Florida Public Utilities Company (NYSE Amex: FPU) mailed the
following letter to its shareholders regarding its proposed merger
with Chesapeake Utilities Corporation (NYSE: CPK).
In its letter, Florida Public Utilities (FPU) reiterated its
strong belief that the merger will provide significant strategic
and financial benefits to shareholders, customers and employees.
The merger provides FPU shareholders a premium of more than 15
percent based on FPU's closing stock price the day before the
merger announcement. FPU's letter also set forth its belief that
the merger will provide FPU shareholders with ongoing ownership in
a stronger utility platform with increased scale and scope in
Florida; a more diversified customer base, energy portfolio and
utility foundation; a broader geographical presence; and increased
financial strength and stability.
In its letter, FPU also corrected important facts about the
proposed merger that Energy, Inc., an opponent of the merger, had
previously mischaracterized or misstated.
FPU urges shareholders to vote in favor of the merger with
Chesapeake on the WHITE proxy card.
Dear Shareholder:
You should have recently received a proxy statement/prospectus
which describes in detail the proposed merger between Florida
Public Utilities and Chesapeake Utilities.
We thought it might be beneficial to provide you with a brief
summary of why the Board of Florida Public Utilities believes the
merger with Chesapeake is the right strategy for our company and
our shareholders.
Under the terms of the proposed agreement, a newly formed wholly
owned subsidiary of Chesapeake will be merged with and into Florida
Public Utilities. As a result, Florida Public Utilities will
continue as the surviving corporation and will become a wholly
owned subsidiary of Chesapeake. Upon completion of the merger, you
will receive Chesapeake shares in exchange for your Florida Public
Utilities shares. Florida Public Utilities will no longer be
publicly traded, but your new shares in Chesapeake will be traded
on the New York Stock Exchange under the symbol "CPK."
Your Board of Directors believes that the merger is in the best
interests of Florida Public Utilities and its shareholders and has
approved the merger and merger agreement. Your Board unanimously
recommends that you vote "FOR" the merger agreement and the
merger.
The Boards of both Florida Public Utilities and Chesapeake
believe that the merger will provide significant strategic and
financial benefits to shareholders, customers and employees,
including:
-- A premium of over 15 percent based on the closing stock price for
Florida Public Utilities on the day prior to the announcement of the merger
agreement;
-- Increased scale and scope of the combined company's energy presence in
Florida;
-- A stronger utility business platform;
-- A more diversified customer base, energy portfolio and utility
foundation, as well as a broader geographical presence;
-- Increased capabilities to take advantage of the expected growth in
Florida;
-- Enhanced expertise and experience of the combined company;
-- Synergistic opportunities; and
-- Increased financial strength and flexibility.
Florida Public's Board of Directors unanimously recommends that
Florida Public Shareholders vote "FOR" the approval of the merger
by returning the WHITE proxy card.
Recently, we learned that Energy, Inc. announced it would seek
proxies from our shareholders to vote against this merger. You may
have received a letter from Energy, Inc. urging you to vote against
this merger. While a shareholder concern over a merger transaction
warrants review, Energy, Inc. mischaracterizes important facts
about our proposed merger and misstates other facts in its letter.
We want you to know the truth about these issues.
-- Your Board considered other strategic initiatives, including other
merger and acquisition opportunities, to obtain the best value for our
shareholders. The Board strongly believes that increased value to our
shareholders is best achieved through a strategic merger with Chesapeake
Utilities. Other possible mergers were discussed by the Board and it was
unanimously decided by the Board that merging with Chesapeake represents
the best value for shareholders, both today and from a long-term
perspective.
-- The Board considered the unsolicited proposal from Energy West. As we
disclosed in our proxy statement, the proposal was for a stock-for-stock
acquisition of Florida Public Utilities by Energy West, Inc. (now a
subsidiary of Energy, Inc.). The Energy West proposal was evaluated
carefully by the Board with the assistance of its legal and financial
advisors. After due consideration of the proposal and an analysis of Energy
West, and after consulting with its legal and financial advisors, the Board
determined that the Energy West proposal did not provide the best available
value for our shareholders -- either immediately or in the long-term. This
decision was communicated directly to Energy West. We believe that Energy,
Inc. is provoking a proxy fight now with the ultimate goal of gaining
control over Florida Public Utilities without any value added for our
shareholders.
-- For many years, we have had in place employment agreements with our
key executives, which provide for severance payments in the event of a
change of control. The severance payments due under the employment
agreements would have greatly exceeded the amounts to be paid as stay
bonuses to retain the executives. The desire of Chesapeake to retain two of
the executives' services after the merger, along with the executives'
desire to work for the combined company, resulted in new agreements and
stay bonuses in lieu of incurring much larger severance payments that would
result in losing the executives' service and assistance in the merger
transition. The Board is confident that these arrangements are reasonable
and fairly compensate the executives for their services.
-- Florida Public Utilities received approval on May 9, 2009 from the
Florida Public Service Commission of a natural gas rate increase of
approximately $8.5 million in revenues annually with new rates beginning
June 4, 2009. Energy Inc. suggests that we may not have considered this
development in our negotiations with Chesapeake. In fact, the financial
forecasts and analysis performed by Houlihan Lokey to assist the Board in
its evaluation of the merger did include projected natural gas rate
implications arising from the Florida Public Service Commission approval.
It is worth noting that the Florida rate case is still not finalized.
We are excited about the pending merger with Chesapeake
Utilities and the opportunities it brings shareholders. Whether or
not you intend to attend the special meeting in person, it is
important that your shares be represented at the meeting and your
voice be heard. Accordingly, we encourage you to return the
enclosed WHITE proxy card as soon as possible to make sure that
your vote counts. In addition to mailing the proxy card, you may
also have the choice of voting over the telephone or Internet by
following the instructions on the proxy card.
VOTE THE WHITE PROXY CARD TODAY!
Sincerely,
John T. English
Chairman, President and CEO
Additional Information and Where to Find It
In connection with the proposed merger, Chesapeake Utilities
Corporation ("Chesapeake") has filed a registration statement on
Form S-4 (Registration No. 333-160795) with the SEC, containing a
joint proxy statement of Chesapeake and Florida Public Utilities
and a prospectus of Chesapeake, which was declared effective on
September 10, 2009. WE URGE INVESTORS TO READ THE REGISTRATION
STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS AND THESE OTHER
MATERIALS CAREFULLY BECAUSE THEY CONTAIN IMPORTANT INFORMATION
ABOUT CHESAPEAKE, FLORIDA PUBLIC UTILITIES AND THE PROPOSED MERGER.
Investors are able to obtain free copies of the registration
statement and proxy statement/prospectus as well as other filed
documents containing information about Chesapeake and Florida
Public Utilities at http://www.sec.gov, the SEC's website. Free
copies of Chesapeake's SEC filings are also available on
Chesapeake's website at http://investor.shareholder.com/CPK/sec.cfm
and free copies of Florida Public Utilities' SEC filings are also
available on Florida Public Utilities' website at
www.fpuc.com/about_us/invest.asp.
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy securities, nor shall there be any
sale of securities in any jurisdiction in which such solicitation
or sale would be unlawful prior to registration or qualification
under the securities laws of such jurisdiction.
Participants in the Solicitation
Chesapeake and Florida Public Utilities and their respective
directors, executive officers, other members of management and
employees may be deemed, under SEC rules, to be participants in the
solicitation of proxies with respect to the proposed merger.
Information about the directors and executive officers of Florida
Public Utilities is set forth in the proxy statement for Florida
Public Utilities' 2009 Annual Meeting of Stockholders, as filed
with the SEC on a Schedule 14A on April 6, 2009 and Form 10-K filed
with the SEC on March 20, 2009. Information about the directors and
executive officers of Chesapeake is set forth in the proxy
statement for Chesapeake's 2009 Annual Meeting of Stockholders, as
filed with the SEC on a Schedule 14A on March 27, 2009 and Form
10-K filed with the SEC on March 9, 2009. Additional information
regarding the interests of those participants and other persons who
may be deemed participants in the merger may be obtained by reading
the registration statement, joint proxy statement/prospectus and
other materials filed with the SEC regarding the proposed merger.
You may obtain free copies of these documents as described
above.
Florida Public (AMEX:FPU)
Historical Stock Chart
Von Aug 2024 bis Sep 2024
Florida Public (AMEX:FPU)
Historical Stock Chart
Von Sep 2023 bis Sep 2024