UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): JULY 21, 2004
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CENTERPOINT ENERGY, INC.
(Exact name of registrant as specified in its charter)
TEXAS 1-31447 74-0694415
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
1111 LOUISIANA
HOUSTON, TEXAS 77002
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 207-1111
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TEXAS GENCO HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
TEXAS 1-31449 76-0695920
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
1111 LOUISIANA
HOUSTON, TEXAS 77002
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 207-1111
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ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE.
On July 21, 2004, CenterPoint Energy, Inc. ("CenterPoint Energy") and
its 81%-owned subsidiary, Texas Genco Holdings, Inc. ("Texas Genco"), announced
a definitive agreement for GC Power Acquisition LLC, a newly formed entity owned
in equal parts by affiliates of The Blackstone Group, Hellman & Friedman LLC,
Kohlberg Kravis Roberts & Co. L.P. and Texas Pacific Group, to acquire Texas
Genco for approximately $3.65 billion in cash.
The transaction will be accomplished in two steps. In the first step,
expected to be completed in the fourth quarter of 2004, Texas Genco will
purchase the approximately 19% of its shares owned by the public in a cash-out
merger at a price of $47 per share. Prior to its minority shareholder buy-out,
Texas Genco will file with the Securities and Exchange Commission a Rule 13e-3
transaction statement and a Schedule 14C information statement relating to
CenterPoint Energy's adoption of the transaction agreement and approval of the
transactions it contemplates. Following the cash-out merger of the publicly
owned shares, a Texas Genco subsidiary that will own Texas Genco's coal, lignite
and gas-fired generation plants will merge with a subsidiary of GC Power
Acquisition. The closing of the first step of the transaction is subject to
several conditions, including the mailing of the information statement described
above, the receipt of debt financing under the financing commitments described
below, the expiration or termination of any applicable waiting period under the
antitrust laws (including the Hart Scott Rodino Antitrust Improvement Act of
1976) and the Federal Energy Regulatory Commission's certification of the entity
that will own Texas Genco's coal, lignite and gas-fired generation plants as an
"exempt wholesale generator" under the Public Utility Holding Company Act of
1935.
In the second step of the transaction, expected to take place in the
first quarter of 2005 following receipt of approval by the Nuclear Regulatory
Commission, Texas Genco, the principal remaining asset of which, at that time,
will be Texas Genco's interest in the South Texas Project nuclear facility, will
merge with another subsidiary of GC Power Acquisition.
Cash proceeds to CenterPoint Energy will be approximately $2.2 billion
from the first step of the transaction and $700 million from the second step of
the transaction, for total cash proceeds of approximately $2.9 billion, or
$45.25 per share for CenterPoint Energy's 81% interest. CenterPoint Energy
intends to use the net after-tax proceeds it receives to pay down outstanding
debt, including senior debt under its bank credit facility that is secured in
part by CenterPoint Energy's 81% ownership interest in Texas Genco. As of June
30, 2004, $1.6 billion principal amount of borrowings was outstanding under this
credit facility.
GC Power Acquisition has entered into a commitment letter with
financing sources, including Goldman Sachs, providing for up to $2.5 billion in
the aggregate in debt financing for the transaction and a separate overnight
loan of $717 million to Texas Genco to fund its minority shareholder buy-out in
the first step of the transaction, each subject to customary closing conditions.
In addition, GC Power Acquisition's sponsor firms have committed upon closing of
the transaction to provide up to $1.08 billion in the aggregate in equity
funding for the transaction.
The transaction has been approved by the board of directors of
CenterPoint Energy and by the board of directors of Texas Genco acting upon the
unanimous recommendation of a special committee composed of independent members
of the Texas Genco board. CenterPoint Energy has signed a written consent that
satisfies all state law voting requirements applicable to the transaction.
In connection with the transaction, Texas Genco has entered into a
master power purchase and sale agreement with a member of the Goldman Sachs
group. Under that agreement, Texas Genco will sell forward a substantial
quantity of its available baseload capacity through 2008. Texas Genco's
obligations under the power purchase agreement will continue regardless of
whether the transaction described in this report is completed.
The foregoing description of the transaction is qualified in its
entirety by reference to the terms of the agreements, including the Transaction
Agreement that is filed as an exhibit to this report.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
The following exhibit is filed herewith:
(c) Exhibits.
10.1 Transaction Agreement dated July 21, 2004 among CenterPoint
Energy, Inc., Utility Holding, LLC, NN Houston Sub, Inc.,
Texas Genco Holdings, Inc., HPC Merger Sub, Inc. and GC Power
Acquisition LLC (excluding exhibits and schedules thereto)
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CENTERPOINT ENERGY, INC.
Date: July 22, 2004 By: /s/ James S. Brian
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James S. Brian
Senior Vice President and
Chief Accounting Officer
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TEXAS GENCO HOLDINGS, INC.
Date: July 22, 2004 By: /s/ James S. Brian
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James S. Brian
Senior Vice President and
Chief Accounting Officer
EXHIBIT INDEX
Exhibit
Number Exhibit Description
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10.1 Transaction Agreement dated July 21, 2004 among CenterPoint Energy,
Inc., Utility Holding, LLC, NN Houston Sub, Inc., Texas Genco
Holdings, Inc., HPC Merger Sub, Inc. and GC Power Acquisition LLC
(excluding exhibits and schedules thereto)