<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-9/A
(AMENDMENT NO. 1)
SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO
SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
MONEYGRAM PAYMENT SYSTEMS, INC.
(NAME OF SUBJECT COMPANY)
------------------------
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)
------------------------
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)
------------------------
WITH A COPY TO:
PETER D. LYONS, ESQ.
SHEARMAN & STERLING
599 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022
212-848-4000
================================================================================
<PAGE> 2
This Amendment No. 1 amends and supplements the Solicitation/Recommendation
Statement on Schedule 14D-9, dated April 10, 1998 (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 Company's 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.
2
<PAGE> 3
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED
Item 8 is hereby amended and supplemented to add the following:
CERTAIN LITIGATION
On April 15, 1998, Taam Associates, Inc. and Harbor Finance Partners
(collectively, the "Plaintiffs") filed and served an Amended Class Action
Complaint for Civil Actions Nos. 16305-NC and 16306-NC restating the allegations
in the original Complaints, filed on April 6, 1998, and alleging, among other
things, that the omission of certain information relating to the Company's first
quarter 1998 earnings and financial information relied upon by Morgan Stanley in
rendering its fairness opinion violated the directors' fiduciary duties to the
Company's stockholders.
In addition, on April 15, 1998, the Plaintiffs filed a Motion for a
Preliminary Injunction seeking an order enjoining the defendants from proceeding
with and consummation or otherwise closing the Offer, and requiring the
Defendants to supplement the materials furnished to the Company's stockholders
by disclosing all allegedly material facts and correcting the alleged omissions
described in the Amended Class Action Complaint. On that same day, the
Plaintiffs also filed a Motion for Expedited Proceedings requesting that the
Court hear the Motion for a Preliminary Injunction prior to May 8, 1998, the
consummation date for the Offer.
Attached hereto as Exhibits 12, 13 and 14, respectively, and incorporated
herein by reference, are copies of the Amended Class Action Complaint, the
Motion for Preliminary Injunction and the Motion for Expedited Proceedings.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
Item 9 is hereby amended and supplemented to add the following:
<TABLE>
<C> <S>
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.
</TABLE>
3
<PAGE> 4
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
------------------------------------
Name: Andrea M. Kenyon
Title: General Counsel and Secretary
Dated: April 17, 1998
4
<PAGE> 1
Exhibit 12
IN THE COURT CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- -----------------------------------------------
TAAM ASSOCIATES, INC.
Plaintiff,
v.
JAMES F. CALVANO, ROBBIN L. AYERS, C.A. No. 16305-NC
JOHN FOWLER, BRIAN J. FITZPATRICK,
WILLIAM D. GUTH, SANFORD MILLER,
MONEYGRAM PAYMENT SERVICES, INC.,
and VIAD CORP.,
Defendants.
- ------------------------------------------------
HARBOR FINANCE PARTNERS,
Individually and on behalf
of all others similarly situated, C.A. No. 16306-NC
Plaintiff
- against -
JAMES F. CALVANO, JOHN M. FOWLER,
ROBBIN L. AYERS, WILLIAM D. GUTH,
BRIAN J. FITZPATRICK, SANFORD
MILLER, and MONEYGRAM PAYMENT
SYSTEMS, INC.,
Defendants.
- -------------------------------------------------
AMENDED CLASS ACTION COMPLAINT
Plaintiffs, by their attorneys, allege upon personal knowledge as to
their own acts and upon information and belief as to all other matters, as
follows:
NATURE OF THE ACTION
1. Plaintiffs bring this action individually and as a class action on
behalf of all persons, other than defendants, who own the securities of
MoneyGram Payment Systems, Inc.
<PAGE> 2
("MoneyGram" or the "Company"), who are similarly situated, for injunctive and
other appropriate relief. Plaintiffs seek to enjoin the consummation of a tender
offer announced by Viad Corporation and its subsidiary, Pine Valley Acquisition
Corporation ("PVAC"), (collectively "Viad") on April 6, 1998, pursuant to which
Viad proposes to pay $17.00 for all of the outstanding MoneyGram Common Stock.
2. The proposed transaction and the acts of the MoneyGram director
defendants, as more particularly alleged herein, constitute a breach of
defendants' fiduciary duties to plaintiffs and the class.
PARTIES
3. Plaintiffs each have been a continuous owner of shares of MoneyGram
common stock at all relevant times described herein.
4. Defendant MoneyGram is a corporation duly organized and existing
under the laws of the State of Delaware, with its principal offices located at
7401 West Mansfield Avenue, Lakewood, Colorado. As of November 1, 1997, the
Company had approximately 16,625,000 shares of common stock outstanding.
MoneyGram's principal business is the electronic transfer of money which allows
its customers to send money worldwide quickly.
5. Defendant Viad Corporation is a Delaware Corporation with its
principal place of business in Phoenix, Arizona. Viad is principally involved in
preparing meals for airlines, operating restaurants, selling money orders and
clearing drafts for credit unions and others.
6. Defendant Pine Valley Acquisition Corporation is a Delaware
corporation and a wholly-owned subsidiary of Viad Corporation.
2
<PAGE> 3
7. Defendant James F. Calvano ("Calvano"), at all times material
hereto, has been the Chief Executive Officer and Chairman of the Board of
MoneyGram.
8. Defendant John M. Fowler ("Fowler"), at all times material hereto
has been an Executive Vice President, Chief Financial Officer, and a Director of
MoneyGram.
9. Defendant Robbin L. Ayers ("Ayers"), at all times material hereto
has been an Executive Vice President, General Manager, and a Director of
MoneyGram.
10. William D. Guth, Brian J. Fitzpatrick, and Sanford Miller are
Directors of MoneyGram.
11. The individual defendants, by reason of their corporate
directorship and/or executive positions, are fiduciaries to and for the
Company's shareholders, which fiduciary relationship requires them to exercise
their best judgment, and to act in a prudent manner and in the best interests of
the Company's shareholders.
CLASS ACTION ALLEGATIONS
12. Plaintiffs bring this action individually on their own behalf and
as a class action, on behalf of all stockholders of the Company (except the
defendants herein and any person, firm, trust, corporation, or other entity
related to or affiliated with any of the defendants) and their successors in
interest, who are or will be threatened with injury arising from defendants'
actions as more fully described herein (the "Class").
13. This action is properly maintainable as a class action because:
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<PAGE> 4
(a) The Class is so numerous that joinder of all members is
impracticable. There are hundreds of shareholders who hold the approximately
16,625,000 shares of MoneyGram common stock outstanding;
(b) There exist questions of law and fact common to all
members of the Class, including, without limitation the following:
(i) whether the proposed transaction is grossly
unfair to the stockholders of MoneyGram;
(ii) whether defendants wrongfully failed to maximize
shareholder value through a meaningful auction or
market check process;
(iii) whether defendants breached the fiduciary and
other common law duties owed by them to plaintiffs
and the members of the Class; and
(iv) whether plaintiffs and the other members of the
Class would be irreparably damaged were the
transaction complained of herein consummated;
(c) Plaintiffs are members of the Class and are committed to
prosecuting this action. Plaintiffs have retained competent counsel experienced
in litigation of this nature. The claims of the plaintiffs are typical of the
claims of other members of the Class, and plaintiffs have the same interests as
the other members of the Class. Plaintiffs do not have interests antagonistic to
or in conflict with those he seeks to represent. Plaintiffs are adequate
representatives of the Class; and
4
<PAGE> 5
(d) The prosecution of separate actions by individual members
of the Class would create the risk of inconsistent or varying adjudications with
respect to individual members of the Class which would establish incompatible
standards of conduct for defendants, or adjudications with respect to individual
members of the Class which would as a practical matter to dispositive of the
interests of the other members not parties to the adjudications or substantially
impair or impede their ability to protect their interests.
(e) The defendants have acted, or refused to act, on grounds
generally applicable to, and causing injury to, the Class and, therefore,
preliminary and final injunctive relief on behalf of the Class as a whole is
appropriate.
SUBSTANTIVE ALLEGATIONS
14. On January 28, 1998, MoneyGram announced earnings for the fourth
quarter ending December 31, 1997 that were substantially below analysts'
estimates. The Company noted that the fourth-quarter results included charges
for impairment reserves on certain under-performing agent contracts, entered
into prior to 1996, with guaranteed minimum commission payments. Charges were
also recorded for non-recurring expenses of converting MoneyGram operations,
which had been conducted under licenses held by First Data Corporation in
various state jurisdictions, to licenses issued directly to MoneyGram.
Additionally, the Company also took reserves for miscellaneous asset write downs
and other items. As a result of this temporary earnings downturn, the price of
MoneyGram stock declined and does not reflect the intrinsic value of the
Company.
5
<PAGE> 6
15. On April 6, 1998, the Bloomberg news wire reported that MoneyGram
and Viad had signed a definitive agreement whereby Viad would acquire MoneyGram
in a transaction valued at $287 million.
16. Pursuant to the proposed transaction, PVAC will commence a tender
offer for all of MoneyGram's stock. Stockholders of MoneyGram will receive
$17.00 per share in cash for each share of MoneyGram stock. The tender offer
will be followed by a merger of PVAC into MoneyGram and MoneyGram will then
become a wholly-owned subsidiary of Viad.
17. Defendants have attempted to portray the Viad offer as fair to the
Company's shareholders by claiming that the $17 per share offer represents 22.5
times analysts' projected earnings for 1998. However, this analysis is flawed
and significantly undervalues the Company because, under Generally Accepted
Accounting Principles ("GMP"), the Company's projected earnings do not reflect
the value of the Company's $58 million deferred tax asset. Additionally,
analysts' projections of the Company's earnings for 1998 are far from uniform.
For example, James Marks of Credit Suisse First Boston estimates that the
Company will achieve earnings per share of $1.31, which would reduce the price
to earnings multiple on Viad's offer to 13.
18. The Viad offer constitutes a premium of 9.2% over the unaffected
trading price of MoneyGram stock on April 3, 1998, which is well-below the
customary premium offered to shareholders in similar change-of-control
transactions.
19. The individual defendants prepared and on April 13, 1998, mailed to
MoneyGram's shareholders a Solicitation\Recommendation Statement on Form 14D-9
filed with
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<PAGE> 7
the Securities and Exchange Commission ("SEC") purportedly describing, inter
alia, the merger transaction, the history of the negotiations between the
companies, the opinion of MoneyGram's financial advisor and certain other
purportedly relevant information.
20. The 14D-9 fails to disclose material information necessary for
MoneyGram's shareholders to make an informed decision. The 14D-9 does not
provide a basis upon which shareholders can independently determine the value of
the Company's stock and whether to tender their shares to Viad.
21. The 14D-1 tender offer statement fails to include the Company's
most recent operating results for the first quarter of 1998 ending March 31,
1998. MoneyGram shareholders are being asked to make an irrevocable decision
regarding their investment in MoneyGram on the basis of incomplete information.
22. Annexed to the 14D-9 is a copy of the fairness opinion issued by
Morgan Stanley & Co. ("Morgan Stanley"). The fairness opinion lists various
documents relied upon by Morgan Stanley, including "certain internal financial
statements and other financial and operating data concerning MoneyGram prepared
by the management of MoneyGram." None of this financial information is provided
to shareholders in the 14D-9 or accounted for in the fairness opinion.
23. Further, neither the 14D-9 nor the fairness opinion contains a
discussion of the results of various financial analyses presumably performed by
Morgan Stanley in determining the value of MoneyGram. In fact, there is no
disclosure as what analyses were even performed other than a comparison to
comparable companies (of which there is only one), a
7
<PAGE> 8
historical analysis of the Company's stock price, and a pro-forma analysis of a
combined Viad/MoneyGram company (which does not even address the independent
valuation of MoneyGram). There was no disclosure whether standard analyses such
as discounted cash flow or comparable earnings analysis were performed or what
the results of such analyses showed. Further, there is no dissuasion of what
analyses Morgan Stanley deemed important and what other factors Morgan Stanley
considered "appropriate" to evaluate.
24. Accordingly, MoneyGram shareholders cannot determine from these
materials the fair value of their shares, whether there was any deviation from
standardized investment banking practices, and why the proposed transaction is
purportedly fair.
25. By entering into the merger agreement with Viad, the MoneyGram
board of directors has initiated a process to sell the Company which imposes
heightened fiduciary responsibilities and requires enhanced scrutiny by the
Court.
26. The defendants' fiduciary obligations a under such circumstance
require them to:
(a) undertake an appropriate valuation of MoneyGram's net
worth as a merger/acquisition candidate; and
(b) engage in a meaningful auction with third parties in an
attempt to obtain the best value for MoneyGram's public shareholders.
8
<PAGE> 9
27. Defendants have failed to properly value MoneyGram as a
merger/acquisition candidate.
28. On April 6, 1998, Gotham Partners, L.P., Gotham Partners II, L.P.
and Gotham International Advisors, L.L.C. (collectively "Gotham"), which
collectively control 31.03% of MoneyGram's outstanding stock, filed an SEC Form
13D objecting to the proposed transaction as being inadequate and valuing
MoneyGram at a substantial discount to the fair market value of the Company.
29. Gotham objected to the proposed transaction for the following
reasons:
(a) The proposed transaction does not properly account for the
Company's $58 million deferred tax asset;
(b) The proposed transaction does not reflect amortization
charges as a result of the Company's separation from First Data Corporation and
is not indicative of conditions under which new agent contracts are being
signed; and
(c) The projections used by the Company are significantly
lower than projections used by analysts following the Company.
30. The proposed transaction further fails to account for the future
growth of the money-transfer business segment, which, by the Company's and
Viad's own estimates, is projected to grow 20-30% per year.
31. On April 10, 1998, Weiss Peck & Greer LLC ("Weiss Peck"), which
holds approximately 8.49% of MoneyGram's outstanding stock, filed a Form 13D
with the SEC
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<PAGE> 10
objecting to Viad's offer as being "inadequate" and characterizing the valuation
performed by the Company as "superficial and inappropriate'.
32. Weiss Peck objected to the proposed transaction for the following
reasons:
(a) The proposed transaction fails to account for the
significant non-cash expenses of the Company which result in a substantial
understatement of the financial performance of the Company;
(b) The proposed transaction does not properly account for the
Company s $58 million deferred tax asset;
(c) The valuation of the Company is based in part upon flawed
analyst' earnings projections which vary greatly and are out-of-date considering
that Moneygram's business has stabilized and transaction volumes have increased
since late 1997;
(d) The domestic market segment which is dominated by
Moneygram and only one other competitor has been growing at 20% annually;
(e) MoneyGram's international operations are growing at a more
rapid rate than even its domestic business; and
(f) The Company has the ability through its internal cash
holdings to finance its own growth without any additional cash infusion from its
acquiror.
33. Moreover, defendants have failed to maximize stockholder value
through reliance on a flawed auction process whereby a third party bidder was
excluded from the final round of negotiations. Consequently, defendants have not
adequately considered other potential
10
<PAGE> 11
purchasers of MoneyGram in a manner designed to obtain the highest possible
price for MoneyGram public stockholders.
34. The consideration to be paid to the MoneyGram shareholders in the
merger is grossly unfair, inadequate, and substantially below the fair or
inherent value of the Company. The intrinsic value of the equity of MoneyGram is
materially greater than the merger consideration taking into account MoneyGram's
asset value, its expected growth, and the strength of its business segment.
35. The proposed transaction has the effect of capping the market price
of MoneyGram stock and will deny class members their right to share
proportionately in the true value of MoneyGram's valuable assets, profitable
business, and future growth in profit and earnings.
36. Unless enjoined by this Court, defendants will continue to breach
their fiduciary duties owed to plaintiffs and the Class, and will succeed in
their plan to enrich themselves by excluding the Class from its fair
proportionate share of MoneyGram's valuable assets and businesses, all to the
irreparable harm of the Class.
37. The plaintiffs and the Class have no adequate remedy of law.
WHEREFORE, plaintiffs pray for judgment and relief as follows:
(a) declaring that this lawsuit is properly maintainable as a
class action and certifying the plaintiffs as proper representatives of the
Class;
(b) declaring that the defendants and each of them have
committed or aided and abetted a gross abuse of trust and have breached their
fiduciary duties to the plaintiffs and the other members of the Class;
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<PAGE> 12
(c) preliminarily and permanently enjoining defendants and
their counsel, agents, employees, and all persons acting under, in concert with,
or for them, from proceeding with, consummating the proposed transaction;
(d) requiring defendants to place the Company up for auction
and to conduct a market-check prior to completion of any transaction for the
sale of the Company;
(e) in the event the proposed transaction is consummated,
rescinding it and setting it aside;
(f) awarding compensatory damages against defendants, jointly
and severally, in an amount to be determined at trial, together with prejudgment
interest at the maximum rate allowable by law;
(g) awarding plaintiffs and the Class their costs and
disbursements and reasonable allowances for plaintiff's counsel and experts'
fees and expenses; and
(h) granting such other and further relief as may be just and
proper.
12
<PAGE> 13
Dated: April 14, 1998
ROSENTHAL, MONHAIT,
GROSS & GODDESS, P.A.
By: /s/ Norman M. Monhait
----------------------------
Suite 1401, Mellon Bank Center
919 Market Street
Wilmington, Delaware 19899-1070
(302) 6564433
Attorneys for Plaintiffs
OF COUNSEL:
BERNSTEIN LIEBHARD
& LIFSHITZ
274 Madison Avenue
New York, NY 10016
(212) 779-1414
WECHSLER HARWOOD
HALEBIAN & FEFFER LLP
488 Madison Avenue
New York, New York 10022
(212) 935-7400
13
<PAGE> 14
CERTIFICATE OF SERVICE
I, Norman M. Monhait, do hereby certify on this 15th day of April, 1998
that I caused two copies of the foregoing Notice of Filing and Amended Class
Action Complaint to be served by hand delivery upon:
All Defendants
c/o The Corporation Trust Company
1209 Orange Street
Wilmington, DE 19801
/s/Norman M. Monhait
-------------------------
Norman M. Monhait
14
<PAGE> 1
Exhibit 13
IN THE COURT CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- ------------------------------------------------------------
TAAM ASSOCIATES, INC.
Plaintiff,
v.
JAMES F. CALVANO, ROBBIN L. AYERS, JOHN FOWLER, BRIAN J. C.A. No. 16305-NC
FITZPATRICK, WILLIAM D. GUTH, SANFORD MILLER, MONEYGRAM
PAYMENT SERVICES, INC., and VIAD CORP.,
Defendant.
- ------------------------------------------------------------
HARBOR FINANCE PARTNERS,
Individually and on behalf
of all others similarly C.A. No. 16306-NC
situated,
Plaintiff
- against -
JAMES F. CALVANO, JOHN M. FOWLER, ROBBIN L. AYERS, WILLIAM
D. GUTH, BRIAN J. FITZPATRICK, SANFORD MILLER, and
MONEYGRAM PAYMENT SYSTEMS, INC.,
Defendants.
- ------------------------------------------------------------
MOTION FOR PRELIMINARY INJUNCTION
Plaintiffs hereby move, pursuant to Court of Chancery Rule 65, for an
Order:
1. Preliminarily enjoining defendants and all persons acting in concert
with them from proceeding with, consummating or otherwise closing the tender
offer by Pine Valley Acquisition Corporation (the "Tender Offer") for all of the
issued and outstanding shares of MoneyGram Payment Systems, Inc. ("MoneyGram");
and
<PAGE> 2
2. Requiring defendants to supplement their materials furnished to
MoneyGram's shareholders in connection with the Tender Offer by disclosing all
material facts and correcting the omissions described in Plaintiffs' Amended
Class Action Complaint in this action.
The grounds for this Motion are set forth in Plaintiff's Amended Class
Action Complaint and will be more fully set forth in plaintiffs' opening brief
and other papers to be filed in support of this motion.
ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A.
By: /s/Norman M. Monhait
Suite 1401, Mellon Bank Center
P.O. Box 1070
Wilmington, DE 19899-1070
(302) 656-4433
Attorneys for Plaintiffs
OF COUNSEL:
BERNSTEIN LIEBHARD & LIFSHITZ
274 Madison Avenue
New York, NY 10016
(212) 779-1414
WECHSLER HARWOOD
HALEBIAN & FEFFER LLP
488 Madison Avenue
New York, NY 10022
(212) 935-7400
2
<PAGE> 1
Exhibit 14
IN THE COURT CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- ------------------------------------------------------------
TAAM ASSOCIATES, INC.
Plaintiff,
v.
JAMES F. CALVANO, ROBBIN L. AYERS, JOHN FOWLER, BRIAN J. C.A. No. 16305-NC
FITZPATRICK, WILLIAM D. GUTH, SANFORD MILLER, MONEYGRAM
PAYMENT SERVICES, INC., and VIAD CORP.,
Defendant.
- ------------------------------------------------------------
HARBOR FINANCE PARTNERS,
Individually and on behalf
of all others similarly C.A. No. 16306-NC
situated,
Plaintiff
- against -
JAMES F. CALVANO, JOHN M. FOWLER, ROBBIN L. AYERS, WILLIAM
D. GUTH, BRIAN J. FITZPATRICK, SANFORD MILLER, and
MONEYGRAM PAYMENT SYSTEMS, INC.,
Defendants.
- ------------------------------------------------------------
MOTION FOR EXPEDITED PROCEEDINGS
Plaintiffs, by their attorneys, respectfully move the Court to schedule
their Motion for Preliminary Injunction, served and filed herewith, for a
hearing prior to May 8, 1998, the presently scheduled date for the closing of
the tender offer (the "Tender Offer") by Pine Valley Acquisition Corporation
("Pine Valley") for all the issued and outstanding shares of MoneyGram Payment
Systems, Inc. ("MoneyGram") at $17.00 per share. As grounds for this Motion,
plaintiffs represent as follows:
<PAGE> 2
1. Plaintiffs are stockholders of MoneyGram. Plaintiffs bring this
action on behalf of all MoneyGram stockholders, except defendants, contending
that the defendant directors of MoneyGram have breached their fiduciary duties
to plaintiffs and the other public shareholders of MoneyGram by failing to take
appropriate steps to ascertain the best transaction available for MoneyGram
public shareholders; and by failing to include in materials disseminated to
MoneyGram's shareholders in connection with the Tender Offer information
material to the decision facing MoneyGram's shareholders of whether or not to
tender their shares. These allegations are particularized in Plaintiff's Amended
Class Action Complaint, served on April 15, 1998 (the "Complaint").
2. Among other things, the Complaint alleges that MoneyGram's Board
accepted the acquisition proposal of Pine Valley's parent, Viad Corporation
("Viad"), in an auction process flawed by the exclusion of a third party bidder
from the final round of bidding, and that the transaction price does not fairly
value MoneyGram.
3. In addition, the Complaint alleges that MoneyGram's
Solicitation/Recommendation Statement on 14D-9 ("14D-9"), omits material
information in a number of respects set forth on Exhibit A hereto wherein the
relevant allegations of the Complaint are reproduced.
4. In short, the Complaint alleges that MoneyGram's shareholders are
being denied the opportunity to make an informed judgment on the Tender Offer,
and that the individual defendants have failed to make their duty to maximize
shareholder value in a change of control transaction. Accordingly, plaintiffs
seek a preliminary injunction against completion of the Tender Offer. Lack of
complete information in connection with a Tender offer, and loss of the
opportunity to obtain the best available transaction in a change of control
context can constitute irreparable injury sufficient to warrant preliminary
injunctive relief. See, e.g., Joseph
<PAGE> 3
v. Shell Oil Company, Del. Ch., 482 A.2d 335 (1984); and, as Vice Chancellor
Jacobs said in QVC Network v. Paramount Communications, Del. Ch., 635 A.2d 1245,
1273 n.50 (1993), affirmed in relevant part, Paramount Communications v. QVC
Network, Del. Supr., 637 A2d 34 (1993):
Since the opportunity for shareholders to receive a superior control
premium would be irrevocably lost if injunctive relief were not
granted, that alone would be sufficient to constitute irreparable harm.
5. Since the Tender Offer is scheduled to close on May 8, 1998,
plaintiffs request that the Court hear their preliminary injunction motions
sufficiently prior to that date to permit a decision before the closing.
6. Plaintiffs have not previously applied for this relief.
WHEREFORE, plaintiffs respectfully request the Court to enter an Order
in the form attached hereto.
ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A.
By: /s/ Norman M. Monhait
---------------------
Suite 1401, Mellon Bank Center
P.O. Box 1070
Wilmington, DE 19899-1070
(302) 656-4433
Attorneys for Plaintiffs
OF COUNSEL:
BERNSTEIN LIEBHARD
& LIFSHITZ
274 Madison Avenue
New York, NY 10016
(212) 779-1414
WECHSLER HARWOOD
HALEBIAN & FEFFER LLP
488 Madison Avenue
New York, New York 10022
(212) 935-7400
3
<PAGE> 4
EXHIBIT A
20. The 14D-9 fails to disclose material information necessary for
MoneyGram's shareholders to make an informed decision. The 14D-9 does not
provide a basis upon which shareholders can independently determine the value of
the Company's stock and whether to tender their shares to Viad.
21. The 14D-1 tender offer statement fails to include the Company's
most recent operating results for the first quarter of 1998 ending March 31,
1998. MoneyGram shareholders are being asked to make an irrevocable decision
regarding their investment in MoneyGram on the basis of incomplete information.
22. Annexed to the 14D-9 is a copy of the fairness opinion issued by
Morgan Stanley & Co. ("Morgan Stanley"). The fairness opinion lists various
documents relied upon by Morgan Stanley, including "certain financial statements
and other financial and operating data concerning MoneyGram prepared by the
management of MoneyGram." None of this financial information is provided to
shareholders in the 14D-9 or accounted for in the fairness opinion.
23. Further, neither the 14D-9 nor the fairness opinion contains a
discussion of the results of various financial analyses presumable performed by
Morgan Stanley in determining the value of MoneyGram. In fact, there is no
disclosure as what analyses were even performed other than to comparable
companies (of which there is only one), a historical analysis of the Company's
stock price, and a pro-forma analysis of a combined Viad/MoneyGram company
(which does not even address the independent valuation of MoneyGram). There was
no disclosure whether standard analyses such as discounted cash flow
<PAGE> 5
or comparable earnings analysis were performed or what the results of such
analyses showed. Further, there is no discussion of what analyses Morgan Stanley
deemed important and what other factors Morgan Stanley considered "appropriate"
to evaluate.
24. Accordingly, MoneyGram shareholders cannot determine from these
materials the fair value of their shares, whether there was any deviation from
standardized investment banking practices, and why the proposed transaction is
purportedly fair.
