Aquila Energy Reaches Agreement to Acquire GPU International

Business Wire, Oct 5, 2000

Business Editors

KANSAS CITY, Mo.--(BUSINESS WIRE)--Oct. 5, 2000

Aquila Energy, a wholly owned subsidiary of UtiliCorp United (NYSE:UCU), and GPU, Inc. (NYSE:GPU) today announced that they have executed a definitive $225 million agreement for Aquila to purchase GPU's wholly owned subsidiary, GPU International Inc., including its interests in six independent U.S.-based generating plants and a development generating project.

GPU's interests in the generating plants represent about 500 megawatts of capacity, and it owns a one-half interest in the 715-megawatt development project. At closing, the corporate employees currently associated with GPU International will be considered for transfer to Aquila. The transaction is expect to close by the end of the year.

"These assets are an excellent strategic fit for us," said Robert K. Green, chairman of Aquila Energy and president and chief operating officer of UtiliCorp.

"With this transaction, Aquila owns or controls more than 3,500 megawatts of generation in operation, construction and under active development. We expect the earnings stream from additional ownership in generation to complement our income from energy marketing and risk management, as well as enhance our portfolio of independent power projects."

The purchase will be accretive to UtiliCorp's earnings. GPU reported that it expects to realize an after-tax gain on the sales of $60 to $80 million to be reflected upon closing of the transaction. The net proceeds will be used by GPU to reduce outstanding debt.

"We are pleased that the sale of our interests in these properties will enable us to further focus on opportunities related to our core infrastructure business, such as GPU's acquisition of the MYR Group, a utility infrastructure services firm, as well as unregulated businesses such as GPU Telcom strategic partnership with Sting Communications to provide high-speed data services in the Northeast," said Fred D. Hafer, chairman, president and chief executive officer of GPU.

The sale is subject to certain regulatory approvals. Salomon Smith Barney and Donald Lufkin & Jenrette were the investment advisors for GPU and Aquila, respectively.

Based in Kansas City, Aquila Energy is one of the largest wholesalers of electricity and natural gas in North America and an innovative provider of risk management services. Aquila also provides wholesale energy services in the U.K. and has a presence in Scandinavia, Germany and Spain.

Aquila is a wholly owned subsidiary of UtiliCorp United, an international energy company with about 4.5 million customers across the U.S. and in Canada, Great Britain, New Zealand and Australia. At June 30, 2000, UtiliCorp had $8.8 billion in assets and 12-month sales of $21.4 billion. Further information is at www.utilicorp.com.

GPU, Inc. (NYSE:GPU), headquartered in Morristown, N.J., is a registered public utility holding company providing utility and utility-related services to customers throughout the world. GPU serves 4.6 million customers directly through its electric companies -- GPU Energy in the U.S., GPU Power UK in England, and Emdersa in Argentina.

It serves an additional 1.4 million customers indirectly through GPU GasNet, its gas transmission subsidiary in Australia. GPU's 1999 revenues were $4.8 billion and its total assets were $21.7 billion. GPU's other subsidiaries include MYR Group Inc., GPU Advanced Resources, Inc., GPU Nuclear, Inc., GPU Service, Inc. and GPU Telcom Services, Inc. (http://www.gpu.com).

    The agreement covers the following properties:

Property             Location            Capacity      GPU % Ownership
--------             --------            --------      ---------------

Onondaga             Geddes, NY          91 MW         100

Selkirk              Selkirk, NY         345 MW        20

Prime Energy         Elmwood Park, NJ    65 MW         50

Mid-Georgia          Kathleen, GA        305 MW        50

Pasco                Dade County, FL     109 MW        50

Lake Cogen           Umatilla, FL        110 MW        100

Saltillo             Saltillo, MS        715 MW        50
(Under Development)