PG ENERGY INC.
OFFER TO PURCHASE FOR CASH
ANY AND ALL OF ITS OUTSTANDING DEPOSITARY PREFERRED SHARES
EACH REPRESENTING A ONE-FOURTH INTEREST IN A SHARE
OF ITS 9% CUMULATIVE PREFERRED STOCK
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON MONDAY, APRIL 8, 1996, UNLESS THE OFFER IS
EXTENDED.
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated March 11,
1996 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer") setting forth an offer by PG Energy Inc., a
Pennsylvania corporation formerly known as Pennsylvania Gas and Water Company
(the "Company"), to purchase any and all of its outstanding Depositary Preferred
Shares (the "Shares"), each representing a one-fourth interest in a share of its
9% Cumulative Preferred Stock, par value $100.00 per share, liquidation
preference $100.00 per share (equivalent to $25.00 per Share), at $27.00 per
Share, net to the seller in cash, upon the terms and subject to the conditions
of the Offer.
We are the holder of record of Shares held for your account. A tender of such
Shares can be made only by us as the holder of record and pursuant to your
instructions. The Letter of Transmittal is furnished to you for your information
only and cannot be used by you to tender Shares held by us for your account.
We request instructions as to whether you wish us to tender any or all of the
Shares held by us for your account, upon the terms and subject to the conditions
set forth in the Offer to Purchase and the Letter of Transmittal.
Your attention is invited to the following:
(1) You may tender Shares as indicated in the attached instruction form,
at a price of $27.00 per Share, net to you in cash.
(2) The Offer is for any and all outstanding Shares of the Company.
(3) The Offer is not conditioned upon any minimum number of Shares being
tendered.
(4) The Offer and withdrawal rights will expire at 5:00 p.m., New York
City time, on Monday, April 8, 1996, unless the Offer is extended. Your
instructions to us should be forwarded to us in ample time to permit us to
submit a tender on your behalf. If you would like to withdraw your Shares
that we have tendered, you can withdraw them so long as the Offer remains
open or at any time after May 3, 1996, if they have not been accepted for
payment.
(5) Any stock transfer taxes applicable to the sale of Shares to the
Company pursuant to the Offer will be paid by the Company, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
Neither the Company nor any of its directors or executive officers makes any
recommendation to any stockholder 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 Company has been advised that
two directors and two executive officers of the Company (each of whom also
serves as a director or executive officer of Pennsylvania Enterprises, Inc., the
holder of all of the Company's common stock) intend to tender Shares pursuant to
the Offer and that no other director or executive officer of the Company or any
of its affiliates intends to tender Shares pursuant to the Offer as no such
person owns any Shares.
If you wish to have us tender any or all of your Shares held by us for your
account upon the terms and subject to the conditions set forth in the Offer,
please so instruct us by completing, executing, detaching and returning to us
the instruction form on the detachable part hereof. An envelope to return your
instructions to us is enclosed. If you authorize tender of your Shares, all such
Shares will be tendered unless otherwise specified on the detachable part
hereof. Your instructions should be forwarded to us in ample time to permit us
to submit a tender on your behalf by the Expiration Date (as defined in the
Offer to Purchase) of the Offer.
The Offer is being made to all holders of Shares. The Company is not aware of
any state where 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 to 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
the Dealer Manager, or one or more registered brokers or dealers licensed under
the laws of such jurisdictions.
INSTRUCTIONS
WITH RESPECT TO OFFER TO PURCHASE FOR CASH
ANY AND ALL OF ITS OUTSTANDING DEPOSITARY PREFERRED SHARES
EACH REPRESENTING A ONE-FOURTH INTEREST IN A SHARE
OF ITS 9% CUMULATIVE PREFERRED STOCK
OF
PG ENERGY INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase, dated March 11, 1996, and the related Letter of Transmittal (which
together constitute the "Offer") in connection with the Offer by PG Energy Inc.,
a Pennsylvania corporation formerly known as Pennsylvania Gas and Water Company
(the "Company"), to purchase any and all of its outstanding Depositary Preferred
Shares (the "Shares"), each representing a one-fourth interest in a share of its
9% Cumulative Preferred Stock, par value $100.00 per share, liquidation
preference $100.00 per share (equivalent to $25.00 per Share), at $27.00 per
Share, net to the undersigned in cash, upon the terms and subject to the
conditions of the Offer.
This will instruct you to tender to the Company the number of Shares
indicated below (or, if no number is indicated below, all Shares) which are held
by you for the account of the undersigned, upon the terms and subject to the
conditions of the Offer.
Number of Shares to be Tendered: SIGN HERE
____________________________Shares*
Dated:_______________________, 1996 --------------------------------
Signature(s)
- - - - - ----------------------------- ---------------------------------
Printed Firm Name Name
- - - - - ----------------------------- ---------------------------------
Address Social Security or Taypayer ID#
*Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.