<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(E)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934)
(AMENDMENT NO. 2)
------------------------
MAGELLAN HEALTH SERVICES, INC.
(Name of Issuer and Person Filing Statement)
COMMON STOCK, PAR VALUE $0.25 PER SHARE
(Title of Class of Securities)
559079 10 8
(CUSIP Number of Class of Securities)
------------------------
STEVE J. DAVIS
EXECUTIVE VICE PRESIDENT --
ADMINISTRATIVE SERVICES AND GENERAL COUNSEL
MAGELLAN HEALTH SERVICES, INC.
SUITE 1400
3414 PEACHTREE ROAD, N.E.
ATLANTA, GEORGIA 30326
(404) 841-9200
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of the Person Filing Statement)
------------------------
COPY TO:
ROBERT W. MILLER
KING & SPALDING
191 PEACHTREE STREET
ATLANTA, GEORGIA 30303
(404) 572-4600
------------------------
August 15, 1996
(Date Tender Offer First Published, Sent or Given to Security Holders)
------------------------
CALCULATION OF FILING FEE
<TABLE>
<S> <C>
Transaction Valuation $61,050,000* Amount of Filing Fee $12,210
</TABLE>
*Based upon purchase of 3,300,000 shares at the maximum tender offer price of
$18.50 per share.
/ / 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: $7,000 Filing Party: Magellan Health Services,
Inc.
Form Or Registration No.: Schedule 13E-4 Date Filed: August 15, 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
This Amendment No. 2 to Schedule 13E-4 is being filed with the Securities
and Exchange Commission (the "Commission") by Magellan Health Services, Inc.
(the "Company") on September 5, 1996, and amends the Schedule 13E-4 filed by the
Company with the Commission on August 15, 1996, and last amended August 21, 1996
(the "Schedule 13E-4"). Unless otherwise defined herein, all capitalized terms
used but not defined herein have the meanings assigned to them in the Schedule
13E-4.
ITEM 1. SECURITY AND ISSUER.
On September 5, 1996, the Company announced that it has increased the number
of shares of its Common Stock that it will accept for payment to 3,300,000
shares (or such lesser number of shares as are properly tendered and not
withdrawn) from 1,891,891. In addition, the Offer, proration period and
withdrawal rights have been extended and will now expire at 12:00 midnight, New
York City time on Wednesday, September 18, 1996 unless the offer is extended.
The information set forth on the cover page of the Supplement to Offer to
Purchase is incorporated herein by reference.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth in the sixth paragraph on the cover page of
the Supplement to Offer to Purchase is incorporated herein by reference.
ITEM 7. FINANCIAL INFORMATION.
(b) The financial information set forth on the back page of the Supplement
to Offer to Purchase is incorporated herein by reference.
ITEM 8. ADDITIONAL INFORMATION.
Not applicable.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ------------- ----------------------------------------------------------------------------------------
<C> <C> <S>
*(a) (1) -- Form of Offer to Purchase dated August 15, 1996.
*(a) (2) -- Form of Letter of Transmittal.
*(a) (3) -- Form of Notice of Guaranteed Delivery.
*(a) (4) -- Form of letter to brokers, dealers, commercial banks, trust companies and other nominees
dated August 15, 1996.
*(a) (5) -- Form of letter to clients who are common stockholders for use by brokers, dealers,
commercial banks, trust companies and other nominees dated August 15, 1996.
*(a) (6) -- Form of letter to stockholders from the Chairman and Chief Executive Officer of the
Company dated August 15, 1996.
*(a) (7) -- Form of letter to Participants for use by the Trustee of the Company's Employee Stock
Ownership Plan dated August 22, 1996.
*(a) (8) -- Form of Summary Advertisement dated August 15, 1996.
*(a) (9) -- Form of Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9.
*(a)(10) -- Form of Press Release dated August 15, 1996.
**(a)(11) -- Form of Supplement to Offer to Purchase dated September 5, 1996.
**(a)(12) -- Form of Press Release dated September 5, 1996.
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ------------- ----------------------------------------------------------------------------------------
*(b) (1) -- Second Amended and Restated Credit Agreement, dated as of May 2, 1994, among the
Company, Bankers Trust Company, as Agent, First Union National Bank of North Carolina,
as Co-Agent, and the financial institutions listed in such credit agreement, which was
filed as Exhibit 4(e) to the Company's Registration Statement on Form S-4 (No.
33-53701), filed May 18, 1994, and is incorporated herein by reference.
<C> <C> <S>
*(b) (2) -- Amendment No. 1, dated as of June 9, 1994, to Second Amended and Restated Credit
Agreement, dated as of May 2, 1994, among the Company, the financial institutions
listed therein, Bankers Trust Company, as Agent, and First Union National Bank of North
Carolina, as Co-Agent, which was filed as Exhibit 4(w) to the Company's Amendment No. 1
to Registration Statement on Form S-4 (No. 33-53701) filed July 1, 1994, and is
incorporated herein by reference.
*(b) (3) -- Amendment No. 2, dated as of September 30, 1994, to Second Amended and Restated Credit
Agreement, dated as of May 2, 1994, among the Company, the financial institutions
listed therein, Bankers Trust Company, as Agent, and First Union National Bank of North
Carolina, as Co-Agent, which was filed as Exhibit 4(s) to the Company's Annual Report
on Form 10-K for the year ended September 30, 1994, and is incorporated herein by
reference.
*(b) (4) -- Amendment No. 3, dated as of December 12, 1994, to Second Amended and Restated Credit
Agreement, dated as of May 2, 1994, among the Company, the financial institutions
listed therein, Bankers Trust Company, as Agent, and First Union National Bank of North
Carolina, as Co-Agent, which was filed as Exhibit 4(a) to the Company's Quarterly
Report on Form 10-Q for the Quarterly Period ended December 31, 1994, and is
incorporated herein by reference.
*(b) (5) -- Amendment No. 4, dated as of January 11, 1995, to Second Amended and Restated Credit
Agreement, dated as of May 2, 1994, among the Company, the financial institutions
listed therein, Bankers Trust Company, as Agent, and First Union National Bank of North
Carolina, as Co-Agent, which was filed as Exhibit 4(b) to the Company's Quarterly
Report on 10-Q for the Quarterly Period ended December 31, 1994, and is incorporated
herein by reference.
*(b) (6) -- Amendment No. 5, dated as of March 17, 1995, to Second Amended and Restated Credit
Agreement, dated as of May 2, 1994, among the Company, the financial institutions
listed therein, Bankers Trust Company, as Agent, and First Union National Bank of North
Carolina, as Co-Agent, which was filed as Exhibit 4(a) to the Company's Quarterly
Report on Form 10-Q for the Quarterly Period ended March 31, 1995, and is incorporated
herein by reference.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ------------- ----------------------------------------------------------------------------------------
*(b) (7) -- Amendment No. 6, dated as of October 17, 1995, to Second Amended and Restated Credit
Agreement, dated as of May 2, 1994, among the Company, Bankers Trust Company, as Agent,
and First Union National Bank of North Carolina, as Co-Agent, which was filed as
Exhibit 4(a) to the Company's Quarterly Report on Form 10-Q for the Quarterly Period
ended December 31, 1995, and is incorporated herein by reference.
<C> <C> <S>
*(b) (8) -- Amendment No. 7, dated as of November 30, 1995, to Second Amended and Restated Credit
Agreement, dated as of May 2, 1994, among the Company, Bankers Trust Company, as Agent,
and First Union National Bank of North Carolina, as Co-Agent, which was filed as
Exhibit 4(b) to the Company's Quarterly Report on Form 10-Q for the Quarterly Period
ended December 31, 1995, and is incorporated herein by reference.
*(b) (9) -- Amendment No. 8, dated as of January 24, 1996, to Second Amended and Restated Credit
Agreement, dated as of May 2, 1994, among the Company, Bankers Trust Company, as Agent,
and First Union National Bank of North Carolina, as Co-Agent, which was filed as
Exhibit 4(c) to the Company's Quarterly Report on Form 10-Q for the Quarterly Period
ended December 31, 1995, and is incorporated herein by reference.
*(b)(10) -- Amendment No. 9, dated as of June 30, 1996, to Second Amended and Restated Credit
Agreement, dated as of May 2, 1994, among the Company, Bankers Trust Company, as Agent,
and First Union National Bank of North Carolina, as Co-Agent, which was filed as
Exhibit 4(a) to the Company's Quarterly Report on Form 10-Q for the Quarterly Period
ended June 30, 1996, and is incorporated herein by reference.
*(b)(11) -- Amendment No. 10, dated as of July 31, 1996, to Second Amended and Restated Credit
Agreement, dated as of May 2, 1994, among the Company, Bankers Trust Company, as Agent,
and First Union National Bank of North Carolina, as Co-Agent, which was filed as
Exhibit 4(b) to the Company's Quarterly Report on Form 10-Q for the Quarterly Period
ended June 30, 1996, and is incorporated herein by reference.
**(b)(12) -- Amendment No. 11, dated as of September 3, 1996, to Second Amended and Restated Credit
Agreement, dated as of May 2, 1994, among the Company, Bankers Trust Company, as Agent,
and First Union National Bank of North Carolina, as Co-Agent.
(c) -- Not applicable.
(d) -- Not applicable.
(e) -- Not applicable.
(f) -- Not applicable.
</TABLE>
- ------------------------
*Previously filed.
**Filed with this amendment.
3
<PAGE>
SIGNATURES
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.
MAGELLAN HEALTH SERVICES, INC.
By: /s/ STEVE J. DAVIS
-----------------------------------
STEVE J. DAVIS
EXECUTIVE VICE PRESIDENT --
ADMINISTRATIVE SERVICES AND GENERAL
COUNSEL
Dated: September 5, 1996
4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
- ------------- -------------------------------------------------------------------------------- -----------
<C> <C> <S> <C>
*(a) (1) -- Form of Offer to Purchase dated August 15, 1996.
*(a) (2) -- Form of Letter of Transmittal.
*(a) (3) -- Form of Notice of Guaranteed Delivery.
*(a) (4) -- Form of letter to brokers, dealers, commercial banks, trust companies and other
nominees dated August 15, 1996.
*(a) (5) -- Form of letter to clients who are common stockholders for use by brokers,
dealers, commercial banks, trust companies and other nominees dated August 15,
1996.
*(a) (6) -- Form of letter to stockholders from the Chairman and Chief Executive Officer of
the Company dated August 15, 1996.
*(a) (7) -- Form of letter to Participants for use by the Trustee of the Company's Employee
Stock Ownership Plan dated August 22, 1996.
*(a) (8) -- Form of Summary Advertisement dated August 15, 1996.
*(a) (9) -- Form of Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
*(a)(10) -- Form of Press Release dated August 15, 1996.
**(a)(11) -- Form of Supplement to Offer to Purchase dated September 5, 1996.
**(a)(12) -- Form of Press Release dated September 5, 1996.
*(b) (1) -- Second Amended and Restated Credit Agreement, dated as of May 2, 1994, among the
Company, Bankers Trust Company, as Agent, First Union National Bank of North
Carolina, as Co-Agent, and the financial institutions listed in such credit
agreement which was filed as Exhibit 4(e) to the Company's Registration
Statement on Form S-4 (No. 33-53701), filed May 18, 1994, and is incorporated
herein by reference.
*(b) (2) -- Amendment No. 1, dated as of June 9, 1994, to Second Amended and Restated Credit
Agreement, dated as of May 2, 1994, among the Company, the financial
institutions listed therein, Bankers Trust Company, as Agent, and First Union
National Bank of North Carolina, as Co-Agent, which was filed as Exhibit 4(w)
to the Company's Amendment No. 1 to July 1, 1994, and is incorporated herein by
reference.
*(b) (3) -- Amendment No. 2, dated as of September 30, 1994, to Second Amended and Restated
Credit Agreement, dated as of May 2, 1994, among the Company, the financial
institutions listed therein, Bankers Trust Company, as Agent, and First Union
National Bank of North Carolina, as Co-Agent, which was filed as Exhibit 4(s)
to the Company's Annual Report on Form 10-K for the year ended September 30,
1994, and is incorporated herein by reference.
*(b) (4) -- Amendment No. 3, dated as of December 12, 1994, to Second Amended and Restated
Credit Agreement, dated as of May 2, 1994, among the Company, the financial
institutions listed therein, Bankers Trust Company, as Agent, and First Union
National Bank of North Carolina, as Co-Agent, which was filed as Exhibit 4(a)
to the Company's Quarterly Report on Form 10-Q for the Quarterly Period ended
December 31, 1994, and is incorporated herein by reference.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
- ------------- -------------------------------------------------------------------------------- -----------
*(b) (5) -- Amendment No. 4, dated as of January 11, 1995, to Second Amended and Restated
Credit Agreement, dated as of May 2, 1994, among the Company, the financial
institutions listed therein, Bankers Trust Company, as Agent, and First Union
National Bank of North Carolina, as Co-Agent, which was filed as Exhibit 4(b)
to the Company's Quarterly Report on 10-Q for the Quarterly Period ended
December 31, 1994, and is incorporated herein by reference.
<C> <C> <S> <C>
*(b) (6) -- Amendment No. 5, dated as of March 17, 1995, to Second Amended and Restated
Credit Agreement, dated as of May 2, 1994, among the Company, the financial
institutions listed therein, Bankers Trust Company, as Agent, and First Union
National Bank of North Carolina, as Co-Agent, which was filed as Exhibit 4(a)
to the Company's Quarterly Report on Form 10-Q for the Quarterly Period ended
March 31, 1995, and is incorporated herein by reference.
*(b) (7) -- Amendment No. 6, dated as of October 17, 1995, to Second Amended and Restated
Credit Agreement, dated as of May 2, 1994, among the Company, Bankers Trust
Company, as Agent, and First Union National Bank of North Carolina, as
Co-Agent, which was filed as Exhibit 4(a) to the Company's Quarterly Report on
Form 10-Q for the Quarterly Period ended December 31, 1995, and is incorporated
herein by reference.
*(b) (8) -- Amendment No. 7, dated as of November 30, 1995, to Second Amended and Restated
Credit Agreement, dated as of May 2, 1994, among the Company, Bankers Trust
Company, as Agent, and First Union National Bank of North Carolina, as
Co-Agent, which was filed as Exhibit 4(b) to the Company's Quarterly Report on
Form 10-Q for the Quarterly Period ended December 31, 1995, and is incorporated
herein by reference.
*(b) (9) -- Amendment No. 8, dated as of January 24, 1996, to Second Amended and Restated
Credit Agreement, dated as of May 2, 1994, among the Company, Bankers Trust
Company, as Agent, and First Union National Bank of North Carolina, as
Co-Agent, which was filed as Exhibit 4(c) to the Company's Quarterly Report on
Form 10-Q for the Quarterly Period ended December 31, 1995, and is incorporated
herein by reference.
*(b)(10) -- Amendment No. 9, dated as of June 30, 1996, to Second Amended and Restated
Credit Agreement, dated as of May 2, 1994, among the Company, Bankers Trust
Company, as Agent, and First Union National Bank of North Carolina, as
Co-Agent, which was filed as Exhibit 4(a) to the Company's Quarterly Report on
Form 10-Q for the Quarterly Period ended June 30, 1996, and is incorporated
herein by reference.
*(b)(11) -- Amendment No. 10, dated as of July 31, 1996, to Second Amended and Restated
Credit Agreement, dated as of May 2, 1994, among the Company, Bankers Trust
Company, as Agent, and First Union National Bank of North Carolina, as
Co-Agent, which was filed as Exhibit 4(b) to the Company's Quarterly Report on
Form 10-Q for the Quarterly Period ended June 30, 1996, and is incorporated
herein by reference.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
- ------------- -------------------------------------------------------------------------------- -----------
**(b)(12) -- Amendment No. 11, dated as of September 3, 1996, to Second Amended and Restated
Credit Agreement, dated as of May 2, 1994, among the Company, Bankers Trust
Company, as Agent, and First Union National Bank of North Carolina, as
Co-Agent.
<C> <C> <S> <C>
(c) -- Not applicable.
(d) -- Not applicable.
(e) -- Not applicable.
(f) -- Not applicable.
</TABLE>
- ------------------------
*Previously filed.
**Filed with this amendment.
<PAGE>
SUPPLEMENT TO OFFER TO PURCHASE DATED AUGUST 15, 1996
MAGELLAN HEALTH SERVICES, INC.
HAS INCREASED ITS
OFFER TO PURCHASE FOR CASH TO 3,300,000 SHARES OF ITS COMMON STOCK
FROM 1,891,891 SHARES OF ITS COMMON STOCK
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS HAVE BEEN EXTENDED AND
WILL NOW EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME ON WEDNESDAY, SEPTEMBER
18, 1996, UNLESS THE OFFER IS EXTENDED.
Magellan Health Services, Inc., a Delaware corporation (the "Company"),
pursuant to this Supplement is increasing the number of Shares that it will
accept pursuant to the Offer to 3,300,000 Shares from 1,891,891 Shares and is
extending the expiration date of the Offer to 12:00 Midnight, New York City time
on Wednesday, September 18, 1996, unless the Offer is extended. Capitalized
terms used but not defined in this Supplement shall have the meanings assigned
to such terms in the Offer to Purchase dated August 15, 1996.
--------------------------
Holders who have previously tendered their Shares pursuant to the Offer need
not take any further action to tender their Shares. Holders who have not
tendered their Shares pursuant to the Offer may continue to use the Letter of
Transmittal to tender Shares.
--------------------------
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 6 OF THE OFFER TO PURCHASE.
--------------------------
The Shares are listed and principally traded on the American Stock Exchange,
Inc. (the "AMEX") under the symbol "MGL". On September 4, 1996, the closing per
Share sales price as reported on the AMEX Composite Tape was $17.125.
STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES. SEE
SECTION 7 OF THE OFFER TO PURCHASE. The Company has been informed by the
Depositary that approximately 224,000 Shares have been tendered and not
withdrawn as of September 4, 1996. The 3,300,000 Shares that the Company is
offering to purchase pursuant to the Offer represent approximately 10.0% of the
Shares outstanding as of July 31, 1996.
--------------------------
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
STOCKHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. THE
COMPANY HAS BEEN ADVISED THAT NO DIRECTOR OR EXECUTIVE OFFICER OF THE COMPANY
INTENDS TO TENDER ANY SHARES PURSUANT TO THE OFFER. STOCKHOLDERS MUST MAKE THEIR
OWN DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND
THE PRICE OR PRICES AT WHICH SHARES SHOULD BE TENDERED.
--------------------------
If the Company were to purchase 3,300,000 Shares pursuant to the Offer at a
Purchase Price of $18.50 per Share (the highest price in the range of possible
purchase prices), the maximum aggregate cost of the Offer would be approximately
$61.8 million (which includes $700,000 in transaction costs), which would be
paid either from borrowings under the Company's Credit Agreement or a
combination of borrowings and cash and cash equivalents of the Company.
--------------------------
EXCEPT AS OTHERWISE SET FORTH IN THIS SUPPLEMENT, THE TERMS AND CONDITIONS
SET FORTH IN THE OFFER TO PURCHASE REMAIN APPLICABLE IN ALL RESPECTS TO THE
OFFER. THE INFORMATION SET FORTH HEREIN SHOULD BE READ IN CONJUNCTION WITH THE
OFFER TO PURCHASE.
--------------------------
Questions and requests for assistance may be directed to, and additional
copies of this Supplement, the Offer to Purchase, the Letter of Transmittal or
the Notice of Guaranteed Delivery may be obtained from, the Information Agent,
MacKenzie Partners, Inc., at (212) 929-5500 (call collect) or (800) 322-2885
(toll-free).
--------------------------
THE DEALER MANAGER FOR THE OFFER IS:
[DEAN WITTER REYNOLDS LOGO]
September 5, 1996
<PAGE>
SUMMARY UNAUDITED CONSOLIDATED PRO FORMA FINANCIAL INFORMATION
The following summary unaudited consolidated pro forma financial information
gives effect to the purchase of the Shares pursuant to the Offer based on
certain assumptions described in the Notes to Summary Unaudited Consolidated Pro
Forma Financial Information and gives effect to the purchase of the Shares
pursuant to the Offer as if it had occurred on October 1, 1994 with respect to
the statement of operations data and on September 30, 1995 and June 30, 1996
with respect to the balance sheet data. The summary unaudited consolidated pro
forma financial information should be read in conjunction with the summary
consolidated historical financial information and does not purport to be
indicative of the results that would actually have been obtained had the
purchase of the Shares pursuant to the Offer been completed at the dates
indicated or that may be obtained in the future.
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30, 1995 NINE MONTHS ENDED JUNE 30, 1996
------------------------------------------ -------------------------------------------
PRO FORMA PRO FORMA
------------------------------ ------------------------------
ASSUMED $18.50 ASSUMED $16.50 ASSUMED $18.50 ASSUMED $16.50
PER SHARE PER SHARE UNAUDITED PER SHARE PER SHARE
HISTORICAL PURCHASE PRICE PURCHASE PRICE HISTORICAL PURCHASE PRICE PURCHASE PRICE
---------- -------------- -------------- ----------- -------------- --------------
(IN THOUSANDS, EXCEPT RATIOS AND PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net revenue....................... $1,151,736 $1,151,736 $1,151,736 $ 996,997 $ 996,997 $ 996,997
Net income (loss)................. (42,963) (45,898) (45,584) 24,095 22,051 22,270
Net income (loss) per common
share............................ $ (1.54) $ (1.87) $ (1.86) $ 0.79 $ 0.81 $ 0.82
Average number of shares
outstanding...................... 27,870 24,570 24,570 30,559 27,259 27,259
Ratio (deficiency) of earnings
before fixed charges to fixed
charges.......................... $ (54,085) $ (58,977) $ (58,454) 1.93 1.81 1.82
</TABLE>
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1995 AS OF JUNE 30, 1996
------------------------------------------- ------------------------------------------
PRO FORMA PRO FORMA
------------------------------ ------------------------------
ASSUMED $18.50 ASSUMED $16.50 ASSUMED $18.50 ASSUMED $16.50
PER SHARE PER SHARE UNAUDITED PER SHARE PER SHARE
HISTORICAL PURCHASE PRICE PURCHASE PRICE HISTORICAL PURCHASE PRICE PURCHASE PRICE
----------- -------------- -------------- ---------- -------------- --------------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working Capital................... $ 91,413 $ 91,413 $ 91,413 $ 115,029 $ 115,029 $ 115,029
Total Assets...................... 983,558 983,558 983,558 1,170,187 1,170,187 1,170,187
Total assets less goodwill and
reorganization value in excess of
amounts allocable to identifiable
assets........................... 943,564 943,564 943,564 1,041,319 1,041,319 1,041,319
Long-term debt and capital lease
obligations...................... 538,770 600,520 593,920 532,100 593,850 587,250
Stockholders' equity.............. 88,560 26,810 33,410 185,715 123,965 130,565
Book value per common share....... 3.17 1.09 1.36 5.72 4.25 4.48
</TABLE>
- ------------------------
NOTES TO SUMMARY UNAUDITED CONSOLIDATED PRO FORMA INFORMATION
The following assumptions regarding the Offer were made in determining the
pro forma financial information:
(1) The information assumes 3,300,000 Shares are purchased at $16.50 per share
and $18.50 per share with the purchase being financed under the Company's
Credit Agreement bearing interest at 7.92% in fiscal 1995 and 7.48% for the
nine months ended June 30, 1996.
(2) Expenses directly related to the Offer are assumed to be $700,000 and are
included as part of the cost of the Shares acquired.
(3) The ratio (deficiency) of earnings before fixed charges to fixed charges
were computed by dividing pre-tax income before fixed charges by fixed
charges. Fixed charges consist of interest expense and the interest
component of operating leases.
(4) Book value per common share is calculated as total stockholders' equity
divided by the number of common shares outstanding, net of treasury shares,
at the end of the period.
MAGELLAN HEALTH SERVICES, INC.
<PAGE>
FOR IMMEDIATE RELEASE
Contact: Robert Mead
(212) 484-6701
MAGELLAN HEALTH SERVICES INCREASES NUMBER OF
SHARES OF ITS COMMON STOCK IT WILL ACCEPT
PURSUANT TO ITS TENDER OFFER
________________________________________________________________________________
ATLANTA, GA, SEPTEMBER 5, 1996 -- Magellan Health Services, Inc. (ASE:MGL)
announced today that it has increased the number of shares of its Common Stock
that it will accept pursuant to its Dutch Auction tender offer to 3,300,000
shares from 1,891,891 shares. The price range within which the Company will
accept tenders remains $16.50 to $18.50 per share. The tender offer, proration
period and withdrawal rights will now expire at 12:00 midnight (New York City
time) on Wednesday, September 18, 1996, unless further extended.
The Company has been informed by the Depositary that approximately 224,000
shares have been tendered and not withdrawn as of September 4, 1996.
Dean Witter Reynolds Inc. is the Dealer Manager for the offer. MacKenzie
Partners, Inc. serves as the Information Agent and First Union National Bank of
North Carolina is the Depositary.
Magellan Health Services, Inc. a Fortune 1000 Company, is the country's largest
integrated behavioral healthcare company. Its three business units include:
Charter Behavioral Health Systems, the nation's largest and most comprehensive
behavioral healthcare delivery system, with nearly 100 facilities providing a
broad continuum of inpatient and outpatient care; majority-owned Green Spring
Health Services, a leader in behavioral managed care services; and Magellan
Public Solutions, serving the public sector with privatized behavioral health
services.
# # #
<PAGE>
AMENDMENT NO. 11
TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
AMENDMENT NO. 11 dated as of September 3, 1996 (this "Amendment") to the
SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of May 2, 1994 (as amended
by Amendment No. 1 thereto dated as of June 9, 1994, Amendment No. 2 thereto
dated as of September 30, 1994, Amendment No. 3 thereto dated as of December 12,
1994, Amendment No. 4 thereto dated as of January 11, 1995, Amendment No. 5
thereto dated as of March 17, 1995, Amendment No. 6 thereto dated as of October
17, 1995, Amendment No. 7 thereto dated as of November 30, 1995, Amendment No. 8
thereto dated as of January 24, 1996, Amendment No. 9 thereto dated as of June
30, 1996 and Amendment No. 10 thereto dated as of July 31, 1996, the "Credit
Agreement"), each among MAGELLAN HEALTH SERVICES, INC., a Delaware corporation
formerly known as CHARTER MEDICAL CORPORATION (the "Company"), the banking and
other financial institutions from time to time party thereto (the "Lenders"),
BANKERS TRUST COMPANY, as Agent for the Lenders, and FIRST UNION NATIONAL BANK
OF NORTH CAROLINA, as Co-Agent. Capitalized terms used herein and not defined
herein shall have the respective meanings set forth for such terms in the Credit
Agreement after giving effect to the amendments thereto set forth herein.
W I T N E S S E T H :
WHEREAS, the Company has requested that the Credit Agreement be amended to
permit the Company to repurchase up to $100,000,000 of its capital stock on the
open market at the fair market value thereof during its 1996 and 1997 fiscal
years; and
WHEREAS, subject to and upon the terms and conditions hereinafter set forth
and in the Credit Agreement as amended hereby, the Lenders party hereto are
willing to agree to the foregoing;
NOW, THEREFORE, the parties hereto hereby agree as follows:
Section 1. AMENDMENTS TO CREDIT AGREEMENT. Clause (xiii) of Section 8.3 of
the Credit Agreement is hereby amended in its entirety to read as follows:
"(xiii) so long as no Default or Event of Default shall have occurred
and be continuing, the Company may, in addition to the purchases
permitted to be made pursuant to clauses (i), (ii), (v), (xi) and (xii)
above, repurchase on the open market from time to time during its 1996
and 1997 fiscal years Company Common Stock for a price not to exceed the
then fair market value thereof; PROVIDED that the aggregate purchase
price paid by the Company and its Restricted Subsidiaries in connection
with all such repurchases shall not exceed $100,000,000."
Section 2. REPRESENTATIONS AND WARRANTIES. The Company hereby represents and
warrants to the Agent and the Lenders that:
(a) The execution and delivery by the Company of this Amendment and the
performance by the Company of the Credit Agreement as amended hereby are within
the Company's corporate powers, have been duly authorized by all necessary
corporate or other action and will not (i) contravene the certificate or
articles of incorporation or the bylaws of the Company, (ii) contravene any law,
regulation, order, writ, judgment, decree, determination or award currently in
effect binding on or affecting the Company or any of its Subsidiaries or any of
their respective assets, except where such contravention would not have a
Material Adverse Effect, or (iii) conflict with or result in any breach of any
of the terms, covenants, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of any Lien (except pursuant to
the Security Documents) upon any of the property or assets of the Company or any
of its Subsidiaries pursuant to the terms of, any indenture, mortgage, deed of
trust, agreement or other instrument (including, without limitation, the Senior
Subordinated Notes Indenture) to which the Company or any of its Subsidiaries is
a party or by which the Company, any of its Subsidiaries or any of their
respective properties or assets is bound or subject to, except to the extent
such conflict, breach, default or creation or imposition would not have a
Material Adverse Effect.
<PAGE>
(b) This Amendment, the Credit Agreement as amended hereby, and after giving
effect to this Amendment, the other Credit Documents constitute the legal, valid
and binding obligations of the Company and the other Credit Parties party
thereto, enforceable against the Company and such Credit Parties in accordance
with their respective terms, except to the extent such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally, and by
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(c) On and as of the date hereof, and both before and after giving effect to
this Amendment, no Default or Event of Default has occurred and is continuing.
(d) The representations and warranties of the Company and the other Credit
Parties contained in the Credit Agreement and the other Credit Documents are
true and correct on and as of the date hereof as if made on and as of the date
hereof both before and after giving effect to the effectiveness of this
Amendment, except to the extent such representations and warranties expressly
relate to a specific date.
Section 3. EFFECTIVENESS. This Amendment shall become effective when the
Agent shall have received duly executed counterparts of this Amendment from the
Company, each Subsidiary of the Company that is a party to any Credit Document
and as many of the Lenders as shall be necessary to comprise the "Required
Lenders".
Section 4. STATUS OF CREDIT DOCUMENTS. This Amendment is limited solely for
the purposes and to the extent expressly set forth herein, and, except as
expressly modified hereby, the terms, provisions and conditions of the Credit
Documents and the Liens granted thereunder shall continue in full force and
effect and are hereby ratified and confirmed in all respects.
Section 5. COUNTERPARTS. This Amendment may be executed and delivered in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. A
complete set of counterparts shall be lodged with the Company and the Agent.
Section 6. GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH, AND SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK (WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF).
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their respective duly
authorized officers to execute and deliver this Amendment No. 11 to the Second
Amended and Restated Credit Agreement as of the date first above written.
MAGELLAN HEALTH SERVICES, INC.
By: __________________________________
Name:
Title:
BANKERS TRUST COMPANY,
as Agent and a Lender
By: __________________________________
Name:
Title:
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, as Co-Agent
and a Lender
By: __________________________________
Name:
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: __________________________________
Name:
Title:
BANK OF IRELAND
By: __________________________________
Name:
Title:
3
<PAGE>
BANQUE FRANCAISE DU COMMERCE
EXTERIEUR
By: __________________________________
Name:
Title:
By: __________________________________
Name:
Title:
CREDIT LYONNAIS,
Cayman Islands Branch
By: __________________________________
Name:
Title:
DRESDNER BANK AG, New York and
Grand Cayman Islands Branches
By: __________________________________
Name:
Title:
By: __________________________________
Name:
Title:
GENERAL ELECTRIC CAPITAL
CORPORATION
By: __________________________________
Name:
Title:
4
<PAGE>
GIROCREDIT BANK AG DER
SPARKESSEN
By: __________________________________
Name:
Title:
THE BANK OF NEW YORK
By: __________________________________
Name:
Title:
THE BANK OF TOKYO-MITSUBISHI
LIMITED, New York Branch,
successor by merger to THE
MITSUBISHI BANK, LIMITED
By: __________________________________
Name:
Title:
Consented and agreed to as of
the date first above written:
By each of the entities listed
on Schedule I hereto:
By: __________________________________
Name:
Title: , of each of
the entities
listed on Schedule I hereto
By each of the entities listed
on Schedule II hereto:
By: __________________________________
Name:
Title: , of each of
the entities
listed on Schedule II hereto
5
