Filed
by
Washington Group International, Inc.
Pursuant
to Rule 425 under the Securities Act of 1933
And
Deemed Filed under the Securities Exchange Act of 1934
Subject
Company: Washington Group International, Inc.
Commission
File No. 001-12054
Date:
October 22, 2007
October
22, 2007
To
the
Stockholders of Washington Group International:
We
encourage you to vote now “FOR” the proposed merger with URS Corporation so that
your votes can be counted at the Washington Group Special Meeting of
Stockholders that is scheduled to be held on October 30, 2007. At the Special
Meeting, stockholders will consider a proposal to adopt the merger agreement
providing for URS to acquire Washington Group in a merger transaction in which
Washington Group stockholders would receive $43.80 in cash and 0.772 shares
of
URS common stock for each Washington Group share, with an aggregate value of
$88.65 per Washington Group share based upon the October 19, 2007, closing
price
for URS common stock.
Your
Board of Directors unanimously recommends that all of our stockholders vote
“FOR” the adoption of the merger agreement.
Please
consider these factors in deciding how you will vote:
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Unique
strategic fit:
Your
Board believes that the combination of Washington Group and URS represents
a unique opportunity to create a single-source provider that can
offer a
full life cycle of planning, engineering, construction, environmental
management, and operations and maintenance services. The combined
company
will have leadership positions in key growth markets, global scale,
a
broad set of service capabilities, a diverse business portfolio and
a
strong financial position. This combination would also provide Washington
Group stockholders with a more diversified company that would be
better
positioned to insulate stockholders from industry
downturns.
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•
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Superior
value:
At
announcement, the merger consideration represented a 14% premium
to the
undisturbed trading price of Washington Group on May 25, 2007. As
of
October 19, 2007, the merger consideration represents a 27% premium
to the
undisturbed preannouncement trading price. The P/E multiple implied
by the
merger consideration exceeds the company's historical P/E multiples
and
the transaction EBITDA multiple represents the second-highest EBITDA
multiple that would ever have been paid in the Engineering &
Construction sector.
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•
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Continued
and significant equity participation
:
Washington
Group stockholders would be able to participate meaningfully in the
long-term benefits and growth prospects of the combined company through
their approximately 32% equity ownership in it. Your Board believes
that
the combined company is capable of creating more stockholder value
than
Washington Group could achieve on its own.
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•
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Extensive,
independent, and robust process:
Before entering into the merger agreement, your Board conducted extensive
arms-length negotiations with URS over a period of approximately
five
months. During that time, URS increased its offer by approximately
18%
from its initial offer. In these negotiations, your Board required
that
there be a low “break-up fee” so as not to preclude proposals for
alternative transactions. Almost five months have passed, and no
proposals
for alternative transactions have emerged. Additionally, prior to
the
execution of the merger agreement with URS, your Board conducted
multiple
discussions with other potentially interested parties that ultimately
did
not result in any transaction.
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Endorsements
from leading proxy advisors:
Recently, three prominent independent proxy advisory firms --
Glass Lewis, Proxy Governance and Egan-Jones* -- affirmed the Board’s
unanimous recommendation that stockholders vote “FOR” adoption of the
merge
r
agreement. In issuing their recommendations, the firms cited the
merger’s
strategic logic, the value to be provided to Washington Group
stockholders, and the process that your Board conducted before entering
into the merger agreement. One other prominent independent proxy
advisory
firm - Institutional Shareholder Services* - has recommended a vote
against adoption of the merger
agreement.
|
In
recommending the proposed merger transaction with URS, your Board of Directors
is focusing on what it believes to be in the best interests of all Washington
Group stockholders. This transaction, which is fully financed and has no
financing contingency, provides Washington Group stockholders with immediate
cash, the benefits of a more efficiently leveraged balance sheet, and
substantial ownership in an exciting company with significant long-term growth
potential.
Since
approval of the merger requires the affirmative vote of the holders of at least
a majority of the outstanding shares of Washington Group common stock,
your
vote is important, no matter how many shares you own.
Not
voting has the same effect as voting against the proposed merger.
If
you
have not already done so, please vote your shares by marking, signing, and
dating the enclosed proxy card and returning it in the envelope provided. You
may also vote your shares by telephone or via the Internet by following the
instructions provided on your proxy card. Additional information regarding
the
proposed merger transaction can be found in the joint proxy statement/prospectus
dated September 28, 2007.
Stockholders
who have questions about the merger or need assistance in submitting their
proxies or voting their shares should contact Washington Group’s proxy
solicitor, MacKenzie Partners, Inc., by calling 800-322-2885 (toll-free) or
212-929-5500 (collect) or via e-mail to proxy@mackenziepartners.com.
We
urge you to vote “FOR” adoption of the merger agreement
today
.
Thank
you
for your continued interest in the company.
Very
truly yours,
Stephen
G. Hanks
President
and Chief Executive Officer
Washington
Group International
*Permission
to cite the recommendations of Glass Lewis, Proxy Governance, Egan-Jones, and
Institutional Shareholder Services was neither sought nor
obtained.
About
the Company
Washington
Group International (NYSE: WNG) provides the talent, innovation, and proven
performance to deliver integrated engineering, construction, and management
solutions for businesses and governments worldwide. Headquartered in Boise,
Idaho, with approximately $4 billion in annual revenue, the company has
approximately 25,000 people at work around the world providing solutions in
power, environmental management, defense, oil and gas processing, mining,
industrial facilities, transportation and water resources. For more information,
visit www.wgint.com.
###
Forward-Looking
Statements
This
news
release, including the open letter to stockholders, contains forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of
1995, as amended, which are identified by the use of forward-looking terminology
such as may, will, could, should, expect, anticipate, intend, plan, estimate,
or
continue or the negative thereof or other variations thereof. Each
forward-looking statement, including, without limitation, any financial
guidance, speaks only as of the date on which it is made, and Washington Group
undertakes no obligation to update any forward-looking statement to reflect
events or circumstances after the date on which it is made or to reflect the
occurrence of anticipated or unanticipated events or circumstances. The
forward-looking statements are necessarily based on assumptions and estimates
of
management and are inherently subject to various risks and uncertainties. Actual
results may vary materially as a result of changes or developments in social,
economic, business, market, legal, and regulatory circumstances or conditions,
both domestically and globally, as well as due to actions by customers, clients,
suppliers, business partners, or government bodies. Performance is subject
to
numerous factors, including demand for new power generation and for modification
of existing power facilities, public sector funding, demand for extractive
resources, capital spending plans of customers, and spending levels and
priorities of the U.S., state and other governments. Results may also vary
as a
result of difficulties or delays experienced in the execution of contracts
or
implementation of strategic initiatives. Results may also be impacted by costs
relating to the proposed merger transaction with URS Corporation and the timing
of such merger transaction if it is approved by both companies’ stockholders.
For additional risks and uncertainties impacting the forward-looking statements
contained in this news release, please see "Note Regarding Forward-Looking
Information" and "Item 1A. Risk Factors" in Washington Group's annual report
on
Form 10-K for fiscal year 2006.
Additional
Information and Where to Find It
In
connection with the proposed transaction, URS and Washington Group International
filed a definitive joint proxy statement/prospectus and other materials with
the
Securities and Exchange Commission (the “SEC”), and URS filed a registration
statement on Form S-4. Investors and security holders are urged to read the
definitive joint proxy statement/prospectus, the registration statement on
Form
S-4, documents incorporated by reference in the definitive joint proxy
statement/prospectus, and the other materials filed with the SEC as they contain
important information about the proposed transaction. Investors and security
holders may obtain free copies of these documents and other documents filed
with
the SEC at the SEC’s Web site at www.sec.gov. In addition, investors and
security holders may obtain free copies of the documents filed with the SEC
by
URS by contacting URS Investor Relations at 877-877-8970. Investors and security
holders may obtain free copies of the documents filed with the SEC by Washington
Group by contacting Washington Group Investor Relations at 866-964-4636. In
addition, you may also find information about the merger transaction at
www.urs-wng.com. URS, Washington Group and their directors and executive
officers may be deemed participants in the solicitation of proxies from the
stockholders of URS and Washington Group in connection with the proposed
transaction. Information regarding the special interests of these directors
and
executive officers in the proposed transaction is included in definitive joint
proxy statement/prospectus described above. Additional information regarding
the
directors and executive officers of URS is also included in URS’ proxy statement
for its 2007 Annual Meeting of Stockholders, which was filed with the SEC on
April 18, 2007. Additional information regarding the directors and executive
officers of Washington Group is also included in Washington Group’s proxy
statement for its 2007 Annual Meeting of Stockholders, which was filed with
the
SEC on April 17, 2007, as amended. These documents are available free of charge
at the SEC’s Web site at www.sec.gov and from Investor Relations at URS and
Washington Group as described above.
CONTACTS:
Investors:
Washington
Group International Executive Vice President & Chief Financial
Officer
George
Juetten, 208-386-5698
Or
MacKenzie
Partners, Inc.
Dan
Burch
or Larry Dennedy, 212-929-5239
Media:
Washington
Group International Vice President of Corporate Communications
Laurie
Spiegelberg, 208-386-5255
Or
Kekst
& Co.
Adam
Weiner, 212-521-4800
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