SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): March 18, 1999
CHESAPEAKE CORPORATION
(Exact Name of Registrant as Specified in Charter)
Virginia 1-3203 54-0166880
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(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
1021 East Cary Street, Richmond, VA 23219
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (804) 697-1000
Page 1 of 7 pages. Exhibit Index appears on page 7.
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INFORMATION TO BE INCLUDED IN REPORT
Item 2: Acquisition or Disposition of Assets.
On March 18, 1999, Chesapeake Corporation, a Virginia corporation
("Chesapeake"), completed its acquisition of substantially all of the
outstanding capital shares of Field Group plc ("Field"), a European packaging
company headquartered in the United Kingdom. The acquisition was effected
through a tender offer by Chesapeake UK Acquisitions plc ("Chesapeake UK"), a
wholly-owned subsidiary of Chesapeake, for all of the outstanding capital shares
of Field at a purchase price of (pound)3.60 per share. The tender offer, which
was recommended by Field's board of directors, represented a value of
approximately US $355 million for Field's outstanding share capital. Including
assumed debt of approximately $50 million, the tender offer reflected a total
enterprise value for Field of approximately US $405 million.
The tender offer initially was commenced by Chesapeake UK on January
20, 1999, at an offer price of (pound)3.20 per Field share. That initial offer
price was determined through arms-length negotiations between Chesapeake and
Field, and was recommended by Field's board of directors. In response to the
announcement of a subsequent competing bid, on February 12, 1999, Chesapeake UK
amended its offer to reflect the final offer price. The offer price is payable
in cash, provided that Field's shareholders were offered the option to elect to
receive unsecured loan notes to be issued by Chesapeake UK and guaranteed by
Chesapeake, with a nominal value of (pound)1 for every (pound)1 of cash
consideration (the "Loan Notes"), instead of all or part of the cash
consideration to which they would otherwise be entitled (subject to proration in
the event the Loan Note alternative was oversubscribed). The aggregate principal
amount of the Loan Notes issuable pursuant to the offer was capped at
approximately 20% of the aggregate offer consideration.
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As of March 5, 1999, Chesapeake UK had received shareholder
acceptances, irrevocable undertakings or acquired shares totaling 88% of the
outstanding share capital of Field and declared its offer wholly unconditional.
As of March 18, 1999, Chesapeake UK had received shareholder acceptances,
irrevocable undertakings or acquired shares exceeding 90% of the outstanding
share capital of Field and, at that time, all of the shareholder acceptances and
irrevocable undertakings were accepted for purchase. As soon as practicable,
pursuant to applicable provisions of United Kingdom law, Chesapeake UK intends
to acquire compulsorily all remaining outstanding Field shares at the offer
price, and to cancel Field's listing on the London Stock Exchange.
Chesapeake believes that, following the compulsory acquisition of all
remaining outstanding Field shares and the settlement (for cash or Loan Notes)
of all outstanding Field stock options, in excess of 90% of the aggregate
purchase price for Field of approximately $355 million will have been funded
through borrowings under a new credit facility provided by First Union National
Bank ("First Union"), as lender and administrative agent for a syndicate of
banks, in an aggregate amount of $450 million (the "Credit Facility"). The
Credit Facility consists of a $200 million 364-day revolving credit facility
(which, at Chesapeake's option, may be converted into a two-year term loan) and
a $250 million five-year revolving credit facility. Borrowings under the Credit
Facility bear interest and incur facility fees at a variable rate per annum,
which are initially equal to an all-in cost of LIBOR plus 1.0%. The Credit
Facility contains customary representations, warranties and covenants, including
covenants that require Chesapeake to maintain certain financial ratios. In
addition, the Credit Facility includes a provision that requires Chesapeake to
apply 50% of the net proceeds of any sale of its timberlands to permanently
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extinguish borrowings under the 364-day revolving credit facility (or the
successor term loan, if Chesapeake has exercised its conversion option).
Chesapeake has previously announced that it is considering strategic
alternatives with respect to its timberlands. The remainder of the purchase
price will have been paid through the issuance of Loan Notes. The Loan Notes
bear interest at a variable rate per annum equal to the LIBOR rate for six month
sterling deposits, are redeemable in whole or part at the option of the holders
on each biannual interest payment date commencing March 31, 2000, and, if not
earlier redeemed, mature on September 30, 2006.
Field specializes in the design and production of cartons, containers,
printed leaflets and labels. The company is focused on three customer sectors:
Pharmaceuticals and Healthcare; International and Branded Products; and Food and
Household. The company operates 17 facilities in the UK, Ireland, the
Netherlands, Belgium and France. Field's Pharmaceutical and Healthcare division
offers a pan-European integrated solution for cartons, labels and leaflets. Its
International and Branded Products division produces packaging and labels
predominately for the drinks, tobacco and confectionery markets. Its Food and
Household division has established key relationships with multinational consumer
products companies. For the 53 weeks ended April 4, 1998, Field reported profits
before tax of (pound)24 million on revenues of (pound)245 million, or profits
before tax of approximately US $40 million on revenues of approximately US $400
million. While Chesapeake will review Field's businesses and their respective
assets, structure, operations and property, Chesapeake has no present intention
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to use the plant, equipment or other physical property of Field for purposes
materially different from the purposes for which they were used prior to the
acquisition.
Additional information with respect to the transaction described herein
is set forth in the exhibits hereto, which are incorporated herein by reference.
Item 7: Financial Statements, Pro Forma Financial Information and Exhibits.
a) Financial Statements of Business Acquired.
The Registrant has determined that it is impractical to file
the required audited historical financial statements of Field
concurrently with this Form 8-K. The Registrant will file such
audited historical financial statements by amendment as soon
as practicable, but in any event not later than June 1, 1999.
b) Pro Forma Financial Information.
The Registrant has determined that it is impracticable to file
the required pro forma financial information concurrently with
this Form 8-K. The Registrant will file such pro forma
financial information by amendment as soon as practicable, but
in any event not later than June 1, 1999.
c) Exhibits.
Number Exhibit
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4.1 Amended and Restated Credit Agreement among
Chesapeake Corporation, Chesapeake UK Holdings
Limited, Various Lenders and First Union National
Bank, as Administrative Agent, dated as of March
15, 1999 (filed as Exhibit 4.3 to the Registrant's
Annual Report on Form 10-K for the year ended
December 31, 1998, and incorporated herein by
reference).
Pursuant to Rule 601(b)(2) of Regulation S-K, Chesapeake
agrees to furnish supplementally to the Securities and
Exchange Commission, upon request, any omitted schedules or
similar attachments to the foregoing Exhibits.
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SIGNATURE
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, thereunto duly authorized.
CHESAPEAKE CORPORATION
Date: April 2, 1999 By: /s/ William T. Tolley
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William T. Tolley
Senior Vice President -
Finance & Chief
Financial Officer
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EXHIBIT INDEX
Exhibit No. Description
4.1 Amended and Restated Credit Agreement among Chesapeake
Corporation, Chesapeake UK Holdings Limited, Various Lenders
and First Union National Bank, as administrative Agent,
dated as of March 15, 1999 (filed as Exhibit 4.3 to the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1998, and incorporated herein by reference).
