SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 12, 1999
CPI CORP.
------------------------------------------------------
(Exact Name of the Registrant as Specified in Charter)
Delaware 001-10204 431256674
- --------------------------------------------------------------------------------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
1706 Washington Avenue, St. Louis, Missouri 63103
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrants telephone number, including area code (314) 231-1575
Not Applicable
-------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 5. Other Events.
On October 12, 1999, SPS International Holdings, Inc. delivered to CPI
Corp. a notice of termination of the Agreement and Plan of Merger dated June 15,
1999 by and among SPS International Holdings, Inc., SPS Acquisition, Inc. and
CPI Corp. (the "Letter of Termination"). A copy of the Letter of Termination is
attached hereto as Exhibit 5.1.
On October 12, 1999, CPI Corp. issued a press release stating that it had
received the Letter of Termination and that no event has occurred that would
justify termination of the Merger Agreement. A copy of the press release is
attached hereto as Exhibit 5.2.
On October 12, 1999, CPI Corp. responded to the Letter of Termination. A
copy of the response letter is attached hereto as Exhibit 5.3.
<PAGE>
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.
CPI CORP.
Date: October 12, 1999 by: /s/Alyn V. Essman
----------------------------------------
Name: Alyn V. Essman
Title: Chief Executive Officer
SPS International Holdings, Inc.
October 12, 1999
BY FACSIMILE
- ------------
CPI Corp.
1706 Washington Avenue
St. Louis, Missouri 63103
Attn: Chief Executive Officer
Re: Agreement and Plan of Merger dated as of June 15, 1999
Dear Sirs:
Reference is made to the Agreement and Plan of Merger, dated as of June 15,
1999 (the "Merger Agreement"), by and among SPS International Holdings, Inc.
("Parent"), SPS Acquisition, Inc. and CPI Corp. (the "Company").
This is to notify you that Parent hereby terminates the Merger Agreement
pursuant to Section 5.01(d) thereof as a result of a breach by the Company of
the representation and warranty of the Company contained in Section 2.01(f) of
the Merger Agreement. This breach would give rise to a failure of a condition
set forth in Section 4.02(a) and cannot be cured prior to 15 days after the date
hereof. Accordingly, the termination of the Merger Agreement is effective
immediately. This letter shall serve as notice of the termination of the Merger
Agreement pursuant to Sections 5.01 and 5.02 thereof. Parent reserves the right
to assert any other grounds for termination of the Merger Agreement, including
the fact that one or more of the conditions to the financing cannot be met.
Pursuant to Section 6.01 of the Merger Agreement, Parent hereby demands
reimbursement from the Company for expenses incurred in connection with the
Merger Agreement.
Very truly yours,
SPS INTERNATIONAL HOLDINGS, INC.
By: /s/ Mark Bandeen
------------------------------
Name: Mark Bandeen
Title: Co-President
cc: William F. Wynne, Jr., Esq.
White & Case LLP
1155 Avenue of the Americas
New York, New York 10036
EXHIBIT 5.2
PRESS RELEASE
St. Louis, MO., October 12, 1999 - - CPI Corp. (NYSE-CPY) ("CPI")
announced today that it received a notice from SPS International Holdings, Inc.,
an affiliate of American Securities Capital Partners, L.P. ("ASCP") asserting
that CPI has experienced or been affected by an event, change, effect or
development that individually or in the aggregate has had or would reasonably be
expected to have a material adverse effect under the merger agreement and
terminating the merger agreement under which entities controlled by affiliates
of ASCP and CPI's management had agreed to acquire CPI for $37.00 per share in
cash.
CPI's Board has consulted with its legal and financial advisors and
has reviewed the facts and circumstances regarding CPI's performance. The Board
has concluded that neither CPI nor any of its subsidiaries has experienced or
been affected by any event, change, effect or development that individually or
in the aggregate has had or would reasonably be expected to have a material
adverse effect under the merger agreement. CPI's recent financial results
constitute and reflect ordinary course of business fluctuations of a type
normally occurring in CPI's operations and were previously disclosed to ASCP.
CPI has notified ASCP that such occurrences do not and cannot serve as the basis
for an assertion of a material adverse effect under the merger agreement and
ASCP's attempt to elevate them to that level is without basis, willful and in
bad faith. No other development has occurred that would justify termination by
ASCP. CPI views the failure on the part of ASCP to proceed to close the
transactions contemplated by the merger agreement as a breach of the merger
agreement entitling CPI to damages.
CPI is a consumer services company with fiscal year 1998 sales of $390
million, operating approximately 1,027 Sears Portrait Studios in the U.S.,
Puerto Rico and Canada and 152 Prints Plus wall decor stores.
EXHIBIT 5.3
[CPI LETTERHEAD]
VIA FACSIMILE
Mark Bandeen
Co-President
SPS International Holdings, Inc.
122 East 42nd Street, Suite 2400
New York, New York 10168
Dear Mr. Bandeen:
Reference is made to a letter dated today from SPS International Holdings,
Inc.("SPS Holdings") to CPI Corp. ("CPI") asserting a termination of the
Agreement and Plan of Merger (the "Agreement") dated as of June 15, 1999 by and
among SPS Holdings ("Parent"), SPS Acquisition, Inc. ("Sub") and CPI for
alleged breach of the representation and warranty contained in Section 2.01(f)
of the Agreement (such letter the "Termination Notice").
As previously communicated to you, neither CPI nor any of its subsidiaries
has experienced or been affected by any event, change, effect or development
that individually or in the aggregate has had or would reasonably be expected to
have a Material Adverse Effect under Section 2.01(f) of the Agreement or
otherwise. No other development has occurred that would justify termination of
the Agreement.
As recently as October 6, American Securities Capital Partners, L.P.
("ASCP"), Parent and Sub, through their representatives, indicated to CPI that
they were not seeking to terminate the Agreement, that they did not wish to
abandon the transaction, that they would keep moving forward on the transaction
and that they would instruct Credit Suisse First Boston to complete the
transaction financing documentation and schedule a bank syndication meeting. CPI
relied on this information.
The purported Termination Notice is materially inconsistent with the
representations made on October 6.
The Termination Notice and the conduct of ASCP, Parent and Sub constitutes
bad faith and breach and willful breach of the Agreement, causing substantial
injury to CPI and its shareholders and entitling them to damages. Moreover, the
willful breach of the Agreement triggers ASCP's guarantee.
It is regrettable that ASCP, Parent and Sub have chosen to proceed in this
fashion in gross disregard of their respective contractual obligations and to
the extreme detriment of CPI and its shareholders.
Sincerely,
/s/ Jane Nelson
Jane Nelson
General Counsel and Secretary
cc: Richard Capeleuto, Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017-3954
William F. Wynne, Jr., Esq.
White & Case LLP
1155 Avenue of the Americas
New York, New York 10036
Mr. Nicholas L. Reding
Monsanto Company
800 North Lindergh Boulevard, Building D
St. Louis, Missouri 63167
