===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 1)
-----------------------
Daniel Industries, Inc.
(Name of Subject Company)
Emersub LXXIV, Inc.
(Bidder)
a wholly-owned subsidiary of
Emerson Electric Co.
Common Stock, $1.25 Par Value
(Title of Class of Securities)
-----------------------
236235-10-7
(CUSIP Number of Class of Securities)
-----------------------
W. Wayne Withers, Esq.
Senior Vice President, General Counsel and Secretary
Emerson Electric Co.
8000 West Florissant Avenue
St. Louis, Missouri 63136-8506
(314) 553-2000
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of Bidder)
-----------------------
With Copies to:
Phillip R. Mills, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
(212) 450-4000
===============================================================================
<PAGE>
- --------------------------------------
CUSIP No. 236235-10-7
- --------------------------------------
- -------------------------------------------------------------------------------
1. NAMES OF REPORTING PERSONS
IRS IDENTIFICATION NOS. ABOVE PERSONS (ENTITIES ONLY)
EMERSON ELECTRIC CO.
IRS IDENTIFICATION NO. 43-0259330
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS
WC; OO; BK
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM
2(e) OR 2(f) [ ]
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
MISSOURI
- -------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
NONE
- -------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
[ ]
- -------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
0%
- -------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON
CO
- -------------------------------------------------------------------------------
<PAGE>
- --------------------------------------
CUSIP No. 236235-10-7
- --------------------------------------
- -------------------------------------------------------------------------------
1. NAMES OF REPORTING PERSONS
IRS IDENTIFICATION NOS. ABOVE PERSONS (ENTITIES ONLY)
EMERSUB LXXIV, INC.
IRS IDENTIFICATION NO. 43-1850428
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS
AF
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM
2(e) OR 2(f) [ ]
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- -------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
NONE
- -------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
[ ]
- -------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
0%
- -------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON
CO
- -------------------------------------------------------------------------------
2
<PAGE>
This Amendment No. 1 amends and supplements the Tender Offer Statement on
Schedule 14D-1 (the "Schedule 14D-1") originally filed with the Securities and
Exchange Commission on May 18, 1999 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 Daniel Industries, Inc.
("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, of Daniel (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.
All capitalized terms used in this Amendment No. 1 without definition have
the meanings attributed to them in the Schedule 14D-1.
Item 10. Additional Information
Item 10(e) is hereby amended and supplemented by adding to the end thereof
the following:
On May 21, 1999, Charles Miller, on behalf of himself and other Daniel
stockholders, filed a purported class action complaint in the Court of Chancery
of the State of Delaware in and for New Castle County (the "Court") against
Daniel, Daniel's directors and Purchaser. The complaint seeks (i) to enjoin the
Offer and the Merger and to require Daniel's directors to make full and fair
disclosure of all material facts to the class before the completion of any such
acquisition, (ii) to rescind the Offer and the Merger or award rescissory
damages if the Offer and the Merger are consummated prior to the entry of the
Court's final judgment, (iii) to direct the defendants to account to plaintiff
and the class for all damages caused to them and to account for all profits and
any special benefits obtained by defendants as a result of their unlawful
conduct, (iv) to order the defendants to supplement the Offer and Daniel's
Schedule 14D-9 dated May 20, 1999 (the "Schedule 14D-9") to include all
material information not currently disclosed and (v) costs and disbursements of
the action, including reasonable fees and expenses of plaintiff's attorneys and
experts. The complaint alleges, among other things, that (i) Daniel's directors
violated their fiduciary duties to Daniel stockholders by failing to disclose
all information material and necessary for such stockholders to make a fully
informed decision on whether or not to tender shares in the Offer and (ii) the
defendants have failed to provide in the Offer and Schedule 14D-9 certain
material information. On May 21, 1999, plaintiff filed with the Court a motion
for expedited proceedings, a motion for a preliminary injunction and a first
request for the production of documents. The date for responses to these
motions has not yet been set. Daniel, Purchaser and Parent believe that the
complaint is without merit and intend to vigorously defend this action. The
above description of the complaint is qualified in its entirety by reference to
the complete complaint, a copy of which is attached hereto as Exhibit (g) and
is incorporated herein by reference.
Item 11. Material to Be Filed as Exhibits
Item 11 is hereby amended and supplemented as follows:
(g)(1) Complaint filed on May 21, 1999 in the Court of Chancery of the
State of Delaware in and for New Castle County in an action
titled Charles Miller v. Daniel Industries, Inc. et al.
(g)(2) Motion for Expedited Proceedings filed on May 21, 1999 in the
Court of Chancery of the State of Delaware in and for New Castle
County in an action titled Charles Miller v. Daniel Industries,
Inc. et al.
(g)(3) Motion for Preliminary Injunction filed on May 21, 1999 in the
Court of Chancery of the State of Delaware in and for New Castle
County in an action titled Charles Miller v. Daniel Industries,
Inc. et al.
3
<PAGE>
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.
May 24, 1999 EMERSON ELECTRIC CO.
By: /s/ Robert M. Cox, Jr.
-------------------------------
Name: Robert M. Cox, Jr.
Title: Senior Vice President -
Acquisitions and
Development
EMERSUB LXXIV, INC.
By: /s/ Robert M. Cox, Jr.
-------------------------------
Name: Robert M. Cox, Jr.
Title: Vice President
4
<PAGE>
EXHIBIT INDEX
Exhibit No.
-----------
(g)(1) Complaint filed on May 21, 1999 in the Court of Chancery of
the State of Delaware in and for New Castle County in an
action titled Charles Miller v. Daniel Industries, Inc. et al.
(g)(2) Motion for Expedited Proceedings filed on May 21, 1999 in the
Court of Chancery of the State of Delaware in and for New Castle
County in an action titled Charles Miller v. Daniel Industries,
Inc. et al.
(g)(3) Motion for Preliminary Injunction filed on May 21, 1999 in the
Court of Chancery of the State of Delaware in and for New Castle
County in an action titled Charles Miller v. Daniel Industries,
Inc. et al.
5
EXHIBIT (g)(1)
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- - - - - - - - - - - - - - - - - - - - - - - - - x
CHARLES MILLER, :
:
Plaintiff, :
:
- against - :
:
DANIEL INDUSTRIES, INC., EMERSUB :
LXXIV, INC., RONALD C. LASSITER, : Civil Action No. 17175
THOMAS J. KEEFE, MICHAEL M. :
CARROLL, W.A. GRIFFIN, BRIAN E. :
O'NEILL, RALPH F. COX, LEO E. LINBECK, :
JR., NATHAN M. AVERY and GIBSON :
GAYLE, JR., :
:
Defendants. :
- - - - - - - - - - - - - - - - - - - - - - - - - x
CLASS ACTION COMPLAINT
----------------------
Plaintiff, by his attorneys, for his amended class action complaint
against defendants, alleges upon information and belief, except for paragraph
2 hereof, which is alleged upon knowledge as follows:
1. Plaintiff brings this action pursuant to Rule 23 of the Rules of the
Court of Chancery on his behalf and as a class action on behalf of all
persons, other than defendants and those in privity with them, who own the
common stock of Daniel Industries, Inc. ("Daniel" or the "Company").
2. Plaintiff has been the owner of the common stock of the Company since
prior to the transaction herein complained of and continuously to date.
3. Defendant Daniel is a corporation duly organized and existing under
the laws of the State of Delaware with principal executive offices at 9753
Pine Lake Drive, Houston, Texas. The Company provides products and services
(including valves) used principally by producers, refiners and transporters of
oil and natural gas. The Company has over 21 million shares of common stock
issued and outstanding on a fully diluted basis, held by 2,450 shareholders of
record, which shares trade on the New York Stock Exchange.
4. Defendant Emersub LXXIV, Inc. ("Emersub") is a Delaware corporation
with offices at 8000 W. Florissant Ave., St. Louis, MO and is a wholly owned
subsidiary of Emerson Electric Co. ("EEC"), a Missouri corporation with
offices at 8000 W. Florissant Ave., St. Louis, MO. EEC and Emersub are
collectively referred to herein as "Emerson."
5. Defendant Ronald C. Lassiter ("Lassiter") is and was at all relevant
times Daniel's Chief Executive Officer and Chairman.
6. Defendant W.A. Griffin ("Griffin") is and was at all relevant times a
director of the Company and Chairman Emeritus.
7. Defendants Thomas J. Keefe ("Keefe"), Michael M. Carroll ("Carroll"),
Brian E. O'Neill ("O'Neill"), Ralph F. Cox ("Cox"), Leo E. Linbeck, Jr.
("Linbeck"), Nathan M. Avery ("Avery") and Gibson Gayle, Jr. ("Gayle") are and
were at all relevant times directors of the Company.
8. The Individual Defendants named in paragraphs 5 through 7 constitute
the Board of Directors of Daniel (the "Board") and are in a fiduciary
relationship with plaintiff and the other public stockholders of Daniel and
owe them the highest obligations of good faith and fair dealing.
CLASS ACTION ALLEGATIONS
------------------------
9. Plaintiff brings this action on his own behalf and as a class action,
pursuant to Rule 23 of the Rules of the Court of Chancery, on behalf of all
common stockholders of the Company (except the defendants herein and any
person, firm, trust, corporation, or other entity related to or affiliated
with any of the defendants) and their successors in interest, who are or will
be threatened with injury arising from defendants' actions as more fully
described herein.
10. This action is properly maintainable as a class action.
11. The class is so numerous that joinder of all members is
impracticable. As of May 18, 1999, there were in excess of 21 million shares
of Daniel common stock outstanding, owned by thousands of shareholders located
throughout the country.
12. There are questions of law and fact which are common to the class
including, inter alia the following: (a) whether defendants have breached
their fiduciary and other common law duties owned by them to plaintiff and the
members of the class; and (b) whether defendants have failed to disclose
material information to Daniel's common stockholders; (c) whether the class is
entitled to injunctive relief or damages as a result of the wrongful conduct
committed by defendants.
13. Plaintiff is committed to prosecuting this action and has retained
competent counsel experienced in litigation of this nature. The claims of the
plaintiff are typical of the claims of other members of the class and
plaintiff has the same interests as the other members of the class. Plaintiff
will fairly and adequately represent the class.
14. Defendants have acted in a manner which similarly affects plaintiff
and all members of the class, thereby making appropriate injunctive relief
and/or corresponding declaratory relief with respect to the class as a whole.
15. The prosecution of separate actions by individual members of the
class would create a risk of inconsistent or varying adjudications with
respect to individual members of the class, which would establish incompatible
standards of conduct for defendants, or adjudications with respect to
individual members of the class which would, as a practical matter, be
dispositive of the interests of other members or substantially impair or
impede their ability to protect their interests.
SUBSTANTIVE ALLEGATIONS
-----------------------
16. On or about May 12, 1999, Daniel announced in a press release that it
had entered into a definitive agreement with EEC pursuant to which EEC will
acquire each share of Daniel common stock at a price of $21.25 cash per share
(the "transaction"). The total value of the transaction is approximately $457
million.
17. Pursuant to the terms of the transaction, Emersub commenced a cash
tender offer for Daniel common stock at $21.25 on or about May 18, 1999
("tender"). The tender is to be followed by a cash out merger at $21.25 per
share ("Merger").
18. As described below, the transaction is fraught with procedural
unfairness. Moreover, defendants have failed to disclose material information
to Daniel's public stockholders.
The Background of the Transaction
---------------------------------
19. On or about May 18, 1999, Emerson filed with the Securities and
Exchange Commission ("SEC") a Schedule 14D-1 ("14D-1"). The 14D-1 contains
Emerson's Offer to Purchase all outstanding common shares of Daniel at $21.25
per share ("Offer"). Thereafter on May 20, 1999, Daniel filed its Schedule
14D-9 ("14D-9"). The 14D-1 and 14D-9 outline in the barest of the terms the
transaction; in fact, the 14D-9 incorporates by reference the section entitled
"Background of the Offer; Past Contracts, Transactions or Negotiations with
the Company" contained in the 14D-1.
20. In the Offer, 14D-1 and 14D-9 (collectively, "offer documents"),
defendants note the background and negotiations of the transaction. According
to the offer documents, on March 16, 1999, Daniel received an unsolicited
offer to acquire the Company for $15 per share in cash and stock. Following
receipt of this unsolicited offer, Daniel retained the services of a financial
advisor, Simmons & Company International ("Simmons") to assist Daniel in
initiating a strategic review to evaluate its options.
21. Subsequently, on March 23 or March 24, a representative of Simmons
contacted EEC to ascertain whether EEC had any interest in exploring a
possible transaction with Daniel.
22. On April 1, 1999, EEC and Daniel entered into a confidentiality
agreement and conducted due diligence. Thereafter, on April 26 and 27, 1999
EEC attended a presentation by Daniel management, toured the Company's
facilities and conducted due diligence with "other potential bidders for the
Company's business."
23. According to the 14D-1, which is incorporated by reference in the
14D-9, EEC was then provided with two versions of Daniel's proposed merger
agreement (one for a cash acquisition, the other for a stock acquisition).
24. On May 7, 1999, representatives of EEC met with "key managers" of the
Company. Later that day, C.F. Knight, Chairman and Chief Executive Officer of
EEC, discussed the transactions with defendant Lassiter and tentatively agreed
upon an acquisition price.
25. Between May 7 and May 12, 1999, representatives of EEC and Daniel
negotiated the terms of a definitive agreements.
26. On May 12, the transaction was approved. The Board of Directors also
approved the merger agreement, which provides for a $15 million termination
fee, and a 19.9% lock up option.
27. On May 18, 1999, by virtue of the 14D-1, the tender commenced, and is
currently scheduled to expire on Tuesday, June 15, 1999.
Defendants Have Failed To Disclose Material Information
-------------------------------------------------------
28. The Offer, the 14D-1 and 14D-9 fail to disclose information material
and necessary for a reasonable Daniel stockholder to make a fully informed
decision on whether or not to tender shares in the Offer, including:
a. The 14D-9 provides Daniel shareholders no information to
enable them to understand why the Board decided to sell the Company.
b. The 14D-9 does not provide Daniel shareholders with any
information concerning the range of values for the Company the Board
considered. In particular, the Offer documents do not even discuss the types
of analysis prepared by Simmons, such as comparable companies analysis,
discounted cash flow analysis and the like, which are customarily prepared in
these types of transactions nor the derived ranges of value.
c. The Offer states on page 10 that Daniel management provided
representatives of EEC with certain projections of future operating
performance of Daniel through the year 2003. The projections are summarized,
and list revenue, net income, cash flow, earnings per share and cash flow per
share. A footnote to the projections for 1999 indicate that first quarter 1999
results were lower than anticipated due to "a decline in business activity
associated with lower energy prices." However, oil and gas prices since April,
1999 have significantly recovered and are at recent all time highs. Thus, it
is unclear what assumptions were made in connection with the projections, and
whether the underlying assumptions are reasonable.
d. The Simmons fairness opinion dated May 12, 1999, which is
annexed as an exhibit to the 14D-9, states that the Company's investment
advisor relied, in part, upon the information supplied by Daniel and its
management as to "certain internal business and financial information relating
to the Company, including certain financial forecasts prepared by management
of the Company . . . ." It is unclear whether this encompasses additional
internal projections. Nonetheless, the Board, in determining to recommend the
transaction to Daniel shareholders, reached its conclusion in part on the
presentation of Simmons, which "involved a discussion of various analyses,
alternative transactions and the written opinion of Simmons that the Offer and
the Merger is fair to the stockholders from a financial point of view." Yet,
the Offer documents do not discuss any analyses or alternative transactions.
In fact, the analysis prepared by Simmons and presumably presented to the
Board of Directors, which is customarily an exhibit to SEC filings in this
type of transaction, is not available and has not been made an exhibit to any
of the offer documents. Thus, Daniel stockholders have been completely
deprived of any information, known to the defendants, about the anticipated
future prospects of the Company or the potential of alternative transactions
which the Board considered.
e. The 14D-9 does not provide Daniel shareholders with
information to evaluate whether or not the Emerson transaction is the best
transaction available. Daniel shareholders are not told why the Board decided
to pursue the Emerson bid as opposed to others. The identity of the other
bidders whose interest is briefly noted in the Offer documents, and the amount
or nature of any competing bid, have not been disclosed.
29. The foregoing information is necessary and material to a Daniel
stockholder's decision to accept or reject the Offer. Thus, defendants should
supplement the Offer promptly to cure these material deficiencies.
30. This transaction represents a change in control and imposes
heightened fiduciary duties on the Individual Defendants to maximize
shareholder value, and to disclose to Daniel shareholders all information
material to an informed decision.
31. Defendants have violated their fiduciary duties by failing to provide
in the Offer documents the material information described in paragraph 28
above.
32. Plaintiff and other members of the Class have been and will be
irreparably damaged in that they must make a significant investment decision
without material information known and readily available to the Individual
Defendants.
33. EEC and Emersub are named as defendants in order to effect complete
relief.
34. Plaintiff has no adequate remedy at law.
WHEREFORE, plaintiff demands judgment as follows:
A. declaring this to be a proper class action and appointing plaintiff
Class representative;
B. enjoining, preliminarily and permanently, the proposed transaction
under the terms presently proposed, and requiring the Individual Defendants to
make full and fair disclosure of all material facts to the Class before the
completion of any such acquisition;
C. to the extent, if any, that the transaction complained of is consummated
prior to the entry of this Court's final judgment, rescinding the same or
awarding rescissory damages to the Class;
D. directing that defendants account to plaintiff and the Class for all
damages caused to them and account for all profits and any special benefits
obtained by defendants as a result of their unlawful conduct;
E. ordering defendants to supplement the Offer to include all material
information not currently disclosed;
F. awarding to plaintiff the costs and disbursements of this action,
including a reasonable allowance for the fees and expenses of plaintiff's
attorneys and experts; and
G. granting such other and further relief as the Court deems appropriate.
ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A.
By: /s/ Norman M. Monhait
-------------------------------------
Norman M. Monhait
Suite 1401, Mellon Bank Center
P.O. Box 1070
Wilmington, DE 19899-1070
(302) 656-4433
Attorneys for Plaintiff
OF COUNSEL:
GOODKIND LABATON RUDOFF
& SUCHAROW LLP
100 Park Avenue
New York, NY 10017
(212) 907-0700
May 21, 1999
Exhibit (g)(2)
IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- - - - - - - - - - - - - - - - - - - - - - - - - - - -x
CHARLES MILLER, :
:
Plaintiff, :
:
v. :
:
DANIEL INDUSTRIES, INC., EMERSUB :
LXXIV, INC., RONALD C. LASSITER, :
THOMAS J. KEEFE, MICHAEL M. : Civil Action No. 17175
CARROLL, W.A. GRIFFIN, BRIAN E. :
O'NEILL, RALPH F. COX, LEO E. LINBECK, :
JR., NATHAN M. AVERY and GIBSON :
GAYLE, JR., :
:
Defendants. :
:
:
- - - - - - - - - - - - - - - - - - - - - - - - - - - -x
MOTION FOR EXPEDITED PROCEEDINGS
Plaintiff, by his attorneys, respectfully moves the Court to schedule his
Motion for Preliminary Injunction, served and filed herewith, for a hearing
prior to June 15, 1999, the presently scheduled date for the closing of the
tender offer (the "Tender Offer") by Emersub LXXIV, Inc. ("Emersub") for all
the issued and outstanding shares of Daniel Industries, Inc. ("Daniel") at
$21.25 per share. As grounds for this Motion, plaintiff represents as follows:
1. Plaintiff alleges that he is a stockholder of Daniel. He brings this
action on behalf of all Daniel stockholders, contending that the defendant
directors of Daniel
<PAGE>
breached their fiduciary duties to plaintiff and the proposed class by failing
to include in materials disseminated to Daniel's shareholders in connection
with the Tender Offer information material to the decision facing Daniel's
shareholders of whether or not to tender their shares. These allegations are
particularized in plaintiff's Class Action Complaint, served and filed on May
21, 1999 (the "Complaint").
2. Among other things, the Complaint alleges that Emersub's Tender Offer
Circular ("14D-1") and Daniel's Solicitation/Recommendation Statement on 14D-9
("14D-9"), disseminated on or about May 18 and 20, 1999, respectively, omit
material information in a number of respects:
a. The 14D-9 provides Daniel shareholders no information to enable them to
understand why the Board decided to sell the Company.
b. The 14D-9 does not provide Daniel shareholders with any information
concerning the range of values for the Company the Board considered. In
particular, the Offer documents do not even discuss the types of analysis
prepared by the Board's investment advisor, ("Simmons"), such as comparable
companies analysis, discounted cash flow analysis and the like, which are
customarily prepared in these types of transactions, nor the derived ranges of
value.
c. The Offer states on page 10 that Daniel management provided
representatives of Emersub's parent ("Emerson") with certain projections of
future operating performance of Daniel through the year 2003. The projections
are summarized, and list revenue, net income, cash flow, earnings per share and
cash flow per share. A footnote to the projections for 1999 indicate that first
quarter 1999 results were lower
2
<PAGE>
than anticipated due to "a decline in business activity associated with lower
energy prices." However, oil and gas prices since April, 1999 have
significantly recovered and are at recent all time highs. Thus, it is unclear
what assumptions were made in connection with the projections, and whether the
underlying assumptions are reasonable.
d. The Simmons fairness opinion dated May 12, 1999, which is annexed as an
exhibit to the 14D-9, states that the Company's investment advisor relied, in
part, upon the information supplied by Daniel and its management as to "certain
internal business and financial information relating to the Company, including
certain financial forecasts prepared by management of the Company . . . ." It
is unclear whether this encompasses additional internal projections.
Nonetheless, the Board, in determining to recommend the transaction to Daniel
shareholders, reached its conclusion in part on the presentation of Simmons,
which "involved a discussion of various analyses, alternative transactions and
the written opinion of Simmons that the Offer and the Merger is fair to the
stockholders from a financial point view." Yet, the Offer documents do not
discuss any analyses or alternative transactions. In fact, the analysis
prepared by Simmons and presumably presented to the Board of Directors, which
is customarily an exhibit to SEC filings in this type of transaction, is not
available and has not been made an exhibit to any of the offer documents. Thus,
Daniel stockholders have been completely deprived of any information, known to
the defendants, about the anticipated future prospects of the Company or the
potential of alternative transactions which the Board considered.
e. The 14D-9 does not provide Daniel shareholders with information to
evaluate whether or not the Emerson transaction is the best transaction
available. Daniel
3
<PAGE>
shareholders are not told why the Board decided to pursue the Emerson bid as
opposed to others. The identity of the other bidders whose interest is briefly
noted in the Offer documents, and the amount or nature of any competing bid,
have not been disclosed.
3. In short, the Complaint alleges that Daniel's shareholders are being
denied the opportunity to make an informed judgment on the Tender Offer.
Accordingly, plaintiff seeks a preliminary injunction against completion of the
Tender Offer. This Court has previously held that lack of complete information
in connection with a Tender Offer can constitute irreparable injury sufficient
to warrant preliminary injunctive relief. See, e.g., Joseph v. Shell Oil
Company, Del. Ch., 482 A.2d 335 (1984).
4. Since the Tender Offer is scheduled to close on June 15, 1999,
plaintiff requests that the Court hear his preliminary injunction motion
sufficiently prior to that date to permit a decision and Order if the Court is
persuaded the Tender Offer should be enjoined.
5. Plaintiff has not previously applied for this relief.
WHEREFORE, plaintiff respectfully requests the Court to enter an Order in
the form attached hereto.
ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A.
By: /s/ Norman M. Monhait
-------------------------------------------
Suite 1401, Mellon Bank Center
P.O. Box 1070
Wilmington, DE 19899-1070
(302) 656-4433
Attorneys for Plaintiff
OF COUNSEL:
GOODKIND LABATON RUDOFF
& SUCHAROW LLP
Suite 1200
100 Park Avenue
New York, NY 10017-5563
(212) 907-0700
May 21, 1999
4
<PAGE>
IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- - - - - - - - - - - - - - - - - - - - - - - - - - - -x
CHARLES MILLER, :
:
Plaintiff, :
:
v. :
:
DANIEL INDUSTRIES, INC., EMERSUB :
LXXIV, INC., RONALD C. LASSITER, :
THOMAS J. KEEFE, MICHAEL M. : Civil Action No. 17175
CARROLL, W.A. GRIFFIN, BRIAN E. :
O'NEILL, RALPH F. COX, LEO E. LINBECK, :
JR., NATHAN M. AVERY and GIBSON :
GAYLE, JR., :
:
Defendants. :
:
:
- - - - - - - - - - - - - - - - - - - - - - - - - - - -x
ORDER
-----
Upon plaintiff's Motion for Expedited Proceedings and for good cause shown,
subject to further Order of the Court upon timely application, IT IS this ____
day of May, 1999, ORDERED:
1. Plaintiff's application for preliminary injunction shall be heard
on June __, 1999, at ______ _.m.
2. Counsel for the parties shall confer promptly concerning a discovery
and briefing schedule for the preliminary injunction motion and present it to
the Court for approval.
_______________________________________
Vice Chancellor
Exhibit (g)(3)
IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
CHARLES MILLER, :
:
Plaintiff, :
:
v. :
:
DANIEL INDUSTRIES, INC., EMERSUB :
LXXIV, INC., RONALD C. LASSITER, :
THOMAS J. KEEFE, MICHAEL M. : Civil Action No. 17175
CARROLL, W.A. GRIFFIN, BRIAN E. :
O'NEILL, RALPH F. COX, LEO E. LINBECK, :
JR., NATHAN M. AVERY and GIBSON :
GAYLE, JR., :
:
Defendants. :
:
:
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
MOTION FOR PRELIMINARY INJUNCTION
Plaintiff hereby moves, pursuant to Court of Chancery Rule 65, for an
Order:
1. Preliminarily enjoining defendants and all persons acting in concert
with them from proceeding with, consummating or otherwise closing the tender
offer by Emersub LXXIV, Inc. ("Emersub") (the "Tender Offer") for all of the
issued and outstanding shares of Daniel Industries, Inc. ("Daniel"), and
2. Requiring defendants to supplement their materials furnished to
Daniel's shareholders in connection with the Tender Offer by disclosing all
<PAGE>
material facts and correcting the omissions described in plaintiff's Class
Action Complaint in this action.
The grounds for this Motion are set forth in plaintiff's Class Action
Complaint and will be more fully set forth in plaintiff's opening brief and
other papers to be filed in support of this motion.
ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A.
By: /s/ Norman M. Monhait
---------------------------------------------------
Suite 1401, Mellon Bank Center
P.O. Box 1070
Wilmington, DE 19899-1070
(302) 656-4433
Attorneys for Plaintiff
OF COUNSEL:
GOODKIND LABATON RUDOFF
& SUCHAROW LLP
Suite 1200
100 Park Avenue
New York, NY 10017-5563
(212) 907-0700
May 21, 1999
2
