Texas Pacific Land Trust Approves Plan to Reorganize into a Delaware Corporation
March 23 2020 - 7:30AM
Business Wire
Corporate Reorganization Is Anticipated
to Enhance Governance and Facilitate Business Objectives
The Trustees of Texas Pacific Land Trust (NYSE: TPL) (the
“Trust”) announced today that the Trust has approved a plan to
reorganize from its current structure to a corporation formed under
Delaware law. The Trustees made their determination following
careful consideration of the recommendation of the Conversion
Exploration Committee of the Trust.
“The Trust’s present structure has suited the Trust’s needs and
those of its shareholders for more than a century, but a Delaware
corporate structure is more aligned with the expectations of
today’s investors. A new corporate structure would better allow us
to execute on business goals and capitalize on our enviable assets,
resources and business potential,” said David E. Barry, a Trustee
of the Trust. “With an enhanced governance framework in step with
practices of publicly traded peer corporations, we expect a new
corporate structure would enable value creation over time and drive
value for stockholders.” John R. Norris III, Trustee of the Trust,
added, “We are grateful to the members of the Committee for
dedicating their time and attention to providing a thoughtful
recommendation that informed this decision.”
Under the corporate reorganization plan, common stock of the new
corporation would be distributed upon the consummation of the
reorganization process to holders of sub-share certificates of
proprietary interest of the Trust and traded on the New York Stock
Exchange (NYSE). At or about such time, the sub-share certificates
would be cancelled. The corporate reorganization is intended to be
tax-free in the United States, and the corporation will be deemed a
c-corporation for U.S. taxation purposes.
The Trust is presently aiming for the corporate reorganization
to be effective by the end of the third quarter of 2020, but the
Trust recognizes that unforeseen impacts of COVID-19 could extend
this timeframe despite the Trust’s efforts. Barring any such
unforeseen disruptions, further information regarding the corporate
reorganization will be included in a registration statement on Form
10 to be filed by the corporation with the SEC as well as in other
communications and disclosures anticipated to be made by the Trust
and the corporation.
Advisors
Credit Suisse is acting as financial advisor and Sidley Austin
LLP as legal advisor to the Trust.
About Texas Pacific Land Trust
Texas Pacific Land Trust is one of the largest landowners in the
State of Texas with approximately 900,000 acres of land in West
Texas. The Trust was organized under a Declaration of Trust to
receive and hold title to extensive tracts of land in the State of
Texas, previously the property of the Texas and Pacific Railway
Company, and to issue transferable Certificates of Proprietary
Interest pro rata to the holders of certain debt securities of the
Texas and Pacific Railway Company. Texas Pacific Land Trust’s
trustees are empowered under the Declaration of Trust to manage the
lands with all the powers of an absolute owner.
Visit the Trust at www.tpltrust.com.
Cautionary Statement Regarding Forward-Looking
Statements
This news release may contain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, that are based on the Trust’s beliefs, as well as
assumptions made by, and information currently available to, the
Trust, and therefore involve risks and uncertainties that are
difficult to predict. Generally, future or conditional verbs such
as “will,” “would,” “should,” “could,” or “may” and the words
“believe,” “anticipate,” “continue,” “intend,” “expect” and similar
expressions identify forward-looking statements. Forward-looking
statements include, but are not limited to, statements regarding
the proposed reorganization of the Trust into a corporation (the
“proposed reorganization”) and other references to strategies,
plans, objectives, expectations, intentions, assumptions, future
operations and prospects and other statements that are not
historical facts. You should not place undue reliance on
forward-looking statements. Although the Trust believes that plans,
intentions and expectations, including those regarding the proposed
reorganization, reflected in or suggested by any forward-looking
statements made herein are reasonable, the Trust may be unable to
achieve such plans, intentions or expectations and actual results,
performance or achievements may vary materially and adversely from
those envisaged in this news release due a number of factors
including, but not limited to: a determination of the Trustees not
to provide final approval of all actions and transactions necessary
to effect the proposed reorganization; a determination that the
proposed reorganization will not be tax-free to the Trust and
holders of the Trust’s sub-share certificates; the SEC declining to
declare effectiveness of filings necessary to effect the proposed
reorganization; the NYSE declining to approve the listing of TPL
common stock on the NYSE; the occurrence of any event, change or
other circumstances that could give rise to the abandonment of the
proposed reorganization; changes in the expected timing and
likelihood of completion of the proposed reorganization;
uncertainties as to the timing of the proposed reorganization;
potential adverse reactions or changes to business relationships
resulting from the announcement or completion of the proposed
reorganization; unexpected costs, charges or expenses resulting
from the proposed reorganization; risks related to disruption of
management time from ongoing business operations due to the
proposed reorganization; the initiation or outcome of potential
litigation; any changes in general economic and/or industry
specific conditions; and the potential impacts of COVID-19 on the
global and U.S. economies as well as on the Trust’s financial
condition and business operations. Except as required by law, the
Trust undertakes no obligation to publicly update or revise any
such forward-looking statements. For more information concerning
factors that could cause actual results to differ from those
expressed or referred to herein, see the Trust’s annual report on
Form 10-K and quarterly reports on Form 10-Q filed with the
SEC.
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version on businesswire.com: https://www.businesswire.com/news/home/20200323005276/en/
(214) 969-5530 Chris Steddum Vice President, Finance and
Investor Relations
Texas Pacific Land (NYSE:TPL)
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