<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 10, 1994
PANHANDLE EASTERN CORPORATION
- --------------------------------------------------------------------------------
(exact name of registrant as specified in its charter)
Delaware 1-8157 74-2150460
- --------------------------------------------------------------------------------
(State or other (Commission File (IRS Employer
jurisdiction of Number Identification No.)
incorporation)
5400 Westheimer Court, P.O. Box 1642, Houston, Texas 77251-1642
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (713) 627-5400
-----------------------------
N/A
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE> 2
Item 5. Other Events
Panhandle Eastern Corporation (the "Company") issued a press release
on October 10, 1994, announcing that the Board of Directors of the Company had
approved, and the Company had entered into, an Agreement and Plan of Merger
dated as of October 9, 1994, with Associated Natural Gas Corporation, a
Delaware corporation ("ANGC"), relating to the proposed merger of a
wholly-owned subsidiary of the Company with and into ANGC, as a result of which
ANGC will become a wholly-owned subsidiary of the Company. A copy of the press
release is attached hereto as Exhibit 1 and is incorporated herein by
reference.
Item 7(c). Exhibits.
1. Press Release dated October 10, 1994 regarding the Agreement
and Plan of Merger among the Company, a wholly-owned
subsidiary of the Company, and ANGC.
2
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
PANHANDLE EASTERN CORPORATION
By: /s/ Carl B. King
Name: Carl B. King
Title: Senior Vice President and
General Counsel
Dated: October 10, 1994
3
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
------- ----
<S> <C> <C>
99. Press Release dated October 10, 1994 regarding 5
the Agreement and Plan of Merger among the Company,
a wholly-owned subsidiary of the Company,
and ANGC.
</TABLE>
4
<PAGE> 1
EXHIBIT 99
PANHANDLE EASTERN CORPORATION
America's Natural Gas Transportation Company
NEWS
Release: October 10, 1994
Contact: Media Relations -- John P. Barnett, (713) 627-4072
Investor Relations -- Gregg E. McBride, (713) 627-4600
or (800) 347-3636
PANHANDLE EASTERN CORPORATION
AND ASSOCIATED NATURAL GAS CORPORATION
ANNOUNCE MERGER AGREEMENT
HOUSTON, October 10 - Panhandle Eastern Corporation (NYSE:PEL) and
Associated Natural Gas Corporation, (NYSE:NGA) today announced an agreement for
the combination of Panhandle Eastern and Associated on a tax-free stock for
stock basis to be accounted for as a pooling of interest.
In the combination, which is structured as a merger of Associated and
a wholly owned subsidiary of Panhandle, each share of Associated's common stock
will be converted into the right to receive between 1.5725 and 1.8750 shares of
Panhandle common stock, depending on the average daily price of Panhandle's
common stock during a 15 day period prior to completion of the merger. Based
on a target price of $39 per share of Associated stock, the total value of the
transaction, inclusive of $239 million of Associated long-term debt, is
approximately $830 million.
Paul Anderson, president of Panhandle, said "The merger of Panhandle
and Associated should enhance the value of the shares owned by the stockholders
of each company," Anderson said. "The combined company, already one of the
nation's largest natural gas transportation companies, will be the nation's
third largest independent natural gas marketing company, the fourth largest
natural gas gathering company, and one of the top 15 natural gas liquids
producers in the country."
Anderson stated that if the transaction is completed by year-end as
planned, the impact of the merger, including all transaction costs, will be
reflected in Panhandle's 1994 results. "We continue to expect Panhandle's 1994
earnings, exclusive of the effect of the Associated merger, to be at the high
end of financial analyst estimates of $1.65 to $1.75 per share. Our
preliminary third-quarter results, which are not final, are expected to be
approximately 40 cents per share. Although there will be minor dilution of
1995 earnings, the company remains confident that our earlier stated goal of $2
per share in 1995 is still achievable," he said.
<PAGE> 2
"This action is a part of Panhandle's strategic plan to further expand
its activities beyond its core gas transmission services business. The merger
with Associated provides a major step in this direction," Anderson continued.
"The combination of Panhandle and Associated will provide diversity of supply
and markets for both companies and will combine significant growth
opportunities with the necessary financial resources to develop them.
Panhandle will broaden its service portfolio and access to Western markets and
supply; Associated will achieve improved access to new high-value markets in
the Midwest and Northeast, as well as to Gulf Coast, Canadian and Mexican gas
supply, along with a portfolio of complimentary market services.
"Both companies have the management depth and flexibility to respond
to and lead change in the energy business. An emphasis on customer service has
been an important focus for both companies and will continue to distinguish the
combined operations and services from its competitors," he added.
Don Anderson, president of Associated, said "The transaction will
provide our stockholders with a premium over the current price of Associated's
common stock, as well as an opportunity to participate in the potential of the
combined companies."
Following completion of the merger, which is subject to certain
conditions including Panhandle and Associated stockholder approval, Associated
will become a wholly owned subsidiary of Panhandle. Associated will remain a
separate operating entity, and substantially all of Associated's management and
operating employees will remain in the combined organization.
In connection with the merger agreement, Associated has granted
Panhandle an option to purchase up to 19.9 percent of newly issued shares of
Associated common stock at the target price of $39 per share upon termination
of the merger agreement under certain circumstances. In addition, Associated
has agreed to pay to Panhandle $20 million as a termination fee if the merger
agreement is similarly terminated. Also, holders of approximately 10 percent
of Associated's outstanding common stock, including substantially all
Associated's executive officers and directors, have granted to Panhandle an
irrevocable proxy to vote in favor of the merger and against any matter that is
inconsistent with the merger.
The agreement was approved by Panhandle's board of directors at a
meeting on Saturday and by Associated's board of directors at a meeting
yesterday.
The parties expect the merger will be completed in mid-December.
Associated Natural Gas Corporation is one of the largest independent
gatherers, purchasers, transporters and marketers of natural gas, natural gas
liquids and crude oil. The company's 870 employees operate 9,467 miles of
pipelines connected to 7,853 wells and other facilities in major natural gas
and oil producing basins in nine states. It markets natural gas from coast to
coast, Canada and the United Kingdom. Associated markets and
-2-
<PAGE> 3
trades over 2.5 billion cubic feet of natural gas, 43,000 barrels of natural
gas liquids and 77,000 barrels of crude oil on a daily basis.
Panhandle Eastern Corporation, America's natural gas transportation
company, operates one of the nation's largest interstate natural gas pipeline
systems, providing natural gas transportation and related services to the
Midwest and Northeast markets.
-3-
