Texas Pacific Land Trust Committee Recommends Conversion to a C-Corp Structure
January 22 2020 - 7:30AM
Business Wire
The Conversion Exploration Committee (the “Committee”) of Texas
Pacific Land Trust (NYSE: TPL) (the “Trust” or “TPL”) today
announced that, following a deliberation process initiated in June
2019, the Committee has recommended to the Trustees of TPL that TPL
convert from a trust into a Delaware c-corporation. The Committee
analyzed reasons for and alternatives to conversion with support
from a team of advisors to TPL, including financial advisor Credit
Suisse and outside legal counsel. The Committee’s deliberations
focused particularly on tax, corporate, corporate governance,
accounting and business implications of the proposed
conversion.
The decision of whether to convert TPL into a c-corporation is
subject to determination of the current Trustees. The Committee
recommended that, if the Trustees elect to authorize the
conversion, the conversion should follow a process intended to
ensure a smooth transition that would be tax-free to shareholders.
As proposed, TPL would transfer all its assets, including cash,
land, Texas Pacific Water Resources, and other assets, to a
wholly-owned limited liability company subsidiary of TPL (“TPL
Holdco”). TPL would then contribute all of the equity in TPL
Holdco, holding all of TPL’s assets, to a newly-created corporation
(“TPL Corporation”). Current shareholders of the Trust would
receive an amount of shares in TPL Corporation proportional to
their ownership of shares in the Trust. When this process as
recommended is completed, shares of the Trust would be cancelled.
Shareholders of the Trust would not need to take any action to
receive the new shares in TPL Corporation.
The process recommended by the Committee would require filings
with the SEC and NYSE approval to complete this conversion as
proposed.
The Committee has extended its term through February 29, 2020,
to continue to consult with respect to corporate governance
matters. The Committee is chaired by John R. Norris III and David
E. Barry, the Trustees of TPL. Its additional members are (in
alphabetical order): General Donald G. Cook, USAF (Retired); Craig
Hodges, Chief Executive Officer of Hodges Capital; Dana McGinnis,
Founder and Chief Investment Officer of Mission Advisors; Eric L.
Oliver, Founder and President of SoftVest Advisors; and Murray
Stahl, Chairman of Horizon Kinetics.
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.
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 TPL’s beliefs, as well as assumptions
made by, and information currently available to, TPL, 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 conversion of
TPL into a corporation (the “Proposed Conversion”) 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 TPL believes
that plans, intentions and expectations, including those regarding
the Proposed Conversion, reflected in or suggested by any
forward-looking statements made herein are reasonable, TPL 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 approve the Proposed Conversion; the occurrence of
any event, change or other circumstances that could give rise to
the abandonment of the Proposed Conversion; changes in the expected
timing and likelihood of completion of the Proposed Conversion;
uncertainties as to the timing of the Proposed Conversion;
potential adverse reactions or changes to business relationships
resulting from the announcement or completion of the Proposed
Conversion; unexpected costs, charges or expenses resulting from
the Proposed Conversion; risks related to disruption of management
time from ongoing business operations due to the Proposed
Conversion; the initiation or outcome of potential litigation; and
any changes in general economic and/or industry specific
conditions. Except as required by law, TPL 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
TPL’s annual report on Form 10-K and quarterly reports on Form 10-Q
filed with the SEC.
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Abernathy MacGregor Sydney Isaacs / Jeremy Jacobs (713) 343-0427
/ (212) 371-5999 sri@abmac.com / jrj@abmac.com
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