================================================================================
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares. The Offer is made solely by the Offer to Purchase dated April
18, 1997 and the Letter of Transmittal which are applicable to the Shares
tendered. Capitalized terms not defined in this announcement have the respective
meanings ascribed to such terms in the Offer to Purchase. The Company is not
aware of any jurisdiction in which the making of the Offer is prohibited by
administrative or judicial action pursuant to a valid state statute. If the
Company becomes aware of any valid state statute prohibiting the making of the
Offer, the Company will make a good faith effort to comply with such statute.
If, after such good faith effort, the Company cannot comply with such statute,
the Offer will not be made to, nor will tenders be accepted from or on behalf
of, holders of Shares in such state. In those jurisdictions whose securities,
blue sky or other laws require the Offer be made by a licensed broker or dealer,
the Offer shall be deemed to be made on behalf of the Company by Legg Mason Wood
Walker, Incorporated as Dealer Manager or one or more registered brokers or
dealers licensed under the laws of such jurisdictions.
PG Energy Inc.
formerly
Pennsylvania Gas and Water Company
Notice of Offer to Purchase for Cash Any and All of the
Outstanding Shares of the Following Series of its Preferred Stock
Title of Series of Preferred Outstanding Shares Purchase Price (per Share) Trading Symbol
- ---------------------------- ------------------ -------------------------- --------------
4.10% Cumulative Preferred Stock 78,853 $70.00 PGWCP
PG Energy Inc., a Pennsylvania corporation formerly known as Pennsylvania
Gas and Water Company (the "Company"), invites the holders of its 4.10%
Cumulative Preferred Stock (the "Shares") to tender any or all of their Shares
to the Company for purchase at the purchase price set forth above, net to the
seller in cash, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated April 18, 1997 (the "Offer to Purchase") and in the
Letter of Transmittal for the Shares tendered (the "Letter of Transmittal"). The
Offer to Purchase, together with the applicable Letter of Transmittal,
constitutes the "Offer".
The Offer is not conditioned upon any minimum number of Shares being
tendered. The Offer is, however, subject to certain other conditions set forth
in the Offer to Purchase.
-----------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON FRIDAY, MAY 16, 1997, UNLESS THE OFFER IS EXTENDED.
-----------------------------------------------------------------
Neither the Company nor any of its directors or executive officers makes
any recommendation to stockholders as to whether to tender all or any Shares.
Each stockholder must make his or her own decision as to whether to tender
Shares and, if so, how many Shares to tender.
The Offer gives holders of Shares the opportunity to sell their Shares at a
premium over market price and without the usual transaction costs associated
with a market sale. The Company's purchase of Shares pursuant to the Offer will
reduce the number of holders of Shares and the number of Shares that might
otherwise trade publicly, and depending upon the number of Shares so purchased,
could adversely affect the liquidity and market value of the remaining Shares
held by the public although there is currently no established trading market for
the Shares, excluding limited and sporadic quotations.
The Company will pay to a Soliciting Dealer (as defined in the Offer to
Purchase) a solicitation fee of $1.50 per Share for any Shares tendered and
accepted for payment and paid for pursuant to the Offer, subject to certain
conditions.
Tenders of Shares made pursuant to the Offer may be withdrawn at any time
prior to the Expiration Date. Thereafter, such tenders are irrevocable, except
that they may be withdrawn after June 13, 1997, unless theretofore accepted for
payment as provided in the Offer to Purchase.
THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION, WHICH SHOULD BE READ BEFORE STOCKHOLDERS DECIDE WHETHER TO ACCEPT
OR REJECT THE OFFER.
These materials are being mailed to record holders of Shares and will be
furnished to brokers, banks and similar persons whose names, or the names of
whose nominees, appear on the Company's stockholder list or, if applicable, who
are listed as participants in a clearing agency's security position listing for
subsequent transmittal to beneficial owners of Shares.
The information required to be disclosed by Rule 13e-4(d)(1) of the
Securities Exchange Act of 1934, as amended, is contained in the Offer to
Purchase and is incorporated in this notice by reference.
Any questions or requests for assistance may be directed to the Information
Agent at the telephone number and address listed below. Requests for additional
copies of the Offer to Purchase, the Letter of Transmittal or other tender offer
materials may be directed to the Information Agent and such copies will be
furnished promptly at the Company's expense. Stockholders may also contact their
local broker, dealer, commercial bank or trust company for assistance concerning
the Offer.
The Dealer Manager: The Information Agent:
Legg Mason Wood Walker D.F. King & Co., Inc.
Incorporated 77 Water Street
New York, New York 10005
7 East Redwood Street, 6th Floor (800) 769-5414
Baltimore, MD 21202
April 18, 1997
================================================================================