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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
(AMENDMENT NO. 5)
Pursuant to Section 14(d)(4) of the
Securities Exchange Act of 1934
PENNZOIL COMPANY
(Name of Subject Company)
PENNZOIL COMPANY
(Name of Person(s) Filing Statement)
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)
LINDA F. CONDIT
CORPORATE SECRETARY
PENNZOIL COMPANY
PENNZOIL PLACE, P.O. BOX 2967
HOUSTON, TEXAS 77252-2967
(713) 546-8910
(Name, address and telephone number of person authorized
to receive notice and communications on behalf of the person(s) filing
statement)
Copies To:
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<S> <C>
Moulton Goodrum, Jr. Charles F. Richards, Jr.
Baker & Botts, L.L.P. Richards, Layton & Finger
One Shell Plaza One Rodney Square
Houston, Texas 77002-4995 P.O. Box 551
(713) 229-1234 Wilmington, Delaware 19899-0551
(302) 658-6541
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This Amendment No. 5 (this "Amendment") amends and supplements the
Solicitation/ Recommendation Statement on Schedule 14D-9, as amended, originally
filed on July 1, 1997 by Pennzoil Company, a Delaware corporation (the
"Company"), relating to a tender offer commenced by Resources Newco, Inc., a
wholly owned subsidiary of Union Pacific Resources Group Inc. on June 23, 1997.
All capitalized terms used in this Amendment without definition have the
meanings attributed to them in the Schedule 14D-9.
The items of the Schedule 14D-9 set forth below are hereby amended by
adding the following:
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
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<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
4 Revised opinion of Evercore Group dated July 1, 1997
delivered to the Company.
5 Revised opinion of J.P. Morgan dated July 1, 1997 delivered
to the Company.
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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.
PENNZOIL COMPANY
Dated: July 21, 1997 By: /s/ James L. Pate
James L. Pate
Chairman of the Board, President
and Chief Executive Officer
26
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EXHIBIT INDEX
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<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <S>
4 Revised opinion of Evercore Group dated July 1, 1997
delivered to the Company.
5 Revised opinion of J.P. Morgan dated July 1, 1997
delivered to the Company.
</TABLE>
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Exhibit 4
[Evercore Group Inc. Letterhead] July 1, 1997
Board of Directors
Pennzoil Company
Pennzoil Place
P.O. Box 2967
Houston, TX 77252
Gentlemen:
We understand that on June 23, 1997 Resources Newco, Inc. (the
"Purchaser"), a wholly owned subsidiary of Union Pacific Resources Group Inc.
("UPR"), commenced a tender offer under which it is offering to purchase up to
25,094,200 shares of common stock, par value $0.83 1/3 per share (the
"Shares"), of Pennzoil Company ("Pennzoil" or the "Company"), or such greater
number of Shares as equals 50.1% of the Shares outstanding on a fully diluted
basis on the Expiration Date (as defined in the Offer to Purchase), in each
case together with the associated preferred stock purchase rights (the
"Rights") issued pursuant to the Rights Agreement dated as of October 28, 1994,
between Pennzoil and Chemical Bank, as Rights Agent, at a price of $84.00 per
Share (and associated Right), net to the seller in cash, without interest
thereon (the "Offer Consideration"), upon the terms and subject to the
conditions set forth in the Offer to Purchase dated June 23, 1997 (the "Offer
to Purchase") and in the related Letter of Transmittal (which, together with
any amendments or supplements thereto, collectively constitute the "Offer").
We also understand that UPR is seeking to negotiate with Pennzoil a definitive
acquisition agreement pursuant to which Pennzoil would, as soon as practicable
following consummation of the Offer, consummate a merger (the "Proposed
Merger", and together with the Offer, the "Transaction") with Purchaser or
another direct or indirect wholly owned subsidiary of UPR. At the effective
time of the Proposed Merger, each Share that is issued and outstanding
immediately prior to the effective time (other than Shares held in the treasury
of Pennzoil or owned by UPR, Purchaser or any direct or indirect wholly owned
subsidiary of UPR) would be converted into a number of shares of common stock,
no par value, of UPR ("UPR Common Stock") determined by dividing $84.00 by the
average closing price of a share of UPR Common Stock during a measurement
period preceding the date of the Pennzoil stockholder meeting at which the
Proposed Merger is approved, provided that the number of shares of UPR Common
Stock to be received for each Share will not be more than 3.36 shares of UPR
Common Stock nor less than 2.80 shares of UPR Common Stock (the "Stock
Consideration", and together with the Offer Consideration, the
"Consideration"). The Offer is subject to a number of terms and conditions
contained in the Offer to Purchase. The terms of the Offer are more fully set
forth in the Schedule 14D-1 (the "Schedule 14D-1") filed by Purchaser and UPR
with the Securities and Exchange Commission on June 23, 1997.
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July 1, 1997
Page 2
You have asked for our opinion as to whether the Consideration to be
received by the holders of the Shares pursuant to the Transaction, including
the Offer, is adequate from a financial point of view to the holders of the
Shares.
For purposes of the opinion set forth herein, we have:
(i) reviewed the Offer to Purchase, the Schedule 14D-1 and certain
related documents;
(ii) analyzed certain publicly available financial statements and
other information of the Company and UPR, respectively;
(iii) analyzed certain internal financial statements and other
financial and operating data concerning the Company prepared
by the management of the Company;
(iv) analyzed certain financial projections for the Company
prepared by the management of the Company;
(v) discussed the past and current operations and financial
condition and the prospects of the Company with senior
executives of the Company;
(vi) reviewed the reported prices and trading activity for the
Company Shares and the UPR Common Stock;
(vii) compared the financial performance of the Company and UPR and
the prices and trading activity of the Company Shares and the
UPR Common Stock to similar publicly available information for
publicly-traded companies having lines of business similar to
those of the Company and UPR, respectively;
(viii) reviewed the financial terms, to the extent publicly
available, of certain comparable acquisition transactions;
(ix) performed such other analyses and examinations and considered
such other factors as we have in our sole judgment deemed
appropriate.
We have assumed and relied upon without independent verification the
accuracy and completeness of the information reviewed by us for purposes of
this opinion. With respect to the financial projections, we have assumed that
they have been reasonably prepared on bases reflecting the best currently
available estimates and judgments of the future financial performance of the
Company. We have not made any independent valuation or appraisal of the assets
or liabilities of the Company, nor have we been furnished with any such
appraisals. In addition, you have not
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July 1, 1997
Page 3
authorized us to solicit, and we have not solicited, any indications of
interest from any third party with respect to the purchase of all or a part of
the Company's business. Our opinion is necessarily based on economic, market
and other conditions as in effect on, and the information made available to us
as of the date hereof.
Evercore Group Inc. has acted as financial advisor to the Board of
Directors of the Company in connection with this transaction and will receive
a fee upon the rendering of this opinion.
This opinion is for the use and benefit of the Board of Directors of
Pennzoil and may not be quoted or referred to or relied upon or used for any
other purpose without our prior written consent, other than in connection with
the Solicitation/Recommendation Statement on Schedule 14 D-9 to be filed by the
Company with the Securities and Exchange Commission in connection with the
Offer. This opinion is not intended to be and does not constitute a
recommendation to any shareholder of the Company as to whether to accept the
Consideration offered to such shareholder in the Transaction.
Based on the foregoing, we are of the opinion on the date hereof that
the Consideration to be received by the holders of the Shares pursuant to the
Transaction, including the Offer, is inadequate from a financial point of view
to the holders of the Shares.
Very truly yours,
EVERCORE GROUP INC.
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EXHIBIT 5
[J.P. Morgan Securities Inc. Letterhead]
July 1, 1997
The Board of Directors
Pennzoil Company
P. O. Box 2967
Houston, Texas 77252-2967
Attention: Mr. James L. Pate
Chairman and Chief Executive Officer
Ladies and Gentlemen:
On June 23, 1997, Union Pacific Resources Group Inc. ("UPR") and Resources
Newco, Inc., a wholly owned subsidiary of UPR ("Acquisition"), commenced a
tender offer for up to 50.1% of the outstanding shares, on a fully diluted
basis, of the Common Stock, par value $0.83 1/3 per share (the "Shares"),
together with the associated preferred share purchase rights (the "Rights"), of
Pennzoil Company (the "Company"), at a price of $84.00 per Share (and
associated Right), net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated June 23, 1997 (the "Offer
to Purchase"), and in the related letter of transmittal (which, together with
the Offer to Purchase, constitute the "Offer"). According to the Offer to
Purchase, UPR and Acquisition seek to negotiate with the Company a definitive
acquisition agreement pursuant to which, upon consummation of the Offer,
Acquisition or another direct or indirect subsidiary of UPR would effect a
merger or similar business combination with the Company upon the terms set
forth in the Offer (the "Proposed Merger" and, together with the Offer, the
"UPR Acquisition Proposal"), and the Company would become a wholly owned
subsidiary of UPR. In addition, according to the Offer to Purchase, at the
effective time of the Proposed Merger, each Share that is issued and
outstanding immediately prior to such effective time would be converted into
shares of common stock of UPR in the manner set forth in the Offer to Purchase.
You have requested our opinion as to the adequacy, from a financial point of
view, to the holders of the Shares of the consideration proposed to be paid for
Shares pursuant to the UPR Acquisition Proposal.
In arriving at our opinion, we have reviewed (i) the Offer to Purchase and the
related Tender Offer Statement on Schedule 14D-1 filed with the Securities and
Exchange Commission (the "Commission") on June 23, 1997; (ii) certain publicly
available information concerning the business of the Company and UPR and of
certain other companies engaged in businesses comparable to those of the
Company and UPR, and the reported market prices for certain other companies'
securities
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deemed comparable; (iii) publicly available terms of certain
transactions involving companies comparable to the Company and UPR and the
consideration received for such companies; (iv) current and historical market
prices of the common stock of the Company and UPR; (v) the audited financial
statements of the Company and UPR for the fiscal year ended December 31, 1996,
and the unaudited financial statements of the Company and UPR for the period
ended March 31, 1997; (vi) certain internal financial analyses and forecasts
prepared by the Company and its management, including the Company's most recent
strategic plan, supporting financial projections relating to the business,
operations, and financial condition and future prospects and operations of the
Company; and (vii) the terms of other business combinations that we deemed
relevant.
In addition, we have held discussions with certain members of the management of
the Company with respect to certain financial aspects of the UPR Acquisition
Proposal, and the past and current business operations of the Company, the
financial condition and future prospects and operations of the Company, the
effects of the UPR Acquisition Proposal on the financial condition and future
prospects of the Company, and certain other matters we believed necessary or
appropriate to our inquiry. We have reviewed such other financial studies and
analyses and considered such other information as we deemed appropriate for the
purposes of this opinion.
In giving our opinion, we have relied upon and assumed, without independent
verification, the accuracy and completeness of all information that was
publicly available or was furnished to us by the Company or otherwise reviewed
by us, and we have not assumed any responsibility or liability therefor. We
have not conducted any valuation or appraisal of any assets or liabilities, nor
have any such valuations or appraisals been provided to us. In relying on
financial analyses and forecasts provided to us, including the views of the
Company concerning the business, operational and strategic consequences of the
UPR Acquisition Proposal, we have assumed that they have been reasonably
prepared based on assumptions reflecting the best currently available estimates
and judgments by management as to the expected future results of operations and
financial condition of the Company to which such analyses or forecasts relate.
We have relied as to all legal matters relevant to rendering our opinion upon
the advice of counsel.
Our opinion is necessarily based on economic, market and other conditions as in
effect on, and the information made available to us as of, the date hereof. It
should be understood that subsequent developments may effect this opinion and
that we do not have any obligation to update, revise, or reaffirm this opinion.
We are expressing no opinion herein as to the price at which the Shares or the
common stock of UPR will trade at any future time. In addition, we were not
authorized to and did not solicit any expressions of interest from any other
parties with respect to the sale of all or any part of the Company or any other
alternative transaction.
We are acting as financial advisor to the Company with respect to the UPR
Acquisition Proposal and will receive a fee from the Company for our services,
including the delivery of this opinion. In the ordinary course of their
businesses, our affiliates may actively trade the debt and equity securities of
the Company or UPR for their own account or for the accounts of customers and,
accordingly, they may at any time hold long or short positions in such
securities.
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On the basis of and subject to the foregoing, it is our opinion as of the date
hereof that the consideration proposed to be paid to the holders of Shares
pursuant to the UPR Acquisition Proposal is inadequate, from a financial point
of view, to such holders.
This letter is provided for the benefit of the Board of Directors of the Company
in connection with and for the purposes of its evaluation of the UPR Acquisition
Proposal. This opinion does not constitute a recommendation to any shareholder
of the Company as to whether such shareholder should tender Shares in the Offer
or how any shareholder should vote with respect to the Proposed Merger. This
opinion may not be disclosed, referred to, or communicated (in whole or in part)
to any third party for any purpose whatsoever except with our prior written
consent in each instance. This opinion may be reproduced in full in the
Solicitation/Recommendation Statement on Schedule 14D-9 to be filed by the
Company with the Commission.
Very truly yours,
J.P. MORGAN SECURITIES INC.
