<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------------------
AMENDMENT NO. 1
TO
SCHEDULE 14D-1
Tender Offer Statement
Pursuant to Section 14(d)(1) of the Securities Exchange Act of 1934
--------------------------------------------
MEADOWCRAFT, INC.
(Name of Subject Company)
SRB-MWI, L.L.C.
MWI ACQUISITION CO.
SAMUEL R. BLOUNT
(Bidders)
<TABLE>
<S> <C>
COMMON STOCK, 58320410
PAR VALUE $.01 PER SHARE (CUSIP Number of Class of Securities)
(Title of Class of Securities)
</TABLE>
SAMUEL R. BLOUNT
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
MWI ACQUISITION CO.
4700 PINSON VALLEY PARKWAY
BIRMINGHAM, ALABAMA 35215
TELEPHONE: (205) 853-2220
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDER)
Copy to:
PAUL S. BIRD, ESQ.
DEBEVOISE & PLIMPTON
875 THIRD AVENUE
NEW YORK, NEW YORK 10022
TELEPHONE: (212) 909-6000
--------------------------------------------
CALCULATION OF FILING FEE
<TABLE>
<CAPTION>
TRANSACTION VALUATION* AMOUNT OF FILING FEE**
<S> <C>
$53,157,190 $10,631.44
</TABLE>
- ------------------
* Calculated by multiplying $10.00, the per share tender offer price, by
5,315,719 shares of Common Stock sought in the Offer.
** 1/50 of 1% of Transaction Valuation.
[X] Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: 10,631.44
-----------------
Form or Registration No.: 14D-1
-----------------
Filing Party: MWI Acquisition Co.
---------------------------
Date Filed: May 19, 1999
-----------------------------
================================================================================
<PAGE> 2
This Amendment No. 1 (this "Amendment") amends and supplements the
Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1") originally
filed on May 19, 1999 by SRB-MWI, L.L.C., a Nevada limited liability company
("Parent"), MWI Acquisition Co., a Delaware corporation ("Purchaser") and a
wholly owned subsidiary of Parent, and Samuel R. Blount, relating to the offer
by Purchaser to purchase all of the outstanding shares of common stock, par
value $.01 per share (the "Shares"), of Meadowcraft, Inc., a Delaware
corporation ("Meadowcraft"), at a purchase price of $10.00 per Share, net to
the seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated May 19, 1999 (the "Offer to
Purchase"), and in the related Letter of Transmittal.
All capitalized terms used in this Amendment without definition have
the meanings attributed to them in the Schedule 14D-1.
<PAGE> 3
ITEM 10. ADDITIONAL INFORMATION
Item 10(e) of the Schedule 14D-1 is hereby amended by adding the
following:
On or about May 25, 1999, an amended complaint was filed in the
Delaware Action. The amended complaint alleges, among other things, that the
$10.00 per Share consideration to be received by holders of Shares in the Offer
and the Merger does not reflect the fair value of Meadowcraft's assets and
business, that the Offer to Purchase fails to disclose material facts, and that
the defendants have breached or are breaching their fiduciary duties. The
amended complaint in the Delaware Action no longer names a former director of
the Company as a defendant, and names Purchaser and one current director of the
Company not named in the initial complaint as additional defendants. The
plaintiff in the Delaware Action also filed a motion for a preliminary
injunction seeking an order preventing the consummation of the Offer and
requiring defendants to supplement the Offer to Purchase and the Schedule 13E-3
filed by Meadowcraft, as well as a motion for expedited discovery in connection
therewith. A copy of the amended complaint is filed as exhibit (g)(2) hereto.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS
Item 11 of the Schedule 14D-1 is hereby amended by adding the
following:
(g)(2) Amended Class Action Complaint filed in Andra v. Blount et al.
(Court of Chancery of the State of Delaware in and for New
Castle County, filed on or about May 25, 1999).
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<PAGE> 4
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Amendment is true, complete and correct.
SRB-MWI, L.L.C.
By: /s/ Samuel R. Blount
---------------------------------
Name: Samuel R. Blount
-------------------------------
Title: Manager
------------------------------
MWI ACQUISITION CO.
By: /s/ Samuel R. Blount
---------------------------------
Name: Samuel R. Blount
-------------------------------
Title: Chairman and Chief Executive
------------------------------
Officer
------------------------------
Samuel R. Blount
/s/ Samuel R. Blount
------------------------------------
Date: May 28, 1999
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
(g)(2) Amended Class Action Complaint filed in Andra v. Blount
et al. (Court of Chancery of the State of Delaware in and
for New Castle County, filed on or about May 25, 1999).
</TABLE>
<PAGE> 1
EXHIBIT (G)(2)
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
N AND FOR NEW CASTLE COUNTY
- ---------------------------------
MARY D. ANDRA, )
)
Plaintiff, )
v. )
) Civil Action No. 17154
SAMUEL R. BLOUNT, )
TIMOTHY M. LEROY, ) AMENDED
T. MORRIS HACKNEY, ) CLASS ACTION COMPLAINT
JAMES M. SCOTT, and )
REESE H. MCKINNEY, JR. )
MEADOWCRAFT, INC., )
and MWI ACQUISITION CO., )
)
Defendants. )
- ---------------------------------)
Plaintiff alleges, on information and belief, except paragraph 1
which is alleged on personal knowledge, as follows:
THE PARTIES
1. Plaintiff is and was at all times relevant to this action the
owner of shares of Meadowcraft, Inc. ("Meadowcraft" or "the Company") common
stock.
2. Meadowcraft, a corporation organized and existing under the
laws of the state of Delaware, is the leading domestic producer of casual
outdoor furniture and is the
<PAGE> 2
largest manufacturer of wrought iron furniture in the United States. As of April
9, 1999, Meadowcraft had approximately 19.7 million shares of common stock
outstanding.
3. Defendant Samuel R. Blount ("Blount") is and was at all
relevant times Chairman of the Board and a director of Meadowcraft since 1985.
Blount is also the 73% controlling stockholder of Meadowcraft, having sole
voting power over 14,407,716 shares. A member of Blount's family, Mary M.
Blount, beneficially owns 800,000 shares, representing 4.1% but shares voting
and disposition powers with Samuel R. Blount through SRB-MWI, LLC.
4. Defendant Timothy M. LeRoy ("LeRoy") is and has been President
and a director of Meadowcraft since March 23, 1999. Prior to becoming President,
LeRoy had been Vice President of sales and marketing for Meadowcraft since 1991.
5. Defendant T. Morris Hackney ("Hackney") is and was at all
relevant times a director of Meadowcraft since at least November 25, 1997, and
the Chairman of Citation Corporation, a metal component supplier located in
Birmingham, Alabama. Hackney owns no shares of Meadowcraft stock. A company in
which Hackney owns a 40% interest leases to Meadowcraft the property on which
Meadowcraft's Birmingham manufacturing facility is located. Hackney receives
indirectly approximately $11,800 per month of the rental payments made by
Meadowcraft to the lessor.
6. Defendant James M. Scott ("Scott") is and was at all relevant
times a director of Meadowcraft since at least November 25, 1997, and a partner
in the
2
<PAGE> 3
Montgomery law firm of Capell, Howard, Knabe and Cobbs, P.A. Scott and his law
firm have provided tax and business advice to Blount and Blount, Inc., who are
clients of the firm. Scott owns 3,000 shares of Meadowcraft stock.
7. Defendant Reese H. McKinney, Jr., ("McKinney") is and was at
all relevant times a director of Meadowcraft since at least November 25, 1997.
McKinney owns 1,000 shares of Meadowcraft stock.
8. The officers and directors of Meadowcraft, referred to in
paragraphs 3-7 (collectively the "Individual Defendants"), owe fiduciary duties
of good faith, fair dealing, due care and candor to plaintiff and the other
Meadowcraft public stockholders.
CLASS ACTION ALLEGATIONS
9. Plaintiff brings this action pursuant to Rule 23 of the Rules
of this Court, on behalf of herself and all other shareholders of the Company
(except the defendants herein and any persons, firms, trust, corporations, or
other entities related to or affiliated with them) and their successors in
interest, who are or will be harmed by reason of the conduct of defendants
described herein (the "Class").
10. This Action is properly maintainable as a class action for the
following reasons:
a. the Class is so numerous that joinder of all members
is impracticable. There are over 3.4 million
Meadowcraft shares publicly traded. There
3
<PAGE> 4
are hundreds of holders of Meadowcraft common stock
who are members of the Class.
b. there are questions of law and fact which are common
to the class and which predominate over questions
affecting any individual class members. The common
questions include, inter alia, the following:
i. Whether defendants have breached or are
breaching their fiduciary duties to the
class; and
ii. Whether plaintiff and the other members of
the class would be irreparably damaged were
defendants not enjoined from effecting the
transaction described herein.
c. The claims of plaintiff are typical of the claims of
the other members of the Class in that all members of
the Class will be injured alike by defendants'
actions.
d. Plaintiff is committed to prosecuting this action and
has retained competent counsel experienced in
litigation of this nature. Accordingly, plaintiff is
an adequate representative of the Class.
SUBSTANTIVE ALLEGATIONS
11. In November 1997, Meadowcraft became a publicly-traded company
listed on the New York Stock Exchange ("NYSE") after having sold over 3,700,000
shares in an initial public offering ("IPO") at $13.00 per share, raising over
$44 million in
4
<PAGE> 5
additional paid in capital. According to the IPO Prospectus, the proceeds of the
IPO would be used, and were used, to pay approximately $32.7 million to the
existing shareholders of Meadowcraft and the balance for capital expenditures.
Prior to the IPO, Blount owned 90% of the shares of Meadowcraft. After the IPO,
Meadowcraft converted from a Subchapter S corporation to a Subchapter C
corporation under the Internal Revenue Code. In essence, Blount sold a portion
of his Meadowcraft stock to public investors for $13.00 per share.
12. In connection with the IPO, Meadowcraft and Blount
represented, among other things, that Meadowcraft had enjoyed increasing
profitability, that Meadowcraft was an "innovator in the design, manufacturing,
distribution and marketing of moderately priced, quality wrought iron
furniture;" that its "net sales have grown from $50.5 million in fiscal 1991 to
$141.9 million in fiscal 1997 while pro forma net income has increased from $1.2
million to $15.9 million over the same period;" that Meadowcraft had net income
of $16.7 million "[f]or Seasonal 1997;" that Meadowcraft's growth and "strong
market position" is attributable to its "ability to produce quality" products
with "broad consumer appeal," its "advanced manufacturing and distribution
facilities and computerized inventory tracking;" and its "excellent
relationships with its mass market retail customers."
13. It was also represented that Meadowcraft's sales are very
seasonal. Historically, approximately 50% of the net sales have been realized in
the quarter ended
5
<PAGE> 6
on the last day of April, while only about 5% of the company's sales have
occurred in the quarter ended on the last day of October. Meadowcraft
historically has experienced losses for the quarter ended on October 31, as the
company resumes production in September to build inventory for the spring
selling season.
14. After the IPO, Meadowcraft changed its financial reporting
year from a fiscal year ending on the Saturday closest to the last day of April
to a fiscal year ending on July 31. As a result, Meadowcraft's two down quarters
became the first fiscal quarter ending October 31 and the second fiscal quarter
ending January 31. And its best fiscal quarter became the third fiscal quarter
ending on April 30.
15. Not surprisingly, in light of the seasonality of its business,
Meadowcraft reported losses for the first and second fiscal quarters of 1999,
ending in October 1998 and January 1999 respectively. After these reported
losses, Meadowcraft's publicly traded shares plummeted to approximately $8 per
share in November 1998 and as low as $4 per share in March 1999.
16. On March 10, 1999, Meadowcraft disclosed that for the second
quarter ended January 31, 1999, the Company had incurred higher professional
fees "in connection with merger negotiations with a large New York Stock
Exchange listed company that were terminated during the quarter."
17. In connection with those merger negotiations, on November 10,
1998, Meadowcraft formed a special committee of defendants Hackney, Scott and
McKinney.
6
<PAGE> 7
The special committee then engaged Interstate/Johnson Lane Corporation (a
predecessor of Wachovia Securities), an investment banking firm, as its
financial advisor. That investment banking firm assisted the special committee
in determining a range of fair values for Meadowcraft's shares. It also analyzed
the fairness of the potential acquiror's offer of $16 per share in cash for the
public stockholders' shares and $13 per share in cash plus an earn-out of up to
an additional $3 per share for the common stock owned by Blount and the then
Chief Operating Officer of Meadowcraft, William J. McCanna.
18. After it was announced in March 1999 that the negotiations
with the potential acquiror were terminated during the second quarter,
Meadowcraft's Chief Financial Officer, Steven Braswell, admitted that the
financial advisor engaged by the special committee had opined during the
negotiations in November and December 1998 that the fair value of Meadowcraft's
outstanding shares was very near the 52 week trading high of the stock, which
was $17 1/8 per share.
19. Before the end of the Meadowcraft's historically good third
quarter, Blount took advantage of the Company's seasonality and the market's
negative reaction thereto. On April 9, 1999, Blount offered to purchase the 27%
of the shares of Meadowcraft he did not own for $8 cash per share in a cash-out
merger transaction. In short, Blount offered to buy back $8 per share stock he
had sold to the public for $13 per share just seventeen months earlier. Blount
further advised Meadowcraft's board that he was not interested in selling his
Meadowcraft shares.
7
<PAGE> 8
20. The proposed acquisition price of $8 per share did not, of
course, take into account the Company's increased or seasonal earnings prospects
and potential. In fact, Blount timed this transaction to capture Meadowcraft's
future and seasonal prospects and potential and use it for his own ends without
paying an adequate or fair price for Meadowcraft's public shares.
21. Blount is in an obvious position of control and power over
Meadowcraft and has access to internal financial information about Meadowcraft,
its true value, expected increase in true value and the benefits of 100%
ownership of Meadowcraft to which plaintiff and the Class members are not privy.
Blount is using his position of power and control to benefit himself in this
transaction, to the detriment of the Meadowcraft public stockholders.
22. The proposed acquisition by Blount undervalues Meadowcraft
common stock by ignoring the full value of its assets and future prospects. The
proposed buyout consideration does not reflect the fair value of Meadowcraft's
valuable assets and business.
23. Blount timed the announcement of the proposed buyout (before
the typically good third quarter results were realized and disclosed) to place
an artificial lid on the market price of Meadowcraft's common stock in order to
justify a price which is unfair to Meadowcraft public stockholders.
8
<PAGE> 9
24. In a press release issued on April 9, 1999, Meadowcraft
announced that it had formed a special committee of three (3) "independent
directors to evaluate the buy-out proposal made by . . . Blount." The special
committee was composed of the same three directors -- Hackney, Scott and
McKinney -- who had evaluated and considered the blended $16 per share and $13
per share cash plus $3 earn out offer made in November and December 1998 by the
unidentified third party company described in paragraph 17 above. The press
release did not disclose that each of the purportedly "independent directors"
had been hand picked by Blount to serve as directors at the time of the IPO. All
of them are longtime, intimate colleagues of Blount through business and social
relationships (for example, Scott or his law firm is Blount's personal lawyer;
Hackney, the chairman of the committee, has a continuing financial interest in a
lease with the Company.) None of them would take any action or position contrary
to Blount's wishes and interests. They are incapable of representing
Meadowcraft's public shareholders in any dealings with Blount.
25. The April 9 press release did not disclose the seasonality of
Meadowcraft's business and, in turn, its stock price performance. The press
release also noted that Blount had advised the board that he had no interest in
selling his own shares.
26. After the close of business on May 13, 1999, defendants
announced that the Meadowcraft board, based on the recommendation of the special
committee, had agreed to a cash-out merger in which Blount would pay $10 cash
per share for each of the over
9
<PAGE> 10
5.3 million shares he did not already own. The cash-out merger would be
effectuated by means of a tender offer by Blount's company, defendant MWI
Acquisition Co., a wholly-owned subsidiary of SRB-MWI, LLC. In the event a
shareholder did not tender, he or she would nevertheless be cashed-out in the
ensuing merger at $10 cash per share. The merger would permit, however,
dissenters' rights and appraisal for any shareholder who perfected his or her
appraisal rights. Thus, although the tender offer would be entirely coercive, a
shareholder could still seek appraisal by awaiting the second step merger.
27. On or about May 19, 1999, defendants filed with the Securities
and Exchange Commission ("SEC") tender offer documents on SEC Schedules 14D-1
and 14D-9 and supplemental materials on a Schedule 13E-3 Transaction Statement
(collectively "the Tender Offer Documents"). The Company's filing on Schedule
14D-9 merely incorporates by reference in disclosures contained in the offeror's
Schedule 14D-1 and the Offer to Purchase disseminated to Meadowcraft's public
shareholders.
28. In the Tender Offer Documents, defendants disclose that the
special committee had retained the same investment banking firm, Wachovia
Securities, to analyze and opine on Blount's cash-out offer as had been retained
in connection with the third party proposal in November and December 1998. In
particular, defendants describe the potential transaction proposed in November
1998 by the unidentified "large New York Stock Exchange, Inc. (`NYSE') listed
company." The description also discloses that the special committee considering
the proposed transaction had engaged
10
<PAGE> 11
"Interstate/Johnson Lane Corporation (a predecessor of Wachovia Securities)
. . . as its financial advisor."
29. Although the Offer to Purchase describes the terms of the
transaction proposed by the third party company in November 1998, it does not
disclose the valuation analyses performed by the special committee's financial
advisor at that time, the same advisor who has issued a fairness opinion on the
$10 per share cash-out merger agreed to between Meadowcraft and Blount.
30. Instead, the Offer to Purchase discloses only that "[d]uring
November and December of 1998, representatives of the Company and the special
committee engaged in negotiations with the proposed acquiror and regularly
informed the special committee of the progress of the negotiations."
31. The Tender Offer Documents state, without any explanation,
that the unidentified potential acquiror advised the Company in the first week
of January 1999 that it did not believe the parties could reach a definitive
agreement and that it was therefore terminating the negotiations. The Tender
Offer Documents do not reveal the reasons for the potential acquiror's
conclusion.
32. Representatives of the financial advisor, Wachovia Securities,
were among the negotiators with the potential acquiror in November and December
1998 and had prepared valuation analyses and a fairness valuation at that time
valuing the shares of Meadowcraft in excess of $16 per share.
11
<PAGE> 12
33. Despite these prior valuation analyses, none of the Tender
Offer Documents discloses the previous analyses by the same financial advisor
who has issued a fairness opinion supporting the $10 per share buy-out by
Blount. Nor do the Tender Offer Documents disclose or explain any basis for a
different fairness valuation in November and December 1998 from the fairness
opinion Wachovia Securities issued as of May 13, 1999. The Company's financial
results in the first two quarters of fiscal 1999 do not themselves explain the
dramatic difference in valuations, as the first two fiscal quarters of
Meadowcraft's fiscal years are typically poor, as was expressly stated in the
prospectus for the Company's November 1997 IPO.
34. The failure to disclose the earlier valuations and fairness
opinion by Wachovia Securities is an omission of material facts in connection
with the present tender offer. In deciding whether to tender at $10 per share or
to dissent and seek appraisal, a reasonable shareholder would consider highly
significant a fairness valuation by the same financial advisor and special
committee of about $17 per share just six months earlier. Such a disclosure not
only would cast doubt on the reliability of the present fairness opinion but
also would indicate that an appraisal proceeding was likely to result in a
higher per share valuation.
35. Likewise, a reasonable shareholder would consider material the
reasons why the unidentified third-party offeror in January 1999 believed the
parties could not reach a
12
<PAGE> 13
definitive agreement, particularly if the reasons did not implicate
Meadowcraft's financial performance and prospects.
36. Defendants also fail to disclose any information about the
reasons for and circumstances surrounding the retirement of William J. McCanna
as President, Chief Operating Officer and a director of Meadowcraft on March 23,
1999. The timing of Mr. McCanna's retirement is especially provocative, coming
shortly before Blount proposed buy-out of the Meadowcraft shares he did not own.
At the time, McCanna was the largest shareholder, owning about 8% of
Meadowcraft's shares, next to Blount. With no disclosure by defendants,
shareholders are forced to speculate as to why a most senior member of
Meadowcraft's management and a large shareholder would retire two weeks before
Blount announced his low-ball buy-out proposal.
37. Because the Tender Offer Documents omit material facts
concerning and bearing on (a) the reliability of Wachovia's fairness opinion
including; (i) the changes, if any, in Meadowcraft's business and projections
since November and December 1998; (ii) the changes, if any, in Meadowcraft's
expected financial performance since November and December 1998; and (iii) the
changes, if any, in assumed discount rates for appropriate cash flow analyses
since November and December 1998; or (b) the termination of negotiations with
the potential acquirer in November and December 1998; or (c) McCanna's
retirement, defendants have breached their duty of disclosure to Meadowcraft's
public shareholders.
13
<PAGE> 14
38. As a result of defendants' unlawful actions, plaintiff and the
other members of the Class will be irreparably harmed in that they will be
deprived of the ability to make an informed choice between tendering or seeking
appraisal in the second-step merger. The omission of the information described
above deprives shareholders of essential information about the merits of seeking
appraisal and the likelihood that such a proceeding would result in a materially
higher per share payment for the shares. As a result, plaintiff and the members
of the Class will not receive their fair portion of the value of Meadowcraft
assets and business and will be prevented from obtaining the fair value of their
equity ownership of the Company. Unless the proposed buy-out is enjoined by the
Court, Blount, with the acquiescence of the other individual Defendants, will
continue to breach his fiduciary duties owed to plaintiff and the members of the
Class, to the irreparable harm of the members of the Class.
39. Plaintiff and the other members of the Class have no adequate
remedy at law.
WHEREFORE, plaintiff prays for judgment and relief as follows:
A. Ordering that this action may be maintained as a class action
and certifying plaintiff as the Class representative;
B. Preliminary and permanently enjoining defendants and their
counsel, agents, employees and all persons action under, in concert with, or for
them, from proceeding with, consummating or closing the transactions complained
of herein;
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<PAGE> 15
C. Directing defendants to disseminate corrective disclosure
documents to class members;
D. In the event the proposed buyout is consummated, rescinding it
and setting it aside;
E. Awarding the Class compensatory and/or rescissory damages
against defendants, individually and severally, in an amount to be determined at
trial, together with prejudgment interest at the maximum rate allowable by law;
F. Awarding plaintiff her costs and disbursements, including a
reasonable allowance for plaintiff's counsel fees and experts' fees; and
15
<PAGE> 16
G. Granting such other and further relief as to the Court may
seem just and proper.
ROSENTHAL, MONHAIT, GROSS &
GODDESS, P.A.
By: /s/ [Signature Illegible]
--------------------------------
Suite 1401, Mellon Bank Center
P.O. Box 1070
Wilmington, DE 19899-1070
(302) 656-4433
Attorneys for Plaintiff
OF COUNSEL:
DONOVAN MILLER LLC
Ann Miller
Michael D. Donovan
1608 Walnut Street, Suite 1400
Philadelphia, PA 19103
(215) 732-6020
Edward E. Angwin, Esquire
Southeast Legal Group LLC
1920 Huntington Road
Birmingham, Alabama 35209
16
