Baker Hughes Incorporated (NYSE:BHI) Files An 8-K Other Events
Item 8.01.
| Other Events. |
As previously disclosed, on October 30, 2016, Baker Hughes
Incorporated (Baker Hughes) entered into a
Transaction Agreement and Plan of Merger, dated as of October 30,
2016, among General Electric Company (GE), Baker
Hughes, Bear Newco, Inc. (New Baker Hughes) and
Bear MergerSub, Inc., which was subsequently amended by the
Amendment to Transaction Agreement and Plan of Merger, dated as
of March 27, 2017, among GE, Baker Hughes, New Baker Hughes, Bear
MergerSub, Inc., BHI Newco, Inc. and Bear MergerSub 2, Inc. (as
amended, the Transaction Agreement). The
Transaction Agreement provides for, among other things, the
combination of Baker Hughes with the oil and gas business of GE.
On May 10, 2017, a putative class action complaint challenging
the transactions contemplated by the Transaction Agreement (the
Transactions) was filed on behalf of purported
Baker Hughes stockholders in the U.S. District Court for the
Southern District of Texas (the Transaction
Litigation). The complaint is captioned Booth Family
Trust v. Baker Hughes Inc., et al., Civil Action No.
4:17-cv-01457 (S.D. Tex. 2017). The Transaction Litigation
relates to the Transaction Agreement and the definitive proxy
statement (the Proxy Statement) filed by Baker
Hughes with the United States Securities and Exchange Commission
(the SEC) on May 30, 2017 in connection with the
Transactions.
In connection with the settlement of the Transaction Litigation,
Baker Hughes hereby voluntarily amends and supplements the Proxy
Statement as described in this Current Report on Form 8-K.
Nothing in this Current Report on Form 8-K shall be deemed an
admission of the legal necessity or materiality under applicable
laws of any of the disclosures set forth herein.
Supplemental Disclosures
The following disclosures supplement the disclosures contained in
the Proxy Statement and should be read in conjunction with the
disclosures contained in the Proxy Statement, which should be
read in its entirety. To the extent that the information set
forth herein differs from or updates information contained in the
Proxy Statement, the information set forth herein shall supersede
or supplement the information in the Proxy Statement. All page
references are to pages in the Proxy Statement, and terms used
below, unless otherwise defined, have the meanings set forth in
the Proxy Statement.
The section of the Proxy Statement The Transactions
Background of the Transactions starting on page 74 of the Proxy
Statement is hereby amended and supplemented as follows:
Under the caption Background of the Transactions starting on
page 74, the following sentence is hereby added to the end of the
current first paragraph on page 75:
Such other strategic companies and financial sponsors did not
express an interest in a broader potential strategic combination
with Baker Hughes beyond such acquisitions, and the
confidentiality agreements entered into with such strategic
companies and financial sponsors did not contain standstill
provisions that would presently preclude such strategic companies
or financial sponsors from making an offer to acquire Baker
Hughes.
Under the caption Background of the Transactions starting on
page 74, the following sentence is hereby added after the current
second sentence of the second paragraph on page 75:
Such discussions did not cover whether the directors or senior
management of Baker Hughes, aside from certain managers of the
specific businesses being discussed, would serve as managers or
directors of GE or its affiliates.
Under the caption Background of the Transactions starting on
page 74, the following sentence is hereby added after the current
first sentence of the first full paragraph on page 81:
Baker Hughes was not contacted by any third parties interested in
a business combination transaction following such media reports.
The section of the Proxy Statement The Transactions
Projected Financial Data starting on page 89 of the Proxy
Statement is hereby amended and supplemented as follows:
Under the caption Forecasted Financial Information starting
on page 91, the following paragraph and tables are hereby added
immediately prior to the caption Estimated Synergies on page
91:
The following tables present reconciliations of (i) EBITDA, as
included in the GE OG Forecasts, to earnings (loss) before
interest and income taxes and (ii) Free Cash Flow, as included in
the GE OG Forecasts, to cash from operating activities, in each
case for the periods indicated in the tables below. Such
reconciliations were not provided by GE to Baker Hughes or
Goldman Sachs.
|
(In billions) Year Ended December 31, |
||||||||||||||||||
| 2017E | 2018E | 2019E | 2020E | |||||||||||||||
| EBITDA | $ | 2.0 | $ | 2.6 | $ | 3.0 | $ | 3.3 | ||||||||||
| Less: Depreciation amortization expense | $ | 0.6 | $ | 0.6 | $ | 0.6 | $ | 0.7 | ||||||||||
|
Earnings (loss) before interest and income taxes |
$ | 1.4 | $ | 1.9 | $ | 2.3 | $ | 2.6 | ||||||||||
|
(In billions) Year Ended December 31, |
||||||||||||||||||
| 2017E | 2018E | 2019E | 2020E | |||||||||||||||
| Free Cash Flow | $ | 1.3 | $ | 1.0 | $ | 1.2 | $ | 1.7 | ||||||||||
|
Plus: Capital expenditures (Net of additions and dispositions) |
$ | 0.4 | $ | 0.5 | $ | 0.5 | $ | 0.6 | ||||||||||
| Cash from operating activities | $ | 1.7 | $ | 1.5 | $ | 1.7 | $ | 2.3 | ||||||||||
Under the caption Certain Financial Forecasts of Baker Hughes
starting on page 91, the following paragraph and tables are
hereby added at the bottom of page 94:
The following tables present reconciliations of (i) EBITDA, as
included in the Baker Hughes Forecasts, to earnings (loss) before
interest and income taxes and (ii) Free Cash Flow, as included in
the Baker Hughes Forecasts, to cash from operating activities, in
each case for the periods indicated in the tables below. Such
reconciliations were not reviewed with the Baker Hughes board of
directors, were not provided to Goldman Sachs for use in its
financial analyses and opinion and were not provided to GE.
|
(In billions) Year Ended December 31, |
||||||||||||||||||
| 2017E | 2018E | 2019E | 2020E | |||||||||||||||
| EBITDA | $ | 1.7 | $ | 2.5 | $ | 3.3 | $ | 3.6 | ||||||||||
| Less: Depreciation amortization expense | $ | 1.0 | $ | 1.0 | $ | 1.0 | $ | 1.2 | ||||||||||
|
Earnings (loss) before interest and income taxes |
$ | 0.7 | $ | 1.5 | $ | 2.3 | $ | 2.4 | ||||||||||
|
(In billions) Year Ended December 31, |
||||||||||||||||||
| 2017E | 2018E | 2019E | 2020E | |||||||||||||||
| Free Cash Flow | $ | 0.6 | $ | 0.9 | $ | 1.2 | $ | 1.6 | ||||||||||
|
Plus: Capital expenditures (Net of additions and dispositions) |
$ | 0.3 | $ | 0.5 | $ | 0.6 | $ | 0.7 | ||||||||||
| Cash from operating activities | $ | 0.9 | $ | 1.4 | $ | 1.8 | $ | 2.3 | ||||||||||
Under the caption Certain Financial Forecasts of Baker Hughes
starting on page 91, the following paragraph and tables are
hereby added at the bottom of page 95:
The following tables present reconciliations of (i) EBITDA, as
included in the Baker Hughes Forecasts for GE OG, to earnings
(loss) before interest and income taxes and (ii) Free Cash Flow,
as included in the Baker Hughes Forecasts for GE OG, to cash from
operating activities, in each case for the periods indicated in
the tables below. Such reconciliations were not reviewed with the
Baker Hughes board of directors, were not provided to Goldman
Sachs for use in its financial analyses and opinion and were not
provided to GE.
|
(In billions) Year Ended December 31, |
||||||||||||||||||
| 2017E | 2018E | 2019E | 2020E | |||||||||||||||
| EBITDA | $ | 2.0 | $ | 2.5 | $ | 3.0 | $ | 3.3 | ||||||||||
| Less: Depreciation amortization expense | $ | 0.6 | $ | 0.6 | $ | 0.6 | $ | 0.6 | ||||||||||
|
Earnings (loss) before interest and income taxes |
$ | 1.4 | $ | 1.9 | $ | 2.4 | $ | 2.7 | ||||||||||
|
(In billions) Year Ended December 31, |
||||||||||||||||||
| 2017E | 2018E | 2019E | 2020E | |||||||||||||||
| Free Cash Flow | $ | 1.3 | $ | 1.0 | $ | 1.2 | $ | 1.7 | ||||||||||
|
Plus: Capital expenditures (Net of additions and dispositions) |
$ | 0.4 | $ | 0.4 | $ | 0.5 | $ | 0.5 | ||||||||||
| Cash from operating activities | $ | 1.7 | $ | 1.4 | $ | 1.7 | $ | 2.2 | ||||||||||
Under the caption Certain Financial Forecasts of Baker Hughes
starting on page 91, the following paragraph and tables are
hereby added immediately prior to the caption Baker Hughes
Synergies on page 96:
The following tables present reconciliations of (i) EBITDA, as
included in the New Baker Hughes Forecasts, to earnings (loss)
before interest and income taxes and (ii) Free Cash Flow, as
included in the New Baker Hughes Forecasts, to cash from
operating activities, in each case for the periods indicated in
the tables below. Such reconciliations were not reviewed with the
Baker Hughes board of directors, were not provided to Goldman
Sachs for use in its financial analyses and opinion and were not
provided to GE.
|
(In billions) Year Ended December 31, |
||||||||||||||||||
| 2017E | 2018E | 2019E | 2020E | |||||||||||||||
| EBITDA | $ | 4.0 | $ | 5.6 | $ | 7.1 | $ | 8.1 | ||||||||||
| Less: Depreciation amortization expense | $ | 1.6 | $ | 1.6 | $ | 1.6 | $ | 1.8 | ||||||||||
|
Earnings (loss) before interest and income taxes |
$ | 2.4 | $ | 4.0 | $ | 5.5 | $ | 6.3 | ||||||||||
|
(In billions) Year Ended December 31, |
||||||||||||||||||
| 2017E | 2018E | 2019E | 2020E | |||||||||||||||
| Free Cash Flow | $ | 2.1 | $ | 2.4 | $ | 3.0 | $ | 4.1 | ||||||||||
|
Plus: Capital expenditures (Net of additions and dispositions) |
$ | 0.7 | $ | 0.8 | $ | 1.0 | $ | 1.1 | ||||||||||
| Cash from operating activities | $ | 2.8 | $ | 3.2 | $ | 4.0 | $ | 5.2 | ||||||||||
Additional Information and Where to Find It
In connection with the proposed transaction between GE and Baker
Hughes, New Baker Hughes
has filed with the SEC a registration statement on Form S-4,
including Amendments No. 1 and 2 thereto. The registration
statement was declared effective by the SEC on May 30, 2017. New
Baker Hughes and Baker Hughes have also filed with the SEC a
definitive combined proxy statement/prospectus (the
Combined Proxy Statement/Prospectus) and Baker
Hughes has mailed the Combined Proxy Statement/Prospectus to its
stockholders and has filed other documents regarding the proposed
transaction with the SEC. This communication is not a substitute
for any proxy statement, registration statement, proxy
statement/prospectus or other documents Baker Hughes and/or New
Baker Hughes may file with the SEC in connection with the
proposed transaction. INVESTORS AND SECURITY HOLDERS ARE URGED TO
READ CAREFULLY AND IN THEIR ENTIRETY THE COMBINED PROXY
STATEMENT/PROSPECTUS, ANY AMENDMENTS OR SUPPLEMENTS TO THE
COMBINED PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED BY
BAKER HUGHES OR NEW BAKER HUGHES WITH THE SEC IN CONNECTION WITH
THE PROPOSED TRANSACTION, BECAUSE THESE DOCUMENTS WILL CONTAIN
IMPORTANT INFORMATION. Investors and security holders are able to
obtain free copies of the Combined Proxy Statement/Prospectus and
other documents filed with the SEC by Baker Hughes and/or New
Baker Hughes through the website maintained by the SEC at
www.sec.gov. Investors and security holders will also be
able to obtain free copies of the documents filed by New Baker
Hughes and/or Baker Hughes with the SEC on Baker Hughes website
at http://www.bakerhughes.com or by contacting Baker
Hughes Investor Relations at alondra.oteyza@bakerhughes.com or by
calling 1-713-439-8822.
No Offer or Solicitation
This communication is for informational purposes only and not
intended to and does not constitute an offer to subscribe for,
buy or sell, the solicitation of an offer to subscribe for, buy
or sell or an invitation to subscribe for, buy or sell any
securities or the solicitation of any vote or approval in any
jurisdiction to or in connection with the proposed transaction or
otherwise, nor shall there be any sale, issuance or transfer of
securities in any jurisdiction in contravention of applicable
law. No offer of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended, and otherwise in accordance
with applicable law.
Participants in the Solicitation
GE, Baker Hughes, New Baker Hughes, their respective directors,
executive officers and other members of its management and
employees may be deemed to be participants in the solicitation of
proxies in connection with the proposed transaction. Information
regarding the persons who may, under the rules of the SEC, be
deemed participants in the solicitation of proxies in connection
with the proposed transaction, including a description of their
direct or indirect interests, by security holdings or otherwise,
is set forth in the Combined Proxy Statement/Prospectus and other
relevant materials filed with the SEC. Information regarding the
directors and executive officers of GE is contained in GEs proxy
statement for its 2017 annual meeting of stockholders, filed with
the SEC on March 8, 2017, its Annual Report on Form 10-K for the
year ended December 31, 2016, which was filed with the SEC on
February 24, 2017, its Quarterly Report on Form 10-Q for the
quarter ended March 31, 2017, which was filed with the SEC on May
5, 2017 and certain of its Current Reports filed on Form 8-K.
Information regarding the directors and executive officers of
Baker Hughes is contained in Baker Hughes proxy statement for its
2017 annual meeting of stockholders, filed with the SEC on March
9, 2017, its Annual Report on Form 10-K for the year ended
December 31, 2016, which was filed with the SEC on February 8,
2017, its Quarterly Report on Form 10-Q for the quarter ended
March 31, 2017, which was filed with the SEC on April 28, 2017
and certain of its Current Reports filed on Form 8-K. These
documents can be obtained free of charge from the sources
indicated above.
Caution Concerning Forward-Looking Statements
This communication contains forward-looking statements as that
term is defined in Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934,
as amended by the Private Securities Litigation Reform Act of
1995, including statements regarding the proposed transaction
between GE and Baker Hughes. All statements, other than
historical facts, including statements regarding the expected
timing and structure of the proposed transaction; the ability of
the parties to complete the proposed transaction considering the
various closing conditions; the expected benefits of the proposed
transaction such as improved operations, enhanced revenues and
cash flow, synergies, growth potential, market profile, customers
business plans and financial strength; the competitive ability
and position of the combined company following completion of the
proposed transaction, including the projected impact on GEs
earnings per share; oil and natural gas market conditions; costs
and availability of resources; legal, economic and regulatory
conditions; and any assumptions underlying any of the foregoing,
are forward-looking statements. Forward-looking statements
concern future circumstances and results and other statements
that are not historical facts and are sometimes identified by the
words may, will, should, potential, intend, expect, endeavor,
seek, anticipate, estimate, overestimate, underestimate, believe,
could, project, predict, continue, target or other similar words
or expressions. Forward-looking statements are based upon current
plans, estimates and expectations that are subject to risks,
uncertainties and assumptions. Should one or more of these risks
or uncertainties materialize, or should underlying assumptions
prove incorrect, actual results may vary materially from those
indicated or anticipated by such forward-looking statements. The
inclusion of such statements should not be regarded as a
representation that such plans, estimates or expectations will be
achieved. Important factors that could cause actual results to
differ materially from such plans, estimates or expectations
include, among others, (1)that one or more closing conditions to
the transaction, including certain regulatory approvals, may not
be satisfied or waived, on a timely basis or otherwise, including
that a governmental entity may prohibit, delay or refuse to grant
approval for the consummation of the proposed transaction, may
require conditions, limitations or restrictions in connection
with such approvals or that the required approval by the
stockholders of Baker Hughes may not be obtained; (2)the risk
that the proposed transaction may not be completed in the time
frame expected by GE or Baker Hughes, or at all; (3)unexpected
costs, charges or expenses resulting from the proposed
transaction; (4)uncertainty of the expected financial performance
of the combined company following completion of the proposed
transaction; (5)failure to realize the anticipated benefits of
the proposed transaction, including as a result of delay in
completing the proposed transaction or integrating the businesses
of GE, Baker Hughes and New Baker Hughes; (6)the ability of the
combined company to implement its business strategy;
(7)difficulties and delays in achieving revenue and cost
synergies of the combined company; (8)inability to retain and
hire key personnel; (9)the occurrence of any event that could
give rise to termination of the proposed transaction; (10)the
risk that stockholder litigation in connection with the proposed
transaction or other settlements or investigations may affect the
timing or occurrence of the contemplated merger or result in
significant costs of defense, indemnification and liability;
(11)evolving legal, regulatory and tax regimes; (12)changes in
general economic and/or industry specific conditions, including
oil price changes; (13)actions by third parties, including
government agencies; and (14) other risk factors as detailed from
time to time in GEs and Baker Hughes reports filed with the SEC,
including GEs and Baker Hughes annual report on Form 10-K,
periodic quarterly reports on Form 10-Q, periodic current reports
on Form 8-K and other documents filed with the SEC. The foregoing
list of important factors is not exclusive.
Any forward-looking statements speak only as of the date of this
communication. Neither GE nor Baker Hughes undertakes any
obligation to update any forward-looking statements, whether as a
result of new information or development, future events or
otherwise, except as required by law. Readers are cautioned not
to place undue reliance on any of these forward-looking
statements.
About Baker Hughes Incorporated (NYSE:BHI)
Baker Hughes Incorporated is engaged in the oilfield services industry. The Company is a supplier of oilfield services, products, technology and systems used in the oil and natural gas industry around the world. The Company also provides industrial products and services for other businesses, including downstream chemicals, and process and pipeline services. It conducts its operations through its subsidiaries, affiliates, ventures and alliances. The Company has four geographical operating segments: North America, Latin America, Europe/Africa/Russia Caspian and Middle East/Asia Pacific. The Company also has an Industrial Services segment, which includes the downstream chemicals business and the process and pipeline services business. The Company’s oilfield products and services are of approximately two categories, Drilling and Evaluation or Completion and Production. The Company’s Industrial Services consists of its downstream chemicals and process, and pipeline services businesses.