URGED TO CONSULT YOUR
OWN TAX ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES TO YOU OF THE OFFER AND
RELATED TRANSACTIONS, INCLUDING ANY EFFECT OF THE OFFER ON THE DIVIDENDS
RECEIVED DEDUCTION.
This discussion applies only to "United States holders" (as defined
below). For purposes of this discussion, a "United States holder" means:
- a citizen or resident of the United States;
- a corporation or other entity taxable as a corporation created or
organized in the United States or under the laws of the United States or of
any political subdivision of the United States;
- an estate, the income of which is includible in gross income for
United States federal income tax purposes regardless of its source; or
- a trust, if a United States court can exercise primary supervision
over its administration and one or more United States persons are
authorized to control all of its substantial decisions.
Characterization of the Purchase. Our purchase of a United States
holder's preferred shares in the offer will be a taxable transaction for
United States federal income tax purposes. Under Section 302 of the Internal
Revenue Code, a United States holder whose preferred shares are purchased by
us in the offer will be treated as having sold its preferred shares, and
thus will recognize capital gain or loss, if the purchase:
- results in a "complete termination" of the United States holder's
equity interest in Bangor Hydro; or
- is "not essentially equivalent to a dividend" with respect to the
United States holder.
For purposes of both of these tests, certain constructive ownership
rules, described in more detail below, apply.
Complete Termination Test. Our purchase of a United States holder's
preferred shares in the offer will result in a "complete termination" of
that holder's equity interest in Bangor Hydro if all of the preferred shares
in Bangor Hydro actually or constructively held by that holder are sold to
us in the offer, provided that no shares of any other class of stock in
Bangor Hydro is actually or constructively owned by the holder.
Not Essentially Equivalent to a Dividend Test. Our purchase of a
United States holder's preferred shares in the offer will be treated as "not
essentially equivalent to a dividend" if the reduction in the United States
holder's proportionate interest in Bangor Hydro as a result of the purchase
constitutes a "meaningful reduction" given the United States holder's
particular circumstances. The application of this test depends upon a
shareholder's particular facts and circumstances. However, since the
preferred shares will be, as of March 1, 2003, the only publicly traded
securities of Bangor Hydro it is likely for most shareholders that tendering
the preferred shares will constitute a "meaningful reduction". (Bangor Hydro
gave notices of redemption on December 31, 2002 with respect to its only
other two publicly traded series of securities, its 4% and 4 1/4% series of
preferred stock, which will occur on March 1, 2003.) YOU ARE URGED TO
CONSULT YOUR OWN TAX ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES TO YOU OF
THE OFFER AND RELATED TRANSACTIONS, INCLUDING ANY EFFECT OF THE OFFER ON THE
DIVIDENDS RECEIVED DEDUCTION.
Constructive Ownership Rules. For purposes of both the "complete
termination" test and the "not essentially equivalent to a dividend" test,
United States holders must take into account both stock in Bangor Hydro that
they actually own and stock in Bangor Hydro they are treated as owning under
the constructive ownership rules of Section 318 of the Internal Revenue
Code. Under the constructive ownership rules, a United States holder is
treated as owning any stock in Bangor Hydro that is owned (actually and in
some cases constructively) by certain related individuals and entities, as
well as any stock in Bangor Hydro that the United States holder has the
right to acquire by exercise of an option or by conversion or exchange of a
security including any convertible stock or debt of Bangor Hydro. A
shareholder in a corporation is treated as owning that shareholder's
proportionate share of any stock owned, directly or indirectly, by that
corporation only if the shareholder actually or constructively owns 50
percent or more of the value of the stock of the corporation. Since all of
the common stock of Bangor Hydro is owned indirectly by Emera, Inc., a
United States holder of preferred stock would be treated as constructively
owning common stock in Bangor Hydro only if that holder and persons related
to that holder owned (actually or constructively) 50 percent or more by
value of the stock of Emera, Inc.
If a United States holder satisfies either of the tests described
above, the United States holder will be treated as if it sold its preferred
shares to us and will recognize capital gain or loss equal to the difference
between the amount of cash received in the offer and the United States
holder's adjusted tax basis in the preferred shares surrendered in exchange
therefor. This gain or loss will be long-term capital gain or loss if the
United States holder's holding period for the preferred shares that were
sold exceeds one year as of the date of purchase by us in the offer. Certain
limitations apply to the deductibility of capital losses by United States
holders. Gain or loss is determined separately for each block of preferred
shares (preferred shares acquired at the same cost in a single transaction)
that is purchased by us from a United States holder in the offer. United
States holders should consult their tax advisors concerning this
determination.
If a United States holder does not satisfy either of the tests
described above, our purchase of that holder's preferred shares in the offer
will not be treated as a sale or exchange. Instead, the entire amount
received by that holder with respect to our purchase of its preferred shares
in the offer will be treated as a dividend distribution to that holder with
respect to its preferred shares under Section 301 of the Internal Revenue
Code, taxable at ordinary income tax rates to the extent of that holder's
share of our current and accumulated earnings and profits (within the
meaning of the Internal Revenue Code). To the extent the amount of the
distribution exceeds that holder's share of our current and accumulated
earnings and profits, the excess first will be treated as a tax-free return
of capital to the extent of that holder's adjusted tax basis in its
preferred shares and any remainder will be treated as capital gain (which
may or may not be long-term capital gain, as described above). A corporate
holder that is treated as receiving a dividend may be eligible for the
dividends-received deduction, subject to certain limitations. As noted
above, if our offer to purchase results in corporate holders being deemed to
have an option to sell their preferred shares, or if corporate holders are
deemed to have entered into a contract to sell their preferred shares, such
holders may not meet the holding period requirements necessary to be able to
claim the dividends received deduction. A corporate holder may also be
subject to special tax rules relating to "extraordinary dividends" under
Section 1059 of the Internal Revenue Code.
Backup Withholding. Under certain circumstances, United States
holders of the preferred shares may be subject to backup withholding at a
30% rate with respect to the amount of consideration received pursuant to
the offer, unless the holder provides proof of an applicable exemption or a
correct taxpayer identification number on the attached substitute Form W-9
and otherwise complies with applicable requirements of the backup
withholding rules. Amounts withheld under the backup withholding rules are
not an additional tax and may be refunded or credited against the holder's
federal income tax liability, provided the required information is furnished
to the Internal Revenue Service.
14. FEES AND EXPENSES
We have retained Georgeson Shareholder Securities Corporation to act
as our dealer manager and Georgeson Shareholder Communications Inc. to act
as the information agent in connection with the offer. We have agreed to
pay Georgeson Shareholder Securities Corporation and Georgeson Shareholder
Communications Inc. a collective base fee of $40,000.00 as compensation for
their services as dealer manager and information agent, respectively. The
information agent may contact holders of the preferred shares by mail,
telephone, facsimile, email, telex, telegraph and personal interviews and
may request brokers, dealers, banks, trust companies and other nominees to
forward materials relating to the offer to beneficial owners. The
information agent will receive reasonable and customary compensation for
certain of these additional services. We have also agreed to reimburse the
dealer manager and the information agent for certain reasonable out-of-
pocket expenses incurred in connection with the offer and to indemnify the
dealer manager and information agent, together with related persons and
entities, against certain liabilities, including certain liabilities under
the federal securities laws, arising out of their engagement.
We have retained EquiServe Trust Company, N.A. to act as the
depositary in connection with the offer. The depositary will receive
reasonable and customary compensation for its respective services and will
be reimbursed for certain reasonable out-of-pocket expenses.
Brokers, dealers, commercial banks and trust companies will be
reimbursed by us for customary mailing and handling expenses incurred by
them in forwarding material to their customers. We will not pay any fees or
commissions to any broker, dealer or other person (other than the dealer
manager) in connection with the solicitation of tenders of preferred shares
pursuant to the offer.
None of the dealer manager, the information agent or the depositary
assume any responsibility for the accuracy or completeness of the
information concerning us or our affiliates contained in this offer to
purchase or for any failure by us to disclose events that may have occurred
and may affect the significance or accuracy of such information.
Certain of our directors or executive officers may, from time to
time, contact shareholders to provide them with information regarding the
offer. These directors and executive officers will not make any
recommendation to any shareholder as to whether to tender all or any
preferred shares and will not solicit the tender of any preferred shares. We
will not compensate any director or executive officer for these services.
Fees and expenses to be incurred and paid by us in connection with
the offer, are estimated as follows:
Dealer Manager and Information Agent Fees................... $ 45,000
Depositary Fees............................................. $ 15,000
Legal Fees.................................................. $ 10,000
Printing.................................................... $ 3,000
Filing Fees................................................. $ 575
Miscellaneous............................................... $ 1,000
----------
Total............................................. $74,575
15. MISCELLANEOUS
No offer is being made to, nor will tenders be accepted from or on
behalf of, holders of preferred shares in any jurisdiction in which the
making of the applicable offer or acceptance thereof would not be in
compliance with the laws of such jurisdiction. However, we may, in our
discretion, take such action as we may deem necessary to make the offer in
any such jurisdiction and extend the offer to holders of preferred shares in
such jurisdiction.
No person has been authorized to give any information or make any
representation on our behalf not contained in this offer to purchase or in
the letter of transmittal and, if given or made, such information or
representation must not be relied upon as having been authorized.
Pursuant to Rule 13e-4 promulgated under the Exchange Act, we have
filed with the SEC an Issuer Tender Offer Statement on Schedule TO which
contains additional information, including information required by Rule 13e-
3 under the Exchange Act, with respect to the offer. The Schedule TO,
including the exhibits and any amendments and supplements to that document,
may be examined, and copies may be obtained, at the same places and in the
same manner as is set forth in Section 8, "Certain Information about Bangor
Hydro."
BANGOR HYDRO-ELECTRIC COMPANY
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
The following is a list of the directors and executive officers of
Bangor Hydro-Electric Company, and for each a description of the following:
(i) current principal occupation or employment and the name, principal
business and address of any corporation or organization in which the
employment or occupation is conducted; (ii) material occupations, positions,
offices or employment during the past five years, giving the starting and
ending dates of each and the name, principal business and address of any
corporation or other organization in which the occupation, position, office
or employment was carried on; and (iii) country of citizenship.
Unless otherwise noted below, none of the following persons has been
convicted in a criminal proceeding during the past five years (excluding
traffic violations or similar misdemeanors), and none of the following
persons has during the past five years been a party to any judicial or
administrative proceeding (except for matters that were dismissed without
sanction or settlement) that resulted in a judgment, decree or final order
enjoining the person from future violations of, or prohibiting activities
subject to, federal or state securities laws, or a finding of any violation
of federal or state securities laws.
BANGOR HYDRO-ELECTRIC COMPANY
NAME AGE POSITION
- ---- --- --------
David McD. Mann........................... 62 Chairman of the Board
Christopher G. Huskilson.................. 44 Director, Vice Chairman
Jane J. Bush.............................. 57 Director
Norman A. Ledwin.......................... 60 Director
Elizabeth A. MacDonald.................... 56 Director
Ronald E. Smith........................... 52 Director
Raymond R. Robinson....................... 44 Chief Operating Officer
David R. Black............................ 54 Treasurer, Controller, CFO
David McD. Mann has been a Director and Chairman of the Board since
Bangor Hydro's merger with Emera in October, 2001. Mr. Mann also serves as
President and Chief Executive Officer and Director of Emera Inc. Until
July, 1996, Mr. Mann was a senior partner with the Halifax, Nova Scotia law
firm of Cox Downie. Mr. Mann's business address is 1894 Barrington Street,
Halifax, Nova Scotia B3J 2A9. Mr. Mann is a citizen of Canada.
Christopher G. Huskilson has been a Director and Vice Chairman of the
Board since Bangor Hydro's merger with Emera in October, 2001. Mr.
Huskilson also serves as Chief Operating Officer of Nova Scotia Power Inc.,
a subsidiary of Emera. Mr. Huskilson's business address is 1894 Barrington
Street, Halifax, Nova Scotia B3J 2A9. Mr. Huskilson is a citizen of Canada.
Jane J. Bush has been a Director since 1990. Ms. Bush is President
and co-owner of Coastal Ventures, a retailing company. Ms. Bush's business
address is 11 Addison Rd, Columbia Falls, ME 04623. Ms. Bush is a citizen
of the United States.
Norman A. Ledwin has been a Director since 1996. Mr. Ledwin
President and Chief Executive Officer and a Director of Eastern Maine
Healthcare, a health care organization made up of not-for-profit and for-
profit entities (including Eastern Maine Medical Center, a not-for-profit
regional acute care hospital facility). Mr. Ledwin's business address is
489 State St., Bangor, Maine 04401. Mr. Ledwin is a citizen of the United
States.
Elizabeth A. MacDonald has been a Director since Bangor Hydro's
merger with Emera in October, 2001. Ms. MacDonald also serves as Vice
President, Human Resources of Emera. Until November, 2001, Ms. MacDonald
was Vice President - Human Resources of Nova Scotia Power Inc. Ms.
MacDonald's business address is 1894 Barrington Street, Halifax, Nova Scotia
B3J 2A9. Ms. MacDonald is a citizen of Canada.
Ronald E. Smith has been a Director since Bangor Hydro's merger with
Emera in October, 2001. Mr. Smith also serves as Chief Financial Officer of
Emera. From September, 1999 to October, 2000, Mr. Smith was an independent
consultant. From March, 1999 to September, 1999, Mr. Smith was Chief
Financial Officer, Telecommunications, for Aliant Inc. Prior to March 1999
was Chief Financial Officer for Maritime Tel & Tel Co. Ltd. Mr. Smith's
business address is 1894 Barrington Street, Halifax, Nova Scotia B3J 2A9.
Mr. Smith is a citizen of Canada.
Raymond R. Robinson has been Chief Operating Officer of Bangor Hydro
since April, 2002. From 2001 until 2002, Mr. Robinson served as Vice
President, Utility Integration for Emera. Prior to 2001, Mr. Robinson
served as President and Chief Executive Officer of Yukon Energy Corporation.
Mr. Robinson's business address is 33 State St., Bangor, Maine 04401. Mr.
Robinson is a citizen of Canada.
David R. Black has been Treasurer and Controller and Chief Financial
Officer of Bangor Hydro since April, 2002. Prior to April, 2002, Mr. Black
was Controller of Bangor Hydro. Mr. Black's business address is 33 State
St., Bangor, Maine 04401. Mr. Black is a citizen of the United States.
The Depositary for the Offer is:
EQUISERVE TRUST, N.A.
BY MAIL: BY HAND: BY OVERNIGHT DELIVERY:
- -------- -------- ----------------------
EquiServe Trust Securities Transfer EquiServe Trust
Corporate Actions & Reporting Attn: Corporate Actions
Post Office Box 43014 c/o EquiServe Trust 150 Royall Street
Providence, RI 100 William's Street, Canton, MA 02021
02940-3014 Galleria
NewYork, NY 10038
To reach EquiServe by telephone: (800) 736-3001
Questions regarding how to tender and requests for additional copies of this
offer to purchase, the letter of transmittal or other documents related to
the offer should be directed to the information agent.
The Information Agent for the Offer is:
Georgeson Shareholder Communications Inc.
17 State Street
New York, NY 10004
For information by telephone:
(866) 328-5445
Questions regarding the terms of the offer should be directed to the dealer
manager.
The Dealer Manager for the Offer is:
GEORGESON SHAREHOLDER SECURITIES CORPORATION
17 State Street
New York, NY 10004
(866) 328-5445