SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE TO
Tender Offer Statement under Section 14(d)(1) or 13(e)(1) of the Securities
Exchange Act of 1934
Vastar Resources, Inc.
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(Name of Subject Company (issuer))
BP Amoco p.l.c.
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(Names of Filing Person (Offeror and Other Person))
Common Stock, $0.01 Par Value Per Share
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(Title of Class of Securities)
911312304
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(CUSIP Number of Class of Securities)
Peter B.P. Bevan
Britannic House,
1 Finsbury Circus,
London, EC2M 7BA,
England
011-44-171-496-4000
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(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of the Person(s) Filing Statement)
COPIES TO:
Benjamin F. Stapleton
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Telephone: (212) 558-4000
Facsimile: (212) 558-3588
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CALCULATION OF FILING FEE
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|
Transaction Valuation | Amount of Filing Fee*
|
$ | $
|
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* Pursuant to General Instruction D to schedule TO, no filing fee is required
[_] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
Amount Previously Paid: Not applicable. Filing Party: Not applicable.
Form or Registration No.: Not applicable. Date Filed: Not applicable.
[X] Check box if the filing relates solely to preliminary communications made
before the commencement of a tender offer.
Check the appropriate boxes to designate any transactions to which this
statement relates:
[_] third party tender offer [X] going-private transaction
subject to Rule 14d-1 subject to Rule 13e-3
[_] issuer tender offer [_] amendment to Schedule 13D
subject to Rule 13e-4 under Rule 13d-2
Check the following box if the filing is a final amendment reporting the
results of the tender offer. [_]
<PAGE>
SCHEDULE TO
This Tender Offer Statement on Schedule TO relates to a proposed offer
by BP Amoco p.l.c., a company organized under the laws of England, to purchase
through a wholly owned subsidiary the outstanding shares of common stock, par
value $0.01 per share of Vastar Resources, Inc., a Delaware corporation, not
currently owned by Atlantic Richfield Company, at a price of $71 per share.
ITEM 12. Exhibit.
(a)(5)(A) Transcript of Sir John Browne's presentation to financial
analysts in the US and UK on March 16, 2000.
(a)(5)(B) Press Release, dated March 16, 2000.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I hereby
certify that the information set forth in this statement is true, complete and
correct.
BP AMOCO PLC
By: *
---------------------------------
Name:
Title:
Dated:
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* Pursuant to General Instruction D to Schedule TO, no signature is required.
<PAGE>
EXHIBIT INDEX
(a)(5)(A) Transcript of Sir John Browne's presentation to financial
analysts in the US and UK on March 16, 2000.
(a)(5)(B) Press Release, dated March 16, 2000.
The offer for Vastar has not yet commenced. This transcript does not constitute
an offer to buy any securities. Any offer will be made pursuant to a tender
offer statement to be filed with the Securities and Exchange Commission. Vastar
shareholders are advised to read the tender offer statement when it is available
because it will contain important information relating to the offer.
Shareholders will be able to obtain the tender offer statement and other filed
docments for free at the Internet website maintained by the Securities and
Exchange Commission at www.sec.gov. In addition, BP Amoco will make the tender
offer statement available for fee to Vastar's shareholders.
Ladies and Gentlemen, good morning, and thank you for joining us.
Thank you also for your patience - its been a busy week and I hope we haven't
taken too much of your time.
A number of things have happened and I just wanted to clarify where we stand and
to set the developments in a strategic context.
First we announced on Tuesday that we were making an agreed bid for Burmah
Castrol.
That brings us a great brand, access to some great new markets such as India and
China and some great marketing skills. It is an acquisition driven by
performance, growth and capabilities.
Secondly we announced last night that subject to the completion of the Arco
transaction we have agreed the sale of Arco's Alaskan businesses to Phillips
Petroleum for a total of around $ 7 bn, including $ 6.6 bn for the relevant
business assets and inventory, and an estimated $ 500 m on the basis of an
agreement giving us a proportion of the revenues when prices exceed $ 25 a
barrel.
Thirdly it has been announced in San Francisco that the litigation with the FTC
has been suspended, and we are working closely now in the hope of receiving a
consent order for the transaction within the next couple of weeks.
Fourth we have agreed, again subject to completion of the Arco transaction, the
sale of Arco's pipeline and storage assets in and around Cushing for $ 0.355 bn.
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Fifth, we've announced this morning our intention to make an offer to the
minority shareholders of Vastar for their holding at $ 71 per share. As you will
know Vastar is currently 82 per cent owned by Arco.
And sixth and finally we are announcing today our intention, subject to approval
at our AGM in April, to initiate a buy back of stock - on the market over the
110 or so clear trading days available this year.
.....
What do all those steps mean ?
First they mean that after a year of intensive effort around some very complex
legal, political and commercial issues we believe we've found an excellent
solution.
We hope and believe this puts us in a position to complete, within a matter of
weeks, something we started a year ago.
The exchange ratio remains unchanged, and we now expect to complete the
transaction in a way which captures many of the benefits we anticipated, and
reinforces our commitment to the combination of performance and growth.
The combination of all those announcements means that we've prepared ourselves
for a whole new phase in our performance and growth. A new beginning.
Secondly, because of the macro environment we've been able to do something which
a year ago none of us thought possible - to raise $ 7 bn through the sale of
Arco's Alaskan barrels.
Thirdly we have a even stronger portfolio - every element of which is now
oriented to performance and disciplined growth.
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We have for the first time, a really serious presence in the gas business on a
global scale.
In the US we have, also for the first time a coast to coast presence which makes
us the largest supplier of gasoline and the operator of the largest number of
sites. 25 per cent of that business will be on the West Coast.
Fourth, we have the prospect, as we said when we announced the deal, of $ 1 bn
in cash savings.
The make up of that total has shifted, but we're confident of the total because
the work we've done since last April has shown the potential from within the
continuing Arco businesses and from the Vastar transaction.
................
Let me explain the detail behind those headlines.
First in Alaska. We've agreed to sell to Phillips Arco's existing Alaskan
business for a total of $ 6.6 bn in cash.
In addition we will receive a proportion of revenues if WTI prices exceed $ 25 a
barrel up to a possible total of $ 500m. The transaction will be effective from
January of this year and that means that over $ 150 m is already secured.
We'll retain BP Amoco's existing interests in Alaska which we see as a very
solid base for the company going forward, and we'll have the chance to talk to
the new owners about the potential for industrial synergies in terms of
operations.
On the basis of our commitment to the transaction with Phillips we hope to have
a consent decree for the combination of BP Amoco and Arco within a couple of
weeks.
3
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The transaction will go ahead at the exchange ratio agreed last year.
The combination gives a platform for growth. As we said last April, that is the
strategic logic.
Starting with natural gas.
This deal transforms BP Amoco into a truly global gas company.
We will be number 1 in North America with reserves of 17 tcf and production of
at least 4 bcf/day.
North America is an important market particularly since demand is growing
strongly and there are indications that replacing the existing resource base
will not be easy. That puts a premium on our low cost supplies.
We'll be number 1 in the UK North Sea, and number 1 in the rapidly growing the
Atlantic and Mediterranean markets.
In the Asian market, which is immature, we'll move from being ninth to third in
terms of production - with over 800 mmcf/day of sales and we'll have some 35 tcf
of booked and unbooked resources - an amount equal to BP Amoco's current gas
reserves world-wide.
In addition to Arco's existing gas production in Indonesia and China there will
be opportunities for growth in both areas and in the Malaysia/Thailand joint
development area.
World-wide, and after taking account of the disposals that are required in the
Southern North Sea, the new company will start life with production of some 8.4
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bcf/day. And we'll have the potential to grow that by about 5 per cent a year
over the next five years.
In the downstream, as this slide shows, we are acquiring a great set of assets
in a strong growth market. West Coast demand grew by 1.5 per cent per annum
through the 1990s.
The transaction also gives us a great brand - am/pm. That brand has some
excellent associated technology which we can apply in other areas world-wide.
We'll have 28,000 gas stations world-wide and 18,000 of them are in the US.
This slide shows that position in more detail
Those sites are all in great locations and now we want to investigate the
possibilities for making even better use of those sites in the new economy.
And finally the combination gives us a number of great positions in different
areas around the world...
.... it strengthens our position in gas in the Lower 48
... In Latin America, it gives us further opportunities in Venezuela, Trinidad
and the Southern Cone.
.... In the UK it boosts gas reserves by 30 per cent
.. It enhances our role in Russia, Kazakhstan and Azerbaijan through Arco's
share in Lukoil ... and through the joint venture which brings access to the
Tengiz field and Caspian pipeline, as well as additional exploration activity.
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... In deep water Gulf of Mexico, where we are the leading leaseholder, where
Vastar has interesting production and development options.
... and downstream in China where Arco has activities in refining, retail and c
store operations which fit well with our interests in petrochemicals and
retailing.
Overall then the geographic fit with our existing business is excellent. ...
Let me focus for a moment on synergies.
We'll give you more detail on this when we talk to you in July but it is already
clear from the intensive preparation we've already done that we can deliver in
full the $ 1 bn per annum of pre tax savings we talked about when we announced
the transaction.
The mix of that has changed. We understand the potential of Arco's world-wide
assets better than we did a year ago, and in addition to that there will a
contribution from the buyout of the Vastar minority.
Any industrial synergies we and our partners can achieve in Alaska will be
additional to the $ 1 bn total.
ARCO, during 1999, further improved performance beyond what we expected at the
time the transaction was announced. The benefits, of course, accrue to us.
Planning for integration is very well advanced and implementation should be
completed by October. We expect to deliver the $ 1 bn of annual savings in full
by the end of 2001.
The restructuring costs associated with delivering these savings are around
$700m - and we expect virtually all of that charge to be made this year.
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......
So stepping back what is the shape of the new company we're creating?
First in regional terms it strengthens our position in the US and in the Far
East. This shows the regional split of the current BP Amoco and of the new
company.
It leaves the business balance - between upstream, refining and marketing and
chemicals largely unchanged
But it marks a significant step in favour of gas. Gas as a proportion of our
total production portfolio will rise from the 19 per cent of the old BP in 1997
to 38 per cent by the time this transaction is completed. The pattern of growth
suggests this shift might continue.
.....
In terms of shareholder value the deal is accretive both to cash earnings and to
cash flow per share.
On the basis of the synergies which can be delivered, and broker estimates, the
combination is slightly accretive to pro-forma earnings - that is before
goodwill amortisation - in Year 1 and 4 to 5% accretive thereafter.
There will be very little impact on the balance sheet... and following these
transactions we expect to remain comfortably within our target gearing range.
We have, as we've already announced, made an offer for the minority stake in
Vastar and we hope that can proceed rapidly as an agreed transaction.
7
<PAGE>
We've offered $ 71 per share in cash, which represents a premium of 14 % over
the closing price on Tuesday, and around 30 % over the average price for the
past 3 months.
This offer has been communicated to the board of Vastar. Arco currently owns 82
% of the company which operates in the Lower 48 and offshore Gulf of Mexico.
We also intend, subject to shareholder approval at the AGM on 13 April, to
initiate an on-market rolling programme of share buy-backs in the US and UK
markets from early May, subject to the normal rules on closed periods.
As I said earlier there are around 110 days when the company could be in the
market this year.
I want to stress that all the steps we're taking will be carried through within
our existing financial planning framework - covering gearing, dividend policy
and the use of mid cycle assumptions - which include Brent at $ 14. The
discipline remains in place.
......
So to summarise. We start from a strong base. We've integrated BP and Amoco over
the last fifteen months, with huge gains in productivity, and early achievement
of the synergies we'd targeted.
We're making an agreed bid for Burmah Castrol which will bring new strengths in
some very interesting markets.
And we're now hopeful of completing the Arco transaction without going to court.
8
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We have a new focus on some key areas of growth such as the deep water of the
Gulf of Mexico, Angola, the Caspian and the global gas business.
Today's announcements add to that growth potential in a very significant way and
they also reinforce the commitment we've made to combine growth with the
discipline of performance.
At our meeting in July we'll give you a detailed and specific rundown of what
that growth means - in each and every one of our businesses.
That growth will come within a disciplined framework - a framework which gives
us flexibility and which allows us to decide in the light of circumstances on
the pace and balance of what we do.
At the moment, of course, circumstances are good and that gives additional
choices.
We can accelerate development - and we now have an even better set of options
from which to choose.......... we can pursue inorganic expansion where we see
the chance to add value and to create the opportunity for further
growth.......... and we can make some additional distribution to shareholders
through a buy back of stock.
A framework which gives us control of our own destiny. And today's announcement
improves the quality of the choices we can make on every dimension of that
framework.
Ladies and Gentlemen, thank you for listening - now we'd be very happy to take
your questions.
9
FOR IMMEDIATE RELEASE
MARCH 16, 2000
13/00
BP AMOCO ADVANCES CONSTRUCTIVE
DISCUSSIONS WITH FTC
BP Amoco chief executive Sir John Browne said today that the company was at an
advanced stage in "constructive" discussions with the US Federal Trade
Commission (FTC) on its proposed combination with Atlantic Richfield Co (ARCO)
and was hopeful of a successful outcome "within a matter of weeks".
Following an earlier announcement in Alaska that BP Amoco and ARCO is to sell
ARCO's Alaskan businesses to Phillips Petroleum for $7 billion, Browne today
disclosed an agreement to sell ARCO's interests in the Cushing storage terminal,
together with various pipeline interests, to TEPPCO Partners, of Houston, for
$355 million.
"With these major disposals we believe we have addressed the anti-trust concerns
of the FTC. We now hope we can move forward in the coming weeks towards
obtaining a consent order allowing us to close the ARCO combination and deliver
the significant synergies of the deal to the shareholders of the combined
company."
Speaking at a presentation to financial analysts in the US and UK, Browne said
that, subject to completion of the ARCO deal, BP Amoco had also today advised
the board of Vastar Resources Inc. of the intention to make a tender offer for
the minority stockholding of the company at $71 a share. ARCO already owns some
82 per cent of Vastar, one of the largest independent oil and gas producers in
the US.
Browne told the analysts that, subject to approval at BP Amoco's annual general
meeting next month, the company intended to embark on a rolling programme of
share buy-backs in the US and UK financial markets, beginning early May.
He said he expected the synergies from ARCO to be better than originally
estimated when the deal was announced in April last year. "At the time, we
envisaged annualised pre-tax savings and synergies of around $1 billion, of
which $200 million would be from Alaska.
"Even after disposing of ARCO's Alaskan interests, we believe we can still
deliver $1 billion in savings. The make-up of the savings have shifted but we
are absolutely confident of the total because the work we've done since last
April has shown the potential from within the continuing ARCO businesses,
including Vastar."
Browne said the oil price had risen sharply and ARCO's financial position had
improved markedly since the combination was first agreed, with capital spending
of $2.7 billion in the interim and much lower gearing than expected a year ago,
both factors which would significantly benefit the combined company.
<PAGE>
He said the combination with ARCO promised a "massive boost" to BP Amoco's
growth strategy, giving the company a coast-to-coast refining and marketing
presence in the US and increasing its oil and gas reserves by some 2.7 billion
barrels of oil equivalent. The company's gas and liquids production would
increase by over 700,000 barrels a day of oil equivalent, including the addition
of 125,000 barrels a day to its UK North Sea production and 360,000 barrels a
day - half of it gas - in the US Lower 48 and the Gulf of Mexico, mainly from
ARCO's stake in Vastar.
In addition, it would add unbooked gas volumes of some 15 trillion cubic feet in
Thailand, Malaysia, the South China Sea, Qatar, and Indonesia where ARCO has a
net share of up to eight trillion cubic feet in the Tangguh field, regarded as
the most competitive future liquefied natural gas project to supply the growing
demands of the Far East.
"This will give us a powerful platform for upstream growth in Asia, with
world-class volumes ready to supply Japan, Korea and other key markets now
recovering fast from recession," Browne said.
The combination would also add interests to BP Amoco's portfolio in Algeria,
Venezuela, the Caspian and in Russia where ARCO has an eight per cent stake in
Lukoil.
"In the downstream we are acquiring a great set of assets on the US West Coast
where demand has grown by 1.5 per cent a year through the 1990s. For the first
time, we will also have a coast-to-coast presence in marketing and refining in
the US."
Concluding his remarks to the analysts, Browne said: "We start with a strong
base, from which we are determined to grow. We've integrated BP and Amoco over
the last 15 months, with huge gains in productivity and early achievement of the
synergies we had targeted.
"We're making an agreed bid for Burmah Castrol which will bring new strengths in
some very interesting markets and now we are hopeful of completing the ARCO
transaction in the near future.
"We have a new focus in some key areas of growth such as the deepwater Gulf of
Mexico, the Caspian and the global gas business. Today's announcements add to
that growth potential in a very significant way and they also reinforce the
commitment we've made to combine growth with the discipline of ongoing
performance."
The offer for Vastar has not yet commenced. This press release does not
constitute an offer to buy any securities. Any offer will be made pursuant to a
tender offer statement to be filed with the Securities and Exchange Commission.
Vastar shareholders are advised to read the tender offer statement when it is
available because it will contain important information relating to the offer.
Shareholders will be able to obtain the tender offer statement and other filed
documents for free at the Internet website maintained by the Securities and
Exchange Commission at www.sec.gov. In addition, BP Amoco will make the tender
offer statement available for free to Vastar's shareholders.
Statements made in this press release, particularly those regarding savings,
demand, gearing, growth, margins, performance, productivity, production,
strategy, synergies, strengths, volumes, BP/ Amoco merger effects, the proposed
ARCO combination and its effects, are or may be forward looking statements and
actual results may differ materially from those expressed or implied in such
statements. Information concerning
<PAGE>
factors that could cause actual results to differ materially from those in the
forward looking statements are contained in BP Amoco's latest published annual
report and accounts and in BP Amoco's latest published report on Form 20F filed
with the US Securities and Exchange Commission.
-- ENDS --
