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As Of Filer Filing For·On·As Docs:Size Issuer Agent 4/03/08 Patriot Coal Corp 425 1:5.3M Patriot Coal Corp Davis Polk & … LLP 01/FA |
Document/Exhibit Description Pages Size 1: 425 Business-Combination Transaction Communication HTML 28K
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Filed by
Patriot Coal 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: Patriot Coal Corporation (Commission File No. 001-33466) |
On April 3, 2008, Patriot Coal Corporation provided the following slides in conjunction with a conferencecall held by management in connection with the proposed acquisition of Magnum Coal Company.
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Acquisition of Magnum Coal Company April 2008 |
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Patriot Coal Statement on Forward-Looking Information
Some of the following information contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, as amended, and is intended to come within the
safe-harbor protection provided by those sections.
Important Information for Stockholders
Patriot Coal Corporation (the "Company") will file a proxy statement/prospectus
with the Securities and Exchange Commission (the "SEC") in connection with the
proposed issuance of Company common stock in the transaction with Magnum Coal
Company ("Magnum"). Investors and stockholders are urged to read the proxy
statement/prospectus when it becomes available and any other relevant documents
filed with the SEC because they will contain important information about the
proposed issuance. Investors and stockholders may obtain these documents free
of charge at the website maintained by the SEC at www.sec.gov. In addition,
documents filed with the SEC by the Company are available free of charge by
contacting investor relations by phone at (314) 275-3680, in writing to Janine
A. Orf, Director of Investor Relations, or by email to jorf@patriotcoal.com.
The final proxy statement/prospectus will be mailed to stockholders.
This communication shall not constitute an offer to sell or the solicitation of
an offer to buy securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of such
jurisdiction.
The Company, Magnum and certain of their respective directors, executive
officers and other members of management and employees may be deemed to be
participants in the solicitation of proxies from the stockholders of the
Company in connection with the proposed issuance. Information about the
Company's directors and executive officers is set forth in the Company's Annual
Report on Form 10-K for the year ended December 31, 2007 filed with the SEC on
March 14, 2008 and in the Information Statement filed as Exhibit 99.1 to the
Report on Form 8-K filed by the Company with the SEC on October 24, 2007.
Additional information regarding the potential participants in the proxy
solicitation and information regarding the interests of such potential
participants will be included in the proxy statement/prospectus and the other
relevant documents filed with the SEC when they become available.
Forward Looking Statements
Certain statements in this document are forward-looking as defined in the
Private Securities Litigation Reform Act of 1995. These statements involve
certain risks and uncertainties that may be beyond our control and may cause
our actual future results to differ materially from expectations. We do not
undertake to update our forward-looking statements. Factors that could affect
our results include, but are not limited to: failure to obtain Company
stockholder approval of the proposed issuance; availability and costs of
financing; failure to obtain, delays in obtaining or adverse conditions
contained in any required regulatory or other approvals; failure to consummate
or delay in consummating the transaction for other reasons; changes in laws or
regulations; changes in general economic conditions, including coal and power
market conditions; the outcome of commercial negotiations involving sales
contracts or other transactions; the Company's dependence on Peabody Energy
Corporation in the near future; geologic, equipment and operational risks
associated with mining; supplier and contract miner performance and the
availability and cost of key equipment and commodities; the Company's ability
to replace coal reserves; labor availability and relations; availability and
costs of transportation; weather patterns affecting energy demand; legislative
and regulatory developments; risks associated with environmental laws and
compliance; the outcome of pending or future litigation; and the availability
and costs of competing energy resources. The Company undertakes no obligation
(and expressly disclaims any such obligation) to publicly update or revise any
forward-looking statement, whether as a result of new information, future
events or otherwise. For additional information concerning factors that could
cause actual results to materially differ from those projected herein, please
refer to the Company's Form 10-K and 8-K reports.
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Transaction Summary
o Purchase price of ~$709 million, based on 4/2/08 closing price of PCX
- 11.9 million newly-issued shares of PCX common stock
- Assumption of ~$150 million of Magnum debt
o Bridge financing in place for $150 million of assumed debt
- Permanent financing expected by closing
o Existing Patriot revolving credit facility amended to accommodate the
transaction
o Subject to regulatory & PCX stockholder approval, and other customary
closing conditions
o Expected closing around mid-year
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Transaction Benefits
Solidifies Patriot as a leading U.S. coal company
Economies of Size, Scale & Scope
o Significant commercial, operating & administrative synergies
o Expanded resource base (reserves, equipment, human, other)
o Opportunity to leverage existing systems & infrastructure
Diversification of Resource Base
o Magnum surface mining balances underground mining at Patriot
o Combined resource portfolio provides enhanced long-term opportunities for
low-cost organic growth
Optimization of Coal Sales Portfolios
o Substantial unpriced volume
o Ability to increase metallurgical coal production & sales
o Improved trading & brokerage opportunities
o Optimize sourcing from larger set of operations
Optimization of Mining Operations
o Identify & incorporate best safety, engineering & operating practices from
both organizations
o Multiple quality & transportation options
o Creates a larger platform for business development activities
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Magnum Strengths
Magnum is a well-established producer & marketer
Strong Asset Base
o Substantial reserve base with long reserve life of 30+ years
o High-quality thermal & metallurgical coal
o Strategically located assets in Central Appalachia with scale and scope
advantages
Safe, Efficient & Productive Operations
o Low cost operations
o Good balance of surface & underground operations
o Attractive organic growth platform
Balanced Contract Backlog
o Over 40% of 2009 and 70% of 2010 production volumes unpriced
o Unpriced position provides upside in strong pricing environment
o Recent transactions have captured favorably priced multi-year business
High-Quality Organization
o Capable & experienced management and operating team
o Numerous executives & managers from some of the largest, most successful
industry players
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Magnum Reserves and Operations
Reserve Control Mining Method Coal Quality(1) Workforce(2)
Leased 94.0% Surface 69% Noncompliance 41.6% Contractor 4%
Owned 6.0% Underground 31% Compliance 58.4% Non-Union 52%
Union 44%
[map]
(tons in millions)
Mining Complex 2007 Production
-------------- ---------------
Hobet 4.1
Samples 3.4
Apogee 3.0
Panther 1.8
Jupiter 1.5
Remington 1.4
Campbell's Creek 0.8
2007 Production 16.1
---------------
Total Reserves 606.6
___________________________
1. Based on percentage of 2007 production volume.
2. Workforce is estimated based on volumes produced by respective groups in
2008.
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Overlay of Patriot and Magnum Properties
Contiguous Appalachian properties create synergistic opportunities
[map]
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Solidifies Patriot Position as Premier CAPP Producer
Patriot will become a leading U.S. producer and reserve holder
2007 Reserves (millions of tons)
Estimated
Holder Reserves
-----------------------------------------------------------------
1 U.S. Government 89,000
2 Great Northern Properties 20,000
3 Peabody 8,228
4 Consol 3,918
5 Arch 2,898
6 NACCO 2,335
7 Massey 2,224
8 Natural Resource Partners 2,145
COMBINED 1,869
9 Pocahontas Land Corp (Norfolk Southern) 1,750
10 Murray Energy 1,700
11 Foundation 1,585
12 Alliance 1,269
13 Rio Tinto 1,262
14 Patriot 1,262
15 ICG 932
16 Penn Virginia Resource Partners 818
17 Luminant Mining 718
18 Alpha 618
19 Magnum 607
20 Kiewit 600
21 BNI Coal 600
22 Kentucky River Properties 570
23 Westmoreland 415
24 BHP 319
25 Black Hills Corp. 280
2007 Production (millions of tons)
Production
Holder Tonnage
-----------------------------------------------------------------
1 Peabody 192.5
2 Rio Tinto 137.8
3 Arch 125.4
4 Foundation 71.9
5 Consol 64.6
6 Massey 39.5
COMBINED 37.6
7 NACCO 34.0
8 Kiewit 32.5
9 Westmoreland 30.0
10 Alpha 28.4
11 Luminant Mining 26.0
12 Alliance 24.3
13 Murray Energy 24.0
14 Patriot 21.5
15 ICG 16.6
16 Magnum 16.1
17 BHP 15.3
18 PacifiCorp 14.3
19 Chevron Mining 12.0
20 James River 11.2
21 Trinity Coal 9.0
22 TECO Coal 8.7
23 Richard Gilliam 7.6
24 Rhino Energy 7.3
25 Jim Booth 6.8
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Based on most recent available information.
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Balanced Asset Mix
Magnum combination improves Patriot's asset mix
o Additional met coal production
o More low-sulfur thermal coal production
o Surface vs. underground diversification
o Increased reserves of compliance coal
Met vs. Steam Underground vs. Surface Union vs. Non-Union
------------- ----------------------- -------------------
Patriot Steam 77% Surface 11% Contractor 25%
Met 23% Underground 89% Union 49%
Non-Union 26%
Magnum Steam 100% Surface 69% Contractor 4%
Met 0% Underground 31% Union 44%
Non-Union 52%
Combined Steam 86% Surface 36% Contractor 16%
Met 14% Underground 64% Union 46%
Non-Union 38%
____________
Based on 2007 production volume.
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| This ‘425’ Filing | Date | Other Filings | ||
|---|---|---|---|---|
 | ||||
| Filed on: | 4/3/08 | 425 | ||
| 3/14/08 | 10-K | |||
| 12/31/07 | 10-K | |||
| 10/24/07 | 4, 8-K | |||
| List all Filings | ||||