SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO
SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
ENEX RESOURCES CORPORATION
(Name of Subject Company)
Enex Resources Corporation
(Name of Person(s) Filing Statement)
Common Stock, par value $.05 per share
(Title of Class of Securities)
292744 208
((CUSIP) Number of Class of Securities)
Gerald B. Eckley
Enex Resources Corporation
800 Rockmead Drive
Three Kingwood Place - Suite 200
Kingwood, Texas 77339
(281) 358-8401
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Person(s) Filing Statement)
With a copy to:
Howard A. Neuman, Esq.
Satterlee Stephens Burke & Burke LLP
230 Park Avenue
New York, New York 10169
(212) 818-9200
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Item 1. Security and Subject Company.
The class of securities to which this statement relates is the
common stock, par value $0.05 per share (the "Common Stock"), of the subject
company, Enex Resources Corporation, a Delaware corporation (the "Company").
The address of the Company's principal executive offices is 800 Rockmead
Drive, Three Kingwood Place, Suite 200, Kingwood, Texas 77339.
Item 2. Tender Offer of the Bidder.
This Statement relates to the tender offer made by Middle Bay Oil Company,
Inc., an Alabama corporation (the "Bidder"), to purchase up to 1,343,352 shares
(the "Shares") of the Common Stock of the Company at $15.00 per share in cash,
as described in the Offer to Purchase dated February 19, 1998 (the "Offer to
Purchase") and the related Letter of Transmittal (which, together with any
amendments or supplements thereto, collectively constitute the "Offer"), which
are annexed to and filed as Exhibits (a)(1) and (2), respectively, with the
Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1") filed by the
Bidder with the Securities and Exchange Commission (the "SEC") on February 19,
1998. The address of the Bidder's principal executive office is 1221 Lamar,
Suite 1020, Houston, Texas 77010.
This response to Item 2 is based upon information contained in the Bidder's
Schedule 14D-1.
Item 3. Identity and Background.
(a) The Company is the person filing this Statement. The business
address of the Company is set forth in the response to Item 1 above.
(b) (1) None
(2) On January 29, 1998, the Bidder and the Company entered into
a letter of intent (the "Letter of Intent") with respect to a proposed
cash tender offer by the Bidder for all of the outstanding capital
stock of the Company. The Letter of Intent provides that, subject to
satisfactory completion of its due diligence review of the Company and
its properties, the Bidder would (i) commence a cash tender offer for
all of the outstanding capital stock of the Company on or before
February 20, 1998; (ii) offer Mr. Gerald B. Eckley, President of the
Company, whose employment agreement with the Company has more than
four years left on its term, a severance arrangement under which the
Bidder would pay an aggregate amount equal to Mr. Eckley's current
salary for four years in exchange for consulting services and a first
right of refusal on all prospects and potential acquisitions that he
has the opportunity to acquire over the four-year period; and (iii)
offer to the holders of outstanding options to purchase Common Stock
of the Company the difference between the exercise price and $15.00
per share in either cash or shares of the Bidder's stock on a private
placement basis. The stock price is to be determined by taking the
previous ten days' average of the means of the closing bid and asked
prices of the Bidder's shares immediately prior to closing on the
Offer. No definitive agreements have been entered into with respect to
Mr. Eckley's severance arrangement or the outstanding options. In
consideration of the foregoing agreements of the Bidder, the Company
agreed not, directly or indirectly, to solicit or encourage inquiries
for proposals to enter into an agreement with regards to the sale of
the Company or its
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assets until February 20, 1998, except for such actions as may be
required to enable the Company and its officers and directors to comply
with their fiduciary duties to the Company's stockholders.
Item 4. The Solicitation or Recommendation.
(a) The Board of Directors of the Company has unanimously
approved the Offer as being in the best interests of the stockholders
of the Company (the "Stockholders") and has unanimously recommended
that the Stockholders tender their Shares to the Bidder pursuant to
the Offer.
(b) The Board of Directors of the Company based its determination
to approve and recommend the Offer on its consideration of the
following factors:
(i) the 30% premium represented by the difference
between the price per share offered by the Bidder and the market price
of the Common Stock immediately prior to the execution of the Letter of
Intent;
(ii) the fact that the consideration offered by the
Bidder is all cash;
(iii) the fact that the Offer is being made for all
of the currently outstanding Common Stock of the Company; and
(iv) the lack of material contingent conditions to
the Offer (other than due diligence, absence of material adverse
change, and certain other conditions typically imposed in tender offer
transactions).
(c) The Company has not sought a fairness opinion from any
third party, nor does it propose to do so.
Item 5. Persons Retained, Employed or to be Compensated.
The Company has not retained or employed, and will not pay any
fees or commissions to, any broker or dealer or other person to make
solicitations or recommendations to Stockholders on its behalf with respect to
the Offer. Certain directors, officers and employees of the Company, not
especially employed for this purpose, may contact Stockholders with respect to
the Offer, without additional remuneration therefor, by personal interview,
mail, telephone, telegraph, facsimile or other electronic means.
Item 6. Recent Transactions and Intent With Respect to Securities.
(a) Gerald B. Eckley, President of the Company, purchased 100
shares of the Company's Common Stock in the open market on December 31, 1997. To
the Company's knowledge, there were no other transactions involving the
Company's Common Stock by the Company or its officers, directors, subsidiaries
or affiliates effected during the 60 days prior to the filing of this Schedule
14D-9.
(b) To the Company's knowledge, all of the directors and
officers of the Company presently intend to tender their shares of Common Stock
held of record or beneficially owned by them to the Bidder pursuant to the terms
of the Offer.
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Item 7. Certain Negotiations and Transactions by the Subject Company.
(a) As described in response to Item 3(b) above, the Company
and the Bidder entered into the Letter of Intent with respect to a tender offer
for the Common Stock of the Company on January 29, 1998. No further negotiations
have taken place which relate to or would result in a merger, sale of assets or
other business combination involving the Company or any subsidiary of the
Company or a change in the Company's capitalization or dividend policy.
(b) On February 17, 1998, the Board of Directors of the
Company unanimously approved the terms of the Offer and recommended that the
Stockholders tender their Shares to the Bidder pursuant to the Offer.
It is presently the intention of the Company's Board of
Directors to take such action as may be necessary to satisfy the "Board Action
Conditions" described in the Bidder's Schedule 14D-1.
Item 8. Additional Information to be Furnished.
Not applicable.
Item 9. Material to be Filed as Exhibits.
The following materials are filed herewith as exhibits hereto:
(a) Letter of Recommendation to Stockholders
(b) Not applicable
(c) Letter of Intent
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
ENEX RESOURCES CORPORATION
By:
Gerald B. Eckley
President
February 19, 1998
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Exhibit A
January 29, 1998
Mr. Gerald B. Eckley
President and Chief Executive Officer
Enex Resources Corporation
800 Rockmead
Kingwood, TX 77339
Dear Gerald,
Middle Bay Oil Company, Inc. (hereinafter collectively referred to as "MBOC") is
pleased to make the following offer to Enex Resources Corporation, (hereinafter
referred as "ENEX"), for due consideration by it's Board of Directors a proposed
cash tender offer (the "Tender Offer") by MBOC for all of the outstanding
capital stock of ENEX, as described below.
The securities proposed to be purchased shall include 100% of ENEX outstanding
common stock and all options and warrants outstanding to purchase common stock
(the ENEX common stock hereinafter referred to as the "Shares").
Based on MBOC's present understanding of ENEX, the Tender Offer will offer
$15.00 (Cash) per share of ENEX ($20,144,265). In addition, we intend to offer
the following: (1) Severance - MBOC is willing to pay your current salary for
four years in exchange for your consulting for MBOC and a first right of refusal
on all prospects and potential acquisitions that you have the opportunity to
acquire over the four-year period, (2) Options - MBOC will offer to the option
holders the difference between the exercise price and $15.00 per share in either
cash or stock. The stock price is to be determined by taking the previous 10
days average of the means of the closing bid and asked prices of MBOC share
immediately prior to closing with Enex Resources Corporation.
This offer is subject to the following understanding between MBOC and ENEX:
1. To the extent allowable by applicable rules and standards, the economic
affect of the purchase of ENEX shares by MBOC for accounting purposes shall
be retroactive to January 1, 1998 at 7:00 a.m. local time. The closing of
the Tender Offer and purchase shall occur at a mutually acceptable date,
time and place, but in no event later than March 15, 1998.
2. MBOC reserves the right to withdraw this offer if written notice of
acceptance of this letter is not received by MBOC by 5:00 p.m. Central
Standard Time on January 29, 1998.
3. Conditions precedent to proceeding with the Tender Offer are as follows:
a. On or before February 20, 1998, ENEX shall have reviewed a draft of
MBOC's tender offer materials, including but not limited to a Tender
Offer Statement on form Schedule 14D-1 prepared pursuant to
Securities and Exchange Commission ("SEC") Rule 14d-2 as MBOC
proposes to use in conducting the Tender Offer (collectively, the
"Tender Offer Materials"), and all of ENEX's comments shall have been
satisfactorily addressed by MBOC.
b. MBOC shall have reviewed a draft of ENEX's Solicitation/Recommenda-
tion Statement on form Schedule 14D-9 prepared pursuant to SEC Rule
14d-9, and all of MBOC's comments thereon shall have been satisfac-
torily addressed by ENEX.
c. MBOC will complete a satisfactory due diligence review of ENEX,
including but not limited to ENEX's title to its properties. The
costs of such review shall be borne by MBOC. Subject to the terms of
confidentiality set forth in the previously executed confidentiality
agreement between MBOC and ENEX, ENEX shall make available, in its
offices, upon reasonable prior notice, during normal business hours
all of their files, records and data relating to land, legal,
geological, engineering, and accounting matters in connection with
the properties.
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d. Satisfactory review and acceptance by MBOC of the ENEX engineering
and geological information and interpretations.
e. Satisfactory review and acceptance by MBOC of accounting information
and current financial statements of ENEX.
f. There shall occur no adverse material change to the financial and
economic status of ENEX from September 30, 1997 until closing.
g. Securing all requisite governmental consents and approvals, including
such as may be required under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
h. The absence of any litigation or other governmental proceeding which
could result in a material adverse effect on either ENEX or MBOC or
which seeks to enjoin the consummation of the Tender Offer.
i. The absence of any breach of any of the terms and conditions set
forth in this letter of intent by the other party.
4. The parties acknowledge that they shall jointly prepare any press release
or other disclosure documents required by law and that neither party shall
make any public disclosure of this letter of intent or the transactions
contemplated hereby without the prior written approval of the other party.
This letter is intended to evidence the understanding which we have reached
regarding the proposed transaction and our mutual intent to proceed in good
faith and use our best efforts to cause the Tender Offer to be published and
distributed to the ENEX shareholders in accordance with the applicable laws and
with the terms herein. In consideration of the foregoing and MBOC instructing
its counsel to proceed with preparing the Tender Offer materials, you hereby
agree that, pending publication of the Tender Offer, you will not, directly or
indirectly, solicit, or encourage inquires for proposals to enter into an
agreement with regards to the sale of ENEX or its assets except that nothing
herein shall be deemed to inhibit ENEX or its officers and directors from taking
such actions as may be required to enable them to comply with their fiduciary
duties to ENEX shareholders. MBOC and ENEX represent and warrant to each other
that neither party has employed any broker or finder in connection with the
transactions described in this letter and neither owes nor will owe any
consideration to any broker of finder contingent upon the occurrence of future
events or transactions, other than Clay Sylvester, whose fee in connection with
the transactions described in this letter, if any, shall be paid by MBOC.
If the foregoing is acceptable to you, please sign and return the enclosed copy
of this letter. It is understood that this letter expresses the present intent
of MBOC, subject to MBOC's satisfaction with its investigation of ENEX's
properties and financial, engineering and geological information. In the event
that MBOC has not commenced the Tender Offer of $15.00 per share for 100% of
ENEX outstanding common stock in accordance with the terms and conditions of
this letter of intent on or before February 20, 1998, then this letter of intent
shall terminate and be of no further force and effect.
Sincerely,
MIDDLE BAY OIL COMPANY, INC.
/s/ John J. Bassett
John J. Bassett
President and Chief Executive Officer
AGREED AND ACCEPTED THIS 29TH DAY OF JANUARY 1998.
ENEX RESOURCES CORPORATION
By: /s/ Gerald B. Eckley
Gerald B. Eckley
President & Chief Executive Officer
<PAGE>
Exhibit C
DATE: February 19, 1998
TO: Shareholders of Enex Resources Corporation
FROM: Board of Directors
Enex Resources Corporation
SUBJECT: Offer to Purchase Enex Resources Corporation Common Stock
Enex Resources Corporation has received an offer from Middle Bay Oil Company,
Inc., Houston, Texas, to purchase for cash all of the outstanding shares of
Enex. The offer will pay $15.00 per share of Enex common stock, which is
approximately 30% higher than the current NASDAQ market trading price.
Enex believes that this offer is fair. It has been recommended and approved by
the Enex Board of Directors. We are pleased to recommend this offer to you.
For the Board of Directors
Gerald B. Eckley, President
