<PAGE>
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
SCHEDULE 14D-9/A
Solicitation/Recommendation Statement
Pursuant to Section 14(d)(4)
of the Securities Exchange Act of 1934
AMENDMENT NO. 8
-----------------
SANTA FE PACIFIC CORPORATION
(Name of Subject Company)
SANTA FE PACIFIC CORPORATION
(Name of Person(s) Filing Statement)
Common Stock, par value $1.00 per share
(Title of Class of Securities)
Common Stock - 802183 10 3
(CUSIP Number of Class of Securities)
------------------
Jeffrey R. Moreland
Vice President - Law and General Counsel
Santa Fe Pacific Corporation
1700 East Golf Road
Schaumburg, Illinois 60173-5860
(708) 995-6000
(Name, address and telephone number of person authorized to receive
notices and communications on behalf of the person(s) filing statement)
------------------
Copy to:
Scott J. Davis
Mayer, Brown & Platt
190 South LaSalle Street
Chicago,Illinois 60603-3441
(312) 782-0600
==============================================================================
<PAGE>
Statement in Response to Union Pacific Offer
--------------------------------------------
Santa Fe Pacific Corporation (the "Company") hereby amends and
supplements its statement on Schedule 14D-9 (the "Original Schedule 14D-9")
filed with the Securities and Exchange Commission (the "Commission") on
November 22, 1994, as amended by Amendments No. 1 through 7 thereto. Unless
otherwise indicated herein, each capitalized term used but not defined herein
shall have the meaning assigned to such term in the Original Schedule 14D-9.
Item 4. THE SOLICITATION OR RECOMMENDATION
The information set forth in the "Recommendation of SFP Board of
Directors" section of the Supplement dated January 13, 1995 to the Offer to
Purchase dated December 23, 1994, which is attached hereto as Exhibit 13, is
incorporated herein by reference.
<PAGE>
Item 9. Material to be Filed as Exhibits.
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
Exhibit 13 - Supplement dated January 13, 1995 to the
Offer to Purchase dated December 23, 1994.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete, and
correct.
January 13, 1995 /s/ Jeffrey R. Moreland
- ---------------- -----------------------
(Date) Jeffrey R. Moreland
Vice President - Law
and General Counsel
<PAGE>
EXHIBIT 99.13
SUPPLEMENT TO THE OFFER TO PURCHASE DATED DECEMBER 23, 1994
IMPORTANT NOTICE TO STOCKHOLDERS OF
SANTA FE PACIFIC CORPORATION
BURLINGTON NORTHERN INC.
AND
SANTA FE PACIFIC CORPORATION
HEREBY SUPPLEMENT THE OFFER TO PURCHASE FOR CASH
UP TO 63,000,000 SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
SANTA FE PACIFIC CORPORATION
AT
$20.00 NET PER SHARE
THE OFFER HAS BEEN EXTENDED. THE OFFER, PRORATION PERIOD AND WITHDRAWAL
RIGHTS WILL NOW EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY,
FEBRUARY 8, 1995, UNLESS FURTHER EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) AT LEAST 63,000,000
SHARES OF SANTA FE PACIFIC CORPORATION COMMON STOCK BEING VALIDLY TENDERED AND
NOT WITHDRAWN BEFORE THE EXPIRATION OF THE OFFER (THE "MINIMUM CONDITION"),
(2) SANTA FE PACIFIC CORPORATION ("SANTA FE") AND BURLINGTON NORTHERN INC.
("BURLINGTON NORTHERN") HAVING OBTAINED SUFFICIENT FINANCING ON TERMS
SATISFACTORY TO THEM TO PURCHASE 63,000,000 SHARES PURSUANT TO THE OFFER AND
(3) APPROVAL OF THE MERGER REFERRED TO BELOW BY THE STOCKHOLDERS OF SANTA FE
AND BURLINGTON NORTHERN. SANTA FE AND BURLINGTON NORTHERN DO NOT INTEND TO
WAIVE THE MINIMUM CONDITION. THE OFFER IS NOT CONDITIONED ON RECEIPT OF
INTERSTATE COMMERCE COMMISSION APPROVAL OF THE MERGER. SEE "THE TENDER OFFER--
14. CONDITIONS OF THE OFFER" OF THE OFFER TO PURCHASE DATED DECEMBER 23, 1994.
THE OFFER IS BEING MADE IN CONNECTION WITH THE AGREEMENT AND PLAN OF MERGER
BETWEEN BURLINGTON NORTHERN AND SANTA FE, AS AMENDED, PURSUANT TO WHICH SANTA
FE WILL MERGE WITH BURLINGTON NORTHERN (THE "MERGER"). THE BOARD OF DIRECTORS
OF SANTA FE HAS UNANIMOUSLY APPROVED THE OFFER AND THE MERGER AND RECOMMENDS
THAT THOSE SANTA FE STOCKHOLDERS WHO WISH TO RECEIVE CASH FOR A PORTION OF
THEIR SHARES ACCEPT THE OFFER AND TENDER THEIR SHARES. THE OFFER IS BEING
EFFECTED TO FACILITATE THE MERGER. SEE "RECOMMENDATION OF SFP BOARD OF
DIRECTORS."
----------------
Questions and requests for assistance or additional copies of the Offer to
Purchase, this Supplement, the Letter of Transmittal and the Notice of
Guaranteed Delivery may be directed to any of the Information Agents or either
of the Dealer Managers at their respective addresses and telephone numbers set
forth on the back cover of this Supplement. Additional copies of the Offer to
Purchase, this Supplement, the Letter of Transmittal and the Notice of
Guaranteed Delivery may also be obtained from brokers, dealers, commercial
banks or trust companies.
----------------
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO. LAZARD FRERES & CO.
----------------
The date of this Supplement is January 13, 1995.
<PAGE>
To the Holders of Common Stock of
Santa Fe Pacific Corporation:
INTRODUCTION
The following information supplements and amends the Offer to Purchase dated
December 23, 1994 (the "Offer to Purchase") of Burlington Northern Inc., a
Delaware corporation ("BNI"), and Santa Fe Pacific Corporation, a Delaware
corporation ("SFP" and, together with BNI, the "Purchasers"), pursuant to which
the Purchasers are severally offering to purchase up to 63,000,000 shares in
the aggregate of the outstanding shares of common stock, par value $1.00 per
share, of SFP (the "SFP Common Stock," including the associated preferred share
purchase rights), upon the terms and subject to the conditions set forth in the
Offer to Purchase, as amended by this Supplement, and in the related Letter of
Transmittal (which collectively constitute the "Offer").
The Purchasers have supplemented the Offer with the information contained
herein. The Offer, proration period and related withdrawal rights were
originally scheduled to expire at 12:00 Midnight, New York City time, on
January 30, 1995. However, the Purchasers have extended the Offer, and the
Offer, proration period and withdrawal rights will now expire at 12:00
Midnight, New York City time, on Wednesday, February 8, 1995, unless further
extended.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) AT LEAST 63,000,000
SHARES OF SFP COMMON STOCK BEING VALIDLY TENDERED AND NOT WITHDRAWN BEFORE THE
EXPIRATION OF THE OFFER (THE "MINIMUM CONDITION"), (2) SFP AND BNI HAVING
OBTAINED SUFFICIENT FINANCING ON TERMS SATISFACTORY TO THEM TO PURCHASE
63,000,000 SHARES PURSUANT TO THE OFFER AND (3) APPROVAL OF THE MERGER REFERRED
TO BELOW BY THE STOCKHOLDERS OF SFP AND BNI. THE PURCHASERS DO NOT INTEND TO
WAIVE THE MINIMUM CONDITION. THE OFFER IS NOT CONDITIONED ON INTERSTATE
COMMERCE COMMISSION ("ICC") APPROVAL OF THE MERGER. SEE "THE TENDER OFFER--14.
CONDITIONS OF THE OFFER" OF THE OFFER TO PURCHASE.
THE BOARD OF DIRECTORS OF SFP HAS UNANIMOUSLY APPROVED THE OFFER AND THE
MERGER AND RECOMMENDS THAT THOSE SFP STOCKHOLDERS WHO WISH TO RECEIVE CASH FOR
A PORTION OF THEIR SHARES OF SFP COMMON STOCK ACCEPT THE OFFER. SEE
"RECOMMENDATION OF SFP BOARD OF DIRECTORS."
The Offer is being made pursuant to an Agreement and Plan of Merger dated as
of June 29, 1994, as amended by the Amendment thereto dated as of October 26,
1994 and Amendment No. 2 thereto dated as of December 18, 1994 (as so amended,
the "Merger Agreement") between SFP and BNI. Pursuant to the Merger Agreement,
and on the terms and subject to the conditions set forth therein, SFP will
merge with BNI, with BNI to be the surviving corporation in such Merger, and
each outstanding share of SFP Common Stock will be converted into the right to
receive 0.40 shares of BNI common stock, no par value per share (the "BNI
Common Stock"). See "The Tender Offer--10. Purpose of the Offer; The Merger
Agreement" of the Offer to Purchase. A copy of the Merger Agreement is attached
as Appendix A to the Offer to Purchase. As of January 12, 1995, 0.40 of a share
of BNI Common Stock had a value of $20.55, based on the closing market price of
BNI Common Stock as reported in The Wall Street Journal.
As of December 31, 1994, there were outstanding 188,301,537 shares of SFP
Common Stock and employee stock options ("Options") to purchase 14,470,071
shares of SFP Common Stock.
The purpose of the Offer is to acquire shares of SFP Common Stock and to
facilitate the Merger, which the Board of Directors of SFP believes is in the
best interest of SFP stockholders. The Offer also provides an opportunity to
existing stockholders of SFP to sell shares of SFP Common Stock at a premium
over recent trading prices. See "The Tender Offer--6. Price Range of SFP Common
Stock; Dividends" of the Offer to Purchase.
<PAGE>
Up to 63,000,000 shares of SFP Common Stock are to be purchased in the Offer;
any shares tendered in response to the Offer over and above such amount would
be subject to proration in accordance with the terms of the Offer. Proration
may result in SFP stockholders receiving cash for only a portion of any shares
of SFP Common Stock tendered, with the remaining consideration to be received
in the form of BNI Common Stock pursuant to the Merger after the receipt of ICC
approval and satisfaction or waiver of the other conditions to the Merger.
All information herein concerning BNI has been furnished by BNI, and all
information herein concerning SFP has been furnished by SFP. BNI has
represented and warranted to SFP, and SFP has represented and warranted to BNI,
that the particular information so furnished is true and complete.
The Offer does not constitute a solicitation of proxies for any meeting of
SFP's stockholders. Such solicitation by SFP will be made only pursuant to
separate proxy materials complying with the requirements of Section 14(a) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"). In
addition, this Offer is neither an offer to sell nor a solicitation of offers
to buy any securities which may be issued in the Merger. The issuance of such
securities would have to be registered under the Securities Act of 1933, as
amended (the "Securities Act"), and such securities would be offered only by
means of a prospectus complying with the requirements of the Securities Act.
SFP is distributing a joint proxy statement/prospectus with respect to the
Merger.
IN ORDER TO VOTE FOR THE MERGER, AN SFP STOCKHOLDER IS REQUIRED TO SUBMIT A
PROXY OR VOTE IN PERSON AT THE SFP STOCKHOLDER MEETING SCHEDULED FOR FEBRUARY
7, 1995, OR ANY POSTPONEMENT OR ADJOURNMENT THEREOF.
Stockholders are urged to read the Offer to Purchase, this Supplement and the
related Letter of Transmittal carefully before deciding whether to tender their
shares of SFP Common Stock.
RECOMMENDATION OF SFP BOARD OF DIRECTORS
The Board of Directors of SFP has unanimously approved the Offer and the
Merger and recommends that those SFP stockholders who wish to receive cash for
a portion of their shares of SFP Common Stock accept the Offer.
The Offer is being effected to facilitate the Merger. The SFP Board believes
that a business combination of SFP and BNI is in the best long-term interests
of SFP and its stockholders. The Offer allows stockholders who wish to do so to
receive cash, at a premium over recent trading prices for SFP Common Stock,
without waiting for ICC approval of the Merger. At the same time, the revised
transaction structure allows SFP stockholders to participate in the ownership
of the combined company. The SFP Board believes that a BNI-SFP combination is
an excellent strategic fit, presents substantial long-term benefits and is
likely to receive ICC approval. The SFP Board has also concluded that the
revised Merger Agreement is superior to Union Pacific Corporation's ("UPC")
offer (which includes a tender offer), especially on a long-term basis. The
Board's reasons for reaching this conclusion included: (1) the Board believed
that a BNI-SFP merger is likely to receive ICC approval and, because of
anticipated increases in operating income from the Merger (which are expected
to result from both operating efficiencies and increased revenues), the Merger
will have significant long-term benefits for SFP stockholders; (2) the Board
believed that the long-term value of the UPC stock that SFP stockholders would
receive in a UPC-SFP merger is uncertain because a combination of the UPC and
SFP railroads is unlikely to receive ICC approval and, even if ICC approval
could be obtained, it would probably require UPC to make substantial
concessions to competing railroads; (3) the $20 per share that SFP stockholders
will receive pursuant to the Offer is greater than the $17.50 per share
available in UPC's tender offer; and (4) as of December 18, 1994, the market
value of 0.40 of a BNI common share (the exchange ratio in the Merger) exceeded
the market value of 0.354 of a UPC common share (the exchange ratio proposed by
UPC). See "The Tender Offer--6. Price Range of SFP Common Stock; Dividends" and
"--9. Background of the Merger and the Offer" of the Offer to Purchase.
2
<PAGE>
In making its recommendation, the Board considered the impact of the increase
in SFP debt that the Offer would require and concluded that incurring such debt
is prudent in light of SFP's ability to repay it and the benefits of the Offer
and the Merger for SFP's stockholders. SFP anticipates borrowing up to $1.31
billion (of which approximately $400 million will be to replace existing debt)
in connection with the Offer and related matters from a syndicate of banks
under a new credit agreement. In addition, the new credit agreement will
provide for a $250 million revolving credit facility for general corporate
purposes. The anticipated terms of such financings are summarized in the Offer
to Purchase. See "The Tender Offer--12. Source and Amount of Funds" of the
Offer to Purchase. SFP anticipates that its ability to borrow additional funds
will be restricted by the terms of the new credit agreement. SFP's credit
rating status was placed under review with direction uncertain by Moody's
Investors Service and on Credit Watch with developing implications by Standard
& Poor's prior to announcement of the Offer and continues in that status. It is
possible that SFP's credit ratings would be downgraded upon completion of the
Offer. SFP does not expect that any ratings downgrade, should one occur, would
impair its ability to maintain adequate liquidity to meet its ongoing
obligations.
The interest expense on SFP's anticipated borrowings would reduce SFP's net
income. Principal and interest on the debt being used by SFP to finance the
Offer, as well as other operating expenses and liquidity needs of SFP, are
expected to be funded by SFP during the period prior to the ICC's decision on
the Merger from cash generated before borrowings, currently available cash
balances and borrowings in excess of requirements in connection with the Offer.
Should the ICC not approve the Merger, SFP believes that, on a stand-alone
basis, it will be able to fund the debt service attributable to the debt
incurred in connection with the Offer through a combination of cash generated
before borrowings and refinancings in the capital markets. In either case, SFP
will have access to the $250 million revolving credit facility for general
corporate purposes, if required. Although the SFP Board believes that SFP's
proposed borrowing is prudent, it is possible that the need to repay the debt
incurred in its borrowing will have a detrimental effect on SFP, either before
the Merger or if the Merger cannot be consummated.
3
<PAGE>
UNAUDITED PRO FORMA FINANCIAL STATEMENTS OF SFP
The unaudited pro forma financial statements have been prepared to give
effect to the SFP tender offer for 38 million shares of SFP Common Stock at $20
per share and the related borrowings and debt repayments (the "SFP
Recapitalization"). The SFP Recapitalization is reflected in the pro forma
balance sheet as if it occurred on December 31, 1993 and September 30, 1994 and
in the statements of operations as if it occurred on January 1, 1993.
The unaudited pro forma financial statements are prepared for illustrative
purposes only and are not necessarily indicative of the financial position or
results of operations that might have occurred had the applicable transaction
actually taken place on the dates indicated, or of future results of operations
or financial position. Consummation of the tender offer for SFP Common Stock is
conditioned upon, among other things, approval of the Merger by both SFP and
BNI stockholders.
4
<PAGE>
PRO FORMA SFP RECAPITALIZED BALANCE SHEET
AS OF SEPTEMBER 30, 1994
UNAUDITED
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
SANTA FE SANTA FE
PACIFIC SFP PACIFIC
CORPORATION RECAPITALIZATION CORPORATION
HISTORICAL ADJUSTMENTS RECAPITALIZED
----------- ---------------- -------------
<S> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents......... $ 17 $-- $ 17
Accounts receivable, net.......... 98 -- 98
Other current assets.............. 246 -- 246
------ ---- ------
Total current assets............ 361 -- 361
Property and equipment, net......... 4,684 -- 4,684
Other assets........................ 271 27 (R.1) 298
------ ---- ------
Total assets.................... $5,316 $ 27 $5,343
====== ==== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable.................. $ 253 $-- $ 253
Other current liabilities......... 449 -- 449
Current portion of long-term debt
and commercial paper............. 192 -- 192
------ ---- ------
Total current liabilities....... 894 -- 894
Long-term debt...................... 890 843 (R.2) 1,733
Deferred income taxes............... 1,167 (19)(R.3) 1,148
Other liabilities................... 1,157 (3)(R.4) 1,154
------ ---- ------
Total liabilities............... 4,108 821 4,929
------ ---- ------
Stockholders' equity
Common stock...................... 190 -- 190
Paid-in capital................... 842 15 (R.4) 857
Retained earnings................. 263 (49)(R.4) 214
Treasury stock.................... (87) (760)(R.4) (847)
------ ---- ------
Total stockholders' equity...... 1,208 (794) 414
------ ---- ------
Total liabilities and stock-
holders' equity.............. $5,316 $ 27 $5,343
====== ==== ======
</TABLE>
(See accompanying Notes to Pro Forma SFP Recapitalized Financial Statements)
5
<PAGE>
PRO FORMA SFP RECAPITALIZED BALANCE SHEET
AS OF DECEMBER 31, 1993
UNAUDITED
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
SANTA FE SANTA FE
PACIFIC SFP PACIFIC
CORPORATION RECAPITALIZATION CORPORATION
HISTORICAL ADJUSTMENTS RECAPITALIZED
----------- ---------------- -------------
<S> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents......... $ 71 $ -- $ 71
Accounts receivable, net.......... 96 -- 96
Other current assets.............. 291 -- 291
------ ----- ------
Total current assets............ 458 -- 458
Properties and equipment, net....... 4,360 -- 4,360
Other assets........................ 556 27 (R.1) 583
------ ----- ------
Total assets.................... $5,374 $ 27 $5,401
====== ===== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable.................. $ 241 $ -- $ 241
Other current liabilities......... 429 -- 429
Current portion of long-term debt
and commercial paper............. 185 -- 185
------ ----- ------
Total current liabilities....... 855 -- 855
Long-term debt...................... 991 843 (R.2) 1,834
Deferred income taxes............... 1,116 (19)(R.3) 1,097
Other liabilities................... 1,144 (3)(R.4) 1,141
------ ----- ------
Total liabilities............... 4,106 821 4,927
------ ----- ------
Stockholders' equity
Common stock...................... 190 -- 190
Paid-in capital................... 870 15 (R.4) 885
Retained earnings................. 340 (49)(R.4) 291
Treasury stock.................... (132) (760)(R.4) (892)
------ ----- ------
Total stockholders' equity...... 1,268 (794) 474
------ ----- ------
Total liabilities and stock-
holders' equity.............. $5,374 $ 27 $5,401
====== ===== ======
</TABLE>
(See accompanying Notes to Pro Forma SFP Recapitalized Financial Statements)
6
<PAGE>
PRO FORMA SFP RECAPITALIZED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1994
UNAUDITED
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
SANTA FE SANTA FE
PACIFIC SFP PACIFIC
CORPORATION RECAPITALIZATION CORPORATION
HISTORICAL ADJUSTMENTS RECAPITALIZED
----------- ---------------- -------------
<S> <C> <C> <C>
Revenues......................... $ 1,970 $-- $ 1,970
Operating expenses
Compensation and benefits...... 625 -- 625
Fuel........................... 183 -- 183
Materials...................... 92 -- 92
Equipment rents................ 185 -- 185
Purchased services............. 282 -- 282
Depreciation................... 150 -- 150
Other.......................... 147 -- 147
------- ---- -------
Total operating expenses..... 1,664 -- 1,664
------- ---- -------
Operating income................. 306 -- 306
Interest expense................. 90 57 (R.5) 147
Other income (expense), net...... 49 -- 49
------- ---- -------
Income before income taxes....... 265 (57) 208
Income tax expense............... 112 (22)(R.6) 90
------- ---- -------
Income from continuing opera-
tions........................... $ 153 $(35) $ 118
======= ==== =======
Earnings per common share
Income from continuing opera-
tions......................... $ .81 $ .77(R.7)
======= =======
Number of shares used in computa-
tion of earnings per common
share (in thousands)............ 189,700 152,400(R.7)
</TABLE>
(See accompanying Notes to Pro Forma SFP Recapitalized Financial Statements)
7
<PAGE>
PRO FORMA SFP RECAPITALIZED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1993
UNAUDITED
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
SANTA FE SANTA FE
PACIFIC SFP PACIFIC
CORPORATION RECAPITALIZATION CORPORATION
HISTORICAL ADJUSTMENTS RECAPITALIZED
----------- ---------------- -------------
<S> <C> <C> <C>
Revenues........................ $ 2,409 $ -- $ 2,409
Operating expenses
Compensation and benefits..... 800 800
Fuel.......................... 239 -- 239
Materials..................... 128 -- 128
Equipment rents............... 229 -- 229
Purchased services............ 322 -- 322
Depreciation.................. 188 -- 188
Other......................... 185 -- 185
------- ----- -------
Total operating expenses.... 2,091 -- 2,091
------- ----- -------
Operating income................ 318 -- 318
Interest expense................ 133 73 (R.5) 206
Gain on sale of California
lines.......................... 145 -- 145
Other income (expense), net..... 24 -- 24
------- ----- -------
Income before income taxes...... 354 (73) 281
Income tax expense.............. 177 (28)(R.6) 149
------- ----- -------
Income from continuing
operations..................... $ 177 $ (45) $ 132
======= ===== =======
Earnings per common share
Income from continuing
operations................... $ .95 $ .88(R.7)
======= =======
Number of shares used in
computation of earnings per
common share (in thousands).... 187,200 149,900(R.7)
</TABLE>
(See accompanying Notes to Pro Forma SFP Recapitalized Financial Statements)
8
<PAGE>
NOTES TO PRO FORMA SFP RECAPITALIZED FINANCIAL STATEMENTS
The SFP Recapitalization plan reflected in the pro forma financial statements
includes borrowing $1,075 million of $1,560 million in available bank
commitments at an assumed average interest rate of 9 percent (see "The Tender
Offer--12. "Source and Amount of Funds" of the Offer to Purchase for further
discussion) with the proceeds principally used for (i) financing the repurchase
of 38 million shares of its outstanding common stock at a price of $20 per
share or $760 million in total, (ii) the early retirement of $200 million of
outstanding senior indebtedness, and (iii) repayment of short-term borrowings
and payment of refinancing transaction costs.
Additionally, SFP will incur Merger transaction costs, including the
accelerated vesting of restricted stock and certain other transaction costs,
upon stockholder approval of the Merger.
R.1 OTHER ASSETS
Represents estimated debt issuance costs to be paid in connection with the
SFP Recapitalization, net of debt issue costs expensed in conjunction with the
retirement of debt.
R.2 LONG-TERM DEBT
Reflects the $1,075 million SFP Recapitalization borrowing less (i) the early
retirement of outstanding senior debt of $200 million and (ii) the repayment of
$32 million short-term borrowings which were outstanding at September 30, 1994.
After the SFP Recapitalization, projected principal repayments during the five
years 1995 through 1999 would be $203 million, $97 million, $218 million, $144
million and $187 million, respectively.
R.3 DEFERRED INCOME TAXES
Deferred income taxes have been reduced for the tax benefit of the costs of
retiring debt and the accelerated vesting of SFP's restricted stock described
in R.4. below at a rate of 39 percent.
R.4 STOCKHOLDERS' EQUITY
Paid-in capital has been increased by $15 million representing the fair value
of approximately 760,000 shares of restricted stock at an assumed $20 per
share, which vests upon shareholder approval.
Retained earnings has been reduced by $49 million to reflect costs, net of
taxes and costs accrued, associated with the SFP Recapitalization and the
Merger including expenses for early retirement of debt, accelerated vesting of
restricted stock, and estimated legal, investment banking and other transaction
costs. Costs of $22 million after taxes for the early retirement of debt will
be expensed as an extraordinary charge in the period the debt is retired. Costs
for the accelerated vesting of restricted stock of $7 million after taxes
(which is net of amounts already accrued) will be expensed in the period that
restrictions lapse. Merger transaction costs of $20 million will be expensed in
the period incurred.
Treasury stock has been increased by $760 million to reflect the purchase of
38 million shares of SFP Common Stock acquired through SFP's tender offer.
R.5 INTEREST EXPENSE
Reflects the estimated net increase in interest expense associated with debt
borrowings/repayments discussed in R.2. above.
R.6 INCOME TAX EXPENSE
Income tax expense reflects the effect of pro forma adjustments at an
estimated rate of 39 percent.
9
<PAGE>
R.7 EARNINGS PER COMMON SHARE
SFP weighted average shares outstanding have been reduced for SFP's cash
tender offer, net of restricted stock which will vest upon stockholder approval
of the Merger. SFP historical earnings per common share have been reduced to
reflect a decrease in income from continuing operations due to additional
interest expense discussed in R.5. above.
CERTAIN ADDITIONAL INFORMATION
HART-SCOTT-RODINO ACT
The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, applicable to BNI's purchase of shares of SFP Common Stock
pursuant to the Offer expired at 12:00 Midnight, January 11, 1995. Accordingly,
the condition to the Purchasers' obligation to accept for payment and pay for
shares of SFP Common Stock pursuant to the Offer set forth in clause (iii) of
the first paragraph of "The Tender Offer--14. Conditions of the Offer" in the
Offer to Purchase has been satisfied.
EXTENSION OF THE OFFER
If the Purchasers increase or decrease the number of shares of SFP Common
Stock being sought in the Offer and the Offer is scheduled to expire at any
time before the expiration of a period of 10 business days from, and including,
the date that notice of such increase or decrease is first published, sent or
given in the manner specified in the Offer to Purchase, the Offer will be
extended until the expiration of such period of 10 business days. The
Purchasers do not intend to waive the Minimum Condition nor do they intend to
increase the number of shares of SFP Common Stock being sought pursuant to the
Offer.
TRANSACTION IN SFP COMMON STOCK
On December 27, 1994, Mr. Robert D. Krebs made a charitable contribution of
15,818 shares of SFP Common Stock.
----------------
Except as otherwise set forth in this Supplement, the terms and conditions
set forth in the Offer to Purchase remain applicable in all respects to the
Offer. The information set forth herein should be read in conjunction with the
Offer to Purchase.
Santa Fe Pacific Corporation
Burlington Northern Inc.
January 13, 1995
10
<PAGE>
Facsimile copies of the Letter of Transmittal will be accepted. The Letter of
Transmittal and certificates for SFP Common Stock and any other required
documents should be sent to the Depositary at one of the addresses set forth
below:
The Depositary for the Offer is:
First Chicago Trust Company of New York
By Mail: By Facsimile Transmission: By Hand:
(For Eligible Institutions Only)
Tenders & Exchanges (201) 222-4720 Tenders & Exchanges
P.O. Box 2564 Suite (201) 222-4721 14 Wall Street
4660 SFP Suite 4680 SFP
Jersey City, NJ 07303-2564 8th Floor
New York, NY 10005
Confirm Facsimile by Telephone:
(For Confirmation Only)
(201) 222-4707
Questions or request for assistance or additional copies of the Offer to
Purchase, this Supplement, the Letter of Transmittal and the Notice of
Guaranteed Delivery may be directed to any of the Information Agents or either
of the Dealer Managers at their respective addresses and telephone numbers set
forth below. Stockholders may also contact their broker, dealer, commercial
bank or trust company for assistance concerning the Offer.
The Information Agents are:
D.F. KING & CO., INC. MACKENZIE KISSEL BLAKE INC.
PARTNERS INC.
77 Water Street 156 Fifth Avenue 25 Broadway, 6th Floor
New York, New York New York, New York 10010 New York, New York 10004
10005 CALL TOLL FREE (800) 322-2885 CALL TOLL FREE (800)
CALL TOLL FREE (800) 554-7733
697-6974
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO. LAZARD FRERES & CO.
85 Broad Street One Rockefeller Plaza
New York, New York 10004 New York, New York 10020
