Court to Consider SCEcorp’s Bid to Acquire SDG&E;’s Mailing List
A Superior Court judge in San Diego will hear SCEcorp’s demand that San Diego Gas & Electric turn over its shareholder mailing list to SCE, the parent company of Southern California Edison, spokesmen for both companies said Monday.
SCE, which last month bought 1,000 shares of SDG&E; common stock, is considering several options: initiating a proxy fight, offering a stock exchange or asking for a special shareholder meeting, according to court documents filed Friday in San Diego by the Rosemead-based company.
SCE turned to the courts after SDG&E; failed to provide the list in a timely fashion, according to SCE spokesman Lewis Phelps.
Unanimous Rejection
Last month, SDG&E;’s board of directors unanimously rejected SCE’s $2.16-billion stock swap offer. SCE in recent weeks has used full-page newspaper advertisements to persuade SDG&E; shareholders that its proposed merger promises a better financial return than the previously announced merger SDG&E; hopes to complete with Tucson Electric Power.
SDG&E;’s shareholders “have a right to hear from SCEcorp . . . before they decide on the merits of SDG&E;’s proposed merger with Tucson Electric Power,” SCE Chairman Howard Allen said in a prepared statement Monday. Allen criticized SDG&E; for “stalling tactics to try to prevent their shareholders from learning the merits” of SCE’s offer.
During a closed hearing Monday, Superior Court Judge James R. Milliken granted SCE’s request for an expedited hearing, according to Phelps. SCE wants to “communicate directly” with SDG&E; shareholders before SDG&E; and Tucson Electric shareholders receive a soon-to-be-mailed joint proxy statement, Phelps said.
Milliken, in what SDG&E; general counsel Stephen Baum described as a “minor victory,” ruled that the San Diego utility can take statements from several SCE executives, including Allen. SDG&E; hopes those depositions will show that SCE’s purchase of 1,000 SDG&E; shares violated a California statute that prohibits regulated utilities from acquiring each other’s stock without the state Public Utilities Commission’s permission.
Exemption Claimed
SCE has maintained that, as a holding company, it is exempt from the statute. But SDG&E; has argued that SCE acts as the “alter ego” of its Edison subsidiary.
SDG&E; also hopes to prove that SCE’s 1,000-share block was acquired “in concert” with a separate, 100-share purchase made by James S. Pignatelli, chief executive of Mission Energy Co., a non-regulated SCE subsidiary. Pignatelli acquired the stock for personal reasons, according to SCE’s court filings.
But an SCE executive recently acknowledged during a telephone conversation that Pignatelli’s purchase was made “for SCEcorp’s purposes,” according to Baum.
