A federal lawsuit filed by a shareholder of Westar Energy Inc. aims to delay and potentially block the utility’s attempt to enact a merger of equals with Great Plains Energy Inc.
Shareholder David Pill seeks class-action status for his lawsuit, an injunction halting the proposed merger and an order directing the parties to issue documents that contain no untrue statements and more complete information about the merger’s financial effect. Pill also seeks damages and attorney fees.
In July, Topeka, Kansas-based Westar and Kansas City-based Great Plains, the parent of Kansas City Power & Light, announced that they would seek the merger, which would create a $14 billion electric utility with 1.6 million customers. This is the second attempt at combining the two companies; the Kansas Corporation Commission in April rejected the initial attempt by Great Plains to acquire Westar.
As part of the second merger attempt, the companies filed a document called an S-4 with the Securities and Exchange Commission on Sept. 14, containing a couple hundred pages of information describing how the decision to merge was reached and plans for the merged entity.
Pill argues that Westar and Great Plains purposely omitted any earnings projections for the merged entity, which would be called Monarch Energy Holdings. He said the S-4 contains materially incomplete and/or misleading information about the financial analyses performed by the advisers the utilities hired to study the deal. As a result, Pill argues, Westar’s stockholders lack material information necessary to allow them to make an informed decision in voting on the merger.
Read more: Kansas City Business Journal