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FILED BY DEVON ENERGY CORPORATION
PURSUANT TO RULE 425 UNDER THE SECURITIES ACT OF 1933
AND DEEMED FILED PURSUANT TO RULE 14a-12
OF THE SECURITIES EXCHANGE ACT OF 1934
SUBJECT COMPANY: MITCHELL ENERGY & DEVELOPMENT CORP.
COMMISSION FILE NO. 333-68694
[DEVON ENERGY LETTERHEAD]
NEWS RELEASE
--------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE
MEDIA CONTACTS: VINCE WHITE
VP COMMUNICATIONS AND INVESTOR RELATIONS
(405) 552-4505
INVESTOR CONTACTS: ZACK HAGER
MANAGER, INVESTOR RELATIONS
(405) 552-4526
DEVON ENERGY AND MITCHELL ENERGY EXPECT TO AMEND
MERGER AGREEMENT TO ENSURE TAX-FREE STATUS
OKLAHOMA CITY AND THE WOODLANDS, TEXAS -- SEPTEMBER 27, 2001 -- Devon Energy
Corporation (AMEX:DVN, TSE:NSX) and Mitchell Energy & Development Corp.
(NYSE:MND) announced today that they expect to amend their merger agreement
shortly and are fully committed to completion of the merger. The amendment would
eliminate the risk that Devon's stock price would prevent the issuance of
certain tax opinions that are a condition to the transaction. The proposed
amendment would have no effect on the economics of the transaction to the
companies and their shareholders.
Under the existing merger agreement, Mitchell is to merge with a subsidiary of
Devon. The transaction is designed to be tax-free except to the extent that
Mitchell's shareholders receive cash. Consequently, a condition to closing is
that each party receive tax opinions to that effect. The recent decline in
Devon's stock price has created doubt as to whether those opinions could be
obtained at closing.
The amended agreement would require the parties to complete the transaction as
it is now structured if the tax opinions are available. However, in the event
that the opinions are not available under that structure, the parties would
effect the transaction by creating a new holding company. Through mergers, Devon
and Mitchell would become subsidiaries of the new company. In those mergers,
Devon's shareholders would exchange each of their Devon shares for one share of
the new holding company. As with the original structure, Mitchell's shareholders
would exchange each of their Mitchell shares for .585 shares of the new holding
company and $31 in cash. The board of directors of the new holding company would
consist of the current Devon
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board of directors and Todd Mitchell. Mr. Mitchell is the son of George P.
Mitchell, Chairman and CEO of Mitchell.
If the new holding company structure is employed, the transaction is expected to
be tax-free, except to the extent Mitchell's shareholders receive cash. Any
necessary opinions are expected to be obtainable, regardless of Devon's stock
price. If this structure is employed, the new holding company would guarantee
the obligations of Devon Financing Corporation, U.L.C.'s recently proposed
private placement of up to $3 billion in senior notes.
Devon and Mitchell do not expect the proposed amendment to delay the closing.
The companies expect to close the merger during the fourth quarter of 2001.
Devon Energy Corporation is an independent energy company engaged in oil and gas
exploration, production and property acquisitions. Devon ranks among the top
five U.S.-based independent oil and gas producers and is included in the S&P 500
Index. Shares of Devon Energy Corporation trade on the American Stock Exchange
under the symbol DVN. Devon's exchangeable shares (resulting from Northstar,
Devon's wholly-owned Canadian operating unit) trade on The Toronto Stock
Exchange under the symbol NSX.
NOTICE TO INVESTORS CONCERNING DEVON'S PLANS TO ACQUIRE
MITCHELL ENERGY
Investors and security holders are advised to read the definitive joint proxy
statement/prospectus that will be included in the Registration Statement on
Form S-4 filed with the Securities and Exchange Commission in connection with
the proposed transaction because it will contain important information. A
preliminary joint proxy statement/prospectus has been filed with the SEC by
Devon and Mitchell. Investors and security holders may obtain a free copy of
the joint proxy statement/prospectus and other documents filed by Devon and
Mitchell with the SEC at the SEC's web site at www.sec.gov. The definitive
joint proxy statement/prospectus and such other documents (relating to Devon)
may also be obtained for free from Devon when they become available by
directing such request to: Devon Energy Corporation, 20 North Broadway,
Suite 1500, Oklahoma City, Oklahoma 73102-8260, Attention: Investor Relations,
telephone: (405) 552-4570, e-mail: judy.roberts@dvn.com. The definitive
joint proxy statement/prospectus and such other documents (relating to Mitchell)
may also be obtained for free from Mitchell when they become available by
directing such request to: Mitchell Energy & Development Corp., 2001 Timberloch
Place, The Woodlands, Texas 77380, Attention: Investor Relations, telephone:
(713) 377-6625, e-mail: mndpr@mitchellenergy.com.
Devon, its directors, executive officers and certain members of management and
employees may be considered "participants in the solicitation" of proxies from
Devon's shareholders in connection with the transaction. Information regarding
such persons and a description of their interests in the transaction is
contained in Devon's Proxy Statements and Annual Reports on Form 10-K filed with
the SEC. Additional information regarding the interests of those persons may be
obtained by reading the definitive proxy statement/prospectus when it becomes
available.
Mitchell, its directors, executive officers and certain members of management
and employees may be considered "participants in the solicitation" of proxies
from Mitchell's shareholders in
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connection with the transaction. Information regarding such persons and a
description of their interests in the transaction is contained in Mitchell's
Proxy Statements and Annual Reports on Form 10-K filed with the SEC. Additional
information regarding the interests of those persons may be obtained by reading
the definitive proxy statement/prospectus when it becomes available.
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