John M, We didn't have to wait long..
Tuesday March 31, 7:15 am Eastern Time
Company Press Release
SLH and Syntroleum to Merge
SHAWNEE MISSION, Kan.--(BUSINESS WIRE)--March 31, 1998-- Syntroleum(R)
Corporation, the developer and owner of a proprietary process for converting natural gas into
synthetic crude oil, and SLH Corporation (NASDAQ:SLHO - news), which owns approximately
31% of Syntroleum, today announced that they have signed a definitive agreement to merge the two
companies.
The transaction, which is expected to close near the end of the second quarter of 1998, has been
approved by the Boards of Directors of both companies.
In the merger, all outstanding shares of Syntroleum common stock will be exchanged for shares of
SLH common stock, all outstanding shares of SLH common stock will remain outstanding, the name
of SLH will be changed to Syntroleum Corporation, and SLH management and six of the eight SLH
directors will be replaced with Syntroleum management and directors.
James R. Seward, President and Chief Executive Office of SLH, and P. Anthony Jacobs, Chairman
of SLH, who are currently directors of both companies, will remain as directors of the merged
company.
Under the merger agreement, each outstanding share of Syntroleum is to be converted into a number
of SLH shares equal to an ''implied'' market value of Syntroleum common stock divided by the
average market value of SLH common stock during the five trading days before the SLH meeting of
shareholders.
The implied market value of Syntroleum common stock will be SLH's market capitalization minus its
March 31, 1998, stockholders' equity divided by the 5,950,000 shares of Syntroleum common
stock that SLH now owns.
If the exchange ratio had been calculated on SLH's average closing prices for the five trading days
ended March 30, 1998, each of the 13,043,950 shares of Syntroleum stock not owned by SLH
would be exchanged for 1.47 shares of SLH common stock based on SLH's estimated March 31,
1998, stockholders' equity of approximately $50 million.
In which case, SLH stockholders would own approximately 34% of the combined company
following the merger. Fairness opinions on the exchange ratio have been provided by Salomon Smith
Barney to SLH, and by J.P. Morgan to Syntroleum.
A principal purpose of the merger is to provide Syntroleum with access to the approximately $50
million of SLH's cash and other assets to fund Syntroleum's capital commitments to a gas-to-liquids
(GTL) project being developed with Enron Capital & Trade Resources Corp., and a second GTL
project being developed with Texaco, Inc., and Brown & Root, Inc., as well as for continued
research and development of process improvements and for general working capital.
Seward, President and Chief Executive Office of SLH, said, ''This transaction is a clear vote of
confidence by SLH in Syntroleum. One of the added benefits of this transaction is that as a public
company, the global energy industry and the investment community will have access to significantly
more information about Syntroleum, its technology, its business model and the benefits of joining its
growing network of industry partners and licensees, which now include Texaco, Atlantic Richfield
Company (NYSE:ARC - news; ''ARCO''), Marathon Oil Company, an affiliate of Yacimientos
Petroliferos Fiscales, S.A. (''YPF''), Enron, Kerr-McGee Corporation, Brown & Root, Inc.,
Bateman Engineering, Inc., Lyondell Petrochemical Company [NYSE:LYO - news], AGC
Manufacturing Services, AMEC Process and Energy Limited, ABB Power Generation Ltd.,
Catalytica Advanced Technologies and Criterion Catalyst Company, L.P.''
''This transaction should enable us to continue the growth and development of Syntroleum and the
Syntroleum Process,'' said Mark Agee, President of Syntroleum. ''We have long appreciated the
tremendous support we have received from SLH and are pleased that with the recent favorable
developments at SLH, we are now able to put our two companies together. We believe the
combination of Syntroleum's technology and SLH's financial resources will provide a strong platform
for future growth.''
The transaction is subject to shareholder approvals and customary closing conditions. Shareholder
meetings to vote on the proposed merger will be scheduled as soon as a registration statement
becomes effective with the Securities and Exchange Commission (''SEC'') and proxy materials are
finalized.
SLH expects to file the registration statement and preliminary proxy materials with the SEC in April
and hold shareholder meetings near the end of the second quarter of 1998.
SLH is primarily engaged in promoting the development of Syntroleum and is also in the business of
managing, developing and disposing of certain real estate and miscellaneous assets.
The offering of SLH common stock in connection with the merger will only be made by means of a
prospectus. Accordingly, this press release is not intended to constitute an offer to sell or the
solicitation of an offer to buy any such securities.
Note to Editors: Syntroleum is both a service mark and trademark of Syntroleum Corporation.
This document contains forward-looking statements as well as historical information.
Forward-looking statements are identified by or are associated with such words as ''intend,''
''believe,'' ''estimate,'' ''expect,'' ''anticipate,'' ''should,'' ''hopeful'' and similar expressions.
They reflect managements' beliefs and estimates of future economic circumstances and industry
conditions, company performance and financial results and are not guarantees of future performance.
In particular, all statements relating to GTL plants using the Syntroleum Process are based on
Syntroleum's experience in operating a pilot plant, laboratory data and numerous engineering
feasibility studies, and no assurances can be given that commercial-scale GTL plants using the
Syntroleum Process will achieve similar results.
Although the Company believes that the expectations reflected in any forward-looking statements
are reasonable, it can give no assurance that such expectations will be met. These and other
forward-looking statements are based on many assumptions and factors, all of which may not be
detailed in this document. Any changes in the assumptions or factors could produce materially
different results than those predicted and could impact stock values.
Contact:
SLH Corporation
Steve Fitzwater or Kim Schaefer, 913/652-1000
or
Syntroleum Corporation
John Ford, 918/592-7900 |
