SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 6, 1999
NEWPORT NEWS SHIPBUILDING INC.
(Exact name of registrant as specified in its charter)
Delaware 1-12385 74-1541566
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
4101 Washington Avenue, Newport News, VA 23607
(Address of principal executive offices) (zip code)
(757) 380-2000
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
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Item 5. Other Events
Newport News Shipbuilding Inc. ("Newport News") reported on May
6, 1999 that Litton Industries, Inc. ("Litton Industries") submitted an
unsolicitated proposal to merge with Newport News in a tax-free,
stock-for-stock merger in which each Newport News common share would be
converted into .55 Litton shares. Newport News also reported that it was
simultaneously provided by Litton Industries with a copy of an independent
proposal made by Litton Industries to acquire Avondale Industries, Inc.
("Avondale") in an all cash transaction of $38.00 per common share. Neither
Litton Industries' offer to Newport News nor its offer to Avondale is
conditioned upon acceptance or rejection of the other.
On January 19, 1999, Newport News announced an agreement for an
all stock merger with Avondale, in which Avondale shareholders would
receive Newport News stock. This proposed merger has received antitrust
clearance from the Department of Justice.
The Newport News board of directors has authorized preliminary
discussions with Litton Industries in order to fully evaluate the terms of
Litton Industries' offer. The Newport News board of directors has not made
any determination as to the adequacy of Litton Industries' present proposal
and there can be no assurance that any transaction proposed by Litton
Industries will be acceptable to the Newport News board of directors.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit 99.1 Press Release
Exhibit 99.2 Letter from Litton Industries dated May 5, 1999, to
Newport News
Exhibit 99.3 Letter from Litton Industries dated May 5, 1999, to
Avondale
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
NEWPORT NEWS SHIPBUILDING INC.
Date: May 10, 1999 By: /s/ Stephen B. Clarkson
--------------------------------
Name: Stephen B. Clarkson
Title: Vice President,
General Counsel and
Secretary
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Exhibit Index
Sequential Page
Exhibit No. Description of Exhibit Number
Exhibit 99.1 Press Release 5
Exhibit 99.2 Letter from Litton Industries dated May 5,
1999, to Newport News 6
Exhibit 99.3 Letter from Litton Industries dated May 5,
1999, to Avondale 9
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EX.-99.1
PRESS RELEASE
NEWS RELEASE
- ---------------------------------------------------------------------------
CONTACTS: Investors: Media:
Dave Anderson George Sard
(757) 380-7600 Paul Verbinnen
(212) 687-8080
NEWPORT NEWS ANNOUNCES RECEIPT OF UNSOLICITED
MERGER PROPOSAL FROM LITTON INDUSTRIES, INC.
NEWPORT NEWS, VA, - May 6, 1999 - Newport News Shipbuilding (NYSE:NNS)
announced today that Litton Industries, Inc. has submitted an unsolicited
proposal to merge with Newport News Shipbuilding in a tax-free,
stock-for-stock merger in which each Newport News Shipbuilding common share
would be converted into .55 Litton shares. Newport News Shipbuilding also
stated that it has simultaneously been provided by Litton with a copy of an
independent proposal made by Litton to acquire Avondale Industries in an
all-cash transaction of $38.00 per common share. Neither Litton's offer to
Newport News Shipbuilding nor its offer to Avondale Industries is
conditioned upon acceptance or rejection of the other.
Newport News Shipbuilding previously announced an agreement for an
all-stock merger with Avondale, in which Avondale shareholders would
receive Newport News stock. This proposed merger has received antitrust
clearance from the Department of Justice.
"Our board is fully committed to acting in the best interest of
Newport News shareholders," said William P. Fricks, Chairman and Chief
Executive Officer of Newport News Shipbuilding. "Accordingly, our board has
authorized preliminary discussions with Litton Industries in order to fully
evaluate the terms of the offer. I want to emphasize, however, that our
board has not made any determination as to the adequacy of Litton's present
proposal and there can be no assurance that any transaction proposed by
Litton will be acceptable to our board."
Newport News Shipbuilding designs and constructs nuclear powered
aircraft carriers and submarines for the U.S. Navy and provides life cycle
maintenance services for ships in the Navy fleet. The company employs
18,000 people and has annual revenues of approximately $1.8 billion.
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EX.-99.2
LITTON LETTER TO NEWPORT NEWS
Litton
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Corporate Litton Industries, Inc.
21240 Burbank Boulevard
Woodland Hills, California
01367-6675
Tel: 818 598-5955
Fax: 818 598-3313
[email protected]
Michael R. Brown
Chairman and
Chief Executive Officer
May 5, 1999
Mr. William P. Fricks
Chairman and Chief Executive Officer
Newport News Shipbuilding
4101 Washington Avenue
Newport News, VA 23607
Dear Bill:
With the approval of the Litton Industries, Inc. Board of Directors, I am
writing on behalf of Litton Industries, Inc. to offer you an exceptional
opportunity to create value for your shareholders, employees and customers.
Given the changes that have occurred in the competitive environment of the
shipbuilding industry over the past decade, it has become apparent to us
that a combination of Litton Industries, Inc.'s Ingalls Shipbuilding
business with that of Newport News Shipbuilding would make a great deal of
sense. Indeed, we have from time to time discussed with you the possibility
of a combination of Newport News Shipbuilding and Ingalls Shipbuilding and
have generally agreed that the combination would create significant value.
Therefore, I am pleased to propose a tax-free, stock-for-stock merger of
Newport News Shipbuilding and Litton Industries, Inc., to be accounted for
as a pooling of interests, in which each Newport News Shipbuilding common
share would be converted into 0.55 Litton Industries, Inc. shares. This
would provide a value of $35.50 for each Newport News Shipbuilding share,
based on yesterday's Litton Industries, Inc. share price, representing a
32% premium to Newport News Shipbuilding's closing share price as of today.
The transaction we propose would create a world-class leader in
shipbuilding and would provide Newport News Shipbuilding shareholders an
opportunity to participate in that leadership at a substantial premium and
on a tax-free basis.
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The U.S. Navy and our other customers would benefit from this combination
and your employees would join a powerful new team. Our Ingalls Shipbuilding
business has many strengths in the construction of complex warships,
commercial vessels and ship repair, maintenance and overhaul.
We further believe that an expanded Ingalls Shipbuilding/Avondale
Industries, Inc./Newport News Shipbuilding combination would represent the
most logical response to the challenging environment we are all facing now
and will likely face for the foreseeable future. This combination would
create a strong, full-service U.S. shipbuilder with the scale and scope to
compete for all shipbuilding programs. It also would create efficiencies
and synergies that will benefit all of our constituencies. Accordingly,
Litton Industries, Inc. today has independently proposed to combine with
Avondale Industries, Inc. in an all-cash transaction. Neither our proposal
to you nor our proposal to Avondale Industries, Inc. is conditioned upon
the acceptance of our proposal to the other. For your convenience, a copy
of our proposal to Avondale Industries, Inc. is enclosed.
The key to any successful business combination is the people involved and
the successful integration of their skills. We have an excellent
relationship with Ingalls Shipbuilding's employees, and are confident that
we would be able to gain the long-term support of Newport News
Shipbuilding's employees. Litton Industries, Inc. has been a leading
shipbuilder for more than 30 years, and we know that much of our success
is rooted in our commitment to the communities in which we operate. We've
worked hard to be good corporate citizens and responsible community
members, and we're committed to continuing that tradition with the Newport
News Shipbuilding and Avondale Industries, Inc. families.
I also have great respect for Newport News Shipbuilding's management team,
having worked closely with them in the past. I contemplate that Newport
News Shipbuilding's team would remain largely intact in the transaction and
that Newport News Shipbuilding personnel would be well represented in the
senior management ranks of the combined shipbuilding businesses. I have
given a similar indication concerning management participation to Avondale
Industries, Inc., should Avondale Industries, Inc. accept our offer.
Bill, I recognize that your contributions to Newport News Shipbuilding have
been an essential factor in its success. I believe it is important to the
success of the combined
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enterprise that following the transaction you will agree to become a senior
officer of Litton Industries, Inc.
Given the compelling logic of what we are proposing and the clear
superiority of our offers to the proposed merger between Newport News
Shipbuilding and Avondale Industries, Inc., we would like to meet with you
and your advisors as soon as possible to finalize a definitive agreement
(comparable to your existing agreement with Avondale Industries, Inc.)
between our companies while conducting due diligence. We are advised by our
legal advisors that there are no significant antitrust or other issues
associated with a combination of our companies,
Sincerely,
Michael R. Brown
cc: Board of Directors
Newport News Shipbuilding
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EX.-99.3
LITTON LETTER TO AVONDALE
Litton
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Corporate Litton Industries, Inc.
21240 Burbank Boulevard
Woodland Hills, California
01367-6675
Tel: 818 598-5955
Fax: 818 598-3313
[email protected]
Michael R. Brown
Chairman and
Chief Executive Officer
May 5, 1999
Mr. Albert Bossier
Chairman, Chief Executive Officer & President
Avondale Industries, Inc.
5100 River Road
Avondale, LA 70094
Dear Al:
Over the years, Litton Industries, Inc. and Avondale Industries, Inc. have
worked together closely and cordially on a number of projects and, as
recently as last November and December, have discussed the advantages of
combining our two companies. It has always been our mutual conclusion that
a strategic relationship would provide exceptional value to our companies,
customers and employees and should be pursued. We were disappointed that
intervening events have prevented an opportunity to pursue those
discussions. However, the logic of a combination has remained and, after
intensive review and evaluation of publicly available information, we have
concluded that the strategic and financial advantages of combining our two
companies are too compelling to ignore.
Accordingly, with the approval of our Board of Directors, we are pleased to
propose that Litton Industries, Inc. acquire Avondale Industries, Inc. in
an all-cash transaction of $38.00 per common share. This price represents
exceptionally attractive value for your shareholders-- specifically, an
all-cash offer at an additional premium of 18% over your closing price of
today.
In addition to providing substantially greater value to your shareholders
than the proposed Newport News Shipbuilding transaction, our proposal
represents a particularly attractive opportunity to build a combined
enterprise uniquely positioned for continued leadership in the shipbuilding
industry. The U.S. Navy and our other
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customers would benefit from this combination and your employees would join
a powerful new team. Our Ingalls Shipbuilding business has many strengths
in the construction of complex warships, commercial vessels and ship
repair, maintenance and overhaul. Avondale Industries, Inc. has
complementary strengths in these areas, plus recent commercial shipbuilding
experience. Supported by Litton Industries, Inc.'s financial resources and
advanced technology, the combined entity will be a formidable competitor,
well positioned to achieve considerable cost savings, to compete
aggressively and effectively and to provide superior service to our
customers. We believe that the combined company would be better suited than
the Avondale Industries, Inc./Newport News Shipbuilding combination to
compete and to thrive in the challenging environment in which we are
operating now and will likely face for the foreseeable future.
In addition, while our proposal to you is not conditioned on entering a
transaction with Newport News Shipbuilding, we believe that the Avondale
Industries, Inc./Litton Industries, Inc. combination would be further
strengthened and would offer even more powerful advantages if the
shipbuilding business of Litton Industries, Inc., Avondale Industries, Inc.
and Newport News Shipbuilding were combined. This combination would create
a strong, full-service U.S. shipbuilder with the scale and scope to compete
for all shipbuilding programs. It also would create efficiencies and
synergies that will benefit all of our constituencies. Therefore, we are
also today independently proposing to merge with Newport News Shipbuilding
in a stock-for-stock transaction. I enclose a copy of our proposal to
Newport News Shipbuilding delivered today.
The key to any successful business combination is the people involved and
the successful integration of their skills. We have an excellent
relationship with Ingalls Shipbuilding's employees, and are confident that
we would be able to gain the long-term support of Avondale Industries,
Inc.'s employees. Litton Industries, Inc. has been a leading shipbuilder
for more than 30 years, and we know that much of our success is rooted in
our commitment to the communities in which we operate. We've worked hard to
be good corporate citizens and responsible community members, and we're
committed to continuing that tradition with the Avondale Industries, Inc.
and Newport News Shipbuilding families.
I also have great respect for Avondale Industries, Inc.'s management team,
having worked closely with them in the past. I contemplate that Avondale
Industries, Inc.'s team would remain largely intact in the transaction and
that
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Avondale Industries, Inc. personnel would be well represented in the senior
management ranks of the combined shipbuilding business. I have given a
similar indication concerning management participation to Newport News
Shipbuilding, should Newport News Shipbuilding accept our offer.
Al, I recognize that your efforts have been critical to Avondale
Industries, Inc.'s success. I believe it is important to the success of the
combined enterprise that following the transaction you will agree to
continue as the chief executive of Avondale Industries, Inc. as well as to
become a senior officer of Litton Industries, Inc.
Given the compelling logic of what we are proposing and the clear
superiority of our offers to the proposed merger between Newport News
Shipbuilding and Avondale Industries, Inc., we would like to meet with you
and your advisors as soon as possible to negotiate and finalize a
definitive agreement between our companies while conducting confirmatory
due diligence. In this regard, we are ready to enter into a merger
agreement substantially comparable to the Newport News Shipbuilding
agreement. Our proposal is not subject to any financing contingencies, and
we are advised by our legal advisors that there are no significant
antitrust or other issues associated with a combination of our companies.
Sincerely,
Michael R. Brown
cc: Board of Directors
Avondale Industries, Inc.
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