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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
SCHEDULE TO
(RULE 14D-100)
TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
ILLINOIS POWER COMPANY
(Name of Subject Company (Issuer))
ILLINOVA CORPORATION
DYNEGY INC.
(Names of Filing Persons (Offerors))
4.08% CUMULATIVE PREFERRED STOCK, PAR VALUE $50 PER SHARE, CUSIP NO. 452092-20-8
4.20% CUMULATIVE PREFERRED STOCK, PAR VALUE $50 PER SHARE, CUSIP NO. 452092-30-7
4.26% CUMULATIVE PREFERRED STOCK, PAR VALUE $50 PER SHARE, CUSIP NO. 452092-40-6
4.42% CUMULATIVE PREFERRED STOCK, PAR VALUE $50 PER SHARE, CUSIP NO. 452092-50-5
4.70% CUMULATIVE PREFERRED STOCK, PAR VALUE $50 PER SHARE, CUSIP NO. 452092-60-4
7.75% CUMULATIVE PREFERRED STOCK, PAR VALUE $50 PER SHARE, CUSIP NO. 452092-79-4
(Title of Class of Securities)
(CUSIP Number of Class of Securities)
KENNETH E. RANDOLPH
DYNEGY INC.
1000 LOUISIANA, SUITE 5800
HOUSTON, TEXAS 77002
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Filing Persons)
WITH A COPY TO:
Julien R. Smythe
Mark S. Croft
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
711 Louisiana, Suite 1900--South
Houston, Texas 77002
(713) 220-5800
Fax: (713) 236-0822
CALCULATION OF FILING FEE
<Table>
<Caption>
Transaction Valuation* Amount of Filing Fee
------------------------------------------ ------------------------------------------
$32,368,942 $6,474
</Table>
* Estimated for purposes of calculating the filing fee only. The amount of
the filing fee, calculated in accordance with Rule 0-11 under the Securities
Exchange Act of 1934, as amended, equals 1/50 of one percent of the transaction
value. The transaction value equals the total amount of funds, excluding fees
and other expenses, required to purchase all outstanding shares of each series
of preferred stock listed above pursuant to the tender offer described in the
Offer to Purchase and Consent Statement filed as Exhibit (a)(1)(i) hereto. The
purchase price for the outstanding shares is based on the average of the high
and low sale price reported on October 15, 2001. Any adjustments to the filing
fee will be made upon filing an Amendment to this Schedule TO upon commencement
of the tender offer.
/ / Check the box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
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Amount Previously Paid: --------------------- Filing Party: ---------------------
Form or Registration No.: Date Filed:
--------------------- ---------------------
</Table>
/ / Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
/X/ third-party tender offer subject to Rule 14d-1.
/ / issuer tender offer subject to Rule 13e-4.
/X/ going-private transaction subject to Rule 13e-3.
/ / amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the
results of the tender offer: / /
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This Tender Offer Statement on Schedule TO relates to the tender offer by
Illinova Corporation, an Illinois corporation ("Illinova") and wholly-owned
subsidiary of Dynegy Inc., an Illinois corporation ("Dynegy"), of its offer to
purchase all of the outstanding shares of cumulative preferred stock, par value
$50 per share (the "Preferred Stock"), of Illinois Power Company, an Illinois
corporation and wholly ownded subsidiary of Illinova ("IPC"), in cash and
without interest (plus, for each preferred share, an amount equal to any accrued
but unpaid dividends up to but not including the settlement date for the tender
offer), at prices that will be specified in an amendment to this Schedule TO and
upon the terms and subject to the conditions set forth in the preliminary Offer
to Purchase and Consent Statement (the "Offer to Purchase and Consent
Statement"), a copy of which is attached hereto as Exhibit (a)(1)(i), and in the
related preliminary form Letter of Transmittal and Consent (the "Letter of
Transmittal"), a copy of which is attached hereto as Exhibit (a)(1)(ii).
Preliminary copies of the Offer to Purchase and Consent Statement and the form
Letter of Transmittal are attached hereto as Exhibits (a)(1)(ii), respectively,
and such documents will be amended upon commencement of the tender offer to
include the respective purchase prices for shares of each series of the
Preferred Stock.
The information in the Offer to Purchase and Consent Statement, including
the Letter of Transmittal, each as amended or supplemented from time to time, is
hereby incorporated by reference in response to all the items of this Schedule
TO, except as otherwise set forth below. Capitalized terms used herein but not
otherwise defined have the meanings ascribed to such terms in the Offer to
Purchase and Consent Statement.
ITEM 1. SUMMARY TERM SHEET.
The information set forth in "Summary Term Sheet" of the Offer to Purchase
and Consent Statement is incorporated herein by reference.
ITEM 2. SUBJECT COMPANY INFORMATION.
The information set forth in "Summary Term Sheet," "Summary," "Terms of the
Tender Offer--Number of Shares; Purchase Prices," "Price Range of Shares;
Dividends" and "Certain Information Regarding IPC and Illinova" of the Offer to
Purchase and Consent Statement is incorporated herein by reference.
ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON.
The information set forth in "Summary Term Sheet," "Summary," "Certain
Information Regarding IPC and Illinova" and Appendix B of the Offer to Purchase
and Consent Statement is incorporated herein by reference.
ITEM 4. TERMS OF THE TRANSACTION.
The information set forth in the Letter of Transmittal and in "Summary Term
Sheet," "Summary," "Special Factors," "Terms of the Tender Offer" and "Certain
U.S. Federal Income Tax Considerations" of the Offer to Purchase and Consent
Statement is incorporated herein by reference.
ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
The information set forth in "Certain Information Regarding IPC and
Illinova" of the Offer to Purchase and Consent Statement is incorporated herein
by reference.
ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
The information set forth in "Summary Term Sheet," "Summary," "Special
Factors" and "Proposed Amendment and Consent Solicitation--Reasons for the
Proposed Amendment; Certain
1
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Effects of the Proposed Amendment" of the Offer to Purchase and Consent
Statement is incorporated herein by reference.
ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The information set forth in "Source and Amount of Funds" of the Offer to
Purchase and Consent Statement is incorporated herein by reference. Illinova has
no alternative financing arrangements or financing plans.
ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
The information set forth in "Security Ownership of Certain Beneficial
Owners and Management" of the Offer to Purchase and Consent Statement is
incorporated herein by reference.
ITEM 9. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED.
The information set forth in "Summary Term Sheet," "Summary," and "Fees and
Expenses" of the Offer to Purchase and Consent Statement is incorporated herein
by reference.
ITEM 10. FINANCIAL STATEMENTS.
Not applicable.
ITEM 11. ADDITIONAL INFORMATION.
The information set forth in the Offer to Purchase and Consent Statement and
Letter of Transmittal is incorporated herein by reference.
ITEM 12. EXHIBITS.
<Table>
<Caption>
EXHIBIT
NUMBER DESCRIPTION
----------- ------------------------------------------------------------
(a)(1)(i) Preliminary Offer to Purchase and Consent Statement.*
(a)(1)(ii) Preliminary Form of Letter of Transmittal and Consent*.
(a)(1)(iii) Preliminary Form of Irrevocable Proxy.*
(a)(1)(iv) Preliminary Form of Letter to Preferred Shareholders of
Illinois Power Company.*
(a)(1)(v) Preliminary Form of Letter to Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.*
(a)(1)(vi) Preliminary Form of Letter to Clients for use by Brokers,
Dealers, Commercial Banks, Trust Companies and Other
Nominees.*
(a)(1)(vii) Guidelines of Certification of Taxpayer Identification
Number on Substitute Form W-9.**
</Table>
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* Filed herewith.
** To be filed by amendment.
ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3.
Listed below is information required by Schedule 13E-3 that is not included
or covered by the items in Schedule TO.
2
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SCHEDULE 13E-3, ITEM 2. SUBJECT COMPANY INFORMATION.
Regulation M-A, Item 1002(b); The information in "Terms of the Tender
Offer--Number of Shares; Purchase Price" of the Offer to Purchase and Consent
Statement is incorporated herein by reference.
Regulation M-A, Item 1002(d): The information set forth in "Price Range of
Shares; Dividends" of the Offer to Purchase and Consent Statement is
incorporated herein by reference.
Regulation M-A, Item 1002(e) and (f): Not applicable
SCHEDULE 13E-3, ITEM 4. TERMS OF THE TRANSACTION.
Regulation M-A, Item 1004(c): Not applicable
Regulation M-A, Item 1004(d): The information set forth in "Terms of the
Tender Offer" and "Proposed Amendment and Consent Solicitation" of the Offer to
Purchase and Consent Statement is incorporated herein by reference.
Regulation M-A, Item 1004(e): Illinova has not made any provision to grant
unaffiliated holders of the Preferred Stock access to IPC's corporate files or
to obtain counsel or appraisal services at Illinova's expense.
Regulation M-A, Items 1004(f): Not applicable
SCHEDULE 13E-3, ITEM 5. PAST CONTRACTS, TRANSACTIONS, NEGOTIATIONS AND
AGREEMENTS.
Regulation M-A, Item 5(c) and (e): The information set forth in "Certain
Information Regarding IPC and Illinova" of the Offer to Purchase and Consent
Statement is incorporated herein by reference. The information set forth in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Dynegy Inc. And Illinova Corporation Merger" in IPC's Form 10-K405,
filed with the Securities and Exchange Commission on March 28, 2001, is
incorporated herein by reference.
SCHEDULE 13E-3, ITEM 7. PURPOSES, ALTERNATIVES, REASONS AND EFFECTS.
Regulation M-A, Item 1013(a) and (c): The information set forth in "Summary
Term Sheet," "Summary," "Special Factors," "Terms of the Tender Offer," and
"Proposed Amendment and Consent Solicitation" of the Offer to Purchase and
Consent Statement is incorporated herein by reference.
Regulation M-A, Item 1013(b): Not applicable
Regulation M-A, Item 1013(d): The information set forth in "Summary Term
Sheet," "Summary," 'Special Factors," "Terms of the Tender Offer," "Proposed
Amendment and Consent Solicitation" and "Certain U.S. Federal Income Tax
Considerations" of the Offer to Purchase and Consent Statement is incorporated
herein by reference. After giving effect to the completion of the tender offer,
Illinova's interest in the book value of IPC, as of June 30, 2001, will increase
by approximately $46 million, or approximately 4.0%, and Illinova's interest in
the net income of IPC, as of June 30, 2001, will increase by approximately $5
million, or approximately 5.6%.
SCHEDULE 13E-3, ITEM 8. FAIRNESS OF THE TRANSACTION.
Regulation M-A, Item 1014: The information in "Summary Term Sheet,"
"Summary," "Special Factors" and "Proposed Amendment and Consent Solicitation"
of the Offer to Purchase and Consent Statement is incorporated herein by
reference.
3
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SCHEDULE 13E-3, ITEM 9. REPORTS, OPINIONS, APPRAISALS AND NEGOTIATIONS.
Regulation M-A, Item 1015: The information in "Special Factors" of the Offer
to Purchase and Consent Statement is incorporated herein by reference.
SCHEDULE 13E-3, ITEM 10. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Regulation M-A, Item 1007(c): The information set forth in "Fees and
Expenses" of the Offer to Purchase and Consent Statement is incorporated herein
by reference.
The following is an estimate of the fees and expenses to be incurred in
connection with the tender offer and consent solicitation:
<Table>
SEC filing fee.............................................. $ 6,474
Dealer manager and solicitation agent fee................... 400,000*
Depositary and information agent fee........................ 13,000
Legal fees and expenses..................................... 300,000
Printing fees............................................... 50,000
Miscellaneous expenses...................................... 3,526
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Total..................................................... $773,000
========
</Table>
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* IPC will pay $150,000 of the dealer manager and solicitation agent fee in
connection with its consent solicitation.
SCHEDULE 13E-3, ITEM 12. THE SOLICITATION OR RECOMMENDATION.
Regulation M-A, Item 1012(d): The information set forth in "Proposed
Amendment and Consent Solicitation" of the Offer to Purchase and Consent
Statement is incorporated herein by reference.
Regulation M-A, Item 1012(e): No executive officer, director or affiliate of
IPC or Illinova owns or has proxy authority for any shares of Preferred Stock,
and none of such persons has made a recommendation either in support of or
opposed to the tender offer.
SCHEDULE 13E-3, ITEM 13. FINANCIAL STATEMENTS.
Regulation M-A, Item 1010(a): The information set forth in "Summary of
Consolidated Financial Information" of the Offer to Purchase and Consent
Statement is incorporated herein by reference.
Regulation M-A, Item 1010(b): Not applicable
SCHEDULE 13E-3, ITEM 14. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR
USED.
Regulation M-A, Item 1009(b): The information set forth in "Proposed
Amendment and Consent Solicitation" and "Fees and Expenses" of the Offer to
Purchase and Consent Statement is incorporated herein by reference.
4
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
<Table>
Dated: October 22, 2001 ILLINOVA CORPORATION
By: /s/ STEPHEN W. BERGSTROM
--------------------------------------
Name: Stephen W. Bergstrom
Title: Executive Vice President
DYNEGY INC.
By: /s/ STEPHEN W. BERGSTROM
--------------------------------------
Name: Stephen W. Bergstrom
Title: President and Chief Operating Officer
</Table>
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EXHIBIT INDEX
<Table>
<Caption>
EXHIBIT
NUMBER DESCRIPTION
----------- -----------
(a)(1)(i) Preliminary Offer to Purchase and Consent Statement.*
(a)(1)(ii) Form of Letter of Transmittal and Consent.*
(a)(1)(iii) Form of Irrevocable Proxy.*
(a)(1)(iv) Form of Letter to Preferred Shareholders of Illinois Power
Company.*
(a)(1)(v) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.*
(a)(1)(vi) Form of Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.*
(a)(1)(vii) Guidelines of Certification of Taypayer Identification
Number on Substitute Form W-9.**
</Table>
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* Filed herewith.
** To be filed by amendment.