UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: December 5, 1998
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(Date of earliest event reported)
BEC ENERGY
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(Exact name of registrant as specified in its charter)
Massachusetts 1-14768 04-6830187
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation File Number) Identification No.)
800 Boylston Street, Boston, Massachusetts 02199
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(Address of principal executive offices) (Zip Code)
1-888-423-2364
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(Registrant's telephone number, including area code)
BEC Energy
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Item 5. Other Events
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On December 5, 1998 BEC Energy (BEC), Commonwealth Energy System (CES) and BEC
Newco, Inc. (Newco), a new corporation owned jointly by BEC and CES, entered
into an Agreement and Plan of Merger (the Merger Agreement) providing for a
merger transaction among the companies. The Merger Agreement and the press
release issued in connection therewith are filed herewith as Exhibits 2.1 and
99.1, respectively, and are incorporated herein by reference. The description
of the Merger Agreement set forth herein does not purport to be complete and
is qualified in its entirety by the provisions of the Merger Agreement.
Pursuant to the Merger Agreement, BEC and CES will be merged into Newco and
holders of BEC and CES common shares will exchange their shares for a
combination of cash and stock in Newco. The Merger Agreement was approved by
the trustees of each of BEC and CES. The mergers are expected to occur
shortly after the satisfaction or waiver of certain conditions, including the
receipt of certain regulatory approvals. The regulatory approval process is
expected to be completed during the second half of 1999.
The mergers will create an energy delivery company serving approximately
1.3 million customers located entirely within Massachusetts, including more
than 1 million electric customers in 81 communities and 240,000 gas customers
in 51 communities.
Under the terms of the Merger Agreement, each outstanding common share of BEC
may be exchanged for one share of Newco common stock or $44.10 in cash, and
each outstanding common share of CES may be exchanged for 1.05 shares of Newco
common stock or $44.10 in cash. $200 million in cash will be allocated to BEC
shareholders and $100 million in cash will be allocated to CES shareholders.
In the event that shareholders of either BEC or CES do not elect to receive
all of the cash allocated to be paid to them, subject to adjustment in certain
cases, such cash will be proportionately allocated among those shareholders
who have elected to receive shares of Newco common stock. The cash portion of
the transaction is expected to be financed primarily through current cash
balances and internally generated funds. At the close of the mergers, BEC
shareholders will own approximately 68% of Newco common stock and CES
shareholders will own approximately 32%.
The transaction is expected to be tax-free to shareholders to the extent they
receive Newco common stock. The mergers are expected to be accounted for
using the purchase method of accounting.
The trustees of BEC have received an opinion of BEC's investment banker,
Goldman, Sachs & Co., to the effect that, as of the date of the Merger
Agreement, the mergers are fair from a financial point of view to the BEC
shareholders. The trustees of CES have received an opinion of CES' investment
banker, SG Barr Devlin, to the effect that, as of the date of the Merger
Agreement, the mergers are fair from a financial point of view to the CES
shareholders.
The mergers are subject to certain customary closing conditions, including the
receipt of the required approvals of BEC and CES shareholders; the receipt of
all necessary regulatory approvals, including the Massachusetts Department of
Telecommunications and Energy's approval of a rate plan and the approval of
the Federal Energy Regulatory Commission, the Securities and Exchange
Commission and the Nuclear Regulatory Commission; and the filing of the
requisite notification with the Federal Trade Commission and the Department of
Justice under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the expiration of the applicable waiting period thereunder.
Shareholder votes on the mergers are expected to be held as part of each of
BEC's and CES' annual shareholder meetings currently scheduled for the second
quarter of 1999. The Merger Agreement may be terminated under certain
circumstances, including by any party if the mergers are not consummated by
December 5, 1999, subject to an automatic extension of six months if the
requisite regulatory approvals have not yet been obtained by such date.
Upon effectiveness of the mergers, Thomas J. May, BEC's current Chairman,
President and Chief Executive Officer (CEO), will become the Chairman and CEO
of Newco. Russell D. Wright, CES' current president and CEO, will become the
President and Chief Operating Officer of Newco and will serve on Newco's board
of directors. Also, upon effectiveness of the mergers, Newco's board of
directors will consist of BEC's and CES' current trustees. Newco's operating
name has yet to be determined.
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits
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(a) Financial Statements of Business Acquired
Not applicable.
(b) Pro Forma Financial Information
Not applicable.
(c) Exhibits
Exhibit 2. Plan of acquisition, reorganization, arrangement,
liquidation or succession
Filed herewith as Exhibit 1:
2.1 Agreement and Plan of Merger by and among BEC Energy,
Boston Energy Technology Group, Inc., Commonwealth Energy
System, COM/Energy Resources, Inc. and BEC Newco, Inc.,
dated as of December 5, 1998
Exhibit 99. Additional exhibits
Filed herewith as Exhibit 2:
99.1 Joint press release dated December 7, 1998 issued by BEC
Energy and Commonwealth Energy System
BEC Energy
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SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BEC ENERGY
By: /s/ Robert J. Weafer, Jr.
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Robert J. Weafer, Jr.
Vice President-Finance,
Controller, Assistant
Treasurer and Assistant
Clerk
Date: December 10, 1998