Attached files
| file | filename |
|---|---|
| EX-99.3 - EXHIBIT 99.3 - WESTAR ENERGY INC /KS | wr063020178kexhibit993.htm |
| EX-99.2 - EXHIBIT 99.2 - WESTAR ENERGY INC /KS | wr-06302017x8xkexhibit992.htm |
| EX-99.1 - EXHIBIT 99.1 - WESTAR ENERGY INC /KS | wr-06302017x8xkexhibit991.htm |
| 8-K - 8-K - WESTAR ENERGY INC /KS | wr-06302017xearningsreleas.htm |
Westar Energy
Investor Update – August 8, 2017
Exhibit 99.4
Filed by: Westar Energy, Inc.
pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934
Subject Company: Westar Energy, Inc.
Commission File Number: 001-03523
Subject Company: Great Plains Energy Incorporated
Commission File Number: 001-32206
Subject Company: Monarch Energy Holding, Inc.
Commission File Number: 132-02816
Date: August 8, 2017 {Merger Excerpts}
Forward-Looking Disclosures
AUGUST 8, 2017 INVESTOR UPDATE 2
Forward Looking Statements
Forward-looking statements: Certain matters discussed in this news release are “forward-looking statements.” The Private Securities Litigation
Reform Act of 1995 has established that these statements qualify for safe harbors from liability. Forward-looking statements may include words
like “believe,” “anticipate,” “target,” “expect,” “pro forma,” “estimate,” “intend,” “guidance” or words of similar meaning. Forward-looking
statements describe future plans, objectives, expectations or goals. Although Westar Energy believes that its expectations are based on reasonable
assumptions, all forward-looking statements involve risk and uncertainty. The factors that could cause actual results to differ materially from these
forward-looking statements include those discussed herein as well as (1) those discussed in the company's Annual Report on Form 10-K for the
year ended Dec. 31, 2016 (a) under the heading, “Forward-Looking Statements,” (b) in ITEM 1. Business, (c) in ITEM 1A. Risk Factors, (d) in
ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, and (e) in ITEM 8. Financial Statements and
Supplementary Data: Notes 3, 14 and 16; (2) those discussed in the company's Quarterly Reports on Form 10-Q filed on May 9, 2017 and Aug. 8,
2017, (a) under the heading "Forward-Looking Statements." (b) in ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations, (c) in Part I, Financial Information, ITEM 1. Financial Statements: Notes 3, 11, 12 (in the Form 10-Q filed on May 9,
2017), and 13 (in the Form 10-Q filed on Aug. 8, 2017), and (d) ITEM 1A. Risk Factors; and (3) other factors discussed in the company's filings
with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date such statement was made, and the
company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which
such statement was made.
Additional Information
The information in this investor update is not complete, and is intended to be read in conjunction with Westar Energy, Inc.’s full earnings package
for the quarter ended June 30, 2017 as well as other information regarding the company that is filed with the Securities and Exchange
Commission. The full earnings package is available is available under Supplemental Materials within the investor section of the company website
at www.WestarEnergy.com, and the company’s filings with the Securities and Exchange Commission can be found in the same section under SEC
Filings.
Recent Announcements & Focus
Merger of Equals with Great Plains Energy
100% stock-for-stock tax-free exchange
Westar: exchange 1 WR share for 1 share of new company stock
Great Plains: exchange 1 GXP share for .5981 share of new company stock
Targeted EPS CAGR at 6-8% (off WR‟s „16 EPS of $2.43)
Immediate 15% WR dividend boost at closing
Targeted dividend CAGR at 6-8% thereafter
Strong credit profile, outlook already improved
New structure addresses KCC objections to prior deal
3 AUGUST 8, 2017 INVESTOR UPDATE
Merger Update
4 AUGUST 8, 2017 INVESTOR UPDATE
Merger Summary
Transaction
Structure
• All stock merger of equals (100% stock-for-stock tax-free exchange); combined equity value of
~$14 billion
• New company to be jointly named prior to close
Exchange Ratio
• Westar Energy exchanges 1 share of WR for 1 share of new holding company
• Great Plains Energy exchanges 1 share of GXP for 0.5981 share of new holding company
Approximate Pro
Forma Ownership
• Westar Energy 52.5%
• Great Plains Energy 47.5%
Pro Forma Dividend • 15% dividend uplift for Westar Energy; maintains current Great Plains Energy dividend
Termination Fee
• Reverse break-up fee of $190 million in favor of Westar Energy
• Mutual fiduciary out break-up fees of $190 million in favor of the other
• Great Plains Energy no-vote fee of $80 million in favor of Westar Energy
Governance
• Mark Ruelle, Westar Energy CEO to become non-executive chairman
• Terry Bassham, Great Plains Energy President & CEO to remain President & CEO
• Tony Somma (Westar Energy CFO) to be CFO; Kevin Bryant (Great Plains Energy CFO) to be COO
• Equal board representation from each company, including Bassham and Ruelle
Headquarters
• Corporate Headquarters – Kansas City, Missouri
• Operating Headquarters – Topeka, Kansas; Kansas City, Missouri
Timing / Approvals
• Expected to close first half 2018
• Shareholders, federal and state regulators
5 AUGUST 8, 2017 INVESTOR UPDATE
Merger Value
6 AUGUST 8, 2017 INVESTOR UPDATE
Expected stronger EPS growth
New company EPS CAGR of 6-8%1 vs
WR stand-alone EPS CAGR of 4-6%2
Merger savings – Improve “slope” of EPS growth
Share buybacks – Upward “shift” of EPS growth
Immediate ≈15% dividend increase
Not at expense of credit or payout ratio
Tax-free exchange
Structured to address regulatory order
Not as dependent on future ongoing
rate relief
2016 2022e
Westar Stand Alone Plan, Guidance 4%-6%, Middle of Range
Merger, Opportunities for Additional Synergies/Buy-back Shares
Merger, Modest Synergies
Merger, No Synergies, Excess Cash Used to Buy-back Approximately 30 Million
Shares
EPS Growth Targets
6%
7%
8%
Merger Close
2018e
1New company expected EPS CAGR based off ‘16 WR EPS of $2.43/sh.
2 WR stand-alone expected EPS CAGR based off normalized ‘15 WR EPS of $2.21/sh.
Strong Growth Targets
7 AUGUST 8, 2017 INVESTOR UPDATE
$2.19
$1.44
$1.52
$1.60
$1.84
$2.32
2015A 2016A 2017 Pro Forma
2018E
Pro Forma
2021E
$2.43
$3.57
2016A Pro Forma 2021E
$3.25
Targeted EPS Growth 6-8%1 Targeted Dividend Growth 6-8%1
1Indicated annual earnings per share and dividend per share are historical Westar Energy and targeted combined company.
Path to Merger Close
8 AUGUST 8, 2017 INVESTOR UPDATE
Local & Political Support Proxy Effective
Dialogue with Regulatory Parties Shareholder Approval
(WR >50% outstanding; GXP >2/3 outstanding)
Execute Agreement HSR Approval
Initial positive reaction FCC Approval
File KS/MO Applications NRC Approval
File FERC Application FERC Approval
File NRC / FCC / HSR KS Approval
File Proxy MO Approval
Estimate Completion 1st Half 2018
Additional Information
AUGUST 8, 2017 INVESTOR UPDATE 9
Additional Information and Where to Find It
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any proxy, vote or
approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such jurisdiction. In connection with the proposed transactions, Monarch Energy Holding, Inc.
(Monarch) will file a Registration Statement on Form S-4, that includes a joint proxy statement of Great Plains Energy and Westar Energy, which
also constitutes a prospectus of Monarch. WE URGE INVESTORS TO READ THE REGISTRATION STATEMENT AND JOINT PROXY
STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED BY MONARCH, GREAT PLAINS ENERGY AND WESTAR ENERGY
WITH THE SEC CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT GREAT PLAINS ENERGY, WESTAR ENERGY, MONARCH AND THE PROPOSED TRANSACTION.
Investors can obtain free copies of the Registration Statement and joint proxy statement/prospectus and other documents filed by Monarch, Great
Plains Energy and Westar Energy with the SEC at http://www.sec.gov, the SEC’s website, or free of charge from Great Plains Energy’s website
(http://www.greatplainsenergy.com) under the tab, “Investor Relations” and then under the heading “SEC Filings.” These documents are also
available free of charge from Westar’s website (http://www.westarenergy.com) under the tab “Investors” and then under the heading “SEC
Filings.”
Participants in Proxy Solicitation
Great Plains Energy, Westar Energy and their respective directors and certain of their executive officers and employees may be deemed, under
SEC rules, to be participants in the solicitation of proxies from Great Plains Energy’s and Westar Energy’s shareholders with respect to the
proposed transaction. Information regarding the officers and directors of Great Plains Energy is included in its definitive proxy statement for its
2017 annual meeting filed with SEC on March 23, 2017. Information regarding the officers and directors of Westar is included in an amendment
to its Annual Report on Form 10-K for the fiscal year ended December 31, 2016, filed with the SEC on April 28, 2017. Additional information
regarding the identity of potential participants, and their direct or indirect interests, by securities, holdings or otherwise, will be set forth in the
Registration Statement and joint proxy statement/prospectus and other materials filed with SEC in connection with the proposed transaction. Free
copies of these documents may be obtained as described in the paragraphs above.