PRELIMINARY COPY - SUBJECT TO COMPLETION, DATED DECEMBER 4, 1998
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant To Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant ( )
Filed by a Party other than the Registrant (X)
Check appropriate box:
(X) Preliminary Proxy Statement
( ) Confidential, For Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
( ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
POOL ENERGY SERVICES CO.
(Name of registrant as specified in its charter)
NABORS INDUSTRIES, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required.
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
( ) Fee paid previously with preliminary materials:
( ) Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the form or schedule and the date of its
filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement no.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
PRELIMINARY COPY SUBJECT TO COMPLETION,
DATED DECEMBER 4, 1998
[NABORS INDUSTRIES, INC. LETTERHEAD]
December __, 1998
To the Shareholders of
Pool Energy Services Co.:
In October 1998, Nabors Industries, Inc. ("Nabors") sent two letters
to Pool Energy Services Co. ("Pool"), proposing a business combination of
the two companies. In a letter dated October 12, 1998, sent to the Board
of Directors of Pool (the "Pool Board"), Nabors proposed an offer of $12.50
for each share of Pool common stock, a premium of 77% over the closing
price of Pool common stock on October 9, 1998, the last day of trading
prior to Nabors' offer. Importantly, this offer also represented a 40%
premium to the unaffected average Pool stock price of $8.93 per share for
the 60 trading days prior to October 9, 1998. In a letter sent to the Pool
Board on October 28, 1998, and subsequently made public by a press release,
Nabors proposed a merger (the "Merger Proposal") of the two companies in
which Pool's shareholders would receive 0.481 shares of Nabors common stock
and $6.125 in cash for each share of Pool common stock. This offer implied
a value of $14.72 per share of Pool common stock based on Nabors' closing
stock price on October 27, 1998. In addition, Nabors stated that it would
consider offering a higher price if the Pool Board was able to demonstrate
value that was not apparent from publicly available information. The Pool
Board rejected Nabors' proposed business combination unanimously and
unequivocally, and despite Nabors' repeated attempts to meet with Pool's
management over the six week period since October 12, 1998, Pool and its
representatives have been unable to meet, or to set a date to meet, with
Nabors and its representatives.
Nabors continues to believe that a business combination between the
two companies makes eminent business sense and is in the best interests of
Pool and its shareholders. Nabors believes that a combination of the two
companies will maximize the long-term value to be realized by Pool's
shareholders based on the following:
<PAGE>
o The Merger Proposal would provide each shareholder with the
benefit of a premium to Pool's current stock price and an ongoing
participation in the equity upside in the combined company.
Nabors' offer of .481 Nabors shares and cash of $6.125 per Pool
share represented a significant premium of 77% to Pool's stock
price of $7.06 on October 9, 1998, the last day of trading prior
to Nabors' offer. Importantly, the Merger Proposal also
represented a 40% premium to the unaffected average Pool stock
price of $8.93 per share for the 60 trading days prior to October
9, 1998.
o Pool's stock price declined 34% from its closing price of $10.75
on the date of its initial public offering on April 17, 1990, to
a closing price of $7.06 on October 9, 1998, the last trading day
prior to Nabors' offer. During the same period, Nabors' stock
price increased 212% from $4.25 to $13.25. Indeed, Pool's stock
price performance since the implementation of Pool's strategic
plan through October 9, 1998, has been lackluster compared to the
industry. From June 6, 1994 the day Nabors announced its
ownership of 6.4% of the then outstanding Pool shares Pool's then
stock price of $9.13 actually decreased 23% to $7.06 on October
9, 1998, while the S&P Oil Well Equipment & Services Index
increased 43% and Nabors' stock price increased 96%.
o Nabors believes the combined company will offer increased
shareholder liquidity and enjoy increased exposure in the
investment community compared to Pool on a stand-alone basis.
o Nabors believes the combined company will have greater ability to
weather a down-turn in business activity than Pool on a stand-
alone basis as a result of its larger market capitalization and
more diversified asset base and geographic scope.
Nabors is committed to affording Pool shareholders, the true owners of
Pool, a meaningful opportunity to consider the Merger Proposal as well as
any other potential business combinations with higher value than the Merger
Proposal which may result from productive negotiations between Nabors and
Pool. Nabors believes, however, that a negotiated transaction remains the
best method to realize the significant benefits of such a business
combination.
<PAGE>
TO THIS END, NABORS, TOGETHER WITH ITS WHOLLY OWNED SUBSIDIARY, NABORS
ALASKA DRILLING, INC., HAS CALLED A SPECIAL MEETING OF SHAREHOLDERS (THE
"SPECIAL MEETING") TO BE HELD AT THE OFFICES OF POOL, 10375 RICHMOND
AVENUE, HOUSTON, TEXAS 77042, ON JANUARY 12, 1999 AT 9:30 A.M., LOCAL
TIME.
o At the Special Meeting, Nabors and its subsidiary will propose
that the shareholders consider and adopt a non-binding resolution
(the "NABORS RESOLUTION") recommending that Pool's Board arrange
for the sale of Pool and take all necessary actions to effect
such sale, including, among other things, entering into merger
negotiations with Nabors and any other qualified bidder offering
a higher price per share than Nabors.
o In rejecting the Merger Proposal, Pool cited its determination to
pursue its strategic plan adopted in 1994. However, during the
period between June 6, 1994 and October 9, 1998, the last day of
trading prior to Nabors' offer, the S&P Oil Well Equipment &
Services Index increased 43% and Nabors' stock price increased
96%, while Pool's stock price decreased by 23%.
o The Pool Board, which owns less than 0.3% (excluding options) of
the outstanding common stock of Pool, is depriving you of the
opportunity to even consider the Merger Proposal. The NABORS
RESOLUTION is your opportunity to tell the Pool Board that the
true owners of Pool believe the Merger Proposal is a superior
alternative to continued adherence to the underperforming
strategic plan.
By signing and returning the enclosed BLUE proxy card and voting FOR
the adoption of the non-binding NABORS RESOLUTION, you will be sending a
strong message to Pool's Board of Directors that it must entertain all good
faith proposals that may maximize shareholder value, including the Merger
Proposal. A vote FOR the adoption of the NABORS RESOLUTION will offer
you the owners of Pool the best opportunity to decide what is in the best
interests of your company.
<PAGE>
The enclosed Notice of Special Meeting and Proxy Statement contain
important information concerning the Special Meeting and the Merger
Proposal. PLEASE READ THEM CAREFULLY. YOUR VOTE AND PROMPT ACTION ARE
IMPORTANT. I URGE YOU TO GRANT YOUR PROXY BY MARKING, SIGNING, DATING AND
RETURNING THE ENCLOSED BLUE PROXY CARD AS SOON AS POSSIBLE.
Sincerely,
Eugene M. Isenberg
Chairman of the Board and
Chief Executive Officer
<PAGE>
IMPORTANT
If your Shares are held in your own name, please sign, date and return
the enclosed BLUE proxy card today. If your Shares are held in
"Street-Name" only your broker or bank can vote your Shares and only
upon receipt of your specific instructions. Please return the
enclosed BLUE proxy card to your broker or bank and contact the person
responsible for your account to ensure that a BLUE proxy card is voted
on your behalf.
Only shareholders of record on ________, 1998 are entitled to vote at
the Special Meeting.
We urge you not to sign any proxy card you may receive from Pool.
If you have any questions or require any assistance in voting your
Shares, please call:
INNISFREE M&A INCORPORATED
501 Madison Avenue, 20(th) Floor
New York, New York 10022
CALL TOLL-FREE: (888) 750-5834
Bankers and Brokers Call Collect: (212) 750-5833
<PAGE>
POOL ENERGY SERVICES CO.
10375 RICHMOND AVENUE
HOUSTON, TEXAS 77042
___________________________
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY 12, 1999
9:30 A.M. (LOCAL TIME)
___________________________
December __, 1998
TO THE SHAREHOLDERS OF
POOL ENERGY SERVICES CO.:
A Special Meeting of Shareholders (the "Special Meeting") of Pool
Energy Services Co. (the "Company") will be held at the offices of the
Company, 10375 Richmond Avenue, Houston, Texas 77042, on January 12, 1999
at 9:30 a.m. local time, for the following purposes:
1. To consider a non-binding resolution of the shareholders of the
Company strongly recommending that the Board of Directors of the
Company arrange for the sale of the Company and take all
necessary actions to effect such sale, including, without
limitation, (i) entering into good faith merger negotiations with
Nabors Industries, Inc. ("Nabors") and any other qualified bidder
for the Company offering a higher price per share than Nabors,
(ii) redeeming the common stock purchase rights of the Company
granted pursuant to the Rights Agreement, dated as of June 7,
1994, between the Company and the First National Bank of Boston
and (iii) taking all actions to approve the sale of the Company
under the Texas Business Corporation Act (the "TBCA"), including,
without limitation, Article 13.03 of the TBCA; it being
understood that this resolution is admonitory only and that the
Board of Directors of the Company must exercise its business
judgment in fulfillment of its fiduciary duties to the
shareholders of the Company.
2. To transact such other business as may properly come before the
Special Meeting.
The Special Meeting has been called at the direction of the undersigned
shareholders, beneficial owners of not less than 10% of the shares entitled
to vote at the Special Meeting, with the knowledge and consent of Cede &
Co., the record holder of such shares, pursuant to Article 2.24C of the
TBCA and Article II, Section 3 of the Company's Bylaws.
NABORS INDUSTRIES, INC.
By: ________________________
Name:
Title:
NABORS ALASKA DRILLING, INC.
By: ________________________
Name:
Title:
<PAGE>
PRELIMINARY COPY -- SUBJECT TO COMPLETION,
DATED DECEMBER 4, 1998
______________________________________________________
SPECIAL MEETING OF SHAREHOLDERS
OF
POOL ENERGY SERVICES CO.
TO BE HELD ON JANUARY 12, 1999
______________________________________________________
PROXY STATEMENT
OF
NABORS INDUSTRIES, INC.
515 WEST GREENS ROAD
SUITE 1200
HOUSTON, TEXAS 77067
______________________________________________________
PLEASE SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED BLUE PROXY CARD IN THE
ENCLOSED ENVELOPE
______________________________________________________
This proxy statement (the "Proxy Statement") and the accompanying BLUE
proxy card are being furnished to shareholders of Pool Energy Services Co.
(the "Company"), a Texas corporation, by Nabors Industries, Inc.
("Nabors"), a Delaware corporation, in connection with the solicitation of
proxies from shareholders of the Company by Nabors to be used at the
Special Meeting of Shareholders of the Company (the "Special Meeting"),
scheduled to be held at the offices of the Company, 10375 Richmond Avenue,
Houston, Texas 77042, on January 12, 1999 at 9:30 a.m. (local time), and at
any and all adjournments, postponements or reschedulings thereof. The
Special Meeting has been called by shareholders of the Company owning
approximately 10.50% in the aggregate of the outstanding shares of common
stock, no par value per share, of the Company (the "Shares"). The purpose
of the Special Meeting is to consider and vote on a non-binding resolution
(the "Nabors Resolution") of the shareholders strongly recommending that
the Board of Directors of the Company (the "Company Board") arrange for the
sale of the Company and take all necessary actions to effect such sale,
including, among other things, entering into merger negotiations with
Nabors and any other qualified bidder for the Company offering a higher
price per Share than Nabors.
<PAGE>
On October 12, 1998, and again on October 28, 1998, Nabors sent a
letter to the Company proposing a negotiated business combination in which
Nabors would acquire the Company for a combination of cash and common
stock, par value $0.10 per share, of Nabors (the "Nabors Common Stock"). In
the letter of October 28, 1998, Nabors proposed a merger transaction (the
"Merger Proposal") in which each shareholder of the Company would receive
0.481 shares of Nabors Common Stock and $6.125 in cash for each Share. The
consideration offered in the Merger Proposal implied a value of $14.72 per
Share based on Nabors' closing stock price on October 27, 1998. The Merger
Proposal consideration represented a 77% premium over the Company's closing
stock price on October 9, 1998, the last day of trading prior to the letter
of October 12, 1998. In addition, Nabors indicated that the Merger
Proposal was based on publicly available information and if the Company
could demonstrate additional value, Nabors would consider offering a higher
price per Share. Despite this attractive premium and Nabors' willingness
to negotiate a higher price, the Company Board rejected the Merger Proposal
after reviewing it for only two days and stated it was not interested in
pursuing discussions related to a business combination with Nabors. The
Company has not met, nor set a date to meet, with Nabors to discuss the
Merger Proposal or other business combination involving the two companies
during the six week period since October 12, 1998, the date of Nabors'
first offer.
The purpose of this proxy solicitation by Nabors is to facilitate a
negotiated business combination between Nabors and the Company and to
afford shareholders of the Company the opportunity to communicate to the
Company Board that good faith offers to acquire the Company, like that made
by Nabors, should be entertained in an effort to maximize shareholder
value. Nabors continues to believe that good faith negotiations are the
best method to produce a mutually beneficial transaction. Nabors believes
that the Company Board, which owns in the aggregate less than 0.3%
(excluding options) of the outstanding Shares (based on publicly available
information), should not deprive the Company's shareholders of the
opportunity to consider the Merger Proposal or any other bona fide merger
proposals and to decide for themselves what is in the best interests of the
Company and its shareholders.
AT THE SPECIAL MEETING, NABORS INTENDS TO PROPOSE THAT THE SHAREHOLDERS
OF THE COMPANY ADOPT THE NABORS RESOLUTION.
<PAGE>
The Nabors Resolution is a non-binding shareholder resolution strongly
recommending that the Company Board arrange for the sale of the Company and
take all necessary actions to effect such sale, including, among other
things, entering into merger negotiations with Nabors or any qualified
bidder for the Company offering a higher price per Share than Nabors. By
voting for the adoption of the Nabors Resolution, shareholders of the
Company can send a strong message that the Company Board should explore and
evaluate all bona fide offers and acquisition proposals, including the
Merger Proposal. While the Nabors Resolution will not affirmatively
require the Company Board to take any action, by voting for the adoption of
the Nabors Resolution, you can let your directors know that there is simply
no justification for refusing to discuss a significant opportunity to
maximize Pool shareholder value.
THIS SOLICITATION IS BEING MADE BY NABORS AND NOT ON BEHALF OF THE BOARD
OF DIRECTORS OF THE COMPANY.
_______________
This Proxy Statement and the BLUE proxy card are first being furnished to
shareholders of the Company on or about _______ __, 1998. The principal
executive offices of the Company are located at 10375 Richmond Avenue,
Houston, Texas 77042.
The record date for determining shareholders entitled to notice of and to
vote at the Special Meeting is , 1998 (the "Special Meeting
Record Date"). Shareholders of record at the close of business on the
Special Meeting Record Date will be entitled to one vote at the Special
Meeting for each Share held on the Special Meeting Record Date. According
to the Quarterly Report on Form 10-Q for the quarter ended September 30,
1998, there were as of such date 21,043,898 Shares issued and outstanding.
A majority of the outstanding Shares present in person or by proxy shall
constitute a quorum to transact business at the Special Meeting and the
affirmative vote of a majority of the Shares present in person or by proxy
will be required to approve the Nabors Resolution. Nabors and its
subsidiary, Nabors Alaska Drilling, Inc., hold an aggregate of 2,209,500
Shares, which represents approximately 10.50% of the outstanding Shares
based on publicly available information. Nabors intends to vote such Shares
in favor of the Nabors Resolution.
THE NABORS PROPOSAL IS DESIGNED TO ENHANCE THE LIKELIHOOD THAT
ACQUISITION PROPOSALS, INCLUDING THE MERGER PROPOSAL, WILL BE FULLY
EXAMINED BY THE COMPANY BOARD. A VOTE IN FAVOR OF THE NABORS RESOLUTION
WILL BE AN IMPORTANT STEP IN FACILITATING A NEGOTIATED TRANSACTION BETWEEN
NABORS AND THE COMPANY. IF YOU BELIEVE THE SAME, PROMPTLY SIGN, DATE AND
MAIL THE ENCLOSED BLUE PROXY CARD.
<PAGE>
IMPORTANT
If your Shares are held in your own name, please sign, date and return
the enclosed BLUE proxy card today. If your Shares are held in
"Street-Name" only your broker or bank can vote your Shares and only
upon receipt of your specific instructions. Please return the
enclosed BLUE proxy card to your broker or bank and contact the person
responsible for your account to ensure that a BLUE proxy card is voted
on your behalf.
Only shareholders of record on ________, 1998 are entitled to vote at
the Special Meeting.
We urge you not to sign any proxy card you may receive from Pool.
If you have any questions or require any assistance in voting your
Shares, please call:
INNISFREE M&A INCORPORATED
501 Madison Avenue, 20(th) Floor
New York, New York 10022
CALL TOLL-FREE: (888) 750-5834
Bankers and Brokers Call Collect: (212) 750-5833
<PAGE>
BACKGROUND AND RECENT EVENTS
Nabors, through subsidiaries, originally began acquiring Shares in late
1993 in order to obtain an equity position in the Company.
On September 13, 1993, Eugene M. Isenberg, Anthony G. Petrello and Warren
Berman, directors of Nabors, had dinner with James T. Jongebloed and Ernest
J. Spillard, both executive officers of the Company. The purpose of the
meeting was to enable the executives to become better acquainted and to
introduce Mr. Petrello to Messrs. Jongebloed and Spillard. Nabors'
representatives expressed an interest in pursuing joint purchasing or other
arrangements that could be of mutual benefit. No specific proposals were
discussed and no specific further actions decided upon. During April 1994,
Mr. Isenberg telephoned Mr. Jongebloed to inquire whether he had any
interest in meeting to examine alternatives of working together for the
mutual benefit of each company's shareholders. No further discussions took
place at that time.
Nabors continued to purchase Shares and filed a Schedule 13D with the
Securities and Exchange Commission on May 26, 1994, reporting that Nabors
then held 867,500 Shares (then constituting 6.4% of the outstanding
Shares). Shortly thereafter, in June 1994, the Company adopted a number of
anti-takeover tactics, including, but not limited to, the adoption of a
shareholder rights agreement or "poison pill." The Company also announced
that it had adopted a new strategic plan (the "Strategic Plan").
In the summer of 1994, Mr. Isenberg, Mr. Petrello and Mr. Christopher
Papouras of Nabors met with Mr. Jongebloed and the Company's investment
advisors to discuss whether the Company had any interest in pursuing a
merger, joint venture, or other combination in which Nabors and the Company
could jointly improve profitability via improved asset utilization,
reducing capital expenditures or reducing operating expenses. Mr.
Jongebloed indicated that the Company was not interested in pursuing any
potential opportunities with Nabors and that the Company was planning to
implement the newly-adopted Strategic Plan.
In light of the opposition of the Company's management, Nabors decided to
retain a substantial investment in the Company and to see whether the
Company's management could realize the potential values for the Company's
shareholders that had initially attracted Nabors as an investor and
potential partner. In July 1996, the Company issued an additional
4,600,000 Shares and, as a result, Nabors' ownership of Shares dropped
below 5%. Subsequently, in February 1997, Nabors filed a final amendment
to its original Schedule 13D filing, noting that Nabors no longer was
subject to the reporting requirements of that form. However, since 1994,
Nabors has continuously owned at least 867,500 Shares.
<PAGE>
In the summer of 1998, through intermediaries, Nabors again approached
the Company regarding the potential benefits of a combination of the two
companies. The Company's representatives reported that the Company's
management was not at that time open to pursuing discussions.
On October 12, 1998, Mr. Isenberg sent the following letter to the
Company Board (the "October 12th Letter"):
October 12, 1998
CONFIDENTIAL
The Board of Directors of
Pool Energy Services Co.
10375 Richmond Avenue
Houston, Texas 77042
Dear Mr. Jongebloed:
We recently raised with your outside advisor the potential benefits to
our respective stockholders, employees and customers of a combination of
our two companies. While you have informed us that you believe now is not
an appropriate time for a combination, we believe that the current
environment causes the combination to make eminent business sense for both
companies.
The strategic direction of both Pool and Nabors is complementary. Each
company operates drilling and workover platform rigs in the Gulf of Mexico
and internationally as well as land drilling operations in Alaska and
internationally, including Saudi Arabia. A combination of the two
companies can lead to economies of scale that offer the prospect of
significant purchasing, operating and other efficiencies. Nabors' offshore
presence would also offer significant opportunities for marketing Pool's
Sea Mar Fleet.
In times of uncertainty, stockholders, employees and customers will
benefit from a larger, stronger and better-capitalized company. I think
most industry observers would also agree with this premise. For this
reason, we propose putting our two companies together and believe that such
a combination is in the best interest of the stockholders of both
companies.
<PAGE>
We would like to submit to your Board a merger proposal under which
Nabors would acquire all of the outstanding shares of Pool at a price of
$12.50 per share. This consideration would be payable at least 51% in
stock (to preserve tax free treatment) and the remainder in cash. This
structure offers those stockholders interested in retaining a long-term
position the prospect of participating in future upside prospects that are
materially enhanced as a result of the transaction and of growth with the
benefit of an over 50 percent premium. At the same time, stockholders
electing cash will recognize an immediate substantial premium over current
market.
Your management team has clearly been a major contributor to the
Company's success. We believe that there will be continuing roles for key
management that will offer greater responsibilities and increased
opportunities in the context of a substantially larger company.
While we know your business well, our proposal is based on public
information. If you can demonstrate additional value, we would consider
offering a higher price.
Nabors' Board of Directors has unanimously approved our proposal. Our
financial advisors and bank lenders have assured us that financing is
available to meet all transaction requirements. Our legal advisors and we
have also carefully studied any potential antitrust issues raised by a
combination of our two companies, and we are confident that any necessary
approvals for the transaction can be obtained without any undue delay. Our
proposal is of course subject to negotiation of a definitive merger
agreement containing customary terms and conditions. We are prepared to
immediately commence negotiating a definitive acquisition agreement between
our companies and to consummate the agreement in an expeditious manner.
My intent in sending this letter is to provide you with information about
our contemplated proposal and to express our desire to work together with
you to structure a transaction acceptable to your Board. We do not believe
this letter requires you to make any public disclosure and we do not intend
to make it public at this time. We would hope that at this point you would
be prepared immediately to commence discussions on a confidential basis
between us.
<PAGE>
We would like to meet with you and your representatives to discuss our
proposal and to answer any questions that you may have. Please contact my
office (281-775-8077) to let me know when we can get together. We would
appreciate receiving your views as to our contemplated proposal no later
than October 23, 1998.
Sincerely,
/s/ Eugene M. Isenberg
Eugene M. Isenberg
Chairman and Chief Executive Officer
On October 26, 1998, Mr. Jongebloed sent the following letter to Mr.
Isenberg (the "October 26th Letter"):
October 26, 1998
CONFIDENTIAL
Mr. Eugene M. Isenberg
Chairman and Chief Executive Officer
Nabors Industries, Inc.
515 West Greens Road, Suite 1200
Houston, Texas 77067-4525
Dear Mr. Isenberg:
My fellow directors and I have carefully considered your October 12, 1998
letter, and I have been instructed by our Board to tell you that we are not
interested in pursuing the discussions with your company suggested in that
letter. We want you to know that this decision is unanimous and
unequivocal.
As you may know, our Company is committed to the implementation of its
own strategic plan, which is designed to capitalize on opportunities for
the Company and to increase shareholder values over the long term. We
believe the results of these efforts to date have been impressive. But for
the current unexpected downturn in our industry, which is the worst in many
years, we believe our stock price would better reflect the efforts and
achievements of our Board and management.
We regard your letter as an expression of confidence in our Company, and
we are happy that you share our views concerning our Company's excellent
prospects.
<PAGE>
You and your company have our best wishes.
Yours very truly,
/s/ J.T. Jongebloed
J.T. Jongebloed
Following the receipt of the October 26th Letter and the Company's
rejection of Nabors' proposal, Nabors consulted with its financial and
legal advisors and determined that it would continue to correspond with the
Company concerning a potential business combination between the Company and
Nabors. On October 28, 1998, Nabors sent the following letter to the
Company (the "October 28th Letter"):
October 28, 1998
CONFIDENTIAL
The Board of Directors of
Pool Energy Services Co.
10375 Richmond Avenue
Houston, Texas 77042
Dear Mr. Jongebloed:
On October 12, 1998, I wrote to you proposing a combination of Nabors and
Pool in which Nabors would acquire all of the outstanding shares of Pool
for consideration consisting of 51% Nabors stock and 49% cash, with an
implied value at that date of $12.50 per Pool share. This offer
represented a 77% premium to Pool's closing stock price of $7.06 per share
on October 9, 1998, the last trading day prior to our proposal. On October
26, 1998, we received a letter from you stating that Pool was not
interested in pursuing discussions with Nabors. In view of the superior
value inherent in our proposal, we were surprised that your Board of
Directors could have concluded unanimously and unequivocally not to discuss
our proposal. Had our proposal been accepted on October 12, your
shareholders would have received consideration with a blended value today
of $14.72 based on the ratios implied by our offer price of $12.50 and
Nabors' closing price on October 9 of $13.25. We continue to believe that
a business combination based on these values is in the best interests of
Pool and its shareholders.
<PAGE>
In your letter, you refer to Pool's commitment to the implementation of
its own strategic plan, which is designed to increase shareholder value
over the long-term. We are convinced that this plan cannot outperform the
benefits of a combination of Pool and Nabors given the high fragmentation
of our industry, the economies of scale which will be realized through the
combination and the enhanced capital structure of the combined entities.
As a result, we believe that a combination of our companies will maximize
the long-term value to be realized by your shareholders.
Given the strong benefits of a combination of Pool and Nabors, we
encourage you to reevaluate our proposal to enter into a merger in which
Nabors would acquire all of the outstanding shares of Pool for
consideration equal to 0.481 Nabors shares and $6.125 in cash for each
outstanding Pool share. As stated above, this offer implies a value of
$14.72 per Pool share based on Nabors' closing stock price on October 27,
1998. In addition, as we indicated in our letter of October 12, our
proposal is based on public information and, if you can demonstrate
additional value, we would consider offering a higher price.
We are hopeful that Pool's management and Board of Directors want to act
in the best interests of the company's shareholders. We also firmly
believe that your shareholders would welcome our proposal, and we are
committed to affording them the opportunity to do so. Based on the
unusually high trading volume in Pool's shares subsequent to our October 12
letter, it is in both our interests to discuss this matter quickly. I will
call you tomorrow to discuss our proposal.
Sincerely,
/s/ Eugene M. Isenberg
Eugene M. Isenberg
Chairman and Chief Executive Officer
On October 30, 1998, Nabors issued a press release setting forth the text
of the October 28th Letter and announcing the Merger Proposal. The press
release also disclosed Nabors' proposal contained in the October 12th
Letter and the Company's rejection of that proposal by the October 26th
Letter.
On October 30, 1998, the Company sent the following letter to Nabors (the
"October 30th Letter"):
October 30, 1998
<PAGE>
Mr. Eugene M. Isenberg
Chairman and Chief Executive Officer
Nabors Industries, Inc.
515 West Greens Road, Suite 1200
Houston, Texas 77067-4525
Dear Mr. Isenberg:
As I told you in my October 26 letter to you, our Board of Directors
carefully considered your October 12, 1998 letter and instructed me to tell
you that we are not interested in pursuing the discussions with your
company suggested in that letter. As I also said, this decision was
unanimous and unequivocal.
As you know, our Company is committed to the implementation of its own
strategic plan, which is designed to capitalize on opportunities for the
Company and to increase shareholder values over the long term. We believe
the results of these efforts to date have been impressive. But for the
current unexpected downturn in our industry, which is the worst in many
years, we believe our stock price would better reflect the efforts and
achievements of our Board and management.
It is not surprising that you share our views concerning our Company's
excellent prospects, but our shareholders - not yours - should be the
beneficiaries of our efforts as our industry recovers. It would not be
prudent or responsible for our Board to let others reap the benefits that
rightly belong to our shareholders.
Yours very truly,
/s/ J.T. Jongebloed
J.T. Jongebloed
Following receipt of the October 30th Letter, Nabors continued to meet
with its financial and legal advisors. The result of such meetings was the
decision to continue to pursue a business combination with the Company.
From November 3, 1998 through November 12, 1998, Nabors Alaska Drilling,
Inc, a wholly owned subsidiary of Nabors ("Nabors Alaska"), purchased
1,089,000 Shares in open market transactions on the NASDAQ National Market
System. On November 13, 1998, Nabors and its subsidiaries filed a Schedule
13D disclosing such purchases. From November 13, 1998 through November 20,
1998, Nabors Alaska purchased 98,000 additional Shares in open market
transactions on the NASDAQ National Market System.
<PAGE>
On November 23, 1998, ARRH, Inc., a Delaware corporation and a wholly
owned subsidiary of Nabors Alaska, was merged with and into Nabors Alaska,
with Nabors Alaska being the surviving corporation. As a result of such
merger Nabors Alaska and Nabors together beneficially own 2,209,500 Shares
and filed an amendment to their Schedule 13D disclosing such beneficial
ownership.
Despite Nabors' repeated attempts to meet with Pool's management over the
six week period since October 12, 1998, Pool and its representatives have
been unable to meet, or to set a date to meet, with Nabors and its
representatives.
ARE THE COMPANY BOARD'S ACTIONS IN THE BEST INTERESTS OF THE SHAREHOLDERS?
Nabors has on two separate occasions proposed a merger transaction that
would have given the Company's shareholders a substantial premium and an
opportunity to become a shareholder of a stronger combined company. In
addition, as a part of each proposal, Nabors has offered to consider a
higher price if the Company could demonstrate additional value. The
Company Board has deprived shareholders of the opportunity to realize such
premiums by declining promptly to meet with Nabors, despite Nabors'
repeated offers to negotiate such a transaction and the price per Share.
Nabors believes that the Company Board, which owns in the aggregate less
than 0.3% (excluding options) of the outstanding Shares based on publicly
available information, should not deprive the Company's shareholders of the
opportunity to consider the Merger Proposal or any other bona fide merger
proposals and decide for themselves what is in the best interests of their
Company.
In its rejection of the Merger Proposal, the Company cited its
determination to pursue the Strategic Plan implemented in 1994, as an
alternative to the benefits of the Merger Proposal. However, during the
period between June 6, 1994 and October 9, 1998, the last day of trading
prior to the Merger Proposal, the S&P Oil Well Equipment & Services Index
increased 43% and Nabors' stock price increased 96%, while the Company's
stock price decreased 23%. Nabors believes such disparities mandate that
the Company Board look for opportunities to maximize shareholder value
beyond the Strategic Plan, a plan that has produced minimal results since
its implementation four years ago.
<PAGE>
Nabors communicated the Merger Proposal in the October 28th Letter, which
the Company Board rejected by the October 30th Letter. The Company Board
stated in such letter that it had "unanimously and unequivocally" rejected
the Merger Proposal after a mere two days consideration, without any
discussions with Nabors. Nabors believes that the Company Board, with its
minimal financial interest in the Company, should not deprive the true
owners of the Company of the significant benefits of the Merger Proposal
after only a cursory review of the merits of the Merger Proposal.
Absent the willingness of the Company Board to negotiate a business
combination with Nabors, there are a number of obstacles to consummation of
such a transaction, including the Company's "poison pill" shareholder
rights agreement and certain provisions of the Texas Business Corporation
Act (the "TBCA") restricting business combinations not approved by the
Company Board. The Nabors Resolution requests that the Company Board take
all actions to approve the sale of the Company under the TBCA, including,
without limitation, Article 13.03 of the TBCA, which generally restricts
business combinations between Texas corporations and their shareholders who
beneficially own 20% or more of the outstanding voting shares unless such
transactions are approved by the board of directors. In addition, the
Nabors Resolution requests the Company Board redeem the "poison pill"
common stock purchase rights currently outstanding. Nabors believes that
the redemption of such rights would permit shareholders who desire to do so
to accept offers to acquire their Shares which they found attractive,
including pursuant to the Merger Proposal, notwithstanding the fact that
the Company Board may consider such offers to be inadequate.
The Company has apparently employed the "Just Say No" defense which is
preventing the shareholders from deciding what is in their best interests.
Nabors believes that the Company's adherence to the four-year-old Strategic
Plan, a plan that has delivered results that lag far behind the rest of the
oil well services and equipment industry and Nabors' growth over the same
period, is not a sufficient justification for rejecting the Merger Proposal
and refusing to explore a transaction with Nabors. Nabors believes that
the decision to adhere to the Strategic Plan or to enter into a transaction
with Nabors is one which should be made by the shareholders and one which
can only be made after meaningful discussions between Nabors and the
Company.
THE COMPANY HAS UNILATERALLY CHOSEN THE STRATEGIC PLAN FOR YOU. THE EFFECT
OF THE COMPANY BOARD'S ACTIONS IS TO PREVENT YOU FROM HAVING THE
OPPORTUNITY TO CONSIDER OTHER ALTERNATIVES TO MAXIMIZE SHAREHOLDER VALUE.
NABORS BELIEVES THAT MEANINGFUL CONSIDERATION OF ALL BONA FIDE
ALTERNATIVES, PROPOSALS AND OFFERS IS IN THE BEST INTERESTS OF THE
SHAREHOLDERS AND THE COMPANY. THE COMPANY BOARD BELIEVES THAT THE
STRATEGIC PLAN IS THE ONLY ALTERNATIVE AFTER REVIEWING THE MERGER PROPOSAL
FOR ONLY TWO DAYS. YOU ARE ENTITLED TO ASK YOURSELF, "WHY WON'T THE
COMPANY BOARD LET THE OWNERS OF THE COMPANY CONSIDER ALTERNATIVES TO THE
STRATEGIC PLAN?"
<PAGE>
ACTIONS YOU SHOULD TAKE
The Company Board has to date declined to discuss a business combination
that would result in significant benefits to all parties, including the
Company's shareholders. Despite such refusal, Nabors continues to believe
that a negotiated transaction is the best way to realize such benefits.
Accordingly, Nabors proposes that the shareholders approve the Nabors
Resolution and let the Company Board know that shareholders believe that
the Company Board should explore the sale of the Company to Nabors or any
other qualified bidder offering a higher price per Share as a viable
alternative to the Strategic Plan. The Nabors Resolution is a non-binding,
precatory resolution that will not require the Company Board to take any
action. However, the Nabors Resolution will send a strong message to the
Company Board that the shareholders, the owners of the Company, do not
agree with the Company Board's adherence to the Strategic Plan when the
Company has been presented with a very attractive alternative, the Merger
Proposal.
If, like us, you believe the shareholders should have the opportunity to
decide the future of our company and that the Company has no justification
for refusing to meet with Nabors to explore a business combination, we urge
you to vote your BLUE proxy card FOR the Nabors Resolution. The Nabors
Resolution will let the Company Board know that the decision to adhere to
the Strategic Plan or enter into a business combination with Nabors is
ultimately for the shareholders and not for the Company Board alone. The
Nabors Resolution will remind the Company Board that they need to consider
all proposals to maximize shareholder value, not simply the Strategic Plan
which has, thus far, failed to deliver such value.
THE PROPOSAL
THE NABORS RESOLUTION.
At the Special Meeting, Nabors proposes that the shareholders of the
Company adopt the following resolution:
RESOLVED, that the shareholders of Pool Energy Services Co. (the
"Company") strongly recommend that the Board of Directors of the
Company arrange for the sale of the Company and take all necessary
actions to effect such sale, including, without limitation, (i)
entering into good faith merger negotiations with Nabors Industries,
Inc. ("Nabors") and any other qualified bidder for the Company
offering a higher price per share of Company common stock than Nabors,
(ii) redeeming the common stock purchase rights of the Company granted
pursuant to the Rights Agreement, dated as of June 7, 1994, between
the Company and the First National Bank of Boston and (iii) taking all
actions to approve the sale of the Company under the Texas Business
Corporation Act (the "TBCA"), including, without limitation, Article
13.03 of the TBCA; it being understood that this resolution is
admonitory only and that the Board of Directors of the Company must
exercise its business judgment in fulfillment of its fiduciary duties
to the shareholders of the Company.
<PAGE>
REASONS FOR THE NABORS RESOLUTION.
The Company has twice rejected concrete offers to enter into a merger
transaction with Nabors. Most recently, in the October 30th Letter, the
Company Board, after only two days review, rejected the Merger Proposal.
Despite Nabors' willingness to meet with the Company and possibly offer a
higher price, the Company has to date declined to discuss a potential
business combination. Nabors believes that the Merger Proposal or any
other negotiated transaction between the Company and Nabors will provide
significant benefits to the Company's shareholders. Nabors believes that
there is no justification for the Company Board's refusal to examine
potential transactions that represent superior alternatives to the
Strategic Plan.
Nabors believes that the Merger Proposal represents a unique and
compelling opportunity to enhance value for shareholders of both Nabors and
the Company based on the following:
o The Merger Proposal would provide each shareholder with the
benefit of a premium to the Company's current stock price and an
ongoing participation in the equity upside in the combined
company. Nabors' offer of .481 Nabors shares and cash of $6.125
per Pool share represented a significant premium of 77% to the
Company's stock price of $7.06 on October 9, 1998, the last day
of trading prior to Nabors' offer. Importantly, the Merger
Proposal also represented a 40% premium to the unaffected average
Company stock price of $8.93 per share for the 60 trading days
prior to October 9, 1998.
o The Company's stock price declined 34% from its closing price of
$10.75 on the date of its initial public offering on April 17,
1990, to a closing price of $7.06 on October 9, 1998, the last
trading day prior to Nabors' offer. During the same period,
Nabors' stock price increased 212% from $4.25 to $13.25. Indeed,
the Company's stock price performance since the implementation of
the Company's strategic plan through October 9, 1998, has been
lackluster compared to the industry. From June 6, 1994 the day
Nabors announced its ownership of 6.4% of the then outstanding
Company shares the Company's then stock price of $9.13 actually
decreased 23% to $7.06 on October 9, 1998, while the S&P Oil Well
Equipment & Services Index increased 43% and Nabors' stock price
increased 96%.
<PAGE>
o Nabors believes the combined company will offer increased
shareholder liquidity and enjoy increased exposure in the
investment community compared to the Company on a stand-alone
basis.
o Nabors believes the combined company will have greater ability to
weather a down-turn in business activity than the Company on a
stand-alone basis as a result of its larger market capitalization
and more diversified asset base and geographic scope.
Not only does the Merger Proposal offer the Company's shareholders a
substantial premium for their Shares, but also the opportunity to
participate as shareholders of the stronger combined company. The Company
Board, owners of less than 0.3% (excluding options) of the Shares, should
not be able to "Just Say No" to a proposal that rightfully belongs to the
shareholders of the Company, the true owners of the Company.
The Nabors Resolution will send a clear message to the Company Board that
the shareholders support the sale of the Company as opposed to continued
adherence to the Strategic Plan and that the Company should enter into
merger negotiations with Nabors and any other qualified bidder for the
Company offering a higher price per Share. The Nabors Resolution does not
mandate the sale of the Company. The Company Board would not be required
to take any action if the Nabors Resolution were to be adopted at the
Special Meeting. The Nabors Resolution, however, outlines the actions the
shareholders expect the Company Board to take to facilitate a negotiated
transaction with Nabors. The Nabors Resolution will let the Company Board
know that when they are offered an attractive proposal for the sale of the
Company, the shareholders expect more of them than the "Just Say No"
defense.
NABORS URGES YOU TO SEND THIS IMPORTANT MESSAGE TO THE COMPANY BOARD BY
FILLING OUT THE BLUE PROXY CARD AND RETURNING IT TO NABORS TODAY.
<PAGE>
REQUIRED VOTE.
The affirmative vote of the holders of a majority of the Shares present
in person or by proxy at the Special Meeting and entitled to vote thereat
will be required to approve the Nabors Resolution. With respect to
abstentions, the Shares will be considered present at the Special Meeting,
but since they are not affirmative votes for the Nabors Resolution, they
will have the same effect as votes against the Nabors Resolution. With
respect to broker non-votes, the Shares will not be considered present at
the Special Meeting for purposes of voting on the Nabors Resolution.
Consequently, broker non-votes will not be counted with respect to the
Nabors Resolution, but they will have the practical effect of reducing the
number of affirmative votes required to achieve a majority with respect to
the Nabors Resolution by reducing the total number of Shares from which the
majority is calculated.
PROXY PROCEDURES
In order for your views on the Nabors Resolution to be represented at the
Special Meeting, please mark, sign and date the enclosed BLUE proxy card
and return it to Nabors, c/o Innisfree M&A Incorporated, in the enclosed
envelope in time to be voted at the Special Meeting. Execution of the BLUE
proxy card will not effect your right to attend the Special Meeting and to
vote in person. Any proxy may be revoked at any time prior to the Special
Meeting by delivering a written notice of revocation or a later dated proxy
for the Special Meeting to Nabors or to the Secretary of the Company, or by
voting in person at the Special Meeting. ONLY YOUR LATEST DATED PROXY FOR
THE SPECIAL MEETING WILL COUNT AT THE SPECIAL MEETING.
Only holders of record as of the close of business on the Special
Meeting Record Date will be entitled to vote. If you are a shareholder of
record on the Special Meeting Record Date, you will retain your voting
rights for the Special Meeting even if you sell such Shares after the
Special Meeting Record Date.
If any of your Shares are held in the name of a brokerage firm, bank,
bank nominee or other institution on the Special Meeting Record Date, only
it can vote such Shares and only upon receipt of your specific
instructions. Accordingly, please contact the person responsible for your
account and instruct that person to execute the BLUE proxy card on your
behalf.
SOLICITATION OF PROXIES
Proxies may be solicited by mail, facsimile, telephone, telegraph, in
person and by advertisements. Solicitations may be made by certain
directors, officers and employees of Nabors, none of whom will receive
additional compensation for such solicitation.
<PAGE>
Banks, brokerage houses and other custodians, nominees and fiduciaries
will be requested to forward the solicitation materials to the beneficial
owners of Shares for which they are holders of record, and Nabors and will
reimburse them for their reasonable out-of-pocket expenses.
Nabors has retained Innisfree M&A Incorporated ("Innisfree") for
solicitation and advisory services in connection with this solicitation,
for which Innisfree will receive a fee not to exceed $50,000, together with
reimbursement for its reasonable out-of-pocket expenses. It is anticipated
that approximately 40 persons will be employed by Innisfree to solicit
proxies.
Merrill Lynch & Co. ("Merrill Lynch") has been engaged by Nabors as its
financial advisor in connection with the proposed acquisition (the
"Proposed Acquisition") of the Company. As compensation for its services,
Merrill Lynch will receive fees of (i) $100,000 payable by Nabors upon the
making of an offer with respect to the Proposed Acquisition or similar
transaction, (ii) $400,000 payable by Nabors upon a public announcement of
an offer or proposal to the Company or any of its security holders to
effect the Proposed Acquisition or similar transaction and (iii) $3,000,000
less any Additional Amount (as defined below) upon the consummation of the
Proposed Acquisition or similar transaction or following an agreement with
the Company which subsequently results in a Proposed Acquisition or similar
transaction. Nabors has also agreed to pay Merrill Lynch 25% of certain
proceeds received by Nabors in the event of termination of any agreement
entered into by Nabors and the Company, less any amounts paid pursuant to
clause (i), (ii) and (iii) above, subject to a maximum payment of
$2,000,000, less any amounts paid pursuant to clause (i), (ii) and (iii)
above (the "Additional Amount"). In addition, Merrill Lynch is entitled to
reimbursement for the reasonable fees and disbursements of Merrill Lynch's
counsel and all of Merrill Lynch's reasonable out-of-pocket expenses, as
well as indemnification from certain liabilities.
In connection with the engagement of Merrill Lynch as financial advisor,
Nabors anticipates that the representatives of Merrill Lynch set forth on
Schedule I may communicate in person, by telephone or otherwise, with a
limited number of institutions, brokers or other persons who are
shareholders of the Company for the purpose of assisting in the
solicitation of proxies. Merrill Lynch will not receive any additional fee
for or in connection with such solicitation activities by its
representatives apart from the fees it is otherwise entitled to receive as
described above.
The cost of soliciting proxies for the Special Meeting is being borne by
Nabors. Nabors estimates that the total expenditures in connection with the
solicitation (including the fees and expenses of their attorneys, public
relations advisors and proxy solicitors, and advertising, printing,
mailing, travel and other costs, but excluding salaries and wages of
officers and employees) will be approximately $ , of which
approximately $ has been spent to date. Nabors does not currently
intend to seek reimbursement of the costs of this solicitation from the
Company.
<PAGE>
INFORMATION ABOUT PARTICIPANTS
Nabors is the largest land drilling contractor in the world, with over
400 actively marketed land rigs. Nabors is principally engaged in oil and
gas land drilling operations in North America (in the US lower 48 states,
Alaska and Canada), and internationally (in South and Central America, the
Middle East and other regions). Nabors also markets approximately 33
offshore drilling, well servicing and workover rigs in the Gulf of Mexico,
Alaska's Cook Inlet and several international markets. To supplement its
primary businesses, Nabors offers ancillary well-site services, including
oilfield management, engineering, transportation, construction,
maintenance, well logging and other support services, in selected domestic
and international markets. In addition, Nabors manufactures and leases or
sells top drives for a broad range of drilling rig applications and
manufactures and leases or sells rig instrumentation equipment to monitor
rig performance.
Nabors is subject to the information and reporting requirements of the
Securities Exchange Act of 1934, as amended, and is required to file
reports and other information with the Securities and Exchange Commission
(the "Commission") relating to its business, financial condition and other
matters. Information, as of particular dates, concerning Nabors' directors
and officers, their remuneration, stock options granted to them, the
principal holders of Nabors' securities, any material interests of such
persons in transactions with Nabors and other matters is required to be
disclosed in proxy statements distributed to Nabors' shareholders and filed
with the Commission. These reports, proxy statements and other information
should be available for inspection at the public reference facilities of
the Commission located in Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 or its site on the World Wide Web:
http://www.sec.gov, and also should be available for inspection and copying
at prescribed rates at the following regional offices of the Commission:
Seven World Trade Center, New York, New York 10048; and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
this material may also be obtained by mail, upon payment of the
Commission's customary fees, from the Commission's principal office at 450
Fifth Street, N.W., Washington, D.C. 20549. Reports, proxy statements and
other information concerning Nabors should also be available for inspection
at the offices of the American Stock Exchange, 86 Trinity Place, New York,
New York 10006.
Nabors has its principal executive offices at 515 West Greens Road, Suite
1200, Houston, Texas 77067.
Nabors Alaska has its principal executive offices at 2525 C Street, Suite
200, Anchorage, Alaska 99503.
Certain information concerning the directors and executive officers of
Nabors and Nabors Alaska and certain employees and other representatives of
Nabors who may also solicit proxies from shareholders is set forth in
Schedule I. As of the date of this Proxy Statement, Nabors and Nabors
Alaska beneficially own 2,209,500 Shares. Except as set forth in this
Proxy Statement, no associate of Nabors owns any Shares.
CERTAIN TRANSACTIONS BETWEEN NABORS AND THE COMPANY
Except as set forth in this Proxy Statement (including the Schedules
hereto), none of Nabors, Nabors Alaska or any of the other participants in
this solicitation, or any of their respective associates has any
substantial interest, direct or indirect, by security holdings or otherwise
in any matter to be acted upon as set forth in this Proxy Statement.
Except as disclosed in this Proxy Statement (including the Schedules
hereto), to the best knowledge of Nabors and Nabors Alaska and their
directors and officers, none of the associates of any of the foregoing
persons beneficially owns, directly or indirectly, any Shares.
The purpose of the Merger Proposal is to facilitate a negotiated
transaction in which Nabors would acquire control of, and the entire equity
interest in, the Company. Nabors will continue to evaluate alternatives
available to it which will result, in its judgment, in maximizing
shareholder value. The alternatives which Nabors will evaluate include,
but are not limited to, the following: (i) holding Shares for investment
purposes; (ii) seeking cooperation between the Company and Nabors to
capitalize on each company's capabilities; (iii) making further contact
with the Company, the Company's representatives and other persons
interested in the Company, for the purpose of discussing the above or an
amended proposal for a merger or other business combination; (iv) seeking
appropriate representation on the Company Board and/or changes in the
Company Board or the Company's management that Nabors considers
appropriate; (v) pursuing any other arrangement or transaction Nabors
determines will result in maximizing shareholder value; (vi) seeking to
obtain control of the Company; (vii) acquiring additional Shares, at prices
and times Nabors considers appropriate, through other open market
purchases, privately negotiated transactions, by tender or exchange offer
or otherwise, in connection with one or more of the preceding alternatives
set forth in (i)-(vi); and (viii) disposing of some or all of the Shares
held by Nabors in the open market or in privately negotiated transactions.
<PAGE>
Except as indicated in this Proxy Statement or as disclosed in Nabors'
filings with the Commission, neither Nabors nor Nabors Alaska has any
present plans or proposals which relate to or would result in an
extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Company or any of its subsidiaries, a sale or
transfer of a material amount of assets of the Company or any of its
subsidiaries or any material change in the Company's capitalization or
dividend policy or any other material changes in the Company's corporate
structure or business, or the composition of the Board or management.
OTHER MATTERS AND ADDITIONAL INFORMATION
Schedule II sets forth certain information, as made available in public
documents, regarding Shares held by the Company Board and the Company's
management and certain other beneficial owners of Shares. The information
concerning the Company contained in this Proxy Statement and the Schedules
attached hereto has been taken from, or is based upon, publicly available
information. Nabors has not to date had access to the books and records of
the Company.
Shareholders will have no appraisal or similar rights of dissenters with
respect to the proposal to adopt the Nabors Resolution.
According to the Company's most recent proxy statement, filed with the
Commission on March 30, 1998, the deadline for submitting shareholder
proposals for inclusion in the Company's proxy statement and form of proxy
for the Company's next annual meeting, scheduled to be held on May 6, 1999,
was December 1, 1998.
_______ , 1998
NABORS INDUSTRIES, INC.
<PAGE>
ANNEX A
THE NABORS RESOLUTION
The following is the resolution proposed to be adopted at the Special
Meeting:
RESOLVED, that the shareholders of Pool Energy Services Co. (the
"Company") strongly recommend that the Board of Directors of the Company
arrange for the sale of the Corporation and take all necessary actions to
effect such sale, including, without limitation, (i) entering into good
faith merger negotiations with Nabors Industries, Inc. ("Nabors") and any
other qualified bidder for the Company offering a higher price per share
than Nabors, (ii) redeeming the common stock purchase rights of the
Company granted pursuant to the Rights Agreement, dated as of June 7,
1994, between the Company and the First National Bank of Boston and (iii)
taking all actions to approve the sale of the Company under the Texas
Business Corporation Act (the "TBCA"), including, without limitation,
Article 13.03 of the TBCA; it being understood that this resolution is
admonitory only and that the Board of Directors of the Company must
exercise its business judgment in fulfillment of its fiduciary duties to
the shareholders of the Company.
<PAGE>
SCHEDULE I
INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE
OFFICERS OF NABORS AND NABORS ALASKA
AND CERTAIN EMPLOYEES AND
OTHER REPRESENTATIVES
OF NABORS
Set forth in the tables below are the present principal occupation or
employment and the name, principal business and address of any corporation
or organization in which such employment is carried on for (l) each of the
directors and officers of Nabors and Nabors Alaska and (2) certain
employees and other representatives of Nabors who may also solicit proxies
from shareholders of the Company. Unless otherwise indicated, each person
identified below is employed by Nabors in the capacity specified. The
principal business address of Nabors, and unless otherwise indicated below,
the principal business address for each individual listed below is 515 West
Greens Road, Suite 1200, Houston, Texas 77067. The principal business
address of Nabors Alaska is 2525 C Street, Suite 200, Anchorage, Alaska
99503.
DIRECTORS AND OFFICERS OF NABORS AND NABORS ALASKA
Name and Business Address PRINCIPAL OCCUPATION OR EMPLOYMENT
Eugene M. Isenberg Chairman of the Board and Chief
Executive Officer
Anthony G. Petrello President and Chief Operating Officer
Richard A. Stratton Vice Chairman of the Board of
Directors, Vice President of Nabors Alaska
Gary T. Hurford President of Hunt Oil Company
Hunt Oil Company
Fountain Place
1445 Ross at Field
Dallas, TX 75202-2785
<PAGE>
Hans W. Schmidt Retired President of Deutag Drilling, a
subsidiary of C. Deilman A.G.
Investment Business Consultant
Myron M. Sheinfeld Senior Partner of the law firm of
Sheinfeld, Maley & Kay Sheinfeld, Maley & Kay
3700 First City Tower
Houston, TX 77002
Jack Wexler International Business Consultant
205 Oceanway
Vero Beach, FL 32963
Martin J. Witman Chairman, President and Chief
767 Third Avenue Executive Officer of Third Avenue
New York, NY 10017-2023 Value Fund, Inc. (an open-end
Investment company)
Bruce P. Koch Vice President - Finance
Daniel McLachlin Vice President - Administration and
Corporate Secretary, Assistant Secretary
of Nabors Alaska
Mark Lindsey Director, Vice President - Finance and
2525 C Street, Suite 200 Secretary/Treasurer of Nabors Alaska
Anchorage, Alaska 99503
James H. Denney Director and President of Nabors Alaska
2525 C Street, Suite 200
Anchorage, Alaska 99503
Jay L. Weidenbach Director of Nabors Alaska
2525 C Street, Suite 200
Anchorage, Alaska 99503
<PAGE>
CERTAIN OTHER REPRESENTATIVES OF NABORS
WHO MAY ALSO SOLICIT PROXIES
In connection with the engagement of Merrill Lynch as financial
advisor, Nabors anticipates that the representatives of Merrill Lynch set
forth below may communicate in person, by telephone or otherwise, with a
limited number of institutions, brokers or other persons who are
shareholders of the Company for the purpose of assisting in the
solicitation of proxies. The principal business address for each such
representative is 1221 McKinney, Suite 2700, Houston, Texas 77010, and each
such representative is employed by Merrill Lynch in the capacity specified.
Name PRINCIPAL OCCUPATION OR EMPLOYMENT
---- ----------------------------------
Samuel R. Dodson Managing Director
Christopher D. Mize Director
Robert Pacha Associate
Michael Aaronson Analyst
Merrill Lynch engages in a full range of investment banking, securities
trading, market-making and brokerage services for institutional and
individual clients. In the normal course of its business, Merrill Lynch
may trade securities of the Company for its own account and the accounts of
its customers and, accordingly, may at any time hold a long or short
position in such securities. Merrill Lynch has informed Nabors that as of
December 3, 1998, Merrill Lynch held a net long position of 192,283 Shares.
Merrill Lynch does not admit that it or any of its directors, officers,
employees or affiliates is a "participant" as defined in Schedule 14A
promulgated under the Exchange Act by the Commission, in the solicitation
to which this Proxy Statement relates or that such Schedule 14A requires
the disclosure in this Proxy Statement of certain information concerning
Merrill Lynch.
<PAGE>
SCHEDULE II
SHARE OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND OF THE COMPANY MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of Shares as known to Nabors. Except as otherwise
noted, the information set forth below concerning the beneficial ownership
of Shares by (a) each director of the Company, (b) each executive and
other corporate officer of the Company and (c) each person known to the
Company to be the beneficial owner of more than 5% of the Shares, has been
taken from the Company's preliminary proxy statement, filed with the
Commission on November 30, 1998. As set forth in such proxy statement,
such information is current as of October 31, 1998. Shareholders should
review more recent publicly available filings, if any, concerning the
Company for more recent information. Such information is available in the
manner set forth under "INFORMATION ABOUT PARTICIPANTS" above.
Beneficial Ownership
--------------------
Percent
Name of Beneficial Owner Shares of Total
------------------------ ------ --------
Nabors . . . . . . . . . . . . . . . . . . 2,209,500(d) 10.50%
Alton Anthony Gonsoulin, Jr. 2,000,000(e) 9.5%
J. T. Jongebloed (a) (b) . . . . . . . . . 181,110.203(f) *
William H. Mobley (a) . . . . . . . . . . . 20,200(g) *
Joseph R. Musolino . . . . . . . . . . . . 14,200(h) *
James L. Payne . . . . . . . . . . . . . . 13,000(i) *
Dennis R. Hendrix (a) . . . . . . . . . . 10,000 *
John F. Lauletta (a) . . . . . . . . . . . - 0 - *
William J. Myers (b) . . . . . . . . . . . 50,008.210(j) *
Ronald G. Hale (b) . . . . . . . . . . . . 22,333.337(k) *
Ernest J. Spillard (b) . . . . . . . . . . 99,394.681(l) *
Louis E. Dupre (b) . . . . . . . . . . . . 12,251.087(m) *
Geoffrey Arms (b) . . . . . . . . . . . . . 53,714.295(n) *
David C. Oatman (c) . . . . . . . . . . . 2,662(o) *
Richard A. Johannsen (c) . . . . . . . . . 11,8740(p) *
Beth G. Gordon (c) . . . . . . . . . . . 812(q) *
All directors and executive officers
as a group (14 persons)(a)(b)(c) . . . . . 491,359.813(r) 2.3%
____________________
* Less than 1%
<PAGE>
(a) Director with sole voting and dispositive power over all Shares
owned or acquirable upon exercise of options as described in
other footnotes to this table.
(b) Executive officer with sole voting and dispositive power over all
Shares owned or acquirable upon exercise of options as described
in other footnotes to this table.
(c) Other corporate officer with sole voting and dispositive power
over all Shares owned or acquirable upon exercise of options as
described in other footnotes to this table.
(d) Based upon an amended Schedule 13D filed on November 20, 1998;
power to dispose and vote shared with a wholly owned subsidiary.
(e) Based upon an amended Schedule 13D filed on September 18, 1998;
461,539 of such Shares are owned by a wholly owned corporate
affiliate; 769,231 of such Shares are held in escrow to fund
indemnity obligations to the Company through March 31, 2000; the
escrowed Shares must be voted as directed by the Board through
March 31, 2000.
(f) Includes 166,723 Shares which may be acquired through the
exercise of stock options that are currently exercisable or will
become exercisable within 60 days after October 31, 1998.
(g) Includes 16,000 Shares which may be acquired through the exercise
of stock options that are currently exercisable or will become
exercisable within 60 days after October 31, 1998.
(h) Includes 10,000 Shares which may be acquired through the exercise
of stock options that are currently exercisable or will become
exercisable within 60 days after October 31, 1998.
(i) Includes 8,000 Shares which may be acquired through the exercise
of stock options that are currently exercisable or will become
exercisable within 60 days after October 31, 1998.
(j) Includes 22,437 Shares which may be acquired through the exercise
of stock options that are currently exercisable or will become
exercisable within 60 days after October 31, 1998.
(k) Includes 12,505 Shares which may be acquired through the exercise
of stock options that are currently exercisable or will become
exercisable within 60 days after October 31, 1998.
(l) Includes 90,457 Shares which may be acquired through the exercise
of stock options that are currently exercisable or will become
exercisable within 60 days after October 31, 1998.
(m) Includes 9,668 Shares which may be acquired through the exercise
of stock options that are currently exercisable or will become
exercisable within 60 days after October 31, 1998.
(n) Includes 45,804 Shares which may be acquired through the exercise
of stock options that are currently exercisable or will become
exercisable within 60 days after October 31, 1998.
(o) Includes 2,562 Shares which may be acquired through the exercise
of stock options that are currently exercisable or will become
exercisable within 60 days after October 31, 1998.
(p) Includes 3,937 Shares which may be acquired through the exercise
of stock options that are currently exercisable or will become
exercisable within 60 days after October 31, 1998.
(q) Includes 812 Shares which may be acquired through the exercise of
stock options that are currently exercisable or will become
exercisable within 60 days after October 31, 1998.
(r) Includes 388,905 Shares which may be acquired through the
exercise of stock options that are currently exercisable or will
become exercisable within 60 days after October 31, 1998.
<PAGE>
IMPORTANT
Your vote is important, no matter how many or how few Shares you may own.
We urge you to vote FOR the adoption of the Nabors Resolution by:
1. SIGNING the enclosed BLUE proxy card,
2. DATING the enclosed BLUE proxy card, and
3. MAILING the enclosed BLUE proxy card TODAY in the envelope
provided (no postage is required if mailed in the United States).
IF ANY OF YOUR SHARES ARE HELD IN THE NAME OF A BROKERAGE FIRM, BANK,
BANK NOMINEE OR OTHER INSTITUTION, ONLY IT CAN VOTE SUCH SHARES AND ONLY
UPON RECEIPT OF YOUR SPECIFIC INSTRUCTIONS. ACCORDINGLY, PLEASE CONTACT THE
PERSON RESPONSIBLE FOR YOUR ACCOUNT AND INSTRUCT THAT PERSON TO EXECUTE THE
BLUE PROXY CARDS REPRESENTING YOUR SHARES. NABORS URGES YOU TO CONFIRM IN
WRITING YOUR INSTRUCTIONS TO NABORS IN CARE OF INNISFREE M&A INCORPORATED
AT THE ADDRESS PROVIDED BELOW SO THAT NABORS WILL BE AWARE OF ALL
INSTRUCTIONS GIVEN AND CAN ATTEMPT TO ENSURE THAT SUCH INSTRUCTIONS ARE
FOLLOWED.
If you have any questions or require any additional information
concerning this Proxy Statement, please contact Innisfree M&A Incorporated
at the address set forth below.
INNISFREE M&A INCORPORATED
501 MADISON AVENUE, 20TH FLOOR
NEW YORK, NEW YORK 10022
CALL TOLL FREE (888) 750-5834
OR
BANKS AND BROKERS CALL (212) 750-5833 (COLLECT)
<PAGE>
PRELIMINARY COPY SUBJECT TO COMPLETION,
DATED DECEMBER 4, 1998
[FORM OF PROXY CARD BLUE]
POOL ENERGY SERVICES CO.
SPECIAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED BY
NABORS INDUSTRIES, INC.
The undersigned shareholder of Pool Energy Services Co. (the
"Company") hereby appoints Eugene M. Isenberg and Anthony G. Petrello, each
with full power of substitution, as proxies of the undersigned, to
represent and to vote, as designated below, all shares of common stock, no
par value per share, of the Company which the undersigned is entitled to
vote at the Special Meeting of Shareholders called for the purpose set
forth below or at any adjournment(s), postponement(s) or rescheduling(s)
thereof (the "Special Meeting"). The undersigned hereby revokes any
previous proxy with respect to the matter covered by this Proxy.
NABORS INDUSTRIES, INC. STRONGLY RECOMMENDS A VOTE FOR THE PROPOSAL.
Proposal: Approve a non-binding, precatory resolution recommending that the
Company's Board of Directors arrange for the sale of the Company
and take all necessary actions to effect such sale.
/ / For / / Against / / Abstain
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON THIS PROXY. WHEN SHARES
ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY-IN-
FACT, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE
AS SUCH. IF A COMPANY, PLEASE SIGN IN FULL CORPORATE NAME BY THE PRESIDENT
OR OTHER AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP
NAME BY AN AUTHORIZED PERSON.
DATED:_________________ , 199_
_______________________________
(Signature)
Title:_________________________
_______________________________
(Signature if held jointly)
Title:_________________________
PLEASE SIGN, DATE AND MAIL PROMPTLY IN THE POSTAGE-PAID ENVELOPE ENCLOSED.
