El Paso Corp. (ticker: EP, exchange: New York Stock Exchange (.N))
News Release -
El Paso Energy, Coastal Corporation Stockholders Overwhelmingly Approve Merger
HOUSTON, TEXAS, May 5, 2000ŚStockholders of EláPaso Energy
Corporation (NYSE:EPG) and The Coastal Corporation (NYSE:CGP) took major steps
today toward completing the merger of Coastal into a subsidiary of EláPaso
Energy. EláPaso Energy stockholders overwhelmingly authorized the company
to issue the required shares of common stock to complete the $16 billion pooling
of interests transaction with Coastal. Echoing the strong support expressed by
the EláPaso stockholders, Coastal stockholders voted to approve the terms of the
merger at a separate meeting.
Each share of Coastal common stock and Class A common stock will
be converted on a tax-free basis into 1.23 shares of EláPaso Energy common
stock, each share of $1.19 Series A convertible preferred stock and $1.83 Series
B convertible preferred stock will be converted to 9.133 shares of EláPaso
Energy common stock, and each share of $5.00 Series C convertible preferred
stock will be converted to 17.980 shares of EláPaso Energy common stock.
Outstanding Coastal stock options will be exchanged for EláPaso Energy common
stock. Coastal stockholders should not send in their stock certificates at this
time. After the transaction closes, Coastal stockholders will receive written
instructions for exchanging their common and preferred Coastal stock for EláPaso
Today's votes advance the companies toward their goal of
completing the merger and thus creating the nation's leading full-service
energy provider. The combined company will be the only top tier player in every
segment of the domestic natural gas value chain-production, processing,
transmission, wholesale marketing, and merchant power. The natural gas
transmission system for the combined company will consist of 58,000 miles of
pipeline, spanning the U.S. from California to New England and from the Gulf of
Mexico to Canada. The combined company will have a leading asset position in the
fastest growing producing areas in the U.S. and will have ownership in 8,000 net
megawatts of power generation.
"I am extremely pleased by this strong vote of confidence
from our stockholders," said William A. Wise, president and chief executive
officer of EláPaso Energy. "With this mandate from our stockholders, we
look forward to completing the merger and moving quickly to realize the
tremendous breakout opportunities offered by this powerful network of assets.
There is tremendous optionality embedded in our combined assets-from our
traditional natural gas markets and our emerging LNG business to our new
businesses in telecommunications and Europe. We are entering an unparalleled new
phase in value creation for our shareholders."
David A. Arledge, chairman and chief executive officer of The
Coastal Corporation, concurred. "Today's vote is further evidence that
our stockholders clearly recognize the benefits of this potent combination of
assets. In this merger, we have assembled the intellectual capital and asset
base to become the pre-eminent North American natural gas company. The combined
company will have tremendous earnings power fueled by the strong market for
natural gas and the extension of our core skills into new geographic and
commodity markets, including crude oil, refined products, and bandwidth."
On January 18, 2000, EláPaso Energy and The Coastal Corporation
announced their plan to merge. The merger, valued at $16 billion, includes
approximately $6 billion of assumed debt and preferred equity. The transaction,
which is subject to approvals by the Federal Trade Commission and the Federal
Energy Regulatory Commission, is expected to close in the fourth quarter of this
With over $16 billion in assets, EláPaso Energy Corporation
provides comprehensive energy solutions through its strategic business units: El
Paso Natural Gas Company, Tennessee Gas Pipeline Company, Southern Natural Gas
Company, EláPaso Field Services Company, EláPaso Merchant Energy Company, El
Paso Production Company, and EláPaso Energy International Company. The company
owns North America's largest natural gas pipeline system, both in terms of
throughput and miles of pipeline, and has operations in natural gas
transmission, gas gathering and processing, gas and oil production, power
generation, merchant energy services, and international project development.
Visit EláPaso Energy's web site at www.epenergy.com.
The Coastal Corporation is a Houston-based energy holding
company with consolidated assets of $15 billion and subsidiary operations in
natural gas transmission, storage, gathering/processing and marketing; oil and
gas exploration and production; petroleum refining, marketing and distribution;
chemicals; power production; and coal. Coastal's World Wide Web site at
www.coastalcorp.com provides additional information on the company.
The Coastal Corporation Media Relations Contact
The Coastal Corporation Investor Relations Contact
Stirling D. Pack
This release includes forward-looking statements and
projections, made in reliance on the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. The companies have made every
reasonable effort to ensure that the information and assumptions on which these
statements and projections are based are current, reasonable, and complete.
However, a variety of factors could cause actual results to differ materially
from the projections, anticipated results or other expectations expressed in
this release, including, without limitation, oil and gas prices; general
economic and weather conditions in geographic regions or markets served by El
Paso Energy and The Coastal Corporation and their affiliates, or where
operations of the companies and their affiliates are located; inability to
realize anticipated synergies and cost savings on a timely basis; difficulty in
integration of operations; and competition. While the companies make these
statements and projections in good faith, neither company nor their managements
can guarantee that the anticipated future results will be achieved. Reference
should be made to the companies' (and their affiliates') Securities and
Exchange Commission (SEC) filings for additional important factors that may
affect actual results.