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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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): October 18, 1995
ADVANCE ROSS CORPORATION
(Exact name of Registrant as Specified in its Charter)
DELAWARE
(State or other Jurisdiction
of Incorporation)
0-21822 36-3878407
(Commission (I.R.S. Employer
File Number) Identification No.)
233 SOUTH WACKER DRIVE, SUITE 9700, CHICAGO, ILLINOIS 60606-6502
(Address of Principal Executive Offices) (Zip Code)
(312) 382-1100
Registrant's Telephone Number,
Including Area Code
NOT APPLICABLE
(Former name, former address
and former fiscal year, if
changed from last report)
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ITEM 5. OTHER EVENTS.
On October 18, 1995, Advance Ross Corporation (the "Company") announced
that CUC International Inc. ("CUC") will acquire all of the Company's
outstanding common stock, which announcement is described more fully in a press
release dated October 18, 1995, a copy of which is attached hereto as Exhibit
001.
In addition, all shares of the Company's Preferred Stock ("Preferred
Stock"), issued and outstanding immediately prior to the effective time of the
merger (other than shares owned by CUC, the Company or any wholly owned
subsidiary of CUC or the Company), will be converted into that number of shares
of CUC International Common Stock equal to the quotient obtained by dividing:
(x) the sum of $27.50, plus all accumulated, accrued and unpaid dividends in
respect of each such share (excluding dividends that, at the effective time,
have been declared with a record date prior to the effective time but having a
payment date after the effective time), by (y) the Average Stock Price (as
defined in the Agreement and Plan of Merger, dated October 17, 1995).
No fractional shares of CUC International Common Stock will be issued
in the merger to holders of the Company's common stock or Preferred Stock.
Accordingly, if the Company reasonably determines that the aggregate amount of
cash to be received by all holders of the Preferred Stock, in lieu of
fractional share interests, would exceed 20% of the value of the aggregate
consideration to be received by all holders of the Preferred Stock at the
effective time, then, in lieu of the conversion in the merger of shares of the
Preferred Stock into shares of CUC International Common Stock, the Company
shall redeem the Preferred Stock in accordance with the redemption provisions
of the Advance Ross Restated Certificate of Incorporation.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
<S> <C>
001 Press Release dated October 18,
1995.
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2
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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.
ADVANCE ROSS CORPORATION
Dated: October 25, 1995 By: /s/ RANDY M. JOSEPH
------------------------
Randy M. Joseph
Vice-President, Chief Financial
Officer, Treasurer
3
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EXHIBIT 99.001
CONTACTS: HARVE FERRILL, CHAIRMAN
(312-382-1105)
PAUL YOVOVICH, PRESIDENT
(312-382-1107)
CUC INTERNATIONAL SIGNS AGREEMENT TO
ACQUIRE ADVANCE ROSS CORPORATION
Chicago, IL, October 18, 1995 -- CUC International Inc. (NYSE:CU)
announced today that it has signed an agreement to acquire all of the
outstanding common stock of Advance Ross Corporation (NASDAQ:AROS), a processor
of value-added tax refunds to travelers in over 20 European countries. CUC
International plans to effect the acquisition through a tax-free merger of a
wholly-owned acquisition subsidiary into Advance Ross. Pursuant to the merger,
CUC plans to issue five-sixths of a share of its common stock for each share of
Advance Ross common stock held on the effective date of the merger, subject to
certain adjustments. As of October 16, 1995, Advance Ross had approximately
7.1 million shares of common stock outstanding. CUC International intends to
account for the acquisition as a "pooling-of-interests."
The acquisition is subject to customary closing conditions, including
the expiration of any applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 and the approval of the holders of Advance
Ross common stock. It is anticipated that the acquisition will be completed in
January, 1996.
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Walter A. Forbes, Chairman and Chief Executive Officer of CUC
International, commented, "This acquisition marks an important strategic move
for CUC International as it significantly strengthens our worldwide presence,
while also providing an extensive, new distribution channel for our services.
Advance Ross will work closely with our International division, which is
headquartered in London."
More specifically:
- With access to over 90,000 retailers, including many high-end
department stores and boutiques, the acquisition will provide
CUC International with a broad international distribution
channel for its Entertainment Publications and other services.
- Advance Ross has operations in over 20 European countries.
There are significant opportunities to expand into additional
countries, primarily in Eastern Europe.
- Advance Ross has a presence in most major European airports,
providing an additional distribution channel for CUC
International's services. Currently, CUC International is
marketing its Travel service, on a test basis, with Advance
Ross at Heathrow Airport.
Harve Ferrill, Chief Executive Officer of Advance Ross, stated, "We are
pleased to become an integral part of CUC International's global growth
strategy. CUC's direct-marketing expertise and entrepreneurial spirit, when
coupled with our international strength, promises to be a powerful
combination."
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Mr. Ferrill continued, "Not only can CUC gain tremendous leverage from
our international presence, but we can also gain from CUC's marketing skills.
The value-added tax refund is a boon to travelers; yet, many tourists are
unaware of it. CUC's proven marketing expertise should prove quite valuable in
our objective to increase travelers' awareness and usage of the refund."
The merger agreement calls for five-sixths of a share of CUC common
stock to be issued for each share of Advance Ross common stock, assuming that
CUC common stock trades at an average price between $30.00 and $38.00 per share
over the ten-day period prior to a special shareholder meeting. If CUC's
average price over that period is above $38.00, the CUC shares to be exchanged
for each share of Advance Ross common stock would be decreased to produce a
maximum $31.67 value for the CUC stock exchanged for each Advance Ross share.
If CUC's average price over that period is below $30.00, the CUC shares to be
exchanged would be increased to produce a minimum of $25.00 for the CUC stock
exchanged for each Advance Ross share.
Advance Ross Corporation's primary business is Europe Tax-free Shopping
(ETS), the world's leading value-added tax (VAT) refund service. For the year
ended December 31, 1994, Advance Ross reported revenues of $66.5 million. Net
income was $8.3 million, or $.97 per fully diluted share, on 8.6 million
weighted average common shares outstanding, which reflects the two-for-one
split distributed on September 8, 1995.
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CUC International Inc. is a leading membership-services company,
currently providing more than 38 million consumers with access to a variety of
services including home shopping, travel, insurance, auto, dining, home
improvement, lifestyle clubs, checking account enhancements and discount coupon
programs.
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