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Exhibit 99.(a)
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ONEOK INC. FINANCIAL NEWS
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ONEOK Inc. Contact: Weldon Watson, (918) 588-7158
Post Office Box 871
Tulsa, OK 74102-0871 For Immediate Release December 12, 1996
(918) 588-7000
(NYSE Symbol: OKE)
ONEOK Inc., WESTERN RESOURCES
ANNOUNCE STRATEGIC ALLIANCE
STOCK TRANSACTION VALUED AT $660 MILLION,
ONEOK BECOMES NINTH-LARGEST GAS DISTRIBUTOR IN NATION,
WESTERN RESOURCES BECOMES LARGEST ONEOK SHAREOWNER
TULSA, Oklahoma and TOPEKA, Kansas -- ONEOK Inc., (NYSE:OKE) and
Western Resources (NYSE: WR) today announced a strategic alliance combining
the natural gas assets of both companies. According to terms of the $660
million transaction, ONEOK will own and operate the natural gas assets of
Western Resources located in Kansas and northeast Oklahoma. Western Resources
will become the largest equity holder of ONEOK through a combination of common
and convertible preferred stock.
The strategic alliance will position each company to maximize its
respective strengths as energy service companies. ONEOK will provide natural
gas and Western Resources will provide electric energy products, security
products and other unregulated services. The agreement, expected to be
positive to earnings for both ONEOK's and Western Resources' shareowners in
the first year, has received approval from both companies' boards of
directors.
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"As we continue to grow our respective companies, it is important to
innovate," said John E. Hayes, Jr., Western Resources chairman of the board and
chief executive officer. "This strategic alliance allows us to market
electricity, security and other unregulated services to a new set of customers
- -- ONEOK's 735,000 customers. In addition, Western Resources will pursue its
plan to market electricity, security and natural gas nationally. Under this
plan, ONEOK will procure natural gas for Western Resources' national marketing
effort."
"The strategic alliance positions the respective strengths of each
management team to capitalize on the opportunities in a marketplace that is
becoming more competitive," said Larry Brummett, ONEOK chairman of the board,
president and chief executive officer. "Western Resources is an excellent
company, with competitive electric costs and an innovative management. We are
extremely pleased with this agreement and look forward to making it happen."
Specific transaction terms include:
o ONEOK Inc. will receive all the natural gas assets of Western
Resources, making it the ninth largest gas distribution company in the
United States serving 1.4 million customers.
o ONEOK's independence is preserved by standstill provisions which
define the rights and responsibilities of the respective companies.
The standstill has an initial term of 15 years.
o Western Resources will receive approximately 3 million new shares of
ONEOK common stock and preferred stock convertible upon necessary
regulatory approvals into approximately another 19.3 million shares of
ONEOK common stock.
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o Western Resources will receive a preferred dividend of 1.5 times the
underlying common dividend, but in no event less than $1.80 per
preferred share per year for the first five years under the terms of
the preferred stock.
o Upon closing, Western Resources will nominate two directors to the
ONEOK board of directors. If the preferred stock converts to common,
Western Resources may designate an additional two directors.
The agreement requires approvals from ONEOK shareholders, the Oklahoma
Corporation Commission, the Kansas Corporation Commission, and the Securities
and Exchange Commission, and anticipated the transaction will close by
mid-1997.
Brummett said the transaction confirms ONEOK's strategy of pursuing
strategic alliances or acquisition opportunities in natural gas distribution and
energy-related businesses. Additionally, it strengthens ONEOK's balance sheet
for future cash transactions.
According to Hayes, the transaction significantly strengthens Western
Resources' annual cash flow.
The natural gas assets of Western Resources include natural gas
distribution properties serving 624,000 customers encompassing two-thirds of
Kansas and 36,000 customers in the northeastern corner of Oklahoma with 10,068
miles of pipeline; a natural gas transmission and gathering system with 976
miles of pipeline; a Kansas gas processing plant with a 15 million
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cubic feet million cubic feet per day capacity; and a 42 percent
interest in a New Mexico plant with a 200 million cubic feet per day
capacity; and a natural gas marketing company with a retail marketing focus.
The assets of ONEOK Inc. include Oklahoma Natural Gas Company, a local
natural gas distribution company providing gas service to 75 percent of
Oklahoma with more than 735,000 customers and 18,520 miles of distribution,
transmission and gathering pipeline; a natural gas wholesale marketing company
serving the mid-continent region of the United States; and ownership interest
in 15 Oklahoma gas processing plants with a net daily capacity of 335 million
cubic feet; and a production company with more than 85.2 Bcf of natural gas
reserves.
The company's stock is traded on the New York Stock Exchange
under the trading symbol of OKE. ONEOK has outstanding 27 million
shares of common stock.
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Information is available on the Internet World Wide Web at http://www.ONEOK.com.