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ENRON ANNOUNCES OFFER FOR MG PLC, WILL EXTEND SUCCESSFUL BUSINESS MODEL TO METALS INDUSTRY
FOR IMMEDIATE RELEASE: Monday, May 22, 2000
LONDON and HOUSTON -- Enron Corp. announced today the terms of a cash offer to acquire the shares of London-based MG plc, the world's leading publicly traded metals marketer. The offer, which has been unanimously recommended by MG plc's board of directors, values the outstanding shares of the company at $4.46 (Ł3.00) per share, or $446 million (Ł300 million). The companies expect to close the transaction, following shareholder and customary regulatory approvals, by early third quarter of this year.
"Enron has been monitoring the global metals market for several years, and we believe now is the time to enter this $120 billion market," said Kenneth L. Lay, Enron chairman and CEO. "Our business model, which we have proven in the natural gas and electricity markets, will give us a tremendous advantage in an industry that is undergoing fundamental change."
MG plc is a leading independent international metals market-making business providing financial and marketing services to the global metals industry.
"MG plc's recognized market-making capabilities and excellent market knowledge provide an immediate platform upon which to overlay Enron's proven ability to offer innovative e-commerce-enabled services to commodity-based industries," said Tom McKeever, MG plc executive chairman.
"In market after market, we have proven that our competitive advantage is our ability to deliver the physical commodity to customers at any time and at the best possible price," said Greg Whalley, CEO of Enron Net Works, the company's business unit that identifies new opportunities to extend Enron's network business model to wholesale commodities markets. "In the metals market and other potential markets, we will deliver market-wide enhancements such as improved pricing, price risk management services, cross-commodity transactions and more flexible transactions for a wider range of customers."
Enron Net Works includes the company's electronic trading platform, EnronOnline, which was launched in November 1999. Through EnronOnline this year, Enron has been a principal in more than 110,000 transactions valued in excess of $45 billion. The company offers more than 800 products in numerous markets, including natural gas, electricity, bandwidth, coal, weather derivatives, clean air credits, plastics, and pulp and paper.
The MG plc group is organized into two operating divisions: Financial Services and Merchanting. The Financial Services division is a leading metals broker and market maker. It is a leading London Metals Exchange (LME) member and operates one of the leading LME metals warehousing businesses. The Merchanting division buys, sells, stores, ships and trades non-ferrous metals as a principal with producers and consumers. It is the world's leading copper merchant, one of the top three merchants of copper concentrates and nickel and a leading European merchant of recycled metal. MG plc has its headquarters in London and employs 330 people in 14 countries around the world. It was listed on the London Stock Exchange in September 1999.
Enron is one of the world's leading electricity, natural gas and communications companies. The company, which owns approximately $37 billion in energy and communications assets, produces electricity and natural gas, develops, constructs and operates energy facilities worldwide, delivers physical commodities and financial and risk management services to customers around the world, and is developing an intelligent network platform to facilitate online business. Fortune magazine has named Enron "Most Innovative Company" for five consecutive years, the top company for "Quality of Management" and the second best company for "Employee Talent." In addition, Enron ranks in the top quarter of Fortune's "Best 100 Companies to Work For in America." Enron's Internet address is www.enron.com. EnronOnline can be found at www.enrononline.com. The stock is traded under the ticker symbol "ENE."
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For additional information please contact:
Jackie Gentle
Enron
44-20-7783-4141
Mark Palmer
Enron
713-853-4738
Tom McKeever
MG plc
44-20-7488-2244
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