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Filed Pursuant to Rule 424(b)(3)
Registration No. 333-11329
PROSPECTUS SUPPLEMENT
(To Joint Proxy Statement/Prospectus dated October 29, 1996)
HOUSTON INDUSTRIES INCORPORATED
HOUSTON LIGHTING & POWER COMPANY
NORAM ENERGY CORP.
This Prospectus Supplement relates to the Joint Proxy
Statement/Prospectus dated October 29, 1996 which describes an Agreement and
Plan of Merger, dated as of August 11, 1996, as amended (the "Merger
Agreement"), among Houston Industries Incorporated ("HI"), its subsidiaries,
Houston Lighting & Power Company ("HL&P") and HI Merger, Inc. ("Merger Sub"),
and NorAm Energy Corp. ("NorAm"). The Merger Agreement provides for
o the merger of HI into HL&P (the "HI/HL&P Merger"), as a
result of which each outstanding share of HI common stock will be
converted into one share of common stock of HL&P, which will be
renamed "Houston Industries Incorporated" ("Houston") and will
continue to conduct HL&P's electric utility business under HL&P's
name, and
o the merger of NorAm into Merger Sub (the "NorAm Merger,"
and together with the HI/HL&P Merger, the "Basic Mergers"), as a
result of which NorAm will become a wholly owned subsidiary of Houston
and the outstanding shares of common stock of NorAm will be converted
into the right to receive cash or Houston common stock.
The Merger Agreement also provides that one of two alternative merger
structures (the "Alternative Mergers") could be used rather than the Basic
Mergers in certain circumstances. The term "Transaction" refers to the
business combination between HI and NorAm, whether implemented using the Basic
Mergers or one of the Alternative Mergers.
In the Transaction, each outstanding share of NorAm common stock will
be converted into either cash or Houston common stock. The cash amount per
share of NorAm common stock will be $16.00 (subject to increase if the
Transaction closes after May 11, 1997). The number of shares of Houston common
stock issued per share of NorAm common stock will be not less than 0.6154
shares nor more than 0.7529 shares. The actual number of shares will depend
upon the average daily closing prices of HI common stock on the New York Stock
Exchange ("NYSE") during a 20-trading-day period commencing 25 trading days
prior to the closing date of the Transaction (the "Closing Date"). (The actual
number of shares of Houston common stock to be issued to NorAm stockholders, as
so determined, is called the "Stock Consideration.") Accordingly, the value
(based on the average closing price) of the Stock Consideration will be $16.00
per share if the average price of HI common stock is greater than or equal to
$21.25 and less than or equal to $26.00; the value will be more or less than
$16.00 if the average price is outside that range. Each NorAm stockholder will
be entitled to elect to receive either cash or Houston common stock. However,
elections may be prorated in order that the total number of cash election
shares and the total number of stock election shares will be approximately
equal. See Instruction 15 of the Form of Election and Letter of Transmittal
for a general discussion of the proration procedures.
On December 17, 1996, the respective stockholders of HI and NorAm
approved and adopted the Merger Agreement.
THE SECURITIES TO BE ISSUED IN CONNECTION WITH THE TRANSACTION HAVE NOT BEEN
APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THE JOINT PROXY STATEMENT/
PROSPECTUS OR THIS PROSPECTUS SUPPLEMENT.
ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
------------------
The date of this Prospectus Supplement is January 21, 1997.
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COMPARATIVE PER SHARE PRICES OF HI AND NORAM COMMON STOCK
HI Common Stock is traded on the NYSE, the Chicago Stock Exchange and
the London Stock Exchange under the symbol "HOU." NorAm Common Stock is traded
on the NYSE under the symbol "NAE." The following table sets forth the high
and low sales prices of HI Common Stock and NorAm Common Stock for the calendar
quarters indicated, as reported in The Wall Street Journal's NYSE Composite
Transactions Reports. It also sets forth certain dividend information.
HI COMMON STOCK NORAM COMMON STOCK
------------------------------------------- --------------------------------------------
MARKET PRICE Market Price
----------------- DIVIDEND DECLARED -------------------- DIVIDEND DECLARED
HIGH LOW PER SHARE High Low PER SHARE
---- --- ----------------- ---- --- ---------
1996
First Quarter . . . . . $25 5/8 $21 1/2 $0.375 $ 9 3/8 $ 7 7/8 $0.07
Second Quarter . . . . $24 3/4 $20 1/2 $0.375 $11 1/8 $ 8 3/8 $0.07
Third Quarter . . . . . $24 3/4 $21 1/8 $0.375 $14 7/8 $10 1/4 $0.07
Fourth Quarter . . . . $24 1/8 $20 3/4 $0.375 $15 1/2 $14 3/4 $0.07
1997
First Quarter (through
January 15) . . . . $23 1/8 $22 1/8 $0.375 $15 5/8 $15 1/4 $0.07
The following table sets forth the closing price per share of HI
Common Stock and NorAm Common Stock on the NYSE and the equivalent per share
price (as explained below) of NorAm Common Stock on August 9, 1996, the
business day preceding public announcement of the Transaction, and on January
15, 1997:
HI NorAm Equivalent per
Market Price per Share at: Common Stock Common Stock Share Price
- ------------------------- ------------ ------------ -----------------
August 9, 1996 . . . . . . . . . . . . . . . . $23.625 $11.625 $16.00
January 15, 1997 . . . . . . . . . . . . . . . $23.125 $15.50 $16.00
The equivalent per share price of a share of NorAm Common Stock
represents an estimation of the Stock Consideration, assuming that the Closing
Date had occurred on the respective dates set forth in the table above.
Stockholders are advised to obtain current market quotations for HI
Common Stock and NorAm Common Stock. No assurance can be given as to the
market price of HI Common Stock or NorAm Common Stock at, or in the case of
Houston Common Stock, after the Closing Date.
