SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event report) February 28, 2001
Commission File Number 1-5324
NORTHEAST UTILITIES
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 1-5324 04-2147929
State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File No.) Identification No.)
174 BRUSH HILL AVENUE, WEST SPRINGFIELD, MASSACHUSETTS
01090-0010
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code)
(413) 785-5871
(Former name or former address, if changed since last report)
Not Applicable
ITEM 5. OTHER EVENTS
On February 28, 2001, Northeast Utilities issued the following news release:
NU LOGO
P. O. Box 270
Hartford, CT 06141-0270
107 Selden Street
Berlin, CT 06037
(860)-665-5000
www.nu.com
News Release
CONTACT: Mary Jo Keating (Media) Jeff Kotkin (Financial)
Office: (860) 665-5181 (860) 665-5154
NORTHEAST UTILITIES FORMALLY SEEKS CON EDISON'S
ASSURANCE OF INTENT TO CLOSE MERGER
Northeast Utilities Would File Suit to Protect Shareholder Interests
Should Con Edison Breach Merger Agreement
Significant Positive Developments and Ratings Upgrades Have Strengthened
Northeast Utilities Substantially Since Signing of Merger Agreement
HARTFORD, Connecticut, February 28, 2001 - Northeast Utilities (NYSE:
NU) announced today that its Board of Trustees has requested that
Consolidated Edison Inc. (NYSE: ED) provide reasonable assurances, in
writing, that it intends to comply with the terms of the definitive merger
agreement between the two companies. This includes assurances that
Consolidated Edison will consummate the pending merger at the price set forth
in the agreement promptly following receipt of the last required regulatory
approval, from the Securities and Exchange Commission (SEC), which is
expected as early as mid-March.
In a letter sent today to Consolidated Edison, Northeast Utilities said
that if Consolidated Edison does not provide this assurance by 9 a.m. Eastern
Standard Time, Friday, March 2, 2001, then Northeast Utilities would treat
its failure to do so as a breach of the merger agreement. Northeast
Utilities said it would pursue all available legal remedies to compel
Consolidated Edison to comply with its obligations or otherwise to obtain the
benefits of this transaction for Northeast Utilities' shareholders.
Michael G. Morris, chairman, president and chief executive officer of
Northeast Utilities, said, "Northeast Utilities continues to believe that a
merger with Con Edison is in the best interests of our shareholders,
employees, customers and communities, and we are fully committed to closing
the merger. Despite several requests over the past two weeks, Con Edison has
failed to confirm to us that it intends to meet its contractual obligations
under the merger agreement, and therefore we have no alternative but to
formally demand that Con Edison provide reasonable assurances, in writing,
that it will do so. Should Con Edison fail to provide this assurance by
March 2, we will take appropriate actions to ensure that our shareholders
receive the value of this deal."
The merger was announced on October 13, 1999 and approved by the
shareholders of both companies on April 14, 2000. The companies have
received necessary clearances from three federal and seven state regulatory
agencies and are awaiting the final regulatory approval from the SEC. Under
applicable law, Northeast Utilities has the right to request that
Consolidated Edison formally confirm its intention to close the merger.
Mr. Morris continued, "Northeast Utilities is a substantially more
valuable company today than when we entered into the merger agreement more
than sixteen months ago, so we are puzzled by Con Edison's apparent
reluctance to commit to this strategic combination and fulfill its
contractual obligations."
Positive Developments Strengthen Northeast Utilities
Mr. Morris pointed to a number of significant developments that have
strengthened Northeast Utilities from a financial and competitive standpoint
since the signing of the merger agreement. These include:
The strong financial performance of Northeast Utilities in 2000,
with earnings coming in well above budget targets in all operations,
including its unregulated businesses;
The execution of a purchase and sale agreement for the Millstone
nuclear power station that will bring to Northeast Utilities more
than $1.2 billion, or about $850 million more than anticipated in
October 1999. That sale will result in a sharp reduction in stranded
costs in Connecticut and Massachusetts, benefiting customers and
shareholders;
The increasing likelihood that stranded costs will be significantly
reduced by the potential sale of Northeast Utilities' 40 percent
interest in the Seabrook nuclear plant;
The successful integration of Yankee Energy into Northeast Utilities;
Multiple rounds of credit ratings upgrades for Northeast Utilities
and its operating companies, with Northeast Utilities unsecured debt
now rated investment grade for the first time in five years and
senior secured debt rating at Northeast Utilities' operating
companies now rated BBB+ by Standard & Poor's, up as many as five
notches since mid-1998;
Northeast Utilities' unregulated energy businesses earned nearly $30
million in 2000, a dramatic turnaround from a loss in 1999;
Select Energy, Inc., NU's unregulated energy marketing subsidiary,
and NU increased their credit lines to $400 million in November 2000
from $350 million following a consortium of banks' thorough review of
Select's business plan;
Prices paid for generation in the Northeast United States have
continued to rise since NU's unregulated businesses acquired 1,289
megawatts of primarily hydroelectric generation in Massachusetts and
Connecticut for $865.5 million a year ago;
Finalization of the settlement of protracted industry restructuring
issues in New Hampshire with endorsement of an agreement by the
state's legislators in May 2000, utility regulators in September 2000
and the state's highest court in January 2001.
Mr. Morris added, "Based on our improved financial position and our
continued strong competitive position in our regional markets, Northeast
Utilities is highly confident that our company is well positioned to create
new growth and build shareholder value in today's competitive energy
markets."
Merger Agreement Terms
Under the terms of the merger agreement announced October 13, 1999,
Consolidated Edison agreed to acquire all of the common stock of Northeast
Utilities for $25.00 per share in a combination of cash and Consolidated
Edison common stock, subject in the case of the common stock to certain
collar provisions. Northeast Utilities' shareholders will have the right to
elect cash or stock subject to proration if the elections exceed 50 percent
in cash or 50 percent in stock. Northeast Utilities' shareholders also have
the right to receive an additional $1.00 in value due to the progress NU has
made in the sale of Millstone 2 and Millstone 3. Further, the value of the
amount of cash or stock to be received by Northeast Utilities' shareholders
is subject to increase by an amount of $0.0034 per share per day for each day
that the transaction does not close after August 5, 2000. If the transaction
closed today, the total price would be approximately $26.70 per share.
Northeast Utilities operates New England's largest energy delivery
system, with $5.9 billion in annual revenues and more than $10 billion in
assets. The company serves approximately 1.77 million electric customers in
Connecticut, New Hampshire and Massachusetts and 185,000 natural gas
customers in Connecticut, and is one of the largest competitive energy
suppliers in New England. For more information on NU, please see our Web
site at www.nu.com.
This press release includes forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995, which are
statements of future expectations and not facts. Actual results or
developments might differ materially from those included in the forward-
looking statements because of factors such as competition and industry
restructuring, changes in economic conditions, changes in historical weather
patterns, changes in laws, regulations or regulatory policies, developments
in legal or public policy doctrines, technological developments and other
presently unknown or unforeseen factors. Other risk factors are detailed from
time to time in NU's reports to the Securities and Exchange Commission.
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NORTHEAST UTILITIES
(registrant)
/s/David R. McHale
David R. McHale
Vice President and Treasurer
Date: February 28, 2001