CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING SHARES OF
THE FOLLOWING SERIES OF ITS PREFERRED STOCK
---------------------------------------------------------------
---------------------------------------------------------------
TITLE OF SERIES OF PREFERRED OUTSTANDING PURCHASE PRICE
SHARES (per share)
$5 Cumulative Preferred Stock 1,915,319 $77.55
(no par value)
Cumulative Preferred Stock
($100 par value)
- 5 3/4% Series A 600,000 $91.30
- 5 1/4% Series B 750,000 $83.60
- 4.65 % Series C 600,000 $80.65
- 4.65 % Series D 750,000 $80.65
- 7.20 % Series I 500,000 $105.04
- 6 1/8% Series J 500,000 $101.75
---------------------------------------------------------------
---------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON TUESDAY, FEBRUARY 27, 1996, UNLESS THE
OFFER IS EXTENDED.
Consolidated Edison Company of New York, Inc., a New York
corporation ("Con Edison"), invites the holders of each series of
Con Edison preferred stock listed above (each a "Series of
Preferred") to tender any and all of their shares of a Series of
Preferred ("Shares") for purchase at the purchase price per share
listed above for the Shares tendered, net to the seller in cash,
upon the terms and subject to the conditions set forth in this
Offer to Purchase and in the Letter of Transmittal for the Series
of Preferred tendered. As to each Series of Preferred, this
Offer to Purchase, together with the applicable Letter of
Transmittal, constitutes the "Offer." Con Xxxxxx will purchase
all Shares validly tendered and not withdrawn, upon the terms and
subject to the conditions of the Offer. See "Terms of the Offer
-- Extension; Termination; Amendments, and -- Certain Conditions
of the Offer."
THE OFFER FOR A SERIES OF PREFERRED IS INDEPENDENT OF THE
OFFER FOR ANY OTHER SERIES OF PREFERRED.
IMPORTANT
Any shareholder desiring to tender all or any portion of his
or her Shares should either (1) complete and sign the applicable
Letter of Transmittal or a facsimile thereof in accordance with
the instructions in the Letter of Transmittal, mail or deliver it
and any other required documents to the Depositary, and either
deliver the certificates for Shares to the Depositary along with
the Letter of Transmittal or deliver such Shares pursuant to the
procedure for book-entry transfer set forth in "Terms of the
Offer--Procedure for Tendering Shares" herein or (2) request his
or her broker, dealer, commercial bank, trust company or nominee
to effect the transaction for him or her. A shareholder whose
Shares are registered in the name of a broker, dealer, commercial
bank, trust company or nominee must contact such broker, dealer,
commercial bank, trust company or nominee if he or she desires to
tender such Shares. Any shareholder who desires to tender Shares
and whose certificates for such Shares are not immediately
available, or who cannot comply in a timely manner with the
procedure for book-entry transfer, should tender such Shares by
following the procedures for guaranteed delivery set forth in
"Terms of the Offer--Procedure for Tendering Shares" herein.
EACH SERIES OF PREFERRED HAS ITS OWN LETTER OF TRANSMITTAL,
AND ONLY THE APPLICABLE LETTER OF TRANSMITTAL FOR A PARTICULAR
SERIES OR A NOTICE OF GUARANTEED DELIVERY MAY BE USED TO TENDER
SHARES OF SUCH SERIES.
Con Xxxxxx will, as provided in Instruction 10 of the Letter
of Transmittal, pay to any Soliciting Dealer a solicitation fee
of $1.50 per share (except that for transactions for beneficial
owners equal to or exceeding 5,000 shares of a particular Series
of Preferred, Con Xxxxxx will pay a solicitation fee of $1.25 per
share) for any Shares tendered, accepted for payment and paid
pursuant to the Offer.
NEITHER CON XXXXXX, ITS BOARD OF TRUSTEES NOR ANY OF ITS
OFFICERS MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER AS TO
WHETHER TO TENDER ALL OR ANY SHARES. EACH SHAREHOLDER MUST MAKE
HIS OR HER OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF
SO, HOW MANY SHARES TO TENDER.
Con Xxxxxx's $5 Cumulative Preferred Stock (no par value)
(the "$5 Preferred") and Cumulative Preferred Stock ($100 par
value), 4.65 % Series C (the "Series C Preferred") are listed
and traded on the New York Stock Exchange. There is no
established trading market for any of the other Series of
Preferred. As of the close of business on January 26, 1996, (the
last trading day prior to the commencement of the Offer), the
last reported sale price on the New York Stock Exchange was
$71 1/8 for the $5 Preferred (on January 26, 1996) and $67 for
the Series C Preferred (on January 22, 1996). Shareholders are
urged to obtain a current market quotation, if available, for
their Shares.
Questions or requests for assistance or for additional
copies of this Offer to Purchase, the Letter of Transmittal for a
Series of Preferred or other tender offer materials may be
directed to the Information Agent or the Dealer Managers at their
respective addresses and telephone numbers set forth on the back
cover of this Offer to Purchase.
_______________
The Dealer Managers for the Offer are:
XXXXXX BROTHERS XXXXX XXXXXX INC.
_______________
The date of this Offer to Purchase is January 29, 1996.
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON
BEHALF OF CON XXXXXX AS TO WHETHER SHAREHOLDERS SHOULD TENDER
SHARES PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN OR IN THE
RELATED LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH
RECOMMENDATION AND SUCH INFORMATION AND REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY CON XXXXXX.
TABLE OF CONTENTS
PAGE
----
SUMMARY 3
INTRODUCTION 6
TERMS OF THE OFFER 7
Number of Shares; Purchase Price; Expiration
Date; Receipt of Dividend 7
Procedure for Tendering Shares 7
Withdrawal Rights 9
Acceptance for Payment of Shares and Payment of
Purchase Price 10
Certain Conditions of the Offer 10
Extension; Termination; Amendments 12
PRICE RANGE OF SHARES; DIVIDENDS 13
PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER 13
SOURCE AND AMOUNT OF FUNDS 15
TRANSACTIONS AND AGREEMENTS CONCERNING THE SHARES 15
CERTAIN FEDERAL INCOME TAX CONSEQUENCES 15
FEES AND EXPENSES 18
CERTAIN INFORMATION CONCERNING CON XXXXXX 19
ADDITIONAL INFORMATION 19
MISCELLANEOUS 19
2
SUMMARY
This general summary is provided solely for the convenience
of holders of Shares and is qualified in its entirety by
reference to the full text and more specific details contained in
this Offer to Purchase and the applicable Letter of Transmittal
and any amendments hereto and thereto.
Con Edison.............. Consolidated Edison Company
of New York, Inc.
The Shares............... Shares of the Series of Preferred
listed on the front cover of this
Offer to Purchase.
Number of Shares Sought.. Any and all of each Series of
Preferred.
Purchase Price........... The purchase price per share
listed on the front cover of this
Offer to Purchase which is
applicable to the Shares tendered,
net to the seller in cash.
See "Price Range of Shares;
Dividends."
Expiration Date.......... Tuesday, February 27, 1996 at 5:00
P.M., New York City time, unless
extended.
How to Tender Shares..... See "Terms of the Offer -- Procedure
for Tendering Shares." For further
information, call the Information
Agent or the Dealer Managers or
consult your broker for assistance.
Withdrawal Rights........ Tendered Shares of any Series of
Preferred may be withdrawn at any
time until the Expiration Date of
the Offer with respect to such
Series of Preferred and, unless
accepted for payment prior thereto,
may be withdrawn after Monday,
March 25, 1996. See "Terms of the
Offer -- Withdrawal Rights."
Purpose of Offer......... Con Xxxxxx is making the Offer
because it believes that it would be
economically attractive to Con
Edison to purchase the Shares.
In addition, the Offer provides
shareholders an opportunity
to sell their Shares without the
usual transaction costs associated
with a market sale. See "Purpose of
the Offer; Certain Effects of the
Offer."
Market Price of Shares... The last reported sale price on the
New York Stock Exchange for each of
the $5 Preferred and the Series C
Preferred is shown on the front
cover of this Offer to Purchase.
There is no established trading
market for the other Series of
Preferred. See "Price Range of
Shares; Dividends."
Dividends................ Con Edison has declared the regular
quarterly dividend for each Series of
Preferred to be paid on February 1,
1996 to holders of record as of
the close of business on January 10,
1996 (the "February 1996 Dividend").
A tender of Shares pursuant to the
Offer will not deprive a shareholder
of his or her right to receive the
February 1996 Dividend regardless of
when such tender is made. Holders of
Shares tendered into and purchased
pursuant to the Offer will not be
entitled to any dividends in respect
of any later dividend periods (or any
portion thereof). The Company expects
to pay the next regular quarterly
dividend for each Series of Preferred
on May 1, 1996 to holders of record
as of the close of business on a date
determined by Con Edison's Board of
Trustees. See "Price Range of Shares;
Dividends."
3
Brokerage Commissions.... Not payable by shareholders.
Con Xxxxxx will pay the solicitation
fee described on the front cover of
this Offer to Purchase to the broker,
dealer, commercial bank or trust
company, if any, designated by the
holder tendering Shares.
Stock Transfer Tax....... None, except as provided in
Instruction 6 of the Letter of
Transmittal.
Payment Date............. As soon as practicable after the
Expiration Date of the Offer. See
"Terms of the Offer -- Extension;
Termination; Amendments, and --
Certain Conditions of the Offer".
Further Information...... Additional copies of this Offer to
Purchase and the Letters of
Transmittal may be obtained from
X.X. Xxxx & Co., Inc., 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
telephone 000-000-0000 (toll free)
or 000-000-0000 (collect). Questions
about the Offer should be directed
to Xxxxxx Brothers at 000-000-0000
or to Xxxxx Xxxxxx Inc. at
000-000-0000.
4
SELECTED FINANCIAL INFORMATION
============================================================================================================
Twelve Months Ended Year Ended December 31,
(Dollars in Millions) September 30, 1995 1994 1993 1992 1991 1990
------------------------------------------------------------------------------------------------------------
Operating revenues $ 6,469.8 $ 6,373.1 $ 6,265.4 $ 5,932.9 $ 5,873.1 $ 5,738.9
Fuel 500.0 567.8 605.2 710.3 879.4 997.6
Purchased power 1,050.9 787.5 812.6 606.8 561.2 437.4
Gas purchased for resale 246.6 341.2 289.7 245.2 223.4 254.2
Operating income 1,043.5 1,036.2 951.1 880.4 813.1 800.8
Net income for common stock 693.0 698.7 622.9 567.7 530.1 534.4
Total assets 14,030.2 13,728.4 13,257.4 11,596.1 11,107.9 10,685.6
Long-term obligations
Long-term debt 4,020.3 4,030.5 3,643.9 3,493.6 3,364.8 3,312.7
Capitalized leases 45.9 47.8 50.4 52.9 55.5 58.0
Preferred stock subject to
mandatory redemption 100.0 100.0 100.0 100.0 41.3 43.5
Common shareholders' equity 5,538.2 5,313.0 5,068.5 4,886.9 4,608.3 4,502.1
Earnings per common share $2.95 $2.98 $2.66 $2.46 $2.32 $2.34
Average common shares
outstanding (millions) 234.9 234.8 234.0 231.1 228.3 228.2
Ratio of earnings to fixed charges 4.32 4.58 4.19 3.93 3.73 4.07
CAPITALIZATION
As of September 30, 1995 (Unaudited)
Actual Ratio Adjusted(a) Ratio
(Dollars in Millions)
Long-term Debt $ 4,020.2 39.4% $4,255.2 41.9%
Preferred Stock 640.0 6.3 365.0 3.6
Common Equity 5,538.2 54.3 5,538.2 54.5
Total Capitalization $10,198.4 100.0% $10,158.4 100.0%
____________________
(a) Adjusted to reflect the assumed purchase pursuant to the
Offer of $275 million of Con Xxxxxx preferred stock and the
assumed issuance of $235 million aggregate principal amount of
subordinated debentures to fund the purchase. See "Source and
Amount of Funds." The State of New York Public Service
Commission has conditioned its approval of this refunding
transaction on Con Edison taking certain actions to offset the
increase to common equity that would otherwise result from the
refunding. See "Terms of the Offer -- Certain Conditions of the
Offer."
RECENT DEVELOPMENTS
On January 23, 1996, Con Edison announced unaudited net
income for common stock in 1995 of $688.3 million compared with
$698.7 million in 1994. For the quarter ended December 31, 1995,
unaudited net income for common stock was $104.2 million compared
with $109.0 million in the corresponding 1994 period.
5
INTRODUCTION
Con Xxxxxx invites the holders of the Series of Preferred
listed on the front cover of this Offer to Purchase to tender any
and all of their Shares for purchase at the purchase price per
share listed on the front cover of this Offer to Purchase which
is applicable to the Shares tendered, net to the seller in cash,
upon the terms and subject to the conditions set forth herein and
in the Letter of Transmittal for the Series of Preferred
tendered. As to each Series of Preferred, this Offer to
Purchase, together with the applicable Letter of Transmittal,
constitutes the "Offer." See "Terms of the Offer -- Extension;
Termination; Amendments, and -- Certain Conditions of the Offer."
THE OFFER FOR SHARES OF A SERIES OF PREFERRED IS INDEPENDENT
OF THE OFFER FOR SHARES OF ANY OTHER SERIES OF PREFERRED.
NEITHER CON XXXXXX, ITS BOARD OF TRUSTEES NOR ANY OF ITS
OFFICERS MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER AS TO
WHETHER TO TENDER ALL OR ANY SHARES. EACH SHAREHOLDER MUST MAKE
HIS OR HER OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF
SO, HOW MANY SHARES TO TENDER.
EACH SERIES OF PREFERRED HAS ITS OWN LETTER OF TRANSMITTAL,
AND ONLY THE APPLICABLE LETTER OF TRANSMITTAL FOR A PARTICULAR
SERIES OR A NOTICE OF GUARANTEED DELIVERY MAY BE USED TO TENDER
SHARES OF SUCH SERIES.
The $5 Preferred and the Series C Preferred are listed and
traded on the New York Stock Exchange under the symbols "EDPrA"
and "EDPrC," respectively. There is no established trading market
for any of the other Series of Preferred. The last reported sale
price on the New York Stock Exchange, as of the close of business
on January 26, 1996, for each of the $5 Preferred and the Series
C Preferred is shown on the front cover of this Offer to
Purchase. Shareholders are urged to obtain a current market
quotation, if available, for their Shares.
The February 1996 Dividend for each Series of Preferred has
been declared and is to be paid on February 1, 1996 to holders of
record as of the close of business on January 10, 1996. A tender
of Shares pursuant to the Offer will not deprive any shareholder
of his or her right to receive the February 1996 Dividend,
regardless of when such tender is made. Holders of Shares
tendered into and purchased pursuant to the Offer will not be
entitled to any dividends in respect of any later dividend
periods (or any portion thereof). See "Price Range of Shares;
Dividends."
Tendering shareholders will not be obligated to pay
brokerage commissions, solicitation fees or, subject to the
Instructions to the Letter of Transmittal, stock transfer taxes
on the purchase of Shares by Con Xxxxxx. Con Xxxxxx will pay all
charges and expenses of Xxxxxx Brothers and Xxxxx Xxxxxx Inc.
(the "Dealer Managers"), The Chase Manhattan Bank, N.A. (the
"Depositary") and X.X. Xxxx & Co., Inc. (the "Information Agent")
incurred in connection with the Offer. In addition, Con Edison
will pay to the Soliciting Dealer, if any, designated by the
holder tendering Shares, the solicitation fee described on the
front cover of this Offer to Purchase. See "Fees and Expenses."
ANY TENDERING SHAREHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE
AND SIGN THE SUBSTITUTE FORM W-9 THAT IS INCLUDED IN THE LETTER
OF TRANSMITTAL MAY BE SUBJECT TO A REQUIRED FEDERAL INCOME TAX
BACKUP WITHHOLDING OF 31% OF THE GROSS PROCEEDS PAYABLE TO SUCH
SHAREHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER. See "Terms of
the Offer--Procedure for Tendering Shares" and "Certain Federal
Income Tax Consequences."
Shareholders are not under any obligation to tender Shares
pursuant to the Offer. The Offer does not constitute notice of
redemption of any Series of Preferred pursuant to Con Xxxxxx's
Restated Certificate of Incorporation, nor does Con Edison intend
to effect any such redemption by making the Offer. The Offer
does not constitute a waiver by Con Edison of any option it has
to redeem Shares. See "Purpose of the Offer; Certain Effects of
the Offer."
6
Copies of this Offer to Purchase and an applicable Letter of
Transmittal are being mailed to record holders of Shares and will
be furnished to brokers, banks and similar persons whose names,
or the names of whose nominees, appear on Con Xxxxxx's
shareholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing for
subsequent transmittal to beneficial owners of the Shares.
TERMS OF THE OFFER
NUMBER OF SHARES; PURCHASE PRICE; EXPIRATION DATE; RECEIPT OF
DIVIDEND
Upon the terms and subject to the conditions described
herein and in the applicable Letter of Transmittal, Con Edison
will purchase any and all Shares that are validly tendered on or
prior to the applicable Expiration Date (and not properly
withdrawn in accordance with "Terms of the Offer--Withdrawal
Rights") at the purchase price per share listed on the front
cover of this Offer to Purchase which is applicable to the Shares
tendered, net to the seller in cash. See "Terms of the Offer --
Extension; Termination; Amendments, and -- Certain Conditions of
the Offer."
The later of 5:00 P.M., New York City time, on February 27,
1996, or the latest time and date to which the Offer is extended
with respect to any Series of Preferred, is referred to herein as
the "Expiration Date." There can be no assurance that Con Edison
will exercise its right to extend the Offer with respect to any
Series of Preferred.
The Offer for a Series of Preferred is independent of the
Offer for any other Series of Preferred.
The February 1996 Dividend for each Series of Preferred has
been declared and is to be paid on February 1, 1996 to holders of
record as of the close of business on January 10, 1996. A tender
of Shares pursuant to the Offer will not deprive any shareholder
of his or her right to receive the February 1996 Dividend,
regardless of when such tender is made. Holders of Shares
tendered into and purchased pursuant to the Offer will not be
entitled to any dividends in respect of any later dividend
periods (or any portion thereof).
No alternative, conditional or contingent tenders will be
accepted.
PROCEDURE FOR TENDERING SHARES
To tender Shares validly pursuant to the Offer, the
tendering holder of Shares must either:
(a) send to the Depositary (at one of its addresses set
forth on the back cover of this Offer to Purchase) a properly
completed and duly executed Letter of Transmittal for the Series
of Preferred tendered or facsimile thereof, together with any
required signature guarantees and any other documents required by
the Letter of Transmittal, and either (i) cause certificates for
the Shares to be tendered to be received by the Depositary, at
one of such addresses or (ii) cause such Shares to be delivered
pursuant to the procedures for book-entry transfer described
below (and a confirmation of such delivery received by the
Depositary), in each case on or prior to the applicable
Expiration Date; or
(b) comply with the guaranteed delivery procedure described
under "Guaranteed Delivery Procedure" below.
The Depositary will establish an account with respect to
each Series of Preferred at The Depository Trust Company, Midwest
Securities Trust Company and Philadelphia Depositary Trust
Company (collectively referred to as the "Book-Entry Transfer
Facilities") for purposes of the Offer within two business days
after the date of this Offer to Purchase, and any financial
institution that is a participant in the system of any Book-Entry
Transfer Facility may make delivery of Shares by causing such
Book-Entry Transfer Facility to transfer such Shares into the
Depositary's account in accordance with the procedures of such
Book-Entry Transfer Facility. Although delivery of Shares may be
effected through book-entry transfer, a properly completed and
duly executed Letter of Transmittal for the Series of Preferred
tendered or facsimile thereof, together with any required
signature guarantees and any other required documents, must, in
any case, be received by the Depositary at one of its addresses
set forth on the back cover of this Offer to Purchase on or prior
to the applicable Expiration Date, or the tendering holder of
Shares must comply with the guaranteed delivery procedure
described below.
7
DELIVERY OF THE APPLICABLE LETTER OF TRANSMITTAL AND ANY
OTHER REQUIRED DOCUMENTS TO ONE OF THE BOOK-ENTRY TRANSFER
FACILITIES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Except as otherwise provided below, all signatures on a
Letter of Transmittal must be guaranteed by a firm that is a
member of a registered national securities exchange or the
National Association of Securities Dealers, Inc., or by a
commercial bank or trust company having an office or
correspondent in the United States which is a participant in an
approved Signature Guarantee Medallion Program (each of the
foregoing being referred to as an "Eligible Institution").
Signatures on a Letter of Transmittal need not be guaranteed if
(a) the Letter of Transmittal is signed by the registered holder
of the Shares tendered therewith and such holder has not
completed the box entitled "Special Payment Instructions" or the
box entitled "Special Delivery Instructions" on the Letter of
Transmittal or (b) such Shares are tendered for the account of an
Eligible Institution. See Instructions 1 and 5 of the Letter of
Transmittal.
Guaranteed Delivery Procedure. If a shareholder desires to
tender Shares pursuant to the Offer and cannot deliver
certificates for such Shares and all other required documents to
the Depositary on or prior to the applicable Expiration Date, or
the procedure for book-entry transfer cannot be complied with in
a timely manner, such Shares may nevertheless be tendered if all
of the following conditions are met:
(i) such tender is made by or through an Eligible
Institution;
(ii) a properly completed and duly executed Notice of
Guaranteed Delivery in the form provided by Con Edison
(with any required signature guarantees) is
received by the Depositary as provided below on or
prior to the applicable Expiration Date; and
(iii) the certificates for such Shares (or a confirmation of
a book-entry transfer of such Shares into the
Depositary's account at one of the Book-Entry Transfer
Facilities), together with a properly completed and
duly executed Letter of Transmittal for the Series of
Preferred to be tendered (or facsimile thereof) and any
other documents required by the Letter of Transmittal,
are received by the Depositary no later than 5:00 p.m.,
New York City time, on the third New York Stock
Exchange trading day after the date of execution of the
Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand
or transmitted by facsimile transmittal or mail to the Depositary
and must include a guarantee by an Eligible Institution in the
form set forth in such Notice.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED
DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING SHAREHOLDER.
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY.
TO AVOID FEDERAL INCOME TAX BACKUP WITHHOLDING EQUAL TO 31%
OF THE GROSS PAYMENTS MADE PURSUANT TO THE OFFER, EACH
SHAREHOLDER MUST NOTIFY THE DEPOSITARY OF SUCH SHAREHOLDER'S
CORRECT TAXPAYER IDENTIFICATION NUMBER AND PROVIDE CERTAIN OTHER
INFORMATION BY PROPERLY COMPLETING THE SUBSTITUTE FORM W-9
INCLUDED IN THE LETTER OF TRANSMITTAL. FOREIGN SHAREHOLDERS MUST
SUBMIT A PROPERLY COMPLETED FORM W-8 IN ORDER TO AVOID THE
APPLICABLE BACKUP WITHHOLDING; PROVIDED, HOWEVER, THAT BACKUP
WITHHOLDING WILL NOT APPLY TO FOREIGN SHAREHOLDERS SUBJECT TO 30%
(OR LOWER TREATY RATE) WITHHOLDING ON GROSS PAYMENTS RECEIVED
PURSUANT TO THE OFFER (AS DISCUSSED UNDER "CERTAIN FEDERAL INCOME
TAX CONSEQUENCES").
EACH SHAREHOLDER IS URGED TO CONSULT HIS OR HER OWN TAX
ADVISOR.
8
All questions as to the form of documents and the validity,
eligibility (including time of receipt) and acceptance for
payment of any tender of Shares will be determined by Con Xxxxxx,
in its sole discretion, and its determination shall be final and
binding. Con Xxxxxx reserves the absolute right to reject any or
all tenders of Shares that (i) it determines are not in proper
form or (ii) the acceptance for payment of or payment for which
may, in the opinion of Con Xxxxxx's counsel, be unlawful. Con
Xxxxxx also reserves the absolute right to waive any defect or
irregularity in any tender of Shares. None of Con Xxxxxx, the
Dealer Managers, the Depositary, the Information Agent or any
other person will be under any duty to give notice of any defect
or irregularity in tenders, nor shall any of them incur any
liability for failure to give any such notice.
Con Xxxxxx will, as provided in Instruction 10 of the Letter
of Transmittal, pay the solicitation fee described on the front
cover of this Offer to Purchase for any Shares tendered and
accepted for payment and paid for pursuant to the Offer, covered
by a Letter of Transmittal which designates, as having solicited
and obtained the tender, the name of (i) any broker or dealer in
securities, including the Dealer Managers in their capacity as a
broker or dealer, who is a member of any national securities
exchange or of the National Association of Securities Dealers,
Inc. (the "NASD"), (ii) any foreign broker or dealer not eligible
for membership in the NASD which agrees to conform to the NASD's
Rules of Fair Practice in soliciting tenders outside the United
States to the same extent as though it were an NASD member, or
(iii) any bank or trust company (each of which is referred to
herein as a "Soliciting Dealer"). No such fee shall be payable to
a Soliciting Dealer if such Soliciting Dealer is required for any
reason to transfer the amount of such fee to a depositing holder
(other than itself). No such fee shall be paid to a Soliciting
Dealer with respect to Shares tendered for such Soliciting
Dealer's own account. No broker, dealer, bank, trust company or
fiduciary shall be deemed to be an agent of Con Xxxxxx, the
Depositary, the Information Agent or the Dealer Managers for the
purposes of the Offer.
WITHDRAWAL RIGHTS
Tenders of Shares of a Series of Preferred made pursuant to
the Offer may be withdrawn at any time prior to the Expiration
Date with respect to such Series of Preferred. Thereafter, such
tenders are irrevocable, except that they may be withdrawn after
Monday, March 25, 1996 unless theretofore accepted for payment as
provided in this Offer to Purchase. If, with respect to any
Series of Preferred, Con Edison extends the period of time during
which the Offer is open, is delayed in accepting for payment or
paying for Shares of that Series of Preferred or is unable to
accept for payment or pay for Shares of that Series of Preferred
pursuant to the Offer for any reason, then, without prejudice to
Con Xxxxxx's rights under the Offer, the Depositary may, on
behalf of Con Edison, retain all Shares of that Series of
Preferred tendered, and such Shares may not be withdrawn except
as otherwise provided in this "Terms of the Offer--Withdrawal
Rights," subject to Rule 13e-4(f)(5) under the Securities
Exchange Act of 1934 (the "Exchange Act"), which provides that
the issuer "making the tender offer shall either pay the
consideration offered, or return the tendered securities,
promptly after the termination or withdrawal of the tender
offer".
To be effective, a written or facsimile transmission notice
of withdrawal must be timely received by the Depositary at one of
its addresses or facsimile numbers set forth on the back cover of
this Offer to Purchase and must specify the name of the person
who tendered the Shares to be withdrawn and the number of Shares
of each Series of Preferred to be withdrawn. If the Shares to be
withdrawn have been delivered to the Depositary, a signed notice
of withdrawal with signatures guaranteed by an Eligible
Institution (except in the case of Shares tendered by an Eligible
Institution) must be submitted prior to the release of such
Shares. In addition, such notice must specify, in the case of
Shares tendered by delivery of certificates, the name of the
registered holder (if different from that of the tendering
shareholder) and the serial numbers shown on the particular
certificates evidencing the Shares to be withdrawn or, in the
case of Shares tendered by book-entry transfer, the name and
number of the account at one of the Book-Entry Transfer
Facilities to be credited with the withdrawn Shares and the name
of the registered holder (if different from the name of such
account). Withdrawals may not be rescinded, and Shares withdrawn
will thereafter be deemed not validly tendered for purposes of
the Offer. However, withdrawn Shares may be retendered by again
following one of the procedures described in "Terms of the Offer-
-Procedure for Tendering Shares" at any time prior to the
applicable Expiration Date.
9
All questions as to the form and validity (including time of
receipt) of any notice of withdrawal will be determined by Con
Xxxxxx in its sole discretion, and its determination shall be
final and binding. None of Con Xxxxxx, the Dealer Managers, the
Depositary, the Information Agent or any other person will be
under any duty to give notification of any defect or irregularity
in any notice of withdrawal or incur any liability for failure to
give any such notification.
ACCEPTANCE FOR PAYMENT OF SHARES AND PAYMENT OF PURCHASE PRICE
Upon the terms and subject to the conditions of the Offer
and as promptly as practicable after the Expiration Date with
respect to a Series of Preferred, Con Xxxxxx will accept for
payment and pay for Shares of that Series of Preferred validly
tendered. See "Terms of the Offer--Number of Shares; Purchase
Price; Expiration Date; Receipt of Dividends, -- Extension;
Termination; Amendments, and -- Certain Conditions of the Offer"
and "Source and Amount of Funds." Thereafter, payment for all
Shares of that Series of Preferred validly tendered on or prior
to the applicable Expiration Date and accepted for payment
pursuant to the Offer will be made by the Depositary by check as
promptly as practicable. In all cases, payment for Shares
accepted for payment pursuant to the Offer will be made only
after timely receipt by the Depositary of certificates for Shares
(or of a confirmation of a book-entry transfer of such Shares
into the Depositary's account at one of the Book-Entry Transfer
Facilities), a properly completed and duly executed Letter of
Transmittal for the Series of Preferred tendered or facsimile
thereof, and any other required documents.
For purposes of the Offer, Con Xxxxxx will be deemed to have
accepted for payment (and thereby purchased) Shares that are
validly tendered prior to the applicable Expiration Date and not
withdrawn as, if and when it gives oral or written notice to the
Depositary of its acceptance for payment of such Shares. Con
Xxxxxx will pay for Shares that it has purchased pursuant to the
Offer by depositing the purchase price therefor with the
Depositary. The Depositary will act as agent for tendering
shareholders for the purpose of receiving payment from Con Edison
and transmitting payment to tendering shareholders. Under no
circumstances will interest be paid on amounts to be paid to
tendering shareholders, regardless of any delay in making such
payment.
Certificates for all Shares not purchased will be returned
(or, in the case of Shares tendered by book-entry transfer, such
Shares will be credited to an account maintained with a Book-
Entry Transfer Facility) as promptly as practicable, without
expense to the tendering shareholder.
Payment for Shares may be delayed in the event of difficulty
in determining the number of Shares properly tendered. In
addition, if certain events occur, Con Edison may not be
obligated to purchase Shares pursuant to the Offer. See "Terms of
the Offer--Certain Conditions of the Offer."
Con Edison will pay or cause to be paid any stock transfer
taxes with respect to the sale and transfer of any Shares to it
or its order pursuant to the Offer. If, however, payment of the
purchase price is to be made to, or Shares not tendered or not
purchased are to be registered in the name of, any person other
than the registered holder, or if tendered Shares are registered
in the name of any person other than the person signing the
Letter of Transmittal, the amount of any stock transfer taxes
(whether imposed on the registered holder, such other person or
otherwise) payable on account of the transfer to such person will
be deducted from the purchase price unless satisfactory evidence
of the payment of such taxes, or exemption therefrom, is
submitted. See Instruction 6 to the Letter of Transmittal.
CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, Con Edison
will not be required to accept for payment or pay for any Shares
of a Series of Preferred tendered, and may terminate or amend the
Offer with respect thereto, and may postpone (subject to the
requirements of the Exchange Act for prompt payment for or return
of Shares) the acceptance for payment of or payment for Shares of
a Series of Preferred tendered, if any of the following shall
have occurred at any time after the date of this Offer to
Purchase and before payment for any Shares of a
10
Series of Preferred (whether or not such occurrence shall be
continuing at the time of such termination, amendment or
postponement):
(a) any action or proceeding shall have been threatened,
instituted, pending or taken, or approval shall have been
withheld, withdrawn or abrogated, or any statute, rule,
regulation, judgment, order or injunction shall have been
threatened, proposed, sought, promulgated, enacted, entered,
amended, enforced or deemed to be applicable to the Offer or Con
Edison, by any legislative body, court, authority, agency or
tribunal or any other person, including the Securities and
Exchange Commission or the State of New York Public Service
Commission (see "Source and Amount of Funds"), which, in Con
Xxxxxx's sole judgment, would or might directly or indirectly (i)
make the acceptance for payment of, or payment for, some or all
of the Shares of that Series of Preferred illegal or challenges
the acquisition of such Shares or otherwise or in any manner
relates to or affects the Offer, (ii) materially impair the
contemplated benefits of the Offer to Con Edison or (iii)
materially affect the business, condition (financial or other),
income, operations or prospects of Con Edison, or otherwise
materially impair in any way the contemplated future conduct of
the business of Con Edison;
(b) the State of New York Public Service Commission shall
have abrogated its authorization of the issuance by Con Edison of
debt securities, the proceeds from the sale of which were to be
used to fund the purchase of Shares pursuant to the Offer (see
"Source and Amount of Funds");
(c) it shall have been publicly disclosed or Con Edison shall
have learned that any person or "group" (within the meaning of
Section 13(d)(3) of the Exchange Act) has acquired or proposes to
acquire beneficial ownership of more than 5% of the outstanding
common stock of Con Edison whether through the acquisition of
stock, the formation of a group, the grant of any option or right
or otherwise;
(d) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on any
national securities exchange or in the over-the-counter market,
(ii) any significant decline in the market price of the Shares of
that Series of Preferred, (iii) any change in the general
political, market, economic or financial condition in the United
States or abroad that could have a material adverse effect on Con
Edison's business, operations, prospects or ability to obtain
financing generally or the trading in the Shares of that Series
of Preferred or other equity securities of Con Edison, (iv) the
declaration of a banking moratorium or any suspension of payments
in respect of banks in the United States or any limitation on, or
any event which, in Con Edison's sole judgment, might affect, the
extension of credit by lending institutions in the United States,
(v) the commencement of a war, armed hostilities or other
international or national calamity directly or indirectly
involving the United States or (vi) in the case of any of the
foregoing existing at the time of the commencement of the Offer,
in Con Xxxxxx's sole judgment, a material acceleration or
worsening thereof;
(e) a tender or exchange offer with respect to some or all of
the Shares of that Series of Preferred or other equity securities
of Con Edison, or a merger, acquisition or other business
combination proposal for Con Edison, shall have been proposed,
announced or made by another person;
(f) there shall have occurred any event or events that have
resulted, or may in the sole judgment of Con Edison result, in an
actual or threatened change in the business, condition (financial
or other), income, operations, stock ownership or prospects of
Con Edison and its subsidiaries;
(g) Xxxxx'x Investors Service Inc., Standard & Poor's
Corporation or Duff and Xxxxxx Inc. shall have downgraded or
withdrawn the rating accorded any securities of Con Edison, or
(ii) Xxxxx'x Investors Service Inc., Standard & Poor's
Corporation or Duff and Xxxxxx Inc. shall have publicly announced
that it has under surveillance or review, with possible negative
implications, its rating of any securities of Con Edison; or
(h) there shall have occurred any decline in the Standard &
Poor's Composite 500 Stock Index by an amount in excess of 15%
measured from the close of business on January 26, 1996;
and, in the sole judgment of Con Xxxxxx, such event or events
make it undesirable or inadvisable to proceed with the Offer with
respect to such Series of Preferred or with such acceptance for
payment or payment. The
11
Offer for a Series of Preferred is independent of the Offer for
any other Series of Preferred. The consummation of the Offer for
any Series of Preferred is not conditioned on the consummation of
the Offer for all Series of Preferred or for any other Series of
Preferred.
The foregoing conditions are for the sole benefit of Con
Edison and may be asserted by Con Xxxxxx regardless of the
circumstances (including any action or inaction by Con Edison)
giving rise to any such condition, and any such condition may be
waived by Con Xxxxxx, in whole or in part, at any time and from
time to time in its sole discretion. The failure by Con Xxxxxx
at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right and each such right shall be
deemed an ongoing right which may be asserted at any time and
from time to time. Any determination by Con Xxxxxx concerning the
events described above will be final and binding on all parties.
EXTENSION; TERMINATION; AMENDMENTS
Prior to the Expiration Date, Con Edison may, with respect
to each Series of Preferred, extend the period of time during
which the Offer is open or otherwise amend or modify the Offer
and may terminate the Offer for any reason. There can be no
assurance, however, that Con Xxxxxx will extend the Offer. During
any such extension, all Shares of that Series of Preferred
previously tendered will remain subject to the Offer, except to
the extent that such Shares may be withdrawn as set forth in
"Terms of the Offer--Withdrawal Rights.
After the Expiration Date, Con Edison may, with respect to
each Series of Preferred, upon the occurrence of any of the
conditions specified in "Terms of the Offer--Certain Conditions
of the Offer" terminate the Offer and not accept for payment or
pay for any Shares tendered or, subject to Rule 13e-4(f)(5) under
the Exchange Act (which provides that the issuer "making the
tender offer shall either pay the consideration offered, or
return the tendered securities, promptly after the termination or
withdrawal of the tender offer"), postpone acceptance for payment
of or payment for Shares.
To effect any such extension, amendment, modification,
termination or postponement, Con Edison shall give oral or
written notice to the Depositary and make a public announcement
thereof. Without limiting the manner in which Con Edison may
choose to make such a public announcement, Con Edison shall have
no obligation (except as otherwise required by applicable law) to
publish, advertise or otherwise communicate any such public
announcement, other than by making a release to the Dow Xxxxx
News Service, except in the case of an announcement of an
extension of the Offer with respect to any Series of Preferred,
in which case Con Edison shall have no obligation to publish,
advertise or otherwise communicate such announcement other than
by issuing a notice of such extension by press release or other
public announcement, which notice shall be issued no later than
9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date with respect to that Series
of Preferred.
If Con Edison materially changes the terms of the Offer or
the information concerning the Offer, or if it waives a material
condition of the Offer, Con Edison will extend the Offer to the
extent required by Rules 13e-4(d)(2) and 13e-4(e)(2) under the
Exchange Act. Under these rules, the minimum period during which
an offer must remain open following material changes in the terms
of the offer or information concerning the offer (other than a
change in price, change in dealer's soliciting fee or change in
percentage of securities sought) will depend on the facts and
circumstances, including the relative materiality of such terms
or information. In a published release, the Commission has stated
that, in its view, an offer should remain open for a minimum of
five business days from the date that a notice of such a material
change is first published, sent or given. The Offer with respect
to any Series of Preferred will be extended for at least ten
business days from the time Con Edison publishes, sends or gives
to holders of Shares of that Series of Preferred a notice that it
will (a) increase or decrease the price it will pay for Shares of
that Series of Preferred or the amount of the dealer's soliciting
fee or (b) increase or decrease the percentage of Shares in that
Series of Preferred it seeks (except that the acceptance for
payment of additional Shares of a Series of Preferred not to
exceed 2% of the outstanding Shares in that Series of Preferred
shall not be deemed to be an increase).
12
PRICE RANGE OF SHARES; DIVIDENDS
The $5 Preferred and the Series C Preferred are listed and
traded on the New York Stock Exchange under the symbols "EDPrA"
and "EDPrC," respectively. There is no established trading market
for any of the other Series of Preferred. The last reported sale
price on the New York Stock Exchange, as of the close of business
on January 26, 1996, for each of the $5 Preferred and the Series
C Preferred is shown on the front cover of this Offer to
Purchase.
SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS,
IF AVAILABLE, FOR THEIR SHARES.
The following table sets forth the high and low sales prices
of the $5 Preferred and the Series C Preferred on the New York
Stock Exchange and the cash dividends paid thereon for the fiscal
quarters indicated.
$5 PREFERRED SERIES C PREFERRED
CASH CASH
DIVIDENDS DIVIDENDS
HIGH LOW PER SHARE HIGH LOW PER SHARE
------ ------ --------- ------ ------ ---------
1994: 1st Quarter 75 68 1/2 $1.25 71 3/4 64 $1.1625
2nd Quarter 70 62 1.25 64 1/2 57 1/2 1.1625
3rd Quarter 66 1/2 62 1/4 1.25 60 55 1/2 1.1625
4th Quarter 64 1/4 57 1/4 1.25 57 1/2 53 1.1625
1995: 1st Quarter 64 1/4 57 1/2 1.25 60 53 1/2 1.1625
2nd Quarter 66 3/8 61 5/8 1.25 65 1/2 57 1.1625
3rd Quarter 69 1/8 66 1.25 68 59 1/4 1.1625
4th Quarter 72 67 3/4 1.25 73 5/8 64 3/4 1.1625
Dividends for a Series of Preferred are payable when, as and
if declared by Con Edison's Board of Trustees at the rate per
annum included in the title of the Series of Preferred listed on
the front cover of this Offer to Purchase. The February 1996
Dividend (which is a regular quarterly dividend) for each Series
of Preferred has been declared and is to be paid on February 1,
1996 to holders of record as of the close of business on January
10, 1996. A tender of Shares pursuant to the Offer will not
deprive any shareholder of his or her right to receive the
February 1996 Dividend, regardless of when such tender is made.
Holders of Shares tendered into and purchased pursuant to the
Offer will not be entitled to any dividends in respect of any
later dividend periods (or any portion thereof).
PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER
Con Xxxxxx is making the Offer because it believes that it
would be economically attractive to Con Edison to purchase the
Shares with funds from the issuance of its subordinated
debentures, interest payments on which, unlike dividends paid on
preferred stock, are deductible by Con Xxxxxx for federal income
tax purposes. As described under "Source and Amount of Funds,"
$600 million of Con Edison debt securities, including
subordinated debentures, are registered under the Securities Act
of 1933 for sale by Con Edison from time to time.
The Offer provides shareholders an opportunity to sell their
Shares without the usual transaction costs associated with a
market sale.
After the consummation of the Offer, Con Edison may
determine to purchase additional Shares on the open market, in
privately negotiated transactions, through one or more tender
offers or otherwise. Any such purchases may be on the same terms
as, or on terms which are more or less favorable to holders of
Shares than, the terms of the Offer. However, Rule 13e-4(f)(6)
under the Exchange Act prohibits Con Edison and its affiliates
from
13
purchasing any Shares of a Series of Preferred, other than
pursuant to the Offer, until at least ten business days after the
Expiration Date with respect to that Series of Preferred. Any
future purchases of Shares by Con Edison would depend on many
factors, including the market price of the Shares, Con Xxxxxx's
business and financial position, restrictions on Con Xxxxxx's
ability to purchase Shares imposed by law or by New York Stock
Exchange listing requirements and general economic and market
conditions.
Shareholders are not under any obligation to tender Shares
pursuant to the Offer. The Offer does not constitute notice of
redemption of any Series of Preferred pursuant to Con Xxxxxx's
Restated Certificate of Incorporation, nor does Con Edison intend
to effect any such redemption by making the Offer. The Offer
does not constitute a waiver by Con Edison of any option it has
to redeem Shares. In accordance with Con Edison's Restated
Certificate of Incorporation, Con Edison is required to redeem
its Cumulative Preferred Stock ($100 par value), 6 1/8% Series J
(the "Series J Preferred") on August 1, 2002, and to redeem
25,000 Shares of its Cumulative Preferred Stock ($100 par value),
7.20% Series I (the "Series I Preferred") on May 1 of each year
in the five-year period commencing with the year 2002 and to
redeem the remaining Series I Shares on May 1, 2007, in each
case, at a redemption price of $100 per share plus accrued
dividends. In addition, each Series of Preferred, other than the
Series J Preferred, is redeemable at the option of Con Edison at
the following redemption prices: the $5 Preferred at $105 per
share; the Series I Preferred at $105.04 per share if redeemed
prior to May 1, 1996, and thereafter at prices declining annually
to $100 per share after April 30, 2002 (but prior to May 1, 1997,
Series I Preferred may not be redeemed with borrowed funds or
proceeds from certain securities issuances having a cost to Con
Edison of less than 7.20% per annum); and the other Series of
Preferred at redemption prices ranging from $101 to $102 per
share, in each case, plus accrued dividends.
Each Series of Preferred ranks equally with respect to
priority in payment of dividends and (to the extent of $100 per
share plus accrued but unpaid dividends) in distribution of
capital assets upon dissolution, liquidation or winding up of Con
Edison ("Liquidation"). Before any distribution may be made to
the holders of Con Xxxxxx's Cumulative Preference Stock ($100 par
value) and Common Stock upon any Liquidation, the holders of the
$5 Preferred will be entitled to receive, upon any Liquidation,
$100 per share, and the holders of the other Series of Preferred
will be entitled to receive, in case of voluntary Liquidation, an
amount equal to the redemption price per share applicable on the
date of the voluntary Liquidation and, in case of involuntary
Liquidation, $100 per share, plus, in each case, accrued
dividends. Con Xxxxxx's Certificate of Incorporation provides
that the sale, conveyance, exchange or transfer of all or
substantially all of Con Xxxxxx's property, or the consolidation
of Con Edison with, or merger of Con Edison into, any other
corporation shall not be deemed a Liquidation.
Shares that Con Xxxxxx purchases pursuant to the Offer will
be retired and cancelled, which will reduce the number of Shares
that might otherwise trade publicly and will reduce the number of
holders of Shares. This could adversely affect the liquidity and
market value of the Shares not purchased in the Offer. However,
Con Edison does not believe that there is a reasonable
likelihood, and it is not a purpose of this Offer, that the Offer
or purchases of Shares by Con Edison will either: (i) under the
current published guidelines of the New York Stock Exchange,
cause the $5 Preferred or the Series C Preferred to be delisted
from the New York Stock Exchange, or (ii) cause any other Series
of Preferred to become eligible for deregistration under the
Exchange Act.
Con Edison has no plans or proposals which relate to or
would result in: (a) the acquisition by any person of additional
securities of Con Edison or the disposition of securities of Con
Edison (other than as discussed under "Source and Amount of
Funds"); (b) an extraordinary corporate transaction, such as a
merger, reorganization or liquidation, involving Con Edison or
any of its subsidiaries; (c) a sale or transfer of a material
amount of assets of Con Edison or any of its subsidiaries; (d)
any change in the present Board of Trustees or management of Con
Edison; (e) any material change in the present dividend rate or
policy, or indebtedness or capitalization of Con Edison; (f) any
other material change in Con Edison's corporate structure or
business; (g) any change in Con Edison's Certificate of
Incorporation or By-Laws or any actions which may impede the
acquisition of control of Con Edison by any person; (h) a class
of equity securities of Con Edison being delisted
14
from a national securities exchange; (i) a class of equity
securities of Con Edison becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Exchange Act; or
(j) the suspension of Con Edison's obligation to file reports
pursuant to Section 15(d) of the Exchange Act.
NEITHER CON XXXXXX, ITS BOARD OF TRUSTEES NOR ANY OF ITS
OFFICERS MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER AS TO
WHETHER TO TENDER ALL OR ANY SHARES. EACH SHAREHOLDER MUST MAKE
HIS OR HER OWN DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW
MANY SHARES TO TENDER.
SOURCE AND AMOUNT OF FUNDS
Assuming that Con Edison purchases all outstanding Shares
pursuant to the Offer, the total amount of funds required by Con
Edison to purchase the Shares would be approximately $478.3
million, excluding fees and other expenses. See "Fees and
Expenses." Con Xxxxxx intends to use the proceeds from the sale,
promptly after the Expiration Date, of its subordinated
debentures to fund the purchase of Shares pursuant to the Offer.
$600 million of Con Edison debt securities, including
subordinated debentures, are registered under the Securities Act
of 1933 for sale by Con Edison from time to time. The New York
State Public Service Commission has authorized the issuance of
Con Edison debt securities, including subordinated debentures, to
refund the Shares, subject to the Commission's right to abrogate
such authorization within twenty-four hours after submission by
Con Xxxxxx to it of the underwriting agreement pursuant to which
such securities are to be sold and certain information relating
to the terms of the securities. See "Terms of the Offer --
Certain Conditions of the Offer."
TRANSACTIONS AND AGREEMENTS CONCERNING THE SHARES
Based upon Con Edison's records and upon information
provided to Con Edison by its Trustees and officers, neither Con
Xxxxxx nor, to Con Xxxxxx's knowledge (but without Con Xxxxxx
having made specific inquiry in connection with the Offer), any
of its associates, subsidiaries, Trustees, officers or any
associate of any such Trustee or officer owns any Shares or has
engaged in any transactions involving Shares during the 40
business days preceding the date hereof. Neither Con Edison nor,
to Con Xxxxxx's knowledge (but without Con Xxxxxx having made
specific inquiry in connection with the Offer), any of its
Trustees or officers is a party to any contract, arrangement,
understanding or relationship relating directly or indirectly to
the Offer with any other person with respect to any securities of
Con Xxxxxx other than as disclosed in this Offer to Purchase.
See "Fees and Expenses."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
In General. The following summary describes certain United
States federal income tax consequences relating to the Offer. The
summary deals only with Shares held as capital assets within the
meaning of the Internal Revenue Code of 1986, as amended (the
"Code") and does not address tax consequences that may be
important to investors in special tax situations, such as certain
financial institutions, tax-exempt organizations, life insurance
companies, dealers in securities or currencies, or shareholders
holding the Shares as part of a conversion transaction, as part
of a hedging transaction, or as a position in a straddle for tax
purposes. Each shareholder should consult a tax advisor with
regard to the Offer and the application of United States federal
income tax laws, as well as the laws of any state, local or
foreign taxing jurisdiction.
Characterization of the Sale. A sale of Shares pursuant to
the Offer will be a taxable transaction for United States federal
income tax purposes and will be treated as a "sale or exchange",
rather than as a distribution by Con Xxxxxx with respect to the
Shares, if under Section 302 of the Code the sale (i) results in
a "complete redemption" of all the stock in Con Edison owned by
the shareholder or (ii) is "not essentially equivalent to a
15
dividend" with respect to the shareholder. The receipt of cash
by a shareholder will constitute a "complete redemption" if all
of the Con Edison stock actually owned by the shareholder and
constructively owned by the shareholder under the attribution
rules described below is sold pursuant to the Offer. The receipt
of cash will be "not essentially equivalent to a dividend" if the
sale of Shares results in a "meaningful reduction" in the
shareholder's interest in Con Edison stock. A sale of Shares by
a shareholder that does not own, actually or constructively, any
Con Edison common stock should qualify as "not essentially
equivalent to a dividend." In the case of a shareholder who owns
$5 Preferred and does not actually or constructively own any Con
Edison common stock, "sale or exchange" treatment will be assured
if at least 21% of the shares of $5 Preferred actually and
constructively owned by the shareholder, rounded upwards to the
nearest whole number of shares, are sold pursuant to the Offer.
Contemporaneous dispositions or acquisitions of Con Edison stock
may be deemed to be part of an integrated transaction which will
be taken into account in this connection.
In applying the foregoing rules, there will be taken into
account not only stock actually owned by the shareholder, but
also stock constructively owned under the attribution rules of
Section 318 of the Code. Under Section 318, a shareholder may
constructively own stock actually owned, and in some cases
constructively owned, by certain related individuals or entities
and stock which the shareholder has the right to acquire by
exercise of an option or conversion right.
If under Section 302 a sale of the Shares is treated as a
"sale or exchange," the tendering shareholder will recognize gain
or loss equal to the difference between the amount of cash
received and the shareholder's tax basis in the Shares sold. Any
such gain or loss will be capital gain or loss, and will be long-
term capital gain or loss if the Shares have been held for more
than one year. If the sale is not so treated as a "sale or
exchange", the tendering shareholder will be deemed to have
received a dividend in the amount of the cash received to the
extent of the shareholder's allocable portion of Con Xxxxxx's
earnings and profits as determined for federal income tax
purposes. Any such dividend would be includible in the gross
income of the shareholder as ordinary income in its entirety
without reduction for the tax basis of the Shares sold pursuant
to the Offer. The shareholder's basis in the Shares sold would
be added to such shareholder's basis in any retained Con Edison
stock. To the extent that the amount of cash received exceeds
the shareholder's allocable portion of Con Xxxxxx's earnings and
profits, the shareholder's basis will be reduced by the amount of
such excess. Any amount received in excess of the shareholder's
tax basis will be treated as received in exchange for the
shareholder's Con Edison stock.
Corporate Shareholders. If a sale of Shares is treated as a
dividend, a corporate shareholder may be entitled to claim a
dividends-received deduction for a portion of the dividend,
subject to applicable limitations. Corporate shareholders should
consider the effect of Section 246(c) of the Code which disallows
the dividends-received deduction with respect to stock that is
held for 45 days or less. For this purpose, the length of time a
shareholder is deemed to have held stock may be reduced by
periods during which the shareholder's risk of loss with respect
to the stock is diminished by reason of the existence of certain
options or other transactions. Also, if a corporate shareholder
has incurred indebtedness directly attributable to an investment
in stock, the dividends-received deduction may be reduced. Under
tax legislation proposed by the Department of the Treasury on
December 7, 1995, the deduction for dividends received, where the
corporate shareholder owns less than 20% of the stock of the
corporation, would be reduced from 70% of the amount of the
dividend to 50%. The proposal would also alter the calculation
of the 45-day holding period under Section 246(c). As proposed,
these provisions would be effective for dividends received or
accrued after January 31, 1996. It is not possible to predict at
this time whether these proposals will be enacted and whether the
proposed effective date would be retained.
Any amount received by a corporate shareholder pursuant to
the Offer that is treated as a dividend would be likely to
constitute an "extraordinary dividend" under Section 1059 of the
Code. For this purpose, all dividends received by a shareholder
within, and having their ex-dividend dates within, an 85-day
period (expanded to a 365-day period in the case of dividends
received in such period that in the aggregate exceed 20% of the
shareholder's adjusted tax basis in the stock) are aggregated and
also treated as extraordinary dividends. Under Section 1059 of
the Code a corporate shareholder is required to reduce its basis
(but not below
16
zero) in its stock by the non-taxed portion of the dividend
(i.e., the portion of the dividend for which a deduction is
allowed). If such portion exceeds the shareholder's tax basis in
its Shares (and its tax basis in any other stock of Con Edison
that it owns), the shareholder would be required to treat the
excess as gain from the sale of its remaining Shares or other Con
Edison stock. Corporate shareholders should consult their own
tax advisors as to the application of Section 1059 of the Code to
the Offer. Under a pending legislative proposal, Section 1059
would be amended to provide for immediate recognition of gain in
certain circumstances where the non-taxed portion of the dividend
exceeds the basis of the shares surrendered.
Foreign Shareholders. Con Xxxxxx will withhold United States
federal income tax at a rate of 30% from gross proceeds paid
pursuant to the Offer to foreign shareholders, unless Con Xxxxxx
determines that a reduced rate of withholding is applicable
pursuant to a tax treaty or that an exemption from withholding is
applicable because such gross proceeds are effectively connected
with the conduct of a trade or business by the foreign
shareholder within the United States. In order to claim an
exemption from withholding on the ground that gross proceeds paid
pursuant to the Offer are effectively connected with the conduct
of a trade or business by a foreign shareholder within the United
States, the shareholder must deliver to the Depositary a properly
executed Internal Revenue Service Form 4224. A foreign
shareholder may be eligible to file for a refund of such tax or a
portion of such tax if such shareholder (i) meets the "complete
redemption" or "not essentially equivalent to a dividend" tests
described above, (ii) is entitled to a reduced rate of
withholding pursuant to a treaty and Con Edison withheld at a
higher rate, or (iii) is otherwise able to establish that no tax
or a reduced amount of tax was due.
Backup Withholding. See "Terms of the Offer--Procedure for
Tendering Shares" with respect to the application of backup
withholding tax.
THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY. THE TAX CONSEQUENCES OF A SALE PURSUANT TO THE
OFFER MAY VARY DEPENDING UPON, AMONG OTHER THINGS, THE PARTICULAR
CIRCUMSTANCES OF THE TENDERING SHAREHOLDER. NO INFORMATION IS
PROVIDED HEREIN AS TO THE STATE, LOCAL OR FOREIGN TAX
CONSEQUENCES OF THE OFFER. SHAREHOLDERS ARE URGED TO CONSULT
THEIR OWN TAX ADVISORS TO DETERMINE THE PARTICULAR FEDERAL,
STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF SALES PURSUANT TO
THE OFFER.
17
FEES AND EXPENSES
Xxxxxx Brothers and Xxxxx Xxxxxx Inc. will act as Dealer
Managers for Con Xxxxxx in connection with the Offer. Con Xxxxxx
has agreed to pay the Dealer Managers an aggregate fee of $0.50
per share for Shares purchased pursuant to the Offer. The Dealer
Managers will also be reimbursed by Con Xxxxxx for their
reasonable out-of-pocket expenses, including attorneys' fees, and
will be entitled to indemnification against certain liabilities,
including liabilities under the federal securities laws, or to
contribution for payments the Dealer Managers may be required to
make in respect thereof. The Dealer Managers have rendered, are
currently rendering and are expected to continue to render
various investment banking and other advisory services to Con
Edison. The Dealer Managers have received, and will continue to
receive, customary compensation from Con Edison for such
services.
Con Xxxxxx will, as provided in Instruction 10 of the Letter
of Transmittal, pay the solicitation fee described on the front
cover of this Offer to Purchase for Shares tendered and accepted
for payment and paid for pursuant to the Offer, covered by a
Letter of Transmittal which designates, as having solicited and
obtained the tender, the name of (i) any broker or dealer in
securities, including the Dealer Managers in their capacity as a
broker or dealer, who is a member of any national securities
exchange or of the National Association of Securities Dealers,
Inc. (the "NASD"), (ii) any foreign broker or dealer not eligible
for membership in the NASD which agrees to conform to the NASD's
Rules of Fair Practice in soliciting tenders outside the United
States to the same extent as though it were an NASD member, or
(iii) any bank or trust company (each of which is referred to
herein as a "Soliciting Dealer"). No such fee shall be payable to
a Soliciting Dealer if such Soliciting Dealer is required for any
reason to transfer the amount of such fee to a depositing holder
(other than itself). No such fee shall be payable to a
Soliciting Dealer with respect to Shares tendered for such
Soliciting Dealer's own account. No broker, dealer, bank, trust
company or fiduciary shall be deemed to be an agent of Con
Xxxxxx, the Depositary, the Information Agent or the Dealer
Managers for the purposes of the Offer.
Con Xxxxxx has retained The Chase Manhattan Bank, N.A. as
Depositary and X.X. Xxxx & Co., Inc. as Information Agent in
connection with the Offer. The Information Agent may contact
shareholders by mail, telephone, telex, telegraph and personal
interviews, and may request brokers, dealers and other nominee
shareholders to forward materials relating to the Offer to
beneficial owners. The Depositary and the Information Agent will
receive reasonable and customary compensation for their services
and will also be reimbursed for certain out-of-pocket expenses.
Con Xxxxxx has agreed to indemnify the Depositary and the
Information Agent against certain liabilities, including certain
liabilities under the federal securities laws, in connection with
the Offer. Neither the Information Agent nor the Depositary has
been retained to make solicitations or recommendations in
connection with the Offer.
Other than as described above, Con Xxxxxx will not pay any
solicitation fees to any broker, dealer, bank, trust company or
other person for any Shares purchased in connection with the
Offer. Con Xxxxxx will reimburse such persons for customary
handling and mailing expenses incurred in connection with the
Offer.
Con Xxxxxx will pay all stock transfer taxes, if any,
payable on account of the acquisition of the Shares by Con Xxxxxx
pursuant to the Offer, except in certain circumstances where
special payment or delivery procedures are utilized pursuant to
Instruction 6 of the Letter of Transmittal.
18
CERTAIN INFORMATION CONCERNING CON XXXXXX
Consolidated Edison Company of New York, Inc. ("Con
Edison"), incorporated in New York State in 1884, supplies
electric service in all of New York City (except part of Queens)
and most of Westchester County. It also supplies gas in
Manhattan, The Bronx and parts of Queens and Westchester, and
steam in part of Manhattan. Most governmental customers within
Con Edison's electric service territory receive electric service
through Con Edison's facilities from the New York Power
Authority. Con Xxxxxx's principal office is located at 0 Xxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (Telephone No.:000-000-0000).
ADDITIONAL INFORMATION
Con Xxxxxx is subject to the informational requirements of
the Exchange Act and, in accordance therewith, files reports,
proxy statements and other information with the Commission. Con
Xxxxxx has also filed an Issuer Tender Offer Statement on
Schedule 13E-4 with the Commission which includes certain
additional information relating to the Offer.
Such material can be inspected and copied at the public
reference room of the Commission at Room 1024, 000 Xxxxx Xxxxxx,
X.X., Xxxxxxxxxx, X.X. 00000, and the public reference facilities
in the Commission's Regional Offices located at Seven World Trade
Center, 7th Floor, New York, New York 10048, and 000 Xxxx Xxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000. Copies of such
material can be obtained at prescribed rates by writing to the
Commission, Public Reference Section, 000 Xxxxx Xxxxxx, X.X.,
Xxxxxxxxxx, X.X. 00000. Copies of such material can also be
inspected at the offices of the New York Stock Exchange, 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, the Chicago Stock Exchange, 000
Xxxxx Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 and the Pacific
Stock Exchange, 000 Xxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000.
Con Xxxxxx's Schedule 13E-4 will not be available at the
Commission's Regional Offices.
MISCELLANEOUS
The Offer is not being made to, nor will Con Edison accept
tenders from, owners of Shares in any jurisdiction in which the
Offer or its acceptance would not be in compliance with the laws
of such jurisdiction. Con Xxxxxx is not aware of any jurisdiction
where the making of the Offer or the tender of Shares would not
be in compliance with applicable law. If Con Xxxxxx becomes aware
of any jurisdiction where the making of the Offer or the tender
of Shares is not in compliance with any applicable law, Con
Xxxxxx will make a good faith effort to comply with such law. If,
after such good faith effort, Con Edison cannot comply with such
law, the Offer will not be made to (nor will tenders be accepted
from or on behalf of) the holders of Shares residing in such
jurisdiction. In any jurisdiction in which the securities, blue
sky or other laws require the Offer to be made by a licensed
broker or dealer, the Offer will be deemed to be made on Con
Xxxxxx's behalf by one or more registered brokers or dealers
licensed under the laws of such jurisdiction.
19
Facsimile copies of the applicable Letter of Transmittal for
the Series of Preferred to be tendered will be accepted. The
Letter of Transmittal and certificates for Shares should be sent
or delivered by each tendering shareholder of Con Edison or his
or her broker, dealer, bank or trust company to the Depositary at
one of its addresses set forth below.
The Depositary:
THE CHASE MANHATTAN BANK, N.A.
By Mail: By Overnight Delivery:
Box 3032 c/o Chase Securities
4 Chase MetroTech Ctr. Processing Corp
Brooklyn, NY 11245 Ft. Xxx Executive Park
0 Xxxxxxxxx Xx. - 0xx xxxxx
Xx. Xxx, XX 00000
By Hand: By Facsimile Transmission:
(9:00 a.m. - 5:00 p.m. (000) 000-0000
New York City Time)
1 Chase Manhattan Plaza Information and Confirm by Telephone:
Floor 1-B
Nassau and Liberty Streets (201) 592-0000
Xxx Xxxx, XX 00000
Any questions or requests for assistance may be directed to
the Information Agent or the Dealer Managers at the respective
telephone numbers and addresses listed below. Requests for
additional copies of this Offer to Purchase, the Letter of
Transmittal or other tender offer materials may be directed to
the Information Agent or the Dealer Managers, and such copies
will be furnished promptly at Con Xxxxxx's expense. Shareholders
may also contact their local broker, dealer, commercial bank or
trust company for assistance concerning the Offer.
The Dealer Managers:
XXXXXX BROTHERS XXXXX XXXXXX INC.
3 World Financial Center 000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000 (000) 000-0000
Attention: Xxx X. Xxxxxxxxxx Attention: Xxxx Xxxxxx
The Information Agent:
X.X. XXXX & CO.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000 (Toll-Free)
