<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
SCHEDULE 14D-9
(RULE 14D-101)
SOLICITATION/RECOMMENDATION STATEMENT
UNDER
SECTION 14(d) (4) OF THE SECURITIES EXCHANGE ACT OF 1934
----------------
HOMESTEAD VILLAGE INCORPORATED
(Name of Subject Company)
----------------
HOMESTEAD VILLAGE INCORPORATED
(Name of Person(s) Filing Statement)
COMMON STOCK, $.01 PAR VALUE PER SHARE
PREFERRED SHARE PURCHASE RIGHTS
(Title of Class of Securities)
437851 10 8
(CUSIP Number of Class of Securities)
JEFFREY A. KLOPF, SECRETARY
HOMESTEAD VILLAGE INCORPORATED
125 LINCOLN AVENUE
SANTA FE, NEW MEXICO 87501
(505) 982-9292
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Person Filing Statement)
WITH COPIES TO:
Randolph C. Coley, Edward J. Schneidman, Esq. Adam O. Emmerich, Esq.
Esq. Mayer, Brown & Platt Wachtell, Lipton, Rosen
King & Spalding 190 South Lasalle Street & Katz
1100 Louisiana, Chicago, Illinois 60603 51 West 52nd Street
Suite 3300 (312) 782-0600 New York, New York 10019
Houston, Texas 77002 (212) 403-1000
(713) 751-3200
[_] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
Item 1. Subject Company Information.
Name and Address.
The name of the subject company is Homestead Village Incorporated, a
Maryland corporation ("Homestead"). The address of the principal executive
offices of Homestead is 2100 RiverEdge Parkway, Ninth Floor, Atlanta, Georgia
30328, and its telephone number is (770) 303-2200.
Securities.
The title of the class of equity securities to which this
Solicitation/Recommendation Statement (this "Statement") relates is the common
stock, par value $.01 per share (the "Shares"). Unless the context requires
otherwise, references to Shares shall include the associated preferred share
purchase rights of Homestead. As of April 28, 2000, there were 120,031,477
Shares issued and outstanding and 3,246,103 shares reserved for issuance upon
the exercise of outstanding stock options.
Item 2. Identity and Background of Filing Person.
Name and Address.
The name, business address and business telephone number of Homestead, which
is the subject company and the person filing this Statement, are set forth in
Item 1 above.
Tender Offer.
This Statement relates to the tender offer by an indirect wholly owned
subsidiary of Security Capital Group Incorporated, a Maryland corporation
("Security Capital "), to purchase all outstanding Shares (other than Shares
owned by Security Capital and its subsidiaries) at a purchase price of $4.10
per Share, net to the seller in cash (less any required withholding taxes),
without interest thereon, on the terms and subject to the conditions set forth
in the Offer to Purchase, dated May 9, 2000 (the "Offer to Purchase"), and in
the related Letter of Transmittal (the "Letter of Transmittal," which,
together with the Offer to Purchase, as they may be amended or supplemented
from time to time, constitute the "Offer"), copies of which are filed as
Exhibits (a) (1) and (a) (2) herewith, respectively, and are incorporated
herein by reference in their entirety. Security Capital and its subsidiaries
already own approximately 87% of the outstanding Homestead Shares. The Offer
is described in a Tender Offer Statement on Schedule TO (which includes the
information required to be reported under Rule 13e-3), dated May 9, 2000 (the
"Schedule TO"), which was filed with the Securities and Exchange Commission on
May 9, 2000.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of May 2, 2000 (the "Merger Agreement"), by and among Security Capital,
Homestead and HSD Acquisition Corporation, an indirect wholly owned subsidiary
of Security Capital ("Purchaser"). Following the completion of the Offer and
the satisfaction or waiver of certain conditions, Homestead will merge with
Purchaser (the "Merger"). Homestead will continue as the surviving
corporation. A copy of the Merger Agreement is filed as Exhibit (e) (1) hereto
and is incorporated herein by reference in its entirety.
The Schedule TO states that the principal executive offices of Security
Capital are located at 125 Lincoln Avenue, Santa Fe, New Mexico 87501.
Item 3. Past Contacts, Transactions, Negotiations and Agreements.
Information concerning the actual or potential conflicts of interest
involving Homestead, its executive officers, directors, affiliates, and
Security Capital and its executive officers, directors and affiliates, is set
forth in Item 10. Directors and Executive Officers of the Registrant, Item 11.
Executive Compensation, Item 12. Security Ownership of Certain Beneficial
Owners and Management and Item 13. Certain Relationships and Related
Transactions in Homestead's 1999 Annual Report on Form 10-K, as amended, which
was distributed to Homestead's stockholders on April 26, 2000. A copy of the
relevant information from the Annual Report on Form 10-K, as amended, is filed
as Exhibits (e)(2) and (e)(3) hereto.
2
<PAGE>
The information set forth under "INTRODUCTION," "SPECIAL FACTORS --
Background of the Tender Offer and the Merger Agreement," "SPECIAL FACTORS --
Recommendation of the Special Committee and the Board" and "SPECIAL
FACTORS -- Interests of Certain Persons" and "THE TENDER OFFER AND THE
MERGER -- Information Concerning Security Capital and Purchaser" in the Offer
to Purchase is incorporated herein by reference.
The Special Committee and the Homestead Board were aware of these actual and
potential conflicts of interest and considered them along with the other
matters described below in Item 4, "The Solicitation or Recommendation --
Reasons for the Recommendation."
Item 4. The Solicitation or Recommendation.
Recommendation.
Recommendation of the Special Committee. At a meeting held on May 2, 2000,
the Special Committee (i) unanimously determined that each of the Offer and
the Merger, both as contemplated by the Merger Agreement, is advisable, fair
to and in the best interests of Homestead and its stockholders; and (ii)
unanimously recommended that the Homestead Board approve, accept and declare
advisable the Offer, the Merger, the Merger Agreement and the transactions
contemplated thereby and recommend to Homestead's stockholders acceptance of
the Offer and approval of the Merger.
Recommendation of the Homestead Board. At a meeting held on May 2, 2000,
after hearing the Special Committee's recommendation, each member of the Board
(other than two members who abstained, citing their positions with Security
Capital) (i) determined that the Offer, the Merger, the Merger Agreement and
the transactions contemplated thereby are advisable, fair to and in the best
interests of Homestead and its stockholders and (ii) recommended that
Homestead's stockholders accept the Offer and approve the Merger. ACCORDINGLY,
THE HOMESTEAD BOARD RECOMMENDS THAT THE STOCKHOLDERS OF HOMESTEAD ACCEPT THE
OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER AND APPROVE THE MERGER.
A letter to the stockholders of Homestead, a letter to brokers, dealers,
commercial banks, trust companies and other nominees, a letter to clients for
use by brokers, dealers, commercial banks, trust companies and other nominees
communicating the Homestead Board's recommendation, a notice of guaranteed
delivery, a summary advertisement, a press release announcing the Offer and
the Merger and a notice of merger are filed herewith as Exhibits (a) (3), (a)
(4), (a) (5), (a) (6), (a) (7), (a) (8) and (a) (10), respectively, and are
incorporated herein by reference.
The Homestead Board's recommendation is based in part on the written opinion
delivered by Stern Stewart & Co. ("Stern Stewart") to the Special Committee on
behalf of the Homestead Board on May 2, 2000, to the effect that, as of such
date and based on and subject to the matters described in the opinion, the
price per share of $4.10 in cash to be received pursuant to the Offer and the
Merger by Homestead stockholders other than Security Capital and its
subsidiaries, was fair, from a financial point of view, to such stockholders.
The full text of the written opinion, which sets forth the assumptions made,
the procedures followed, the matters considered and the limitations on the
review undertaken by Stern Stewart, is attached hereto as Annex A and filed
herewith as Exhibit (a) (9) and is incorporated herein by reference.
Reasons for the Recommendation.
The reasons for the recommendation stated in this Item 4 are set forth under
"INTRODUCTION," "SPECIAL FACTORS -- Background of the Tender Offer and the
Merger Agreement," "SPECIAL FACTORS -- Recommendation of the Special Committee
and the Board" and "SPECIAL FACTORS -- Reports, Opinions and Appraisals" in
the Offer to Purchase and are incorporated herein by reference.
3
<PAGE>
Intent to Tender.
To the best knowledge of Homestead, after making reasonable inquiry,
Homestead's executive officers, directors, affiliates and subsidiaries who own
or hold Homestead shares currently intend to tender their Homestead shares,
other than Homestead shares that they have the right to purchase by exercising
stock options or Homestead shares that, if tendered, would cause such persons
to incur liability under the short-swing profit provisions of the Securities
Exchange Act of 1934, as amended.
Item 5. Persons/Assets Retained, Employed, Compensated or Used.
The information contained under "SUMMARY OF THE OFFER," "INTRODUCTION,"
"SPECIAL FACTORS -- Background of the Tender Offer and the Merger Agreement,"
"SPECIAL FACTORS -- Recommendation of the Special Committee and the Board,"
"SPECIAL FACTORS -- Reports, Opinions and Appraisals" and "THE TENDER OFFER
AND THE MERGER -- Fees and Expenses" in the Offer to Purchase is incorporated
herein by reference.
Except as set forth in the sections of the Offer to Purchase incorporated
herein by reference to this Item 5, neither Homestead nor any person acting on
its behalf has employed, retained or compensated, or currently intends to
employ, retain or compensate, any person to make solicitations or
recommendations to the stockholders of Homestead on its behalf with respect to
the Offer or the Merger.
Item 6. Interest in Securities of the Subject Company.
The information set forth under "THE TENDER OFFER AND THE MERGER --
Information Concerning Security Capital and Purchaser," "SCHEDULE I" and
"SCHEDULE II" in the Offer to Purchase is incorporated herein by reference.
Except as set forth in the sections of the Offer to Purchase incorporated
herein by reference to this Item 6, no transactions in the Shares have been
effected by Homestead or, to Homestead's knowledge, by any executive officer,
director, affiliate, or subsidiary of Homestead during the past 60 days.
Item 7. Purposes of the Transaction and Plans or Proposals.
Except as described or referred to in this Statement, no negotiation is
being undertaken or engaged in by Homestead which relates to or would result
in (i) a tender offer or other acquisition of the Shares by Homestead, any of
its subsidiaries or any other person, (ii) an extraordinary transaction, such
as a merger, reorganization, or liquidation, involving Homestead or any of its
subsidiaries, (iii) a purchase, sale, or transfer of a material amount of
assets by Homestead or any of its subsidiaries or (iv) any material change in
the present dividend rate or policy, or indebtedness or capitalization of
Homestead. Additionally, the information set forth in "THE TENDER OFFER AND
THE MERGER -- The Merger Agreement and the Merger" is incorporated herein by
reference.
Except as described or referred to in this Statement, there are no
transactions, Homestead Board resolutions, agreements in principle, or signed
contracts entered into in response to the Offer that would relate to one or
more of the matters referred to in this Item 7.
Item 8. Additional Information.
The information contained in the Offer to Purchase filed as Exhibit (a) (1)
herewith is incorporated herein by reference.
4
<PAGE>
Item 9. Exhibits.
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
(a)(1) Offer to Purchase dated May 9, 2000.*+
(a)(2) Letter of Transmittal.*+
(a)(3) Letter from the Interim Chairman and Chief Executive Officer of
Homestead to Homestead's Stockholders, dated May 9, 2000.+
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies, and
Nominees.*
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies, and Other Nominees.*
(a)(6) Form of Notice of Guaranteed Delivery.*+
(a)(7) Summary Advertisement dated May 9, 2000.*
(a)(8) Text of joint press release issued by Homestead and Security Capital,
dated May 2, 2000.*
(a)(9) Opinion of Stern Stewart & Co., dated May 2, 2000 (attached as Annex
A hereto).+
(a)(10) Notice of Merger.*+
(e)(1) Agreement and Plan of Merger, dated as of May 2, 2000, among Security
Capital, Purchaser and Homestead.*
(e)(2) Items 1 and 10 through 13 of the Form 10-K of Homestead for the year
ended December 31, 1999 (incorporated by reference to the Form 10-K
of Homestead, filed on March 14, 2000).
(e)(3) Items 10 through 13 of the Form 10-K/A of Homestead for the year
ended December 31, 1999 (incorporated by reference to the Form 10-K/A
of Homestead, filed on April 26, 2000).
</TABLE>
- --------
* Incorporated by reference to the Schedule TO filed by Security Capital on
May 9, 2000.
+ Included in copies mailed to Homestead's stockholders.
5
<PAGE>
SIGNATURE
After due 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.
Homestead Village Incorporated
/s/ Eugene Vesell
By: _________________________________
Name: Eugene Vesell
Title: Chairman of the Special
Committee of the Board of
Directors
Dated: May 9, 2000
6
<PAGE>
[Logo of Stern Stewart]
Annex A
May 2, 2000
Special Committee of the
Board of Directors
Homestead Village Incorporated
2100 River Edge Parkway
Atlanta, Georgia 30328
Dear Mr. Vesell:
We understand that Security Capital Group, Inc. ("Security Capital") has
offered to purchase all of the outstanding shares and associated preferred
share purchase rights of Homestead Village Incorporated (the "Company") not
already owned by Security Capital (the "Remaining Shares"), pursuant to a
tender offer for $4.10 in cash per share and in the related merger of a
subsidiary of Security Capital with and into the Company (the "Transaction").
We further understand that Security Capital currently owns approximately 87%
of the Company's common shares and associated preferred share purchase rights.
You have asked for our opinion ("Opinion") as to the fairness from a financial
point of view of the consideration to be paid to the holders of the Remaining
Shares by Security Capital in connection with the Transaction.
STERN STEWART & CO. ("STERN STEWART"), AS PART OF ITS CORPORATE FINANCIAL
ADVISORY BUSINESS, IS REGULARLY ENGAGED IN THE VALUATION OF BUSINESSES AND
THEIR SECURITIES AND CONTRACTS, BUSINESS UNITS, AND JOINT VENTURES. WE WILL
RECEIVE A FEE FOR ACTING AS FINANCIAL ADVISOR TO THE SPECIAL COMMITTEE OF THE
BOARD OF DIRECTORS OF THE COMPANY (THE "SPECIAL COMMITTEE") AND FOR RENDERING
THIS OPINION. IN ADDITION, THE COMPANY HAS AGREED TO INDEMNIFY US FOR CERTAIN
LIABILITIES ARISING OUT OF THE RENDERING OF THIS OPINION. WE HAVE NOT
PREVIOUSLY ADVISED THE COMPANY OR THE BOARD OF DIRECTORS.
In arriving at our Opinion set forth below, we have, among other things:
1. Reviewed financial and other information that was publicly available
or furnished to us by the Company, including information provided during
discussions with management. We have used, studied and analyzed forward-
looking projections provided to us by the Company.
2. Reviewed the Company's assumptions and projections and, based on
information provided to us by management, have made revisions to certain
assumptions to reflect positive variances from budgets in the Company's
performance in the first quarter of 2000. We have revised these forward-
looking projections to reflect the long-term operating performance of the
Company.
3. Incorporated discounted EVA(R) and discounted cash flow valuation
analyses and methodologies.
4. Familiarized ourselves to the extent appropriate and feasible with the
financial and operating performance, current financial condition, business,
and prospects of the Company and reviewed other Company-specific and
industry-related information provided to us.
5. Compared certain financial data of the Company with various industry
reports and conducted such other reviews and evaluations of industry data
and reports as we deemed appropriate for the purposes of this Opinion.
<PAGE>
6. Discussed the past and current operations and financial condition and
the prospects of the Company with senior executives of the Company.
7. Prepared sensitivity analyses of the financial impact that changes in
the assumptions used in financial forecasts have on the value of the
Company.
8. Conducted such other financial studies, analyses, or investigations,
and reviewed such other documents as we deemed appropriate for the purposes
of this Opinion. We have not made an independent evaluation or appraisal of
any of the assets or liabilities of the Company, nor have we been furnished
with such appraisals.
9. Reviewed the Merger Agreement and certain related documents.
10. Compared the financial terms of the Transaction, to the extent
applicable, with the terms of certain other recent transactions that we
deemed relevant.
11. Reviewed the trading history of the common stock of the Company and a
comparison of that trading history with the trading histories of those
other companies that we deemed relevant.
In rendering this Opinion, we have relied, without independent verification,
on the accuracy and completeness of all financial and other information
reviewed by us for the purposes of this Opinion. With respect to the Company's
projections and assumptions, we have assumed that they were reasonably
prepared on bases reflecting the best currently available estimates and good
faith judgement of the Company's management.
On the basis of and subject to the foregoing, as of the date hereof, it is
our Opinion that the consideration to be paid to the holders of the Remaining
Shares in connection with the Transaction is fair, from a financial point of
view, to the holders of the Remaining Shares.
Sincerely yours,
Stern Stewart & Co.
By: /s/ Dennis Soter
Dennis Soter
Partner
<PAGE>
[LETTERHEAD OF HOMESTEAD VILLAGE LETTERHEAD]
May 9, 2000
Homestead Village Incorporated
2100 RiverEdge Parkway, Ninth Floor
Atlanta, Georgia 30328
Dear Stockholder:
On May 2, 2000, Homestead Village Incorporated, a Maryland corporation
("Homestead"), and Security Capital Group Incorporated, a Maryland corporation
("Security Capital"), entered into a merger agreement providing for the
acquisition of all of the outstanding shares of Homestead and associated
Preferred Share Purchase Rights not already owned by Security Capital and its
subsidiaries at $4.10 per share, net to the seller in cash (less any required
withholding taxes), without interest thereon.
Security Capital has today commenced a cash tender offer for all outstanding
shares of Homestead common stock and associated Preferred Share Purchase
Rights not already owned by Security Capital and its subsidiaries, at a price
of $4.10 per share, net to the seller in cash (less any required withholding
taxes), without interest thereon. The merger agreement provides that,
following the tender offer, a newly formed indirect wholly owned subsidiary of
Security Capital will merge with and into Homestead and any remaining shares
of common stock of Homestead other than those owned by Homestead or Security
Capital will be converted into the right to receive $4.10 per share in cash,
without interest.
At a meeting on May 2, 2000, your Board of Directors (the "Board"), by vote
of each member of the Board (other than two members who abstained because of
their positions with Security Capital) based on, among other things, the
recommendation of a Special Committee comprised of Homestead's independent
directors, (i) determined that each of the tender offer and the merger is fair
to, advisable and in the best interests of Homestead and its stockholders and
(ii) recommended acceptance of the tender offer and approval of the merger by
Homestead's stockholders.
In arriving at its recommendation, the Board gave careful consideration to
the factors described in the enclosed tender offer materials and Homestead's
Solicitation/Recommendation Statement on Schedule 14D-9. Included as Annex A
to the Schedule 14D-9 is the written opinion, dated May 2, 2000, of Stern
Stewart & Co., the Special Committee's financial advisor, to the effect that,
as of that date and based on and subject to the matters described in the
opinion, the price per share of $4.10 to be received in the tender offer and
the merger by the holders of Homestead shares, is fair, from a financial point
of view, to those holders.
Enclosed for your consideration are copies of the tender offer materials and
Homestead's Solicitation/Recommendation Statement on Schedule 14D-9, which are
being filed today with the Securities and Exchange Commission. These documents
should be read carefully.
Sincerely,
/s/ C. Ronald Blankenship
C. Ronald Blankenship
Interim Chairman
