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Santa Fe Pacific Corporation
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Union Pacific Corporation
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(4) Date Filed: October 13, 1994
* Although the attached press release is being
filed as additional material pursuant to Rule 14a-6 under
the Securities Exchange Act of 1934, the filer of this additional
material does not believe that this press release constitutes
soliciting material.
UNION PACIFIC ANNOUNCES INCREASE IN PRICE
OF PROPOSAL TO NEGOTIATE WITH SANTA FE
Lewis Takes Short-Term Medical Leave
BETHLEHEM, PA, October 30 -- Union Pacific Corporation
(NYSE: UNP) announced today that it has increased the price in
its proposal to negotiate a combination with Santa Fe Pacific
Corporation (NYSE: SFX) to $20 per share of Santa Fe common
stock.
The revised Union Pacific proposal represents a 29.0 percent
premium over the closing price of Santa Fe common stock on
October 28, 1994, and is 16.2 percent higher than the recently
revised offer to Santa Fe stockholders from Burlington Northern
Inc. (NYSE: BNI) based on the closing price of Burlington
Northern common stock on October 28, 1994.
Union Pacific is proposing to negotiate a tax-free merger
transaction in which Santa Fe shareholders would receive shares
of Union Pacific common stock having a value of $20 per Santa Fe
share based on the $49.125 closing price of Union Pacific common
stock on the New York Stock Exchange on October 28, 1994. Union
Pacific also said it would consider paying a portion of the
consideration in cash.
The revised proposal made by Union Pacific remains subject
to termination of the merger agreement between Burlington
Northern and Santa Fe in accordance with the terms of that
agreement, approval of a mutually satisfactory merger agreement
by both Boards of Directors, receipt of ICC and other
governmental approvals and approval by stockholders of both
companies.
In addition, Elbridge T. Gerry, Jr., Chairman of the
Executive Committee of Union Pacific Corporation's Board of
Directors, announced today on behalf of the Board that Union
Pacific Corporation Chairman and Chief Executive Officer Drew
Lewis requested and was granted a short-term medical leave to
enter an alcohol treatment program. Mr. Lewis is expected to
return to work in four to six weeks.
Mr. Gerry said that in Mr. Lewis' absence his duties will be
shared by Dick Davidson, President of Union Pacific Corporation
and CEO of Union Pacific Railroad Company, Jack Messman, Chief
Executive Officer of Union Pacific Resources and L. White
Matthews, III, Executive Vice President - Finance of Union
Pacific Corporation. Mr. Matthews will oversee the Union
Pacific/Santa Fe merger project.
/EDITORS NOTE/ Attached is the full text of a letter from Union
Pacific to Mr. Robert D. Krebs, chairman, president and CEO of
Santa Fe.
This announcement is neither an offer to sell nor a
solicitation of offers to buy any securities which may be issued
in any merger or similar business combination involving Union
Pacific and Santa Fe. The issuance of such securities would have
to be registered under the Securities Act of 1933 and such
securities would be offered only by means of a prospectus
complying with the requirements of such Act.
/Union Pacific Letter/
Mr. Robert D. Krebs
Chairman, President & CEO
Santa Fe Pacific Corporation
1700 East Golf Road
Schaumburg, Illinois 60173
Dear Rob:
I am writing to submit the following revised proposal to
negotiate a combination of our companies. We ask that you and
your Board of Directors, consistent with your fiduciary
obligations and in accordance with the terms of your existing
merger agreement with Burlington Northern, give careful
consideration to our proposal.
We propose to negotiate a tax-free merger in which your
shareholders would receive Union Pacific shares of common stock
at a ratio of .407 of a share for each Santa Fe share of common
stock, having a value of $20 per Santa Fe share based on the
closing price of Union Pacific stock on October 28, 1994. We
would also consider paying a portion of the consideration in
cash.
This price would represent a premium of 29.0 percent over
the closing price of Santa Fe common stock on October 28, 1994.
Our proposed price also represents a premium of 16.2 percent over
the current value of the revised Burlington Northern transaction,
which has been endorsed by your financial advisors as fair to
your stockholders.
We are prepared to begin immediate negotiation of a
definitive merger agreement containing mutually agreeable terms
and conditions. Our proposal would continue to be subject to the
conditions previously described, including termination of your
merger agreement with Burlington Northern in accordance with its
terms, completion of due diligence, approval of a mutually
satisfactory merger agreement by our respective Boards of
Directors, ICC and other governmental approvals and approval of
our respective shareholders.
We are in receipt of your letter, dated October 27, 1994,
concerning our ICC case. We disagree with many of your
statements and will be sending you shortly a written response
addressing those differences. We continue to believe that you
have not given fair consideration to the ICC issue. As we have
said previously, we think it would be far more constructive for
your Board and management to meet with us to discuss how we would
propose to deal with this issue.
Sincerely,
Dick Davidson
President
Union Pacific Corporation
Chairman and Chief Executive Officer,
Union Pacific Railroad Company
cc: Board of Directors
Santa Fe Pacific Corporation
