[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]


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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.
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    \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.
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    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.
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    \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.
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    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