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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO
SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2)
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DANIEL INDUSTRIES, INC.
(NAME OF SUBJECT COMPANY)
DANIEL INDUSTRIES, INC.
(NAME OF PERSON(S) FILING STATEMENT)
COMMON STOCK, PAR VALUE $1.25 PER SHARE
(AND ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
(TITLE OF CLASS SECURITIES)
236235-10-7
(CUSIP Number of Class of Securities)
JAMES M. TIDWELL
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
DANIEL INDUSTRIES, INC.
9753 PINE LAKE DRIVE
HOUSTON, TEXAS 77055
(713) 467-6000
(Name, Address and Telephone Number of Person Authorized to
Receive Notice and Communications on Behalf of the
Person(s) Filing Statement)
With copy to:
CHARLES H. STILL, ESQ.
FULBRIGHT & JAWORSKI L.L.P.
1301 MCKINNEY, SUITE 5100
HOUSTON, TEXAS 77010-3095
(713) 651-5270
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This Amendment No. 2 amends and supplements the
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9")
originally filed with the Securities and Exchange Commission (the "Commission")
on May 20, 1999 by Daniel Industries, Inc., a Delaware corporation (the
"Company"), as amended by Amendment No. 1 filed with the Commission on May 25,
1999, in connection with the offer by Emersub LXXIV, Inc., a Delaware
corporation ("Purchaser") and a wholly owned subsidiary of Emerson Electric
Co., a Missouri corporation ("Parent"), to purchase all outstanding shares of
Common Stock, $1.25 par value (the "Common Stock"), of the Company, including
the related right as to each share to purchase one one-hundredth of a share of
Series A Junior Participating Preferred Stock, $1.00 par value, of the Company
(singularly, a "Right" and collectively, the "Rights") (singularly, a share of
such Common Stock, including the related Right, a "Share" and collectively, the
"Shares"), at $21.25 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated as of May
18, 1999 and in the related Letter of Transmittal (which together constitute
the "Offer"), copies of which are attached as Exhibits (a)(1) and (a)(2),
respectively, to the Schedule 14D-1 dated May 18, 1999, as amended by Amendment
No. 1 filed with the Commission on May 24, 1999 and Amendment No. 2 filed with
the Commission on May 27, 1999 (as so amended, the "Schedule 14D-1") of
Purchaser and Parent.
All capitalized terms used in this Amendment No. 2 without definition
have the meanings attributed to them in the Schedule 14D-9.
ITEM 4. THE SOLICITATION OR RECOMMENDATION
Item 4(a) is hereby amended and supplemented by adding to the end
thereof the following:
Background of the Transaction. On March 4, 1999, the Company received
an unsolicited written proposal for a business combination with another company
in which the Company's stockholders would receive cash and stock of the other
company aggregating $15 per share of Common Stock. On the same date, the
Company retained Simmons & Company International ("Simmons"), as the Company's
financial advisor, to assist the Company in its consideration of the business
combination proposal.
On March 16, 1999, the Board of Directors of the Company met to
consider the business combination proposal. At that meeting the Board discussed
the proposal with Simmons and the Company's management and legal advisors. The
Board, with the assistance of its advisors, also considered the Company's
business, historical and projected future performance, historical trading
prices for the Company's stock, market conditions, competition, possible
alternative transactions (including a sale of the Company) for maximizing value
for the Company's stockholders, the potential values for the Company using
discounted cash flows, various multiples and comparable transactions analyses
and the range of possible values that could be achieved if the Company were to
remain independent or pursue its other alternatives. After considering all of
those factors, the Board (i) determined that the business combination proposal
was inadequate and rejected it and (ii) decided to initiate a strategic review
to evaluate its options for maximizing the value of the Company to its
stockholders, including a possible business combination with a larger company.
Later on March 16, 1999, the Company announced publicly that its Board
of Directors had received and rejected the unsolicited proposal described above
and that the Board had decided to initiate a strategic review to evaluate its
options for maximizing the value of the Company to its stockholders. The
Company also announced that it had retained Simmons to assist the Company with
its strategic review.
In the course of the Company's review, 28 potential purchasers for the
Company were given the opportunity to sign confidentiality agreements. The
Company and Simmons believed that these 28 parties constituted the companies
that could be expected both to have an interest in pursuing a transaction with
the Company and to be able to consummate a transaction at an acceptable price.
Nineteen of these parties, including Parent, agreed to execute confidentiality
agreements. Thereafter, Simmons distributed the Company's Confidential
Descriptive Memorandum prepared by Simmons and the Company to each of the
interested parties that had executed a confidentiality agreement. The
Confidential Descriptive Memorandum contained a more detailed analysis of the
Company's business than was available publicly and included portions of the
Company's strategic business plan, projections for the Company as a whole as
well as for its business units and a description of the key underlying
assumptions by business unit used in developing the projections.
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Interested parties were invited to submit preliminary indications of
interest on April 19, 1999 based on the information provided, subject to
confirmatory due diligence, stating the price and form of consideration
(including cash, stock or a combination of the two) that they would be willing
to pay in an acquisition transaction involving the Company. Subsequent to the
receipt and review of the preliminary indications of interest, the Company
invited nine of those interested parties separately to attend a presentation by
the Company's management, to tour the Company's plant and office facilities in
Houston, Texas and to review selected due diligence materials in a data room at
the Company's offices. Eight of those interested parties, including Parent,
participated in that due diligence review of the Company. Each of these eight
interested parties was also provided with two versions of the Company's
proposed merger agreement, one for use with a stock for stock acquisition and
the other for use in a cash acquisition.
The eight interested parties were invited to submit firm proposals by
May 24, 1999 which were to state, among other things, the price each was
willing to pay to acquire the Company, the form of consideration to be paid to
the Company's stockholders and any financing or other contingencies, and to
include their comments on the applicable version of the Company's proposed form
of merger agreement.
Throughout the proposal solicitation process, the Company and its
advisors were in regular contact with the interested parties regarding their
due diligence investigation of the Company and their bids for the Company.
At the request of Parent, C.F. Knight, Chairman & CEO of Parent, and
D.N. Farr, Senior Executive Vice President of Parent responsible for the
Process Control business of Parent, met on May 7, 1999 with key management of
the Company, including R.C. Lassiter, the Chairman of the Board and CEO of the
Company. Following that meeting, Mr. Knight proposed to Mr. Lassiter that
Parent acquire the Company for $21.25 per Share in cash. Messrs. Lassiter,
Knight and Farr discussed Parent's proposal and tentatively agreed on it,
subject to the approval of the Boards of Directors of the Company, Parent and
Purchaser, negotiation of definitive agreements and receipt by the Company of a
fairness opinion from Simmons.
Among other things, Parent's offer of $21.25 in cash per Share was
higher than any indication of interest submitted previously by any other party
and, in the Company's opinion, was likely to be superior to any bid that any
other potential purchaser was likely to make. In addition, Parent's proposed
terms permitted another bidder to make a superior proposal which Parent could
respond to with a more favorable proposal; or if the Parent did not do so, the
Company could terminate its Merger Agreement with Parent and the Purchaser and,
subject to paying certain termination fees and expense reimbursement to Parent,
enter into a merger agreement with the alternative bidder. To date, the Company
has not received any proposal or indication of interest higher than $21.25 per
Share.
Between May 7, 1999 and May 12, 1999, representatives of the Company
and Parent (including financial and legal advisors) met to negotiate the terms
of the Merger Agreement and the Stock Option Agreement.
On May 12, 1999, at a meeting of the Board of Directors of the
Company, the Board received a presentation by Simmons and its opinion that, as
of that date, and based on the assumptions made, matters considered and limits
of review set forth therein, the consideration to be received by the holders of
the Shares (other than Parent and its affiliates) in the Offer and the Merger
is fair to such holders from a financial point of view. After discussion and
consideration of the factors previously described in Item 4 of the Company's
Schedule 14D-9, the Board unanimously approved the Offer and the Merger
(including the execution of the Merger Agreement and the Stock Option
Agreement) based on its conclusion that Parent's offer of $21.25 in cash per
Share was superior to all other options available to the Company for maximizing
value to its stockholders, including the option to remain independent. The
Board also unanimously recommended that stockholders tender their Shares
pursuant to the Offer.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 18 -- Letter to Stockholders dated June 7, 1999
2
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SIGNATURE
After reasonable 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: June 7, 1999
DANIEL INDUSTRIES, INC.
By /s/ James M. Tidwell
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James M. Tidwell
Executive Vice President and
Chief Financial Officer
3
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EXHIBIT INDEX
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18 Letter to Stockholders dated June 7, 1999
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EXHIBIT 18
[Daniel Industries Logo]
June 7, 1999
To Our Stockholders:
Enclosed is Amendment No. 2 ("Amendment No. 2") to the
Solicitation/Recommendation Statement on Schedule 14D-9 dated May 20, 1999 of
Daniel Industries, Inc. ("Daniel"), as amended by Amendment No. 1 filed with
the Securities and Exchange Commission (the "Commission") on May 25, 1999, in
connection with the offer by Emersub LXXIV, Inc. ("Purchaser"), a wholly owned
subsidiary of Emerson Electric Co. ("Parent"), to purchase all outstanding
shares of Common Stock, $1.25 par value (the "Common Stock"), of Daniel,
including the related right as to each share to purchase one one-hundredth of a
share of Series A Junior Participating Preferred Stock, $1.00 par value (the
"Rights" and together with the Common Stock, the "Shares"), of Daniel, at
$21.25 per Share, net to the seller in cash (the "Offer"). The Offer will
expire at 12:00 midnight, New York City time, on June 15, 1999 (the "Expiration
Date"), unless the Offer is extended. The Agreement and Plan of Merger dated as
of May 12, 1999 among Parent, Purchaser and Daniel (the "Merger Agreement")
provides that each Share not acquired by Purchaser in the Offer will be
converted into the right to receive cash in an amount equal to the price per
Share paid pursuant to the Offer in the subsequent merger of Purchaser into
Daniel (the "Merger").
YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT,
THE OFFER AND THE MERGER AND HAS UNANIMOUSLY DETERMINED THAT THE OFFER AND THE
MERGER ARE FAIR TO, AND IN THE BEST INTEREST OF, DANIEL AND ITS STOCKHOLDERS.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS OF DANIEL
ACCEPT THE OFFER AND TENDER THEIR SHARES.
The enclosed Amendment No. 2 is being sent to you prior to the
Expiration Date pursuant to an agreement in principle to settle a purported
class action lawsuit in the Court of Chancery of the State of Delaware in and
for New Castle County entitled "Miller v. Daniel Industries, Inc., et al., C.A.
No. 17175" (the "Action"), brought on behalf of the stockholders of Daniel. The
Notice of Settlement of the Action will be sent to you at a future date. I urge
you to read the enclosed Amendment No. 2, together with all materials relating
to the Offer and/or the Merger that have been sent to you and/or filed with the
Commission, carefully before making any decision with respect to tendering your
Shares. Stockholders who have previously validly tendered and continue to want
to sell their Shares pursuant to the Offer are not required to take further
action.
By way of this letter, I request that brokers, dealers, commercial
banks, trust companies and other nominees promptly forward to their respective
clients for whom they hold Shares registered in their name or in the name of
their nominee copies of this letter and Amendment No. 2.
On behalf of the Board of Directors and management of Daniel, I thank
you for your continued support.
On behalf of the Board of Directors,
/s/ R. C. Lassiter
R. C. Lassiter
Chairman of the Board, President
and Chief Executive Officer
