Pepco Holdings Inc. announces final merger consideration, election results of Conectiv shareholders


WASHINGTON, Aug. 19, 2002 — Pepco Holdings Inc. recently announced the final merger consideration election results in connection with the merger of Potomac Electric Power Company (Pepco) and Conectiv.

According to the final tabulation submitted by Mellon Investor Services LLC, the Exchange Agent:

* The holders of 36,542,216 shares of Conectiv common stock and 1,851,544 shares of Conectiv Class A common stock have elected to receive cash in exchange for their Conectiv shares; and
* The holders of 30,591,481 shares of Conectiv common stock and 2,426,800 shares of Conectiv Class A common stock have elected to exchange their shares for shares of Pepco Holdings common stock.
* The holders of all other outstanding shares of Conectiv common stock and Class A common stock failed to make a valid election.

Based on the final calculations of the Exchange Agent, all shares of Conectiv common stock and Class A common stock that are the subject of a valid cash election or a valid Pepco Holdings common stock election will be exchanged as requested.

To satisfy the requirement of the merger agreement that 50 percent of the aggregate merger consideration be paid in cash and 50 percent be paid in shares of Pepco Holdings common stock, holders of each share of Conectiv common stock for which no valid election was made will receive 0.84882 of a share of Pepco Holdings common stock and $8.44792 in cash and holders of each share of Conectiv Class A common stock for which no valid election was made will receive 0.73642 of a share of Pepco Holdings common stock and $7.32942 in cash.

All questions concerning the exchange of Conectiv shares for the merger consideration should be directed to the Exchange Agent at 1-800-774-5469.

Pepco Holdings, headquartered in Washington, D.C., the public utility holding company formed by the merger, is the largest electricity delivery company in the mid-Atlantic region with a transmission network serving 1.8 million customers in a 10,000-square-mile area. Pepco, based in Washington, and Conectiv, based in Wilmington, Del., will continue to operate as separate companies. The Pepco Holdings common stock is listed on the New York Stock Exchange and trades under the symbol “POM”.

Pepco delivers electricity to more than 700,000 customers in Washington, D.C. and the Maryland suburbs. Conectiv is focused on two core energy businesses. Conectiv Power Delivery provides energy to more than one million customers in New Jersey, Delaware, Maryland and Virginia. Conectiv Energy manages a growing portfolio of “mid-merit” power plants that can respond quickly to changes in the demand for power with the PJM power pool.

SOURCE: Pepco Holdings, Inc.

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