Houston, October 14, 1998
Weatherford International, Inc. (NYSE: WFT) and Christiana Companies, Inc. (NYSE: CST) today announced that they have amended their Merger Agreement, under which Weatherford is proposing to acquire Christiana.
The amendment makes two material changes. First, it eliminates a $10 million contingent hold back that was previously required. Second, it adds Christiana’s commitment to expend $10 million to acquire shares of Weatherford Common Stock prior to the mailing of new proxy materials relating to the Merger. It also contains a clause for an additional $5 million commitment, if necessary, to allow for the stock consideration to be paid by Weatherford in the Merger to be received by the Christiana shareholders on a tax free basis.
The changes to the Agreement were made to allow the Merger to close, despite a decline in the market price of the Weatherford Common Stock since late 1997. This decline resulted in the Merger not being able to close on a partially tax free basis because the Weatherford Common Stock to be issued to the Christiana shareholders in the Merger would have represented less than 80% of the total consideration to be paid in the Merger as required by the applicable tax regulations.
Christiana’s commitment to acquire shares of Weatherford Common Stock reflects its view that the Weatherford Common Stock is an attractive investment. The purchases also increase the likelihood that the stock component of the merger consideration will constitute at least 80% of the total merger consideration and thereby allow the Merger to be consummated on a partially tax free basis.
Under the amended Agreement’s terms, Weatherford would acquire Christiana in consideration for: 1) a number of shares of Weatherford Common Stock equal to the number of shares of Weatherford Common Stock held by Christiana at the time of closing; and 2) cash equal to the amount of cash held by Christiana at the time of closing less certain accrued liabilities of Christiana at the time of closing and the value of certain tax benefits.
Christiana currently estimates that the cash component would be between $3.00 and $4.00 per share depending on if any of the additional $5 million Weatherford common share purchases are completed.
Prior to the merger, Christiana is required to sell a two-thirds interest in Total Logistic Control, a wholly owned subsidiary, to C2, Inc., an entity recently formed for the purpose of acquiring such interests.
Because the number of shares issuable by Weatherford will be equal to the number of shares of Weatherford Common Stock held by Christiana, no change will result in the outstanding shares of Weatherford.
As previously announced, the shareholders of Weatherford and Christiana approved the prior terms of the Merger at special meetings of stockholders held on August 17, 1998. The Merger, however, did not close because the shares of Weatherford Common Stock that would have been received by the Christiana shareholders could not have been able to be received on a tax free basis.
The closing of the Merger contemplated by the amended Merger Agreement is subject to various conditions, including stockholder approval at Special Meetings that are expected to be held in December 1998. The timing of these meetings will depend upon the timing of clearance of certain filings that are being made with the Securities and Exchange Commission.
Houston-based Weatherford International, Inc. is one of the largest global providers of engineered products and services to the drilling and production segments of the oil and gas industry.
Christiana's principal operating business is providing refrigerated and non-refrigerated third party logistic services which include warehousing, transportation, distribution and international freight forwarding.
Don Galletly, Weatherford (713) 693-4148
Christine McGee, Weatherford (713) 693-4362
William T. Donovan, Christiana (414) 291-9000
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning, among other things, Weatherford's prospects for its operations and the integration of recent acquisitions, all of which are subject to certain risks, uncertainties and assumptions. These risks and uncertainties, which are more fully described in Weatherford International, Inc.'s Annual, Quarterly and Current Reports filed with the Securities and Exchange Commission, include the impact of oil and natural gas prices and worldwide economic conditions on drilling activity, the demand and pricing of Weatherford's products, as well as the ability to achieve the anticipated synergies and savings from the recent merger between EVI, Inc. and Weatherford Enterra, Inc. Should one or more of these risks or uncertainties materialize, or should the assumptions prove incorrect, actual results may vary in material aspects from those currently anticipated.
Weatherford International, Inc.
515 Post Oak Blvd, Suite 600
Houston, Texas 77027