SCHEDULE 14A INFORMATION
Securities Exchange Act of 1934
Filed by the Registrant [_]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Definitive Proxy Statement
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[X] Soliciting Materials Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
Columbus McKinnon Corporation
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(Exact Name as Specified In its Charter)
The Columbus McKinnon Shareholders Committee
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(Name of Person(s) Filing Proxy Statement)
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Rule 14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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to Exchange Act Rule 0-11: (1)
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was determined.
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[_]Check box if any part of the fee is offset as provided by Exchange Act
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THE COLUMBUS MCKINNON
SHAREHOLDERS COMMITTEE
c/o Metropolitan Capital Advisors, Inc.
660 Madison Avenue
New York, NY 10021
May 24, 1999
Dear Fellow Columbus McKinnon Shareholder:
Nearly three weeks ago, several long-time, significant shareholders who own
approximately 8.5% of Columbus McKinnon, formed the Columbus McKinnon
Shareholders Committee. Our purpose in nominating an alternate slate of
directors is to pursue a value maximization strategy for Columbus shareholders.
Our proposal to the Company, and the history of management inaction that led to
it, are described in a Form l3D filed with the Securities and Exchange
Commission which we amended today.
We want to take this opportunity to update you on events that only reinforce the
need for shareholders to act.
o Since our filing, management has neither publicly responded to our
proposal, nor indicated any intent to develop a new strategy of their
own. Despite the market's clear support for the sale of Columbus,
management has refused to answer shareholder questions about our
proposal to adopt a value maximization strategy. Even in its recent
press release reporting results for fiscal year 1999, and a related
conference call for investors, management only offered its reasons for
underperforming analyst expectations, and pointed to better times
ahead. What management did not describe was a new strategy to achieve
better returns ahead.
o Management claims that it has already succeeded in building shareholder
value. We disagree. In over three years since Columbus first became a
public company to the day before our announcement, the value of
Columbus' shares appreciated less than $6. In just the few days
following our announcement, Columbus' shares traded as much as $8
HIGHER, and even after the Company announced earnings below
expectations, shares remain nearly $6 HIGHER. Management's continued
refusal to acknowledge that their strategy has not succeeded only
indicates you can expect no new initiatives from the incumbent Board,
and no recognition that shareholder value is the top priority, not an
afterthought.
o Let us give another example of management's silence speaking volumes
about their view of outside shareholders. Even as they issued their
press release and held a conference call, management and the incumbent
Board amended the Company's by-laws to make it more difficult for
shareholders to nominate alternative directors, or propose business for
shareholder action. Why did management choose not to disclose these
defensive tactics in their press release, or in their conference call-
Did they think these steps were not important? Would they be able to
explain why the Company's long- standing by-laws suddenly were deemed
inadequate? We suggest that this eleventh-hour attempt to change the
election process tells you what management thinks of allowing
shareholders to freely choose a value maximization strategy: it is less
important than the incumbent Board retaining their positions.
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o Management's disregard of shareholder interests and views is not new.
In 1998, we advocated that management use some of the Company's
remaining borrowing capacity to implement a share buyback. The
Company's poor market performance (with the stock declining below its
IPO level) actually presented Columbus with an excellent opportunity to
enhance value for all shareholders by buying back and retiring its
substantially undervalued shares. Management did decide to pursue a
share repurchase strategy, but not as a value-enhancing tool for public
shareholders. Instead, the Company purchased stock exclusively for the
ESOP, thereby stockpiling years of shares and votes in the ESOP, but
not increasing the ownership of public shareholders. Did this do the
most for shareholders? No. Did this do more to entrench management and
the incumbent Board? What do you think?
One final point. Management has continually pointed to the 1998 strike at
General Motors as the prime driver for Company earnings failing to meet investor
expectations. However, an agreement settling that strike was reached in July
1998 and UAW workers began to return to their jobs in early August. In fact, not
only has stability returned to the economy, but GDP growth and industrial
activity rebounded well beyond pre-strike levels in the quarters following the
strike. The strike is not the cause for management's failure to create
shareholder value. Management has had years to implement its strategy, and have
it bear fruit. It has not succeeded. It is time to change the strategy and the
Board.
The Columbus McKinnon Shareholder Committee is committed to providing you with
an alternative to the current Board, and in so doing, allow you to choose a
slate dedicated to evaluating all alternatives for immediate maximization of
your share value. We welcome your input either directly at (212) 829-9507, or by
your contacting our representative, MacKenzie Partners, Inc. at (800) 322-2885.
We also strongly encourage you to tell management what you think of their
attempts to impede action by independent shareholders, and to express your
support for our strategy to maximize value.
Sincerely,
Jeffrey E. Schwarz
On Behalf of the Columbus McKinnon
Shareholders Committee
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The Shareholders Committee is composed of Metropolitan Capital
Advisors, Inc., which beneficially owns 366,800 shares of Columbus McKinnon
common stock; Metropolitan Capital III, Inc., which beneficially owns 240,600
shares; Lakeway Capital Partners, LLC, which beneficially owns 120,450 shares;
Scoggin, Inc., which beneficially owns 322,500 shares; and Scoggin, LLC, which
beneficially owns 153,200 shares. The Shareholders Committee's collective
beneficial ownership, including shares owned by certain affiliates of the
Shareholders Committee members, of approximately 1,245,545 shares, represents
about 8.49% of Columbus McKinnon's outstanding common stock.
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ADDITIONAL PARTICIPANT INFORMATION
In addition to the participants named above, the following individuals
and entities also may be deemed to be participants in the Committee's proxy
solicitation: Bedford Falls Investors, L.P., of which Metropolitan Capital
Advisors, L.P. is the sole general partner, of which Metropolitan Capital
Advisors, Inc. is the sole general partner; Metropolitan Capital Advisors
International Limited, of which Metropolitan Capital Partners III, L.P. is the
investment advisor, of which Metropolitan Capital III, Inc. is the sole general
partner; Jeffrey E. Schwarz and Karen Finerman, as shareholders, directors and
executive officers of Metropolitan Capital Advisors, Inc. and Metropolitan
Capital III, Inc.; Yaupon Partners, L.P. and Yaupon Partners II, L.P., of which
Lakeway Capital Partners, LLC is the sole general partner; Robert F. Lietzow,
Jr., as managing member of Lakeway Capital Partners, LLC; Scoggin Capital
Management, L.P., of which Scoggin, Inc. is the sole general partner; Scoggin
International Fund, Ltd., of which Scoggin, LLC is the investment advisor; and
Curtis Schenker and Craig Effron, as shareholders, directors and executive
officers of Scoggin, Inc. and managing members of Scoggin, LLC.
A further description of the interests held by each of the above-named
participants is contained in the Schedule 13D filed by the Shareholders
Committee and each of its members on May 6, 1999, as amended by Amendment No. 1
to Schedule 13D filed with the Commission on May 24, 1999.
