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 [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ X] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
MAVERICK TUBE CORPORATION
(Name of Registrant as Specified in Its Charter)
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 to 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>
Investors and security holders are advised to read the proxy statement and other
documents related to the Maverick Tube Corporation and Prudential Steel Ltd.
combination when they become available and any amendments to these documents
when they become available because they will contain important information.
Investors and security holders may obtain these documents free of charge, when
available, and other documents filed by Maverick or Prudential with the
Securities and Exchange Commission at the SEC's Internet web site (www.sec.gov)
and these documents may be obtained for free, in the case of Maverick, from
Maverick by directing such request to Maverick Tube Corporation, 1640 Swingley
Ridge road, Seventh Floor, Chesterfield, MO 63017, (636) 733-1600; and in the
case of Prudential from Prudential by directing such request to Prudential Steel
Ltd., Suite 1800, 140 Fourth Avenue S.W., Calgary, Alberta, Canada T2P 3N3,
(403) 267-0300.
Maverick and its directors intend to solicit proxies from Maverick stockholders
in favor of the combination. The names of the directors of Maverick and
information regarding their security holdings may be obtained for free from
Maverick by directing such request to Maverick Tube Corporation, 1640 Swingley
Ridge road, Seventh Floor, Chesterfield, MO 63017, (636) 733-1600.
<PAGE>
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[LOGO] [LOGO]
MAVERICK TUBE CORPORATION PRUDENTIAL STEEL
Partners In Quality
INVESTOR PRESENTATION
JUNE 2000
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Forward Looking Statements
These slides accompany an oral presentation by Maverick Tube Corporation and
Prudential Steel Ltd., which, except for the historical information, contain
forward-looking statements representing our expectations or beliefs about future
events and financial performance. Forward-looking statements are subject to
known and unknown risks, uncertainties and assumptions, including:
oil and gas price volatility;
steel price volatility;
domestic and foreign competitive pressures;
fluctuations in industry-wide inventory levels;
the presence or absence of governmentally imposed trade restrictions;
asserted and unasserted claims; and
those other risks and uncertainties described on Exhibit 99.1
to our Annual Report on Form 10-K for our fiscal year ended
September 30, 1999.
In light of these risks, uncertainties and assumptions, some or all of the
forward-looking events to be discussed by Maverick and Prudential and included
in the slides might not occur. In addition, actual results could differ
materially from those suggested by the forward-looking statements. Maverick and
Prudential undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
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On June 11, Maverick and Prudential Announced . . . . .
A combination of the companies to create the leading North American
welded tube producer
Prudential holders receive 0.52 Maverick shares in an Exchangeable
Share transaction
Tax deferred transaction
Pooling of Interests accounting treatment expected
Transaction subject to shareholder approval
Plan to list on NYSE
Closing expected by September 30, 2000
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Organization Structure
Corporate name will remain Maverick Tube
Prudential Steel will maintain identity in Canada
Gregg Eisenberg Chairman, President and CEO
Don Wilson President, Prudential Steel Ltd.
and Director
Barry Pearl Vice President, Finance and Chief
Financial Officer
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<PAGE>
Broad Product Line
Energy Products
- new and reworked wells, transportation of oil and gas,
and other products
- Casing 1 1/2" thru 16"
- Tubing Carbon and alloy grades
- Line Pipe Complete end finishing
- Couplings HIC resistant products for sour gas service
- Premium connections 80 ft Line Pipe
Industrial Products
- construction, agricultural and industrial equipment, and other products
- HSS 1 1/2" - 12"
- Standard Pipe Rounds, squares, rectangles
- Piling Custom products
- Cold drawn tubing High tolerance products
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Combined Company Overview
1.5 million tons of tubular products capacity
Largest North American welded OCTG producer
Diverse operations with 10 mills and 5 locations
Highly efficient and low cost operations
Well positioned for future growth
Financially strong
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[LOGO]
PRUDENTIAL STEEL
Partners In Quality
OVERVIEW
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History
Manufacturing and marketing tubular products since 1966
Well-established Western Canada OCTG, Line Pipe and HSS producer
Customer-focused strategies
Recognized innovator in product development
Recent entrant into US structural tube market
Efficient and profitable producer with strong earnings history
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<PAGE>
Steady Growth & Earnings Capability
Significant expansion of capacity and sales
Canadian energy pipe market share increased to 25%
[Graph Omitted - Tabular representation for EDGAR filing below]
<TABLE>
<CAPTION>
Capacity (Short Tons 000)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1992 1993 1994 1995 1996 1997 1998 1999 2000
---- ---- ---- ---- ---- ---- ---- ---- ----
265 265 265 350 350 375 440 550 550
Sales (Short Tons 000)(1)
1992 1993 1994 1995 1996 1997 1998 1999 2000E
---- ---- ---- ---- ---- ---- ---- ---- -----
110 229 290 213 284 407 200 257 429
(1) Includes by-product and conversion tons
</TABLE>
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Expanded Geographic Reach
The recent plant addition in Longview, Washington expanded Prudential's
market penetration in the Northwestern U.S. and Rocky Mountain
regions
[Pie Graph Omitted - Tabular representation for EDGAR filing below]
Calgary Product Mix
Industrial Products Energy Products
------------------- ---------------
8% 92%
Longview Product Mix
Energy Products Industrial Products
--------------- -------------------
44% 56%
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Innovating with New Products
OCTG Products
- PS80 - high strength casing
- New premium threading facility
Line Pipe Products
- PS66 - sour gas line pipe
- HIC - hydrogen induced crack resistant
- 80 foot lengths
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Capabilities Added Since 1997 Cycle
New Longview facility adds 25% capacity to 1997 level
Calgary mill 1 re-commissioned, new finishing equipment, adds 20%
capacity over 1997 level
Calgary mill 2 upgraded with new accumulator
Finishing lines are modified to handle 80 ft pipe
New premium thread facility for critical application
New products to take advantage of niche applications
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<PAGE>
[LOGO]
MAVERICK TUBE CORPORATION
OVERVIEW
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A History of Growth
Capacity grew at a 16% CAGR from 1989-2000
Sales grew at a 12% CAGR from 1989-1999
[Graph Omitted- Tabular representation for EDGAR filing below]
<TABLE>
<CAPTION>
Capacity (Short Tons 000)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1992 1993 1994 1995 1996 1997 1998 1999 2000
---- ---- ---- ---- ---- ---- ---- ---- ----
427 477 477 577 669 669 669 669 974
Sales (Short Tons 000)
1992 1993 1994 1995 1996 1997 1998 1999 2000E
---- ---- ---- ---- ---- ---- ---- ---- -----
172 229 215 276 345 470 428 338 515
</TABLE>
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Competitive Strengths
Innovative and diversified product line
Full range of products with new large diameter mill
Low cost manufacturer - economies of scale
High quality reputation - customer service focus
Significant market share in sizes produced
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Large Diameter Mill Broadens Maverick Product Line
16-inch mill adds large diameter OCTG, Line Pipe, HSS, Standard Pipe,
and Piling
New mill adds 250,000 tons of capacity
New products will enter markets in July 2000
Increased volume with minimal sales force expansion
Improves customer access to single source supplier
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Maverick's Incremental Market Access
The accessible market will be 37% larger overall
[Graph Omitted - Tabular representation for EDGAR filing below]
% of US Market
OCTG Line Pipe HSS Standard Pipe Total
Current Products 68.5% 29.2% 85.0% 24.7% 45.5%
Large Diameter Products 20.9% 24.1% 12.0% 16.8% 17.0%
Current and Large
Diameter Products 89.4% 53.3% 97.0% 41.5% 62.5%
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<PAGE>
We Believe The Combination Will Enhance Shareholder Value
Financial Benefits
- Accretive to EPS and cash flow
- Strong balance sheet
- Reduced earnings volatility
- Larger market capitalization
- Increased trading liquidity
- Broader investor base
- Lower cost of capital
Operating Benefits
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Broad Array of Operating Benefits
Enhance purchasing economies
Expand product line and cross selling
Optimize capacity utilization
Improve distribution / reduce transportation costs
Implement "Best Practices" across all disciplines
Streamline administrative processes
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Historical Combined Sales Volume
[Graph Omitted - Tabular representation for EDGAR filing below]
Short Tons (000)
Maverick(1) Prudential(1,2)
1994 215 290
1995 276 213
1996 345 284
1997 470 407
1998 428 200
1999 338 257
2000* 512 453
Does not include the large diameter mill which will be fully operational
in 2001.
(1) Annualized first three months of CY 2000 for Prudential and first 6 months
of FY 2000 for Maverick
(2) Includes by-product and conversion tons
--------------------------------------------------------------------------------
Combined Company's Expanded
Prime Distribution Capabilities
[Picture Graphic Omitted - Picture of United States with combined
distribution capabilities from Calgary, Canada; Longview, WA;
Beaver Falls, PA; Hickman, AR; Conroe, TX]
[Pie graph omitted - demonstrates 25% industrial products and 75%
energy products]
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[LOGO] [LOGO]
MAVERICK TUBE CORPORATION PRUDENTIAL STEEL
Partners In Quality
Financial Review
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<PAGE>
1997 Combined Earning Capacity
Energy and industrial tube markets were strong in 1997 and the combined
company produced impressive results . . . . .
Maverick(1) Prudential(2,3) Combined
Short Tons Shipped 498 407 905
Revenue (US$) 313 255 568
EBITDA (US$) 36 51 87
(1) Maverick data is for calendar 1997
(2) Converted to US Dollars at average 1997 exchange rate of: CN$1.38=
US$1.00
(3) Includes by-product and conversions tons
--------------------------------------------------------------------------------
Strong Combined Balance Sheet
(In millions of US$, except for percentages)
March 31, 2000
Pro Forma
Maverick Prudential(1) Combined
-------- ---------- ----------
Working Capital 67.9 60.7 128.6
Total Assets 223.8 144.0 367.7
Total Debt 51.9 7.6 59.5
Shareholder's Equity 114.0 91.8 205.8
Total Debt/Book Capitalization 31.3% 7.6% 22.4%
(1) Converted to US Dollars at exchange rate of CN$1.45=US$1.00
--------------------------------------------------------------------------------
Current Market Dynamics - Energy Products
Oil and gas supply constraints are leading to increased drilling to
fulfill demand
New pipeline construction and deregulation have unified the North
American market
End users are combining to create larger, more efficient oil and gas
producers
<TABLE>
<CAPTION>
US Working Gas Storage (Bcf)
----------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Jan Feb Mar Apr May
2000 2081.5 1357 1082.8 1031.75 1193
1999 2194.25 1821.25 1439.75 1371 1593.5
5 Yr. Average 1939.048 1367.05 1044.143 1004.381 1222.095
June July Aug Sept Oct Nov Dec
2000 1906.5 2217.6 2431.5 2706.5 2957.4 3005 2960.8
1999 1643.476 1991 2253.238 2580.048 2854.043 2837.905 2539.091
5 Yr. Average N/A N/A N/A N/A N/A N/A N/A
US Crude Oil Stocks (MMBbls)
----------------------------
Jan Feb Mar Apr May June July
2000 290.6428 285.54 291.6143 304.5288
1999 327.26 331.22 339.52 338.72 332.36 331.11 329.22
5 Yr. Average 305.1393 309.5312 312.2324 317.7683 321.404 326.4654 323.1922
Aug Sept Oct Nov Dec
2000 317.17 307.36 305.57 305.91 294.26
1999 317.9006 309.2141 310.5008 315.4216 310.357
5 Yr. Average N/A N/A N/A N/A N/A
</TABLE>
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<PAGE>
U.S. Tubular Business is Gaining Momentum
<TABLE>
<CAPTION>
(Price Indexed to 1/96) (Tons Shipped 000)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jan-96 Feb-96 Mar-96 Apr-96 May-96 Jun-96
U.S. OCTG Price Index 100 100.3802 100.6337 100.7605 101.2674 102.0279
U.S. Domestic Shipments 145 134 151 158 154 147
Jul-96 Aug-96 Sep-96 Oct-96 Nov-96 Dec-96 Jan-97 Feb-97
U.S. OCTG Price Index 102.0279 103.2953 103.8023 104.0558 104.436 104.943 105.1965 105.7034
U.S. Domestic Shipments 155 178 183 186 166 211 164 182
Mar-97 Apr-97 May-97 Jun-97 Jul-97 Aug-97 Sep-97 Oct-97
U.S. OCTG Price Index 107.4778 108.4918 110.0127 111.4068 112.4208 113.6882 114.0684 114.3219
U.S. Domestic Shipments 195 222 262 252 282 268 242 239
Nov-97 Dec-97 Jan-98 Feb-98 Mar-98 Apr-98 May-98 Jun-98
U.S. OCTG Price Index 114.5754 114.8289 115.0824 114.9556 114.1952 113.1812 112.9278 111.7871
U.S. Domestic Shipments 214 221 230 227 213 205 168 150
Jul-98 Aug-98 Sep-98 Oct-98 Nov-98 Dec-98 Jan-99 Feb-99
U.S. OCTG Price Index 109.7592 108.1115 104.6895 102.9151 101.1407 98.47909 96.07098 93.91635
U.S. Domestic Shipments 145 126 108 107 56 72 91.136 70.459
Mar-99 Apr-99 May-99 Jun-99 Jul-99 Aug-99 Sep-99
U.S. OCTG Price Index 91.3815 90.36755 89.48035 89.6071 89.73384 90.36755 92.14195
U.S. Domestic Shipments 65.085 80.676 84.749 84.315 94.65 108.883 135.431
Oct-99 Nov-99 Dec-99 Jan-00 Feb-00
U.S. OCTG Price Index 94.04309 95.81749 98.47909 100.2535 101.7744
U.S. Domestic Shipments 171.53 171.027 177.251 189.325 201.137
Source: Raymond James and Assoc.
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Canadian Tubular Fundamentals are Outstanding
(Price Indexed to 1/96) (Tons Shipped 000)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Jan-96 Feb-96 Mar-96 Apr-96 May-96 Jun-96 Jul-96
Canadian OCTG Price Index 100 100 99.8 100.5 102.7 101.3 103.5
Canadian Domestic Shipments 41 41 39 14 19 34 38
Aug-96 Sep-96 Oct-96 Nov-96 Dec-96 Jan-97 Feb-97 Mar-97 Apr-97
Canadian OCTG Price Index 102.1 102.9 100.3 102.7 102.2 102.6 101.8 103.4 102
Canadian Domestic Shipments 43 34 46 45 39 46 47 45 28
May-97 Jun-97 Jul-97 Aug-97 Sep-97 Oct-97 Nov-97 Dec-97 Jan-98
Canadian OCTG Price Index 101.2 101.1 101.2 103.2 102.6 103.2 104.3 104.7 103.8
Canadian Domestic Shipments 42 48 59 49 53 59 56 53 56
Feb-98 Mar-98 Apr-98 May-98 Jun-98 Jul-98 Aug-98 Sep-98 Oct-98
Canadian OCTG Price Index 104.9 106.4 108.6 107.4 109.7 109.4 109.3 109.2 106.4
Canadian Domestic Shipments 53 38 15 26 29 21 25 22 21
Nov-98 Dec-98 Jan-99 Feb-99 Mar-99 Apr-99 May-99
Canadian OCTG Price Index 106.8 107.2 106.5 106.3 106 104.4 102.6
Canadian Domestic Shipments 23 21 24 21 14 4 12
Jun-99 Jul-99 Aug-99 Sep-99 Oct-99 Nov-99 Dec-99
Canadian OCTG Price Index 102.7 102.9 103.1 103 103.8 105.3 105.9
Canadian Domestic Shipments 23 22 31 41 33 39 39
Jan-00 Feb-00 Mar-00
Canadian OCTG Price Index 106.5 107.1 107.9
Canadian Domestic Shipments 44 44 40
</TABLE>
Source: Raymond James and Assoc.
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<PAGE>
Current Market Dynamics - Industrial / Mechanical
HSS market growing 7-8% annually in the U.S. and about 5% annually
in Canada
Strong economy encouraging construction, equipment additions and
replacements
HSS US Shipments (Short Tons 000)
1Q94 278
2Q94 338
3Q94 294
4Q94 325
1Q95 341
2Q95 327
3Q95 311
4Q95 318
1Q96 369
2Q96 388
3Q96 376
4Q96 376
1Q97 409
2Q97 447
3Q97 443
4Q97 422
1Q98 454
2Q98 469
3Q98 458
4Q98 416
1Q99 436
2Q99 474
3Q99 439
4Q99 505
1Q00 545
Source: Steel Tube Institute
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Combined Company Business Strategy
Supply North American energy markets with broader OCTG and Line Pipe
product offering
Complete large mill expansion with successful market entry
Expand market penetration by Longview and Beaver Falls facilities
Increase margins through successful business combination and
implementation of plans to achieve synergies
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Conclusions
The Maverick / Prudential combination creates a stronger company with
minimal redundancy
Strong market dynamics and new product introduction will drive
near-term growth
Larger market capitalization and broader shareholder base improves
liquidity and capital access
Combined company is well positioned to pursue future growth
opportunities
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[LOGO] [LOGO]
MAVERICK TUBE CORPORATION PRUDENTIAL STEEL
Partners In Quality
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