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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(D)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
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THE UNION CORPORATION
(NAME OF SUBJECT COMPANY)
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THE UNION CORPORATION
(NAME OF PERSON(S) FILING STATEMENT)
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COMMON STOCK, PAR VALUE $.50 PER SHARE
(Title of Class of Securities)
906072 10 3
(CUSIP number of Class
of Securities)
WILLIAM B. HEWITT
PRESIDENT
THE UNION CORPORATION
SUITE 100
211 KING STREET
CHARLESTON, SOUTH CAROLINA 29401
(803) 958-3800
(Name, address and telephone number of person authorized to receive
notice and communications on behalf of person(s) filing statement)
WITH A COPY TO:
ROBERT H. HAINES, ESQ.
ZIMET, HAINES, FRIEDMAN & KAPLAN
460 PARK AVENUE
NEW YORK, NEW YORK 10022
(212) 486-1700
January 14, 1998
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This Amendment No. 1 amends and supplements the Solicitation/Recommendation
Statement on Schedule 14D-9 (the "Schedule 14D-9") which relates to the tender
offer (the "Offer") made by Sherman Acquisition Corporation ("Purchaser"), a
Delaware corporation and a wholly owned subsidiary of Outsourcing Solutions Inc.
("Parent"), a Delaware corporation, disclosed in a Tender Offer Statement on
Schedule 14D-1 (the "Schedule 14D-1") dated December 24, 1997, to purchase all
outstanding shares Common Stock, par value $.50 per share (the "Shares") of The
Union Corporation, a Delaware corporation (the "Company"), upon the terms and
subject to the conditions set forth in the Offer to Purchase dated December 24,
1997 (the "Offer to Purchase"), and the related Letter of Transmittal (which,
together with any amendments or supplements thereto, the "Offer Documents").
ITEM 4 OF THE SCHEDULE 14D-9 IS HEREBY AMENDED AND SUPPLEMENTED IN ITS
ENTIRETY AS FOLLOWS:
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
(A) RECOMMENDATION.
On December 22, 1997, the Board of Directors unanimously approved the Merger
Agreement and the transactions contemplated thereby in all respects, and
determined that each of the Offer and the Merger is fair to, and in the best
interest of, the stockholders of the Company. The Board recommends that all
holders of Shares accept the Offer and tender their Shares pursuant to the
Offer.
(B) BACKGROUND; OPINION OF FINANCIAL ADVISOR; REASONS FOR RECOMMENDATION.
Background.
Pursuant to an engagement letter dated September 15, 1997, the Company
retained CIBC Oppenheimer Corp. ("Oppenheimer") as its financial adviser in
connection with the Merger. Oppenheimer issued its written opinion dated
December 22, 1997, that, based upon and subject to the various considerations
set forth therein, the proposed consideration to be received by the stockholders
of the Company in the Offer and the Merger is fair to the stockholders of the
Company from a financial point of view. No limitations were imposed by the
Company upon Oppenheimer with respect to investigations made or procedures
followed by Oppenheimer in rendering its opinion.
THE FULL TEXT OF OPPENHEIMER'S OPINION DATED DECEMBER 22, 1997, WHICH SETS
FORTH ASSUMPTIONS MADE, MATTERS CONSIDERED AND LIMITS ON THE REVIEW UNDERTAKEN
BY OPPENHEIMER, IS ATTACHED HERETO AS EXHIBIT (C). The Company's shareholders
are urged to read the opinion in its entirety. Oppenheimer's opinion is
addressed to the Company's Board, is directed only to the fairness of the merger
consideration and does not constitute a recommendation to any shareholder of the
Company as to whether or not shareholders should tender their common shares
pursuant to the Offer. The summary set forth in this Schedule 14D-9 of the
Oppenheimer opinion is qualified in its entirety by reference to the full text
of the opinion attached hereto as Exhibit (c).
Oppenheimer's relationship with the Company started in July 1994, when the
Company and Oppenheimer entered into an agreement for Oppenheimer to act as the
Company's exclusive financial advisor. On June 4, 1996, the Company announced
publicly that Oppenheimer had been retained as financial advisor to explore
strategic alternatives to maximize shareholder value. Oppenheimer advised the
directors that a sale of the Company appeared to be the most effective means to
maximize shareholder value. A large scale marketing effort was begun during the
months of June, July, August and September. Approximately 200 candidates were
approached during this time with 100 candidates signing Confidentiality
Agreements. On behalf of the Company, Oppenheimer received 17 indications of
interest with 12 advancing to the next round following a request for new bids.
This narrowing of bidders, during the months of August and September 1996, was
followed by a period where each bidder was given a chance to conduct
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due diligence. All 12 conducted preliminary legal and environmental due
diligence with three dropping out. Nine were invited to management presentations
during the months of September, October and November; two declined and seven
parties attended the management presentations. Ultimately, one bidder offered a
price of $28.00 per share, 95% ($26.60) cash and 5% stock, and proceeded to go
forward on diligence and drafting of a proposed agreement. The proposed
transaction was terminated in April, 1997 following a reduction by the bidder of
the proposed offering price and certain other conditions deemed not to be in the
best interest of the stockholders of the Company. The Company understands that
the reduction of the proposed offering price was the result of concerns
developed by the bidder following its environmental due diligence review.
Thereafter, all marketing efforts relating to a sale of the Company were
terminated.
On April 21, 1997, NCO Group, Inc. ("NCO"), an accounts receivable
management company, wrote to the Company expressing an interest in opening a
dialogue with the Company relative to a potential business combination. NCO
completed an initial public offering of its common stock in November 1996. NCO's
April 21 letter did not set forth any specific proposals but suggested two
scenarios, an all stock transaction at a price range of $24-$27 per share
payable in NCO stock or a cash transaction at a price range of $22-$25 per
share. On April 23, 1997, the Company responded to NCO's letter and declined
further discussions with NCO, stating that, among other things, the price range
for the Company set forth by NCO was insufficient. From time to time during the
summer of 1997 NCO contacted the Company to explore a possible acquisition of
the Company by NCO, but NCO did not then make any specific acquisition proposal.
On August 5, 1997, Parent, one of the original twelve (12) bidders that had
previously indicated an interest in the Company, sent the Company an unsolicited
letter expressing interest in acquiring the Company through a merger transaction
at a cash price of $28.50 per share. On August 18, 1997, the Company entered
into a confidentiality agreement with Parent in order to allow Parent to
commence limited due diligence and review certain non-public Company
information. The Company informed Parent that it considered the $28.50 per share
cash price to be an unacceptable price, but agreed to continue discussions with
Parent. The Company requested that Parent conduct only environmental and legal
due diligence and respond with an acceptable cash price before conducting full
scale due diligence with respect to the Company.
On September 2, 1997, NCO contacted the Company indicating an interest in
acquiring or merging with the Company. On September 3, 1997, the Company
informed NCO that the Company would consider its inquiry and would respond in
due course. On September 9, 1997, NCO expressed its interest in discussing with
the Company a stock-for-stock acquisition of the Company, accounted for as a
pooling of interests, in which the Company's shareholders would receive NCO
stock valued by NCO in excess of $35 per share, and potentially in the high
$30's depending upon its due diligence review.
At a regular meeting of the Board on September 10, 1997, the Board
discussed, among other things, the unsolicited all cash proposal from Parent and
the unsolicited stock-for-stock proposal from NCO. The Board considered the
proposals and concluded that the Company should continue discussions with both
Parent and NCO. It was the consensus of the Board that if the Company were to
receive an offer to purchase the Company at a per share price that the Board
considered to be favorable to the Company's shareholders, it would be preferable
to receive an all cash payment rather than stock. However, the Board also agreed
that it would consider a stock-for-stock transaction if such a transaction were
more advantageous to and in the best interests of the Company's shareholders.
Thereafter, on September 15, 1997, representatives of the Company met with
representatives of NCO to discuss NCO's proposal, and prior to such discussions,
NCO and the Company entered into a confidentiality agreement. At that meeting,
the Company's management advised NCO that a cash transaction was preferable to a
stock transaction, and suggested that any stock-for-stock transaction should
include, in addition to a collar on the NCO stock price, a mechanism that would
allow the Company's
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stockholders to receive a guaranteed price in cash. Management requested that
NCO respond to this suggestion. NCO has not responded to this suggestion.
On September 23, 1997, after negotiations with the Company's management
regarding the price, Parent advised the Company in a letter that, subject to the
finalization of due diligence, it was prepared to offer to acquire the Company
in a merger in which the Company's shareholders would receive $31.50 per share
in cash. Parent's proposal also requested that, in consideration for the
expenses to be incurred by Parent in conducting due diligence and negotiating a
definitive merger agreement, the Company and its agents agree that for a thirty
(30) day period, they would not encourage, solicit, participate in or initiate
discussions or negotiations with or provide any information to any person other
than Parent concerning any stock or asset purchase, merger or similar
transaction. Based upon the increase in Parent's cash offer, the Company agreed
to that requirement.
On September 30, 1997, NCO sent a letter to the Company expressing an
interest in discussing with the Company a merger transaction under one of three
options: (1) an all cash transaction at $30 per Share; (2) a 50% cash and 50%
stock deal valued by NCO at $34 per Share; or (3) an all stock transaction,
accounted for as a pooling of interests, in which the Company's shareholders
would receive a number of shares of NCO stock amounting to $39 per Share. This
expression of interest was made prior to NCO conducting any due diligence,
including environmental due diligence-- an event that previously had caused
other possible suitors to decline to bid for the Company or to discount the
value of the Company's stock and, as stated above, a bidder to decrease its bid
for the Company after conducting substantial due diligence. NCO's letter stated
that the cash alternative was not a viable alternative and that an all stock
transaction was the best alternative from NCO's perspective. NCO also mentioned,
without elaboration, the possibility of providing an appropriate collar around
NCO's stock, but did not respond to management's suggestion concerning a
mechanism that would allow the Company's stockholders to receive a guaranteed
price in cash. The Company informed NCO that it would consider NCO's proposals.
On November 14, 1997, when Parent agreed to maintain its offer of $31.50 per
share in cash, despite its reservations concerning environmental issues and
certain litigation matters after conducting substantial due diligence, the
Company extended the exclusivity provisions contained in the September 23, 1997
letter agreement with Parent until December 31, 1997.
At a regular meeting of the Board, on November 19, 1997, the Board
considered the proposals submitted by NCO in its letter of September 30, 1997.
Oppenheimer representatives made a presentation reviewing the NCO proposals.
Oppenheimer concluded that the September 30, 1997 NCO letter did not make any
proposals which were as favorable to the Company's shareholders as Parent's
$31.50 per share cash proposal. Oppenheimer also concluded, based upon its
analysis, that the two stock proposals in the NCO letter were not likely to
result in the consummation of a transaction at the stated consideration. Among
the reasons for Oppenheimer's conclusions relating to the stock proposals were
the estimated value of the NCO stock taking into account, among other things,
its high price/earnings multiple, the illiquidity of NCO's stock, the apparently
highly dilutive effect of the proposals on NCO's stock and the absence of any
due diligence on the part of NCO. After discussing Oppenheimer's analysis of
NCO's proposals and considering the possible risk to the on-going negotiations
with Parent in the event the Company were to pursue the NCO proposals, the Board
unanimously resolved that Parent's offer of $31.50 per share in cash was in the
best interests of the Company's shareholders and superior to the proposals
outlined by NCO. The Board also approved the extension of the exclusivity
arrangement with Parent, and authorized the Company's management and agents to
continue negotiations with Parent and to report to the Board before concluding
such negotiations.
On December 17, 1997, the Company's Board of Directors met to review the
status of negotiations with Parent. At that meeting, Oppenheimer provided the
Board with its written analysis of Parent's offer and provided the Board with
its views concerning the fairness of Parent's offer. After discussion, the Board
authorized management to proceed with negotiations and the finalization of the
definitive transaction documents, subject to final approval by the Board.
Thereafter, on December 22, 1997, the Company's
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Board met to consider the final terms of Parent's offer. At that meeting
Oppenheimer rendered its written opinion that Parent's $31.50 cash per share
offer was fair to the Company's shareholders from a financial point of view, as
described below. The Board approved the terms of the final agreement with Parent
and authorized management to execute such agreement on behalf of the Company,
and to prepare and file all necessary documents with the appropriate regulatory
agencies.
After the transaction with Parent was publicly announced, on December 23,
1997 NCO contacted the Company regarding the Merger. Since that date there has
been no further contact from NCO.
Opinion of Financial Advisor.
In connection with rendering its opinion dated December 22, 1997,
Oppenheimer reviewed among other things: (a) the Merger Agreement; (b) the
Tender Agreement; (c) audited consolidated financial statements and management's
discussion and analysis of the financial condition and results of operations for
the Company for the three fiscal years ended June 30, 1997; (d) certain other
publicly available business and financial information relating to the Company;
(e) certain internal financial analyses, budgets, projections and forecasts for
the Company, prepared by and reviewed with the management of the Company; (f)
the views of senior management of the Company of the past and current business
operations, results thereof, financial condition and future prospects; (g) a
comparison of certain financial information for the Company, in each case with
similar information for certain other companies considered comparable to the
Company; (h) the financial terms of certain recent business combinations in the
accounts receivable industry; (i) the current market environment generally and
the accounts receivable environment in particular; and (j) such other
information, financial studies, analyses and investigations and financial,
economic and market criteria as Oppenheimer considered appropriate in the
circumstances.
The preparation of a fairness opinion is a complex process and is not
necessarily susceptible to a partial analysis or summary description.
Oppenheimer believes that its analyses must be considered as a whole and that
selecting portions of its analyses, without considering the analyses taken as a
whole, would create an incomplete view of the process underlying the analyses
set forth in its opinion. In addition, Oppenheimer considered the results of all
such analyses and did not assign relative weights to any of the analyses, so
that the ranges of valuations resulting from any particular analysis described
above should not be taken to be Oppenheimer's view of the actual value of the
Company or the combined entity.
The following is a summary of the analyses presented by Oppenheimer to the
Company's Board in connection with Oppenheimer's written opinion dated December
22, 1997, the date the Company's Board of Directors approved the Offer and the
Merger:
Comparable Company Analysis. Using publicly available information, Oppenheimer
compared selected financial information for the Company with similar information
for eight selected comparable companies in the receivables management industry.
However, no company is exactly comparable. Oppenheimer notes that of the group
of selected companies, two companies are pure play collection companies: FCA
International ("FCA") and NCO. FCA is a Canadian company in financial
difficulty, while NCO recently completed an initial public offering and has a
limited history of operations and is thinly traded. For each of these companies,
Oppenheimer calculated, among other things, return on average assets, return on
average equity, price/book, market capitalization/revenues, price/earnings per
share ("EPS") for the latest twelve months ended September 30, 1997 ("LTM"),
forecasted 1997 and forecasted 1998, and compared the results of these
calculations to calculations made by Oppenheimer for the Company.
This analysis showed, as of December 15, 1997, that the Company had a return
on average assets of 6.73%, above the group average of 6.23%. The Company's
return on average equity of 12.36% is below the group average of 17.55%. The
Company's price/book and market capitalization/revenues of 2.19x and 1.31x are
both below the group averages of 4.90x and 5.15x, respectively. In addition, the
Company's EPS multiple for the LTM, 1997 and 1998 of 20.59x, 15.47x and 13.56x,
respectively, are all below the group's averages of 27.30x, 23.88x and 18.33x
respectively. Further, the trailing twelve months earnings before
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interest, taxes, depreciation and amortization ("EBITDA") and net income margins
for the Company of 15.81% and 6.82% are both below the comparable group mean of
26.61% and 15.69%.
Discounted Cash Flow Analysis. Using a discounted cash flow analysis,
Oppenheimer estimated the present value of the future streams of after-tax cash
flows that the Company could produce through June 30, 2002. In this analysis,
Oppenheimer estimated the terminal value multiple of cash flows to be a range
from 9 to 12 times the Company's estimated after-tax cash flows for the twelve
months ended June 30, 2002. This range of multiples reflects Oppenheimer's
estimate of reasonable market expectations for trading values in the future. The
after-tax cash flows and terminal values were discounted to present values using
different rates (ranging from 11%-16%) chosen to reflect different assumptions
regarding the required rates of return. The Company's weighted average cost of
capital is approximately 11%, but Oppenheimer believes 15%-16% is more
reasonable given market expectations. Oppenheimer prepared a discounted cash
flow analysis, using the Company's earning estimates for 1998. Fiscal year 1999
was derived by taking the average net income margins for the last 6 months of
forecasted 1998 (with a 5% reduction) multiplied by forecasted operating
revenues minus corporate expense. Fiscal year 2000 to fiscal year 2002 is
assumed to grow at that same rate. This analysis, using a 15% and 16% discount
rate, indicated an implied range of values of the Company ranging from $157.4
million to $152.1 million.
Comparable Transactions Analysis. Oppenheimer compared the financial terms of
the Merger to the financial terms, to the extent publicly available, of seven
transactions Oppenheimer believed to be comparable for purposes of determining
the imputed values of the Share Purchase and the Merger.
The seven recent acquisitions involving companies providing accounts
receivable management services included the following: Allied Bond & Collection
Agency/Union Corporation; Payco American Corporation/OSI Holdings Corporation
(now known as Outsourcing Solutions Inc.); National Revenue/ Deluxe Corp.;
National Action Financial Services/Sitel Corp.; Trans Union Corp. (Collections
Division)/ NCO; Management Adjustment Bureau/NCO and CRW Financial, Inc.
(Collections Division)/NCO.
For each of these transactions, Oppenheimer reviewed firm value/trailing
twelve months multiples to sales, earnings before interest and taxes ("EBIT")
and EBITDA. Oppenheimer calculated the Company's firm value/trailing twelve
months multiples to sales, EBIT and EBITDA to be 1.5, 9.2 and 11.9,
respectively. The comparable accounts receivable companies reviewed by
Oppenheimer had a mean firm value/ trailing twelve months multiples to Sales,
EBIT and EBITDA of 1.1, 6.6 and 12.8, respectively. In addition, for each of
these transactions, Oppenheimer calculated the high, mean, median, and trimmed
mean of offer value/trailing twelve months multiples to net income and book
value and compared the results of these calculations to calculations made by
Oppenheimer for the proposed Merger. The Company's offer value/trailing twelve
months multiples to net income and book value of 22.7 and 2.7, respectively,
were both lower than the comparable accounts receivable companies of 23.2 and
8.2, respectively.
The purchase price of $31.50 per share is above the mean and median averages
for both the imputed firm value and the imputed equity value. The offer price is
nearly 11% higher than the mean imputed firm value and over 28% greater than the
median imputed firm value. The mean imputed equity value is $31.39, while the
median imputed equity value of the Company is $27.54, 14.4% lower than the
$31.50 purchase price.
In preforming its analyses, Oppenheimer made numerous assumptions with
respect to industry performance, general business and economic conditions and
other matters, many of which are beyond the control of the Company. The analyses
performed by Oppenheimer are not necessarily indicative of actual values, which
may be significantly more or less favorable than suggested by such analyses.
Such analyses were prepared solely to enable Oppenheimer to render its December
22, 1997 written opinion. The analyses do not purport to be appraisals or to
reflect the prices at which a company might actually be sold.
In determining the valuation for the Company, Oppenheimer also considered
these valuation factors: 1) History of Sales Process: Oppenheimer conducted two
separate exclusive sales efforts for the Company.
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Approximately seventy parties were contacted during the first exclusive sales
effort which started in 1994. The bids that were received were not deemed
acceptable by management and the Board of Directors. Approximately two hundred
parties were contacted for the second exclusive sale effort conducted during
1996. More than half of the seventeen parties that submitted bids dropped out
due to concerns relating to environmental matters. The one party that was
selected to proceed ultimately lowered its bid because of concerns relating to
environmental matters, and the transaction was terminated due to concerns
relating to environmental matters and price issues. 2) Environmental Matters:
The Company has accrued approximately $4 million for future liabilities relating
to environmental matters. A large number of potential bidders in the previous
sales processes either dropped from the bidding process or deeply discounted
their bids due to varying estimates on future liabilities relating to
environmental matters. 3) Corporate History: The Company has a history of uneven
earnings growth and periodic write-offs, prior to fiscal year 1996. Moreover,
the initial terms of several of the Company's large call center outsourcing
contracts are scheduled to expire within eighteen months.
The Company's Board retained Oppenheimer based upon its experience and
expertise. Oppenheimer is a nationally recognized investment banking and
advisory firm. Oppenheimer, as part of its investment banking business, is
continuously engaged in the valuation of business and securities in connection
with mergers and acquisitions, negotiated underwritings, competitive biddings,
secondary distributions of listed and unlisted securities, private placements
and valuations for corporate and other purposes. In the course of its market
making and other trading activities, Oppenheimer may, from time to time, have a
long or short position in, and may buy or sell, securities of the Company both
for its own account and for the accounts of customers.
As compensation for Oppenheimer's services as financial advisor, the Company
has agreed to pay Oppenheimer a fee equal to $4,250,000, plus reasonable
out-of-pocket expenses. The Company has been informed that, of this amount, a
research analyst formerly employed by Oppenheimer and currently employed by
Lazard Freres & Co. will be entitled to 10% of the net fee paid by the Company
to Oppenheimer.
Reasons for Recommendation.
In reaching its conclusions set forth in Item 4(a), above, the Board of
Directors considered a number of factors, including, without limitation, the
following:
(i) the opinion of Oppenheimer, described above, to the effect that, as
of the date of Oppenheimer's opinion, the consideration to be received by
the stockholders of the Company in the Offer and the Merger is fair, from a
financial point of view, to the stockholders of the Company;
(ii) a review of the financial condition, results of operations,
business and prospects of the Company;
(iii) the terms and conditions of the Merger Agreement, including the
Offer, and the Tender Agreement;
(iv) a review of the possible alternatives to the Offer and the Merger,
including, among others, the possibility of continuing to operate the
Company as an independent entity;
(v) the extensive efforts to locate a suitable purchaser for the Company
at an appropriate price, the certainty of the transaction with Parent and
the availability to Parent of committed financing; and
(vi) the trading price of the Shares, and that the $31.50 price per
share to be paid to the stockholders of the Company in the Offer and the
Merger represents a premium of approximately 14.5% over the closing price
for the Shares on The New York Stock Exchange on December 22, 1997, the last
trading day prior to the public announcement of the Merger Agreement.
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In view of the wide variety of factors considered in connection with its
evaluation of the Offer and the Merger, the Board of Directors found it
impracticable to, and did not, quantify or otherwise attempt to assign relative
weight to the specific factors considered in reaching its determination.
ITEM 8. OF THE SCHEDULE 14D-9 IS HEREBY AMENDED AND SUPPLEMENTED BY ADDING
THERETO THE FOLLOWING:
On December 29, 1997, a putative class action lawsuit captioned JERRY TODER
V. WILLIAM B. HEWITT, MELVIN L. COOPER, GORDON S. DUNN, ROBERT A. KERR, JAMES C.
MILLER III, HERBERT R. SILVER, HERBERT A. DENTON, ROBERT A. MARSHALL, JAMES M.
MCCORMICK, OUTSOURCING SOLUTIONS INC., SHERMAN ACQUISITION CORPORATION AND THE
UNION CORPORATION, (C.A. No. 16106-NC) (the "Action") was filed in the Court of
Chancery in the State of Delaware, New Castle County on behalf of the public
shareholders of the Company.
The Action alleges that the Merger Consideration and the terms of the Merger
are inadequate and unfair. The Action also asserts, among other things, that the
members of the Company's Board of Directors named as defendants (the "Director
Defendants"), have, in violation of their fiduciary duties, failed to maximize
shareholder value, to conduct an adequate market check, to act independently and
to properly inform themselves of the Company's value. No class action has been
certified in this matter.
The complaint seeks a declaration that: (i) the action is properly
maintainable as a class action and certifying plaintiff as the representative of
the class; (ii) defendants have breached and are breaching their fiduciary and
other duties to plaintiff and other members of the potential class and (iii) the
proposed transaction is a legal nullity. The complaint also seeks to enjoin
defendants and their agents from proceeding with, consummating or closing the
proposed transaction or, alternatively, to rescind the transaction in the event
that the transaction is consummated. The complaint also seeks compensatory
damages, in an amount to be determined at trial, together with pre-judgment and
post-judgment interest, attorney's fees and costs.
The Company believes the Action to be baseless and without merit and that it
intends to vigorously defend this matter. Parent and Purchaser have informed the
Company that they also intend to vigorously defend this matter.
Separately, on January 13, 1998, the Company, Purchaser and Parent each
received notification from the Federal Trade Commission that their request for
early termination of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act with respect to the Offer and the Merger has been granted. The
termination is effective as of January 13, 1998. The consummation of the Offer
and the Merger are subject to certain additional terms and conditions, as set
forth in the Schedule 14D-9 and the Offer to Purchase.
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.
THE UNION CORPORATION
By: /s/ Nicholas P. Gill
-----------------------------------
Nicholas P. Gill
Executive Vice President, Chief
Financial
Officer, Secretary and Treasurer
Dated: January 14, 1998
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THE
UNION CORPORATION
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745 Fifth Avenue, Suite 1107
MELVIN L. COOPER New York, NY 10151
CHAIRMAN OF THE BOARD (212) 751-6422
Facsimile: (212)755-0302
January 14, 1998
Dear Stockholder:
In connection with the ongoing tender offer (the "Offer") to purchase all
the issued and outstanding shares (the "Shares") of common stock, par value $.50
per share, of The Union Corporation ("Union") at a cash price of $31.50 per
Share by Sherman Acquisition Corporation ("Purchaser"), a Delaware corporation
and a wholly-owned subsidiary of Outsourcing Solutions Inc., a Delaware
corporation ("OSI"), we enclose Amendment No. 1 to Schedule 14D-9 which has been
filed by Union with the Securities and Exchange Commission today. The amendment
contains certain supplemental information relating to the Offer.
AS STATED IN THE SCHEDULE 14D-9, YOUR BOARD OF DIRECTORS BELIEVES, AND
CONTINUES TO BELIEVE, THAT THE OFFER IS FAIR TO, AND IN THE BEST INTEREST OF,
UNION'S STOCKHOLDERS AND RECOMMENDS THAT UNION'S STOCKHOLDERS TENDER THEIR
SHARES PURSUANT TO THE OFFER.
In arriving at its recommendation, the Board of Directors gave careful
consideration to a number of factors described in the Schedule 14D-9, including
the information set forth in the enclosed amendment.
Additional information with respect to this transaction is contained in the
documents previously delivered to you, including the Schedule 14D-9, the Offer
to Purchase and the related materials (including the Letter of Transmittal).
Those documents set forth in detail the terms and conditions of the Offer and
provide instructions on how to tender Shares, or withdraw Shares previously
tendered. We urge you to read the enclosed amendment, as well as the previously
delivered materials, carefully in making your decision with respect to tendering
your Shares.
Sincerely yours,
MELVIN L. COOPER
Chairman of the Board
