Entergy Offers Details on Merger Termination, Posts 2002 Earnings Guidance

Apr 02, 2001, 01:00 ET from Entergy Corporation

    NEW ORLEANS, April 2 /PRNewswire/ -- Entergy Corporation (NYSE:   ETR) today
 offered additional details on the announcement that Entergy and FPL Group
 jointly agreed to terminate the merger agreement they signed last July.  The
 Entergy Board concluded that accepting various positions taken by FPL would
 leave Entergy with no merger of equals, as approved by shareholders.  This was
 considered inconsistent with the terms of the FPL Group/Entergy merger of
 equals for which the financial advisors rendered their fairness opinions, and
 further, was inconsistent with other merger of equals transactions observed in
 the marketplace.
     The Board also believed that there would be no prospects for regulatory
 approval because commitments and representations made to regulators would be
 violated, and no ability to drive the unregulated growth businesses in a
 direction that Entergy believed would create the most value for its
 shareholders.
     Entergy also noted the following areas of disagreement between the
 companies:
 
     * Governance and Leadership.  FPL Chairman and Chief Executive Officer
       James L. Broadhead proposed changing the merged company management
       structure.  This was contrary to the express terms of the merger
       agreement as is also described in the proxy statement issued to
       shareholders before their approval of the merger in December.
 
     * Valuation.  Entergy's Board was advised by its financial advisors,
       Morgan Stanley Dean Witter and J. P. Morgan, that with no premium to
       shareholders and a revised management structure, the transaction was
       equivalent to a takeover without a premium.  The merger agreement
       specifically defined the transaction as a merger of equals which was an
       important basis upon which fairness opinions were rendered to Entergy by
       its financial advisors.
 
     * Organizational Structure.  The merger agreement provided for a
       decentralized organization, with major business units based away from
       the corporate headquarters in Juno Beach, Florida.  The business units
       and locations were specified in the proxy statement.  Since that time,
       however, FPL expressed unwillingness to implement the agreed-to
       organizational structure.
 
     * Regulatory Issues.  The initially proposed management structure and
       organizational decentralization were critical to regulatory approvals in
       the Entergy service area.  FPL expressed unwillingness to honor these
       provisions.
 
     * Risk Management Strategy.  Recent changes in regional power markets and
       increased commodity price volatility, as evidenced by recent
       developments in California, also heightened differences in the
       companies' approaches to their non-regulated businesses.  FPL's approach
       is focused on owning and managing assets to create value through
       operations and efficiency improvements.  Entergy's approach emphasizes
       developing skills, relationships, and proprietary systems to create
       value around assets through superior market knowledge and effective risk
       management.
 
     Entergy Chairman Robert v.d. Luft said, "We are disappointed that we were
 unable to achieve the benefits of the merger; however, we are confident that
 our management team will continue to deliver superior results to our
 shareholder through other avenues, as they have done so successfully to date.
 Just three years ago, this board conducted a careful, world-wide search for a
 Chief Executive Officer and Wayne Leonard and his team have done an
 outstanding job.  Since this new management team was put in place, Entergy has
 produced total shareholder returns of 100 percent through December 29, 2000.
 In comparison, the S&P 500 returned 25 percent.  This team has also exceeded
 Wall Street's consensus earnings estimate for eleven straight quarters, with
 operational earnings per share growing from $2.22 per share in 1998 to $3.12
 in 2000, representing a 41 percent improvement.  Entergy rationalized its
 portfolio and business mix by divesting $4 billion of businesses in less than
 six months and reinvesting less than $3 billion in businesses that produced
 earnings of $0.90 per share, or six times the earnings productivity of the
 divested businesses.  Despite an aggressive growth strategy, net debt fell 20
 percent from $9.5 billion to $7.6 billion.  They have led a remarkable
 financial turnaround.
     "Furthermore, as CEO, Wayne has served all our stakeholders by improving
 service to customers, creating one of the safest and cleanest companies in the
 country, implementing programs to promote diversity and assist low-income
 customers, and living up to the commitments we have made to our regulators and
 shareholders."
     Leonard said, "As we go forward from today's announcement, we are very
 optimistic.  Entergy is stronger today than it was eight months ago, and we
 intend to capitalize on its strengths.  Our optimism is supported by our most
 recent financial plan reviewed at our Board of Directors retreat just last
 week.  Our plan reflects continuing strong growth across all our businesses
 producing 2002 earnings per share in the $3.30 to $3.50 range.  This level of
 earnings is consistent with our long-term commitment of 8-10 percent as
 compared to the analysts' consensus estimates for 2001 of $3.10 of earnings
 per share.
     "We have yet to realize all of the upside potential in our businesses,"
 Leonard continued, "and we are determined to do so in a manner that benefits
 all our stakeholders."
 
     Entergy, headquartered in New Orleans, is a U.S. based global energy
 company with power production, distribution operations, and related
 diversified services. Entergy owns, manages, or invests in power plants
 generating nearly 30,000 megawatts of electricity domestically and
 internationally. Entergy distributes energy to more than 330,000 customers in
 Texas and about 2.5 million customers in the U.S.
     Entergy will hold a teleconference call today at 10:00 a.m. CDST to review
 the material contained in this release.  The teleconference may be accessed by
 calling Premiere Conferencing at (913)-981-4900 no more than 15 minutes prior
 to the start of the call.  The confirmation number is 795489.  For 7 days
 following the teleconference, a tape delay will be available and may be
 accessed by dialing (719)-457-0820.  The confirmation number is the same.
 Internet users may also access the teleconference by visiting Entergy's
 website at the online address noted just below.
 
     Entergy's online address is www.entergy.com .
 
     The following constitutes a "Safe Harbor" statement under the Private
 Securities Litigation Reform Act of 1995: Investors are cautioned that
 forward-looking statements contained in the foregoing release with respect to
 the revenues, earnings, performance, strategies, prospects and other aspects
 of the business of Entergy Corporation may involve risks and uncertainties.
 Actual events and results may, for a variety of reasons, prove to be
 materially different from those indicated in these forward-looking statements,
 estimates and projections.  Factors that could influence actual future
 outcomes include regulatory decisions, the effects of changes in law, the
 evolution of markets and competition, changes in accounting, weather, the
 performance of generating units, fuel prices and availability, financial
 markets, risks associated with businesses conducted in foreign countries,
 changes in business plan, the presence of competitors with greater financial
 resources and the impact of competitive products and pricing; the effect of
 the Entergy Corporation's policies, including the amount and rate of growth of
 Entergy Corporation's expenses; the continued availability to Entergy
 Corporation of adequate funding sources and changes in interest rates;  delays
 or difficulties in the production, delivery or installation of products and
 the provision of services; and various legal, regulatory and litigation risks.
 Entergy Corporation undertakes no obligation to publicly update or revise any
 forward-looking statements, whether as a result of new information, future
 events or otherwise.  For a more detailed discussion of some of the foregoing
 risks and uncertainties, see Entergy Corporation's filings with the Securities
 and Exchange Commission.
 
 

SOURCE Entergy Corporation
    NEW ORLEANS, April 2 /PRNewswire/ -- Entergy Corporation (NYSE:   ETR) today
 offered additional details on the announcement that Entergy and FPL Group
 jointly agreed to terminate the merger agreement they signed last July.  The
 Entergy Board concluded that accepting various positions taken by FPL would
 leave Entergy with no merger of equals, as approved by shareholders.  This was
 considered inconsistent with the terms of the FPL Group/Entergy merger of
 equals for which the financial advisors rendered their fairness opinions, and
 further, was inconsistent with other merger of equals transactions observed in
 the marketplace.
     The Board also believed that there would be no prospects for regulatory
 approval because commitments and representations made to regulators would be
 violated, and no ability to drive the unregulated growth businesses in a
 direction that Entergy believed would create the most value for its
 shareholders.
     Entergy also noted the following areas of disagreement between the
 companies:
 
     * Governance and Leadership.  FPL Chairman and Chief Executive Officer
       James L. Broadhead proposed changing the merged company management
       structure.  This was contrary to the express terms of the merger
       agreement as is also described in the proxy statement issued to
       shareholders before their approval of the merger in December.
 
     * Valuation.  Entergy's Board was advised by its financial advisors,
       Morgan Stanley Dean Witter and J. P. Morgan, that with no premium to
       shareholders and a revised management structure, the transaction was
       equivalent to a takeover without a premium.  The merger agreement
       specifically defined the transaction as a merger of equals which was an
       important basis upon which fairness opinions were rendered to Entergy by
       its financial advisors.
 
     * Organizational Structure.  The merger agreement provided for a
       decentralized organization, with major business units based away from
       the corporate headquarters in Juno Beach, Florida.  The business units
       and locations were specified in the proxy statement.  Since that time,
       however, FPL expressed unwillingness to implement the agreed-to
       organizational structure.
 
     * Regulatory Issues.  The initially proposed management structure and
       organizational decentralization were critical to regulatory approvals in
       the Entergy service area.  FPL expressed unwillingness to honor these
       provisions.
 
     * Risk Management Strategy.  Recent changes in regional power markets and
       increased commodity price volatility, as evidenced by recent
       developments in California, also heightened differences in the
       companies' approaches to their non-regulated businesses.  FPL's approach
       is focused on owning and managing assets to create value through
       operations and efficiency improvements.  Entergy's approach emphasizes
       developing skills, relationships, and proprietary systems to create
       value around assets through superior market knowledge and effective risk
       management.
 
     Entergy Chairman Robert v.d. Luft said, "We are disappointed that we were
 unable to achieve the benefits of the merger; however, we are confident that
 our management team will continue to deliver superior results to our
 shareholder through other avenues, as they have done so successfully to date.
 Just three years ago, this board conducted a careful, world-wide search for a
 Chief Executive Officer and Wayne Leonard and his team have done an
 outstanding job.  Since this new management team was put in place, Entergy has
 produced total shareholder returns of 100 percent through December 29, 2000.
 In comparison, the S&P 500 returned 25 percent.  This team has also exceeded
 Wall Street's consensus earnings estimate for eleven straight quarters, with
 operational earnings per share growing from $2.22 per share in 1998 to $3.12
 in 2000, representing a 41 percent improvement.  Entergy rationalized its
 portfolio and business mix by divesting $4 billion of businesses in less than
 six months and reinvesting less than $3 billion in businesses that produced
 earnings of $0.90 per share, or six times the earnings productivity of the
 divested businesses.  Despite an aggressive growth strategy, net debt fell 20
 percent from $9.5 billion to $7.6 billion.  They have led a remarkable
 financial turnaround.
     "Furthermore, as CEO, Wayne has served all our stakeholders by improving
 service to customers, creating one of the safest and cleanest companies in the
 country, implementing programs to promote diversity and assist low-income
 customers, and living up to the commitments we have made to our regulators and
 shareholders."
     Leonard said, "As we go forward from today's announcement, we are very
 optimistic.  Entergy is stronger today than it was eight months ago, and we
 intend to capitalize on its strengths.  Our optimism is supported by our most
 recent financial plan reviewed at our Board of Directors retreat just last
 week.  Our plan reflects continuing strong growth across all our businesses
 producing 2002 earnings per share in the $3.30 to $3.50 range.  This level of
 earnings is consistent with our long-term commitment of 8-10 percent as
 compared to the analysts' consensus estimates for 2001 of $3.10 of earnings
 per share.
     "We have yet to realize all of the upside potential in our businesses,"
 Leonard continued, "and we are determined to do so in a manner that benefits
 all our stakeholders."
 
     Entergy, headquartered in New Orleans, is a U.S. based global energy
 company with power production, distribution operations, and related
 diversified services. Entergy owns, manages, or invests in power plants
 generating nearly 30,000 megawatts of electricity domestically and
 internationally. Entergy distributes energy to more than 330,000 customers in
 Texas and about 2.5 million customers in the U.S.
     Entergy will hold a teleconference call today at 10:00 a.m. CDST to review
 the material contained in this release.  The teleconference may be accessed by
 calling Premiere Conferencing at (913)-981-4900 no more than 15 minutes prior
 to the start of the call.  The confirmation number is 795489.  For 7 days
 following the teleconference, a tape delay will be available and may be
 accessed by dialing (719)-457-0820.  The confirmation number is the same.
 Internet users may also access the teleconference by visiting Entergy's
 website at the online address noted just below.
 
     Entergy's online address is www.entergy.com .
 
     The following constitutes a "Safe Harbor" statement under the Private
 Securities Litigation Reform Act of 1995: Investors are cautioned that
 forward-looking statements contained in the foregoing release with respect to
 the revenues, earnings, performance, strategies, prospects and other aspects
 of the business of Entergy Corporation may involve risks and uncertainties.
 Actual events and results may, for a variety of reasons, prove to be
 materially different from those indicated in these forward-looking statements,
 estimates and projections.  Factors that could influence actual future
 outcomes include regulatory decisions, the effects of changes in law, the
 evolution of markets and competition, changes in accounting, weather, the
 performance of generating units, fuel prices and availability, financial
 markets, risks associated with businesses conducted in foreign countries,
 changes in business plan, the presence of competitors with greater financial
 resources and the impact of competitive products and pricing; the effect of
 the Entergy Corporation's policies, including the amount and rate of growth of
 Entergy Corporation's expenses; the continued availability to Entergy
 Corporation of adequate funding sources and changes in interest rates;  delays
 or difficulties in the production, delivery or installation of products and
 the provision of services; and various legal, regulatory and litigation risks.
 Entergy Corporation undertakes no obligation to publicly update or revise any
 forward-looking statements, whether as a result of new information, future
 events or otherwise.  For a more detailed discussion of some of the foregoing
 risks and uncertainties, see Entergy Corporation's filings with the Securities
 and Exchange Commission.
 
 SOURCE  Entergy Corporation