Exhibit 99.1
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FOR IMMEDIATE RELEASE
[LOGO OMITTED] Duquesne Light Holdings [LOGO OMITTED]
MACQUARIE
MACQUARIE-LED CONSORTIUM TO ACQUIRE DUQUESNE LIGHT HOLDINGS
FOR $1.59 BILLION; TRANSACTION ENTERPRISE VALUE OF $3.15 BILLION
Duquesne Light's Headquarters to Remain in Pittsburgh,
Morgan O'Brien To Remain CEO
Ongoing Commitment to Duquesne's Customer Service,
Reliability and Community Involvement
Cash Offer Represents 21.7% Premium on Prior Closing Share Price
PITTSBURGH, PA and NEW YORK, NY, July 5, 2006 - Duquesne Light Holdings (NYSE:
DQE, "Duquesne Light", "the Company") and a consortium led by Macquarie
Infrastructure Partners and Diversified Utility and Energy Trusts (DUET), ("the
Macquarie Consortium"), today announced that they have entered into a definitive
merger agreement.
Under the terms of the agreement, the Macquarie Consortium will acquire all of
the outstanding shares of Duquesne Light Holdings for $20.00 per share in cash,
representing a 21.7% premium based upon Duquesne Light Holdings' closing share
price on July 3, 2006. Duquesne Light Holdings' headquarters will remain in
Pittsburgh and the companies will maintain Duquesne Light's longstanding
commitment to service, reliability and community involvement. The transaction
has been approved by the Board of Directors of Duquesne Light Holdings and the
members of the Macquarie Consortium.
"I am excited about the opportunity that this merger presents for our customers,
shareholders, employees and the communities we serve," said Morgan K. O'Brien,
President and Chief Executive Officer of Duquesne Light. "Macquarie is the
global infrastructure leader and a dynamic organization with an outstanding
track-record of long-term investment in infrastructure assets in the U.S. and
around the world. We are confident that our partnership with the Macquarie
Consortium will not only help ensure Duquesne Light's continued success, but
also add to the ongoing success of our region."
"Duquesne Light is dedicated to providing its 587,000 customers in the
Pittsburgh region reliable, safe and efficient electric service," continued Mr.
O'Brien. "Over the last several years, as we have made progress under our
back-to-basics strategy, Duquesne Light has reviewed a broad range of strategic
alternatives. In a consolidating electric utility industry, this partnership
with the Macquarie Consortium gives Duquesne Light the best opportunity to
maintain our role as a committed, Pittsburgh-based public service provider, a
key employer and a long-time community partner in the region while delivering an
attractive cash premium to our shareholders. This is the right transaction at
the right time with the right partner for Duquesne Light."
Christopher J. Leslie, Chief Executive Officer of Macquarie Infrastructure
Partners, said, "We are pleased to have the opportunity to team with this
well-established, solidly-run, locally-based utility as Macquarie further
expands its infrastructure interests in the United States. Duquesne Light is a
strong, stable company in a market that has displayed consistent demand over
time. We believe it is an excellent, long-term investment for our consortium.
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"We are confident that with Duquesne Light's talented management team and
experienced workforce, the Company can continue to enhance its financial and
operating performance and build upon its leadership role in the communities it
serves," continued Mr. Leslie. "We are firmly committed to making the capital
expenditures necessary to ensure Duquesne Light continues to provide the high
level of reliability and customer service for which it is known."
Commitment to Duquesne Light's Headquarters, Management and Employees
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Upon completion of the transaction, Duquesne Light Holdings' common stock will
cease to be publicly traded and the Company will be a wholly owned subsidiary of
Castor Holdings LLC, operating as Duquesne Light Holdings. Duquesne Light
Holdings' headquarters will remain in Pittsburgh and the Company will continue
to be subject to regulations of the Pennsylvania Public Utility Commission
(PAPUC) and the Federal Energy Regulatory Commission (FERC).
The Macquarie Consortium plans to retain Morgan O'Brien in his current role as
Chief Executive Officer. Macquarie will honor the current collective bargaining
agreement in place for Duquesne Light's represented employees, as well as
existing wage and benefit packages for non-represented employees.
"A significant part of our attraction to Duquesne Light is the high quality of
its existing management and employees," said Mr. Leslie. "We look forward to
those same people continuing to play an essential role at Duquesne Light, and to
working closely with Morgan O'Brien and the other members of the Duquesne Light
management team to continue driving the Company's success."
Commitment to Duquesne Light's Customers
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A key priority of the Macquarie Consortium is to ensure that Duquesne Light
continues to provide high levels of service and reliability to customers
throughout Allegheny and Beaver counties.
"Duquesne Light has made a significant commitment to improve the electric
infrastructure of the region, in order to maintain the levels of service and
reliability customers have come to expect," said Mr. O'Brien. "Over the
long-term, Macquarie is committed to funding necessary maintenance and upgrades
to the Company's electric infrastructure."
Commitment to Duquesne Light's Community Involvement
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Duquesne Light and the members of the Macquarie Consortium have excellent
records of corporate citizenship and community involvement and the Macquarie
Consortium is committed to continuing Duquesne Light's ongoing active role in
the community.
"We view this transaction as a strong endorsement of Duquesne Light and our more
than 125-year commitment to the Pittsburgh region," said Mr. O'Brien. "We look
forward to keeping our logo on Pittsburgh's skyline and our employees on the job
in their home communities for many years to come."
"We regard Duquesne Light as a community asset," added Mr. Leslie. "We welcome
the opportunity to join with the Duquesne Light team to become a contributing
member of the Pittsburgh community. We are committed to maintaining the
Company's extensive community support and involvement in Duquesne Light's
service territory."
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Transaction Terms and Financing
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Under the terms of the agreement, the Macquarie Consortium will acquire all of
the outstanding common shares of Duquesne Light Holdings for $20.00 per share in
cash. The transaction has a total equity market value of approximately $1.59
billion, based upon the approximately 79.6 million Duquesne Light Holdings
common shares currently outstanding. The Macquarie Consortium also will assume
$148 million of Duquesne Light Company's preferred and preference shares on
issue as well as assuming approximately $1.26 billion of Duquesne Light
Holdings' long-term debt (estimated at completion).
The offer represents a premium of 21.7% based upon Duquesne Light Holdings'
closing share price on July 3, 2006 and a premium of 24.0% over Duquesne Light
Holdings' average 30-day closing price ending July 3, 2006.
Prior to the closing of the acquisition, members of the Macquarie Consortium
will also invest approximately $141 million in newly issued Duquesne Light
Holdings equity under a private placement, priced at $16 per share. Duquesne
Light Holdings intends to use the proceeds to assist the financing of the
planned acquisition of a minority interest in the Keystone and Conemaugh
generation stations, as well as in its ongoing utility infrastructure investment
program.
The transaction will be funded at completion from the following financing
sources:
o $954 million in Consortium cash equity;
o $141 million in newly issued shares of Duquesne Light Holdings contributed
by members of the Consortium; and
o $638 million of term loan bank debt facilities.
The Macquarie Consortium will also assume:
o $148 million of Duquesne Light Company preferred and preference shares;
o $1.26 billion in assumed long term debt (estimated at completion).
The total enterprise value of the transaction is $3.15 billion.
Further debt facilities totaling $807 million will be available to the Macquarie
Consortium for the repayment of existing debt and Duquesne Light Company
preference shares (approximately $424 million), capital expenditure and general
corporate purposes (approximately $275 million) plus transaction and other
costs.
Approvals and Timing
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The transaction is subject to customary closing conditions, including the
approval of Duquesne Light's shareholders and various regulatory agencies,
including the Pennsylvania Public Utility Commission (PAPUC) and the Federal
Energy Regulatory Commission (FERC). The companies anticipate completing the
transaction in the first quarter of 2007.
Lehman Brothers has provided a fairness opinion regarding the transaction to
Duquesne Light's Board of Directors.
Macquarie Securities (USA) Inc. acted as financial advisor to the Macquarie
Consortium in connection with the transaction.
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Conference Call
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Duquesne Light Holdings and the Macquarie Consortium will host a management
presentation at 3 p.m. today, July 5, 2006, in New York. The presentation also
will be available by teleconference and webcast. The presentation can be
accessed by dialing 706-643-0299 beginning 10 minutes prior to the start of the
call. A live, listen-only webcast of the conference call, together with a copy
of this news release, is available on the Internet at Duquesne Light Holdings'
web site: www.duquesnelightholdings.com.
For interested individuals unable to join the conference call, a replay will be
available by dialing 800-642-1687 and using conference ID 2574619. In addition,
an online archive of the webcast will be available at the Company's web site:
www.duquesnelightholdings.com.
About Duquesne Light Holdings
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Duquesne Light Holdings is comprised of an electric-utility company and several
affiliate companies that complement the core business. Duquesne Light Company,
its principal subsidiary, is a leader in the transmission and distribution of
electric energy, offering superior customer service and reliability to more than
half a million customers in southwestern Pennsylvania. For more information,
please visit Duquesne Light's website: www.duquesnelightholdings.com
About the Macquarie Consortium
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The Macquarie-led Consortium that has entered into a definitive merger agreement
with Duquesne Light is led by Macquarie Infrastructure Partners and Diversified
Utility and Energy Trusts. The Consortium also includes Industry Funds
Management Pty Ltd, an Australian infrastructure investment fund, and other
institutional investors.
Macquarie Infrastructure Partners (MIP), headquartered in New York, is managed
by a member of the Macquarie group (Macquarie). MIP is a diversified unlisted
fund focusing on infrastructure investments in the United States and Canada. The
Fund's seed investment includes a committed majority equity stake in Aquarion
Company, a regulated New England water utility operating in Connecticut,
Massachusetts, New Hampshire, and New York State.
Diversified Utility and Energy Trusts (DUET), listed on the Australian Stock
Exchange (ASX:DUE), is managed under a 50:50 joint venture between Macquarie
Bank Limited and AMP Limited. DUET has majority ownership in some of Australia's
key, regulated energy utility businesses. These include regional electricity
(United Energy Distributors) and gas (Multinet) distribution businesses in the
state of Victoria as well as Western Australia's Dampier to Bunbury gas
transmission pipeline, that state's key gas infrastructure asset. DUET also has
a minority stake in Western Australia's largest gas distributor, AlintaGas
Networks. For more information, visit www.duet.net.au.
About Macquarie
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The Macquarie group is one of the world's largest owners and managers of
infrastructure assets, managing over $25 billion in infrastructure equity around
the world. Important community infrastructure investments managed by Macquarie
include assets in the energy transmission and distribution, water,
transportation, airport, social infrastructure, and telecommunications sectors.
Macquarie's infrastructure investment philosophy is to:
o invest strategically for the long-term in quality infrastructure and
related assets;
o take a partnership approach, working with strong existing management teams
to support overall performance;
o bring specialist international networks and global resources to support
business growth; and
o manage its various assets responsibly and profitably for the long-term.
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Macquarie has significant experience managing numerous regulated energy and
utility investments around the world. In the United States Macquarie's energy
and utility investments to date include: Aquarion Company, a New England water
utility (pending financial close and regulatory approval); The Gas Company, a
Hawaiian full-service gas company; Thermal Chicago, district energy assets
located in Chicago and Las Vegas; Path 15, an upgrade of Southern California's
electricity transmission grid; and Michigan Electric Transmission Company, an
electricity transmission company in Michigan, among others.
The foregoing contains forward-looking statements, the results of which may
materially differ from those implied due to known and unknown risks and
uncertainties, some of which are discussed below. The ultimate timing of the
merger transaction closing depends on, among other things, the timing of PAPUC
and FERC approvals, which, in turn, depend on the procedures of those agencies.
Timing of the Keystone and Conemaugh power station acquisitions will depend on
the timing and substance of the regulatory approval.
Additional Information and Where to Find It
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This communication may be deemed to be solicitation material in respect of the
proposed acquisition of Duquesne Light by the Macquarie Consortium. In
connection with the proposed acquisition, Duquesne Light Holdings will file
relevant materials with the Securities and Exchange Commission, including a
proxy statement on Schedule 14A. SECURITY HOLDERS OF DUQUESNE LIGHT ARE URGED TO
READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING DUQUESNE LIGHT'S PROXY
STATEMENT WHEN IT BECOMES AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION. Security holders may obtain a free
copy of the proxy statement, when it becomes available, and other documents
filed by Duquesne Light Holdings at the Securities and Exchange Commission's web
site at www.sec.gov. The proxy statement and other relevant documents may also
be obtained for free from Duquesne Light Holdings by directing such request to
Holdings at 411 Seventh Avenue, Pittsburgh, PA 15219, Attn: Corporate Secretary;
or by telephone: 800-247-0400 (outside the Pittsburgh area) or 412-393-6167 (in
the Pittsburgh area).
Participants in Solicitation
Duquesne Light Holdings and its directors, executive officers and certain other
members of its management and employees may be deemed to be participants in the
solicitation of proxies from its stockholders in connection with the proposed
transaction. Information regarding the interests of such directors and executive
officers is included in the Company's Proxy Statement for its 2006 Annual
Meeting of Stockholders filed with the Securities and Exchange Commission on
April 28, 2006, and information concerning all of the Company's participants in
the solicitation will be included in the proxy statement relating to the
proposed transaction when it becomes available. Each of these documents is, or
will be, available free of charge at the Securities and Exchange Commission's
web site at www.sec.gov and from Duquesne Light Holdings by directing such
request to the address provided in the section above.
CONTACTS:
FOR DUQUESNE LIGHT FOR MACQUARIE
Financial Community: Alex Doughty
Darrin Duda, CFA Corporate Communications
(412) 393-1158 Macquarie
Office: (212) 231-1710
Media: Cell: (646) 824-1708
John Laudenslager
(412) 232-6848
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