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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE TO
(Rule 14d-100)
Tender Offer Statement Under Section 14(d)(1)
or Section 13(e)(1) of the Securities Exchange Act of 1934
CDNOW, INC.
(Name of Subject Company)
BINC ACQUISITION CORP.
BERTELSMANN INC.
(Offerors)
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COMMON STOCK, NO PAR VALUE
(Title of Class of Securities)
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125086
(CUSIP Number of Class of Securities)
Robert Sorrentino
President and Chief Executive Officer
Bertelsmann, Inc.
1540 Broadway
New York, New York 10036
Telephone: (212) 782-1000
(Name, address and telephone number of
person authorized to receive notices and communications
on behalf of filing persons)
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Copy to:
Christopher J. Mayer
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telephone: 212-450-4000
CALCULATION OF FILING FEE
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Transaction Valuation* Amount of Filing Fee**
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$99,006,737 $19,801
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* Calculated by (i) multiplying $3.00, the per share tender offer price, by
32,961,610, the sum of the number of shares of Common Stock sought in the
Offer, plus (ii) payments to holders of options with an exercise price
less than $3.00 in an amount per option equal to the difference between
(a) $3.00 and (b) the applicable exercise price, based on (A) 102,400
outstanding options with an average weighted exercise price of $2.94 per
share and (B) 69,319 outstanding options with an average weighted
exercise price of $1.33 per share.
** Calculated as 1/50 of 1% of the transaction value.
[ ] Check the 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 Filing party: Not Applicable
Form or Registration No.: 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.
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.
[ ] 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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<PAGE>
TENDER OFFER
This Tender Offer Statement on Schedule TO ("Schedule TO") relates to an
offer by BINC Acquisition Corp., a Pennsylvania corporation ("Purchaser") and a
wholly owned subsidiary of Bertelsmann, Inc., a Delaware corporation
("Bertelsmann"), to purchase all outstanding shares of common stock, no par
value (the "Shares"), of CDnow, Inc., a Pennsylvania corporation (the
"Company"), at $3.00 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase (the "Offer to
Purchase"), and in the related Letter of Transmittal (the "Letter of
Transmittal", and together with the Offer to Purchase and any amendments or
supplements thereto, the "Offer"), copies of which are attached hereto as
Exhibits (a)(l) and (a)(2).
The information in the Offer to Purchase, including all schedules and
annexes thereto, is hereby expressly incorporated herein by reference in
response to all the items of this Statement, except as otherwise set forth
below.
Item 12. Exhibits.
(a)(1) Offer to Purchase dated July 26, 2000.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(a)(5) Letter to Clients for Use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Summary Advertisement dated July 26, 2000.
(b) Not applicable.
(c) Not applicable.
(d)(1) Agreement and Plan of Merger dated as of July 19, 2000 among
Bertelsmann, the Company, and Purchaser.
(d)(2) Shareholder Agreement dated as of July 19, 2000 between Bertelsmann
and Jason Olim and Matthew Olim.
(d)(3) Convertible Loan Agreement dated as of July 19, 2000 among the
Company, as Borrower, and Bertelsmann, as Lender.
(d)(4) Guarantee and Collateral Agreement dated as of July 19, 2000 among
the Company and certain of its Subsidiaries in favor of Bertelsmann,
as Security Agent.
(d)(5) Registration Rights Agreement dated as of July 19, 2000 between the
Company and Bertelsmann.
(d)(6) Confidentiality Agreement dated as of June 15, 2000 between the
Company and Bertelsmann AG.
(e) Not applicable.
(f) Not applicable.
(g) Not applicable.
(h) Not applicable.
<PAGE>
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: July 26, 2000
BINC ACQUISITION CORP.
By: /s/ Robert Sorrentino
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Name: Robert Sorrentino
Title: President
BERTELSMANN, INC.
By: /s/ Robert Sorrentino
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Name: Robert Sorrentino
Title: President and Chief
Executive Officer
2
<PAGE>
EXHIBIT INDEX
Exhibit No.
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(a)(1) Offer to Purchase dated July 26, 2000.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees.
(a)(5) Letter to Clients for Use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other
Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Summary Advertisement dated July 26, 2000.
(d)(1) Agreement and Plan of Merger dated as of July 19, 2000 among
Bertelsmann, the Company,
and Purchaser.
(d)(2) Shareholder Agreement dated as of July 19, 2000 between
Bertelsmann, and Jason Olim and Matthew Olim.
(d)(3) Convertible Loan Agreement dated as of July 19, 2000 among
the Company, as Borrower, and Bertelsmann, as Lender.
(d)(4) Guarantee and Collateral Agreement dated as of July 19,
2000 among the Company and certain of its Subsidiaries in
favor of Bertelsmann, as Security Agent.
(d)(5) Registration Rights Agreement dated as of July 19, 2000 between
the Company and Bertelsmann.
(d)(6) Confidentiality Agreement dated as of June 15, 2000 between the
Company and Bertelsmann AG.
