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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 March
11, 1996 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.
Notice by
PG Energy Inc.
formerly
Pennsylvania Gas and Water Company
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
- - - - - ---------------------------- ------------------ -------------------------- --------------
9% Depositary Preferred Shares 1,000,000 $27.00 PGWCZ
4.10% Cumulative Preferred Stock 100,000 $50.00 PGWCP
PG Energy Inc., a Pennsylvania corporation formerly known as Pennsylvania
Gas and Water Company (the "Company"), invites the holders of each series of
preferred stock described above (each a "Series of Preferred") to tender any or
all of their shares of a Series of Preferred (the "Shares") to the Company for
purchase at the purchase price set forth above for the Series of Preferred
tendered, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated March 11, 1996 (the "Offer
to Purchase") and in the Letter of Transmittal for the Shares tendered (the
"Letter of Transmittal"). As to each Series of Preferred, 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 MONDAY, APRIL 8, 1996, UNLESS THE OFFER IS EXTENDED.
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Such time and date, or the latest time and date as to which the Offer is
extended with respect to either Series of Preferred, is referred to herein as
the "Expiration Date." The Company will give oral or written notice of any
extension to the Depositary and make a public announcement thereof.
THE OFFER FOR A SERIES OF PREFERRED IS INDEPENDENT OF THE OFFER FOR THE
OTHER SERIES OF PREFERRED.
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 is one of the recapitalizations being undertaken in connection
with the sale on February 16, 1996, by the Company of its regulated water
operations and certain related assets. The Company believes that the Offer and
the other recapitalizations will have a positive effect on the Company's
financial and capital ratios and credit rating. In addition, the repurchase of
Shares pursuant to the Offer will adjust the Company's capital structure to a
level more appropriate to the size and nature of its operations after the sale
of the water operations. Finally, the Offer will enable the Company to reduce
its dividend requirements and annual administrative expenses in connection with
servicing the accounts of holders of the Shares. The Offer will afford to
stockholders who are considering the sale of all or a portion of their Shares
the opportunity to sell Shares without the usual transaction costs associated
with open-market sales. The Company believes the Offer is fair to holders of
Shares.
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. In addition, there is currently no established trading market for the
shares of 4.10% Cumulative Preferred Stock, excluding limited and sporadic
quotations.
The Company also expressly reserves the right, in its sole discretion, at
any time or from time to time, to extend the period of time during which the
Offer is open by giving oral or written notice of such extension to the
Depositary and making a public announcement thereof.
The Company will pay to a Soliciting Dealer (as defined in the Offer to
Purchase) a solicitation fee of $0.50 per Share for any Shares tendered and
accepted for payment and paid for pursuant to the Offer, subject to certain
conditions.
Tenders of Shares of a Series of Preferred made pursuant to the Offer may
be withdrawn at any time prior to the applicable Expiration Date with respect to
such Series of Preferred. Thereafter, such tenders are irrevocable, except that
they may be withdrawn after May 3, 1996, unless theretofore accepted for payment
as provided in the Offer to Purchase. To be effective, a written or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of the Offer to Purchase and
must specify the name of the person who tendered the Shares to be withdrawn and
the number of Shares of each Series of Preferred to be withdrawn. If the Shares
to be withdrawn have been delivered to the Depositary, a signed notice of
withdrawal with signatures guaranteed by an Eligible Institution (except in the
case of Shares tendered by an Eligible Institution) must be submitted prior to
the release of such Shares. In addition, such notice must specify, in the case
of Shares tendered by delivery of certificates, the name of the registered
holder (if different from that of the tendering stockholder) and the serial
numbers shown on the particular certificates evidencing the Shares to be
withdrawn or, in the case of Shares tendered by book-entry transfer, the name
and number of the account at one of the Book-Entry Transfer Facilities to be
credited with the withdrawn Shares. Withdrawals may not be rescinded, and Shares
withdrawn will thereafter be deemed not validly tendered for purposes of the
Offer. However, withdrawn Shares may be retendered by again following one of the
procedures described in the Offer to Purchase at any time prior to the
applicable Expiration Date.
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.
EACH SERIES OF PREFERRED HAS ITS OWN LETTER OF TRANSMITTAL AND ONLY THE
APPLICABLE LETTER OF TRANSMITTAL FOR A PARTICULAR SERIES OR A NOTICE OF
GUARANTEED DELIVERY MAY BE USED TO TENDER SHARES OF SUCH SERIES.
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 Information Agent:
D.F. King & Co., Inc.
77 Water Street
New York, New York 10005
(800) 714-3313
The Dealer Manager:
Legg Mason Wood Walker
Incorporated
7 East Redwood Street, 6th Floor
Baltimore, MD 21202
March 11, 1996
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