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SCHEDULE 14A INFORMATION
CONSENT STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[ ] Preliminary Consent Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Consent Statement
[ ] Definitive Additional Materials
[X] Soliciting Material Pursuant to Section 240.14a-12
BARRETT RESOURCES CORPORATION
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(Name of Registrant as Specified in its Charter)
SHELL OIL COMPANY
SRM ACQUISITION COMPANY
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(Name of Person(s) Filing Consent Statement, if other than the Registrant)
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SHELL CHALLENGES BARRETT'S 14D-9 RECOMMENDATIONS
HOUSTON (MARCH 28, 2001) - Walter van de Vijver, president and CEO of
Shell Exploration & Production Company, the exploration and production arm of
Shell Oil Company, today sent the following letter to the Board of Directors of
Barrett Resources Corporation (NYSE: BRR). Shell Oil Company is a wholly-owned
member of the Royal Dutch/Shell Group (NYSE: RD, SC).
***
March 28, 2001
Board of Directors
Barrett Resources Corporation
1515 Arapahoe Street
Tower 3, Suite 1000
Denver, CO 80202
Attention: Peter A. Dea, Chairman and Chief Executive Officer
Dear Peter:
After carefully reviewing Barrett's March 23 Schedule 14D-9 recommending against
Shell's tender offer, we see no basis for your Board's conclusion that our
tender offer is inadequate. We are also concerned that your Board might pursue a
strategy to remain independent instead of maximizing shareholder value by
selling the company. Therefore, we would like to convey our concerns, as well as
propose a path forward that utilizes a shareholder-friendly merger agreement,
directly to you and your fellow directors.
First, with respect to the conclusion that our $55 per share all-cash offer is
inadequate, we recognize that reasonable people, acting in good faith, can
differ on questions of value. We also realize that you and your directors have a
fiduciary duty to take steps, within limits, designed to achieve the highest
price for your shareholders. Nevertheless, in Shell's view, the negotiating
posture adopted by the Barrett Board may be encouraging unrealistic expectations
about values in the present context and could prove in the end to be harmful to
your shareholders. For example, you and your Board, as well as your financial
advisors, would probably acknowledge that the Barrett stock is trading in the
low $60's because of market speculation that Shell might raise its bid or that
another credible suitor may materialize at those levels, not because of some
sudden recognition of a higher intrinsic value for the company. Still, hundreds
of thousands of Barrett shares continue to be purchased at these speculative
levels.
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On the question of intrinsic value, while you have identified several of the
positive attributes of the company in the March 23 Schedule 14D-9, there is
essentially no new information in that filing or in the related press release.
In past public disclosures and in your March 2 analysts call, you outlined in
detail virtually all of that information, even predicting in that call that
Barrett's reserves would double in size in the foreseeable future. The market
assimilated all that information about Barrett's fundamental value and future
growth expectations, and ascribed a $45 value to Barrett's shares prior to
announcement of the Shell offer. The only new information in the market relates
to Shell's bid.
Accordingly, we think it is important for you to understand why we believe our
price represents full and fair value for Barrett. To advance our interest in
establishing a presence in the Rocky Mountain Region, Shell has devoted
substantial resources to the evaluation of Barrett and several other companies
with properties and operations in that region. In this process, Shell deployed
more than 20 members of its own internal technical staff, as well as other
outside consultants, in evaluating Barrett's assets utilizing geologic mapping,
laboratory experiments and reserve development scenarios with Shell's
proprietary subsurface modeling technology. Given the depth of our technical
evaluation of Barrett, we cannot imagine any secret information about your plans
or properties you have not already disclosed to the investing public in your
various SEC filings and other public disclosures that would indicate higher
values. Thus, we believe our valuation is right on target.
We know that Barrett briefly traded in the high $50's when the natural gas
markets were at all-time high prices this winter, but those share prices have
proved to be unsustainable for Barrett and its peer group companies. The fact
that you and some of your fellow Barrett officers sold a significant number of
Barrett shares in December for well below $55 per share, according to SEC
filings, leads us to believe you may personally share Shell's views about
Barrett's value. Given the current trading levels of companies in the
exploration and production sector, you and your Board should ask yourselves
where Barrett's stock would be trading now if Shell had not made its offer. In
addition, you must recognize that any failure by the Barrett Board to quickly
conclude its auction process could very well have an adverse impact on your
employees and on the company's operations -- an impact that could also affect
company value.
In short, we do not understand how you can tell your shareholders that $55 per
share is inadequate. Barrett's Schedule 14D-9 does not provide any new guidance
as to how the Barrett Board reached that conclusion. At the very least, your
shareholders are entitled to a detailed description of your financial advisors'
analysis. We hope the Barrett Board will reconsider its initial conclusion
regarding our $55 offer.
Second, with respect to our concerns about your Board's strategy, we wonder
whether the Barrett Board is really committed to maximizing shareholder value
through a sale of the company. Your strategy would indicate that, if no suitor
makes an offer at the high price expectations you seem to be encouraging, the
Board may simply declare an unsuccessful end to the "strategic alternatives"
process and say that the company needs to stay independent. If that is the
Board's intent, then we expect to take our proposal directly to your
shareholders by means of the written consent process. This would give them an
opportunity to express their opinions about a sale of the company by replacing
the current Barrett Board with our nominees. To that end, we have taken
preliminary action and requested that the Barrett Board set a record date for
the written consent process. We hope that this effort to replace the current
Board will not become necessary, but we think the written consent process is the
best way for the Barrett shareholders to be heard if the Board ignores their
desire to sell the company.
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We urge the Barrett Board to demonstrate its commitment to a sale of the company
in the following manner. Shell is willing to negotiate a binding merger
agreement with Barrett as soon as possible. This merger agreement would not
include any of the typical deal protection provisions, such as "no-shop"
provisions, "break up" fees or other forms of "lock up" provisions. In this way,
the Barrett shareholders could be assured of a sale of their company that
secures them a minimum cash purchase price for their shares. The Barrett Board
could then continue its "strategic alternatives" process through May 11, 2001,
the date on which you indicated to us that the standstill period in your
confidentiality agreements relating to your data room process would terminate.
If during that period the Barrett Board receives a binding proposal offering
superior consideration for the company, the Barrett Board would be free to
accept the higher offer. Otherwise, the company would be sold to Shell under the
terms of the merger agreement.
Of course, we would expect that any merger agreement with another bidder would
likewise not contain deal protection provisions. Excluding these deal protection
provisions, and in particular break up fees, would allow your shareholders,
rather than a competing bidder, to benefit from any additional consideration
paid in a sale of the company. Thus, when the gavel falls on this auction, your
shareholders, and not the participants in the process, would have reaped the
benefit of the highest offer made. We hope you recognize that committing to a
sale of the company in this manner is the best alternative for your
shareholders.
Finally, we hope our proposal demonstrates the extent of our interest in
acquiring Barrett, and in establishing a presence in the Rocky Mountain Region.
As I indicated to you in my March 1 letter, we envision Barrett and its talented
employees serving as the cornerstone of our Rocky Mountain core area, and we
would welcome your ideas as to how to best expand on your existing operations
through additional acquisitions.
If you are interested in discussing any of the foregoing points, I am prepared
as always to meet with you on very short notice at any place of your choosing.
Very truly yours,
Walter van de Vijver
President & CEO
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SHELL OIL COMPANY HAS FILED A PRELIMINARY CONSENT STATEMENT AND OTHER
SOLICITATION MATERIALS WITH THE SEC RELATING TO SHELL OIL COMPANY'S SOLICITATION
OF WRITTEN CONSENTS FROM THE SHAREHOLDERS OF BARRETT RESOURCES CORPORATION.
INVESTORS AND SECURITY HOLDERS ARE STRONGLY ADVISED TO READ THE DEFINITIVE
CONSENT STATEMENT, WHEN AVAILABLE, BECAUSE IT WILL CONTAIN IMPORTANT
INFORMATION. THE DEFINITIVE CONSENT STATEMENT WILL BE FILED BY SHELL OIL COMPANY
WITH THE SEC. INVESTORS AND SECURITY HOLDERS CAN OBTAIN A FREE COPY OF THE
CONSENT STATEMENT (WHEN AVAILABLE) AND OTHER RELEVANT DOCUMENTS ON THE SEC'S WEB
SITE.
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IN ADDITION, THE IDENTITY OF PEOPLE WHO, UNDER SEC RULES, MAY BE CONSIDERED
"PARTICIPANTS IN THE SOLICITATION" OF BARRETT SHAREHOLDERS AND THEIR HOLDINGS OF
BARRETT COMMON STOCK ARE CONTAINED IN SHELL OIL COMPANY'S PRELIMINARY CONSENT
STATEMENT FILED WITH THE SEC UNDER REGULATION 14A.
THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS THAT ARE BASED ON SHELL
OIL COMPANY'S CURRENT EXPECTATIONS, ESTIMATES AND PROJECTIONS. WORDS SUCH AS
"EXPECTS," "ANTICIPATES," "FORECASTS," "INTENDS," "PLANS," "BELIEVES,"
"PROJECTS," AND "ESTIMATES," AND VARIATIONS OF SUCH WORDS AND SIMILAR
EXPRESSIONS ARE INTENDED TO IDENTIFY SUCH FORWARD-LOOKING STATEMENTS.
THESE STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND INVOLVE RISKS AND
UNCERTAINTIES AND ARE BASED ON A NUMBER OF ASSUMPTIONS THAT COULD ULTIMATELY
PROVE INACCURATE AND, THEREFORE, THERE CAN BE NO ASSURANCE THAT THEY WILL PROVE
TO BE ACCURATE.
ACTUAL RESULTS AND OUTCOMES MAY VARY MATERIALLY FROM WHAT IS EXPRESSED OR
FORECAST IN SUCH STATEMENTS. AMONG THE FACTORS THAT COULD CAUSE ACTUAL RESULTS
TO DIFFER MATERIALLY ARE CHANGES IN NATURAL GAS PRICES, CHANGES IN COMPETITIVE
OR ECONOMIC CONDITIONS AFFECTING SUPPLY AND DEMAND FOR GAS, PENDING OR FUTURE
LITIGATION, CHANGES IN CURRENT LAWS AND REGULATIONS, AND GENERAL DOMESTIC AND
INTERNATIONAL ECONOMIC AND POLITICAL CONDITIONS. SHELL OIL COMPANY UNDERTAKES NO
OBLIGATION TO UPDATE PUBLICLY ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A
RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
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MEDIA CONTACTS:
Kitty Borah/Stacy Hutchinson Shell Oil Media Relations (713) 241-4544
David Sexton Shell Oil Investor Relations (212) 218-3112
Web site information www.shell-barrett.com/