[Federal Register Volume 63, Number 178 (Tuesday, September 15, 1998)] [Notices] [Pages 49372-49374] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 98-24694] ======================================================================= ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 35-26914] Filings Under the Public Utility Holding Company Act of 1935, as Amended (``Act'') September 8, 1998. Notice is hereby given that the following filing(s) has/have been made with the Commission pursuant to provisions of the Act and rules promulgated under the Act. All interested persons are referred to the application(s) and/or declaration(s) for complete statements of the proposed transaction(s) summarized below. The application(s) and/or declaration(s) and any amendments is/are available for public inspection through the Commission's Office of Public Reference. Interested persons wishing to comment or request a hearing on the application(s) and/or declaration(s) should submit their views in writing by October 5, 1998, to the Secretary, Securities and Exchange Commission, Washington, D.C. 20549, and serve a copy on the relevant applicant(s) and/or declarant(s) at the address(es) specified below. Proof of service (by affidavit or, in case of an attorney at law, by certificate) should be filed with the request. Any request for hearing should identify specifically the issues of fact or law that are disputed. A person who so requests will be notified of any hearing, if ordered, and will receive a copy of [[Page 49373]] any notice or order issued in the matter. After October 5, 1998, the application(s) and/or declaration(s), as filed or as amended, may be granted and/or permitted to become effective. Conectiv, et al. (70-9331) Notice of Proposal To Amend Charter and Authorize Registered Holding Company To Acquire Preferred Stock of Utility Subsidiary; Order Authorizing Solicitation of Proxies Conectiv, a registered holding company, located at 800 King Street, Wilmington, Delaware 19989, and its wholly owned public-utility subsidiary, Atlantic City Electric Company (``ACE''), located at 6801 Black Horse Pike, Egg Harbor Township, New Jersey, 08234, have filed an application-declaration under sections 6(a), 7, 9(a), 10, 12(c), 12(d) and 12(e) of the Act and rules 43, 44, 51, 54, 62 and 65 under the Act. In summary, ACE proposes to amend its charter to eliminate a provision restricting the amount of securities representing unsecured indebtedness issuable by ACE and to solicit proxies in connection with this proposal. In addition, Conectiv proposes to acquire shares of ACE preferred stock and sell those shares to ACE. ACE has outstanding 18,320,937 shares of common stock, $3.00 par value, all of which are held by Conectiv. ACE also has outstanding 300,000 shares of Cumulative Preferred Stock, $100 Par Value (``Par Preferred'') issued in six series.\1\ In addition, ACE has 239,500 shares outstanding of Preferred Stock, No Par Value (``No Par Preferred'' and together with the Par Preferred, ``Preferred'') issued in one series. --------------------------------------------------------------------------- \1\ The six series of Par Preferred consist of a 4% series, of which 77,000 shares are outstanding; a 4.10% series, of which 72,000 shares are outstanding; a 4.35% series, of which 15,000 shares are outstanding; a 4.35% series, of which 36,000 shares are outstanding; a 4.75% series, of which 50,000 shares are outstanding; and a 5% series, of which 50,000 shares are outstanding. --------------------------------------------------------------------------- ACE's Agreement of Merger, dated May 24, 1949, as amended on April 8, 1952 (``ACE Charter''), contains a provision restricting the amount of securities representing unsecured indebtedness issuable by ACE. ACE requests authority to remove this provision from the ACE charter. In connection with this proposal, ACE also requests authority to solicit proxies from the holders of its outstanding shares of each series of Preferred for use at a special meeting of its stockholders (``Special Meeting'') to consider an amendment (``Proposed Amendment'') removing this provision. Consent by two-thirds of the aggregate shares of Preferred and common stock outstanding and by two thirds of the Preferred stock outstanding is required to adopt the Proposed Amendment. Conectiv intends to vote all shares of common stock in favor of the Proposed Amendment. In addition, ACE proposes to make a special cash payment of $1.00 (``Special Payment'') to each holder of Preferred for each share of Preferred voted in favor of the Proposed Amendment if the Proposed Amendment is adopted, except as described below. ACE proposes to remove the unsecured debt restriction for several purposes. ACE desires to issue debt without using the overly restrictive and expensive first mortgage bonds under which secured debt is currently issued. In addition, ACE wishes to take advantage of unsecured financial instruments which are designed to enhance a company's overall credit structure and allow for better management of the company's cost of capital. ACE also desires to issue additional interim unsecured debt in order to obtain the best terms available in the market for permanent capital financing. Concurrent with the ACE proxy solicitation, Conectiv proposes to undertake a program of stock acquisition, through December 31, 2000, through cash tender offers (``Tender Offers'') for all six series of the Par Preferred (``Tendered Series'').\2\ The price to be offered each share of the Tendered Series will be established through market conditions or through a redemption at the call price of $100 or at par value (``Purchase Price''). The Tender Offer for any share is conditioned, among other things, on the vote of that share in favor of the Proposed Amendment and the adoption of the Proposed Amendment at the Special Meeting.\3\ Subject to the terms of the offering documents for each Tendered Series (``Offer Documents''), ACE will purchase for the applicable Purchase Price those shares of any Tendered Series that are validly tendered and not withdrawn prior to the expiration date of the Tender Offer for that series (``Expiration Date''). Tenders of shares made under the Tender Offers may be withdrawn at any time prior to the Expiration Date. After the Expiration Date, all such tenders are irrevocable, subject to certain exceptions identified in the Offer Documents. Shares tendered in accordance with any Tender Offer will not qualify for the Special Cash Payment. --------------------------------------------------------------------------- \2\ Conectiv does not propose to make an offer to acquire the No Par Preferred. \3\ If the Proposed Amendment is not adopted at the Special Meeting, Conectiv may nonetheless proceed with the Tender Offers in order to facilitate a subsequent solicitation of proxies to seek adoption of the Proposed Amendment. In addition, ACE may choose to solicit consents to a waiver of the unsecured short-term debt restriction, as permitted by the ACE charter. ACE is not now requesting authority to engage in a subsequent solicitation of proxies with respect to the Proposed Amendment or a solicitation of a waiver. --------------------------------------------------------------------------- To tender shares in accordance with the terms of the Offer Documents, the tendering stockholder must comply with a guaranteed delivery procedure specified in the Offer Documents. Alternatively, the tendering stockholder may send a properly completed and duly executed letter of transmittal and proxy with respect to the Proposed Amendment to the depositary for the Tender Offers (``Depositary''), together with any required signature guarantees and any other documents required by that letter of transmittal and proxy. In that case, certificated shares tendered must be received by the Depositary by the Expiration Date and confirmation of the delivery of book-entry securities must be received by the Depositary by the Expiration Date. At any time and from time to time, Conectiv may extend the Expiration Date applicable to any series by giving notice of that extension to the Depositary, without extending the Expiration Date for any other series. During any such extension, all shares of the applicable series previously tendered will remain subject to the Tender Offer, and may be withdrawn at any time prior to the Expiration Date as extended. Conectiv may elect in its sole discretion to terminate one or more Tender Offers prior to the scheduled Expiration Date and not accept any shares tendered, if any of the conditions to closing enumerated in the Offer Documents occurs. Conectiv will notify the Depository of any termination and make public announcement of the termination. In addition, Conectiv reserves the right in the Offer Documents to amend one or more Tender Offers in any respect by making a public announcement of the amendment. Also, if Conectiv materially changes the terms of a Tender Offer or the information concerning a Tender Offer or if Conectiv waives a material condition of a Tender Offer, Conectiv will extend the applicable Expiration Date to the extent required by law. Conectiv requests authority through December 31, 2000 to sell to ACE all shares of Preferred acquired by the Tender Offers and ACE proposes [[Page 49374]] through December 31, 2000 to repurchase those shares for the applicable Purchase Price, plus expenses of sale. ACE will retire and cancel the shares so acquired. Conectiv requests that the effectiveness of the application- declaration with respect to the proxy solicitation be permitted to become effective immediately under rule 62(d). It appears to the Commission that the application-declaration, to the extent that it relates to the proposed solicitation of proxies, should be permitted to become effective immediately under rule 62(d). It is ordered, that the application-declaration, to the extent that it relates to the proposed solicitation of proxies, be permitted to become effective immediately, under rule 62 and subject to the terms and conditions prescribed in rule 24 under the Act. For the Commission, by the Division of Investment Management, under delegated authority. Margaret H. McFarland, Deputy Secretary. [FR Doc. 98-24694 Filed 9-14-98; 8:45 am] BILLING CODE 8010-01-M