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FORM 8-K/A
AMENDMENT TO CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
METALLURG, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 13-1661467
(STATE OR OTHER JURISDICTION (IRS EMPLOYER
OF INCORPORATION) IDENTIFICATION NUMBER)
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6 EAST 43RD STREET
NEW YORK, NEW YORK 10017
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)(ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(212) 835-0200
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ITEM 1. PROPOSED CHANGE OF CONTROL OF REGISTRANT.
On June 15, 1998, Metallurg, Inc. ("Metallurg"), Metallurg Holdings, Inc.
("Metallurg Holdings") and Metallurg Acquisition Corp. ("Metallurg Acquisition")
entered into a merger agreement (the "Merger Agreement") pursuant to which
Metallurg Acquisition will merge with and into Metallurg, with Metallurg being
the Surviving Corporation of the merger (the "Merger"). Upon consummation of the
Merger, each share of Metallurg's outstanding common stock will be converted
into the right to receive $30.00 in cash, subject to the terms of the Merger
Agreement. Upon consummation of the Merger, Metallurg Holdings will own 100% of
the outstanding common stock of Metallurg. Metallurg Holdings is owned by a
group led by Safeguard International Fund, L.P. ("Safeguard International").
Safeguard International is an international private equity fund with current
committed capital in excess of $250 million, which includes coinvestment
commitments of up to $45 million. Safeguard International invests primarily in
equity securities of companies in process industries -- industries which convert
raw or semi-finished materials into products for use by other businesses. With a
presence in both the United States and Europe and investment professionals that
have substantial management experience in process industries, Safeguard
International has a strong international operating orientation and concentrates
on situations where it believes that it can create value by drawing upon the
experience of its investment team.
The obligations of Metallurg and Metallurg Holdings to consummate the
Merger are subject to various conditions, including, without limitation, the
following: obtaining the requisite approval of Metallurg's stockholders; the
receipt of certain consents from Metallurg's lenders; and the absence of any
injunction or other legal restraint or prohibition preventing the Merger.
Metallurg Holdings' obligations are further subject to no material adverse
change relating to Metallurg and its subsidiaries having occurred and being
continuing; receipt of the favorable opinion of Deloitte & Touche LLP to the
effect that the Merger will be recorded by Metallurg as a recapitalization for
financial reporting purposes; and the receipt of the requisite consents from
holders of Metallurg's 11% Senior Notes due 2007 to a one-time waiver of
Metallurg's obligation to make a change of control offer following the Merger in
accordance with the Indenture for the Notes and to certain other amendments to
the Indenture to reflect the beneficial ownership of Metallurg following Merger.
Metallurg can give no assurance that the conditions to the Merger will be
satisfied or that the Merger will ever be consummated. In addition, subject to
the provisions of Delaware law, the Merger Agreement may be amended by the
parties.
As of June 4, 1998, Metallurg had 4,956,406 shares of common stock
outstanding. Directors and executive officers of Metallurg beneficially owned
3,085,415 shares of common stock and options to purchase 130,000 shares of
common stock of Metallurg as of that date. In addition, pursuant to existing
employment agreements between Metallurg and Michael A. Standen, J. Richard Budd,
Michael A. Banks, Barry C. Nuss and Eric L. Schondorf, each of these individuals
will, in certain circumstances, be entitled to payments of $1.2 million,
$474,300, $321,300, $321,300 and $313,650, respectively, if their employment is
terminated by them or by the Surviving Corporation in accordance with the terms
of their respective employment agreements following the Merger. See Metallurg's
Annual Report on Form 10-K for the year ended January 31, 1998 which has been
filed with the Securities and Exchange Commission for a discussion of these
employment agreements and of certain other benefits to which these employees may
become entitled in the event of their termination.
The Merger Agreement provides that immediately following the Merger, the
officers of Metallurg immediately prior to the Merger will be the officers of
Metallurg immediately following the Merger, and that the directors of Metallurg
will be the following persons: Heinz C. Schimmelbusch, Arthur R. Spector and
Michael A. Standen. Information with regard to Mr. Standen can be found in
Metallurg's Annual Report on Form 10-K for the year ended January 31, 1998 which
has been filed with the Securities and Exchange Commission. Information with
regard to Messrs. Schimmelbusch and Spector is set forth below:
Heinz C. Schimmelbusch. Mr. Schimmelbusch is a Managing Director of the
general partner and of the management company of Safeguard International. He is
also Chairman of the Board, President and the Chief Executive Officer of Allied
Resource Corporation, a company he founded in 1994. Until 1994, Mr.
Schimmelbusch was Chairman of the Management Board of Metalgesellschaft AG,
Germany, a
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multibillion dollar multinational company in the process industries, and
Chairman of the Supervisory board of LURGI AG, Germany's leading process
engineering firm; of Buderus AG, a leading manufacturer of commercial and
residential heating equipment; of Dynamit Nobel AG, a leading manufacturer of
explosives; and Norddeutsche Affinerie AG, Europe's largest copper producer. Mr.
Schimmelbusch also served on the boards of several German and other foreign
corporations and institutions, including Allianz Versicherungs AG, Munich;
Philipp Holzmann AG, Frankfurt; Mobil Oil AG, Hamburg; Teck Corporation,
Vancouver; and others. Mr. Schimmelbusch has been the founder and Chairman of a
number of public companies in process industries, including: Inmet Corporation,
Toronto (formerly Metall Mining Corporation); Methanex Corporation, Vancouver;
and B.U.S. Umweltservice AG, Frankfurt. Mr. Schimmelbusch is a Director of
Safeguard Scientifics, Inc., a position he has held since 1989, and of Arthur
Treacher's Seafood Grill.
Arthur R. Spector. Mr. Spector is a Managing Director of the general
partner and of the management company of Safeguard International. From January
1997 to March 1998, Mr. Spector served as a managing director of TL Ventures
LLC, a venture capital management company organized to manage day-to-day
operations of TL Ventures III L.P. and TL Ventures III Offshore L.P. From
January 1995 through December 1996, Mr. Spector served as Director of
Acquisitions of Safeguard Scientifics, Inc. From July 1992 until May 1995, Mr.
Spector served as Vice Chairman and Secretary of Casino & Credit Services, Inc.
From October 1991 to December 1994, Mr. Spector was Chief Executive Officer and
a director of Perpetual Capital Corporation, a merchant banking organization.
Mr. Spector serves as Chairman of Neoware Systems, Inc., a manufacturer of
thin-client computers; and as a director of USDATA Corporation, a company which
produces factory and process automation software; and Bocucorp International,
Inc., a document automation company.
On June 19, 1998, Metallurg announced that it would promptly begin
soliciting consents from the registered holders of its 11% Senior Notes due 2007
to make the "change of control" provisions of the Indenture for those Notes
inapplicable to the Merger and to amend the definition of "Permitted Holders" to
reflect the beneficial ownership of Metallurg following the Merger. See the
press release filed as an exhibit to this report.
On June 19, 1998, Metallurg also announced that Safeguard International had
advised Metallurg that it plans to finance the Merger in part through an
unregistered offering of senior discount notes due 2008 of Metallurg Holdings.
See the press release filed as an exhibit to this report.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
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(2) Merger Agreement dated June 15, 1998 between Metallurg,
Metallurg Holdings and Metallurg Acquisition*.
(99)(a) Press Release of Metallurg, Inc. dated June 15, 1998*.
(99)(b) Press Release of Metallurg, Inc. dated June 19, 1998.
(99)(c) Press Release of Metallurg, Inc. dated June 19, 1998.
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* Filed with Current Report on Form 8-K, dated June 16, 1998.
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SIGNATURES
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.
METALLURG, INC.
By /s/ ERIC L. SCHONDORF
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Name: Eric L. Schondorf
Date: July 2, 1998
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[METALLURG, INC. LETTERHEAD]
FOR IMMEDIATE RELEASE
FINANCING PLANS FOR ACQUISITION OF METALLURG, INC.
New York, NY - June 19, 1998 - Metallurg, Inc. (OTCBB: MEAL) announced
today the plans of Safeguard International Fund, L.P. for financing the
acquisition of Metallurg by a group of institutional co-investors led by
Safeguard International.
Safeguard International has advised Metallurg that it plans to finance the
acquisition in part through an unregistered offering of senior discount notes
due 2008. It is anticipated that the notes will be issued by Metallurg
Holdings, Inc., a newly formed Delaware corporation, which will own all the
outstanding common stock of Metallurg, Inc. after the acquisition. The offering
is expected to yield gross proceeds to Holdings of approximately $60 million.
The proceeds will be used by Holdings, together with equity contributions to
Holdings by the investor group of approximately $100 million, to fund the
purchase price of $30 per share to current shareholders of Metallurg. No funds
of Metallurg, Inc. will be used to finance the purchase price.
Safeguard International has advised Metallurg that the senior discount
notes will not be registered under the Securities Act of 1933, as amended, and
may not be offered or sold in the United States absent registration or an
applicable exemption form the registration requirements of the Act.
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METALLURG, INC.
6 EAST 43RD STREET
NEW YORK, N.Y. 10017
TELEPHONE (919) 687-9470 / (919) 835-0901
FACSIMILE (915) 637-0091
FOR IMMEDIATE RELEASE
METALLURG BEGINS CONSENT SOLICITATION
New York, NY -- June 19, 1998 -- Metallurg, Inc. (OTCBB: MEAL) announced
today that in connection with its previously announced acquisition by an
investor group led by Safeguard International Fund, L.P., Metallurg would
promptly begin soliciting consents from the registered holders of its 11%
Senior Notes due 2007.
Consents under the consent solicitation would make the "change of control"
provisions of the indenture, dated as of November 25, 1997, by and among
Metallurg, the guarantors named therein, and IBJ Schroder Bank & Trust Company
inapplicable to the proposed acquisition for all noteholders and amend the
definition of "Permitted Holders" to reflect the proposed acquisition. The
purposes of the consent are to facilitate the proposed acquisition of
Metallurg, which will be structured as a merger, including the appointment of a
new board of directors pursuant to the terms of the merger agreement and to
change the definition of "Permitted Holders" under the indenture to reflect the
beneficial ownership of Metallurg following the merger.
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The consent solicitation will expire at 5:00 p.m., New York City time, on
July 2, 1998, unless extended by Metallurg in its sole discretion, but if the
requisite consents are received prior to such date, the consents will become
irrevocable.
BancBoston Securities Inc. is acting as the solicitation agent and D.F.
King & Co., Inc. as the information agent, with respect to the consent
solicitation.
Metallurg will distribute consent solicitation materials to its noteholders
beginning on June 19, 1998. Copies of the Consent Solicitation materials are
available from D.F. King & Co., Inc., 77 Water Street, New York, NY 10005. Banks
and brokers call collect at (212) 269-5530, and others call toll free at (800)
859-8509.
Metallurg, founded in 1911, is an international producer and seller of
high quality metal alloys and specialty metals used by manufacturers of steel,
aluminum, superalloys and titanium and other metal consuming products.
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