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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14D-9
(Amendment No. 1)
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(D)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
McM Corporation
(Name of Subject Company)
McM Corporation
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(Name of Person(s) Filing Statement)
Common Stock, $1.00 Par Value
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(Title of Class of Securities)
552674103
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(CUSIP Number of Class of Securities)
George E. King
Chairman and Chief Executive Officer
McM Corporation
702 Oberlin Road, Suite 300
Raleigh, North Carolina 27605
(919) 831-8172
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(Name, address and telephone number of person authorized to
receive notice and communications on behalf of the person(s) filing statement)
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This Amendment No. 1 amends and supplements the Solicitation/
Recommendation Statement on Schedule 14D-9, dated July 23, 1998, (the "Schedule
14D-9") of McM Corporation, a North Carolina corporation (alternatively, "McM"
or the "Company"), filed in connection with the IAT offer as set forth in the
Schedule 14D-9. Capitalized terms used herein shall have the definitions set
forth in the Schedule 14D-9 unless otherwise provided herein.
ITEM 4. THE SOLICITATION OR RECOMMENDATION
The Company's response to Item 4 (b) Background; Reasons for the
Company Board's Recommendation is hereby amended and supplemented as follows:
Throughout the period of its engagement with the Company, PaineWebber
contacted parties it believed might have a strategic interest in acquiring the
Company. These parties were primarily insurance related entities, with most of
them having a focus on specialty property & casualty insurance lines.
Approximately fifteen of these parties conducted varying levels of due diligence
of the Company. Several of these parties, including IAT, submitted inquiries,
expressions of interest or proposals regarding the acquisition of all or a
portion of the stock of the Company. Certain of these communications did not
rise to the level of a formal proposal, but were, in the board's view, attempts
to acquire the Company for minimal consideration. Others of these communications
were more formalized but were not, in the board's view, adequate consideration
or otherwise credible offers because of the many contingencies contained in the
"offer." Items such as post closing purchase price adjustments, consideration
other than cash, escrows and/or holdbacks made these expressions of interest
unappealing to the board because of the inherent uncertainty of exactly what
value would actually be received by the shareholders of the Company. If there
were negative or mediocre development of the many conditions contained in the
offers, the shareholders would then receive a price per share well below what
the board believed represented the true value of the Company. With all except
one proposal, even positive development of the multiple conditions would not, in
the board's view, yield an appropriate value for shareholders. This one proposal
was laden with conditions that yielded a range of possible purchase prices
depending on the results of operations of the Company and other factors, some
being outside the Company's control. If every aspect of these many contingencies
developed in favor of the Company and against the interests of the offeror, this
particular offer conceivably could have produced a higher price per share than
IAT's offer, although the likelihood of such incredibly positive development
was, in the board's opinion, minute. In light of the proven credibility and
reliability of IAT and its controlling shareholder, IAT's proposed payment of
$3.65 per share in cash to shareholders at closing, the absence of unreasonably
restrictive conditions in IAT's offer and the unreliability, inadequacy and
uncertainty of all other expressions of interest made to the Company, the board,
after thorough examination and consultation with PaineWebber and its other
advisors, concluded that these proposals were inferior to IAT's proposal and
that IAT's proposal provided the best value to the shareholders of the Company.
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IAT was provided access to detailed information about the Company and
conducted a series of due diligence meetings and business reviews. Upon
completion of those reviews, IAT entered into a series of negotiations with
PaineWebber and the Company. The Offer price of $3.65 per share was agreed upon
after a series of negotiations between IAT, PaineWebber and the Company wherein
PaineWebber and the Company persuaded IAT to increase its offer price to more
accurately reflect the value of the Company and to maximize shareholder value to
the extent possible without jeopardizing the success of the proposed IAT
transaction.
ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED
The Company's response to Item 5 is hereby amended and supplemented
as follows:
PaineWebber has consented to the use of its fairness opinion in the
Company's 14D-9.
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.
McM Corporation, a North Carolina corporation
8/20/98 By: /s/ George E. King
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Date George E. King, Chairman/CEO
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