SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 4)
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Wallace Computer Services, Inc.
(Name of Subject Company)
FRDK, INC.
(Bidder)
COMMON STOCK, PAR VALUE $1.00 PER SHARE
INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS
(Title of Class of Securities)
932270101
(CUSIP Number of Class of Securities)
JOSEPH M. DUANE, ESQ.
FRDK, INC.
1 FIRST CANADIAN PLACE
TORONTO, ONTARIO, CANADA M5X 1GF
(416) 364-2600
(Name, Address and Telephone Number of Persons Authorized to
Receive Notices and Communications on Behalf of Bidder)
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COPY TO:
DENNIS J. FRIEDMAN, ESQ.
DAVID M. WILF, ESQ.
DAVID M. SCHWARTZBAUM, ESQ.
CHADBOURNE & PARKE LLP
30 ROCKEFELLER PLAZA
NEW YORK, NY 10112
(212) 408-5100
<PAGE>
FRDK, Inc. hereby amends and supplements its Tender Offer
Statement on Schedule 14D-1 (as amended, the "Statement"), originally filed on
August 2, 1995, with respect to its offer to purchase all outstanding shares of
Common Stock, par value $1.00 per share, of Wallace Computer Services, Inc., a
Delaware corporation, (together with the associated preferred stock purchase
rights), as set forth in this Amendment No. 4. Capitalized terms not defined
herein shall have the meanings assigned thereto in the Statement.
ITEM 10. ADDITIONAL INFORMATION.
On August 15, 1995, the Company filed a complaint against
Moore and the Purchaser in the United States District Court for the Southern
District of New York (the "Wallace Action"). In the Wallace Action, Wallace
purports to allege that (i) the transactions contemplated by the Offer to
Purchase may substantially lessen competition in a relevant market and therefore
violate Section 7 of the Clayton Act, 15 U.S.C. ss. 18, and (ii) Moore and the
Purchaser have made false and misleading statements of fact in connection with
the Offer. The Wallace Action purports to seek declaratory and injunctive relief
enjoining Moore and the Purchaser (i) from acquiring any voting securities of
the Company, and (ii) in the alternative, from acquiring any Shares until 60
days after they have fully complied with the Exchange Act. A copy of the Wallace
Action is attached hereto as an exhibit and the foregoing description is
qualified in its entirety by reference to such exhibit.
On August 15, 1995, the Company and the Board of Directors of
the Company filed a Motion to Dismiss the litigation commenced by Moore and the
Purchaser against the Company and the Board of Directors of the Company in the
United States District Court for the District of Delaware.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(12) Press Release, dated August 15, 1995.
(g)(6) Complaint in Wallace Computer Services, Inc. v. Moore
Corporation Limited and FRDK, Inc., filed in the
United States District Court for the Southern
District of New York on August 15, 1995.
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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.
Dated: August 16, 1995
FRDK, Inc.
By: /s/ Joseph M. Duane
Name: Joseph M. Duane
Title: President
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EXHIBIT INDEX
(a)(12) Press Release, dated August 15, 1995.
(g)(6) Complaint in Wallace Computer Services, Inc. v. Moore
Corporation Limited and FRDK, Inc., filed in the
United States District Court for the Southern
District of New York on August 15, 1995.
Exhibit (a) (12)
CONTACT:
Hilda Mackow
Vice President, Communications
Moore Corporation
416-364-2600
Lissa Perlman
Kekst and Company
212-593-2655
MOORE CORPORATION ISSUES STATEMENT
TORONTO (August 15, 1995) -- Moore Corporation Limited (TSE, ME, NYSE: MCL) has
released the following statement:
Wallace's Board of Directors has given its shareholders no alternative to our
offer except unspecified value at an unknown time. We do not believe their
shareholders will be satisfied with this response. Our fully-financed US$56 cash
offer stands: an 84% premium over the price at the time we first contacted
Wallace and 42% over the average 30-day close immediately prior to our offer.
We are in the process of evaluating Wallace's filings and lawsuit. Nothing in
these filings, however, causes us to change our view of the issues raised:
first, there are no antitrust impediments to the closing of this transaction,
and second, we have been accurate in our public disclosures. If we determine
that a further response is appropriate, we will communicate in due course.
###
Moore Corporation Limited is a global leader in delivering information handling
products and services that create efficiency and enhance competitiveness for
customers. Founded in Toronto in 1882, Moore has approximately 20,000 employees
and over 100 manufacturing facilities serving customers in 59 countries. Sales
in 1994 were US$2.4 billion.
Exhibit (g) (6)
ROBERT W. HIRTH (RWH 2526)
SIDLEY & AUSTIN
875 Third Avenue
New York, New York 10022
(212) 906-2000
WALTER C. CARLSON (WCC 6356)
WILLIAM H. BAUMGARTNER, JR. (WHB 3409)
RICHARD B. KAPNICK (RBK 1120)
SIDLEY & AUSTIN
One First National Plaza
Chicago, Illinois 60603
(312) 853-7000
Attorneys for Plaintiff
Wallace Computer Services, Inc.
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
)
WALLACE COMPUTER SERVICES, INC., )
)
Plaintiff, )
)
v. )
)
MOORE CORPORATION LIMITED and )
FRDK, INC. )
)
Defendants. )
COMPLAINT
Plaintiff Wallace Computer Services, Inc. ("Wallace"), for its
Complaint against Moore Corporation Limited ("Moore") and FRDK, Inc. ("FRDK"),
alleges as follows:
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NATURE OF THE ACTION
1. Moore has launched a hostile $56 per share tender offer for
Wallace, its most successful and tenacious competitor in the business forms
industry. Wallace's Board of Directors has rejected this offer as inadequate
because of Wallace's record of exceptional financial performance, its reputation
as a provider of superior products and services and its position in the industry
as a technological leader and innovator, as well as other factors, including the
probability that the offer, if consummated, may violate the antitrust laws of
the United States. This action seeks to do two things.
2. First, this action seeks a declaration that the tender
offer for Wallace, if consummated, would violate Section 7 of the Clayton Act,
and seeks to preliminarily and permanently enjoin FRDK and Moore from acquiring
any voting securities of Wallace. Moore and Wallace are direct competitors in
the market for the sale of business forms to large, forms-intensive customers
with multiple locations. In that market, the effect of an acquisition of Wallace
by Moore would be to change a three-firm market into a two-firm market.
3. Second, this action seeks to enjoin Moore from making
manipulative and misleading disclosures to the press and investors. In its false
and misleading media campaign, Moore has deliberately misrepresented the
character and significance of prior contacts between the parties; failed to
disclose its pledge only to pursue a friendly business combination with Wallace;
has falsely stated that Wallace enhanced its takeover defenses in response to
earlier contacts with Moore; and has failed to disclose the substantial
antitrust obstacles presented by the proposed merger.
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THE PARTIES
4. Wallace is a Delaware corporation with its principal place
of business in Hillside, Illinois. Founded in Chicago in 1908, Wallace is one of
the largest United States manufacturers and distributors in the computer
services and supply industry. More specifically, Wallace sells a broad line of
products and services including business forms, commercial and promotional
graphics printing, computer labels, machine ribbons, computer hardware and
software, computer accessories, office products and electronic forms. Wallace
has a reputation in the industry as a technological leader and innovator both in
the application of computer applications to traditional paper business forms and
in the area of customer service, delivery and inventory monitoring systems.
5. Moore is a corporation organized under the laws of the
Province of Ontario, Canada with its principal place of business in Toronto,
Ontario, Canada. Moore is a direct competitor of Wallace in the sale of business
forms, products and services that are both paper and electronically based. In
recent years, Wallace has beaten Moore in head to head competition to service
numerous large accounts, including ITT Automotive, Rubbermaid, and American
Airlines.
6. FRDK is a New York corporation with its principal place of
business in Toronto, Ontario, Canada. It is a wholly owned subsidiary of Moore
and purportedly was incorporated for the purpose of making the tender offer and
proxy solicitation for Wallace.
JURISDICTION AND VENUE
7. Moore is subject to the personal jurisdiction of this Court
because it is found or transacts business in this District. FRDK is subject to
the personal jurisdiction of this Court because it is a New York corporation and
is found or transacts business in this
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District. Both Moore and FRDK have taken specific acts in this District with
respect to the tender offer.
8. Count I of this action arises under Section 7 of the
Clayton Act, 15 U.S.C. ss. 18. This Court has subject matter jurisdiction of
Count I pursuant to 15 U.S.C. ss. 26, 28 U.S.C. ss. 1331, and 28 U.S.C. ss.
1337.
9. This Court has jurisdiction over Count II of this action
under Section 27 of the Securities Exchange Act of 1934 ("Exchange Act"), 15
U.S.C. ss. 78aa and 28 U.S.C. ss.ss. 1331 and 2201.
10. Venue with respect to Count II is proper in this District
under Section 27 of the Exchange Act, 15 U.S.C. ss. 78aa and 28 U.S.C. ss.
1391(b).
COUNT ONE
DEFENDANTS' THREATENED ANTITRUST VIOLATION
11. In a Tender Offer Statement on Schedule 14D-1 dated August
2, 1995, FRDK disclosed a tender offer to purchase all outstanding voting
securities of Wallace.
12. Pursuant to this tender offer, Moore, through its
wholly-owned New York subsidiary, FRDK, intends to acquire Wallace.
13. Moore and Wallace compete in a number of businesses,
including the manufacture and sale of business forms (examples of which include
Federal Express shipping forms, brokerage firm trade confirmation forms, and the
printed paper stock on which telephone bills are generated).
14. For antitrust purposes, the sale of business forms to
large, forms-intensive customers with multiple locations constitutes a relevant
product market. Examples
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of such customers would be Federal Express and K-Mart. Within this product
market, the relevant geographic market is the United States of America.
15. Large, forms-intensive customers with multiple locations
typically require a forms vendor with the following characteristics:
a. sufficient forms manufacturing capability to satisfy their
needs;
b. distribution capability to deliver multiple types of forms
to hundreds of locations on short notice (the consequence of a
supply disruption often being the cessation of the customer's
business); and
c. the information systems capability to provide centralized
billing, reporting, and control for such shipments.
16. For most customers in the relevant product and geographic
market, the only acceptable vendors are Wallace, Moore, and The Standard
Register Company.
17. For these customers, the effect of an acquisition of
Wallace by Moore would be to change a three-firm market into a two-firm market.
18. The key impediment to entry into this business is the
development of the information services capability needed to support the
required distribution and billing capabilities. Wallace has spent more than a
decade developing its system, and did so internally. A new entrant would be
unable to purchase the required information services capability and would need
to spend a period of years attempting to develop it.
19. If Moore were to acquire Wallace, the effect of such
acquisition may be substantially to lessen competition in the relevant product
and geographic market, thus violating Section 7 of the Clayton Act, 15 U.S.C.
ss. 18.
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20. Unless Moore and FRDK are enjoined, Wallace will suffer
irreparable harm as a result of the above stated actions, including, inter alia,
loss of independent decisionmakng authority, loss of trade secrets, loss of
employees, and loss of customers. Wallace has no adequate remedy at law.
COUNT TWO
DEFENDANTS VIOLATIONS OF THE SECURITIES LAWS
21. Wallace repeats and realleges its allegations in
paragraphs 1 - 20 as if set forth fully herein.
Preliminary Inquiries Concerning The Possibility
Of Discussions Between Wallace And Moore
22. On or about February 16, 1995, a representative of Lazard
Freres & Co. LLC ("Lazard") contacted Neele E. Stearns, Jr., a member of
Wallace's Board of Directors and a personal acquaintance of the Lazard
representative, and inquired whether a Wallace representative would be willing
to meet with Mr. Reto Braun, Chief Executive Officer of Moore, to discuss a
possible business combination on a friendly basis involving Moore and Wallace.
Mr. Stearns replied that he would communicate with Wallace representatives and
then follow up with the Lazard representative.
23. On February 21, 1995, Mr. Stearns contacted the Lazard
representative and informed him that Mr. Braun or a representative of Lazard
should communicate in writing directly with Robert J. Cronin, the President and
Chief Executive Officer of Wallace, in the event they wished to raise the
possibility of discussing a business combination.
24. On or about February 24, 1995, Mr. Braun sent a letter to
Mr. Cronin, which provided in part as follows:
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"As a result of recent discussions between our financial
advisor, Lazard Freres, and Mr. Neele Stearns of your Board of
Directors, it has been suggested that I communicate directly
with you in this manner." . . .
* * * *
"I would welcome to begin discussions with you, on a strictly
confidential basis, to explore the possibility of a
combination of our companies. We are very flexible in our
thinking as to the form such a combination might take. After
you have had a chance to discuss this with your Board, I would
be most happy to meet with you to share our respective views.
. . . I look forward to hearing from you."
25. On or about March 8, 1995, at a regularly scheduled
meeting of Wallace's Board of Directors, the Board discussed the February 24
letter of Mr. Braun and Moore's interest in pursuing a possible transaction with
the Company.
26. On or about March 9, 1995, Mr. Cronin attempted to reach
Mr. Braun by telephone, but was advised that he would be out of his office until
March 14.
Moore Pledges To Pursue Only A Friendly Transaction
27. During the various communications between representatives
of Wallace and representatives of Moore in February and March 1995, Moore stated
at least three times that it was only interested in pursuing a friendly deal
with Wallace.
28. In the initial February 16 telephone call between the
Lazard representative and Mr. Stearns, the Lazard representative inquired
whether a Wallace representative would be willing to discuss a business
combination on a friendly basis with Moore.
29. On or about March 14, Mr. Cronin contacted Mr. Braun by
telephone. At the outset of the telephone conversation, Mr. Cronin stated that
the telephone call would not have been made if Wallace had not received Lazard's
assurances that Moore would only proceed on a friendly basis. Mr. Braun agreed
completely and stated that Moore would only
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pursue a transaction on a friendly basis. Mr. Cronin informed Mr. Braun that
Wallace was successfully pursuing its corporate strategy, saw no reason to
depart from it and that, accordingly, Wallace was not for sale. However, Mr.
Cronin stated he was nevertheless prepared to meet with Mr. Braun if he still
desired to do so. Mr. Braun stated that such a meeting was unnecessary and that
Wallace should "consider the situation closed."
30. On March 22, Mr. Stearns briefly visited the offices of
the Lazard representative to confirm that the representative was aware of the
March 14th telephone conversation between Messrs. Braun and Cronin. The Lazard
representative once again stated that Moore would only pursue a friendly
transaction.
Mr. Cronin And Mr. Braun Agree To Have Lunch
31. On April 18, 1995, Mr. Cronin and Mr. Braun met each other
at an industry conference in New York City. Mr. Braun suggested that the two
should meet for lunch to discuss certain matters unrelated to a business
combination. Mr. Cronin stated that he would be willing to have lunch and that
Mr. Braun should contact him to set up a date. Both are residents of the Chicago
metropolitan area.
32. In the following weeks, Mr. Braun's secretary contacted
Mr. Cronin's secretary several times to arrange a lunch meeting for Messrs.
Braun and Cronin. Ultimately the secretaries scheduled the lunch between Mr.
Braun and Mr. Cronin for August 8, 1995. When Moore launched its hostile tender
offer, this lunch date was still scheduled.
33. On or about June 28, 1995, Mr. Braun failed at the last
minute to attend a dinner in Itasca, Illinois sponsored by the International
Business Forms Institute. Mr. Braun knew that Mr. Cronin would be in attendance
and if he had wanted to speak with
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Mr. Cronin on any appropriate subject, Mr. Cronin would have been available
before, during or after the dinner.
Moore's And FRDK's False And Misleading Media Campaign
34. On the evening of Sunday, July 30, 1995, Mr. Braun called
Mr. Cronin from New York and left a recorded message on Mr. Cronin' s home
answering machine stating that Moore and FRDK were going to make a tender offer
for Wallace.
35. At approximately 10:30 p.m. on Sunday, July 30, 1995, a
messenger slipped a letter under the front door at Mr. Cronin's residence
stating that Moore and FRDK were commencing a hostile tender offer to purchase
all of Wallace's common stock at $56 per share.
36. Sometime earlier on Sunday, July 30, 1995, Moore, FRDK and
Mr. Braun commenced a carefully calculated media campaign in connection with the
hostile tender offer to manipulate and mislead Wallace investors concerning the
character and significance of prior discussions between the companies with
respect to the possibility of a business combination; Wallace's responses to
those discussions; and the facts relating to any antitrust obstacles to the
tender offer.
37. Statements made in the media campaign also falsely
portrayed Wallace as unwilling even to meet with Moore's representatives. As the
foregoing Paragraphs 27-33 make clear, this portrayal was directly contrary to
the actual facts as Moore, FRDK and Mr. Braun knew. In fact, at the time Moore,
FRDK and Mr. Braun commenced misleading the press and Wallace's investors, the
lunch that had been scheduled was less than nine days away.
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38. On July 30, Mr. Braun launched the false and misleading
media campaign on behalf of Moore and FRDK by giving interviews to The Wall
Street Journal, The New York Times and The Globe and Mail, among others. During
these interviews, Mr. Braun made various false and misleading statements of fact
in connection with the tender offer. Copies of articles based on these
interviews are attached as Exhibit 1 hereto.
39. In his July 30 interview with The Wall Street Journal, Mr.
Braun stated that Moore's unsolicited bid for Wallace came after "six or seven"
attempts to discuss a possible acquisition since February when Mr. Braun
contended that Wallace had rejected a proposal about a possible acquisition. On
information and belief, Mr. Braun failed to disclose to The Wall Street Journal:
(1) that in the earlier discussions, Mr. Braun and Moore had pledged at least
three times not to launch a hostile offer; (2) that at the conclusion of the
March 14 telephone call, Mr. Braun stated that the situation was closed; and (3)
that almost all of the "attempts" since March to "discuss a possible business
combination" were calls from his secretary to Mr. Cronin's secretary trying to
schedule a lunch -- a lunch which in fact, was scheduled to occur on August 8,
1995. All of these facts were necessary to make the actual facts disclosed by
Mr. Braun in The Wall Street Journal interview not misleading.
40. Likewise, in his July 30 interview with The New York
Times, Mr. Braun stated that Wallace had "rejected" Moore's February proposal
that the two companies "meet to discuss a merger." This statement, as the
foregoing illustrates, was false and misleading because, among other things, it
was Mr. Braun who had stated at the close of the March 14 telephone call that
there was no point in meeting, and in any event a lunch meeting
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was scheduled for August 8. All of these facts were necessary to make the facts
disclosed by Mr. Braun in The New York Times interview not misleading.
41. In his July 30 interview with The Globe and Mail, Mr.
Braun stated that, among other things, Wallace had "strengthened" its "poison
pill" following the February discussions between Moore and Wallace. In fact, Mr.
Braun was very familiar with Wallace's takeover defenses and knew that Wallace
had not amended its stockholder rights plan after the February 1995 discussions.
In fact, Wallace's stockholder rights plan has not been amended since its
adoption in March 1990.
42. On July 31, 1995, Mr. Braun continued his campaign of
false and misleading disclosures to the press and to investors by holding a
conference call to discuss Moore's and FRDK's tender offer with financial
analysts covering the industry. During the call, Mr. Braun made various false
and misleading statements of fact in connection with the tender offer.
43. During the July 31 conference call with industry analysts,
Mr. Braun falsely stated that Wallace, in rejecting any discussions over a
possible business combination, had refused to specify any reasons. To the
contrary, the true facts were that, as described in Paragraph 29 above, Mr.
Cronin had informed Mr. Braun that Wallace was successfully pursuing its
corporate strategy and saw no reason to depart from it. Moreover, Mr. Braun
failed to disclose to the analysts that he and Moore had pledged in the March 14
discussion and on two other occasions only to pursue a friendly deal and that
following Wallace's expression of no interest he had informed Wallace that the
matter was closed -- all facts which are necessary to make the facts disclosed
in the analysts' conference call not misleading.
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44. In the July 31 conference call with industry analysts, Mr.
Braun continued his false and misleading campaign of media disclosures by again
stating that Moore had tried to "get together" a number of times with Wallace
since February without explaining that nearly all of these contacts involved his
secretary calling Mr. Cronin's secretary to schedule a lunch -- all facts which
are necessary to make the facts disclosed not misleading.
45. In the July 31 conference call with industry analysts, Mr.
Braun also twice repeated his false statement, made previously in The Globe and
Mail interview, that Wallace, following the earlier discussions, had
"strengthened their position on poison pills" and "strengthened their arsenal of
poison pills." In fact, as heretofore set forth above, Mr. Braun was very
familiar with Wallace's takeover defenses and knew that Wallace has not amended
its stockholder rights plan in response to Moore's overtures.
46. In the July 31 conference call with industry analysts, Mr.
Braun also falsely stated that antitrust concerns are not "a problem" or "big
issue" which would prevent consummation of the proposed tender offer. As
described more fully above in Paragraphs 11-20, there are basic material facts
concerning relevant markets which give rise to antitrust issues concerning the
tender offer. On information and belief, Mr. Braun, Moore and FRDK were aware of
the basic facts relating to these antitrust issues. Failure to disclose these
basic material facts and the antitrust issues they create, is false and
misleading.
47. On July 31, Moore and FRDK caused to be filed a Complaint
against Wallace and its Board of Directors in the United States District Court
for the District of Delaware. The Complaint contained false and misleading
statements of fact made in connection with the tender offer. The false
statements of fact in the Complaint served to reinforce the false and misleading
statements made in the media campaign launched in Mr.
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Braun's interviews with The Wall Street Journal, The New York Times, The Globe
and Mail and in the conference call with financial analysts covering the
industry.
48. The Complaint states that "in February 1995, Moore
attempted to initiate discussions with Wallace regarding a possible business
combination between Moore and Wallace." paragraph 38. The Complaint then alleges
that Mr. Cronin informed Mr. Braun in response that "Wallace's Board of
Directors had considered Moore's proposal, was not interested in any such
combination and would not pursue the matter further." Id. The Complaint then
falsely states that "all efforts by Moore to engage in further discussions with
Wallace concerning a possible business combination with Moore since that time
have been rebuffed by Wallace."
49. In fact, on the date the Complaint was filed, Mr. Braun
was scheduled to have lunch with Mr. Cronin on August 8. The Complaint failed to
disclose the following facts: (1) that Moore had pledged in the March 1995
discussion and on two other occasions only to proceed on a friendly basis; (2)
that following Wallace's lack of interest, Moore had stated that the matter was
closed; (3) that almost all of the subsequent contacts between the parties
consisted of Mr. Braun's secretary calling Mr. Cronin's secretary to set up a
lunch; and (4) that Mr. Braun, at the last minute, failed to show up for a small
industry meeting of CEOs where he could have had private discussions with Mr.
Cronin on any appropriate subject -- all facts which under the circumstances
were necessary to make the statements set forth therein and elsewhere concerning
the February and March discussions and subsequent contacts not misleading.
50. The Complaint also falsely states that "Wallace's Board of
Directors has taken specific steps since Moore's initial approach in February
1995 to create additional
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obstacles to a merger." In fact, as set forth above, Moore and FRDK are very
familiar with Wallace's takeover defenses and know very well that no actions
taken since February 1995 present any "obstacle" to a merger.
51. The Complaint states that the first "obstacle" is a
Wallace bylaw amendment that merely increased the time prior to a stockholder
meeting for submitting stockholder proposals. This amendment presents no
"obstacle" to a merger.
52. The Complaint states that the second "obstacle" is the
employment contract between Wallace and Mr. Cronin. This characterization of Mr.
Cronin's employment agreement is false and misleading in that Moore
simultaneously affirmatively represented that it had the highest respect for Mr.
Cronin and intended him to stay with the Company. Under these circumstances, Mr.
Cronin's contract is no "obstacle" to Moore's offer whatsoever.
53. The Complaint further falsely alleges that the members of
Wallace's Board of Directors "will" violate their fiduciary duties in
considering Moore's and FRDK's offer. The statement that Wallace's directors
"will" violate the fiduciary duties is false and has no reasonable basis in
fact. At the time the Complaint was filed, the Board had not even received a
Schedule 14D-1 from Moore or FRDK. Moreover, the assumption that Wallace's Board
of Directors, including management members, will violate their fiduciary
obligations to stockholders is flatly inconsistent with Moore's statement in the
letter dated July 30, 1995 from Mr. Braun to Mr. Cronin that "We have the
highest regard for you and your management team," and inconsistent with Moore's
and FRDK's pledge in its Schedule 14D-1 to "retain the Company's management
team" after a merger and assign it "significant responsibility" for the combined
businesses of Moore and Wallace.
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54. On or about August 2, 1995, Moore and FRDK caused to be
filed, with the Securities and Exchange Commission ("SEC"), a Schedule 14D-1 in
connection with the tender offer.
55. Like the false and misleading statements previously made
to the financial media and industry analysts, the Schedule 14D-1 is misleading
concerning the character and significance of the prior contacts between Moore
and Wallace. A copy of the prior contacts section of the Schedule 14D-1 is
attached hereto as Exhibit 2. The Schedule 14D-1 is misleading in that it fails
to disclose (1) that Moore representatives had pledged at least three times to
Wallace representatives that Moore was only interested in a friendly deal, and
(2) that when Mr. Braun was informed that Wallace had no interest in diverting
from its business plan, Mr. Braun had stated to Mr. Cronin that the matter was
closed. Disclosure of all these facts is necessary to make the statements made
in the Schedule 14D-1 concerning prior contacts between the parties not
misleading. Moore and FRDK never disclose in the Schedule 14D-1 what facts
changed between March 1995 when Moore pledged three times only to pursue a
friendly deal and stated that the matter was closed, and August 1995 when Moore
and FRDK launched the hostile tender offer.
56. Like the false and misleading statements previously made
to financial industry analysts the Schedule 14D-1 fails to disclose basic
material facts relating to the antitrust issues described more fully above in
Paragraphs 11-20. On information and belief, Mr. Braun, Moore and FRDK were
aware of the basic facts relating to these antitrust issues. The section of the
Schedule 14D-1 discussing issues arising under the antitrust laws is attached as
Exhibit 3 hereto. The failure to disclose the basic facts relating to the
antitrust
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issues violate applicable SEC rules and regulations and render the
statements made in the Schedule 14D-1 materially misleading.
Moore And FRDK Have Violated Sections 14(d) And 14(e)
Of The Securities Exchange Act And SEC Rules And Regulations
57. Section 14(d)(1) of the Exchange Act provides in pertinent
part that:
It shall be unlawful for any person, directly or indirectly,
by use of the mails or by any means or instrumentalities of
interstate commerce or of any facility of a national
securities exchange or otherwise, to make a tender offer for,
or a request or invitation for tenders of, any class of any
equity security . . . unless at the time copies of the offer
or request or invitation are first published or sent or given
to security holders, such person has filed with the [SEC] a
statement [on Schedule 14D-1 containing the required
information].
58. The disclosure requirements for tender offers generally
are governed by Rule 14d-6 which dictates the contents of "tender offer
materials." Tender offer materials are defined in Rule 14D-1(b)(5) to include
"all the material terms and conditions of the tender offer."
59. Item 10(f) of Schedule 14D-1 promulgated by the SEC
pursuant to Section 14(d) provides in pertinent part that an offeror must
disclose in its offer to purchase:
"Such additional material information, if any, as may be
necessary to make the required statements, in light of the
circumstances under which they are made, not materially
misleading."
60. Section 14(e) of the Exchange Act provides in part as
follows:
"It shall be unlawful for any person to make any untrue
statement of a material fact or omit to state any material
fact necessary in order to make the statements made, in light
of the circumstances under which they are made, not
misleading, or to engage in any fraudulent, deceptive, or
manipulative acts or practices, in connection with any tender
offer."
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61. These and other provisions of the Exchange Act and the
rules and regulations promulgated thereunder by the SEC are designed to provide
stockholders with all material information necessary to make informed investment
decisions when faced with a tender offer and to prevent the manipulation of the
market by tender offerors.
62. Moore and FRDK's false and misleading media campaign and
its offer to purchase violate Sections 14(d) and 14(e) of the Exchange Act, and
the rules and regulations promulgated thereunder by the SEC, in that they
contain materially false, deceptive, manipulative and misleading statements in
that, among other things, Moore and FRDK falsely state, conceal and fail to
disclose material facts necessary to make the facts disclosed not misleading as
described more particularly above.
63. All of the false, deceptive, manipulative and misleading
statements and the information and facts omitted as set forth above are material
to each and every Wallace stockholder in deciding whether or not to tender their
shares to Moore at the inadequate price of $56 per share.
64. The false and misleading statements of fact more
specifically described above were each made with knowledge of and/or with
reckless disregard for their falsity.
65. By reason of the foregoing, defendants Moore and FRDK have
violated and are continuing to violate Sections 14(d) and 14(e) of the Exchange
Act and the rules and regulations promulgated thereunder by the SEC.
66. Unless the injunctive relief sought under this claim is
granted, Wallace and its stockholders will be irreparably harmed in that Moore
and FRDK will continue to seek control of Wallace without providing Wallace's
shareholders the information necessary to make an informed decision regarding
the disposition of their shares.
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<PAGE>
67. Wallace has no adequate remedy at law.
RELIEF
WHEREFORE, Wallace demands judgment against Moore and FRDK,
and respectfully prays that this Court enters orders as follows:
(a) Declaring that FRDK's tender offer for the outstanding
voting securities of Wallace, if consummated, would violate Section
7 of the Clayton Act, 15 U.S.C. ss. 18;
(b) Preliminarily and permanently enjoining Moore and FRDK
from acquiring any voting securities of Wallace;
(c) Awarding to Wallace its cost of suit, including a
reasonable attorney's fee, as provided by Section 16 of the Clayton
Act, 15 U.S.C. ss. 26;
(d) Declaring that Moore and FRDK have violated Sections
14(d) and 14(e) of the Exchange Act and the rules and regulations
promulgated thereunder and that any solicitation or purchases of
Wallace's common stock pursuant to FRDK's offer to purchase is
unlawful;
(e) Preliminarily and permanently enjoining Moore and FRDK
and their subsidiaries, directors, officers, representatives,
agents, servants and employees, and all other persons in active
concert or participation with them, from soliciting, acquiring or
attempting to acquire in any manner any shares of Wallace stock or
any right to acquire such shares, unless and until 60 days after
they have fully complied with the Exchange Act;
(f) Awarding Wallace the costs and disbursements of this
action together with reasonable attorneys' fees; and
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<PAGE>
(g) Awarding such other and further relief as the Court
deems just and proper.
Respectfully submitted,
s/Robert W. Hirth
One of the Attorneys for Wallace
Computer Services, Inc.
Robert W. Hirth (RWH 2526)
SIDLEY & AUSTIN
875 Third Avenue
New York, New York 10022
(212) 906-2000
Of Counsel:
Walter C. Carlson (WCC 6356)
William H. Baumgartner (WHB 3409)
Richard B. Kapnick (RBK 1120)
SIDLEY & AUSTIN
One First National Plaza
Chicago, Illinois 60603
(312) 853-7000
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