-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, arUoHdQVJS9yQB+SHV5xmW6Tx0Rgkwsf+cnHJfmDya4pGPT3G6Kuf/pSL9DtxUMK C502R25ywSjZ40h/HeQYFw== 0000950131-95-000118.txt : 19950608 0000950131-95-000118.hdr.sgml : 19950608 ACCESSION NUMBER: 0000950131-95-000118 CONFORMED SUBMISSION TYPE: DEFA14A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19950127 SROS: MSE SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SANTA FE PACIFIC CORP CENTRAL INDEX KEY: 0000732639 STANDARD INDUSTRIAL CLASSIFICATION: RAILROADS, LINE-HAUL OPERATING [4011] IRS NUMBER: 363258709 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEFA14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-08627 FILM NUMBER: 95503367 BUSINESS ADDRESS: STREET 1: 1700 EAST GOLF RD CITY: SCHAUMBURG STATE: IL ZIP: 60173-5860 BUSINESS PHONE: 7089956000 FORMER COMPANY: FORMER CONFORMED NAME: SANTA FE SOUTHERN PACIFIC CORP DATE OF NAME CHANGE: 19890516 DEFA14A 1 ADDITIONAL PROXY MATERIAL - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SCHEDULE 14A SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934 ---------------- Filed by the Registrant [x] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Definitive Proxy Statement [x] Definitive Additional Materials [ ] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12 ---------------- SANTA FE PACIFIC CORPORATION (NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) SANTA FE PACIFIC CORPORATION (NAME OF PERSON(S) FILING PROXY STATEMENT) ---------------- Payment of Filing Fee (Check the appropriate box):(/1/) [ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2). [ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a- 6(i)(3). [x] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. 1) Title of each class of securities to which transaction applies: Santa Fe Pacific Corporation common stock, par value $1.00 per share. 2) Aggregate number of securities to which transaction applies: 186,523,992 shares of Santa Fe Pacific Corporation common stock. 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11: $52 3/8(/2/) 4) Proposed maximum aggregate value of transaction: $2,637,682,402(/2/) (/1/) The filing fee previously was paid with the initial filing of the preliminary proxy materials on August 8, 1994. (/2/) For purposes of calculating the filing fee only. Upon consummation of the Merger, each outstanding share of Santa Fe Pacific Corporation common stock, par value $1.00 per share, would have been converted into the right to receive 0.27 shares of Burlington Northern Inc. common stock, no par value. The proposed maximum aggregate value of the transaction described in the preliminary proxy materials is equal to one-fiftieth of one percent of $2,637,682,402 (calculated based on the number of shares of Santa Fe Pacific Corporation common stock outstanding as of June 30, 1994, the average of the high and low reported prices of Burlington Northern Inc. common stock on August 5, 1994 and the exchange ratio of 0.27). [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 1) Amount Previously Paid: .......... 2) Form, Schedule or Registration Statement No.: ................... 3) Filing Party: .................... 3) Date Filed: ...................... - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SANTA FE PACIFIC CORPORATION BURLINGTON NORTHERN/SANTA FE MERGER Investment Summary . STRUCTURE . ONE-THIRD OF SHARES PURCHASED UP FRONT FOR $20 CASH . REMAINDER IN BNI STOCK, ALLOWING PARTICIPATION IN SIZABLE UPSIDE . NON-TAXABLE STOCK EXCHANGE . EQUITY PARTICIPATION . BNI/SANTA FE MERGER CREATES SIGNIFICANT STRATEGIC ENHANCEMENTS . PROVEN MANAGEMENT TEAM TO IMPLEMENT OPERATING PLAN . REVENUE GROWTH AND COST REDUCTIONS RAISE EARNING POWER . SUPERIOR LONG-TERM RETURN ON INVESTMENT 1 SANTA FE PACIFIC CORPORATION BURLINGTON NORTHERN/SANTA FE MERGER Joint Tender Offer and Merger . BNI AND SFP JOINTLY TENDER FOR 63 MILLION SFP SHARES FOR $20 PER SHARE . TAX FREE STOCK EXCHANGE AT .40 BNI SHARES FOR REMAINING SFP SHARES AFTER REGULATORY APPROVAL . RECORD DATE - DECEMBER 27 . SHAREHOLDER'S MEETING - FEBRUARY 7 . TENDER CLOSES - FEBRUARY 8 . CONDITIONS TO SHARE REPURCHASE . SHAREHOLDER APPROVAL OF BNI/SFP MERGER . MINIMUM OF 63 MILLION SHARES VALIDLY TENDERED 2 SANTA FE PACIFIC CORPORATION BURLINGTON NORTHERN/SANTA FE MERGER Joint Tender Offer and Merger . SFP FINANCING PROVIDED BY BANK LOAN FACILITY ($ MILLIONS) INITIAL SHARE REPURCHASE $ 760 REFINANCING 400 OTHER CASH REQUIREMENTS 150 ------ SUBTOTAL $1,310 WORKING CAPITAL REVOLVER 250 ------ TOTAL $1,560 ====== 3 SANTA FE PACIFIC CORPORATION BURLINGTON NORTHERN/SANTA FE MERGER Possible Incremental Share Repurchase .Santa Fe Can Repurchase Up to 10 Million Shares Between Tender and Merger As Long as Certain Conditions Are Met .Exchange Ratio at Closing Will Be Adjusted for Shares Actually Repurchased Up to .4347 4 SANTA FE PACIFIC CORPORATION NOMINAL VALUE OF BN PROPOSAL Current Offer With No Incremental Share Repurchase Value - -------------------------------- --------- $20 Cash Tender for 33.2% of Stock $ 6.64 0.4 BN Shares for 66.8% of Stock (a) $ 13.53 ------- Total $ 20.17 Incremental Repurchase of 10 Million Shares Value ----------------------------- --------- $20 Cash Tender for 33.2% of Stock $ 6.64 0.4347 BN Shares for 66.8% of Stock (a) $ 14.70 ------- Total $ 21.34 (a) Using BN Share Price on 1/23/95 of $50.625 5 SANTA FE PACIFIC CORPORATION BURLINGTON NORTHERN/SANTA FE MERGER Combined Route Structure [MAP SHOWING COMBINED SYSTEMS] 6 SANTA FE PACIFIC CORPORATION BURLINGTON NORTHERN/SANTA FE MERGER BENEFITS . BROAD GEOGRAPHIC COVERAGE . EXTENSIVE SINGLE LINE SERVICE . DIVERSIFIED TRAFFIC BASE . REVENUE GROWTH . OPERATING SYNERGIES . OVERHEAD REDUCTION . FINANCIAL STRENGTH 7 SANTA FE PACIFIC CORPORATION BURLINGTON NORTHERN/SANTA FE MERGER BENEFITS . BROAD GEOGRAPHIC COVERAGE . ALL MAJOR WESTERN PORTS . MEXICAN AND CANADIAN GATEWAYS . GULF PORTS . MAJOR MIDWESTERN AND SOUTHWESTERN GATEWAYS . EXTENSIVE SINGLE LINE SERVICE . ELIMINATES COSTS AND DELAYS OF INTERCHANGES . IMPROVES PRODUCTIVITY . ENHANCES RESPONSIVENESS TO CUSTOMER NEEDS 8 SANTA FE PACIFIC CORPORATION BURLINGTON NORTHERN/SANTA FE MERGER Benefits Diversified Traffic Base ------------------------ ($ Millions) Dollars Percentage ------- ---------- Coal $1,752 25% Intermodal $1,707 24% Agricultural Commodities $1,029 14% Chemicals $ 677 10% Forest Products $ 591 8% Automotive $ 379 5% Other $ 973 14% - ---------------------------- | Combined Freight | | Revenues - 1993* $7,108 | - ---------------------------- * Base Year Used In ICC Case. Combined Freight Revenues for 1994 Were $7,676. 9 SANTA FE PACIFIC CORPORATION BURLINGTON NORTHERN/SANTA FE MERGER Benefits REVENUE GROWTH* -------------- ($ MILLIONS) TRUCK DIVERSIONS $132.1 NEW RAIL BUSINESS 115.2 EXTENDED HAULS 59.2 ------ TOTAL $306.5 ====== * FROM ICC CASE BASE YEAR 1993 EXCLUDING REVENUE GROWTH OF INDEPENDENT BNI AND SFP WHICH TOTALED $568 MILLION IN 1994. 10 SANTA FE PACIFIC CORPORATION BURLINGTON NORTHERN/SANTA FE MERGER Benefits OPERATING SYNERGIES ------------------- ($ MILLIONS) REROUTE SAVINGS $ 14.7 . 37 MILLION CAR MILES . 2.7 BILLION GROSS TON MILES . 1.8 MILLION LOCOMOTIVE MILES . 525,000 TRAIN MILES . 4 MILLION GALLONS OF DIESEL FUEL COMMON POINT CONSOLIDATIONS 11.9 MECHANICAL 45.7 ENGINEERING/MAINTENANCE OF WAY 12.7 PURCHASING AND MATERIALS 13.3 INTERMODAL OPERATIONS 8.7 ------ TOTAL $107.0 ====== 11 SANTA FE PACIFIC CORPORATION BURLINGTON NORTHERN/SANTA FE MERGER Benefits OVERHEAD REDUCTION* ------------------- ($ MILLIONS) EXECUTIVE OFFICE $ 9.4 TRANSPORTATION/MAINTENANCE SUPPORT 37.3 PURCHASING SUPPORT 32.4 OPERATING SUPPORT 24.2 MANAGEMENT INFORMATION SYSTEMS 45.1 BUSINESS UNIT OVERHEADS 86.8 OTHER GENERAL AND ADMINISTRATIVE 110.8 ------ TOTAL $346.0 ====== *EXCLUDES INDEPENDENT COST INITIATIVES ANTICIPATED BY BNI AND SFP PRIOR TO MERGER 12 SANTA FE PACIFIC CORPORATION BURLINGTON NORTHERN/SANTA FE MERGER Summary of Benefits ($ Millions) BENEFITS YEAR ONE YEAR TWO YEAR THREE NORMAL YEAR - -------- -------- -------- ---------- ----------- INCREASED REVENUES $ 183.9 $ 260.5 $ 291.2 $ 306.5 LESS COSTS 119.6 169.5 189.4 199.4 ------- ------- ------- ------- NET REVENUE 64.3 91.0 101.8 107.1 OPERATING BENEFITS 271.8 385.1 430.3 453.0 ------- ------- ------- ------- TOTAL ANNUAL BENEFITS $ 336.1 $ 476.1 $ 532.1 $ 560.1 ======= ======= ======= ======= ONE-TIME COSTS - -------------- SEPARATION/RELOCATION/TRAINING $(211.6) $ (42.3) $ (28.2) - NET CAPITAL EXPENDITURES $ (63.4) - - - SOURCE: ICC MERGER CASE 13 SANTA FE PACIFIC CORPORATION BURLINGTON NORTHERN/SANTA FE MERGER ICC Pro Forma Assumptions . BASE YEAR 1993 . REVENUE GROWTH FROM GENERAL BUSINESS CONDITIONS NOT INCLUDED . FUTURE REVENUE GROWTH OF AN INDEPENDENT BN OR SFP NOT INCLUDED . INDEPENDENT COST INITIATIVES ANTICIPATED BY BN OR SFP NOT INCLUDED . MERGER-RELATED REVENUE GROWTH AND MERGER-RELATED COST REDUCTIONS INCLUDED 14 SANTA FE PACIFIC CORPORATION BURLINGTON NORTHERN/SANTA FE MERGER ICC Pro Formas ($Millions) BASE YEAR PRO FORMA PRO FORMA PRO FORMA PRO FORMA (1993) YEAR ONE YEAR TWO YEAR THREE NORMAL YEAR --------- --------- --------- ---------- ----------- OPERATING INCOME $979 $1,102 $1,411 $1,481 $1,538 NET INCOME $438* $ 513 $ 707 $ 763 $ 814 * EXCLUDES GAIN FROM CALIFORNIA LINE SALES AND RETROACTIVE IMPACT OF 1% INCREASE IN FEDERAL INCOME TAX RATE. SOURCE: ICC MERGER CASE 15 SANTA FE PACIFIC CORPORATION BURLINGTON NORTHERN/SANTA FE MERGER Operating Statistics ($ Millions) Base BNSF BNSF Year Merger Pro Forma 1994 Actual 1993* Benefits* Normal Year* Combined** ------ --------- ------------ ----------- Revenue $7,108 $307 $7,415 $7,676 Operating Income $ 979 $560 $1,539 $1,282 Operating Ratio 86.2% 79.2% 83.3% * Source: ICC Merger Case ** 1994 Actual Results of BNI and SFP Combined 16 SANTA FE PACIFIC CORPORATION BURLINGTON NORTHERN/SANTA FE MERGER Summary of Benefits to Shareholders . ENHANCED SHAREHOLDER VALUE . SYNERGIES OF $560 MILLION . SIGNIFICANT GROWTH PROSPECTS . LIKELY REGULATORY APPROVAL . POSSIBILITY OF FASTER SCHEDULE 17 SANTA FE PACIFIC CORPORATION BURLINGTON NORTHERN/SANTA FE MERGER Comparative Financial Statistics ($ Millions) Norfolk UP BNSF Southern Corp Pro Forma 1993** 1994 --------- -------- ---- Debt to Capitalization 47.1%* 25.7% 45.9%E Stockholders' Equity (Millions) $4,802* $4,621 $5,131 * Source: Proxy Filing ** Latest Available 18 SANTA FE PACIFIC CORPORATION BURLINGTON NORTHERN/SANTA FE MERGER Regulatory Timing . Expedited 535-Day Schedule Issued by ICC October 5 . Formal Application Filed with ICC October 13 . Initial Expected Decision End of March 1996 . Special Meeting of Shareholders Scheduled February 7 . ICC Schedule Resumes . ICC Decision Expected Late Second Quarter 1996 . Possibility of Faster Schedule 19 GRAPHIC MATERIAL CROSS-REFERENCE PAGE A MAP SHOWING COMBINED SYSTEMS APPEARS ON PAGE 6. -----END PRIVACY-ENHANCED MESSAGE-----