ICO Responds to Travis Street Partners

- Offers to Meet With Travis Street Partners



- Postpones Annual Meeting to April 25



Apr 11, 2001, 01:00 ET from ICO, Inc.

    HOUSTON, April 11 /PRNewswire/ -- ICO, Inc. (Nasdaq: ICOC) announced today
 that it has sent the following letter to Travis Street Partners in response to
 its letter of April 9, 2001.  In connection with sending this letter, ICO
 announced that its annual meeting of shareholders has been postponed to
 Wednesday, April 25, 2001.  The meeting will be held at 11:00 a.m. Houston
 time at the Renaissance Hotel, 6 Greenway Plaza East, Houston, Texas 77046.
 
      April 11, 2001
      Travis Street Partners, LLC
      910 Travis Street, Suite 2150
      Houston, Texas  77002
      713-759-2040 (By Fax)
 
      Attention:  Messrs. Timothy Gollin and
                          Christopher N. O'Sullivan
 
      Dear Sirs:
 
     On April 9, 2001, just a week before the April 17 scheduled annual meeting
 of shareholders of ICO, Inc., Travis Street Partners submitted another
 expression of interest with respect to a possible transaction with ICO.
     Despite our questions about your latest proposal -- including concerns
 that the stated price is illusory and the proposal is unfinanced and highly
 conditional -- we are prepared to meet with you promptly to see if an
 acceptable letter of intent contemplating a transaction at an acceptable price
 can be reached that would be in the best interests of ICO and its
 shareholders.
     We believe that to be acceptable, a letter of intent should address the
 following basic issues presented by your April 9 proposal:
 
     -- the letter of intent must not put at risk ICO's proposed sale of its
 oilfield services division to Varco International, Inc. for $165 million in
 cash;
     -- the price must be based on realistic assumptions so as not to be
 illusory;
     -- the proposal must be less conditional;
     -- there must be demonstrable ability to finance an acquisition; and
     -- the proposal must not expose ICO to the possibility of multi-million
 dollar payments to Travis Street.
 
     Risk to Varco transaction.  Your proposed letter of intent is unclear as
 to Travis Street's intentions with respect to ICO's proposed sale of its
 oilfield services business.  As you know, ICO, after an extensive competitive
 sales process, has entered into a letter of intent for the sale of the
 oilfield services division for $165 million in cash.  As you also know, ICO
 could be obliged to pay substantial fees under its existing letter of intent
 under certain circumstances if ICO did not proceed with the sale of its
 oilfield services business.  ICO has every intention of continuing to
 negotiate in good faith for the completion of that transaction, which ICO
 believes is in the best interests of ICO and its shareholders.
     Travis Street's proposed letter of intent would entitle Travis Street to
 terminate its obligations under the letter if the definitive agreement between
 ICO and Varco was unsatisfactory to Travis Street "for any reason in TSP's
 sole discretion."  Nowhere in your April 9 letter does Travis Street indicate
 its support for the Varco transaction.  We need to understand whether, as we
 believe to be the case, Travis Street now supports the sale to Varco in
 accordance with the existing letter of intent.
 
     Uncertainty of price.  In the non-binding portions of your draft letter of
 intent, you state a price per share ($2.65).  However, as with prior Travis
 Street expressions of interest, it is difficult to discuss price with you when
 even your stated price appears to be illusory, since it is based on targets or
 predicates you have reason to know may not be attainable.  For example:
 
     -- you state that your price would be subject to reduction if ICO paid any
 fees to Varco -- yet Travis Street has not indicated its support for the Varco
 transaction.
     -- you state that you must be satisfied, in your sole discretion, that
 your expectations as to the earnings of ICO's petrochemicals processing
 division for the calendar year 2001 will be met.  Our concern is that you may
 use this unusual and subjective condition to lower your stated price.
     -- you say the price would be reduced if ICO's professional fees to
 advisers and attorneys, including those to Bear, Stearns & Co. Inc., exceeded
 $3 million.  Yet you have been advised that the fee payable to Bear Stearns,
 as a result of its hard work on the Varco transaction, will be approximately
 $2.25 million.  You know that this is in line with standard industry practice.
     -- your proposal is predicated on ICO officers giving up significant
 rights under their existing contractual severance agreements.
     -- your proposal is subject to your satisfaction, in your sole discretion,
 as to your due diligence investigation.
 
     Conditions.  In addition to "customary conditions," your proposal is
 subject to a number of additional subjective conditions, including the due
 diligence condition just noted and the determination in your sole discretion
 as to the expected earnings of the petrochemicals processing division for
 calendar year 2001.
     As a further condition, you would require ICO to redeem the rights issued
 under its rights agreement -- not just to exempt an acquisition of ICO at a
 specified price per share under a definitive merger agreement.  Such a blanket
 redemption would be irresponsible, since it would make it easier for Travis
 Street or someone else to acquire control of ICO through market purchases,
 without paying an appropriate premium.
 
     Financing.  Your letter provides no evidence as to how Travis Street would
 finance the transaction, other than a statement that Travis Street "currently
 expects" that financing would be provided by Deutsche Bank.  You have never
 provided to ICO or to the investing public any evidence of the ability of
 Travis Street to finance a transaction.
 
     Exposure to payment obligations.  Your proposal would impose a flat no-
 shop obligation of unlimited duration on ICO -- without any customary
 fiduciary out.  That would mean that ICO could not even consider a superior
 transaction -- such as a transaction at a higher price -- proposed by someone
 else.  Moreover, you propose that a $3.5 million fee would be payable by ICO
 to Travis Street if ICO were to talk to any third party -- even an unsolicited
 bidder.
     An additional $3.5 million fee would be payable by ICO to Travis Street
 under your proposal if:
 
     -- ICO terminated the letter of intent after May 31 because ICO and Travis
 Street could not reach a definitive agreement -- even if the reason was that
 Travis Street tried to reduce its price; or
     -- Travis Street failed to complete its acquisition of ICO under a
 definitive agreement by July 31, 2001 for any reason whatsoever, other than a
 material breach by Travis Street of its obligations under the definitive
 agreement.  In other words, even if the acquisition could not be completed
 through no fault of ICO, this additional $3.5 million fee would become
 payable.
 
                                     * * *
 
     We are prepared to meet with you promptly to discuss these concerns, and
 to see if it is possible to reach agreement on a letter of intent that could
 serve as a framework for exploration of the possibility of a transaction
 between our companies.
     In your proposed letter of intent, you suggest postponing the annual
 meeting of shareholders to enable ICO shareholders to vote on the proposed
 acquisition -- presumably on the assumption that a definitive agreement is
 reached.  You also propose that the meeting in any event be postponed until a
 date that is at least ten days following the termination of the letter of
 intent.
     We agree with you that shareholders should have time to consider
 information about your new proposal, and as to whether we are able to reach
 agreement in the near future on a letter of intent.  In order to permit
 discussions to go forward, as outlined above, and to allow this information to
 be disseminated to shareholders, including those who hold their shares through
 brokers or other intermediaries, we are postponing the forthcoming annual
 meeting of shareholders until Wednesday, April 25, 2001.
     We look forward to meeting with you at your earliest convenience.
 
      On behalf of the Board of Directors,
 
      Al O. Pacholder
      Chairman of the Board and
      Chief Financial Officer
 
 
     ICO, Inc. serves the global petrochemical, energy and steel industries by
 providing high technology equipment and services for petrochemical processing
 and oilfield services.
     Statements regarding the proposed sale of oilfield services to Varco, any
 future transaction or agreement with Travis Street Partners, and fees, as well
 as any other statements that are not historical facts in this press release,
 are forward-looking statements under applicable securities laws and involve
 certain risks, uncertainties and assumptions.  They include, but are not
 limited to, risks and uncertainties relating to the closing of the oilfield
 services sale on expected terms, Travis Street and ICO reaching agreement as
 to any transaction or agreement, business cycles and other conditions of the
 oil and gas and petrochemical industries, acquisition risks, international
 risks, operational risks and other factors detailed in ICO's Form 10-K for the
 fiscal year ended September 30, 2000, and its other filings with the
 Securities and Exchange Commission.  Should one or more of these uncertainties
 materialize, or should underlying assumptions prove incorrect, actual results
 may vary materially from those indicated.
 
 

SOURCE ICO, Inc.
    HOUSTON, April 11 /PRNewswire/ -- ICO, Inc. (Nasdaq: ICOC) announced today
 that it has sent the following letter to Travis Street Partners in response to
 its letter of April 9, 2001.  In connection with sending this letter, ICO
 announced that its annual meeting of shareholders has been postponed to
 Wednesday, April 25, 2001.  The meeting will be held at 11:00 a.m. Houston
 time at the Renaissance Hotel, 6 Greenway Plaza East, Houston, Texas 77046.
 
      April 11, 2001
      Travis Street Partners, LLC
      910 Travis Street, Suite 2150
      Houston, Texas  77002
      713-759-2040 (By Fax)
 
      Attention:  Messrs. Timothy Gollin and
                          Christopher N. O'Sullivan
 
      Dear Sirs:
 
     On April 9, 2001, just a week before the April 17 scheduled annual meeting
 of shareholders of ICO, Inc., Travis Street Partners submitted another
 expression of interest with respect to a possible transaction with ICO.
     Despite our questions about your latest proposal -- including concerns
 that the stated price is illusory and the proposal is unfinanced and highly
 conditional -- we are prepared to meet with you promptly to see if an
 acceptable letter of intent contemplating a transaction at an acceptable price
 can be reached that would be in the best interests of ICO and its
 shareholders.
     We believe that to be acceptable, a letter of intent should address the
 following basic issues presented by your April 9 proposal:
 
     -- the letter of intent must not put at risk ICO's proposed sale of its
 oilfield services division to Varco International, Inc. for $165 million in
 cash;
     -- the price must be based on realistic assumptions so as not to be
 illusory;
     -- the proposal must be less conditional;
     -- there must be demonstrable ability to finance an acquisition; and
     -- the proposal must not expose ICO to the possibility of multi-million
 dollar payments to Travis Street.
 
     Risk to Varco transaction.  Your proposed letter of intent is unclear as
 to Travis Street's intentions with respect to ICO's proposed sale of its
 oilfield services business.  As you know, ICO, after an extensive competitive
 sales process, has entered into a letter of intent for the sale of the
 oilfield services division for $165 million in cash.  As you also know, ICO
 could be obliged to pay substantial fees under its existing letter of intent
 under certain circumstances if ICO did not proceed with the sale of its
 oilfield services business.  ICO has every intention of continuing to
 negotiate in good faith for the completion of that transaction, which ICO
 believes is in the best interests of ICO and its shareholders.
     Travis Street's proposed letter of intent would entitle Travis Street to
 terminate its obligations under the letter if the definitive agreement between
 ICO and Varco was unsatisfactory to Travis Street "for any reason in TSP's
 sole discretion."  Nowhere in your April 9 letter does Travis Street indicate
 its support for the Varco transaction.  We need to understand whether, as we
 believe to be the case, Travis Street now supports the sale to Varco in
 accordance with the existing letter of intent.
 
     Uncertainty of price.  In the non-binding portions of your draft letter of
 intent, you state a price per share ($2.65).  However, as with prior Travis
 Street expressions of interest, it is difficult to discuss price with you when
 even your stated price appears to be illusory, since it is based on targets or
 predicates you have reason to know may not be attainable.  For example:
 
     -- you state that your price would be subject to reduction if ICO paid any
 fees to Varco -- yet Travis Street has not indicated its support for the Varco
 transaction.
     -- you state that you must be satisfied, in your sole discretion, that
 your expectations as to the earnings of ICO's petrochemicals processing
 division for the calendar year 2001 will be met.  Our concern is that you may
 use this unusual and subjective condition to lower your stated price.
     -- you say the price would be reduced if ICO's professional fees to
 advisers and attorneys, including those to Bear, Stearns & Co. Inc., exceeded
 $3 million.  Yet you have been advised that the fee payable to Bear Stearns,
 as a result of its hard work on the Varco transaction, will be approximately
 $2.25 million.  You know that this is in line with standard industry practice.
     -- your proposal is predicated on ICO officers giving up significant
 rights under their existing contractual severance agreements.
     -- your proposal is subject to your satisfaction, in your sole discretion,
 as to your due diligence investigation.
 
     Conditions.  In addition to "customary conditions," your proposal is
 subject to a number of additional subjective conditions, including the due
 diligence condition just noted and the determination in your sole discretion
 as to the expected earnings of the petrochemicals processing division for
 calendar year 2001.
     As a further condition, you would require ICO to redeem the rights issued
 under its rights agreement -- not just to exempt an acquisition of ICO at a
 specified price per share under a definitive merger agreement.  Such a blanket
 redemption would be irresponsible, since it would make it easier for Travis
 Street or someone else to acquire control of ICO through market purchases,
 without paying an appropriate premium.
 
     Financing.  Your letter provides no evidence as to how Travis Street would
 finance the transaction, other than a statement that Travis Street "currently
 expects" that financing would be provided by Deutsche Bank.  You have never
 provided to ICO or to the investing public any evidence of the ability of
 Travis Street to finance a transaction.
 
     Exposure to payment obligations.  Your proposal would impose a flat no-
 shop obligation of unlimited duration on ICO -- without any customary
 fiduciary out.  That would mean that ICO could not even consider a superior
 transaction -- such as a transaction at a higher price -- proposed by someone
 else.  Moreover, you propose that a $3.5 million fee would be payable by ICO
 to Travis Street if ICO were to talk to any third party -- even an unsolicited
 bidder.
     An additional $3.5 million fee would be payable by ICO to Travis Street
 under your proposal if:
 
     -- ICO terminated the letter of intent after May 31 because ICO and Travis
 Street could not reach a definitive agreement -- even if the reason was that
 Travis Street tried to reduce its price; or
     -- Travis Street failed to complete its acquisition of ICO under a
 definitive agreement by July 31, 2001 for any reason whatsoever, other than a
 material breach by Travis Street of its obligations under the definitive
 agreement.  In other words, even if the acquisition could not be completed
 through no fault of ICO, this additional $3.5 million fee would become
 payable.
 
                                     * * *
 
     We are prepared to meet with you promptly to discuss these concerns, and
 to see if it is possible to reach agreement on a letter of intent that could
 serve as a framework for exploration of the possibility of a transaction
 between our companies.
     In your proposed letter of intent, you suggest postponing the annual
 meeting of shareholders to enable ICO shareholders to vote on the proposed
 acquisition -- presumably on the assumption that a definitive agreement is
 reached.  You also propose that the meeting in any event be postponed until a
 date that is at least ten days following the termination of the letter of
 intent.
     We agree with you that shareholders should have time to consider
 information about your new proposal, and as to whether we are able to reach
 agreement in the near future on a letter of intent.  In order to permit
 discussions to go forward, as outlined above, and to allow this information to
 be disseminated to shareholders, including those who hold their shares through
 brokers or other intermediaries, we are postponing the forthcoming annual
 meeting of shareholders until Wednesday, April 25, 2001.
     We look forward to meeting with you at your earliest convenience.
 
      On behalf of the Board of Directors,
 
      Al O. Pacholder
      Chairman of the Board and
      Chief Financial Officer
 
 
     ICO, Inc. serves the global petrochemical, energy and steel industries by
 providing high technology equipment and services for petrochemical processing
 and oilfield services.
     Statements regarding the proposed sale of oilfield services to Varco, any
 future transaction or agreement with Travis Street Partners, and fees, as well
 as any other statements that are not historical facts in this press release,
 are forward-looking statements under applicable securities laws and involve
 certain risks, uncertainties and assumptions.  They include, but are not
 limited to, risks and uncertainties relating to the closing of the oilfield
 services sale on expected terms, Travis Street and ICO reaching agreement as
 to any transaction or agreement, business cycles and other conditions of the
 oil and gas and petrochemical industries, acquisition risks, international
 risks, operational risks and other factors detailed in ICO's Form 10-K for the
 fiscal year ended September 30, 2000, and its other filings with the
 Securities and Exchange Commission.  Should one or more of these uncertainties
 materialize, or should underlying assumptions prove incorrect, actual results
 may vary materially from those indicated.
 
 SOURCE  ICO, Inc.