MADISON, Wis., Aug. 16 /PRNewswire/ -- WPL Holdings, Inc. (NYSE: WPH),
IES Industries Inc. (NYSE: IES) and Interstate Power Co. (NYSE: IPW) today
announced that they have agreed on a new exchange ratio for IES, given the
strategic value of their unprecedented three-way merger to customers,
shareowners and employees.  If approved, the three utility companies would
combine as Interstate Energy Corp.
    The agreement on a new exchange ratio for IES, which all three boards of
directors are recommending that shareowners approve, was announced following
a decision by the IES Board of Directors to reject a recent unsolicited offer
for IES by MidAmerican Energy Co.
    Under terms of the agreement, holders of IES Industries common stock will
receive 1.14 shares of Interstate Energy Corp. common stock for each share of
IES stock they own.  Under the previous terms of the merger agreement, holders
of IES common stock would have received 1.01 shares of Interstate Energy Corp.
common stock for each share of IES stock.
    Holders of Interstate Power common stock will continue to receive
1.11 shares of Interstate Energy Corp. common stock for each share of
Interstate Power stock they own.  WPL shares, meanwhile, will remain
outstanding as an identical number of shares in  Interstate Energy Corp.
    Erroll B. Davis Jr., president and CEO of WPL Holdings, said all three
Interstate Energy partners believe the strategic value of the three-way
combination justifies the new exchange ratio.
    "Unequivocally, the strategic value of our three-way merger for our
customers, shareowners and employees is even stronger today than it was when
we announced the merger agreement nine months ago," he said.  "The new
exchange ratio reflects a commitment to the strategic value of this
unprecedented three-way alliance."
    According to Davis, the continuing proliferation of merger agreements in
the electric-utility industry only confirms the inevitability of a more
competitive energy marketplace.
    "Utility companies are not looking for strategic partners merely to get
bigger," Davis said.  "Strategic alliances such as ours are merely a means,
not an end, toward developing and marketing the array of energy products and
services customers will demand once competition is injected into the
electric-utility industry."
    Davis also cited the benefits to customers and shareowners that are
projected to accrue from approximately $749 million in operational savings
over 10 years as a result of the three-way merger.  Most of the savings will
be achieved through greater economies of scale and the elimination of
duplicated functions.
    "As a more cost-effective business, Interstate Energy Corp. will enable us
to maintain low energy rates and high-quality customer service for more than
1 million energy customers in a four-state region," Davis said.
    The annual meetings of shareowners of WPL Holdings, IES and Interstate
Power remain scheduled for Thursday, Sept. 5, beginning at 10 a.m., with the
WPL Holdings annual meeting to take place at the Dane County Exposition Center
in Madison.  In the very near future, WPL Holdings shareowners will receive
supplemental proxy materials describing the new stock exchange ratio.
    WPL Holdings, IES Industries and Interstate Power announced the three-way
merger agreement on Nov. 11, 1995.  If the merger is approved by shareowners
and regulatory authorities, Interstate Energy Corp. would serve approximately
870,000 electric and 360,000 natural gas customers in Wisconsin, Iowa,
Minnesota and Illinois.

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