<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
SCHEDULE TO
(RULE 14d-100)
TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 0-23403
HOLT'S CIGAR HOLDINGS, INC.
(Name of Subject Company)
HCH ACQUISITION CORP.
FUENTE INVESTMENT PARTNERSHIP
ROBERT G. LEVIN
(Name of Filing Persons-Status as Offeror)
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<S> <C>
Common Stock, $0.001 par value 436598 10 6
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(Title of Class of Securities) (CUSIP Number of Class of Securities)
</TABLE>
Matthew H. Lubart, Esq.
Fox, Rothschild, O'Brien & Frankel, LLP
997 Lenox Drive, Bldg. 3
Lawrenceville, New Jersey 08648
Telephone: 609-896-3600
Facsimile: 609-896-1469
(Name, Address and Telephone Number of Person authorized to
Receive Notices and Communications on Behalf of Filing Persons)
<PAGE> 2
CALCULATION OF FILING FEE
Transaction Valuation $8,342,323* Amount of Filing Fee: $1,668.47
* Estimated for purposes of calculating the amount of the filing fee only.
This calculation assumes the purchase of 1,516,786 shares of common stock,
$0.001 par value (the "Common Stock"), of Holt's Cigar Holdings, Inc. at a price
per share of Common Stock of $5.50 in cash. Such number of shares of Common
Stock represents the number of outstanding shares of Common Stock not
beneficially owned by the Fuente Investment Partnership and Robert G. Levin as
of November 14, 2000. The amount of the filing fee, calculated in accordance
with Rule 0-11 of the Securities Exchange Act of 1934, as amended, equals 1/50th
of one percent of the value of the Common Stock proposed to be acquired.
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: Not applicable.
Form or Registration No.: Not applicable.
Filing Party: Not applicable.
Date Filed: Not applicable.
Check the box if the filing relates solely to preliminary communications made
before the commencement of a tender offer: /X/
Check the appropriate boxes below to designate any transactions to which the
statement relates:
/X/ third party tender offer subject to Rule 14d-1.
/ / issuer tender offer subject to Rule 13e-4.
/X/ going private transaction subject to Rule 13e-3.
/ / amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the
results of the tender offer: / /
This Tender Offer Statement on Schedule TO relates to the offer by HCH
Acquisition Corp., a Delaware corporation (the "Purchaser") to purchase all of
the outstanding shares of common stock, par value $0.001 per share ("Common
Stock"), of Holt's Cigar Holdings, Inc., a Delaware corporation (the "Company"),
not already beneficially owned by the Fuente Investment Partnership and Robert
G. Levin (collectively, the "Purchaser Stockholders"), at $5.50 per share, net
to the sellers in cash, without interest, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated November 14, 2000 (the
"Offer to Purchase"), a copy of which is attached hereto as Exhibit (a)(1)(i),
and in the related Letter of Transmittal, a copy of which is attached hereto as
Exhibit (a)(1)(ii) (the "Letter of Transmittal," which, with the Offer to
Purchase as they may be amended and supplemented from time to time, together
constitute the "Offer").
<PAGE> 3
HOLT'S CIGAR HOLDINGS, INC. ANNOUNCES "GOING PRIVATE" TENDER OFFER AND RECORD
SECOND QUARTER SALES
PHILADELPHIA, PA - NOVEMBER 9, 2000, HOLT'S CIGAR HOLDINGS, INC. NASDAQ (HOLT),
Holt's Cigar Holdings, Inc., a leading retailer and distributor of premium
cigars in the United States, reported today that it has signed a definitive
agreement to be acquired by HCH Acquisition Corp., which is wholly owned by
Robert G. Levin and the Fuente Investment Partnership. Mr. Levin is the Chairman
of the Board of Directors, President and Chief Executive Officer of the Company.
The Fuente Investment Partnership is beneficially owned by Carlos A. Fuente,
Sr., his son, Carlos P. Fuente, Jr., and his daughter, Cynthia Fuente Suarez.
Messrs. Fuente, Sr. and Fuente, Jr. are both directors of the Company and the
Fuentes are also principals of the Company's major supplier. Under the terms of
the agreement, HCH Acquisition Corp. will make a tender offer of $5.50 in cash
per share of common stock to all holders of the common stock of Holt's Cigar
Holdings, Inc. (other than Mr. Levin and the Fuente Investment Partnership). Mr.
Levin and the Fuente Investment Partnership currently own 2,806,728 shares and
1,522,964 shares, respectively, aggregating 74.06% of the shares outstanding.
The acquisition transaction was approved on November 8, 2000 by the Board of
Directors of Holt's Cigar Holdings, Inc. acting upon the recommendation of a
Special Committee of the Board comprised of two independent directors. In making
its recommendation, the Special Committee retained Berwind Financial, LP.
Berwind Financial, LP rendered a written opinion that the consideration proposed
to be offered by HCH Acquisition Corp. to the Company's shareholders in the
tender offer and subsequent merger is fair, from a financial point of view, to
the shareholders of the Company (other than Mr. Levin and the Fuente Investment
Partnership). The tender offer, which will commence shortly, is subject to
customary conditions, including that a majority of the common stock, other than
the stock controlled by Mr. Levin and the Fuente Investment Partnership, be
tendered pursuant to the offer. The offer price represents a 60.0% premium over
the closing price of the common stock on November 8, 2000 and a 56.3% premium
over the average closing price of the common stock over the thirty trading days
through November 8, 2000. The tender offer is the first step in a "going
private" transaction which contemplates a merger of HCH Acquisition Corp. with
the Company following the conclusion of the offer, with all remaining shares of
the Company's common stock being cancelled in exchange for the right to receive
the merger consideration, which is also $5.50 per share of common stock.
HOLDERS OF SHARES OF COMMON STOCK OF HOLT'S CIGAR HOLDINGS, INC. SHOULD READ THE
OFFER TO PURCHASE THAT WILL BE DISSEMINATED BY HCH ACQUISITION CORP. UPON
COMMENCEMENT OF THE CASH TENDER OFFER. HCH ACQUISITION CORP. WILL FILE THE OFFER
TO PURCHASE WITH THE SECURITIES AND EXCHANGE COMMISSION AT THAT TIME. THE OFFER
TO PURCHASE AND OTHER FILED DOCUMENTS RELATING TO THE TENDER OFFER, INCLUDING
THE COMPANY'S RECOMMENDATION STATEMENT ON SCHEDULE 14D-9, WILL BE AVAILABLE FROM
THE PUBLIC REFERENCE ROOM OF THE COMMISSION
<PAGE> 4
FREE OF CHARGE, SUBJECT TO COPYING FEE. THE COMMISSION'S ADDRESS IS 450 5TH
STREET N.W., WASHINGTON, D.C., 20549. THE TELEPHONE NUMBER OF THE PUBLIC
REFERENCE ROOM IS 202-942-8090. THE FILED DOCUMENTS RELATING TO THE TENDER OFFER
CAN ALSO BE OBTAINED BY ACCESSING THE COMMISSION'S WEB SITE AT
HTTP:://WWW.SEC.GOV.
In addition, Holt's Cigar Holdings, Inc. reported that it posted record sales of
$9,948,000 for the quarter ended September 30, 2000, an increase of 6.4% over
sales of $8,891,000 for the same period last year. Net earnings for the second
quarter increased 12.7% to a record $1,128,000, or $0.19 per share, from
$1,000,000, or $0.17 per share for the same period last year. The wholesale
division, Ashton Distributors, Inc., outperformed the industry with sales
increasing by 24.1% for the quarter, while the retail division more closely
followed the industry performance with a 3.1% decrease in sales.
For the six months ended September 30, 2000, sales increased 9.3% to $18,690,000
from $17,098,000 for the same period last year. Net income increased 1.0% to
$2,063,000 from $2,044,000 reported last year. Earnings per share were $0.35 for
the current six month period compared to $0.34 for the same period last year.
This press release may contain forward-looking statements. While the statements
reflect our best current judgment, they are subject to risks and uncertainties
that could cause actual results to vary. In addition to factors noted here,
these risks are described in detail in the Company's annual report registration
statement on Form 10-K dated June 28, 2000, as filed with the Securities and
Exchange Commission.
Holt's Cigar Holdings is the parent company of Holt's Cigar Company, Inc.,
Ashton Distributors, Inc., Holt's Mail Order, Inc. and Holt's Company. The
Company, through its operating subsidiaries, is the exclusive worldwide
distributor of the highly acclaimed Ashton brand of premium, hand rolled cigars
and accessories. Holt's sells and distributes premium cigars and related
accessories nationwide through its mail order catalog, E-commerce site, and its
flagship retail store in Philadelphia.
For more information, please contact:
Mary Ann Pentz, Shareholder Relations
Holt's Cigar Holdings, Inc., 12270 Townsend Road, Philadelphia, PA 19154
215-676-8778 /Fax: 215-676-0438
Visit our website at: www.holts.com
<PAGE> 5
HOLT'S CIGAR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Six Months Ended September 30,
2000 and 1999
<TABLE>
<CAPTION>
QUARTER ENDED 9/30 SIX MONTHS ENDED 9/30
2000 1999 2000 1999
----------- ----------- ----------- -----------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net sales $ 9,947,821 $ 8,890,873 $18,690,241 $17,097,832
Cost of goods sold 5,507,542 5,126,167 10,464,975 9,578,315
----------- ----------- ----------- -----------
Gross profit 4,440,279 3,764,706 8,225,266 7,519,517
Operating expenses 2,737,878 2,337,058 5,288,262 4,494,063
----------- ----------- ----------- -----------
Income from operations 1,702,401 1,427,648 2,937,004 3,025,454
Other income 267,630 209,425 502,106 350,195
----------- ----------- ----------- -----------
Income before income taxes 1,970,031 1,637,073 3,439,110 3,375,649
Provision for income tax 842,335 636,675 1,376,430 1,332,105
----------- ----------- ----------- -----------
Net income $ 1,127,696 $ 1,000,398 $ 2,062,680 $ 2,043,544
=========== =========== =========== ===========
Net income per share (basic and $ 0.19 $ 0.17 $ 0.35 $ 0.34
diluted)
Weighted average number of shares 5,846,899 6,048,186 5,874,838 6,078,421
</TABLE>
<PAGE> 6
HOLT'S CIGAR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
9/30/2000 3/31/2000
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(UNAUDITED)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 6,676,539 $ 2,882,393
Investment Securities 4,420,695 4,183,179
Accounts Receivable (Net of $73,526 and $73,511 Allowance for
September and March, respectively) 3,159,207 2,170,445
Inventory (Net of $202,000 reserve for September and March) 5,446,550 7,559,416
Deferred Income Taxes 106,885 106,885
Prepaid Expenses and Other Current Assets 255,584 390,032
Prepaid Income Taxes 243,238 602,704
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TOTAL CURRENT ASSETS 20,308,698 17,895,054
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Investment Securities 7,967,520 7,897,483
Property and Equipment (Net of $942,390 and $749,050 accumulated
depreciation for September and March, respectively) 2,682,750 2,048,521
Loan Receivable - Officer 700,000 700,000
Deferred Income Taxes 26,930 26,930
Other Assets (Net of $298,693 and $238,238 amortization for September
and March, respectively) 758,203 753,929
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TOTAL ASSETS 32,444,101 29,321,917
============ ============
CURRENT LIABILITIES:
Accounts Payable 1,118,450 617,735
Due to Related Party 1,498,573 1,348,266
Accrued Expenses and Other Current Liabilities 798,193 401,180
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TOTAL CURRENT LIABILITIES 3,415,216 2,367,181
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STOCKHOLDERS' EQUITY:
Preferred Stock, $.001 par value, 25,000,000 shares authorized,
none issued -- --
Common Stock, $.001 par value, 25,000,000 shares authorized,
6,245,593 issued at September and March and 5,846,478 outstanding
and 5,847,728 outstanding at September and March, respectively 6,246 6,246
Additional Paid-in Capital 20,054,541 20,054,541
Retained Earnings 10,748,014 8,685,334
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Subtotal 30,808,801 28,746,121
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Treasury Stock, 399,115 and 397,865 shares at cost, respectively (1,723,172) (1,716,141)
Stock Purchase Loans (65,597) (75,244)
Other Comprehensive Income - Available for Sale Investments 8,853 --
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TOTAL STOCKHOLDERS' EQUITY 29,028,885 26,954,736
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 32,444,101 $ 29,321,917
============ ============
</TABLE>
