Summary
ONEOK, Inc. (OKE) announced on August 22, 2002, that it will not exercise its option to purchase Westar Industries, Inc.'s 42.5% stake in ONEOK. This stake consists of approximately 4.7 million shares of common stock and 19.9 million shares of Series A convertible preferred stock. The decision not to purchase, at a price of $21.77 per share for a total of approximately $971.1 million, was made within the 90-day period stipulated by a Shareholder Agreement between the two companies. The company's decision means Westar Energy, Inc. (formerly Western Resources, Inc.) will have until September 30, 2003, to find an alternative buyer for its stake. The existing Shareholder Agreement, which includes standstill provisions for Westar, will remain in effect during this period. This announcement is significant as it avoids a substantial equity purchase by ONEOK, which could have impacted its financial structure and strategic direction.
Key Highlights
- 1ONEOK will not purchase Westar Industries' 42.5% stake in the company.
- 2The purchase price for the stake was approximately $971.1 million, at $21.77 per share.
- 3The decision was made within the 90-day period outlined in the Shareholder Agreement.
- 4Westar now has until September 30, 2003, to sell its stake to a third party.
- 5The Shareholder Agreement, including standstill provisions for Westar, remains in effect.
- 6This non-purchase avoids a significant financial outlay for ONEOK at this time.