Exhibit 99
[Western Resources (R) logo] [KCPL (R) logo]
making life a little easier
MEDIA CONTACTS: MEDIA CONTACTS:
Michel' J. Philipp (785) 575-1927 Phyllis Desbien (816) 556-
2903
INVESTOR CONTACT: INVESTOR CONTACT:
Bruce Burns (785) 575-8227 Andrea Bielsker (816) 556-2312
JOINT NEWS RELEASE
NEW AGREEMENT REACHED,
RESULTS IN FORMATION OF WESTAR ENERGY
SHAREOWNER MEETINGS SET FOR SUMMER
TOPEKA, Kansas, and KANSAS CITY, Missouri, March 19, 1998
(6:30 a.m. CST) -- Western Resources (NYSE:WR) and Kansas City
Power & Light Company (NYSE:KLT) today announced a restructuring
of their merger agreement, resulting in the formation of a new
electric company. Both companies will ask shareowners to approve
the transaction around June 30.
The new company -- to be named Westar Energy -- will be
headquartered in Kansas City, Missouri, and traded on the New
York Stock Exchange. Under the new agreement, each KCPL
shareowner will receive $23.50 worth of Western Resources common
stock, subject to a collar mechanism, for each share of KCPL
common stock owned. In addition, for each KCPL common share
owned, each KCPL shareowner will receive one share of the new
company -- Westar Energy -- with an estimated value of between
approximately $10.00 and $12.00 per share based on current market
conditions. This estimate is based on an analysis by KCPL and
Western Resources assuming that the dividend for the first year
of operation is $0.72 and assuming a
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p. 2 - WESTAR ENERGY
normal electric utility payout ratio. Since Westar Energy will
be a newly formed entity with no trading history, there can be no
assurance that Westar Energy will trade at such levels.
"This unique and creative approach will give the electric
operations of both companies a foundation for success in the new
competitive environment," said John E. Hayes, Jr., Western
Resources chairman of the board and chief executive officer.
"Shareowners will reap the benefits of the regulated utility
assets of Western Resources and KCPL and the upside potential of
ownership in Western Resources, a consumer services company with
diversified holdings in monitored security and energy companies.
"This transaction provides significant tangible benefits for
all involved," said Hayes. "Our mutual commitment to no employee
layoffs and long-range cost savings exemplifies what our two
companies can do together. We are delighted to build on each
other's strengths to create a company poised for the future."
Western Resources and KCPL will contribute their respective
electric operations to form Westar Energy, which will be 80.1
percent owned by Western Resources and 19.9 percent by KCPL
shareowners.
"By combining the electric utility businesses of both
companies, we are creating a larger regional platform from which
to provide customers with the same reliable competitive energy
services to which they are accustomed," said Drue Jennings,
KCPL's chairman of the board, president and chief executive
officer.
"In addition, KCPL shareowners' ownership in Western
Resources, one of the most dynamic companies in the nation, has
the potential for growth," said Jennings. "Western Resources'
management team has a demonstrated track record for growth,
having delivered to its
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p. 3 - WESTAR ENERGY
shareowners a total return on their investment of approximately
48% during the last year. We are extremely pleased with this
agreement and look forward to making it happen."
Westar Energy will continue to operate under the brand names
of KCPL, KGE, and KPL. The combined company will have more than
one million electric customers in Kansas and Missouri, $8.2
billion in assets and more than 8,000 megawatts of electric
generation resources. Hayes will serve as chairman of the board;
Jennings will assume chief executive officer responsibilities of
Westar Energy.
A 10-member board of directors will govern Westar Energy.
Six positions will be appointed by Western Resources and four
positions from KCPL.
Westar Energy's executive headquarters will be in Kansas
City, Missouri, customer service operations will be headquartered
in Wichita, and its field operations will be headquartered in
Topeka.
Western Resources will continue to be headquartered in
Topeka, Kansas, and will include KLT, Inc., KCPL's unregulated
operations; 80.1% of Westar Energy; Western Resources' existing
investments of 45% interest in ONEOK, Inc., the eighth largest
natural gas distribution company in the nation; an 80% interest
in Protection One, the second largest monitored security company
with more than one million security customers in 48 states; and
the Wing Group, international power project developers. Three
members of the KCPL board will join the Western Resources board.
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p. 4 - WESTAR ENERGY
Western Resources will continue to trade on the New York
Stock Exchange under the symbol WR.
Salomon Smith Barney, Western Resources' investment banker,
and Merrill Lynch & Co., Inc., KCPL's investment banker, have
presented fairness opinions to the boards of directors of each
company. The agreement must receive approval from various
regulatory agencies. The approval process should take
approximately 12 months. It is expected the transaction will
close by mid-year 1999.
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Western Resources (NYSE:WR) is a consumer services company
with interests in monitored security and energy. The company has
total assets of approximately $7 billion, including security
company holdings through ownership of Protection One
(NASDAQ:ALRM), which has more than 1 million security customers
in 48 states. Its utilities, KPL and KGE, provide electric
service to approximately 600,000 customers in Kansas. Through its
ownership in ONEOK Inc. (NYSE:OKE), a Tulsa-based natural gas
company, Western Resources has a 45 percent interest in the
eighth largest natural gas distribution company in the nation,
serving more than 1 million customers. Through its other
subsidiaries, Westar Capital and The Wing Group, the company
participates in energy-related investments in the continental
United States and offshore.
For more information about Western Resources and its
operating companies, visit us on the Internet at
http://www.wstnres.com.
Kansas City Power & Light Company (NYSE:KLT) provides
electric power to a growing and diversified service territory
encompassing metropolitan Kansas City, parts of eastern Kansas
and western Missouri. KCPL is a low-cost producer and leader in
fuel procurement and plant technology. KLT Inc., a wholly owned
subsidiary of KCPL, pursues opportunities in nonregulated,
primarily energy-related ventures.
For more information about KCPL, visit http://www.kcpl.com.
This press release includes forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act
of 1934. These forward-looking statements reflect numerous
assumptions, and involve a number of risks and uncertainties.
Among the factors that could cause actual results to differ
materially are: electric load and customer growth; abnormal
weather conditions; available sources and cost of fuel and
generating capacity; the speed and degree to which competition
enters the power generation, wholesale and retail sectors of the
electric utility industry; state and federal regulatory
commission decisions; the ability of the combined company to
achieve synergies; the economic climate and growth in the service
territories of the two companies; economies generated by the
merger; inflationary trends and interest rates and the other
risks detailed from time to time in the two companies' SEC
reports.
FACT SHEET
WESTERN RESOURCES/KCPL AGREEMENT
MARCH 19, 1998
TERMS OF AGREEMENT
Under the agreement, KCPL shareowners will receive both Western
Resources stock and Westar Energy stock. Upon closing of the
transaction, KCPL shareowners will receive shares of Western
Resources common stock, with a value at closing of $23.50 per share,
subject to a collar. Western Resources shareowners will continue to
hold the common stock they currently own. At closing, for every one
share of KCPL common stock they currently own, KCPL shareowners will
also receive one share of Westar Energy with an estimated value
between approximately $10.00 and $12.00 per share based on current
market conditions. This estimate is based on an analysis by KCPL and
Western Resources assuming that the dividend for the first year of
operation is $0.72 and assuming a normal electric utility payout
ratio. Since Westar Energy will be a newly formed entity with no
trading history, there can be no assurance that Westar Energy will
trade at such levels.
Western Resources will own 80.1% of Westar Energy's total common
equity and KCPL shareowners will own the remaining 19.9% of Westar
Energy. KCPL shareowners will own approximately 35% of Western
Resources and Western Resources' existing shareowners will own
approximately 65% of Western Resources based on current Western
Resources stock price. It is anticipated that the transaction will be
tax-free to both Western Resources and KCPL shareowners and accounted
for as a purchase.
On a proforma basis for the year ended December 31, 1997, Westar
Energy's revenues would have been approximately $2.1 billion and its
debt $2.7 billion ($1.9 billion from Western Resources and $800
million from KCPL). With $8.2 billion in combined assets, Westar
Energy will serve more than 1 million electric customers in Kansas
and Missouri. The combined entity will have more than 8,000 megawatts
of electric generation resources.
DIVIDEND POLICY
KCPL currently pays an annual dividend of $1.62 per KCPL share.
Western Resources has an indicated annual dividend of $2.14 per
Western Resources share. In addition, it is presently the intention
of Westar Energy to pay annual dividends at a target rate consistent
with the dividend payout ratios of other pure-play utilities, or
approximately 72 cents per Westar Energy share the first full year of
operation. It is anticipated that after completion of the
transaction, KCPL shareowners will receive dividends on both the
Western Resources shares and the Westar Energy shares exchanged for
their KCPL shares.
Based on these assumptions and Western Resources stock price and
dividend rates, KCPL shareowners would thus receive stock which is
anticipated to pay a combined dividend of $1.90 for each KCPL share
exchanged at the closing. Of course, there can be no assurance that
the boards of the directors of either Western Resources or Westar
Energy will declare dividends in the future or, if declared, the
amount of such dividends.
MANAGEMENT AND BOARD
John E. Hayes, Jr., will become chairman of the board of Westar
Energy and Drue Jennings will become chief executive officer. The
board of directors of Westar Energy will consist of 10 members,
including six directors appointed by Western Resources and four
directors from KCPL. In addition, three KCPL directors will join
Western Resources' board.
HEADQUARTERS
Westar Energy will do business in its various service areas
under the names KCPL, KGE, and KPL. The corporate headquarters of
Westar Energy will be in Kansas City, Missouri. Its customer service
operations will be headquartered in Wichita, Kansas, and its field
operations will be located in Topeka, Kansas.
COLLAR
The number of shares to be received by KCPL shareowners in the
exchange will be equal to $23.50 in value provided that the average
closing price of Western Resources stock over the 20-day trading
period ending 10 days prior to closing is not greater than $47.00 or
less than $38.28 (the collar). If the stock price is above or below
this range, the collar has additional steps above and below which are
outlined in detail in the amended merger agreement, which has been
set forth on a Form 8-K to be filed with the Securities and Exchange
Commission.
APPROVALS AND TIMING
The transaction is conditioned, among other things, upon the
approval of each company's shareowners at meetings to be conducted
around June 30, 1998. Other approvals include various state and
federal regulatory agencies, including the Kansas Corporation
Commission, the Missouri Public Service Commission, the Federal
Energy Regulatory Commission, and the Nuclear Regulatory Commission.
The companies are hopeful that regulatory approvals can be obtained
by mid-1999.
Salomon Smith Barney is serving as financial advisor and
Sullivan & Cromwell is serving as legal advisor to Western Resources.
Merrill Lynch & Co. is serving as financial advisor and Skadden,
Arps, Slate, Meagher & Flom LLP is serving as legal advisor to KCPL.
HOW THE TRANSACTION LOOKS
PRE-TRANSACTION:
[flow chart]
[box] WR [box] KCPL
(KPL) (Regulated
Utility)
[line connecting WR (KPL) [line connecting
box down to box marked WR (KPL) box [line connecting KCPL
Unregulated Businesses] down to box Regulated Utility box
marked KGE] down to box marked
KLT Inc.]
[box] Unregulated [box] KGE [box] KLT Inc.
Businesses
POST-TRANSACTION:
[flow chart]
[dotted circle] [dotted circle]
WR KCPL
Shareholders Shareholders
19.9% [line connecting KCPL
Shareholders dotted
circle down to box marked
Westar Energy KCPL KGE KPL]
65.5% [line connecting WR box up
to dotted circle marked WR
Shareholders]
34.5%(a) [line connecting WR box to
upper right-hand corner
dotted circle marked KCPL
Shareholder]
[box]
WR
[line connecting WR box 80.1% [line connecting WR box down to lower
down to box marked right-hand corner box marked
Monitored Security Westar Energy
Gas KCPL
Other Business] KGE
KPL]
100% [line connecting WR box down
to box marked KLT Inc.]
[box] [box] [box]
Monitored Security KLT Inc. Westar Energy
Gas KCPL
Other Businesses KGE
KPL
(a) Based on 65.4mm WR Shares, 61.9mm KCPL Shares, a 0.555 exchange
ratio, and a $42.31 WR 03/13/98 closing stock price