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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT - JANUARY 18, 2000
(DATE OF EARLIEST EVENT REPORTED: JANUARY 17, 2000)
THE COASTAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 001-71761 74-1734212
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification Number)
COASTAL TOWER, NINE GREENWAY PLAZA, HOUSTON, TEXAS 77046-0995
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 877-1400
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ITEM 5. OTHER EVENTS.
On January 17, 2000, The Coastal Corporation ("Coastal") entered
into an Agreement and Plan of Merger ("Merger Agreement") with El Paso
Energy Corporation ("El Paso") and El Paso Merger Company, a wholly
owned subsidiary of El Paso ("Merger Sub"), providing for the merger
(the "Merger") of Merger Sub with and into Coastal. As a result of the
Merger, Coastal will become a wholly-owned subsidiary of El Paso. The
total value of the transaction is approximately $16 billion, including
$6 billion of assumed debt and preferred equity, and is expected to be
accounted for as a pooling of interests. It is expected that the
Merger will be consummated during the fourth quarter of 2000.
In the Merger, (i) each outstanding share of common stock and
class A common stock of Coastal will be converted into the right to
receive 1.230 shares of common stock of El Paso, (ii) each share of
$1.19 cumulative convertible preferred stock, series A and $1.83
cumulative convertible preferred stock, series B of Coastal will be
converted into the right to receive 9.133 shares of common stock of El
Paso, and (iii) each share of $5.00 cumulative convertible preferred
stock, series C, of Coastal will be converted into the right to
receive 17.980 shares of common stock of El Paso.
Under the Merger Agreement, the combined company will be
headquartered in Houston, Texas. Ronald L. Kuehn, Jr., currently
Chairman of El Paso, will remain in that position until December 31,
2000. At that time, William A. Wise, currently El Paso's President and
Chief Executive Officer, will assume the position of Chairman in
addition to continuing as President and Chief Executive Officer of the
combined company. David A. Arledge, currently Coastal's Chairman,
President and Chief Executive Officer, will become Vice-Chairman and
will oversee the non-regulated operations of the combined company. The
Board of Directors for the combined company will consist of 12
directors--seven of whom will be designated by El Paso and five of
whom will be designated by Coastal.
In connection with the execution of the Merger Agreement, El Paso
and Coastal entered into cross stock option agreements pursuant to
which each granted the other an option, exercisable in certain
circumstances described therein, to purchase a number of shares of the
grantor's common stock equal to approximately 14.9% of the number of
outstanding shares of common stock of the grantor, without giving
effect to the shares issuable upon exercise of the option.
A joint press release announcing the execution of the Merger
Agreement was issued on January 18, 2000 and is attached hereto as
Exhibit 99.1.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
EXHIBIT NO. DESCRIPTION
99.1 Press Release dated January 18, 2000 (incorporated by reference
to Exhibit 99.1 of Form 8-K filed by the El Paso Energy
Corporation on January 18, 2000).
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: January 18, 2000 THE COASTAL CORPORATION
By: /s/ Austin M. O'Toole
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Name: Austin M. O'Toole
Title: Senior Vice President and
Secretary
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
99.1 Press Release dated January 18, 2000 (incorporated by
reference to Exhibit 99.1 of Form 8-K filed by the El Paso
Energy Corporation on January 18, 2000).
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