EXHIBIT 99(c)
[ALLETE LOGO]
DAVID G. GARTZKE
CHAIRMAN, ALLETE BOARD OF DIRECTORS
August 24, 2004
Dear Shareholder:
Your board of directors has taken action on several issues related to
the upcoming separation of ADESA from ALLETE. These matters are important to all
ALLETE shareholders, and I urge you to read this letter carefully. We have
enclosed with this mailing a question-and-answer sheet and a copy of a news
release we issued. I want you to fully understand this transaction and the key
events that will transpire over the next month.
SPIN-OFF OF ADESA TO ALLETE SHAREHOLDERS:
- -----------------------------------------
I'm pleased to report that the SPIN-OFF OF ADESA (NYSE:KAR) FROM ALLETE
(NYSE:ALE) WILL TAKE PLACE SEPTEMBER 20, 2004. ON THAT DAY, INVESTORS WHO OWN
SHARES OF ALLETE ON THE RECORD DATE OF SEPTEMBER 13, 2004, ARE EXPECTED TO
RECEIVE ONE SHARE OF ADESA STOCK FOR EACH SHARE OF ALLETE THEY HOLD.
Shareholders of ALLETE will receive their ADESA shares in direct registration
form. Within days after the spin-off, all ALLETE shareholders of record will
automatically receive a statement of ownership from ADESA and a check for any
fractional share. NO ACTION IS REQUIRED BY YOU TO RECEIVE YOUR SHARES OF ADESA.
The distribution of ADESA common stock is structured to qualify as a
tax-free stock dividend. The result is that you will not recognize a taxable
gain or loss as a result of the receipt of ADESA common stock, except with
respect to any cash you may receive for a fractional share. You will receive
information that will help you calculate the tax basis of your ADESA and ALLETE
shares after the spin-off.
ONE-FOR-THREE REVERSE STOCK SPLIT:
- ----------------------------------
The ALLETE board of directors has also declared a one-for-three reverse
stock split, effective immediately following the spin-off on September 20,
whereby every three shares of ALLETE that you own will be converted into one
share of "new" ALLETE common stock.
This reverse split will not affect your investment interest in ALLETE
and is intended to increase the share price to a range that is more appealing to
a broader group of investors. Here's an example of how the reverse split will
work. Let's say you own 300 shares of post-spin-off ALE priced at $9 per share
before the reverse split on September 20, 2004. Immediately after the reverse
stock split, you would have 100 shares of ALE priced at $27 per share. In both
cases, the value of your investment is $2,700.
30 West Superior Street Duluth, Minnesota 55802-2093
August 24, 2004 Page 2
Investors who hold ALLETE shares in stock certificate form will have to
turn in their certificates to the Company's transfer agent, Wells Fargo Bank
N.A., after the spin-off to receive their "new" ALLETE shares. The "new" shares
will be in direct registration form, and shareholders will receive a statement
of ownership and a check for any fractional share. PLEASE DO NOT SEND IN YOUR
CERTIFICATES NOW; INSTRUCTIONS ON HOW TO DO SO WILL BE SENT TO YOU IN LATE
SEPTEMBER.
Investors who hold ALLETE shares within the Invest Direct stock
purchase and dividend reinvestment plan will not have to take any action to
receive their "new" shares. The changed price and quantity of your shares will
be reflected in the next Invest Direct statement you receive after the spin-off.
ALLETE COMMON STOCK DIVIDEND:
- -----------------------------
ALLETE'S September 1 common stock dividend will be the same as the
previous quarter's dividend of $0.2825 per share. The ALLETE BOARD OF DIRECTORS
ANTICIPATES DECLARING A QUARTERLY DIVIDEND OF $.30 PER POST-SPLIT SHARE at its
regular October meeting for payment on December 1, 2004 to shareholders of
record on November 15, 2004.
NOTICE TO PARTICIPANTS IN THE INVEST DIRECT PLAN:
- -------------------------------------------------
In order to facilitate appropriate record keeping for these
transactions, the company will be suspending all sales and transfer activity in
its Invest Direct stock purchase plan from September 10 until September 20.
Optional cash payments received after August 25 will buy shares in post-spin-off
ALLETE.
It's gratifying for all of us at ALLETE and ADESA to be reaching the
point where these two fine companies are able to pursue their strategies
independently. It has been my distinct pleasure to serve as ALLETE's board
chairman during a period of growth and change. As I leave ALLETE to devote my
full attention to the leadership of ADESA, you may be assured that your
investment in both companies is very much appreciated.
Sincerely,
/s/ David G. Gartzke
David G. Gartzke
Chairman
30 West Superior Street Duluth, Minnesota 55802-2093
- ------------------------
THE ADESA
spin-off.
- ------------------------
THE ALLETE
reverse stock split.
- ------------------------
A NEW ALLETE
dividend.
- ------------------------
QUESTIONS AND ANSWERS
How the transactions
work for you.
----
[ALLETE LOGO]
THE ADESA spin-off.
- - Q. What am I going to receive when ADESA
is spun off?
A. On September 20, ALLETE expects to distrib-
ute one share of ADESA stock for every share of
ALLETE stock you own as of September 13, and
a check for the value of any fractional share. Your
ADESA shares will be held in a Direct Registration
System (DRS) account managed by Wells Fargo
Bank N.A., ADESA's transfer agent.
- ------------------------------------------------------
- - Q. Do I have to do anything to receive my
ADESA shares?
A. No, you will not have to do anything to
receive your shares. You will automatically be
mailed a statement from ADESA reflecting your
ownership.
- ------------------------------------------------------
- - Q. What is DRS and how does it work?
A. DRS is a system for book-entry ownership
of stock. It is a service in which shares are
owned, recorded and transferred electronically
without issuing a physical stock certificate.
By having the transfer agent keep shareholder
records electronically, the risk of lost or stolen
stock certificates is eliminated. Shareholders still
have all their traditional rights and privileges,
without the necessity of holding a physical
certificate. You will receive information on how
to perform transactions within your DRS account
when you receive your new statement of owner-
ship. A physical stock certificate will be issued
only upon request.
- ------------------------------------------------------
- - Q. What happens if I buy or sell shares of
ALLETE before the spin-off date?
A. If you buy ALLETE stock before September
21, you'll be eligible for the ADESA spin-off shares.
If you sell shares of ALLETE prior to September 21
you will also sell your entitlement to receive any
THE ALLETE reverse stock split.
corresponding ADESA spin-off shares. Please note
that transactions in ALLETE's Invest Direct plan
will be suspended between September 10 and
September 20 to accommodate recordkeeping.
- ------------------------------------------------------
- - Q. What is a reverse stock split?
A. It is the opposite of a stock split. A reverse
split results in a decrease in the number of out-
standing shares with a proportionate increase in
the price per share so that the total value of the
stock owned remains the same. For example, if
a shareholder owned 300 shares of ALLETE stock
valued at $9 per share immediately after the spin-
off of ADESA, he would own 100 shares valued at
$27 after the one-for-three reverse stock split.
In both cases the total value of his investment
equals $2700.
[GRAPHIC ILLUSTRATING THE FOLLOWING OMITTED]
HOW A REVERSE STOCK SPLIT WORKS
BEFORE AFTER
you have... you will have...
STOCK STOCK
Three Shares Valued = $27 = One Share Valued
At $9.00 Each Stock Value At $27.00
DIVIDEND DIVIDEND
Quarterly Dividend = $.30 = Quarterly Dividend
10 Cents Each Share 30 Cents Each Share
Total Quarterly Total Quarterly
Dividend of 30 Cents Dividend of 30 Cents
- ------------------------------------------------------
- - Q. Why was a reverse stock split declared?
A. Our research indicates that common stock
priced over $20 appeals to more investors than
stock that is priced well under that level. Since
ALLETE stock would likely trade at a price well
under $20 immediately after the spin-off of ADESA,
the board declared a one-for-three reverse stock
split with the intention of increasing the price to
a range that is more appealing to a broader group
of investors.
A NEW ALLETE dividend.
- - Q. What do I need to do to receive my "new"
ALLETE shares after the reverse split?
A. If you currently hold a stock certificate,
it must be turned in. You should do nothing
now; you will receive instructions in late
September about how to turn in your old
stock certificates. After you surrender your
old certificate, you will automatically be mailed
a new DRS statement of ownership from
ALLETE and a check for any fractional share.
If you hold your stock within an Invest
Direct account, you do not have to do
anything. Your next Invest Direct statement
will reflect your share ownership.
- ------------------------------------------------------
- - Q. What will the common dividend be?
A. The September 1 common stock dividend
of $0.2825 per share remains unchanged from
the previous quarter. The ALLETE board of
directors expects to declare a quarterly
dividend of $0.30 per post-split share
(which would be equivalent to $0.10 per
pre-split share) at its regular October meeting
for payment on December 1, 2004 to share-
holders of record on November 15, 2004.
- ------------------------------------------------------
- - Q. Who do I contact at ALLETE with
questions?
A. ALLETE Shareholder Services
30 W. Superior St., Duluth, MN 55802
800-535-3056
FAX: 218-720-2502
E-mail: shareholder@allete.com
[ALLETE LOGO]
ALLETE, INC.
will spin off its remaining
equity interest in ADESA, Inc.
to shareholders in late
September. Effective
immediately following
and in connection with
the spin-off, the ALLETE
board will declare a
one-for-three reverse stock
split, whereby each three
shares will be converted into
one share of "new" ALLETE
common stock. The ALLETE
board expects to declare
a quarterly dividend of
30 cents per post-split share
at its October meeting for
payment on December 1.
[ALLETE LOGO]
What you will own
after the spin-off:
[OMITTED GRAPHIC OF
NEW YORK STOCK EXCHANGE LISTING
HIGHLIGHTING SECTIONS A AND K
WHERE ALLETE STOCK "ALE" AND
ADESA STOCK "KAR" ARE LISTED.]
Add share prices and dividends
of ALLETE and ADESA together.
[ALLETE LOGO]
30 W. Superior St. / Duluth, MN 55802
www.allete.com