Great Plains Energy Incorporated (NYSE: GXP) (“Great Plains
Energy” or the “Company”) announced today the pricing of its
previously announced concurrent underwritten public offerings of
52,600,000 shares of its common stock at a price of $26.45 per
share and 15,000,000 depositary shares, each representing a 1/20th
ownership interest in a share of its 7.00% Series B Mandatory
Convertible Preferred Stock, without par value (the “Mandatory
Convertible Preferred Stock”), with a liquidation preference of
$1,000 per share of Mandatory Convertible Preferred Stock
(equivalent to $50 per depositary share), at a price of $50 per
depositary share. In addition, the underwriters in each respective
offering have been granted a 30-day option to purchase up to
7,890,000 additional shares of common stock and up to 2,250,000
additional depositary shares.
Great Plains Energy intends to use the net proceeds from these
offerings to finance a portion of the cash consideration payable in
connection with its previously announced proposed acquisition (the
“Proposed Merger”) of Westar Energy, Inc. (“Westar”).
The concurrent common stock and depositary share offerings are
separate public offerings made by means of separate prospectus
supplements and are not contingent on one another. In addition,
neither offering is or will be contingent on the consummation of
the Proposed Merger.
The net proceeds from the common stock offering and the
depositary shares offering will be approximately $1.35 billion and
$727 million, respectively, in each case after deducting the
underwriting discount and estimated offering expenses. The
concurrent offerings are expected to close on October 3, 2016,
subject to customary closing conditions.
Goldman, Sachs & Co. is acting as lead book-running manager
for the concurrent offerings. BofA Merrill Lynch and J.P. Morgan
are joint book-running managers for the common stock offering, and
Barclays and Wells Fargo Securities are joint book-running managers
for the depositary shares offering.
Each depositary share entitles the holder of such depositary
share, through the bank depositary, to a proportional fractional
interest in the rights and preferences of the Mandatory Convertible
Preferred Stock, including conversion, dividend, liquidation and
voting rights, subject to the terms of the deposit agreement.
Unless previously converted or redeemed, on or around September 15,
2019, each then outstanding share of Mandatory Convertible
Preferred Stock will automatically convert into between 31.5060 and
37.8080 shares of the Company’s common stock (and correspondingly,
the conversion rate for each depositary share will be between
1.5753 and 1.8904 shares of the Company’s common stock), subject to
customary anti-dilution adjustments, depending on the
volume-weighted average price of the Company’s common stock over a
20 consecutive trading day averaging period prior to that date.
Dividends on the Mandatory Convertible Preferred Stock will be
payable on a cumulative basis when, as and if declared by the
Company’s board of directors, at an annual rate of 7.00% on the
liquidation preference of $1,000 per share of Mandatory Convertible
Preferred Stock (or $50 per depositary share), on each March 15,
June 15, September 15 and December 15 of each year, commencing on
December 15, 2016 and ending on, and including, September 15,
2019.
Currently, no public market exists for the depositary shares.
Great Plains Energy intends to apply to list the depositary shares
on the New York Stock Exchange under the symbol “GXPPRB.” If the
application is approved, Great Plains Energy expects trading of the
depositary shares on the New York Stock Exchange to commence within
30 days after the initial delivery of the depositary shares.
This news release shall not constitute an offer to sell or the
solicitation of an offer to buy any shares of common stock, any
depositary shares or any other securities, nor will there be any
sale of common stock, depositary shares or any other securities in
any state or jurisdiction in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the
securities laws of any such state or jurisdiction.
Each offering is being made under Great Plains Energy’s
effective shelf registration statement, as amended, filed with the
Securities Exchange Commission (the “SEC”). Each offering is being
made only by means of a prospectus supplement and accompanying
prospectus. Copies of the prospectus supplements and accompanying
prospectus related to the offerings will be available on the SEC's
website at http://www.sec.gov and may be obtained from Goldman,
Sachs & Co., c/o Prospectus Department, 200 West
Street, New York, NY 10282, by calling (866) 471-2526 or
by email at prospectus-ny@ny.email.gs.com.
About Great Plains Energy
Headquartered in Kansas City, Mo., Great Plains Energy
Incorporated (NYSE: GXP) is the holding company of Kansas
City Power & Light Company and KCP&L Greater
Missouri Operations Company, two of the leading regulated providers
of electricity in the Midwest. Kansas City Power & Light
Company and KCP&L Greater Missouri Operations
Company use KCP&L as a brand name.
Forward-Looking Statements
Statements made in this release that are not based on historical
facts are forward-looking, may involve risks and uncertainties, and
are intended to be as of the date when made. In some cases, you can
identify forward-looking statements by use of the words “may,”
“should,” “expect,” “plan,” “anticipate,” “estimate,” “predict,”
“potential” or “continue.” Forward-looking statements include, but
are not limited to, statements relating to the Proposed Merger, the
outcome of regulatory proceedings, cost estimates of capital
projects and other matters affecting future operations. These
forward-looking statements are based on assumptions, expectations
and assessments made by the Company’s management in light of their
experience and their perception of historical trends, current
conditions, expected future developments and other factors they
believe to be appropriate. Any forward-looking statements are not
guarantees of the Company’s future performance and are subject to
risks and uncertainties, including those discussed in the Company’s
filings with the SEC. These risks and uncertainties could cause
actual results, developments and business decisions to differ
materially from those contemplated or implied by forward-looking
statements. Consequently, you should recognize these statements for
what they are and we caution you not to rely upon them as facts.
The Company claims the protection of the safe harbor for
forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995 for all forward-looking statements.
Some of the factors that may cause actual results, developments and
business decisions to differ materially from those contemplated by
these forward-looking statements include the following: future
economic conditions in regional, national and international markets
and their effects on sales, prices and costs; prices and
availability of electricity in regional and national wholesale
markets; market perception of the energy industry and the Company;
changes in business strategy, operations or development plans; the
outcome of contract negotiations for goods and services; effects of
current or proposed state and federal legislative and regulatory
actions or developments, including, but not limited to,
deregulation, re-regulation and restructuring of the electric
utility industry; decisions of regulators regarding rates the
Company can charge for electricity; adverse changes in applicable
laws, regulations, rules, principles or practices governing tax,
accounting and environmental matters including, but not limited to,
air and water quality; financial market conditions and performance
including, but not limited to, changes in interest rates and credit
spreads and in availability and cost of capital and the effects on
derivatives and hedges, nuclear decommissioning trust and pension
plan assets and costs; impairments of long-lived assets or
goodwill; credit ratings; inflation rates; effectiveness of risk
management policies and procedures and the ability of
counterparties to satisfy their contractual commitments; impact of
terrorist acts, including, but not limited to, cyber terrorism;
ability to carry out marketing and sales plans; weather conditions
including, but not limited to, weather-related damage and their
effects on sales, prices and costs; cost, availability, quality and
deliverability of fuel; the inherent uncertainties in estimating
the effects of weather, economic conditions and other factors on
customer consumption and financial results; ability to achieve
generation goals and the occurrence and duration of planned and
unplanned generation outages; delays in the anticipated in-service
dates and cost increases of generation, transmission, distribution
or other projects; Great Plains Energy’s ability to successfully
manage transmission joint ventures or to integrate or restructure
the transmission joint ventures of Westar; the inherent risks
associated with the ownership and operation of a nuclear facility
including, but not limited to, environmental, health, safety,
regulatory and financial risks; workforce risks including, but not
limited to, increased costs of retirement, health care and other
benefits; the ability of Great Plains Energy to obtain the
regulatory approvals necessary to complete the Proposed Merger; the
risk that a condition to the closing of the Proposed Merger or the
committed debt or equity financing may not be satisfied or that the
Proposed Merger may fail to close; the failure to obtain, or to
obtain on favorable terms, any equity, debt or equity-linked
financing necessary to complete or permanently finance the Proposed
Merger, including these offerings, and the costs of such financing;
the outcome of any legal proceedings, regulatory proceedings or
enforcement matters that may be instituted relating to the Proposed
Merger; the costs incurred to consummate the Proposed Merger; the
possibility that the expected value creation from the Proposed
Merger will not be realized, or will not be realized within the
expected time period; the credit ratings of Great Plains Energy
following the Proposed Merger; disruption from the Proposed Merger
making it more difficult to maintain relationships with customers,
employees, regulators or suppliers and the diversion of management
time and attention on the proposed transactions; and other risks
and uncertainties.
This list of factors is not all-inclusive because it is not
possible to predict all factors. Additional risks and uncertainties
will be discussed in the prospectus supplements and accompanying
prospectuses that Great Plains Energy will file with
the SEC in connection with the proposed offerings. Other
risk factors are detailed in Great Plains Energy’s quarterly
reports on Form 10-Q and annual report on Form 10-K filed with
the SEC. Each forward-looking statement speaks only as of the
date of the particular statement. Great Plains
Energy undertakes no obligation and disclaims any duty to
publicly update or revise any forward-looking statement, whether as
a result of new information, future events or otherwise.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160927006808/en/
Great Plains EnergyInvestors:Calvin Girard,
816-654-1777Senior Manager of Investor
Relationscalvin.girard@kcpl.comorMedia:Katie McDonald,
816-556-2365Senior Director of Corporate
Communicationskatie.mcdonald@kcpl.com
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