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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9/A
(AMENDMENT NO. 3)
SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO
SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
MONEYGRAM PAYMENT SYSTEMS, INC.
(NAME OF SUBJECT COMPANY)
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MONEYGRAM PAYMENT SYSTEMS, INC.
(NAME OF PERSON FILING STATEMENT)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(TITLE OF CLASSES OF SECURITIES)
608910105
(CUSIP NUMBER OF CLASS OF SECURITIES)
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MONEYGRAM PAYMENT SYSTEMS, INC.
7401 WEST MANSFIELD AVENUE
LAKEWOOD, COLORADO 80235
(303) 716-6800
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF
THE PERSON FILING STATEMENT)
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WITH A COPY TO:
PETER D. LYONS, ESQ.
SHEARMAN & STERLING
599 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022
212-848-4000
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This Amendment No. 3 amends and supplements the Solicitation/Recommendation
Statement on Schedule 14D-9, dated April 10, 1998, as amended (the "Schedule
14D-9"), relating to the offer by Pine Valley Acquisition Corporation, a
Delaware corporation (the "Purchaser") and a wholly owned subsidiary of Viad
Corp (the "Parent"), to purchase all of the issued and outstanding shares of
common stock, par value $.01 per share (the "Common Stock") of MoneyGram Payment
Systems, Inc. (the "Company") at a price of $17.00 per share, net to the seller
in cash.
Capitalized terms used herein without definition shall have the meanings
ascribed to such terms in the aforementioned Schedule 14D-9.
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ITEM 2. TENDER OFFER OF THE BIDDER
Item 2 is hereby amended and supplemented to add the following:
On May 11, 1998, Parent issued a press release announcing an increase in
the Offer price from $17.00 to $17.35 per Share, net to the seller in cash, and
that the Offer has been extended to 6:00 p.m., New York City time, on Friday May
22, 1998 (as so revised, the "Offer"). A copy of the press release is attached
as Exhibit 17 to this Amendment No. 3 and is incorporated herein by reference in
its entirety.
ITEM 4. THE SOLICITATION OR RECOMMENDATION
Item 4 is hereby amended and supplemented to add the following:
(A) RECOMMENDATION OF THE BOARD OF DIRECTORS
At a special meeting held on May 12, 1998, the Board unanimously voted to
approve the Offer and determined that the Offer is fair to and in the best
interests of the stockholders of the Company.
THE BOARD UNANIMOUSLY RECOMMENDS ACCEPTANCE OF THE OFFER BY THE
STOCKHOLDERS OF THE COMPANY.
A press release issued by the Company on May 13, 1998 communicates such
approval and recommendation and is filed as Exhibit 18 to this Amendment No. 3
and is incorporated herein by reference in its entirety.
(B) BACKGROUND OF THE MERGER AND THE OFFER; REASONS FOR THE RECOMMENDATION
Background of the Merger and the Offer. On May 11, 1998, Purchaser amended
the Offer by filing an amendment ("Amendment No. 4") to the Tender Offer
Statement on Schedule 14D-1 which was originally filed on April 10, 1998.
Amendment No. 4 reflects the increase in the Offer price from $17.00 to $17.35
and the extension of the Offer to 6:00 p.m., New York City time, on Friday May
22, 1998. The amendment was publicly announced through a press release issued by
the Parent on May 12, 1998. That same day, Parent mailed a supplement to the
Offer to Purchase to all shareholders of record on the Record Date.
Also on May 12, 1998, the Board held a special meeting to review, with
advice and assistance of the Company's financial and legal advisors, the Offer.
All members of the Board participated either in person or by telephone. At such
meeting, Morgan Stanley provided both an oral and a written opinion that, as of
such date and based upon and subject to the matters discussed with the Board and
contained in such written opinion, the cash consideration to be received by the
holders of the Shares in the Offer and the Merger was fair from a financial
point of view to such holders. Shearman & Sterling reviewed the Board's
fiduciary duties to shareholders and the principal terms of the Offer and the
Merger. The Board then unanimously determined that the Offer is fair to and in
the Best interests of the Company's stockholders, and approved the Offer and
recommended that the Company's stockholders accept the Offer and tender their
Shares pursuant to the Offer.
On May 13, 1998, the Company issued a press release communicating such
approval and recommendation which, as mentioned above, is filed as Exhibit 17 to
this Amendment No. 3.
Reasons for the Board's Recommendation. In addition to the considerations
described in the Schedule 14D-9, in recommending that the shareholders accept
the Offer as revised and tender their shares pursuant to the Offer, the Board
considered a number of factors, including, but not limited to the following:
(ix) the fact that the $17.35 per Share to be paid in the Offer and as
consideration in the Merger represents a premium of approximately 11.49% over
the $15.5625 closing sale price for the Shares on the NYSE on April 3, 1998, the
last trading day prior to the public announcement of the execution of the Merger
Agreement, a premium of approximately 37.43% over the $12.625 closing sale price
for the Shares on the NYSE one month prior to April 6, 1998 and a premium of
approximately 27.89% over the average closing price for the Shares on the NYSE
in the 12 months prior to April 6, 1998; and
(x) the analysis conducted by Morgan Stanley, the oral and written
presentations by Morgan Stanley at the May 12, 1998 Board meeting and the
written opinion of Morgan Stanley delivered to the Board at such meeting, that,
as of such date, and subject to the assumptions made, matters considered and
limitations set forth in such opinion, the $17.35 consideration to be received
by the holders of Common Stock in the Offer and the Merger is fair from a
financial point of view to such stockholders. A copy of the Morgan Stanley
Opinion is attached as Exhibit 19 to this Amendment No. 3, and is incorporated
herein by reference in its entirety.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
MoneyGram Payment Systems, Inc.
By: /s/ ANDREA M. KENYON
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Name: Andrea M. Kenyon
Title: General Counsel and Secretary
Dated: May 13, 1998
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO.
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<C> <S>
Exhibit 1* Agreement and Plan of Merger dated as of April 4, 1998 among
the Parent, the Purchaser and the Company.
Exhibit 2* Letter dated April 10, 1998, from the Chairman of the Board
and Chief Executive Officer to the stockholders of the
Company.
Exhibit 3* Joint Press Release issued by Parent and the Company dated
April 6, 1998.
Exhibit 4* Joint Press Release issued by Parent and the Company dated
April 10, 1998.
Exhibit 5* Opinion of Morgan Stanley dated April 4, 1998 (included as
Annex II to this Statement).*
Exhibit 6* Confidentiality Agreement between Parent and the Company
dated February 11, 1998.
Exhibit 7* 1996 Stock Option Plan of the Company (incorporated herein
by reference to Exhibit 10.7 of the 1997 10-K).
Exhibit 8* 1996 Broad-Based Stock Option Plan (incorporated herein by
reference to Exhibit 10.8 of the 1997 10-K).
Exhibit 9* Executive Retention Plan, dated May 15, 1997, as amended to
date (incorporated by reference to Exhibit 10 of the
Company's Quarterly Report on Form 10Q for the quarter ended
June 30, 1997).
Exhibit 10* Complaint filed in Taam v. Calvano et. al., Court of
Chancery of the State of Delaware in and for New Castle
County, April 9, 1998.
Exhibit 11* Complaint filed in Harbor v. Calvano et. al., Court of
Chancery of the State of Delaware in and for New Castle
County, April 9, 1998.
Exhibit 12* Amended Class Action Complaint filed in Taam Associates Inc.
v. Calvano et. al., C.A. No. 16305-NC and Harbor Finance
Partners v. Calvano et. al., C.A. No. 16306-NC, Court of
Chancery of the State of Delaware and for New Castle County,
April 14, 1998.
Exhibit 13* Motion for Preliminary Injunction filed in Taam Associates
Inc. v. Calvano et. al., C.A. No. 16305-NC and Harbor
Finance Partners v. Calvano et. al., C.A. No. 16306-NC,
Court of Chancery of the State of Delaware and for New
Castle County, April 14, 1998.
Exhibit 14* Motion for Expedited Proceedings filed in Taam Associates
Inc. v. Calvano et. al., C.A. No. 16305-NC and Harbor
Finance Partners v. Calvano et. al., C.A. No. 16306-NC,
Court of Chancery of the State of Delaware and for New
Castle County, April 14, 1998.
Exhibit 15* Rights Agreement dated as of May 10, 1998, between the
Company and BankBoston, N.A., as Rights Agent, including a
Form of Rights Certificate as Exhibit A and a Summary of
Rights as Exhibit B (incorporated herein by reference to
Exhibit 4 of the Registration Statement on Form 8-A filed
with the Commission on May 11, 1998).
Exhibit 16* Press Release issued by the Company dated May 11, 1998.
Exhibit 17 Press Release issued by Parent dated May 12, 1998.
Exhibit 18 Press Release issued by the Company dated May 13, 1998.
Exhibit 19 Opinion of Morgan Stanley dated May 12, 1998.
</TABLE>
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* Previously filed.
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EXHIBIT 17
[VIAD CORP LETTERHEAD]
NEWS
FOR IMMEDIATE RELEASE
REVISED NEWS RELEASE
CONTACT: William Peltier
(602) 207-5812
[email protected]
PRESS RELEASE
VIAD REVISES MONEYGRAM
CASH TENDER OFFER TO $17.35 PER SHARE
EXTENDS TENDER OFFER TO MAY 22
PHOENIX, Ariz., May 11, 1998 -- Viad Corp (NYSE:VVI) today announced a revised
offer to acquire MoneyGram Payment Systems, Inc. (NYSE:MNE). Viad is now
offering to purchase all outstanding MoneyGram shares for cash at $17.35 per
share. The offer, which commenced on April 10, 1998, and was scheduled to
expire at 6:00 p.m., New York City time on May 8, has been extended to 6:00
p.m., New York City time on May 22, 1998.
Viad will not further increase its offer price above $17.35. If Viad has
not received a majority of MoneyGram's shares by the extended expiration date,
the offer will be terminated. MoneyGram is intended to be part of Viad's
Travelers Express Company in Minneapolis, the nation's largest money order
company. If a majority of the shares are tendered, Viad is prepared to promptly
close this transaction based on the regulatory approvals it has received.
At the close of business Friday, May 8, there were 4,976,441 shares
tendered, representing approximately 30.1 percent.
Viad Corp is a $2.5 billion S&P MidCap 400 services company with interests
in payment services, airline catering, convention services and travel and
leisure. Headquarters are in Phoenix, Ariz.
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EXHIBIT 17
[MONEYGRAM LETTERHEAD]
Contact: Warren Bechtel
(201) 291-3672
MONEYGRAM BOARD RECOMMENDS
VIAD REVISED TENDER OFFER OF $17.35
Saddle Brook, New Jersey, May 13 -- MoneyGram Payment Systems, Inc.,
(NYSE:MNE) announced today that its Board of Directors has determined that Viad
Corp's revised tender offer, which increased the offer price to $17.35 per
share, is fair to and in the best interests of the Company and its shareholders.
The Board unanimously recommends that all MoneyGram shareholders accept the Viad
offer and tender their shares.
The Board's recommendation is based on a number of factors, including an
opinion of Morgan Stanley & Co. Incorporated, the Company's financial advisors,
that the all-cash consideration of $17.35 per share is a fair offer to the
Company's stockholders. The Board also noted that it has not received any other
inquiries or offers from any other parties interested in acquiring the Company
since the execution of its Merger Agreement with Viad.
James F. Calvano, MoneyGram's Chairman and Chief Executive Officer, said:
"The combination of MoneyGram with Viad's Travelers Express Company presents an
excellent opportunity to accelerate the growth of our business and also realize
fair value for MoneyGram shareholders. Given the increased consideration in
Viad's revised proposal, their tender offer is, in our view, now even more
compelling."
The Viad offer had been scheduled to expire on Friday, May 8. At that time,
4,976,441 shares, representing approximately 30.1 percent of the outstanding
shares, had been tendered. The revised offer is scheduled to expire at 6:00 p.m.
EDT on May 22, 1998.
Viad has announced that it will not further increase its offer price above
$17.35, and that if a majority of MoneyGram's shares have not been tendered by
the extended expiration date it will terminate the offer. Viad has also stated
that if a majority of the shares are tendered it is prepared to close the
transaction based on the regulatory approvals it has received.
MoneyGram Payment Systems, Inc. is a leading non-bank provider of consumer
money transfer and other financial services. Through the MoneyGram(R) network of
more than 22,000 convenient agent locations, customers can wire cash in minutes
to more than 100 countries throughout the world. MoneyGram Express Payment(SM)
service enables credit card issuers, mortgage servicers, finance companies,
collections companies and others to collect good-funds payments from delinquent
debtors within hours. The Company was organized in January, 1996 and completed
the initial public offering of its common shares on December 11, 1996.
Viad Corp. is a $2.5 billion S&P MidCap 400 services company with interests
in payment services, airline catering, convention services and travel and
leisure. It is headquartered in Phoenix, Arizona.
# # #
5/13/98
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EXHIBIT 19
[MORGAN STANLEY LETTERHEAD]
May 12, 1998
Board of Directors
MoneyGram Payment Systems, Inc.
Park 80 West Plaza I
Saddle Brook, NJ 07663
Members of the Board:
We understand that MoneyGram Payment Systems, Inc. ("MoneyGram" or the
"Company"), Viad Corp. ("Viad") and Pine Valley Acquisition Corporation, a
wholly owned subsidiary of Viad, ("Acquisition Sub") have entered into an
Agreement and Plan of Merger dated April 4, 1998 (the "Merger Agreement"), which
provides, among other things, for (i) a tender offer by Acquisition Sub (the
"Tender Offer") for all outstanding shares of common stock, par value $.01 per
share (the "Company Common Stock") of the Company for $17.35 per share net to
the seller in cash and (ii) the subsequent merger (the "Merger") of Acquisition
Sub with and into the Company. Pursuant to the Merger, the Company will become a
wholly owned subsidiary of Viad, and each outstanding share of Company Common
Stock, other than shares held in treasury or held by Viad or any affiliate of
Viad or as to which dissenters' rights have been perfected, will be converted
into the right to receive $17.35 per share in cash. The terms and conditions of
the Tender Offer and the Merger are more fully set forth in the Merger
Agreement.
You have asked for our opinion as to whether the consideration to be
received by the holders of shares of Company Common Stock pursuant to the Merger
Agreement is fair from a financial point of view to such holders.
For purposes of the opinion set forth herein, we have:
(i) reviewed certain publicly available financial statements and other
information of MoneyGram;
(ii) reviewed certain internal financial statements and other
financial and operating data concerning MoneyGram prepared by the
management of MoneyGram;
(iii) analyzed certain financial projections prepared by the
management of MoneyGram;
(iv) discussed the past and current operations and financial condition
and the prospects of MoneyGram with senior executives of MoneyGram;
(v) reviewed the pro forma impact of the Merger on Viad's earnings per
share;
(vi) reviewed the reported prices and trading activity of the Company
Common Stock;
(vii) compared the financial performance of the Company and the prices
and trading activity of the Company Common Stock with that of certain other
comparable publicly-traded companies and their securities;
(viii) reviewed the financial terms, to the extent publicly available,
of certain comparable acquisition transactions;
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(ix) participated in discussions and negotiations among
representatives of MoneyGram and Viad and their financial and legal
advisors;
(x) reviewed the draft Merger Agreement and certain related documents;
and
(xi) performed such other analyses and considered such other factors
as we have deemed appropriate.
We have assumed and relied upon without independent verification the
accuracy and completeness of the information reviewed by us for the purposes of
this opinion. With respect to the financial projections, we have assumed that
they have been reasonably prepared on bases reflecting the best currently
available estimates and judgments of the future financial performance of the
Company. We have not made any independent valuation or appraisal of the assets
or liabilities of the Company, nor have we been furnished with any such
appraisals. Our opinion is necessarily based on economic, market and other
conditions as in effect on, and the information made available to us as of, the
date hereof.
We have acted as financial advisor to the Board of Directors of MoneyGram
in connection with this transaction and will receive a fee for our services. In
the past, Morgan Stanley & Co. Incorporated and its affiliates have provided
financial advisory and financing services for MoneyGram and have received fees
for the rendering of these services.
It is understood that this letter is for the information of the Board of
Directors MoneyGram and may not be used for any other purpose without our prior
written consent, except that this opinion may be included in its entirety in any
filing made by the Company in respect of the transaction with the Securities and
Exchange Commission.
Based upon and subject to the foregoing, we are of the opinion on the date
hereof that the consideration to be received by holders of shares of the Company
Common Stock pursuant to the Merger Agreement is fair from a financial point of
view to such holders.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
By: /s/ SCOTT R. BRAKEBILL
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Scott R. Brakebill
Managing Director
