SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
SCHEDULE 14D-9
Solicitation/Recommendation Statement
Pursuant to Section 14(d)(4) of the
Securities Exchange Act of 1934
(Amendment No. 3)
_______________
CBI INDUSTRIES, INC.
(Name of Subject Company)
CBI INDUSTRIES, INC.
(Name of Person(s) Filing Statement)
Common Stock, par value $2.50 per share
(and Associated Preferred Stock Purchase Rights)
(Title of Class of Securities)
_______________
124800 10 3
(CUSIP Number of Class of Securities)
_______________
Charles O. Ziemer, Esq.
Senior Vice President and General Counsel
CBI Industries, Inc.
800 Jorie Boulevard
Oak Brook, Illinois 60521-2268
(708) 572-7000
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf
of the Person(s) Filing Statement)
_______________
With a copy to:
Richard D. Katcher, Esq.
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019-6150
(212) 403-1000
<PAGE>
This Amendment No. 3 amends and supplements the
Solicitation/Recomendation Statement on Schedule 14D-9 filed
with the Securities and Exchange Commission (the "Commission")
on November 16, 1995, and as subsequently amended (as so
amended, the "Schedule 14D-9"), by CBI Industries, Inc., a
Delaware corporation (the "Company" or "CBI"), relating to the
tender offer made by PX Acquisition Corp. ("P Sub"), a Delaware
corporation and a wholly owned subsidiary of Praxair, Inc., a
Delaware corporation ("Praxair"), to purchase all outstanding
shares of Common Stock, including the associated Rights issued
pursuant to the Amendment and Restatement dated as of August 8,
1989 of a Rights Agreement dated as of March 4, 1986, between
the Company and First Chicago Trust Company of New York, as
Rights Agent, at a price of $32.00 per Share, net to the seller
in cash, upon the terms and subject to the conditions set forth
in the Offer to Purchase dated November 3, 1995 and the related
Letter of Transmittal, as disclosed in a Tender Offer Statement
on Schedule 14D-1 filed by P Sub and Praxair with the Commis-
sion on November 3, 1995, and as subsequently amended (as so
amended, the "Schedule 14D-1"). Unless otherwise indicated,
all capitalized terms used but not defined herein shall have
the meanings ascribed to them in the Schedule 14D-9.
Item 8. Additional Information to be Furnished.
(a) Litigation. Praxair and P Sub filed an amended
complaint in the Delaware Court of Chancery on November 17,
1995, which amended complaint was filed as Exhibit (a)(15) to
Amendment No. 5 to the Schedule 14D-1. On November 27, 1995
the Company filed its answer to Praxair's amended complaint,
which answer is filed herewith as Exhibit 33.
Item 9. Material to Be Filed as Exhibits.
Item 9 is hereby amended and supplemented by adding
thereto the following:
Exhibit 33 Answer in Praxair, Inc. and PX Acquisition Corp.
v. CBI Industries, Inc. (Delaware Chancery
Court).<PAGE>
SIGNATURE
After reasonable inquiry and to the best of its know-
ledge and belief, the undersigned certifies that the informa-
tion set forth in this statement is true, complete and correct.
CBI INDUSTRIES, INC.
Dated: November 30, 1995 By: /s/ John E. Jones
John E. Jones
Chairman, President and
Chief Executive Officer<PAGE>
EXHIBIT INDEX
Exhibit 33 Answer in Praxair, Inc. and PX Acquisition Corp.
v. CBI Industries, Inc. (Delaware Chancery
Court.)
EXHIBIT 33
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
----------------------------------------)
PRAXAIR, INC. and PX ACQUISITION CORP., )
)
Plaintiffs, )
)
v. ) C.A. No. 14648
)
CBI INDUSTRIES, INC., JOHN E. JONES, )
LEWIS E. AKIN, WILEY N. CALDWELL, )
E.H. CLARK, JR., JOHN F. RIORDAN, )
GARY E. MACDOUGAL, JOHN T. HORTON, )
STEPHANIE PACE MARSHALL, ROBERT T. )
STEWART, EDWARD J. MOONEY, ROBERT )
J. DAY, and ROBERT G. WALLACE, )
)
Defendants. )
----------------------------------------)
ANSWER
Defendants CBI Industries, Inc. ("CBI"), John E.
Jones, Lewis E. Akin, Wiley N. Caldwell, E.H. Clark, Jr.,
John F. Riordan, Gary E. MacDougal, John T. Horton, Stephanie
Pace Marshall, Robert T. Stewart, Edward J. Mooney, Robert J.
Day, and Robert G. Wallace, for their answer to the Amended
Complaint herein, respond as follows:
1. Deny the allegations contained in paragraph 1,
except admit that: (a) plaintiffs purport to seek the injunc-
tive and/or declaratory relief described therein; and (b) CBI
is exploring its strategic alternatives in response to plain-
tiffs' offer to purchase all of CBI's outstanding common stock. <PAGE>
2. Deny the allegations contained in paragraph 2,
except admit that CBI common stock traded at a price of $30 per
share during September 1994 and closed at $20.125 per share on
October 27, 1995.
3. Deny the allegations contained in paragraph 3,
except admit that: (a) on October 29, 1995, Praxair, Inc.
("Praxair") announced that it had made a proposal to CBI's
Board of Directors (the "Praxair Proposal") and respectfully
refer the Court to that announcement for the terms thereof; (b)
on November 3, 1995, PX Acquisition Corp. ("PX") commenced a
tender offer for all of CBI's outstanding shares of common
stock at a price of $32 per share in cash (the "Tender Offer");
and (c) that the Tender Offer represented a premium over the
market price for CBI shares immediately prior to Praxair's an-
nouncement of the Praxair Proposal.
4. Deny the allegations contained in paragraph 4,
except admit that: (a) on November 16, 1995, CBI announced,
among other things, that its Board of Directors was rejecting
the Tender Offer "as inadequate and not in the best interests
of CBI or its stockholders", that the CBI Board has concluded
"that the interests of the Company's stockholders would be best
served by the Company exploring alternatives to maximize stock-
holder value", and that CBI "has entered into confidentiality
2<PAGE>
agreements with certain parties"; and (b) to date, no other
party has made an offer to CBI's shareholders.
5. Deny the allegations contained in paragraph 5,
except admit that the Tender Offer represents a premium over
the market price for CBI shares immediately prior to Praxair's
announcement of the Praxair Proposal.
6. Deny the allegations contained in paragraph 6.
7. Deny knowledge or information sufficient to form
a belief as to the truth of the allegations contained in para-
graph 7, except admit that Praxair is a supplier of various
industrial gases.
8. Deny knowledge or information sufficient to form
a belief as to the truth of the allegations contained in para-
graph 8.
9. Deny the allegations contained in paragraph 9,
except admit that: (a) CBI is a Delaware corporation with its
principal place of business in Oak Brook, Illinois; and (b) CBI
is a holding company and has classified the operations of its
subsidiaries into three major business segments, Contracting
Services, Industrial Gases and Investments.
10. Admit the allegations contained in paragraph 10,
except deny that Robert J. Day is a director of CBI.
3<PAGE>
11. Deny the allegations contained in paragraph 11,
except deny knowledge or information sufficient to form a be-
lief as to the truth of the allegations that: (a) Anthony
Orphanos is a managing director of Warburg Pincus Counselors
("Warburg"); (b) Warburg was a manager or co-manager of funds
that, as of October 31, 1995, held 1.5 million shares of CBI
stock; or (c) Mr. Orphanos made the statement attributed to him
by the Chicago Sun Times; and admit that: (x) CBI's stock
price declined between January 1, 1995 and October 27, 1995;
and (y) the S&P Specialty Chemical Index and the S&P 500 Index
rose during that same period.
12. Admit the allegations contained in paragraph 12.
13. Deny the allegations contained in paragraph 13,
except admit that: (a) on May 19, 1995, Mr. Lichtenberger and
Mr. Jones met in Chicago, Illinois; (b) at that meeting,
Mr. Lichtenberger said he wanted to explore whether CBI had any
interest in pursuing any one of several possible business
transactions including, among others, a business combination
between Praxair and CBI; and (c) Mr. Jones responded, among
other things, that while it was CBI's desire to pursue its
business plan as an independent company, the CBI Board would
consider any proposal that was made to it in light of the best
interests of CBI's stockholders.
4<PAGE>
14. Deny the allegations contained in paragraph 14,
except admit that: (a) on August 28, 1995, Mr. Lichtenberger
called Mr. Jones; (b) Mr. Jones informed Mr. Lichtenberger that
he was not interested in pursuing any of the possible transac-
tions discussed at the May 19, 1995 meeting; and (c) at Mr.
Lichtenberger's request, Mr. Jones agreed to meet with Mr.
Lichtenberger in New York.
15. Deny the allegations contained in paragraph 15,
except admit that: (a) on August 31, 1995, Mr. Lichtenberger
and Mr. John A. Clerico, Vice President and Chief Financial
Officer of Praxair, met with Mr. Jones and Mr. A.J. Schneider,
Chief Financial Officer of CBI; and (b) Messrs. Lichtenberger
and Clerico presented their conception of the bases upon which
a business combination of CBI and Praxair might proceed.
16. Admit the allegations of paragraph 16.
17. In response to paragraph 17, admit that on Octo-
ber 27, 1995, Mr. Lichtenberger sent to Mr. Jones the letter
annexed as Exhibit A to the Amended Complaint, and respectfully
refer the Court to that letter for the complete terms thereof.
18. Deny the allegations contained in paragraph 18,
except admit that on November 3, 1995, PX commenced the Tender
Offer and respectfully refer the Court to the Offer to Purchase
for the complete terms thereof.
5<PAGE>
19. Deny knowledge or information sufficient to form
a belief as to the truth of the allegations contained in para-
graph 19.
20. Deny the allegations contained in paragraph 20,
except admit that: (a) on November 16, 1995, CBI made the
Schedule 14D-9 filing, a copy of which is annexed as Exhibit B
to the Amended Complaint; (b) the Schedule 14D-9 filing states,
among other things, that the CBI Board has determined that the
Tender Offer is inadequate and recommends that CBI stockholders
reject the Tender Offer; and (c) the Tender Offer price of $32
per share represents a premium of $11.875 per share over the
closing market price of CBI common stock on October 27, 1995.
21. Deny the allegations contained in paragraph 21,
except admit that the CBI Board has not redeemed the Rights
issued pursuant to the Company's Rights Agreement with First
Chicago Trust Company of New York (the "Rights Agreement").
22. Deny the allegations contained in paragraph 22,
except admit that in its Schedule 14D-9 filing, CBI stated,
among other things, that: (a) CBI's Board believes "that the
interests of the Company's stockholders would be best served if
the Company were to actively explore alternatives to maximize
shareholder value"; (b) "the Company is in the preliminary
stages of discussion or negotiation concerning a possible
6<PAGE>
transaction involving the Company of the type described [there-
in], having entered into confidentiality and standstill agree-
ments concerning the furnishing of confidential information to
parties indicating an interest in such a transaction and having
responded to due diligence inquiries"; and (c) "the Company has
had preliminary discussions with other parties regarding their
potential interest in such a transaction."
23. Deny the allegations contained in paragraph 23.
24. Deny the allegations contained in paragraph 24.
25. Deny the allegations contained in paragraph 25.
26. Deny the allegations contained in paragraph 26,
except admit that CBI entered into the Rights Agreement on
March 4, 1986, and respectfully refer the Court to such Rights
Agreement, as subsequently amended and restated, for the com-
plete terms thereof.
27. Deny the allegations contained in paragraph 27,
except admit that: (a) on December 20, 1994, the Rights Agree-
ment was amended and respectfully refer the Court to such
amendment for the terms thereof; (b) the amendment was adopted
following the receipt of certain proposals from Airgas, Inc.
("Airgas"); and (c) Airgas ultimately withdrew its proposals to
CBI.
7<PAGE>
28. Deny the allegations contained in paragraph 28,
and respectfully refer the Court to the Rights Agreement for
the complete terms thereof.
29. Deny the allegations contained in paragraph 29,
and respectfully refer the Court to the Rights Agreement for
the complete terms thereof.
30. Deny the allegations contained in paragraph 30,
and respectfully refer the Court to the Rights Agreement for
the complete terms thereof.
31. Deny the allegations contained in paragraph 31.
32. Deny the allegations contained in paragraph 32.
33. In response to the allegations contained in
paragraph 33, respectfully refer the Court to Article Tenth of
CBI's Restated Certificate of Incorporation (the "Certificate")
for the complete terms thereof.
34. In response to the allegations contained in
paragraph 34, respectfully refer the Court to Article Fifteenth
of the Certificate for the complete terms thereof.
35. In response to the allegations contained in
paragraph 35, respectfully refer the Court to Article Fifteenth
of the Certificate for the complete terms thereof.
8<PAGE>
36. Deny the allegations contained in paragraph 36.
37. Deny the allegations contained in paragraph 37,
and respectfully refer the Court to Article Fourteenth of the
Certificate and to Article IV, Section 3 of CBI's By-Laws (the
"By-Laws") for the complete terms thereof.
38. Deny the allegations contained in paragraph 38,
and respectfully refer the Court to Article Sixth of the Cer-
tificate and Article IV, Section 9 of the By-Laws for the com-
plete terms thereof.
39. Deny the allegations contained in paragraph 39,
and respectfully refer the Court to Articles Tenth and Fif-
teenth of the Certificate and Article IV, Section 9 of the By-
Laws for the complete terms thereof.
40. Deny the allegations contained in paragraph 40.
41. Admit the allegations contained in paragraph 41.
42. Deny the allegations contained in paragraph 42,
and respectfully refer the Court to Section 203 of the Delaware
General Corporation Law for the complete terms thereof.
43. Deny the allegations contained in paragraph 43.
44. Deny the allegations contained in paragraph 44.
9<PAGE>
45. In response to the allegations contained in
paragraph 45, defendants incorporate by reference their re-
sponses to paragraph 1 through 44.
46. Deny the allegations contained in paragraph 46.
47. Deny the allegations contained in paragraph 47.
48. In response to the allegations contained in
paragraph 48, defendants incorporate by reference their re-
sponses to paragraphs 1 through 47.
49. Deny the allegations contained in paragraph 49,
except admit that Praxair purports to seek declaratory relief.
50. Deny the allegations contained in paragraph 50.
51. In response to the allegations contained in
paragraph 51, defendants incorporate by reference their re-
sponses to paragraphs 1 through 50.
52. Deny the allegations contained in paragraph 52.
53. Deny the allegations contained in paragraph 53.
FOR A FIRST AFFIRMATIVE DEFENSE
54. The Complaint fails to state a claim upon which
relief may be granted.
10<PAGE>
FOR A SECOND AFFIRMATIVE DEFENSE
55. The conduct of the CBI Board of Directors has
not coerced CBI shareholders in any respect and has not pre-
cluded Praxair from acquiring CBI. Moreover, the conduct of
the CBI Board of Directors has been reasonable in relation to
the threat posed by Praxair's unsolicited and financially inad-
equate proposal.
56. The CBI Board of Directors has acted on an in-
formed basis, in good faith, and for a proper corporate pur-
pose.
57. Accordingly, the CBI Board of Directors and
their conduct are entitled to the protections of the business
judgment rule.
FOR A THIRD AFFIRMATIVE DEFENSE
58. On November 20, 1995, counsel for CBI sent coun-
sel for Praxair a draft confidentiality and standstill agree-
ment for Praxair's signature that was no less favorable to
Praxair than the agreements CBI has entered into with other
potential bidders. Praxair refused to sign the proposed
confidentiality and standstill agreement, which contained a
two-year standstill provision, claiming that it enjoyed a
"unique status" among the potential bidders for CBI. On
11<PAGE>
November 24, 1995, CBI's counsel advised Praxair's counsel that
CBI would agree to a six-month standstill period. Praxair has
yet to respond.
FOR A FOURTH AFFIRMATIVE DEFENSE
59. Defendant Robert J. Day is no longer a director
of CBI.
WHEREFORE, the defendants demand judgment as follows:
A. Dismissing the Complaint in its entirety;
B. Awarding defendants all costs incurred in de-
fending this action, including reasonable attorneys' fees; and
C. Granting defendants such other and further re-
lief as the court may deem just and proper.
Dated: November 27, 1995
RICHARDS, LAYTON & FINGER
By: /s/ Jesse A. Finkelstein
Jesse A. Finkelstein
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899
(302) 658-6541
Attorneys for Defendants
12<PAGE>
OF COUNSEL:
WACHTELL, LIPTON, ROSEN & KATZ
51 West 52nd Street
New York, New York 10019
(212) 403-1000
13<PAGE>
CERTIFICATE OF SERVICE
IT IS HEREBY CERTIFIED that on November 27, 1995,
two copies of the attached Answer of Defendants to the Amended
Complaint were served by hand on the attorney listed below at
the address indicated:
Elaine C. Reilly, Esquire
Morris, Nichols, Arsht & Tunnell
1201 N. Market Street
Wilmington, DE 19801
/s/ Jesse A. Finkelstein
Jesse A. Finkelstein
14
