==============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
SCHEDULE 14D-1
(Amendment No. 18)
Tender Offer Statement
Pursuant to Section 14(d)(1) of the Securities Exchange Act of 1934
------------------------
Pennzoil Company
(Name of Subject Company)
------------------------
Union Pacific Resources Group Inc.
Resources Newco, Inc.
(Bidders)
------------------------
Common Stock, par value $0.83 1/3 per Share
(Including the Associated Preferred Stock Purchase Rights)
(Title of Class of Securities)
------------------------
709903 10 8
(CUSIP Number of Class of Securities)
------------------------
Joseph A. LaSala, Jr., Esq.
Vice President, General Counsel and Secretary
Union Pacific Resources Group Inc.
801 Cherry Street
Fort Worth, Texas 76102
Telephone: (817) 877-6000
(Name, Address and Telephone Number of Persons
Authorized to Receive Notices and Communications on Behalf of Bidders)
Copies To:
Howard L. Shecter, Esq. Paul T. Schnell, Esq.
Morgan, Lewis & Bockius LLP Skadden, Arps, Slate, Meagher & Flom LLP
101 Park Avenue 919 Third Avenue
New York, NY 10178-0060 New York, NY 10022-3897
Telephone: (212) 309-6384 Telephone: (212) 735-3000
==============================================================================
<PAGE>
This Amendment No. 18 amends the Tender Offer Statement on Schedule
14D-1 filed on June 23, 1997 (the 'Schedule 14D-1') by Union Pacific Resources
Group Inc., a Utah corporation ('UPR'), and Resources Newco, Inc., a Delaware
corporation and a wholly owned subsidiary of UPR (the 'Purchaser', and together
with UPR, the 'Bidders'), with respect to Purchaser's offer to purchase up to
25,094,200 shares of Common Stock, par value $0.83 1/3 per share (the 'Shares'),
of Pennzoil Company, a Delaware corporation ('Pennzoil'), or such greater number
of Shares as equals 50.1% of the Shares outstanding on a fully-diluted basis, in
each case together with the associated Preferred Stock Purchase Rights, upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
June 23, 1997 (the 'Offer to Purchase'), and the related Letter of Transmittal
(which, together with any amendments or supplements thereto, collectively
constitute the 'Offer'), which were filed as Exhibits (a)(1) and (a)(2) to the
Schedule 14D-1, respectively. Unless otherwise defined herein, all capitalized
terms used herein shall have the respective meanings given such terms in the
Offer to Purchase.
Item 3. Past Contacts, Transactions or Negotiations with the Subject Company.
Item 3 is hereby amended to add the following:
On August 13, 1997, Mr. Jack L. Messman sent to each member of the
Board of Directors of Pennzoil a letter in the form attached to this Schedule
14D-1 as Exhibit (g)(11), which is incorporated by reference herein.
On August 14, 1997, Mr. James L. Pate sent to Mr. Jack L. Messman a
letter in the form attached to this Schedule 14D-1 as Exhibit (g)(12), which is
incorporated by reference herein.
Item 11. Material to be Filed as Exhibits.
Item 11 is hereby amended to add the following:
(g) (11) Form of letter, dated August 13, 1997, to each member of the
Board of Directors of Pennzoil.
(g) (12) Form of letter, dated August 14, 1997, from Mr. James L. Pate
to Mr. Jack L. Messman.
<PAGE>
SIGNATURES
After due inquiry and to the best of our knowledge and belief, we
certify that the information set forth in this statement is true, complete and
correct.
UNION PACIFIC RESOURCES GROUP INC.
By: /s/ JOSEPH A. LASALA, JR.
------------------------------------------
Name: Joseph A. LaSala, Jr.
Title: Vice President, General Counsel
and Secretary
RESOURCES NEWCO, INC.
By: /s/ JOSEPH A. LASALA, JR.
------------------------------------------
Name: Joseph A. LaSala, Jr.
Title: Vice President, General Counsel
and Secretary
Dated: August 15, 1997
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page No.
- ---------- ----------- --------
(g) (11) Form of letter, dated August 13, 1997,
to each member of the Board of
Directors of Pennzoil.
(g) (12) Form of letter, dated August 14, 1997,
from Mr. James L. Pate
to Mr. Jack L. Messman.
[LOGO] Union Pacific
Resources
Jack L. Messman
Chairman & CEO
August 13, 1997
Mr. James L. Pate
Pennzoil Company
700 Milam
Houston, TX 77252
Dear Jim:
As you know, UPR is strongly committed to achieving the combination of our
two companies. We believe that UPR's proposal offers far greater value than
Pennzoil can hope to achieve on its own.
The results of our tender offer suggest that your shareholders
overwhelmingly agree with UPR. As you may know, 61.5% of all Pennzoil shares
were tendered into our offer. Moreover, our information agent estimates that in
excess of 80% of the shares held by institutions and other professionally
managed accounts were tendered.
Many Wall Street analysts have expressed strong support for our offer.
Attached are a representative sample of independent investment community
commentary and two recent analyst reports. They underscore a number of key
points, including:
o current and projected values for Pennzoil are substantially below
UPR's offer;
o Pennzoil's Board should negotiate a transaction with UPR; and
o the combination of UPR and Pennzoil will enhance the value of UPR
stock, which will benefit both companies' shareholders.
We remain convinced that our proposal will serve the best interests of the
shareholders of both Pennzoil and UPR.
Sincerely
/s/ Jack,
Jack L. Messman
JLM/ds
Attachments
801 Cherry Street Fort Worth, Texas 76102-6803 (817) 877-7517
<PAGE>
SELECTED ANALYST COMMENTARY
ON A PENNZOIL / UPR COMBINATION
"UPR can drop its bid and we project that Pennzoil stock could drop by $10-$15
per share."
Michael Young
Deutsche Morgan Grenfell
First Call, July 10, 1997
"If UPR's offer is blocked or withdrawn, it would take a long time for
Pennzoil to get its stock back up to $84 on its own."
Benjamin Rice
Brown Brothers Harriman
Dow Jones, June 24, 1997
"It would be hard for most shareholders to turn [the $84 per share tender offer]
down. A year from now, I see this as being a done deal."
Christopher Eades
UBS Securities
Dow Jones, June 23, 1997
"Pennzoil would not be trading north of $60 if not for UPR."
Nicholas Colabella
Petroleum Research Group
Fort Worth Star-Telegram, July 15, 1997
"'I think UPR is overpaying,' said Gary F. Hovis, an analyst with Argus
Research, saying that Pennzoil was worth about $70 a share, not $84."
Gary F. Hovis
Argus Research
The New York Times, June 24, 1997
"UPR's offer price is a significant premium to where Pennzoil will be trading in
the next six to eight months and significantly in excess of what the company is
worth right now."
Norman Rosenberg
S&P Equity Group
Dow Jones Federal Filings, July 17, 1997
"It's a no brainer. Pennzoil shareholders should take the money and run . . .
[Pennzoil] invested in international exploration and production to the
detriment of domestic prospects. Those investments haven't proved up. There's
been a steady, steady decline in profitability."
Sharon James
John S. Herold Inc.
Houston Business Journal, June 30, 1997
"A rejection of UPR's bid combined with Pennzoil's takeover defenses could be
sufficient to keep Pennzoil independent for a year or longer, in our view. Under
this scenario, the stock could fall to $60 . . . A restructuring involving a
spin-off of downstream operations and/or share repurchase could not hold the
stock at the current level, according to our estimates."
Frederick P. Leuffer, Michelle D. Marlow
Bear Stearns & Co.
First Call, July 28, 1997
"We have found UPR's acquisition team to have made an extremely detailed and
thoughtful competitive analysis. UPR's expertise is in fast cycle time drilling
and production operations . . . UPR had adjoining fields to many of PZL's areas,
knew the geology, oftentimes operated the production infrastructure, and used
production, seismic and well log data to essentially perform pre-development
planning. So if successful, UPR could take over PZL operations, immediately
accelerate drilling, and not go through the typical period of post-purchase
operations indigestion."
". . . we believe that UPR's stock should trade at 6.3x-6.8x our 1998 DCFPS
estimate or $28-$30/share . . . With Pennzoil, we believe that UPR could
ultimately get a greater premium."
John Herrlin, Alvina Lee
Merrill Lynch
Analyst Report, July 21, 1997
"You sense things are moving UPR's way. They attracted 61 percent of Pennzoil's
stock in the face of determined board opposition."
Tom Bernett
Merger Insight
Forth Worth Star-Telegram, July 23, 1997
"These are very strong tender offer results, it is overwhelming for Pennzoil's
Board."
Michael Young
` Deutsche Morgan Grenfell
Reuters, July 22, 1997
"You can't hold out against [a 61.5% tender acceptance rate]."
Benjamin Rice
Brown Brothers Harriman
Reuters, July 22, 1997
"[The 61.5% tender offer response is] clearly a stronger-than-expected response
from Pennzoil shareholders. Pennzoil's board has been sent a strong message from
shareholders that they should at least sit down with Union Pacific."
Michael Young
Deutsche Morgan Grenfell
Dallas Morning News, July 23, 1997
"In our view, UPR's bold move is well conceived and undoubtedly reflects a
thorough assessment of Pennzoil's assets and operations . . . an already
compelling core investment holding within the large capitalization E&P segment
would become even more attractive with Pennzoil in the fold. Accordingly, we
reiterate our Buy rating on UPR shares, with a 12-month stock price objective of
$35.00/share."
Paul Leibman, Paul Korus
Petrie Parkman
Research Comment, June 27, 1997
"If you put UPR's drilling philosophy onto Pennzoil's properties, you'd have a
real powerhouse."
David Garcia
Principal Financial Group
First Call, June 24, 1997
# # #
[Also attached to the letter were an analyst report of Merrill Lynch, dated
July 21, 1997 and an analyst report of Petrie Parkman & Co., dated
June 27, 1997.]
[Pennzoil Letterhead]
James L. Pate
Chairman of the Board
Chief Executive Officer
August 14, 1997
Mr. Jack L. Messman
Chairman and Chief Executive Officer
Union Pacific Resources Corporation
801 Cherry Street
Fort Worth, TX 76102-6803
Dear Jack:
Your recent correspondence that purports to summarize the views of Wall
Street analysts with regard to your proposal to acquire Pennzoil is incomplete,
misleading and, most importantly, pointless. Based upon your letter, it appears
that I need to reiterate points that I have made in previous correspondence to
you and that our Board has made in the Company's filings with the SEC.
The Pennzoil Board of Directors has rejected your proposal, including
the first step tender offer, as inadequate and not in the best interests of the
Pennzoil stockholders. We firmly believe that our strategic plan can deliver
greater long-term value to our stockholders than the UPR proposal -- it's as
simple as that.
As I said to you in my letter of August 1, we fully intend to pursue
our strategic plan and will take all necessary steps to assure that our
stockholders are the ones who receive the benefits of that strategic plan.
Sincerely,
/s/ Jim
JLP:mrm
