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:
( ) Preliminary Proxy Statement
( ) Confidential, For Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
(X) 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>
[LOGO] [NABORS INDUSTRIES, INC. LETTERHEAD]
December 10, 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
eight 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:
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 0.481 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
<PAGE>
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.
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 the Pool Board
arrange for the sale of Pool and take all necessary actions to
<PAGE>
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 the Pool Board 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.
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,
/s/ Eugene M. Isenberg
----------------------
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 December 10, 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, 20th 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 10, 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.
<PAGE>
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: /s/ Eugene M. Isenberg
-----------------------------
Name: Eugene M. Isenberg
Title: Chairman and Chief
Executive Officer
NABORS ALASKA DRILLING, INC.
By: /s/ Daniel McLachlin
-----------------------------
Name: Daniel McLachlin
Title: Assistant Secretary
<PAGE>
------------------------------------------------------
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.
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
<PAGE>
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 eight 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.
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
<PAGE>
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 December 10, 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 December 10, 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 RESOLUTION 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 December 10, 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, 20th 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.
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
<PAGE>
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.
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
<PAGE>
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"):
<PAGE>
October 30, 1998
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
<PAGE>
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.
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
eight 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.
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
<PAGE>
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. Nabors believes that
Article 13.03 and the common stock purchase rights are designed to afford the
Company Board considerable leverage to prohibit acquisitions of the Company
without its approval. Accordingly, the actions contemplated by the Nabors
Resolution, including approving the sale of the Company under Article 13.03 of
the TBCA and redeeming the common stock purchase rights, could reduce the
Company Board's leverage in negotiating a final transaction.
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
<PAGE>
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?"
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.
<PAGE>
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.
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:
<PAGE>
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 0.481 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%.
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
<PAGE>
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.
The Nabors Resolution strongly recommends that the Company enter into good
faith merger negotiations with Nabors and any other qualified bidder for the
Company offering a higher price per share of Company common stock than Nabors.
In Nabors view the term "qualified" refers to, among other things, a bidder's
ability to finance the purchase of the Company and the ability to consummate the
transaction generally. While the Nabors Resolution focuses on the price per
share at which the Company would be sold, Nabors recognizes that the Nabors
Resolution is subject to some measure of interpretation by the Company Board
(and its legal and financial advisors) in determining who is a qualified bidder
as well as to what amounts to a "higher price per share." However, as stated in
the Nabors Resolution itself, the Nabors Resolution is non-binding, and the
Company Board's implementation of the Nabors Resolution is subject to the
Company Board's business judgment in fulfilling its fiduciary duties to the
Company's shareholders.
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.
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.
<PAGE>
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.
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 $75,000, 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
<PAGE>
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 $500,000, of which approximately $60,000 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.
<PAGE>
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.
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
<PAGE>
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.
December 10, 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
Hans W. Schmidt Retired President of Deutag Drilling, a
subsidiary of C. Deilman A.G.
Investment Business Consultant
<PAGE>
NAME AND BUSINESS ADDRESS PRINCIPAL OCCUPATION OR EMPLOYMENT
- ------------------------- ----------------------------------
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
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.
<PAGE>
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.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
PERCENT
NAME OF BENEFICIAL OWNER SHARES OF TOTAL
<S> <C> <C>
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 (a)............................. 14,200(h) *
James L. Payne (a) ................................ 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) .......................... 11,874(p) *
<PAGE>
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%
</TABLE>
(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 Company 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.
<PAGE>
(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>
[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, and with discretionary
authority with respect to such other matters as may properly come before said
meeting, 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.
1. 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
2. In their discretion, the aforementioned attorneys and proxies
are authorized to vote upon such other matters as may properly
come before the Special Meeting.
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.
<PAGE>
IMPORTANT NOTICE
FROM
NABORS INDUSTRIES, INC.
TO
FELLOW SHAREHOLDERS OF POOL ENERGY SERVICES CO.
RE: SPECIAL MEETING RECORD DATE
Please be advised that, on December 9, 1998, Pool Energy Services Co. ("Pool")
stated in a filing with the Securities and Exchange Commission that its Board of
Directors purported to set a Record Date of December 9, 1998 in connection with
the Special Meeting of Shareholders which has been called by Nabors Industries,
Inc. ("Nabors") to be held on January 12, 1999. The accompanying proxy
materials, which were printed immediately prior to Pool's December 9th filing,
indicate that Nabors set the Special Meeting Record Date as December 10, 1998,
the first date that the accompanying proxy materials are being mailed to Pool
shareholders.
While Nabors does not necessarily concur with Pool's Special Meeting Record Date
determination, Nabors has concluded that, in the interest of enfranchising Pool
shareholders and avoiding controversy concerning the Special Meeting Record
Date, and without waiving any rights available to it, NABORS WILL RECOGNIZE
DECEMBER 9, 1998 AS THE SPECIAL MEETING RECORD DATE FOR THE PURPOSES OF
DETERMINING THE HOLDERS OF SHARES ENTITLED TO NOTICE OF AND TO VOTE AT THE
SPECIAL MEETING AND AT ANY ADJOURNMENT, POSTPONEMENT OR RESCHEDULING THEREOF.
ACCORDINGLY, ALL REFERENCES TO THE SPECIAL MEETING RECORD DATE IN THE
ACCOMPANYING PROXY MATERIALS REFER TO DECEMBER 9, 1998, RATHER THAN DECEMBER 10,
1998.
