Protection One, Westar finalize

stock sale
Tuesday, April 1, 2003

TOPEKA, Kan. - In the latest step towards the separation of the two companies, Westar Energy recently agreed to repurchase all of the Westar stock held by Protection One.
In the deal, which was finalized in February, Protection One sold to Westar the 850,000 common shares and 34,000 preferred shares of Westar stock for approximately $11,645,000.

According to Protection One spokesperson Robin Lampe, the sale of the stock was part of the agreement between the two companies and the Kansas Corporation Commission to begin the separation of the two companies.

Late last year, the KCC began to put pressure on Westar, the largest electric utility in Kansas, to sell its outside businesses, including Protection One, as a way to reduce its approximately $3.6 billion debt.

Speaking at an analyst breakfast on Feb. 26, Westar chief financial officer Mark Ruelle, told Westar investors that the KCC’s order was the impetus for the stock purchase.

“There is some unwinding that has to be done,” said Ruelle. “(This transaction) is part of the cleanup process.”

Analyst Jack Mallon, managing director at Mallon Capital, said that since the shares were sold at market price, the deal seems to be housecleaning in preparation for the separation of the two companies.

“It’s my understanding that the transaction was mandated by the (KCC) which had been pressuring Westar to completely disengage from its non-core activities,” said Mallon. “To my mind, it wasn’t anything monumental, it was just compliance with the regulatory pressure in terms with the interlocking ownership of shares.”