Executive News:

PNM terminates merger with Western Resources

Albuquerque, N.M.-based PNM Resources announced Tuesday its board had
officially killed the proposed deal to buy Western Resources' electric
utility subsidiaries. The deal, originally valued at over $4 billion, had
been in trouble for months, and each side sued the other in state court in
New York. PNM said the merger could be terminated after Dec. 31 under the
terms of the deal, if there had not been satisfactory progress made towards
completing the transaction. But Western has disputed that PNM had grounds to
back out of the deal. PNM sued Western in October seeking to get out of the
deal alleging breach of contract, in part because of adverse rulings from
the Kansas Corporation Commission (KCC) on rates and a Western restructuring
plan considered vital to the transaction.

Western fired back with its own lawsuit a month later, seeking at least $650
million in damages against PNM for alleged extortion, breach of contract,
sabotage and improper interference in the KCC proceedings. Neither case has
been decided, although PNM has asked the court to either dismiss Western's
case or delay action on it until after it has decided PNM's initial suit.
Western also has appealed the KCC order blocking a planned restructuring in
preparation for the PNM transaction to a Kansas district court. Western
fired back with its own lawsuit a month later, seeking at least $650 million
in damages against PNM for alleged extortion, breach of contract, sabotage
and improper interference in the KCC proceedings. Neither case has been
decided, although PNM has asked the court to either dismiss Western's case
or delay action on it until after it has decided PNM's initial suit. Western
also has appealed the KCC order blocking a planned restructuring in
preparation for the PNM transaction to a Kansas district court.