-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, p9ZE5IRgk3SAGR9CVH7uPp1C1hushco3f1W47LHGlDBgNMIwdS+gI14za1jvQOMm KpkU035iagGB1YCtazkEjw== 0000899140-94-000091.txt : 19941021 0000899140-94-000091.hdr.sgml : 19941021 ACCESSION NUMBER: 0000899140-94-000091 CONFORMED SUBMISSION TYPE: SC 14D1/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19941020 SROS: NYSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MAGMA POWER CO /NV/ CENTRAL INDEX KEY: 0000355878 STANDARD INDUSTRIAL CLASSIFICATION: 4991 IRS NUMBER: 953694478 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-33882 FILM NUMBER: 94554242 BUSINESS ADDRESS: STREET 1: 4365 EXECUTIVE DR STE 900 CITY: SAN DIEGO STATE: CA ZIP: 92121 BUSINESS PHONE: 6196227800 MAIL ADDRESS: STREET 1: 4365 EXECUTIVE DR STE 900 CITY: SAN DIEGO STATE: CA ZIP: 92121 FORMER COMPANY: FORMER CONFORMED NAME: MAGMA DEVELOPMENT CORP DATE OF NAME CHANGE: 19820519 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CALIFORNIA ENERGY CO INC CENTRAL INDEX KEY: 0000720556 STANDARD INDUSTRIAL CLASSIFICATION: 4961 IRS NUMBER: 942213782 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1/A BUSINESS ADDRESS: STREET 1: 10831 OLD MILL RD STE 900 CITY: OMAHA STATE: NE ZIP: 68194 BUSINESS PHONE: 4023308900 MAIL ADDRESS: STREET 1: 10831 OLD MILL ROAD CITY: OMAHA STATE: NE ZIP: 68154 SC 14D1/A 1 AMENDMENT NO.1 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14D-1 Amendment No. 1 (Tender Offer Statement Pursuant to Section 14(d)(1) of the Securities Exchange Act of 1934) MAGMA POWER COMPANY (Name of Subject Company) CE ACQUISITION COMPANY, INC. CALIFORNIA ENERGY COMPANY, INC. (Bidders) Common Stock, par value $0.10 per Share (Including the Associated Preferred Share Purchase Rights) (Title of Class of Securities) 94-2213782 (CUSIP Number of Class of Securities) Steven A. McArthur, Esq. Senior Vice President, General Counsel and Secretary CALIFORNIA ENERGY COMPANY, INC. 10831 Old Mill Road Omaha, Nebraska 68194 (402) 330-8900 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Bidder) Copies to: Peter J. Hanlon, Esq. Michael A. Schwartz, Esq. Willkie Farr & Gallagher One Citicorp Center 153 East 53rd Street New York, New York 10022 (212) 821-8000 2 California Energy Company, Inc., a Delaware corporation ("CECI"), and CE Acquisition Company, Inc., a Delaware corporation and a wholly owned subsidiary of CECI (the "Purchaser"), hereby amend and supplement their Statement on Schedule 14D-1 ("Schedule 14D-1") filed with the Securities and Exchange Commission (the "Commission") on October 6, 1994, with respect to the Purchaser's offer to purchase 12,400,000 shares of Common Stock, par value $0.10 per share (the "Shares"), of Magma Power Company, a Nevada corporation (the "Company"), and, if applicable, associated Preferred Share Rights (the "Rights"), upon the terms and subject to the conditions set forth in the Offer to Purchase, dated October 6, 1994 (the "Offer to Purchase") and the related Letter of Transmittal. Unless otherwise indicated herein, each capitalized term used but not defined herein shall have the meaning assigned to such term in the Schedule 14D-1. Item 3. Past Contacts, Transactions or Negotiations with the Subject Company. The information set forth in Item 3(b) is hereby amended and supplemented by the following: On October 13, 1994, CECI issued a press release regarding the Company's refusal to provide Mr. Ben Holt, a director of CECI and a record holder of Shares for more than six months, with a stockholder list; a copy of such press release is attached hereto as Exhibit (g)(1) and incorporated herein by reference. Item 5. Purpose of the Tender Offer and Plans or Proposals of the Bidder. The information set forth in Items 5(a), (c) and (e) are hereby amended and supplemented by the following: On October 13, 1994, CECI issued a press release announcing the filing of a preliminary Request Solicitation Statement with the Commission; a copy of such press release is attached hereto as Exhibit (g)(2) and incorporated herein by reference. Item 10. Additional Information. The information set forth in Item 10(e) is hereby amended and supplemented by the following: Pending Litigation. On October 3, 1994, the Company filed a complaint entitled Magma Power Company v. California Energy Company, Inc., Case No. CV- N-94-00719-DWH, 3 against CECI in the Second Judicial District Court of the State of Nevada in and for the County of Washoe. The complaint seeks a declaratory judgment that (i) the Company's Board properly discharged its fiduciary obligations in adopting the Rights Agreement and an amendment to the Company's Bylaws and, accordingly, such documents were valid and binding, and (ii) the Merger Moratorium Statute is valid and not in violation of the Commerce Clause and Supremacy Clause of the United States Constitution. CECI removed this action to the United States District Court for the District of Nevada. On October 17, 1994, CECI filed its answer and counterclaims in response to the Company's complaint. The counterclaims name the Purchaser as an additional counterclaim plaintiff and the Company's directors as counterclaim defendants in addition to the Company. CECI's counterclaims seek primarily: (i) a declaratory judgment that certain actions taken by the Company, including the amendment to the Company's Bylaws precluding Company stockholders from taking action by written consent, and implementation of its "poison pill" Rights Agreement, are void and ultra vires, and constitute a breach of fiduciary duty by the Company's Board; (ii) an injunction requiring the Company's Board to rescind the amendment to the Company's Bylaws and certain "golden parachute" severance agreements and indemnification agreements; (iii) an injunction enjoining the operation of the "poison pill" Rights Agreement and directing the Company's Board to redeem the Rights provided for in that Agreement; (iv) a declaratory judgment that the Merger Moratorium Statute is unconstitutional under the Supremacy Clause and the Commerce Clause of the United States Constitution; (v) an injunction enjoining the Company's Board from invoking the terms of the Merger Moratorium Statute or otherwise obstructing the Offer; and (vi) an injunction requiring the Company to correct all false and misleading statements in its Schedule 14D-9 and the amendments thereto. A copy of the press release issued by CECI concerning its counterclaims is attached hereto as Exhibit (g)(3) and incorporated herein by reference. On October 17, 1994, the Company filed an amended complaint, which, in addition to the relief requested in its original complaint, seeks (i) declaratory and injunctive relief with respect to certain purportedly false and misleading disclosures in the Schedule 14D-1 and the Offer to Purchase therein; and (ii) declaratory and injunctive relief with respect to certain allegedly false and misleading statements made in CECI's preliminary Request Solicitation Statement filed with the Commission pursuant to Section 14(a) of the Securities Exchange Act of 1934 on October 13, 1994. On October 19, 1994, CECI and the Purchaser filed their answer to the Company's amended complaint and their amended counterclaims which, in addition to the relief requested in the original counterclaims, seeks an injunction requiring the Company to correct additional false and misleading statements reflected in an amendment to its Schedule 14D-9 and in other statements made by the Company. On September 20, 1994, William Steiner, a stockholder of the Company, filed a class action complaint entitled William Steiner, et al. v. Paul M. Pankratz, et al., Case No. 680986, against the Company and its directors in the Superior Court of the State of California in and for the County of San Diego, alleging, among other things, that the Company's stockholders have been, and continue to be, deprived of the opportunity to fully 4 realize the benefits of their investment in the Company as a result of the directors' refusal to properly consider CECI's offer for the Company, which actions are alleged to constitute unfair dealing and a breach of fiduciary duty. As relief, the complaint seeks an order directing the Company's directors to carry out their fiduciary duties to the Company's stockholders by cooperating fully with CECI or any other entity making a bona fide offer for the Company, as well as damages and costs. On October 4, 1994, Charles Miller, a stockholder of the Company, filed a class action complaint entitled Charles Miller, et al. v. Magma Power Company, et al., Case No. CV94-06187, against the Company, its directors and The Dow Chemical Company in the Second Judicial District Court of the State of Nevada in and for the County of Washoe, alleging, among other things, that the defendants' unwillingness to seriously consider CECI's proposal to acquire the Company and its implementation of defensive measures constitute breaches of the fiduciary duty owed to the Company's stockholders. As relief, the complaint seeks a declaration that defendants have breached their fiduciary duties, an order directing the defendants to fairly evaluate alternatives designed to maximize value for the Company's stockholders, and an injunction with respect to the implementation of the Company's "poison pill" or other defensive measures, as well as damages and costs. On October 14, 1994, Ben Holt, a stockholder of the Company, and a director of CECI, filed a complaint entitled Ben Holt v. Magma Power Company, Case No. CV94-06432, against the Company in the Second Judicial District Court for the State of Nevada in and for the County of Washoe, alleging, among other things, that the Company has infringed the plaintiff's right as a stockholder by denying his demand for access to the Company's stockholder list, and certain related material necessary to communicate with the Company's stockholders. The plaintiff seeks an order directing the Company to comply with the demand for the stockholder list and related information necessary to communicate with stockholders. A expedited briefing schedule has been set by the Court in this action. Item 11. Material to Be Filed as Exhibits. (g)(1) Text of Press Release, dated October 13, 1994, issued by California Energy Company, Inc. (g)(2) Text of Press Release, dated October 13, 1994, issued by California Energy Company, Inc. (g)(3) Text of Press Release, dated October 17, 1994, issued by California Energy Company, Inc. 5 Signatures After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: October 20, 1994 CE ACQUISITION COMPANY, INC. By:/s/ Steven A. McArthur Steven A. McArthur Senior Vice President, General Counsel and Secretary CALIFORNIA ENERGY COMPANY, INC. By:/s/ Steven A. McArthur Steven A. McArthur Senior Vice President, General Counsel and Secretary 6 EXHIBIT INDEX Exhibit Page No. Description No. (g)(1) Text of Press Release, dated October 13, 1994, issued by California Energy Company, Inc. (g)(2) Text of Press Release, dated October 13, 1994, issued by California Energy Company, Inc. (g)(3) Text of Press Release, dated October 17, 1994, issued by California Energy Company, Inc. EX-99 2 EXHIBIT G(1) 1 EXHIBIT (g)(1) FOR IMMEDIATE RELEASE David L. Sokol - Chairman and Chief Executive Officer (402) 330-8900 Mark H. Harnett - MacKenzie Partners, Inc. (212) 929-5877 MAGMA TO BE SUED TO OBTAIN RELEASE OF MAGMA STOCKHOLDER LIST OMAHA, Neb., Oct. 13 /PRNewswire/ -- California Energy Company, Inc. (NYSE: CE) ("CECI") announced today that Magma Power Company (Nasdaq: MGMA) ("Magma"), in an apparent effort to delay the ability of Magma shareholders to call a special meeting, has denied the request of one of CECI's directors who is a long-time Magma shareholder, for the Magma shareholder list. As previously announced, CECI is soliciting requests to call a Special Meeting of Magma's shareholders in order to provide Magma stockholders the opportunity to consider and vote on CECI's Special Meeting proposals which, if approved, would result in certain By-law amendments that would facilitate CECI's proposal to acquire Magma and the election of four (4) CECI nominees to Magma's Board, who would be committed to removing any impediments to shareholders being able to freely choose whether to accept CECI's pending cash tender offer for 12,400,000 shares at $35 net per share and approve the proposed second step merger, thereby ensuring that the offer and proposed merger get a full and fair hearing. David L. Sokol, California Energy's Chairman and Chief Executive Officer, stated: "Magma's denial of access to the list of shareholders is, at best, an attempt to delay the inevitable, when Magma's Board and management will have to account for their recent actions in front of their shareholders. Such obstructionist tactics viewed in light of recent actions to implement "Golden Parachutes" for 15 of the most highly compensated members of management simply serve as further evidence of management's improper entrenchment motive in recommending against CECI's acquisition proposal." Sokol added: "This sort of irresponsible corporate behavior simply demonstrates the fact that Magma's management is apparently unwilling to permit its actions to be judged by the Company's owners and will result in another wasteful lawsuit to the detriment of Magma's shareholders." - more - 2 Page 2 - October 13 The Special Meeting Request Solicitation will be made only pursuant to definitive solicitation documents, which will be filed with the Securities and Exchange Commission and mailed to Magma stockholders. Gleacher & Co. Inc. is acting as Financial Advisor to California Energy and Dealer Manager in connection with the tender offer and request solicitation and MacKenzie Partners, Inc. is acting as the Information Agent for the tender offer and request solicitation. California Energy Company is an international developer, owner and operator of geothermal and other environmentally responsible power generation facilities. Its six existing facilities currently produce in excess of 325 MW of power with an additional 300 MW under construction. # # # EX-99 3 EXHIBIT G(2) 1 EXHIBIT (g) (2) FOR IMMEDIATE RELEASE David L. Sokol - Chairman, President and C.E.O. (402) 330-8900 Mark H. Harnett - MacKenzie Partners, Inc. (212) 929-5877 CALIFORNIA ENERGY TO SOLICIT CALL OF SPECIAL MEETING OF MAGMA STOCKHOLDERS OMAHA, NEBRASKA, October 13, 1994 - California Energy Company, Inc. (NYSE, PSE and LSE: CE) ("CECI") announced today that in order to facilitate consummation of its pending cash tender offer ("Offer") for 12,400,000 shares, or approximately 51%, of the common stock of Magma Power Company (NASDAQ:MGMA) ("Magma") at a price of $35 net per share, CECI has filed materials with the Securities and Exchange Commission ("SEC") to solicit written requests from Magma shareholders to require Magma to call a Special Meeting of shareholders. A Special Meeting will provide Magma stockholders the opportunity to consider and vote on CECI's Special Meeting proposals which, if approved, would result in certain By-law amendments that would facilitate CECI's proposal and the election of four (4) CECI nominees to Magma's Board, who would be committed to removing any impediments to shareholders being able to freely choose whether to accept the Offer and approve the proposed merger, thereby ensuring that the Offer and proposed merger get a full and fair hearing. As previously announced, CECI's tender offer is to be followed by a second step merger in implementing its September 19 proposal to acquire all Magma shares for a combination of $25 in cash and $10 in market value of California Energy common stock. Today's announcement by CECI to commence a Special Meeting Request Solicitation follows the decision by Magma's Board of Directors to recommend that Magma shareholders not tender into CECI's $35 per share Offer because remaining independent was more attractive to shareholders. In its SEC filing recommending against CECI's Offer, Magma also disclosed that it had entered into "Golden Parachute" severance agreements with 15 of the most highly compensated members of Magma's management as well as indemnity agreements with Board members in response to CECI's September 19 proposal. CECI intends to take any appropriate action necessary to have any impediments to its Offer set aside. David L. Sokol, California Energy's Chairman and Chief Executive Officer, stated: - more - 2 "Magma's rejection of our offer, without any attempted negotiation with us, demonstrates their disregard for Magma shareholders. Rather than maximizing shareholder value, they have implemented Golden Parachutes for the top 15 members of management, entered into an excessive fee arrangement with Goldman Sachs and initiated wasteful litigation. These actions alone are estimated to cost Magma's shareholders between 0.75 and $1.00 per share. We believe that Magma's Board of Directors have a fiduciary obligation to maximize shareholder value, not the lifestyles of their friends and co-workers. It is our understanding that the Magma Board Chairman, President and Chief Financial Officer began a "road show" presentation for investors yesterday directed at misrepresenting and discrediting our offer, disparaging California Energy, and offering extraordinary and unsustainable projections for Magma's future. Much of the information which Magma presented is inaccurate, misleading and in our view in violation of the proxy solicitation rules established by the Securities and Exchange Commission. Magma's management, again yesterday, stated their hope to investors that we would just go away. This will not happen unless the shareholders reject our ultimate offer. It is our belief that Magma's shareholders recognize the value of our offer and will not allow the Magma management to prosper to their detriment." The Special Meeting Request Solicitation will be made only pursuant to definitive solicitation documents, which will be filed with the Securities and Exchange Commission and mailed to Magma stockholders. Gleacher & Co. Inc. is acting as Financial Advisor to California Energy and Dealer Manager in connection with the tender offer and Request Solicitation and MacKenzie Partners, Inc. is acting as the Information Agent for the tender offer and Request Solicitation. California Energy Company is an international developer, owner and operator of geothermal and other environmentally responsible power generation facilities. Its six existing facilities currently produce in excess of 325 MW of power with an additional 300 MW under construction. # # # EX-99 4 EXHIBIT G(3) 1 EXHIBIT (g)(3) FOR IMMEDIATE RELEASE David L. Sokol - Chairman and Chief Executive Officer (402) 330-8900 Mark H. Harnett - MacKenzie Partners, Inc. (212) 929-5877 CALIFORNIA ENERGY SUES MAGMA'S DIRECTORS FOR BREACH OF FIDUCIARY DUTY OMAHA, NEBRASKA, October 17, 1994 - California Energy Company, Inc. (NYSE, PSE and LSE: CE) ("CECI") announced today that it has sued the Directors of Magma Power Company (NASDAQ: MGMA) ("Magma"), for, among other things, breach of their fiduciary duties in failing to properly consider CECI's proposal to acquire Magma and for taking obstructionist actions in response to CECI's proposal, such as adopting special indemnity agreements for themselves, "Golden Parachutes" for 15 Magma executives, a discriminatory "poison pill" and by-law amendments which are intended to impede the right of the majority of Magma's shareholders to freely consider CECI's offer and to entrench current Magma management. In addition, CECI's suit notes that the Board (which includes five (5) present or former Dow employees out of an 11 member Board) breached its duties by not disclosing to Magma's shareholders Dow's conflict of interest in the transaction due to the fact that Dow cannot obtain the same benefit from the tender offer price as other shareholders because of recent Dow transactions that would invoke the SEC's 16(b) short- swing profit disgorgement rule. David L. Sokol, California Energy's Chairman and Chief Executive Officer, stated: "We find it astounding that Magma's Board has not even given serious consideration to a proposal which would pay shareholders a $7.50 per share premium over Magma's - more - 2 Page 2 - October 17 trading price prior to making the proposal. Moreover, the Board, while stating our price to be "inadequate," has declined to engage in a discussion about what price would constitute an adequate offer. Although we have indicated that we are prepared to negotiate all aspects of our offer, Magma has refused to engage in price discussions, merely stating that it is somehow in the best interest of shareholders to remain "independent." At the same time Magma's Board has also taken actions to impede majority shareholder action (such as adopting a poison pill and by-law amendments and refusing access to a shareholder list) which indicate the Board's apparent belief that shareholders shouldn't be permitted to make up their own minds as to what is in their best economic interest and which only serve to entrench current management. It is also noteworthy that, while attempting to deny shareholders the right to consider our offer, Magma's Board has taken steps to provide for management's economic self-interest, such as approving "Golden Parachute" severance agreements for the 15 most highly compensated members of Magma's management. These and other obstructionist actions are estimated to cost shareholders between $0.75 and $1.00 per share. Such actions, viewed in the context of Dow's conflict of interest, due to its inability to fully benefit from the tender offer as a result of 16(b), paint a picture of management entrenchment plain and simple." Sokol added: "It is curious to note that the five (5) Dow Board members recommended against our $35 per share offer in light of Dow's liquidation of a significant amount of - more - 3 Page 3 - October 17 its Magma holdings (3,635,000 shares) in 1993 at a net price of $30.88 per share and Dow's recent sale in September 1994 of 857,143 Magma shares at $28.25. Assuming the 16(b) problems which prevent Dow from fully benefitting from our offer were fully disclosed to the independent Magma Board members, we do find it surprising that Magma's Board could be advised that there was not a conflict that would require the five (5) Dow members to abstain from voting on our proposal." As previously announced, CECI is soliciting requests to call a Special Meeting of Magma's shareholders in order to provide Magma stockholders the opportunity to consider and vote on CECI's Special Meeting proposals which, if approved, would result in certain by-law amendments that would facilitate CECI's proposal to acquire Magma and the election of four (4) CECI nominees to Magma's Board, who would be committed to removing any impediments to shareholders being able to freely choose whether to accept CECI's pending cash tender offer for 12,400,000 shares at $35 net per share and to approve the proposed second step merger, thereby ensuring that the offer and proposed merger get a full and fair hearing. The Special Meeting Request Solicitation will be made only pursuant to definitive solicitation documents, which will be filed with the Securities and Exchange Commission and mailed to Magma stockholders. Gleacher & Co. Inc. is acting as Financial Advisor to California Energy and Dealer Manager in connection with the tender offer and request solicitation and MacKenzie Partners, Inc. is acting as the Information Agent for the tender offer and request solicitation. California Energy Company is a leading international developer, owner and operator of geothermal and other environmentally responsible power generation facilities. Its six existing facilities currently produce in excess of 325 MW with an additional 300 MW under construction. # # # -----END PRIVACY-ENHANCED MESSAGE-----