Filed by WPS
Resources Corporation
Pursuant to Rule 425
under the Securities Act of 1933, as amended,
and deemed as filed pursuant to Rule 14a-12
under
the Securities Exchange Act of 1934, as amended
Subject Company: WPS
Resources Corporation
Commission File Number: 1-11337
[Additional Employee
Q&A]
July 12, 2006
| |
1. Q: |
What
will be the impact of the Peoples Energy combination on jobs at WPS Resources?
How are we going to achieve the financial savings (synergies)
identified? |
| |
A:
At this point, we don’t know how jobs at WPS Resources will be affected. We know we
will need quality employees from both organizations, employees who have demonstrated
commitment and strong job performance. The synergies will be achieved in the utilities by
streamlining some processes and functions that cut across the companies and by
eliminating redundancies where that makes sense. Of course, the non-regulated businesses
will also seek cost-saving synergies, and will look for growth opportunities as well. At
this point, we do not know which positions will be relocated, terminated or even created
as part of the new company. |
| |
2. Q: |
Why
are we moving the WPSR (holding company) headquarters to Chicago? |
| |
A:
There are two primary reasons. First, we feel we need to have a strong presence in
Chicago to work effectively and efficiently with the regulatory agencies there. Second,
we feel that a company wanting to be a leader in the Midwest energy market has a better
strategic advantage working out of Chicago than out of Green Bay. |
| |
3. Q: |
We
have acquired four natural gas companies (LDCs) in our Aquila and pending Peoples
transactions. What does this say about our plans for the electricity
side of our business? |
| |
A:
It only says two good natural gas LDCs came on the market before a potential electric
company did. Our focus is still on a balanced portfolio, where the utility portion of the
business remains the larger share of revenues and is a big enough portion that the
non-regulated share of the business can grow appropriately. |
| |
4. Q: |
Will
this transaction have any impact on WPS Resources' benefits, retirement or pension
programs? |
| |
A:
Although some change is inevitable, we presently have no plans to modify pay and
benefits. |
| |
5. Q: |
Will
we be using our ITS platforms and other technical systems or others? |
| |
A.
That remains to be seen, pending decisions by the Organization
Design Team and the Integration Teams dealing with those technical
systems. We need systems (infrastructure) to support the new
business. The Integration Teams will be instrumental in making
recommending to the Transaction Committee, which will make the final
decisions. |
| |
6. Q: |
We
know Peoples has had some operations problems and some strained relationships with
the Illinois Commerce Commission. Will that affect WPS’s reputation
now? |
| |
A:
No. In fact, initial news reports suggest that WPS Resources’ regulatory
relationships will serve it well in Illinois. |
| |
7. Q: |
How
will the combination with Peoples Energy affect our share price? |
| |
A:
We’ve been pleased to note that the initial Wall Street reaction to the announcement
lifted both companies’ share prices. If we can show the market that we can complete
the transaction on time and deliver the operating efficiencies we expect, our share price
should continue to do well. |
| |
8. Q: |
Is
it realistic to take on the Peoples project so quickly after the Aquila project?
Why can’t we take a short break, at least? |
| |
A.
If we could have chosen another time to take this on, we might have
done so. The nature of the industry, though, forces us to act on
these opportunities when they arise. |
| |
9. Q: |
What
can you tell us about the proposed organization structure and the leadership? |
| |
A.
The combined company will be led by Larry Weyers, chairman,
president, and CEO of WPS Resources, who will serve as president and
CEO. Tom Patrick, chairman, president and CEO of Peoples Energy,
announced his intention to retire earlier this year. The combined
company’s Board of Directors will be drawn from members of both
company’s existing boards. WPS Resources will have the majority
of directors on the new board. An Executive Committee of the Board of
Directors will be comprised of Larry Weyers, Bob Gallagher (the
current lead director for WPS Resources), Jim Boris (the current lead
director for Peoples Energy), and Keith Bailey (a current Peoples
Energy director). Jim Boris, will serve as non-executive Chairman of
the Board. Mr. Weyers has started a process to determine the best
overall organizational structure and senior leadership team for the
combined companies. He will make additional announcements as formal
decisions are made. |
| |
10. Q: |
If
we need to achieve significant cost savings (synergies), can we start now by having
both companies institute hiring freezes? |
| |
A.
There are some legal and regulatory limits to what we can do
together at this early point in the transaction. The Transition
Committee and the Project Management team(s) will be looking for many
opportunities, including the idea of a hiring freeze and joint
posting of open positions, when the time is right. |
| |
11. Q: |
When
will we know the name for the holding company? What's the process for developing
one? |
| |
A:
The new name for the holding company will be announced before the end of August. There
will also probably be a new name for the non-regulated subsidiaries. There is a team of
people from the regulated and the non-regulated subsidiaries working on that right now. |
| |
12. Q: |
If
I hold shares of WPS, will they be converted to common shares of the new company?
Is there any action I have to take? |
| |
We
do not expect that you will need to take any action with respect to your shares since WPS
Resources remains unchanged after the transaction, except for the pending name change.
You will learn more about this transaction when the proxy statement is issued for the
shareholders meeting to be held in the fourth quarter of 2006. |
* * *
Additional Information
This communication is not a
solicitation of a proxy from any security holder of WPS Resources Corporation or Peoples
Energy Corporation. WPS Resources Corporation intends to file a registration statement on
Form S-4 with the Securities and Exchange Commission (the “SEC”) in connection
with the proposed transaction. The registration statement will include a joint proxy
statement of WPS Resources Corporation and Peoples Energy Corporation that also
constitutes a prospectus of WPS Resources Corporation, which will be sent to the
shareholders of WPS Resources Corporation and Peoples Energy Corporation. Shareholders
are urged to read the joint proxy statement/prospectus and any other relevant document
when they become available, because they will contain important information about WPS
Resources Corporation, Peoples Energy Corporation and the proposed transaction. A
definitive proxy statement will be sent to shareholders of WPS Resources Corporation and
Peoples Energy Corporation seeking approval of the proposed transaction. The joint proxy
statement/prospectus and other documents relating to the proposed transaction (when they
are available) can be obtained free of charge from the SEC’s website at www.sec.gov.
These documents (when they are available) can also be obtained free of charge from WPS
Resources Corporation upon written request to WPS Resources Corporation, Attention: Barth
J. Wolf, Secretary and Manager - Legal Services, P.O. Box 19001, Green Bay,
Wisconsin 54307-9001, or by calling (920) 433-1727, or from Peoples Energy Corporation,
upon written request to Peoples Energy Corporation, Attention: Secretary, 130 East
Randolph Drive, 24th Floor, Chicago, Illinois 60601, or by calling (312)
240-4366.
Participants in the
Proposed Transaction
WPS Resources Corporation, Peoples
Energy Corporation and certain of their respective directors and executive officers may be
deemed to be participants in the solicitation of proxies from shareholders in connection
with the proposed transaction under the rules of the SEC. Information about the directors
and executive officers of WPS Resources Corporation may be found in its 2005 Annual Report
on Form 10-K filed with the SEC on February 28, 2006 and definitive proxy statement
relating to its 2006 Annual Meeting of Shareholders filed with the SEC on April 7, 2006.
Information about the directors and executive officers of Peoples Energy Corporation may
be found in its Amendment No. 1 to its 2005 Annual Report on Form 10-K filed with the SEC
on December 14, 2005 and definitive proxy statement relating to its 2006 Annual Meeting of
Shareholders filed with the SEC on January 1, 2006. These documents can be obtained free
of charge from the sources indicated above. Additional information regarding the interests
of these participants will also be included in the joint proxy statement/prospectus
regarding the proposed transaction when it becomes available.
Non-Solicitation
This communication shall not
constitute an offer to sell or the solicitation of an offer to sell or the solicitation of
an offer to buy any securities, 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. No offer
of securities shall be made except by means of a prospectus meeting the requirements of
Section 10 of the Securities Act of 1933, as amended.