Filed by: Public Service Company of New Mexico
pursuant to Rule 425 under the Securities Act
of 1933 and deemed filed pursuant to Rule 14a-12
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of the Securities Exchange Act of 1934
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Public Service Company of New Mexico Commission File No.: 1-6986
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Western Resources, Inc. Commission File No.: 1-3523
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Subject Company: Western Resources, Inc.
THURSDAY, JULY 26, 2001
PNM AND WESTERN TO DISCUSS TRANSACTION MODIFICATIONS
ALBUQUERQUE, NM AND TOPEKA, KS, JULY 26, 2001 - PNM, Public Service Company of
New Mexico (NYSE: PNM) and Western Resources (NYSE: WR) today announced their
belief that, if the recent orders by the Kansas Corporation Commission (KCC)
remain in effect, their proposed transaction to combine the two companies'
electric operations will be difficult to complete as currently structured.
PNM Chairman, President and Chief Executive Officer Jeff Sterba said, "PNM
doesn't believe that the split-off and other transactions envisioned in our
Merger Agreement with Western Resources can be accomplished on the agreed terms
if the KCC's orders remain in effect. PNM continues to believe in the strategic
benefits of bringing our two companies together. We are hopeful a transaction
can be structured that would benefit customers and shareholders of both
companies and could obtain the approval of necessary regulatory authorities,
including those in Kansas and New Mexico."
The companies intend to discuss with each other over the next several weeks
modifications to the transaction that will make it possible to obtain necessary
regulatory approvals. Separately, Western Resources also indicated its intention
to file motions to reconsider the KCC's recent actions and to pursue the issue
of the KCC's jurisdiction in order to preserve the company's appellate rights.
Commenting on the situation, David Wittig, Chairman, President and Chief
Executive Officer of Western Resources, said, "We believe that we understand the
KCC's concerns with the current transaction and are hopeful that we can reach
agreement with PNM on alternative terms that will permit the transaction to move
forward and provide the benefits that we believe the combination will bring to
our customers and shareholders."
PNM is a combined electric and gas utility serving approximately 1.3 million
people in New Mexico. The company also sells power on the wholesale market in
the Western U.S. PNM stock is traded primarily on the NYSE under the symbol PNM.
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Western Resources (NYSE: WR) is a consumer services company with interests in
monitored services and energy. The company has total assets of about $8 billion,
including security company holdings through ownership of Protection One (NYSE:
POI) and Protection One Europe, which have more than 1.5 million security
customers. Its utilities, KPL and KGE, provide electric service to approximately
636,000 customers in Kansas. Through its ownership in
ONEOK, Inc. (NYSE: OKE), a Tulsa-based natural gas company, Western Resources
has a 45 percent interest in one of the largest natural gas distribution
companies in the nation, serving more than 1.4 million customers.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
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This press release contains forward looking statements within the meaning of the
"safe harbor" provisions of the United States Private Securities Litigation
Reform Act of 1995. Investors are cautioned that such forward-looking statements
with respect to revenues, earnings, performance, strategies, prospects and other
aspects of the businesses of PNM and Western Resources and with respect to the
benefits of the transaction are based on current expectations that are subject
to risk and uncertainties. Such statements are based upon the current beliefs
and expectations of the management of PNM and Western Resources. A number of
factors could cause actual results or outcomes to differ materially from those
indicated by such forward looking statements. These factors include, but are not
limited to, risks and uncertainties relating to: the possibility that
shareholders of PNM and/or Western Resources will not approve the transaction,
the risks that the businesses will not be integrated successfully, the risk that
the benefits of the transaction may not be fully realized or may take longer to
realize than expected, disruption from the transaction making it more difficult
to maintain relationships with clients, employees, suppliers or other third
parties, conditions in the financial markets relevant to the proposed
transaction, the receipt of regulatory and other approvals of the transaction,
the outcome of possible appeals of regulatory orders issued to date, that future
circumstances could cause business decisions or accounting treatment to be
decided differently than now intended, changes in laws or regulations, changing
governmental policies and regulatory actions with respect to allowed rates of
return on equity and equity ratio limits, industry and rate structure, stranded
cost recovery, operation of nuclear power facilities, acquisition, disposal,
depreciation and amortization of assets and facilities, operation and
construction of plant facilities, recovery of fuel and purchased power costs,
decommissioning costs, present or prospective wholesale and retail competition
(including retail wheeling and transmission costs), political and economic
risks, changes in and compliance with environmental and safety laws and
policies, weather conditions (including natural disasters such as tornadoes),
population growth rates and demographic patterns, competition for retail and
wholesale customers, availability, pricing and transportation of fuel and other
energy commodities, market demand for energy from plants or facilities, changes
in tax rates or policies or in rates of inflation or in accounting standards,
unanticipated delays or changes in costs for capital projects, unanticipated
changes in operating expenses and capital expenditures, capital market
conditions, competition for new energy development opportunities and legal and
administrative proceedings (whether civil, such as environmental, or criminal)
and settlements, the impact of Protection One's financial condition on Western
Resources' consolidated results, and other factors. PNM and Western Resources
disclaim any obligation to update any forward-looking statements as a result of
developments occurring after the date of this news release. Readers are referred
to PNM's and Western Resources' most recent reports filed with the Securities
and Exchange Commission.
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Additional Information
In connection with a transaction, PNM and Western Resources would file a joint
proxy statement / prospectus with the Securities and Exchange Commission.
INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE JOINT PROXY STATEMENT /
PROSPECTUS WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN IMPORTANT
INFORMATION. Investors and security holders may obtain a free copy of the joint
proxy statement / prospectus (when available) and other documents filed by PNM
and Western Resources with the SEC at the SEC's web site at http://www.sec.gov.
Free copies of the joint proxy statement / prospectus, when available, and each
company's other filings with the SEC may also be obtained from the respective
companies. Free copies of PNM's filings may be obtained by directing a request
to PNM, Alvarado Square, Albuquerque, New Mexico 87158. Phone (800) 545-4425.
Free copies of Western Resources' filings may be obtained by directing a request
to Western Resources, P.O. Box 889, Topeka, Kansas 66601-0889. Phone: (800)
527-2495.
Participants in Solicitation
PNM, Western Resources and certain of their respective directors, executive
officers and other members of their management and employees, each of whom may
be considered participants in this transaction under applicable securities laws,
may be soliciting proxies from their respective stockholders in favor of the
transaction. Information concerning PNM's directors and executive officers
participating in the solicitation is set forth in PNM's Annual Report on Form
10-K filed with the Commission on February 22, 2001, as amended on April 30,
2001, and information concerning Western Resources' directors and executive
officers participating in the solicitation is set forth in Western Resources'
Annual Report on Form 10-K filed with the Commission on April 2, 2001 and
amended on April 30, 2001. Certain directors and executive officers of PNM and
Western Resources may have direct or indirect interests in the transaction due
to securities holdings, vesting of options, and rights to severance payments if
their employment is terminated following the transaction. In addition, directors
and officers, after the transaction, will be indemnified by PNM and Western
Resources, and benefit from insurance coverage for liabilities that may arise
from their service as directors and officers of PNM or Western Resources prior
to the transaction. Additional information regarding PNM's and Western
Resources' respective participants in the solicitation will be contained in the
joint proxy statement/prospectus.
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