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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 6)/1/
MaxServ, Inc.
_____________________________________________________________________
(Name of issuer)
Common Stock, Par Value $.01
(Title of class of securities)
005779171
_________________________________
(CUSIP number)
Michael D. Levin, Esq.
Sears, Roebuck and Co.
3333 Beverly Road
Hoffman Estates, IL 60179
847/286-2500
_____________________________________________________________________
(Name, address and telephone number
of person authorized to receive
notices and communications)
January 27, 1997
__________________________________________
(Date of event which requires filing
of this statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box. [ ]
Check the following box if a fee is being paid with this statement [ ]. (A
fee is not required only if the reporting person: (1) has a previous statement
on file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom
copies are to be sent.
___________________
1. The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes).
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1) Name of Reporting Person Sears, Roebuck and Co.
SS. or I.R.S. Identification
No. of Above Person I.R.S. ID No. 36-1750680
2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [ ]
3) SEC Use Only
4) Source of Funds (See Instructions)
WC
5) Check Box if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e) [ ]
6) Citizenship or Place of Organization
New York
<TABLE>
<CAPTION>
<S> <C> <C>
Number of 7) Sole Voting Power
Shares Bene- 7,033,333 shares
ficially Owned by
Each Reporting 8) Shared voting Power
Person With: 0
9) Sole Dispositive Power
7,033,333 shares
10) Shared Dispositive Power
0
</TABLE>
11) Aggregate Amount Beneficially Owned by Each Reporting Person
7,033,333 shares
12) Check if the Aggregate Amount in Row (11) Excludes
Certain Shares (See Instructions) [ ]
13) Percent of Class Represented by Amount in Row (11)
64.4%
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14) Type of Reporting Person (See Instructions)
CO
This Amendment No. 6 further amends and supplements the Schedule 13D filed
by Sears, Roebuck and Co. ("Sears"), as previously amended, relating to the
common stock, par value $.01 per share ("Common Stock"), of MaxServ, Inc. (the
"Company").
ITEM 2. IDENTITY AND BACKGROUND
The principal office of Sears and its consolidated subsidiaries is 3333
Beverly Road, Hoffman Estates, IL 60179.
Sears is among the largest retailers in the world, on the basis of sales of
merchandise and services, conducting merchandising and credit operations in the
United States, Canada and Mexico.
During the last five years, neither Sears nor any of its directors or
executive officers listed below has been convicted in any criminal proceeding
(excluding traffic violations or similar misdemeanors).
During the last five years, neither Sears nor any of its directors or
executive officers listed below has been a party to any civil proceeding of a
judicial or administrative body of competent jurisdiction as a result of which
Sears or any of its directors or executive officers was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
The executive officers and directors of Sears and their principal
occupations are listed below. Except as expressly indicated, the business
address of each person listed below is 3333 Beverly Road, Hoffman Estates, IL
60179, and each such person is a citizen of the United States of America.
Hall Adams, Jr. Sears Director; Retired Chairman and Chief Executive
Officer, Leo Burnett Co. (advertising agency)
Paul A. Baffico President, Automotive Group, of Sears
Warren L. Batts Sears Director; Chairman of Premark International, Inc.
(consumer and commercial products), 1717 Deerfield
Road, Deerfield, IL 60015
James A. Blanda Vice President and Controller of Sears
Alston D. Correll Sears Director; Chairman and Chief Executive Officer of
Georgia-Pacific Corp., 133 Peachtree Street, Atlanta,
GA 30303
John H. Costello Senior Executive Vice President and General Manager,
Marketing, of Sears
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James W. Cozad Sears Director; Retired Chairman and Chief Executive
Officer, Whitman Corporation (a diversified consumer
and commercial products company)
Steven D. Goldstein President, Credit, of Sears and Chairman of Sears
National Bank
Alan J. Lacy Executive Vice President and Chief Financial Officer of
Sears
Michael D. Levin Senior Vice President, General Counsel and Secretary of
Sears
Arthur C. Martinez Sears Director; Chairman, President and Chief Executive
Officer of Sears
Robert L. Mettler President, Merchandising - Full Line Stores, of Sears
Michael A. Miles Sears Director; (No current business affiliation)
Richard C. Notebaert Sears Director; Chairman of the Board, President and
Chief Executive Officer of Ameritech Corporation, 30
South Wacker Drive, Chicago, IL 60606
William G. Pagonis Executive Vice President, Logistics, of Sears
Nancy C. Reynolds Sears Director; Senior Consultant, The Wexler Group, a
unit of Hill and Knowlton, Inc. (a public affairs
consulting firm), 330 Calle Estado, Santa Fe, NM 87510
Clarence B. Rogers, Jr. Sears Director; Chairman of Equifax, Inc. (information-
based administrative services), 1600 Peachtree Street,
Northwest, Atlanta, GA 30309
Anthony J. Rucci Executive Vice President, Administration, of Sears
Donald H. Rumsfeld Sears Director; Former Chairman of the Board and Chief
Executive Officer of General Instrument Corporation (a
diversified international company in the electronics
industry)
William L. Salter President, Home Stores, of Sears
Joseph A. Smialowski Senior Vice President, Chief Information Officer, of
Sears
Allan B. Stewart President, Stores - Full Line Stores, of Sears
Dorothy A. Terrell Sears Director; President of SunExpress, Inc.
(operating company of Sun Microsystems, Inc., a leading
supplier of open network computing products and
services) and Corporate Executive Officer of Sun
Microsystems, Inc., 5 Omni Way, Chelmsford, MA 01824
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Jane J. Thompson President, Home Services, of Sears
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Any acquisition of additional shares of Common Stock by Sears as a result
of the discussions described in Item 4 would be funded by working capital of
Sears.
ITEM 4. PURPOSE OF TRANSACTION.
As previously disclosed, Sears and the Company and a major stockholder
had commenced discussions with respect to the acquisition by Sears of the
outstanding minority interests in the common stock of the Company (the "Proposed
Transaction"). On December 20, 1996, the Company publicly announced it had
retained Broadview Associates ("Broadview") as financial advisor to the Special
Committee of the Board of Directors of the Company, which had been appointed by
the Board of Directors to negotiate with Sears as to the price and other terms
of the Proposed Transaction.
On January 9, 1997, the Special Committee (comprised of Nathaniel P.
Turner, Chairman, and Stephen J. Keane and Patrick A. Rivelli), counsel to the
Special Committee, representatives of Broadview, officers of Sears and counsel
to Sears met to discuss the possible purchase price which might be paid by Sears
in the Proposed Transaction. At that meeting, Sears proposed a range of $6.50 to
$6.75 for the Common Stock, to be paid in the Proposed Transaction. Sears would
fund the purchase from working capital. Officers of Sears stated Sears belief
that such a price range was appropriate in light of (i) the premium it
represented to historic trading prices of the Company's shares (33-38% to the
$4.88 closing price of the Common Stock on December 4, 1996 (the "Pre-
Announcement Closing Price") and 69-75% to the $3.85 average trading price
during the 12 month period ending on December 4, 1996 (the "12 Month Average"),
(ii) Sears discounted cash flow analysis of the value of the Company, (iii) the
post-announcement trading prices of the Company's shares reflecting a similar
valuation of the Company's minority shares, and (iv) no "control premium" being
attributable to the acquisition of the minority shares. The Special Committee
expressed the view that such a price range was not acceptable, and Broadview
stated its data supported a price "in the teens" per share for the minority's
interest, both from the perspective of the valuations of comparable companies as
well as a discounted cash flow analysis prepared by Broadview. At the end of
this meeting, Sears and the Special Committee agreed a further meeting should be
held to evaluate the data which supported Sears and the Special Committee's
respective views on value.
On January 14, 1997, representatives of Sears and Broadview met and
exchanged views and data on Sears and the Special Committee's respective
valuation methods and assumptions.
On January 16, 1997, in a conference call in which the members of the
Special Committee, officers of Sears and counsel and financial advisors to each
of the Special Committee and Sears participated, a representative of Merrill
Lynch & Co., Sears financial advisor, presented its views on comparable
premiums for minority interest transactions, mathematical errors it identified
in the discounted cash flow analysis prepared by Broadview and the
appropriateness of the "peer" companies utilized by Broadview in Broadview's
valuation analysis. Merrill Lynch & Co's representative also noted that the
Company's stock price since the announcement had not risen to a level
commensurate with the valuation Broadview was presenting, and that a valuation
methodology which assumes the markets are efficient and produces a value
"in the teens" could not be supported analytically. Representatives of Sears
expressed disagreement with assumptions made by Broadview in its
discounted cash flow analysis regarding projected growth of revenues from Sears
(25% compounded annual growth for the fiscal years 1997 to 2002) and the
Company's ability to expand revenues from third party customers, i.e., customers
other than Sears (projected to grow from $5 million to $110 million,
approximately 85% compounded annual growth, in the fiscal years from 1997 to
2002). The Special Committee and representatives of Sears exchanged additional
views on the future prospects of the Company. The call ended with an agreement
to meet again on January 23, 1997.
On January 17, 1997, John Pigott, an officer of Sears, and Mr. Turner,
the Chairman of the Special Committee, spoke and reviewed the current positions
of Sears and the Special Committee as to the price per share to be paid in the
Proposed Transaction. Mr. Pigott also requested a meeting with management of
the Company so that Sears might better understand the basis for the Company's
growth projections used by Broadview, as (i) management of the Company had not
previously prepared for the Board any long-term business plan or projections
beyond May 1997, and (ii) Broadview had previously advised representatives of
Sears that the information Broadview was using in its discounted cash flow
analysis had been prepared solely in connection with its analysis of the
Proposed Transaction. Mr. Turner stated that further discussions regarding the
cash flow projections prepared by Broadview would not be productive in resolving
the difference between the Sears valuation and the Special Committee's
valuation of the Company. Mr. Pigott then requested that Sears speak with
MaxServ management under the condition that the Broadview projections would not
be discussed. Soon thereafter, Mr. Turner called Mr. Pigott back and agreed
that representatives of Sears could meet with management of the Company if
Broadview's discounted cash flow analysis was not discussed.
On January 20, 1997, Mr. Turner left a voicemail message for Mr. Pigott
stating that unless Sears range of offer prices connected with the Special
Committee's range, there was no purpose in having the previously agreed January
23 meeting. Mr. Pigott contacted Mr. Turner and expressed Sears view that the
meeting on January 23 should still be held. Mr. Turner advised Mr. Pigott that
he would speak with the Special Committee and respond as to whether they
believed the meeting should be held.
Mr. Turner and the Special Committee never responded to Sears request
that a meeting be held. In an effort to move the negotiations forward, on the
afternoon of January 23, 1997, Merrill Lynch & Co. advised Broadview Associates
that Sears was prepared to make an offer of $7.00 per share for the Common
Stock in the Proposed Transaction (an approximate 43% premium to the Pre-
Announcement Closing Price and an 82% premium to the 12 Month Average). Later
that day, Broadview responded to Merrill Lynch & Co. that the Special Committee
had evaluated Sears proposed offer and would not accept such an offer.
Broadview did not offer any alternative price per share and did not propose any
means of resolving the impasse.
In light of the Special Committee's unwillingness to accept a Sears offer
of $7.00 per share in the Proposed Transaction or to propose a means to resolve
the impasse, Sears has concluded that reaching agreement with the Special
Committee on price is unlikely, and on January 27, 1997 advised the Special
Committee it was withdrawing its proposal to offer $7.00 per share.
In light of its inability to reach an agreement with the Special
Committee, Sears is evaluating its alternatives with respect to its business
relationship with the Company. Unless it completes the Proposed Transaction
Sears intends, as it had advised the Special Committee, to develop new projects
outside of the Company, as Sears does not desire to develop new proprietary
customer communication programs within an entity it does not wholly own.
Further, Sears also would intend to reevaluate its existing contractual programs
with the Company.
Sears is similarly evaluating its alternatives with respect to its
investment in the Common Stock. Sears does not intend, for so long as it has a
material business relationship with the Company, to reduce its equity interests
below a majority interest in the Company. Sears could determine to commence a
tender offer to acquire any or all of the Common Stock it does not own. Under
the terms of the Stock Purchase Agreement between Sears and the Company dated as
of December 29, 1994 and previously filed as Exhibit 6 to this statement (the
"Stock Purchase Agreement"), Sears and any of its affiliates (with certain
limited exceptions) may acquire shares of Common Stock if Sears or an affiliate
makes a tender offer for all of the outstanding Common Stock. As of this date,
Sears has not made any determination as to whether, when or at what price it
might commence such a tender offer, or the other material terms of any such
offer. Sears is also permitted under the Company's bylaws and articles of
incorporation to appoint a majority or more of the directors of the Company
(including through removal of existing directors without cause), and can do so
by written consent without a meeting of the Company's stockholders, at any time.
As of this date, Sears has not made any determination as to whether or when it
might exercise such powers of appointment and/or removal.
Subject to the preceding paragraphs, Sears will continue to evaluate its
investment in the Company in light of Sears business and financial objectives,
the Company's business operations and prospects, the market for the Common
Stock, general stock market and economic conditions and other factors deemed
relevant and may determine to dispose of some or all of its Common Stock in one
or more public or private transactions. Except as described herein, Sears does
not have any plans or proposals which relate to, or could result in, any of the
matters referred to in paragraphs (a) through (j) inclusive of Item 4 of
Schedule 13D. Subject to its continuing review of its business and the business
of the Company, and other factors noted above, however, Sears may in the future
take one or more actions which could relate to, or result in, one or more of
such matters.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIP WITH RESPECT
TO SECURITIES OF THE ISSUER
With the exception of the transactions and documents referred to herein,
there exist no contracts, arrangements, understandings or relationships with
respect to securities of the Company involving Sears or its directors or
executive officers.
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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.
Date: January 27, 1997 /s/ Michael D. Levin
---------------- --------------------------------
Signature
Michael D. Levin,
Senior Vice President, General Counsel
and Secretary
Sears, Roebuck and Co.
Attention: Intentional misstatements or omissions of fact constitute Federal
criminal violations (See 18 U.S.C. 1001).
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