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EXHIBIT (a)(5)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
OF
PENNACO ENERGY, INC.
AT
$19.00 NET PER SHARE
BY
MARATHON OIL ACQUISITION 1, LTD.
A WHOLLY OWNED SUBSIDIARY OF
MARATHON OIL COMPANY
A WHOLLY OWNED SUBSIDIARY OF
USX CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, FEBRUARY 5, 2001, UNLESS THE OFFER IS EXTENDED.
January 8, 2001
To Our Clients:
Enclosed for your consideration are an Offer to Purchase dated January 8,
2001 and a related Letter of Transmittal (which, together with any amendments or
supplements thereto, collectively constitute the "Offer") relating to the offer
by Marathon Oil Acquisition 1, Ltd., a Delaware corporation (the "Purchaser")
and a wholly owned subsidiary of Marathon Oil Company, an Ohio corporation
("Marathon") and a wholly owned subsidiary of USX Corporation, a Delaware
corporation, to purchase all outstanding shares of common stock, par value $.001
per share, together with the associated common share purchase rights (the
"Shares"), of Pennaco Energy, Inc., a Delaware corporation (the "Company"), on
the terms and subject to the conditions set forth in the Offer. Also enclosed is
the letter to stockholders of the Company from the Chairman of the Board,
President and Chief Executive Officer of the Company, accompanied by the
Company's Solicitation/Recommendation Statement on Schedule 14D-9.
We (or our nominees) are the holder of record of Shares held by us for your
account. A tender of those Shares can be made only by us as the holder of record
and pursuant to your instructions. The Letter of Transmittal is furnished to you
for your information only and cannot be used to tender Shares held by us for
your account.
We request instructions as to whether you wish to tender any or all of the
Shares held by us for your account pursuant to the terms and subject to the
conditions set forth in the Offer.
Your attention is directed to the following:
1. The offer price is $19.00 per Share, net to the seller in cash,
without interest thereon, on the terms and subject to the conditions set
forth in the Offer.
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2. The Offer is being made for all outstanding Shares.
3. The Board of Directors of the Company has unanimously approved the
Merger Agreement (as defined below) and the transactions contemplated by
the Merger Agreement, including the Offer and the Merger (as defined
below), and determined that the Offer and the Merger and the other
transactions contemplated by the Merger Agreement are advisable and fair to
and in the best interests of the stockholders of the Company, and
unanimously recommends that the stockholders of the Company accept the
Offer and tender their Shares pursuant to the Offer.
4. The Offer is being made pursuant to the terms of an Agreement and
Plan of Merger dated as of December 22, 2000 (the "Merger Agreement") among
the Purchaser, Marathon and the Company pursuant to which, following the
consummation of the Offer and on the terms and subject to conditions of the
Merger Agreement and in accordance with the General Corporation Law of the
State of Delaware, the Purchaser will be merged with and into the Company,
with the Company surviving the merger as a wholly owned subsidiary of
Marathon (the "Merger"). At the effective time of the Merger, each
outstanding Share (other than Shares owned by the Company, the Purchaser,
Marathon or by stockholders, if any, who are entitled to and properly
exercise appraisal rights under Delaware law) will be converted into the
right to receive the price per Share paid pursuant to the Offer in cash,
without interest thereon, as set forth in the Merger Agreement and
described in the Offer to Purchase.
5. The Offer is conditioned on, among other things, there being
validly tendered and not properly withdrawn prior to the Expiration Date
(as defined in the Offer to Purchase) a number of Shares that would
constitute at least a majority of all outstanding Shares on a fully diluted
basis on the date of purchase. Certain other conditions to the Offer are
described in Section 14 of the Offer to Purchase.
6. The Purchaser will pay any stock transfer taxes with respect to the
transfer and sale of Shares to it or its order pursuant to the Offer,
except as otherwise provided in Instruction 6 of the Letter of Transmittal.
7. Tendering stockholders will not be obligated to pay brokerage fees
or commissions to the Depositary or the Information Agent or, except as set
forth in Instruction 6 of the Letter of Transmittal, transfer taxes on the
purchase of Shares by the Purchaser pursuant to the Offer. However, federal
income tax backup withholding at a rate of 31% may be required, unless an
exemption is provided or unless the required taxpayer identification
information is provided. See Instruction 9 of the Letter of Transmittal.
If you wish to have us tender any of or all the Shares held by us for your
account, please so instruct us by completing, executing and returning to us the
instruction form set forth below. An envelope to return your instructions to us
is enclosed. If you authorize the tender of your Shares, all such Shares will be
tendered unless you otherwise specify below. YOUR INSTRUCTIONS TO US SHOULD BE
FORWARDED PROMPTLY TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE
EXPIRATION DATE.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by The Bank of New York (the
"Depositary") of (1) the certificates for (or a timely Book-Entry Confirmation
(as defined in the Offer to Purchase) with respect to) such Shares, (2) a Letter
of Transmittal (or a facsimile thereof), properly completed and duly executed,
with any required signature guarantees, or, in the case of a book-entry transfer
effected pursuant to the procedures set forth in Section 2 of the Offer to
Purchase, an Agent's Message (as defined in the Offer to Purchase), and (3) any
other documents required by the Letter of Transmittal. Accordingly, tendering
stockholders may be paid at different times depending on when certificates for
Shares or Book-Entry Confirmations with respect to Shares are actually received
by the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE
PRICE OF THE SHARES TO BE PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF
OR AMENDMENT TO THE OFFER OR ANY DELAY IN PAYING FOR SUCH SHARES.
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of such
jurisdiction.
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INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
OF
PENNACO ENERGY, INC.
The undersigned acknowledge(s) receipt of your letter enclosing the Offer
to Purchase dated January 8, 2001 and the related Letter of Transmittal relating
to the offer by Marathon Oil Acquisition 1, Ltd., a Delaware corporation, to
purchase all the outstanding shares of common stock, par value $.001 per share,
together with the associated common share purchase rights (the "Shares"), of
Pennaco Energy, Inc., a Delaware corporation.
This will instruct you to tender the number of Shares indicated below held
by you for the account of the undersigned (or, if no amount is indicated below,
for all the Shares held by you for the account of the undersigned) on the terms
and subject to the conditions set forth in the Offer to Purchase and the related
Letter of Transmittal.
Number of Shares to be Tendered* -----------------------------------------------------
- ---------------------------------------------- Shares -----------------------------------------------------
Signature(s)
Dated: --------------------------------------- , 2001 -----------------------------------------------------
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Please Type or Print Name(s)
Address(es) (including Zip Code(s)):
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Area Code and Telephone No.:
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Taxpayer Identification or
Social Security No.: -------------------------------
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* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
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