KANSAS CITY, MO. -- Two hundred miles and a state line separate Wichita, Kan., and Kansas City, Mo.
That doesn't seem far to Wichita sports fans, who follow Kansas City's baseball and football teams. It also doesn't seem far to utility company executives in the two cities, who once were partners and now are locked in a takeover battle.
In the nation's first hostile utility takeover attempt, Kansas City Power & Light Co. launched a bid this summer for its longtime neighbor and business partner, Kansas Gas and Electric Co. of Wichita.
The impetus for KCP&L's bid is clear: The Kansas City-based utility is short of power to serve its growing area while its Wichita neighbor has a glut of power but serious financial problems.
The two companies spent billions of dollars together jointly constructing coal-fired generating plants and the nation's 1989 top-producing nuclear power plant.
Then, KCP&L made its unsolicited offer to buy the company.
KG&E spurned the $857 million deal, urged its stockholders to hold onto their shares and is fighting the takeover in court. The company has said it is talking with other potential merger partners. (The offer for KG&E stock, extended twice, now is set to expire Friday.)
It sounds like a scenario for high business drama: Two community stalwarts at each other's throats, shattering the gentlemanly world of Midwestern electricity production with the weapons of high finance.
But, to listen to local leaders, that doesn't seem to be the case. The questions of electric power seem more important in these Midwestern business communities than do the questions of high-powered, Wall Street-style maneuvering.
Brian Johnson, an insurance executive who serves as chairman of the Wichita-Sedgwick County Partnership for Growth, an economic development group, said reaction in his area has been muted.
"The community has a wait-and-see attitude. Not that many understand the pluses and minuses."
The key concern is the impact on electric rates for the short and long term, he said.
Leaders in Wichita feel they have supported relatively high electric rates to ensure themselves an abundant supply of power, and they want assurances that the supply will remain available should KCP&L succeed in its takeover, Johnson said.
KCP&L, with generally lower rates, has had less success meeting demand. It is promising a rate moratorium, as well as no layoffs, should the merger go through.
In addition, Wichitans want to know if the would-be out-of-town owner would match KG&E's level of corporate contributions to civic projects.
Gordon Greer, president of Bank IV in Wichita, said while many Wichita residents would prefer local management of the utility, KCP&L is regarded as a good utility with a solid record.
Greer said the initial surprise of the hostile takeover has quickly turned into a nonevent. "It's fairly quiet in the business community now."
In Kansas City, the fact that a healthy company can attempt a hostile takeover is welcome news to some, breaking the cycle of local companies being taken over by outsiders.
"In Kansas City, the consensus tends to run in favor of KCP&L," said Bill Eddy, dean of the Bloch School of Business and Public Administration at the University of Missouri at Kansas City. "A lot of leaders recognize KCP&L is itself a healthy company and could be subject to a takeover, so it's better to grow than face being swallowed up later."
KCP&L, larger and more profitable than the company it wants to take over, is seeking to extend its control into the southeastern quarter of Kansas now served by KG&E. The combination would boost the medium-size utility into one serving more than 650,000 customers throughout 12,800 square miles.
"These companies logically should combine," said A. Drue Jennings, president of KCP&L, who first hoped for a friendly merger and eventually resorted to the tender offer.
The match-up pits Jennings, a younger, civic-minded, relatively new company president, against the longtime KG&E chairman and native Wichitan, Wilson K. Cadman.
At 44, Jennings represents a new generation of management at the Kansas City operation. He was named president and chief executive in 1988, 14 years after he went to work for the utility as a lawyer. Jennings is part of the youngish Kansas City power elite, advocating a myriad of social causes and even lending a utility executive to the Kansas City School District, which is struggling in the midst of a court-ordered desegregation plan.
Cadman, with almost 40 years of tenure at KG&E, is handling the takeover attempt by keeping his public opinions few, declining interviews. Analysts say the Cadman regime may be without an obvious successor as he nears retirement, leading managers to fight for their jobs by objecting to the takeover.
Cadman has called the takeover proposal "illegal and not adequate" and said talks have begun with "a third party."
As recently as June, KCP&L crews assisted KG&E crews in repairing storm damage. These working relationships will continue, executives at KCP&L maintain.
"Our relationships go way back into the early 1970s when we began planning and built the LaCygne Generating Station in 1973 and a second unit later," said Lyle Koerper, manager of corporate communications at KG&E.
The LaCygne coal-fired plants were constructed and operated by KCP&L, but ownership is split 50-50 between the utilities.
Later the two again joined forces to build the Wolf Creek nuclear power plant in Kansas, which opened in 1985 and in 1989 topped the nation in kilowatt hour production.
How does Jennings, who initiated the takeover, address the possibility of becoming the first victor in a hostile electric utility takeover? "I'm not out to make history," Jennings said. "I'm out to make a bigger company."