Exhibit 1
July 10, 1997 4:00 pm est/5:00 pm est
WPS and UPEN Announce Merger
(Green Bay, WI and Houghton, MI) -- WPS Resources Corporation
(NYSE:WPS) and Upper Peninsula Energy Corporation (NASDAQ:UPEN)
announced today their Boards of Directors have approved an
agreement to merge the two energy companies.
WPS Resources Corporation's principal subsidiary is Wisconsin
Public Service Corporation (WPSC), an electric and natural gas
utility headquartered in Green Bay, Wisconsin. It serves 400,000
customers in northeastern and northcentral Wisconsin, as well as
a small portion of Michigan's Upper Peninsula. WPS Resources
Corporation's other subsidiaries include WPS Energy Services,
Inc., which provides energy marketing services and energy project
management services in the non-regulated energy marketplace, and
WPS Power Development, Inc., which develops electric generation
projects and provides services to the non-regulated electric
generation industry. WPS Resources Corporation's revenues for
the year ending December 31, 1996 were $858,254,000.
The Upper Peninsula Energy Corporation's principal subsidiary is
the Upper Peninsula Power Company (UPPCO), an electric utility
which serves 48,000 customers in two-thirds of Michigan's Upper
Peninsula. The holding company's revenues for the year ending
December 31, 1996 were $58,302,000. Its two other subsidiaries
are: PENVEST, Incorporated, which pursues opportunities in
telecommunications, engineering services, and other non-regulated
businesses; and Upper Peninsula Building Development Company,
which is the owner of the corporate headquarters building in
Houghton.
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Following the necessary regulatory approvals, UPEN will be merged
into WPS and UPPCO will become a wholly-owned subsidiary of WPS.
A merger transition team made up of representatives from both
companies will be established to ensure a smooth transition and
continue the already strong tradition of customer, shareholder,
and employee value.
The transaction will be structured as a tax-free, stock-for-stock
exchange. In the merger, holders of UPEN common stock will
receive .90 shares of WPS common stock for each share of UPEN
common stock they own. Owners of WPS common stock will retain
the number of shares they own on the effective date. At the
close of business on July 10, 1997, WPS had 23,896,962 shares
outstanding, and UPEN had 2,897,001 shares outstanding.
Accordingly, following the effective date of the merger, existing
WPS shareholders will hold 90.2 percent of the WPS shares and the
remaining 9.8 percent will be held by UPEN shareholders.
The Board of Directors of WPS will be expanded from nine to ten
members following the effective date of the merger to include one
director nominated by UPEN.
The merger is subject to approval by the shareholders of UPEN,
the Securities and Exchange Commission (SEC), and the Federal
Energy Regulatory Commission (FERC).
The merger is also subject to the expiration of the applicable
waiting period under the Hart-Scott-Rodino Anti-Trust
Improvements Act. Conditions of closing require that the parties
receive an opinion of counsel that the exchange of stock
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qualifies as a tax-free transaction and obtain appropriate
accountant assurances that the transaction will be accounted
for as a pooling of interests.
Preliminary proxy materials will be filed with the SEC in the
near future. Based on optimal times for the required regulatory
approvals, the merger is expected to be completed in 1998.
Both principal subsidiaries, WPSC and UPPCO, have already
established a history of working together on certain aspects of
their operations. Since last year, WPSC has contracted to handle
UPPCO's after-hours trouble calls and dispatching of line crews
during storm outages.
The current workforce of UPPCO is 423 people, which includes
employees who are assigned to the Presque Isle Power Plant owned
by Wisconsin Electric Power Company and the city of Escanaba's
generating station. In the purchase agreement, the two companies
agreed that any reduction in the work force will be through
normal attrition or relocation. The companies also agreed that
current union agreements will be honored.
The merger agreement will benefit customers, according to utility
officials. Both WPSC and UPPCO have similar electrical systems
and customer bases. The merger, according to officials, will
ensure future electric rate stability and electric system
reliability as the utility industry faces the uncertainty
associated with re-regulation.
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Customer service levels are expected to improve as there will now
be a larger support staff to assist customers. Utility officials
expect the merger to result in improved service and operating
standards.
There are no plans to change UPPCO's name and the Houghton office
will continue to serve as its headquarters. Officials from both
companies emphasized that community presence will continue to be
a priority. All of UPPCO's existing customer contracts will be
honored.
In a joint statement from WPS President and CEO Larry Weyers and
UPEN Chairman of the Board and President Clarence Fisher, "This
merger is about growth, opportunity, and creating value. Each
company has a recognized name, strong reputation, and a shared
commitment of increasing value to customers, community,
shareholders, and employees."
# END #
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For further information, contact:
Patrick Schrickel Clarence Fisher
Executive Vice President Chairman of the Board and President
WPS UPEN
(414) 433-1036 (906) 487-5090
Ralph Baeten Burton Arola
Treasurer Corporate Secretary
WPS UPEN
(414) 433-1449 (906) 487-5084