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ENRON CORP. AND ENRON GLOBAL POWER & PIPELINES AGREE ON MERGER PROPOSAL; EPP DECLARES THIRD QUARTER DIVIDEND
FOR IMMEDIATE RELEASE: Monday, August 18, 1997
HOUSTON -- Enron Corp. and Enron Global Power & Pipelines L.L.C. (EPP) jointly announced today that they have agreed to a merger whereby EPP would become a wholly-owned subsidiary of Enron in a transaction in which EPP shareholders would receive $35 per share in Enron common stock. The transaction, which is expected to be completed in the fourth quarter of 1997, is subject to the approval of a majority of the shareholders of EPP other than Enron.
On May 14, Enron and EPP announced that Enron had made an initial merger proposal of $32 per share to EPP's Oversight Committee, which is comprised of EPP's three outside board members, for evaluation with assistance from outside legal and financial advisers. The $35 per share merger price represents a 25 percent premium over the $28 trading price for EPP shares one month prior to the original merger proposal. The Oversight Committee has unanimously approved the $35 merger proposal. EPP has approximately 26 million shares outstanding, of which 12.5 million are in the public market and the remaining 13.5 million are held by Enron.
Enron expects to file shortly with the Securities and Exchange Commission (SEC) a registration statement containing a prospectus/proxy statement whereby the shares to be issued in the merger will be offered to EPP shareholders. The exchange ratio will be determined by the average closing price of Enron common stock 20 days prior to the day of final closing, after shareholder and SEC approval.
In addition, the Board of Directors of EPP today declared a regular third quarter dividend of $0.25 per share, payable September 15, 1997 to shareholders of record August 29, 1997.
In terms of benefits, Enron and EPP management believe the proposed merger:
- provides EPP's shareholders with the opportunity to participate in all of Enron's international activities across a broader spectrum of geographical regions;
- affords EPP shareholders the opportunity to participate in Enron's worldwide infrastructure development and merchant activities;
- integrates EPP's manpower, skills and expertise with those in the Enron International organization;
- permits the shareholders of both Enron and EPP to benefit from administrative cost reductions arising from the integration of EPP into Enron; and
- simplifies the financial reporting structure of Enron.
Enron Global Power & Pipelines, majority owned by Enron, is traded on the New York Stock Exchange under the ticker symbol, "EPP." EPP's assets consist of interests in two power plants in the Philippines, power plants in Guatemala and the Dominican Republic and natural gas pipeline systems in Argentina and Colombia. EPP and Enron are parties to a purchase right agreement that requires Enron to offer EPP ownership interests in qualifying power and natural gas pipeline projects developed or acquired by Enron outside the United States, Canada and Western Europe at prices more favorable to EPP than those at which Enron would be permitted to sell the projects to any third party.
Enron Corp., one of the world's largest integrated natural gas and electricity companies with approximately $19 billion in assets, operates one of the largest natural gas transmission systems in the world; is the largest purchaser and marketer of natural gas and the largest non-regulated marketer of electricity in North America; is a leading participant in liberalized energy markets in the United Kingdom and the Nordic Countries; markets natural gas liquids worldwide; manages the largest portfolio of fixed-price natural gas risk management contracts in the world; is among the leading entities arranging new capital to the energy industry; owns a majority interest in Enron Oil & Gas Company, one of the largest independent (non-integrated) exploration and production companies in the United States; is one of the largest independent developers and producers of electricity in the world; and is a major supplier of solar and wind renewable energy worldwide. Enron's internet address is www.enron.com and its common stock is traded under the ticker symbol, "ENE."
For additional information please contact:
Carol Hensley
(713) 853-6498
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