SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
Amendment No. 1 to
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934
National Convenience Stores Incorporated
(Name of Subject Company)
National Convenience Stores Incorporated
(Name of Person(s) Filing Statement)
Common Stock, par value $.01 per share
(including the associated Rights to Purchase Preferred Stock)
Warrants to Purchase Common Stock
(Titles of Classes of Securities)
635570500
635570112
(CUSIP Numbers of Classes of Securities)
____________________
A. J. Gallerano
Senior Vice President, General Counsel and Secretary
National Convenience Stores Incorporated
100 Waugh Drive
Houston, Texas 77007
(713) 863-2200
(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:
Edgar J. Marston III
Bracewell & Patterson, L.L.P.
711 Louisiana Street, Suite 2900
Houston, Texas 77002-2781
(713) 223-2900<PAGE>
<PAGE>
This Amendment No. 1 amends and supplements the Solicitation/Recommendation
Statement on Schedule 14D-9 filed with the Securities and Exchange Commission on
September 19, 1995 (the "Schedule 14D-9"), and relates to the tender offer made
by Circle K Acquisition, Inc., a Delaware corporation (the "Offeror"), a wholly-
owned indirect subsidiary of The Circle K Corporation, a Delaware corporation
("Circle K"), disclosed in a Tender Offer Statement on Schedule 14D-1 dated
September 7, 1995, as amended, to purchase the following securities of National
Convenience Stores Incorporated (the "Company"): (i) all outstanding shares of
Common Stock, par value $.01 per share (the "Common Stock"), including the
associated Rights to Purchase Preferred Stock (the "Rights") issued pursuant to
the Rights Agreement dated as of August 31, 1995 (the "Rights Agreement"),
between the Company and Boatmen's Trust Company, as Rights Agent, at the
purchase price of $20.00 per share of Common Stock (and associated Right), net
to the tendering holder in cash and (ii) all outstanding Warrants to Purchase
Common Stock (the "Warrants") issued pursuant to the Warrant Agreement dated as
of March 9, 1993, between the Company and Boatmen's Trust Company, as Warrant
Agent, at the purchase price of $2.25 per Warrant, net to the tendering holder
in cash, all upon the terms and subject to the conditions set forth in the
Offer to Purchase dated September 7, 1995 (the "Offer to Purchase"), and the
related Letters of Transmittal (which together constitute the "Circle K Offer").
The Common Stock, the Warrants and the Rights together are referred to herein
as the "Securities." The purpose of this Amendment No. 1 is to amend Items 3,
4, 7, 8 and 9 of the Schedule 14D-9, as set forth below. All capitalized terms
not defined herein are used as defined in the Schedule 14D-9.
ITEM 3. IDENTITY AND BACKGROUND.
Item 3(b) is hereby amended to add the information with respect to the
Merger Agreement (as defined below) set forth in Item 4(b) hereof, which is
hereby incorporated by reference.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
Item 4(b) is hereby amended to add the following:
At a special meeting held on November 7, 1995, the Board of Directors of
the Company approved a definitive Agreement and Plan of Merger (the "Merger
Agreement") for the acquisition of the Company by Diamond Shamrock, Inc.
("Diamond Shamrock") for $27.00 cash per share of Common Stock. The Merger
Agreement has also been approved by the Board of Directors of Diamond Shamrock
and is dated as of November 8, 1995. Pursuant to the Merger Agreement, Diamond
Shamrock will make a cash tender offer for (i) all outstanding shares of Common
Stock, including the associated Rights, at $27.00 per share net to the seller
(pre-tax) in cash and (ii) all outstanding Warrants at $9.25 per Warrant, net to
the seller (pre-tax) in cash. The tender offer is to be commenced as promptly
as practicable, and, in any event, by November 14, 1995, and will be conditioned
on, among other things, the valid tender of at least two-thirds of the shares of
Common Stock on a fully diluted basis (after giving effect to the exercise of
all Warrants tendered in the tender offer), expiration of the Hart-Scott-Rodino
Act waiting period, and other customary conditions. The Merger Agreement also
includes customary representations, warranties and covenants (including
covenants relating to the treatment of outstanding stock options in connection
with the acquisition and the indemnification of officers and directors of the
Company), and provisions relating to
-2-
<PAGE>
conditions to closing, termination (including in certain customary
circumstances the payment of a break-up fee of $7 million plus the
documented expenses of Diamond Shamrock) and other matters.
The Merger Agreement provides that following the completion of the tender
offer, a newly formed subsidiary of Diamond Shamrock will be merged into the
Company, with the Company continuing as a wholly-owned subsidiary of Diamond
Shamrock. In the merger, all remaining shares of Common Stock not tendered in
the tender offer will be converted into the right to receive $27.00 in cash.
Warrants not tendered in the tender offer and not exercised prior to the
completion of the merger will remain outstanding after the merger, but upon
exercise will represent only the right to obtain $27.00 in cash rather than one
share of Common Stock.
A copy of the press release announcing the Merger Agreement is attached
hereto as Exhibit 29 and is incorporated herein by reference.
In view of the Merger Agreement and the transactions contemplated thereby,
at the November 7, 1995 meeting the Board of Directors of the Company confirmed
its rejection of the Circle K Offer and also confirmed its recommendation that
all holders of Common Stock (and associated Rights) and Warrants reject the
Circle K Offer and not tender their Securities into the Circle K Offer.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY.
Item 7(b) is hereby amended to add the following:
Except for the Merger Agreement and as described in the Schedule 14D-9,
there are no transactions, Board resolutions, agreements in principle or signed
contracts in response to the Circle K Offer that relate to or would result in
one or more of the events referred to in Item 7(a) above.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
Item 8(d) is hereby amended to add the following:
Pursuant to the Merger Agreement, the Company has agreed to redeem the
Rights immediately prior to Diamond Shamrock's acceptance for payment of Common
Stock and Warrants pursuant to the tender offer required by the Merger
Agreement.
Item 8(f) is hereby amended to add the following:
At its meeting on November 7, 1995, the Board of Directors of the Company
approved the Merger Agreement and the Diamond Shamrock tender offer and merger
for purposes of Section 203 of the Delaware General Corporation Law.
-3-
<PAGE>
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit No. Description
___________ ____________
Exhibit 29 Joint press release issued by Diamond
Shamrock, Inc. and National
Convenience Stores Incorporated on
November 8, 1995
-4-
<PAGE>
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.
NATIONAL CONVENIENCE STORES
INCORPORATED
/s/ A. J. Gallerano
By:______________________________________
A. J. Gallerano
Senior Vice President, General
Counsel and Secretary
Dated: November 8, 1995
-5-
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE NO.
___________ ___________ _______
Exhibit 29 Joint press release issued by Diamond
Shamrock, Inc. and National Convenience
Stores Incorporated on November 8, 1995
<PAGE>
EXHIBIT 29
<PAGE>
FOR MORE INFORMATION CONTACT
DIAMOND SHAMROCK:
Katherine Hughes, Public Relations
210/641-8846
or
Mary Hartman, Investor Relations
210/641-8840
DIAMOND SHAMROCK REACHES AGREEMENT
TO ACQUIRE NATIONAL CONVENIENCE STORES
SAN ANTONIO, TEXAS -- November 8, 1995 -- Diamond Shamrock, Inc. (NYSE:DRM) and
National Convenience Stores Incorporated (NYSE:NCS) today jointly announced that
they had entered into a definitive merger agreement providing for the
acquisition of all shares of NCS' common stock at $27 per share in cash.
Pursuant to the agreement unanimously approved by the Board of Directors of both
companies, Diamond Shamrock will commence a tender offer to acquire all
outstanding shares of NCS' common stock for $27 per share in cash and all
outstanding warrants to purchase NCS common stock for $9.25 per warrant in
cash. The tender offer will be commenced as promptly as practicable and, in
any event, by Tuesday, November 14.
The tender offer will be conditioned upon Diamond Shamrock acquiring at least
two-thirds of NCS' fully diluted common shares, regulatory approvals, and other
customary conditions. The merger agreement provides that all remaining NCS
common stock will be acquired for the same $27 per share in cash in a merger in
which NCS will become a wholly owned subsidiary of Diamond Shamrock. Warrants
not tendered in the offer or not exercised prior to the completion of the merger
will remain outstanding, but upon exercise will represent only the right to
obtain $9.25 in cash rather than one share of common stock.
The total value of the transaction is approximately $260 million, which assumes
the cancellation of outstanding stock options for the spread over the exercise
prices and includes net debt. Diamond Shamrock has arranged to finance the
acquisition with Bank of America.
<PAGE>
Diamond Shamrock Chairman, CEO, and President Roger R. Hemminghaus commented,
"The acquisition of NCS, with its 661 convenience stores, all of which are in
Texas and over 90 percent of which sell gasoline, continues Diamond Shamrock's
strategy of retail growth, as well as provides increased demand for our Advanced
Formula gasolines. Once the operations are fully integrated, we anticipate that
this acquisition will enhance Diamond Shamrock's financial strength by
contributing significantly to cash flow and improved earnings per share."
NCS President and CEO V. H. Van Horn commented, "The focus of our management
team has been to maximize stockholder value while, to the extent consistent
therewith, providing continuing opportunities for our employees, and this
agreement with Diamond Shamrock fulfills those objectives. We are very
pleased that Diamond Shamrock recognizes the achievements of our employees and
company over the past several years."
Hemminghaus said that Diamond Shamrock currently plans to retain most NCS
personnel and foresees gaining many dedicated, experienced employees who will
become important to Diamond Shamrock's operations. Following the acquisition,
Diamond Shamrock will have over 10,000 employees and about 1500 company operated
convenience stores, including nearly 1,300 in Texas.
Hemminghaus continued, "Stop N Go operates quality stores with high merchandise
sales volumes that complement our stores' growing merchandise sales and strong
gasoline sales volumes." He says that Diamond Shamrock plans to brand the NCS
gasoline facilities "Diamond Shamrock" and integrate the units into its system
while retaining the Stop N Go store identification.
Nearly 600 of the NCS stores sell gasoline. Hemminghaus commented, "We believe
that providing quality `Diamond Shamrock' gasoline will increase per store
gasoline sales volumes and revenues and offer more convenient locations to
Diamond Shamrock customers. We have strong brand acceptance in Texas, loyal
customers, and a large credit card base in markets where Stop N Go stores are
located."
Diamond Shamrock also has two Texas refineries with a throughput of 210,000
barrels per day, producing over 5 million gallons of gasoline daily. Because
many of the stores will be directly
<PAGE>
supplied with gasoline from these refineries, Hemminghaus expects the company's
refining business to benefit significantly from the acquisition.
Diamond Shamrock, Inc., headquartered in San Antonio, is a leading refiner and
marketer of petroleum products in the Southwest with a growing mix of related
businesses. With annual sales of over $2.6 billion, Diamond Shamrock refines
and markets gasoline through over 2,000 Diamond Shamrock branded locations,
including 835 company operated Corner Stores that sell a full range of
convenience items.
National Convenience Stores Incorporated, headquartered in Houston, is the
largest convenience store chain in Texas, operating primarily in the geographic
area known as the "Texas Triangle," which encompasses Houston, Dallas/Fort
Worth, and San Antonio. The company maintains its leading position through the
operation of approximately 660 Stop N Go stores throughout Texas and employs
approximately 5,000 people throughout the state. NCS sells gasoline at about
595 of its stores.
* * *
