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EXHIBIT 99.1
[AZURIX LOGO]
Media Contact:
Diane Bazelides
(713) 345-5209
Analyst Contact:
Elizabeth Ivers
(713) 646-9531
AZURIX CORP. BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS ENRON
PROPOSAL AT INCREASED PRICE OF $8.375 PER SHARE
FOR IMMEDIATE RELEASE: Friday, December 15, 2000
HOUSTON - Azurix Corp. announced today that it has entered into an
agreement and plan of merger with Enron Corp. under which the holders of
Azurix's publicly traded shares would receive cash of $8.375 per share. The
merger requires the approval of a majority of Azurix's public shareholders
voting on the matter, excluding Enron, Atlantic Water Trust and their
affiliates.
Azurix's board of directors unanimously approved the transaction and
its submission to Azurix's shareholders. This approval followed a determination
by a special committee of the board that the merger is fair to and in the best
interests of Azurix's public shareholders. The special committee, which consists
of Azurix directors who are directors but not officers of Enron, has been
negotiating the previously announced Enron proposal to fund a buyback of public
shareholders at $7.00 per share. In making its determination, the special
committee relied on advice of its investment bankers, Salomon Smith Barney and
Wasserstein Perella & Co., Inc., who concluded that the proposal with the
increased price is fair to Azurix's public shareholders from a financial point
of view.
Under the proposed agreement and plan of merger, Enron would
effectively acquire the public shareholders' one-third interest in Azurix.
Atlantic Water Trust would continue to hold
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the remaining two-thirds of the Azurix common stock and thus would continue to
control Azurix. Enron holds a 50 percent voting interest in Atlantic Water
Trust.
A special shareholder meeting to vote on the agreement will occur
following the distribution of proxy materials by Azurix. Azurix intends to file
the required documents with the Securities and Exchange Commission by the end of
December. A shareholders' meeting and closing are targeted for the first quarter
of 2001. The merger is subject to customary closing conditions.
The agreement may be terminated by Azurix's board of directors or the
special committee without any termination fee if they receive a proposal to
acquire Azurix or its assets that in the judgment of the board or special
committee is superior to the merger.
To the extent needed to enable Azurix to meet certain conditions for a
merger under the indenture for its senior notes, Enron has agreed to convert,
immediately prior to the merger, up to $180 million of indebtedness owed to it
by Azurix under an existing line of credit to equity in the form of Azurix
preferred stock. The stock would be subject to mandatory redemption in 2012.
Azurix also announced that it has settled in principle certain
shareholder litigation pending in Delaware and Texas that had challenged the
Enron proposal as unfair. The settlement is contingent upon execution of a
definitive settlement agreement, confirmatory discovery, and court approval.
Azurix Corp. (www.azurix.com) is a global water company that owns,
operates and manages water and wastewater assets, provides water and wastewater
related services, and develops and manages water resources. Azurix offers
e-business solutions in the areas of procurement, engineering and design, water
supply and storage and billing and collections. Azurix is listed on the Russell
2000 U.S. equity index. Its stock is traded on the New York Stock Exchange under
the ticker symbol, "AZX."
This press release includes forward-looking statement within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Although Azurix believes that its expectations
are based on reasonable assumptions, it can give no assurance that these
expectations will prove to be correct. Important factors that could cause actual
results to differ materially from the expectations reflected in the
forward-looking statements include, among other things, the timing of the SEC's
review of Azurix's submission, whether third parties will offer to acquire
Azurix or its assets before the proposed merger is approved, and whether
Azurix's public shareholders will approve the proposed merger. No assurance can
be given that the merger will occur.
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