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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT NO. 2
TO
SCHEDULE 14D-9/A
Solicitation/Recommendation Statement Pursuant to
Section 14(d)(4) of the Securities Exchange Act of 1934
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SHOPPING.COM
(Name of Subject Company)
SHOPPING.COM
(Name of Person Filing Statement)
COMMON STOCK, NO PAR VALUE
(Title of Class of Securities)
82509Q-10-6
(Cusip Number of Class of Securities)
FRANK W. DENNY
2101 E. Coast Hwy, Garden Level
Corona del Mar, California 92625
(949) 640-4393
(Name, Address and Telephone Number of Person Authorized to Receive
Notice and Communications on Behalf of Person Filing Statement)
WITH COPIES TO:
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BARRY D. FALK, ESQ. MARK ASDOURIAN, ESQ. CELESTE E. GREENE
Jeffers, Wilson, Shaff & Falk, LLP A Professional Law Corporation Skadden, Arps, Slate,
18881 von Karman Avenue, Suite 1400 5 Park Plaza, Suite 1480 Meagher & Flom, LLP
Irvine, California 92612 Irvine, California 92614 Four Embarcadero Center
(949) 660-7700 (714) 557-4100 San Francisco, California 94111
(415) 984-6460
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SOLICITATION/RECOMMENDATION STATEMENT
This Amendment No. 2 to Schedule 14D-9 amends and supplements the
Solicitation/Recommendation Statement on Schedule 14D-9 filed by Shopping.com
(the "Company") with the Securities and Exchange Commission ("SEC") on January
15, 1999, as amended by that Amendment No. 1 to Schedule 14D-9/A ("Amendment No.
1") filed by the Company with the SEC on January 21, 1999 (as amended, the
"Statement"), relating to the cash tender offer (the "Offer") by Compaq
Interests, Inc., a Delaware corporation ("Purchaser") and an indirect, wholly-
owned subsidiary of Compaq Computer Corporation ("Parent"), a Delaware
corporation, disclosed in a Tender Offer Statement on Schedule 14D-1, filed by
Parent dated January 15, 1999, as amended by Amendment No. 1 to Schedule 14D-1
filed January 21, 1999.
Capitalized terms used but not otherwise defined herein have the meanings
ascribed such terms in the Statement.
ITEM 4 SOLICITATION AND RECOMMENDATION.
(b) Background; Reasons for the Company's Board Recommendation.
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Item 4(b) is hereby amended and supplemented by adding thereto the following:
"The press release issued by the Company on January 11, 1999, mistakenly
referred to the "safe harbor" provided by the Private Securities
Litigation Reform Act of 1995. The "safe harbor" is not available to
statements made in connection with a tender offer."
ITEM 9 MATERIAL TO BE FILED AS EXHIBITS.
Item 9 is hereby amended and supplemented by adding thereto the following
Exhibits:
(a)(14) Press Release, dated January 11, 1999, issued by Company.
(a)(15) Press Release, undated, posted on Company's website at
www.shopping.com.
ANNEX B FAIRNESS OPINION OF TRAUTMAN KRAMER & COMPANY, INCORPORATED
Annex B to the Statement, Fairness Opinion of Trautman Kramer & Company,
Incorporated, dated January 20, 1999, is hereby deleted in its entirety and
replaced with the ANNEX B attached hereto.
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SIGNATURES
After reasonable 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.
SHOPPING.COM, INC.
Date: February 9, 1999 /s/ FRANK W. DENNY
---------------------------------
Frank W. Denny, President and
Chief Executive Officer
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REVISED
ANNEX B
TRAUTMAN KRAMER & COMPANY
INCORPORATED
500 FIFTH AVENUE
NEW YORK, NEW YORK 10110
212-575-5500 . 800-895-4800 . FAX . 212-575-6589
www.tkco.com
As of January 20, 1999
(Revised February 4, 1999)
To The Board of Directors
Shopping.com
2101 East Coast Highway
Corona del Mar, CA 92625
We understand that all of the issued and outstanding common shares and certain
other equity interests of Shopping.com ("IBUY" or the "Company") are to be
acquired by Compaq Interests, Inc., an indirect wholly-owned subsidiary of
Compaq Computer Corporation (collectively, "Compaq") for the consideration of
not less than $18.25 per share of Common Stock in an all-cash transaction (the
"Transaction). Compaq will indirectly assume all liabilities, both existing and
contingent and existing indebtedness at the close of the transaction, and the
Company will become a wholly owned subsidiary of Compaq.
You have requested our written opinion (the "Opinion") solely as to the matters
set forth below. This Opinion values the Company on a "take-out value" basis,
giving effect inter alia to the Company's history, operating plan,
infrastructure, existing financial condition and value ascribed to the domain
name. For purposes of this Opinion, "take-out value" shall be defined as the
amount at which the Company would change hands between a willing buyer and a
willing seller, each having reasonable knowledge of the relevant facts, neither
being under any compulsion to act, in an arm's length transaction under present
conditions for the sale of comparable business enterprises, as such conditions
can be reasonably evaluated by Trautman Kramer & Company, Incorporated ("TKCO").
We have used the same valuation methodologies in determining take-out value for
purposes of rendering this Opinion. The term "existing and contingent
liabilities" shall mean the stated amount of all existing and contingent
liabilities identified to us and valued by responsible officers of the Company,
upon whom we have relied without independent verification; no other contingent
liabilities will be considered. No representation is made herein, or directly
or indirectly by the Opinion, as to any legal matter or as to the sufficiency of
said definitions for any purpose other than setting forth the scope of TKCO's
Opinion hereunder.
Notwithstanding the use of the defined terms "take-out value," we have not been
engaged to identify prospective purchasers or to ascertain the actual prices at
which and terms under which the Company can currently be sold, and we know of no
such efforts by others.
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Because the sale of any business enterprise involves numerous assumptions
and uncertainties, not all of which can be quantified or ascertained prior to
engaging in an actual selling effort, we express no opinion as to whether the
Company would actually be sold for the amount we believe to be its fair value
and present fair saleable value.
Pursuant to the terms of an engagement letter dated January 11, 1999, by
and between the Company and TKCO, the Company has agreed to compensate TKCO a
$250,000 fee for rendering its opinion assuming a successful close to the
Transaction. In the event that the Transaction does not occur, the fee will be
reduced to $50,000. TKCO has acted as the Company's investment banker on prior
occasions and received fees for those services. TKCO and certain of its
principals own shares of Common Stock and warrants to acquire Common Stock of
the Company.
In connection with this Opinion, we have made such reviews, analyses and
inquiries as we have deemed necessary and appropriate under the circumstances.
Among other things, we have:
1. Reviewed the Company's audited financial statements for the fiscal years
ended January 31, 1998 and 1997;
2. Reviewed certain Company interim financial information and interim
projections for the 9 months ended.October 30, 1998, which the Company's
management has identified as the most current information available;
3. Reviewed a revised capitalization table, prepared by the Company dated
January 19, 1999 setting forth the outstanding shares of Common Stock as well
as all unexercised warrants and options;
4. Reviewed the Company's most-recent Business Plan for its Internet retailing
business and on-line auction site;
5. Held discussions with management of the Company to discuss the condition,
future prospects, and projected operations and performance of the Company;
6. Reviewed the Company's financial projections dated July 1998 for the fiscal
years ended January 31, 1999 through 2002;
7. Reviewed the historical market prices and trading volume for the Company's
publicly traded securities;
8. Reviewed other publicly available financial data for the Company and certain
companies that we deem comparable to the Company, and other economic and
financial matters related to the Company's business operation; and
9. Conducted such other studies, analyses and investigations as we have deemed
appropriate.
We have relied upon and assumed, without independent verification, that the
financial forecasts and projections provided to us have been reasonably prepared
and reflect the best currently available estimates of the future financial
results and condition of the Company, and that there has been no material
adverse change in the assets, financial condition, business or prospects of the
Company since the date of the most recent interim financial statement made
available to us.
We have not independently verified the accuracy and completeness of the
information supplied to us with respect to the Company and do not assume any
responsibility for it. We have not made any physical inspection or independent
appraisal of any of the properties or assets of the Company. Our opinion is
necessarily based on business, economic, market and other conditions as they
exist and can be evaluated by us at the date of this letter.
It is understood that this letter is intended for the benefit and use of
the Board of Directors of the Company in its consideration of the Transaction
and may not be used for any other purpose or reproduced, disseminated, quoted or
referred to at any time, in any manner or for any purpose without our prior
written consent; provided however, that this letter may be disclosed if required
by law and may be included in its entirety and referred
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to in any filing with the Securities and Exchange Commission relating to the
Transaction. Our conclusion in connection therewith does not constitute a
recommendation that any stockholder of the Company vote to approve, ratify,
disapprove, abstain from voting, act or abstain from acting in connection with
any action considered by the stockholders. Based upon and subject to the
foregoing, it is our opinion that as of the date hereof, the consideration to be
received by common stockholders of the Company in the transaction is fair, from
a financial point of view, to the stockholders of the Company.
Based on the foregoing, and in reliance thereon, it is our opinion as of
the date of this letter that, assuming the Transaction is consummated as
proposed, immediately after and giving effect to the Transaction, the take-out
value of the Company's operating business and its tangible and intangible assets
approximates the value of the consideration presently being offered by Compaq in
the proposed Transaction.
We further note that we previously issued an opinion on the Transaction on
January 11,1999 which is with your consent, hereby withdrawn in light of certain
supplemental information which the Company has provided to us.
This Opinion is delivered to you subject to the conditions, scope of
engagement, limitations and understandings set forth in this Opinion and our
engagement letter dated January 11, 1999, and subject to the understanding that
the obligations of TKCO in the Transaction are solely corporate obligations, and
no officer, director, employee, agent, shareholder or controlling person of TKCO
shall be subjected to any personal liability whatsoever to any person, nor will
any such claim be asserted by or on behalf of you or your affiliates.
TRAUTMAN KRAMER & COMPANY, INCORPORATED
/s/ GREGORY O. TRAUTMAN
-------------------------------
Gregory O. Trautman, CFA
President
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EXHIBIT INDEX
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EXHIBIT
NO.
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(a)(1)+ Offer to Purchase, dated January 15, 1999
(a)(2)+ Letter of Transmittal
(a)(3)+ Letter for use by Brokers, Dealers, Banks, Trust Companies and
Nominees to their Clients
(a)(4)+ Letter to Clients
(a)(5)+ Notice of Guaranteed Delivery
(a)(6)+ Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9
(a)(7)+ Press Release issued by Parent, dated January 11, 1999
(a)(8)+ Form of Summary Advertisement, dated January 15, 1999
(a)(9)+ Fairness Opinion of Trautman Kramer & Company, dated January 11, 1999
(a)(10)+ Supplemental Letter to Shareholders dated January 21, 1999
(a)(11)+ Press Release, dated January 21, 1999, issued by Parent
(a)(12)+ Fairness Opinion of Trautman Kramer & Company, dated January 20, 1999
(a)(14) Press Release, dated January 11, 1999, issued by Company
(a)(15) Press Release, undated, posted on Company's website at www.shopping.com
(c)(1)+ Agreement and Plan of Merger, dated January 11, 1999, by and between
Parent and the Company
(c)(2)+ Shareholder Agreement, dated January 11, 1999, by and between Parent
and Robert McNulty
(c)(3)+ Shareholder Agreement, dated January 11, 1999, by and between Parent
and Cyber Depot
(c)(4)+ Shareholder Agreement, dated January 11, 1999, by and between Parent
and Kipling Isle
(c)(5)+ Shareholder Agreement, dated January 11, 1999, by and between Parent
and Paul Hill
(c)(6)+ Shareholder Agreement, dated January 11, 1999, by and between Parent
and Ed Bradley
(c)(7)+ Shareholder Agreement, dated January 11, 1999, by and between Parent
and Mark Winkler
(c)(8)+ Shareholder Agreement, dated January 11, 1999, by and between Parent
and Kristine Webster
(c)(9)+ Shareholder Agreement, dated January 11, 1999, by and between Parent
and John Markley
(c)(10)+ Shareholder Agreement, dated January 11, 1999, by and between Parent
and Frank Denny
(c)(11)+ Shareholder Agreement, dated January 11, 1999, by and between Parent
and Pat Demicco
(c)(12)+ Shareholder Agreement, dated January 11, 1999, by and between Parent
and Randy Read
(c)(13)+ Stock Option Agreement, dated January 11, 1999, by and between Parent
and the Company
(c)(14)+ Amendment No. 1 to the Agreement and Plan of Merger, dated January
20, 1999, by and between Parent and the Company
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(c)(15)+ Amendment No. 1 to the Shareholder Agreement, dated January 20, 1999,
by and between Parent and Robert McNulty
(c)(16)+ Amendment No. 1 to the Shareholder Agreement, dated January 20, 1999,
by and between Parent and Cyber Depot
(c)(17)+ Amendment No. 1 to the Shareholder Agreement, dated January 20, 1999,
by and between Parent and Kipling Isle
(c)(18)+ Amendment No. 1 to the Shareholder Agreement, dated January 20, 1999,
by and between Parent and Paul Hill
(c)(19)+ Amendment No. 1 to the Shareholder Agreement, dated January 20, 1999,
by and between Parent and Ed Bradley
(c)(20)+ Amendment No. 1 to the Shareholder Agreement, dated January 20, 1999,
by and between Parent and Mark Winkler
(c)(21)+ Amendment No. 1 to the Shareholder Agreement, dated January 20, 1999,
by and between Parent and Kristine Webster
(c)(22)+ Amendment No. 1 to the Shareholder Agreement, dated January 20, 1999,
by and between Parent and John Markley
(c)(23)+ Amendment No. 1 to the Shareholder Agreement, dated January 20, 1999,
by and between Parent and Frank Denny
(c)(24)+ Amendment No. 1 to the Shareholder Agreement, dated January 20, 1999,
by and between Parent and Pat Demicco
(c)(25)+ Amendment No. 1 to the Shareholder Agreement, dated January 20, 1999,
by and between Parent and Randy Read
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+ Previously filed with the Statement.
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Exhibit (a)(14) Press Release, dated January 11, 1999, issued by Company
For Further Information:
Contact: Mr. Frank Denny, CEO & President
Shopping.com
2101 E. Coast Highway
Garden Level
Corona del Mar, CA 92625
(949) 640-4374
www.shopping.com
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FOR IMMEDIATE RELEASE
Shopping.com Enters Merger Agreement with Compaq Computer Corporation
Corona del Mar, CA, January 11, 1999 -- Frank W. Denny, CEO and President of
Shopping.com (OTCBB: IBUY) today announced that the company's Board of Directors
has approved a tender offer for $19.00 per share to be accepted and approved by
its shareholders in a merger agreement with Compaq Computer Corporation (NYSE;
CPQ).
"In my opinion the value that has been created at Shopping.com for the benefit
of its shareholders after only roughly one year of becoming a public company
made the offer by Compaq attractive to the Company," Denny said.
The anticipated traffic from Alta Vista and Compaq Internet PCS will enable
Shopping.com to grow faster and more efficiently than stand alone e-commerce
companies. In turn, the increased knowledge gained from users' online
purchasing interests will allow Alta Vista to better organize content and
information for its users.
About Shopping.com
Shopping.com was founded with the mission to be the dominant low-price leader on
the Internet, selling brand-name consumer products every day. Shopping.com is
an online retailer offering more than 2 million item selections of top brand-
name consumer products organized by category. Shopping.com targets both the
consumer and commercial markets utilizing state-of-the-art proprietary systems
technology. Shopping.com competes with other Internet retailers such a CDnow
CDNW, at cdnow.com, for music; Amazon AMZN, at amazon.com, Barnes and Noble BKS,
- ---- ---- ---
at barnesandnoble.com and Books-A-Million, Inc. BAMM, at booksamillion.com, for
----
books; Cyberian Outpost, Inc. COOL, at outpost.com and CompUSA, Inc. CPU, at
---- ---
compusa.com, for computers; and Staples, Inc. SPLS, at staples.com, for office
----
products; along with the AOL and Yahoo shopping sites.
Shopping.com offers millions of brand-name products to the Internet shopper,
ranging from computers, books, office products, CDS, pet supplies, housewares
and more. Shopping.com provides everyday low prices and fast delivery using
direct vendor shipping, secure online payment protection and customer-friendly
check-out services to ensure a user-friendly Web shopping experience for the
Internet shopper. Visit Shopping.com's Web site at www.shopping.com or
www.IBUYstores.com.
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Exhibit (a)(15) Press Release, undated, posted on Company's website at
www.shopping.com
PRESS CONTACT
Bender, Goldman & Helper
310/473-4147
Jenny Rosa
[email protected]
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Debra Gorov
[email protected]
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FOR IMMEDIATE RELEASE
Compaq Reaches Agreement to Acquire Shopping.com
Strategic Move for AltaVista to Become a Leading Internet Transaction Site
In a move designed to leverage the tremendous user traffic generated by its
AltaVista Internet guide and its Internet PCs, Compaq Computer Corporation CPQ
today announced it has reached a definitive agreement to acquire Shopping.com
IBUY, a leading on-line retailer which offers Internet shoppers a vast array of
top brand-name consumer products. The increased traffic from AltaVista and
Compaq Internet PCs will enable Shopping.com to grow faster and more efficiently
than stand alone e-commerce companies. In turn, the increased knowledge gained
from users' online purchasing interests will allow AltaVista to better organize
content and information for its users.
A wholly owned subsidiary of Compaq will promptly commence a tender offer to
acquire all of the outstanding shares of Shopping.com for $19 per share in cash,
representing an aggregate approximate purchase price of $220 million. The Board
of Directors and management of Shopping.com have unanimously approved the
acquisition and will recommend shareholder acceptance.
"The Internet is fast becoming a transaction medium in addition to a content
medium. Today, AltaVista becomes the first site to fully combine these two
capabilities into one synergistic user experience," said Rod Schrock, Compaq
Senior Vice President and Group General Manager, Consumer Products. "Our intent
is to make AltaVista the leading guide for both information and e-commerce on
the Internet."
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During the recent holiday season, AltaVista drove several million visits to the
AltaVista Holiday shopping experience and its e-commerce partners. With the
addition of Shopping.com capabilities, AltaVista can now directly complete e-
commerce transactions and offer customers a seamless information and shopping
experience.
Compaq entered into a stockholder agreement with certain significant
shareholders who, in the aggregate, are the holders of approximately 27 percent
of the fully diluted shares of common stock of Shopping.com. The stockholder
agreement provides for, among other things, the commitment of each of these
shareholders to tender their respective shares into the tender offer.
The closing of the transaction is subject to the satisfaction of various
conditions including, but not limited to, Compaq receiving at least 90 percent
of the issued and outstanding shares of common stock of Shopping.com and
expiration of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act.
AltaVista Leads the Industry
AltaVista is the most powerful and useful guide to the Internet and is a
forerunner in Web search technology. AltaVista continues to set new standards
such as indexing the entire Internet as well as providing the AV Family Filter
and AV Photo Finder search capabilities.
Over the last several months, AltaVista has made extensive enhancements to make
navigating the Internet relevant, fast and effective for Web users of all
proficiency levels. The impact of these improvements has been noted by both
customers and the press:
- -- AltaVista was named one of "The Best Sites of `98" by ZDNet/Yahoo! Internet
Life.
- -- AltaVista is a nominee for the 1999 Webby Awards given by the International
Academy of Digital Arts & Sciences (IADAS).
- -- AltaVista received the highest marks in the Internet search industry for
accuracy, user satisfaction and loyalty based on a recent study by Cyber
Dialogue, a leading authority in one-to-one marketing and on-line market
research.
- -- AltaVista has grown to become the ninth largest individual domain on the
Internet, up from the eleventh position, as ranked by the firm Relevant
Knowledge.
For more information, visit AltaVista's flagship site located at
http://www.altavista.com or http://www.av.com.
Shopping.com Unique Attributes
Shopping.com has a state-of-the-art transaction capability that can best
complement AltaVista's customer traffic potential while delivering a superior
customer buying experience. Committed to offering one-stop shopping for products
and services, Shopping.com:
- -- Features 63 Warehouse Power Stores to Internet shoppers providing a
comprehensive selection of over two million name brand products backed by
more than 1,000 merchandizing partners
- -- Offers the Maximizer frequent shopper program where customers earn reward
dollars on all purchases and services
The simple "Shopping.com" name is easily recognizable and will aid in the
development of the most powerful e-commerce brand in the industry. Shopping.com
is available at http://www.shopping.com.
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Company Background
Compaq Computer Corporation, a Fortune Global 100 company, is the second largest
computer company in the world and the largest global supplier of computer
systems. Compaq develops and markets hardware, software, solutions, and
services, including industry-leading enterprise computing solutions, fault-
tolerant business-critical solutions, networking and communication products,
commercial desktop and portable products and consumer PCs. The company is an
industry leader in environmentally friendly programs and business practices.
Compaq products are sold and supported in more than 100 countries through a
network of authorized Compaq marketing partners. Customer support and
information about Compaq and its products are available at
http://www.compaq.com.
Compaq, Registered U.S. Patent and Trademark Office. Product names mentioned
herein may be trademarks and/or registered trademarks of their respective
companies.
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