10 September 2002 – Aquila, Inc. (NYSE: ILA) announced today that it has agreed to accept a take-over offer to be made by Vector Limited. Upon expiration of a statutory notice period, Vector will make a take-over offer to the UnitedNetworks shareholders for all of the outstanding shares of UnitedNetworks for a purchase price of NZ$9.90 ($4.67) per share.
Aquila’s commitment to accept Vector’s offer is the culmination of a competitive auction process spearheaded by the UnitedNetworks independent directors to sell all of the shares or assets of UnitedNetworks to one or more successful bidders.
In a statement released by UnitedNetworks earlier today announcing its recommendation of the Vector bid, UnitedNetworks director Mike Smith stated, “We are pleased to have selected Vector at a price and on terms and conditions we and our advisers have determined is fair and reasonable.”
As a part of its bid, Vector has entered into a binding commitment to make a take-over offer for 100 percent of the outstanding UnitedNetworks shares within 30 days, subject only to its agreement with Aquila becoming unconditional.
Under the agreement with Vector, UtiliCorp NZ Limited, an indirect 79 percent-owned subsidiary of Aquila, committed to selling its 70.2 percent interest in UnitedNetworks to Vector promptly following the date the Vector take-over offer becomes effective. The commitment is subject to Aquila obtaining appropriate bank consents. As a part of this commitment, Aquila and UtiliCorp NZ Limited have agreed not to entertain, solicit or consider any other third-party offer for a period of 150 days in the event Vector’s take-over offer is not accepted by the requisite number of UnitedNetworks shareholders.
To enable Aquila to enter into its agreement with Vector, the independent directors of UnitedNetworks have waived certain placement rights under a cornerstone relationship deed that would otherwise have restricted Aquila’s ability to take this action.
Aquila announced on June 11 that, as majority owner of New Zealand-based UnitedNetworks, it had requested that UnitedNetworks seek expressions of interest from potential buyers. More than 20 interested bidders responded by the June 28 deadline.
“This sale results in US$302.6 million of net cash proceeds raised from the New Zealand divestment process, which will be used to reduce debt,” said Robert K. Green, president and chief executive officer of Aquila. “To date, we have signed purchase and asset sales agreements totalling $786 million toward our $1 billion target.”
Earlier in the quarter, Aquila reduced its New Zealand-related debt by US$60.3 million as part of a debt refinancing.
Based in Kansas City, Missouri, Aquila operates electricity and natural gas distribution networks serving more than six million customers in seven states and in Canada, the United Kingdom, New Zealand and Australia. The company also owns and operates power generation assets. At June 30, 2002, Aquila had total assets of $11.9 billion. More information is available at www.aquila.com.