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The Empire District Electric Company Message Board

  • matttyler_99 matttyler_99 Dec 28, 2000 8:32 AM Flag

    Re: EDE Paralysis

    I have to agree with you. Another major point to
    consider is the fact that Empire has applied for a 20%
    rate hike and as UCU stated in the merger proposal all
    of the savings from reducing the workforce by 40%
    and selling off the property not needed after the
    merger is completed then I would have to surmise that
    UCU would not get much or any of the rate request if
    the merger is completed. Ucu driving force is
    shareholder value and it just doesn't appear that paying half
    again for a company just doesn't make sense to their
    sacred shareholder value.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Hope that you all saw the release at 6:55PM that
      the MO Commission approved the merger with UCU
      subject to hearings. I believe that it will go forward
      with Ark coming in line shortly. I am also sorry if
      Matt is losing his job, but consolidation within the
      industry is necessary and years have been spent in the
      protected environment that has lead to great
      inefficiencies. Making progress in delivering services in a "
      very competitive " future requires a lot of fat
      trimming- often initially too far but that will adjust in
      time. When UCU put the $ 26.00 collar in they knew then
      and there what the dilution would be as the number of
      shares are set at that point- any gain in stockprices
      from that point is a windfall to the EDE shareholders
      , but even bigger for the UCU shareholders. I hope
      we get at least $34 and that you live comfortably in
      retirement! Good Luck!

    • Matt, Its a little early here in Fla. so I can't
      really get your math; ie if the appreciation of UCU
      means they are paying $100 more -valid. How are they
      paying nearly half again or 350M more for a 600M
      acquisition. Is this fuzzy math or am I having a Senior
      moment? Please help!

      • 1 Reply to Puttemout
      • When the merger was announced the price of Empire
        stock was in the $21 range. And UCU agreed to pay a 39%
        premium,to get the shareholders to vote positively on the
        merger, which put the price of the stock UCU would pay at
        $29.50 providing that UCU stock was priced between $22
        and $26 dollars per share. However with their stock
        presently above $30 dollars they will have to pay $1.135
        more per share more for every dollar above $26 dollars
        that UCU stock goes to. So Because of the offer Empire
        stock has gained in value from approximately $21
        dollars to now if it merged and closed today to a price
        in the range of $34 dollars per share. So by my math
        the price has gained $13 dollars a share. By UCU's
        math they have stated that with the 39% premium they
        are going to pay $850 million dollars with $250
        million being the 39% premium. That was with a $8.50
        increase in value from $21 cdollars and now they would
        have to pay an additional $4.00 dollars per share to
        acquire the stock which figures out to be better than
        $100 million dollars more than they had originally
        stated. If the price of their stock continues to rise
        they will have to pay even more to close the deal. I
        hope this helps.

    • Shareholder value isn't a concept to be loathed as you imply. It is the first obligation of management.

      • 1 Reply to Tapped_OutY2K
      • I do not loathe shareholder value. I have some
        friends at Empire and know a fair amount of what has went
        on with the merger. Empires management has bet the
        farm on the deal being consumated and if its not the
        shareholder value of Empire is going to tank big time. There
        are a lot of retirees who live on their Empire stock
        and they are going to take a big hit if it doesn't
        happen as well. UCU hasn't exactly been honest with
        their dealings with Empire employees in regards to what
        happens after the merger. Without loyal and dedicated
        employees management can't sustain shareholder value
        either. Ucu has announced that it is going to sell off
        all of the men an equipment in all their utilities
        and retain only the lines and power plants and
        substations. So with Empire they will have bought the company
        with 615 employees and by the time its all said and
        done they will have about 150 employees left of the
        original company. The sell also affects about 900 UCU
        employees that currently work for them as well so when you
        have 1300 employees that have absolutely no future
        with UCU they obviously are not going to be overly
        concerned with the financial welfare of UCU or their
        shareholder value. A company must give some thought to their
        employees to thrive and I personally think the executives
        of Empire or UCU could care less about their
        employees and its the employees who have did the actual
        work to make them successful. Sorry a bit winded, but
        its how I feel. Good stock hunting to all!!!!!!

 
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