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CALIFORNIA

Protection One's Parent Firm Plans to Split Into 2 Companies

Energy: Western Resources said it will separate its electric utilities from other non-utility businesses.

March 30, 2000|From Bloomberg News

TOPEKA, Kan. — Western Resources Inc. said Wednesday that it will split into two companies, separating its Kansas electric utilities from riskier ventures.

The non-utility company, not yet named, will include Western's 85% stake in Culver City-based Protection One Inc., a money-losing home-security company.

Western's shares have fallen about 40% in the past year amid concerns about Protection One. Western has struggled to satisfy two groups of investors: those expecting steady returns from its utilities, and others attracted to the growth potential of the company's new businesses.

Western shareholders will be able to exchange their shares for stock in the non-utility company. Terms will be announced when the offer begins, with Western expecting to complete the split this year. Western's market value is about $1.2 billion.

The utility business will be called Westar Energy. That company is expected to pay an annual dividend of $1.20 a share. The other business won't have a dividend, Western said.

Topeka-based Western was forced to restate 1997 and 1998 earnings after regulators ordered changes in income reported by Protection One.

The accompanying decline in Western's shares led Kansas City Power & Light Co. in January to call off the companies' planned $2.5-billion merger.

Western said the non-utility company also will include its 45% stake in Oneok Inc., a Tulsa, Okla.-based natural-gas company, and 40% interest in direct marketer Paradigm Direct.

Western CEO David Wittig, 44, will be chairman of Westar Energy, as well as chairman, president and CEO of the other company.

Western also said its fiscal fourth-quarter loss narrowed to $75.8 million, or $1.12 a share, from $84.5 million, or $1.29, a year earlier. Sales fell 7.5% to $450.4 million.

Western shares rose 13 cents to close at $16.75 on the New York Stock Exchange. Protection One fell 31 cents to $1.75.

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