SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Schedule TO
Tender Offer Statement under Section
14(d)(1) or 13(e)(1)of the Securities Exchange Act of 1934
Payless ShoeSource, Inc.
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(Name of Issuer)
Payless ShoeSource, Inc. (Issuer)
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(Name of Filing Person (Identifying Status as Offeror, Issuer or
Other Person))
Common Stock, Par Value $.01 Per Share
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(Title of Class of Securities)
704379106
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(CUSIP Number of Class of Securities)
William J. Rainey, Esq.
Payless ShoeSource, Inc.
3231 South East Sixth Street, Topeka , Kansas 66607-2207
Telephone: (785) 233-5171
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Filing
Persons)
Copy to:
Edward D. Herlihy, Esq.
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Telephone: (212) 403-1000
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CALCULATION OF FILING FEE
TRANSACTION VALUATION AMOUNT OF FILING FEE*
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* Pursuant to General Instruction D to Schedule TO, no filing fee is required.
/_/ 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: N/A
Form or Registration No.: N/A
Filing Party: N/A
Date Filed: N/A
/x/ Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
/_/ third-party tender offer subject to Rule 14d-1.
/x/ issuer tender offer subject to Rule 13e-4.
/_/ 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: /_/
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This Tender Offer Statement on Schedule TO relates to the tender offer by
Payless ShoeSource, Inc., a Delaware corporation, to purchase 7,547,170 shares,
or such lesser number of shares as are properly tendered, of its common stock,
par value $.01 per share, including the associated preferred stock purchase
rights issued under the Rights Agreement, dated as of April 20, 1998, between
Payless ShoeSource, Inc. and UMB Bank, N.A., as Rights Agent, at prices not in
excess of $53 nor less than $48 per share, net to the seller in cash, without
interest, as specified by shareholders tendering their shares. This Schedule TO
is intended to satisfy the reporting requirements of Rule 13e-4(c)(1) of the
Securities Exchange Act of 1934, as amended.
Item 12. EXHIBIT.
(a)(5) Press Release, dated March 8, 2000.
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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.
PAYLESS SHOESOURCE, INC.
By: *
Name:
Title:
Dated:
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* Pursuant to General Instruction D to Schedule TO, no signature is required.
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
(a)(5) Press Release, dated March 8, 2000
For Immediate Release Contact: Timothy J. Reid (785) 295-6695
TOPEKA, Kansas, March 8, 2000 - Payless ShoeSource, Inc. (NYSE:PSS) announced
today that its Board of Directors has approved repurchasing up to approximately
7.5 million shares, or 25 percent of the 29.6 million shares of common stock
currently outstanding, through a Dutch Auction self-tender offer expected to
commence the week of March 12, 2000. The tender offer price will range from $48
to $53 per share, or a total of $362 million to $400 million, if the maximum
number of shares is repurchased. This price range represents a 15 to 27 percent
premium to the $41 3/4 closing price per share on March 7, 2000, the last
trading day prior to date of this release.
The company also announced that it has raised its current fiscal year earnings
per share growth target to 20 percent, compared with its previous goal of 15
percent, excluding non-recurring and extraordinary charges. The company will
take $11.8 million of pre-tax charges for non-recurring and extraordinary items
against first quarter 2000 earnings, principally for costs associated with the
analysis and consideration of various strategic alternatives, refinancing costs
and costs associated with the self-tender.
If the number of shares tendered is greater than the number sought, the company
will select the lowest price within the stated range that will allow it to buy
7,547,170 shares, with purchases to be made on a pro rata basis for shareowners
tendering at or below the purchase price.
Payless ShoeSource, Inc. has obtained committed financing for the self-tender.
Steven J. Douglass, Payless Chairman and Chief Executive Officer, said, "Since
our spin-off from The May Department Stores Company in 1996, Payless ShoeSource,
Inc. has committed $582 million to repurchase more than 27 percent of its
original outstanding shares in less than four years. The transaction we are
announcing today clearly demonstrates that management continues to focus its
capital allocation on creating value for its shareowners."
Mr. Douglass went on to explain that, "Payless has a very healthy business with
cash flows capable of servicing the additional debt it has incurred. By
leveraging its balance sheet, Payless ShoeSource, Inc. lowers its cost of
capital and provides shareowners significant benefit in the near term."
This announcement follows a year of record sales and earnings for the company.
Earnings per share increased 15.1 percent in 1999 over last year and have
exceeded this level of growth on a compound annual basis over the past four
years. Return on equity rose to 19.4 percent at year-end from 16.1 percent last
year.
"Payless ShoeSource is a performance leader within the footwear industry with
after-tax earnings in 1999 exceeding $136 million." Mr. Douglass added that he
expects a reenergized Payless ShoeSource chain, plus continued growth from
Parade, Canadian expansion, the store-within-store strategy with ShopKo Stores,
Inc. and Payless.com(sm) to provide earnings growth, and sufficient cash flow
resources to complete the share repurchase and continue to support its
expansion.
"We believe the share repurchase program announced by the Company today
represents the best balance between using our strong cash flow to build our
operations, especially in light of consolidation opportunities in our industry,
while also providing immediate shareowner returns," Mr. Douglass concluded.
In connection with approving the tender offer, the Board of Directors approved
the increase of its $500 million stock repurchase program, approved in October
of 1998, by $200 million. As of January 30, 2000, Payless ShoeSource, Inc. had
$235 million remaining from the $500 million authorization, which,
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combined with the additional $200 million authorization, leaves $435 million
available for share repurchases, including the self-tender.
THIS PRESS RELEASE IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT AN OFFER TO BUY
OR THE SOLICITATION OF AN OFFER TO SELL ANY SHARES OF THE COMPANY'S COMMON
STOCK. THE SOLICITATION OF OFFERS TO BUY THE COMPANY'S COMMON STOCK WILL ONLY BE
MADE PURSUANT TO THE OFFER TO PURCHASE AND RELATED MATERIALS THAT THE COMPANY
WILL BE SENDING OUT TO ITS SHAREOWNERS SHORTLY. SHAREOWNERS SHOULD READ THOSE
MATERIALS CAREFULLY BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING
THE VARIOUS TERMS AND CONDITIONS TO THE OFFER. SHAREOWNERS WILL BE ABLE TO
OBTAIN THE OFFER TO PURCHASE AND RELATED MATERIALS FOR FREE AT THE SEC'S WEBSITE
AT WWW.SEC.GOV OR FROM OUR INFORMATION AGENT, D.F. KING & CO., INC., AT 77 WATER
STREET, 20TH FLOOR, NEW YORK, NEW YORK 10005, TELEPHONE: 212-269-5550.
SHAREOWNERS ARE URGED TO CAREFULLY READ THOSE MATERIALS PRIOR TO MAKING ANY
DECISIONS WITH RESPECT TO THE OFFER.
The Board of Directors of the company has approved the tender offer but neither
the company nor the Board of Directors is making any recommendation to
shareowners as to whether to tender or refrain from tendering their shares or as
to the purchase price or prices at which shareowners may choose to tender their
shares. Shareowners must make their own decision as to whether to tender their
shares and, if so, how many shares to tender and the price or prices at which
such shares should be tendered.
Payless ShoeSource, Inc. is North America's largest family footwear retailer.
The company operates 4,462 Payless ShoeSource stores offering quality family
footwear at affordable prices. In addition, customers can buy shoes over the
Internet through Payless.com(SM), at http://www.payless.com. Payless also
operates 220 Parade stores featuring fashionable mid-priced women's footwear.
This release contains forward-looking statements relating to such matters as
anticipated financial performance, share repurchase plans, consumer spending
patterns, business prospects, new products, future store openings, inventories,
possible strategic alternatives and similar matters. Forward looking statements
are identified by words such as "expects," "anticipates," "intends," "plans,"
"believes," "seeks," or variations of such words. A variety of known and unknown
risks and uncertainties and other factors could cause actual results and
expectations to differ materially from the anticipated results or expectations.
Please refer to the company's 1998 Annual Report and the company's Form 10-K for
the fiscal year ended January 30, 1999, for more information on these and other
risk factors that could cause actual results to differ. The company does not
undertake any obligation to release publicly any revisions to such
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.
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