Westar completes sale of Protection One Europe

Thursday, July 3, 2003

July 3, 2003

TOPEKA, Kan. - In a deal announced after the close of the stock market Monday, Westar Energy announced it had completed the sale of Protection One Europe to ABN Amro Capital France.

The deal will bring about $114 million, which will go toward reducing Westar’s $3.2 billion in debt.

The sale of its 88 percent stake in Protection One Europe was the latest cost-cutting move for Westar, which has been ordered by Kansas regulators to restructure its financial operations and reduce its debt. Earlier this year, it sold all but 27 percent of its holdings in ONEOK Inc., a natural gas conglomerate, for $244 million.

Joe Freeman, of J.P. Freeman Co., said the splitting of Protection One Europe and Protection One’s U.S. business, while helpful to Westar, shouldn’t have much bearing on the security industry as a whole.

“To Westar and Protection One, it really doesn’t make any difference. The important thing for them was to raise some cash because Westar has a terrific financial obligation,” he said. “They have to raise cash somehow or another, so whether it splits or stays together is really of no consequence.”

What is significant, Freeman said, is that ABN Amro will most likely not hold onto its latest acquisition for long.

“What I think they clearly plan to do is resell it and make money in the process by acting as a broker,” he said. “It is possible that they could enter the security industry because they may see an opportunity to do that, but more likely, because they’re an equity firm, they will probably resell the assets, and they might even break it up in pieces to the degree that it’s possible, so they can make more money.”

As for Protection One’s U.S. business, Freeman said Westar would probably like to sell that piece of the business sooner rather than later. Westar officials have said they hope to have a buyer by early 2004.