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SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of report (Date of earliest event reported): October 11, 1999
BIG FLOWER HOLDINGS, INC.
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(Exact Name of Registrant as Specified in Charter)
DELAWARE 0-29474 13-3971556
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
3 EAST 54th STREET, NEW YORK, NEW YORK 10022
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (212) 521-1600
Item 5. OTHER EVENTS.
On October 11, 1999, Big Flower Holdings, Inc., a Delaware corporation
(the "Company"), entered into an Amended and Restated Agreement and Plan of
Merger (the "Revised Merger Agreement") with BFH Merger Corp., a Delaware
corporation ("MergeCo"). The Revised Merger Agreement provides for the payment
to public stockholders of all cash consideration of $31.50 per share of common
stock.
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The Company's Board of Directors has set October 22, 1999 as the record
date for the Annual Stockholders Meeting to consider and vote upon a proposal to
adopt a Revised Merger Agreement.
A copy of the press release announcing the signing of the Revised
Merger Agreement, issued by the Company on October 11, 1999, is attached hereto
as Exhibit 99 and is incorporated by reference.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
The following exhibits are filed as part of this report on Form 8-K:
99 Text of Press Release, dated October 11, 1999, issued by Big Flower
Holdings, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: October 12, 1999 BIG FLOWER HOLDINGS, INC.
By: /s/ Irene B. Fisher
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Irene B. Fisher
Vice President and
Associate General Counsel
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EXHIBIT INDEX
Exhibit Description
99 Press Release, dated October 11, 1999, issued by Big
Flower Holdings, Inc.
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EXHIBIT 99
FOR IMMEDIATE RELEASE
BIG FLOWER RE-CAP REVISED TO $31.50 ALL CASH
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- EARNINGS FOR THE THIRD QUARTER AND 1999 LOWER THAN EXPECTED -
NEW YORK, NY -- OCTOBER 11, 1999 -- Big Flower Holdings, Inc. (NYSE: BGF) ("Big
Flower") today announced that it has signed an amended and restated merger
agreement (the "Revised Agreement") with BFH Merger Corp., an affiliate of
Thomas H. Lee Company ("THL Co.") and Evercore Capital Partners ("Evercore").
The Revised Agreement provides for the payment to public stockholders of all
cash consideration of $31.50 per share of common stock, a premium of 16 percent
over its average New York Stock Exchange closing price for the three day period
ending Friday, October 8. Big Flower believes that, in addition to offering a
higher cash amount, the revised transaction provides a higher probability of
completion and a greater likelihood of closing in late November or December. The
Revised Agreement values the re-capitalization of Big Flower at approximately
$1.9 billion.
Big Flower also announced today that, because of slower than expected
integration of recent direct marketing acquisitions, accompanied by weakness in
the direct mail sector arising from Big Flower's business with consumer products
and publishing companies, it now estimates that adjusted earnings per diluted
share for the third quarter will be approximately 5 to 10 percent lower than
earnings in the comparable period in 1998. While Big Flower continues to expect
stronger performance in the fourth quarter of 1999, it now expects that the
revised third quarter estimate and the continuing soft environment in the direct
mail sector will result in full-year adjusted earnings per diluted share for
1999 being slightly higher than 1998's $1.80.
Big Flower will hold a telephone conference call for investors and analysts to
discuss the third quarter and respond to questions on the Revised Agreement on
or about Wednesday, October 27, after its Proxy Statement has been filed with
the Securities and Exchange Commission and complete financial results for the
third quarter are available.
"The importance of cash to our shareholders was underscored by the market's
reaction to the paper component of the previously announced transaction," said
Peter Diamandis, Chairman of the Independent Directors of Big Flower. "We
believe that the revised transaction provides value to our shareholders not only
in terms of increased cash, but also because it provides shareholders with
greater speed and probability of closing."
"Notwithstanding difficult market and business conditions, we are pleased to
re-affirm our commitment to Big Flower," said Anthony J. DiNovi and Scott M.
Sperling, Managing Directors of Thomas H. Lee Company. "We continue to believe
in the Company and its industry leading positions and we and Evercore intend to
support fully its growth strategy."
-more-
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As with the previously announced agreement, Founder and Chairman of the Board,
Theodore Ammon, and members of management of Big Flower and its operating
subsidiaries, will retain a portion of their equity which, upon consummation of
the merger, will represent a significant equity interest in the re-capitalized
company and certain of its subsidiaries. Both Mr. Ammon and members of
management are expected to continue to serve in their current management
capacities.
Closing of the Revised Agreement is subject, among other things, to Company
shareholder approval at a special shareholder meeting expected to be held in
late November or December, receipt of the necessary financing and other
customary conditions. The Company does not expect that the consummation of the
merger would constitute a change of control under the terms of its 8 7/8% Senior
Subordinated Notes and its 8 5/8% Senior Subordinated Notes. The financing
necessary for the transaction has been fully committed by Chase Securities Inc.,
Deutsche Banc Alex. Brown, Bank of America and certain of their respective
affiliates.
Under the previously announced agreement, the common shares of Big Flower held
by the public would have been converted into the right to receive (I) $30 per
share in cash and (ii) 0.21 shares of a payment-in-kind (PIK) preferred stock
with a liquidation preference of $25 per share (or $5.25 per share of Big Flower
common stock), together with warrants to purchase common shares of the Company,
with an exercise price of $0.01 per share, representing, in aggregate, 5% of the
primary common shares of the company following the re-capitalization.
The Big Flower Independent Directors have unanimously approved the adoption of
the Revised Agreement. Berenson Minella & Company and Goldman, Sachs & Co. have
served as financial advisors to the Company and have each provided a fairness
opinion to the Company's Board in connection with the revised transaction. Chase
Securities Inc. and Deutsche Banc Alex. Brown provided merger advisory services
to BFH Merger Corp.
Big Flower is a leading advertising and marketing services and solutions company
which provides more than 3,000 retail, advertising agency, broadcasting,
manufacturing and newspaper customers with highly-targeted, promotional
advertising products, services and software. Big Flower specializes in targeted
advertising inserts, circulation-building newspaper products, data-driven direct
mail and direct marketing services, and digital services, including commercial
image design and production, and computer-based advertising management systems.
For the year ended December 31, 1998, the Company's pro forma revenues were
approximately $1.8 billion, including all acquisitions.
Thomas H. Lee Company is a Boston-based private equity firm focused on
identifying and acquiring substantial ownership positions in growing companies.
Founded in 1974, THL Co. currently manages approximately $5 billion of committed
capital. Recent transactions sponsored by THL Co. include Eye Care Centers of
America, Experian Information Solutions, Fisher Scientific International,
Homeside Lending, Rayovac, Safelite Glass and United Industries.
Evercore Partners provides strategic and financial advisory services to major
corporations and makes private equity investments through its Evercore Capital
Partners affiliate. Evercore Capital Partners' most recent investment was its
$850 million purchase of American Media. Recent advisory work includes advising
CBS on its merger with Viacom, Tenneco on the separation of its automotive and
packaging businesses, and Dow Jones on its interactive joint venture with
Reuters.
-more-
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This release contains forward-looking statements that involve risks and
uncertainties. Actual events in the future could differ materially from those
described in the forward-looking statements as a result of changes affecting the
Company's operating businesses, changes in the advertising markets, the
financial conditions of the Company's customers, the general condition of the
domestic and international economies and financial markets.
Big Flower Contact: James Abernathy
Abernathy MacGregor Frank
Tel: 212/371-5999
Evercore Contact: Austin M. Beutner
Evercore Capital Partners
Tel: 212-857-3120
Thomas H. Lee Contact: Peter Rosenthal
Rubenstein Associates, Inc.
Tel: 212-842-8030
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