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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-1
(Amendment No. 22)
Tender Offer Statement
Pursuant to Section 14(d)(1) of the Securities Exchange Act of 1934
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Pennzoil Company
(Name of Subject Company)
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Union Pacific Resources Group Inc.
Resources Newco, Inc.
(Bidders)
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Common Stock, par value $0.83 1/3 per Share
(Including the Associated Preferred Stock Purchase Rights)
(Title of Class of Securities)
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709903 10 8
(CUSIP Number of Class of Securities)
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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
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<PAGE>
This Amendment No. 22 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 September 9, 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)(14), which is
incorporated by reference herein.
Item 11. Material to be Filed as Exhibits.
Item 11 is hereby amended to add the following:
(a)(22) Press release, dated September 9, 1997, relating to Pennzoil's
strategic plan disclosures.
(g)(14) Form of Letter, dated September 9, 1997, from Mr. James L. Pate to
Mr. Jack L. Messman.
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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.
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Name: Joseph A. LaSala, Jr.
Title: Vice President, General Counsel
and Secretary
RESOURCES NEWCO, INC.
By: /s/ JOSEPH A. LASALA, JR.
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Name: Joseph A. LaSala, Jr.
Title: Vice President, General Counsel
and Secretary
Dated: September 10, 1997
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EXHIBIT INDEX
Exhibit No. Description Page No.
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(a)(22) Press release, dated September 9, 1997, relating to Pennzoil's
strategic plan disclosures.
(g)(14) Form of Letter, dated September 9, 1997, from Mr. James L. Pate
to Mr. Jack L. Messman.
Union Pacific Resources Group Inc.
News Release [UPR LOGO]
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UPR SAYS PENNZOIL ADVERTISEMENTS DO NOT CONSTITUTE "STRATEGIC PLAN"
UPR Calls on Pennzoil to End "Disclosure Sideshow"
UPR Rejects Pennzoil's Distorted and Inaccurate Statements on UPR's filings
Fort Worth, TX -- Sept. 9, 1997 -- Union Pacific Resources (NYSE: UPR) issued
the following statement in response to misleading and inaccurate statements made
by Pennzoil today:
"We are astonished by Pennzoil's assertion today that its marketing blitz of
recent advertisements can possibly be characterized as a 'strategic plan.'
Pennzoil continues to use the issue of UPR's disclosure documents as a sideshow
in an attempt to obscure the central question it must answer for all
shareholders: How, specifically, can Pennzoil's still-secret 'strategic plan'
possibly exceed the value of UPR's offer to Pennzoil shareholders?"
# # #
Media Contact: Investor Relations Contact:
Walter Montgomery Michael Liebschwager
212-484-6721 817-877-6531
801 Cherry Street
Fort Worth, Texas 76102-6803
[PENNZOIL LETTERHEAD]
September 9, 1997
James L. Pate
Chairman of the Board
Chief Executive Officer
Mr. Jack L. Messman
Chairman and Chief Executive Officer
Union Pacific Resources Group Inc.
801 Cherry Street
Fort Worth, TX 76102-6803
Dear Jack:
Your Schedule 14D-1 amendment filed late yesterday afternoon is remarkable
for its eleventh hour sensational admissions of information which we have long
maintained Union Pacific Resources (UPR) had a duty to disclose. Notwithstanding
the spin you attempt to place on these admissions and your attempt to divert
attention from them by your concurrent attack on our strategic plan, your filing
illustrates the serious credibility problem faced by UPR, both with respect to
the posture of UPR and your offer for Pennzoil Company.
It has been clear to us all along that your offer is a desperate attempt to
solve UPR's problems. Moreover, you are attempting to do so by acquiring
Pennzoil at a price well below its inherent value.
I note here just a few examples from your filing yesterday.
o You, Jack, coined the phrase "valley of despair" to describe the trend
of steep declines in production from UPR's Austin Chalk and other
properties and the phrase "walking up the down escalator" to refer to
UPR's publicly stated goal of 10% growth per year in spite of such
declines.
o In a submission to the IRS, you stated "[T]here is significant
uncertainty as to how much further the Austin Chalk production can be
economically extended.... Consequently, management has concluded that
[UPR] cannot maintain its current levels of production for existing
properties.... Quite simply, [UPR]'s current drill site inventory is
not sufficient to keep [UPR]'s overall production and reserves from
declining significantly in the near future."
o In January 1997, Smith Barney, UPR's financial advisor for the tender
offer, presented a report to UPR valuing Pennzoil from $82.02 per
share up to $94.86 per share. Yet you have written to Pennzoil
shareholders that "Pennzoil, by itself, cannot create sufficient
shareholder value to compete with
<PAGE>
Mr. Jack L. Messman
Page 2
September 9, 1997
UPR's $84 per share bid...." Plus, I think you know that even the
Smith Barney range is low and that the actual value of your purported
$84 per share proposal is problematic and subject to substantial
downward pressure.
o UPR's planning memorandum states that "The tender offer would be
accompanied by litigation to remove the shareholder rights plan....
The likelihood of winning is nil, but the litigation applies pressure
to [Pennzoil] and provides defense against an unfriendly venue if
[UPR] gets sued."
o UPR's tender offer planning team believed that it was necessary to
commence the offer as soon as possible because of the risk that
Pennzoil's stock price would continue to rise, thereby "disminish[ing]
the perceived premium [to be] paid" by UPR. You hoped that "[a]n early
strike would... somewhat blur the market's perception of any
subsequent increase in stock price, for which [UPR] would naturally
take credit."
o And that "[t]here is more likely good news than bad news" for
Pennzoil, thus the recommendation to strike now before Pennzoil's
stock price reflected the good news.
o UPR's advisors prepared a response for you, Jack, to a possible
question that I might ask, that states "I believe, and apparently so
does the investment community, that you have done a superb job of
turning around the company. You have it on the right path."
Your document filed yesterday is a prime example of highly selective
disclosure accompanied by spin control. You well know that your litigation team
fought tooth and nail in federal courts in two states to avoid having to make
the partial disclosures you made yesterday. I can only surmise that it was the
expectation that you would be defeated in the court hearing tomorrow in your
effort to avoid these disclosures that led you to make them at the eleventh
hour. Moreover, you repeatedly downplay these disclosures by implying that they
do not have the imprimatur of anyone of significance at UPR. I invite you to go
public with the full text of all of the documents referenced in your filing,
including the heavily redacted portions which have been withheld from everyone.
File them in full as exhibits to your Schedule 14D-1. File them in full in an
8-K so your own shareholders and your analysts can see for themselves.
While reviewing these documents, I hope your shareholders will ask you the
following questions:
1. According to UPR's own long-range plan, when does production from
the Austin Chalk trend downward and precipitously decline?
<PAGE>
Mr. Jack L. Messman
Page 3
September 9, 1997
2. What is UPR's forecasted drillsite inventory for 1998 and beyond?
3. When does the "drilling machine" run out of raw material? What
happens then?
4. Why should UPR's experiences differ from those of other companies
that are dependent on the Austin Chalk?
5. Why doesn't UPR retain the discipline of independent reservoir
engineers in determining its proved and probable reserves?
Your letter and accompanying press release attempt to divert attention from
the serious deficiencies of UPR's disclosures by alleging shortcomings in our
strategic plan. You well know that our strategic plan has been succeeding and
that there is every expectation that it will continue to succeed. Contrary to
your claim, we have disclosed significant elements of our strategic plan in our
SEC filings, in public advertisements and to our analysts and shareholders. Our
international, Gulf of Mexico, downstream and consumer products initiatives are
well known. We have delivered our plan to UPR in litigation discovery. In
contrast, UPR continues to withhold its strategic plan from Pennzoil in
litigation discovery. Your general counsel Joseph LaSala in a sworn affidavit
has said that UPR's own plan is "proprietary" and "secret" and that UPR would be
"irreparably harmed" by any disclosures of the plan. Under the circumstances,
how can you complain about our strategic plan in light of your refusal to
disclose your own plan? Finally, I am disappointed that you continue to quote my
alleged statement about Pennzoil's stock price over the next four to five years.
I never made that statement and I believe you know it.
Our Board of Directors has carefully and thoroughly reviewed UPR's partial
cash, partial stock proposal and rejected it because it is inadequate and not in
the best interests of Pennzoil and its shareholders. We remain committed to the
continued implementation of our strategic plan which can deliver better
long-term value to our shareholders and has more upside potential than the UPR
proposal.
Sincerely,
/s/ Jim
James L. Pate
JLP: mrm
