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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14A-101)
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT [ ]
FILED BY A PARTY OTHER THAN THE REGISTRANT [X]
CHECK THE APPROPRIATE BOX:
[ ] PRELIMINARY PROXY STATEMENT
[ ] DEFINITIVE PROXY STATEMENT [ ] CONFIDENTIAL, FOR USE OF THE
[ ] DEFINITIVE ADDITIONAL MATERIALS COMMISSION ONLY (AS PERMITTED)
[X] SOLICITING MATERIAL PURSUANT TO BY RULE 14A-6(E)(2)
RULE 14A-12
ICO, INC.
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(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TRAVIS STREET PARTNERS, LLC
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(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] NO FEE REQUIRED.
[ ] FEE COMPUTED ON TABLE BELOW PER EXCHANGE ACT RULES 14A-6(I)(4) AND 0-11.
(1) TITLE OF EACH CLASS OF SECURITIES TO WHICH TRANSACTION APPLIES:
NOT APPLICABLE
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(2) AGGREGATE NUMBER OF SECURITIES TO WHICH TRANSACTION APPLIES: NOT
APPLICABLE.
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(3) PER UNIT PRICE OR OTHER UNDERLYING VALUE OF TRANSACTION
COMPUTED PURSUANT TO EXCHANGE ACT RULE 0-11 (SET FORTH THE
AMOUNT ON WHICH THE FILING FEE IS CALCULATED AND STATE HOW
IT WAS DETERMINED): NOT APPLICABLE.
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<PAGE>
(4) PROPOSED MAXIMUM AGGREGATE VALUE OF TRANSACTION: NOT APPLICABLE.
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(5) TOTAL FEE PAID: NOT APPLICABLE.
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[ ] FEE PAID PREVIOUSLY WITH PRELIMINARY MATERIALS:
[ ] CHECK BOX IF ANY PART OF THE FEE IS OFFSET AS PROVIDED BY EXCHANGE
ACT RULE 0-11(A)(2) AND IDENTIFY THE FILING FOR WHICH THE OFFSETTING
FEE WAS PAID PREVIOUSLY. IDENTIFY THE PREVIOUS FILING BY REGISTRATION
STATEMENT NUMBER, OR THE FORM OR SCHEDULE AND THE DATE OF ITS FILING.
(1) AMOUNT PREVIOUSLY PAID: NOT APPLICABLE.
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(2) FORM, SCHEDULE OR REGISTRATION STATEMENT NO.: NOT APPLICABLE.
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(3) FILING PARTY: NOT APPLICABLE.
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(4) DATE FILED: NOT APPLICABLE.
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<PAGE>
On January 3, 2001, Travis Street Partners, LLC sent the form of letter included
in this filing, with the applicable shareholder listed as addressee, to each of
the shareholders listed below:
Mr. John C. Kornitzer
President
Kornitzer Capital Management, Inc.
5420 W. 61st Place
Shawnee Mission KS 66205
Mr. J. Luther King, Jr.
President
Luther B. King Capital Management
301 Commerce Street, Suite 1600
Fort Worth TX 76102
Mr. Michael T. Scardina
Vice President & CFO
Dimensional Fund Advisors, Inc.
1299 Ocean Ave
11th Floor
Santa Monica CA 90401
Mr. John D. Race
Partner
DePrince Race & Zollo
201 S Orange Avenue
Suite 850
Orlando FL 32801
Mr. Eric E. Ryback
President
Ryback Management Corporation
7711 Carondelet Ave.
St. Louis MO 63105
Mr. Nelson Obus
Portfolio Manager
Wynnefield Capital Management LLC
450 Seventh Ave.
Suite 509
New York NY 10123
Mr. Matthew C. Rudolf
Managing Director
Summit Capital Management, LLC
601 Union Street
Suite 3900
Seattle WA 98101
Mr. George Randall Hecht
CEO
RS Investment Management, L. P.
388 Market Street
Suite 200
San Francisco CA 94111
<PAGE>
TRAVIS STREET PARTNERS, LLC 910 Travis Street
Suite 2150
Houston, Texas 77002
fax 713 759 2040
TEL 713 759 2030
www.travisstreetpartners.com
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VIA COURIER
January 3, 2001
[Applicable Addressee]
RE: AN INVESTMENT IN ICO, INC.
Dear [Applicable Addressee]:
As you may be aware, Travis Street Partners, LLC ("TSP") recently purchased in
excess of 5% of the common stock of ICO Inc. ("ICO" or the "Company"). As a
result, TSP filed a 13D disclosure statement with the SEC, disclosing, among
other items, that TSP has offered to buy ICO at a price of $2.85 per common
share. The offer represents an 82% premium to ICO's closing price on the day
prior to our offer and nearly three times the December low for the stock. Our
13D filing additionally disclosed that on December 8, 2000, TSP nominated three
directors to the ICO board to run against ICO management's nominees.
You may also have been surprised to learn that ICO's Board of Directors
summarily rejected our offer. We are writing to you and a few other major
institutional shareholders today to explain why we believe our offer makes sense
for ICO shareholders and why ICO was wrong to reject it.
TSP's analysis of ICO performance is quite straightforward. Since current
management took control five years ago, shareholders and bondholders alike have
witnessed an 80%+ reduction in tangible net worth per share and nearly an 80%
reduction in market value of the Company's common stock. A host of other
statistics and facts can be marshaled to support our position, which we will
more fully present in our proxy materials. As a major investor in ICO, you may
already be familiar with the startling failure of this management, represented
by the husband-and-wife team of Dr. Asher O. Pacholder and Ms. Sylvia A
Pacholder, 1% owners of ICO, and respectively the Company's chairman/CFO and
president/CEO. This management group has turned $120 million of borrowed cash,
raised through the issuance of Senior Notes, into a series of unsuccessful
acquisitions which generate operating losses while providing a sinecure for
Pacholder parents and children. In sum, while doing well for themselves, ICO's
managers have dismally failed their investors.
Nonetheless, ICO's core assets have value. We believe that value can best be
realized through a sale of the Company.
<PAGE>
[Applicable Addressee] January 3, 2001
page 2 of 4
As Dr. Pacholder noted in his recent letter to us rejecting our all-cash offer,
a proxy fight is time-consuming and expensive. We agree. Whatever the outcome,
however, history shows that companies in proxy contests frequently wind up being
sold. Thus, money spent on both sides of a proxy fight is simply money which
lawyers and investment bankers, not shareholders, receive. Most important, there
is no guarantee that shareholders will ultimately receive a price any higher
than the initial offer.
This said, we were astounded when ICO's Board summarily rejected our all-cash
offer at $2.85, a substantial premium to market. A friendly acquisition leaves
more cash for the shareholders, and it provides a better potential future for
ICO employees and stakeholders. Protracted takeover battles for a small company
like ICO can scar the business irrevocably, ultimately impairing, not enhancing,
shareholder value.
From the point of view of other shareholders, the cash and management attention
consumed in a proxy fight represent a further squandering of corporate
resources. A small proxy fight costs nearly as much as a big one. ICO has plenty
of cash on hand, but that bankroll effectively represents the Company's only
remaining tangible net worth. To survive in the future, ICO can ill afford to
waste money on an extended battle which will only distract this Board from what
should be its primary mission: maximizing shareholder value. That is important
to us as well as to you. After all, Travis Street Partners is not just offering
to buy ICO; we are also a substantial investor in the Company.
Prior to our filings, we met with Dr. Asher O. Pacholder, ICO's Chairman and
CFO, and his wife, Ms. Sylvia A. Pacholder, ICO's president and CEO. We did not
meet with Robin Pacholder, who manages ICO's plastic business, or with Tom D.
Pacholder, who is additionally employed by the Company, or with David Gerst, who
is Robin Pacholder's husband and incidentally the Company's general counsel. The
Pacholders individually own about 1% of ICO's stock but also own another 2%
through their ownership interest in Pacholder Associates, Inc., a junk bond
advisory concern. However, through various stratagems, they apparently control
about 25% of the Company's votes for election of the Board of Directors.
The Pacholders responded to our offer with a letter which dismissed the
"process" they claimed we had demanded without addressing the financial merits
of our proposal. Nor did the Pacholders start to talk with us about the terms
and conditions under which they would consider a sale of ICO. A management
focused on shareholder value, rather than self-entrenchment, would not have been
so cavalier in dismissing an offer which provided such a large premium to
shareholders.
As Dr. Pacholder wrote, we also believe it's good business and good common sense
to avoid a costly and time-consuming proxy fight. We welcome and urge continuing
dialogue with ICO to maximize shareholder value through a negotiated transaction
in which everyone - especially shareholders - can emerge a winner.
We look forward to working with you and other ICO shareholders in the future as
we attempt to realize value from our collective investment in ICO.
Very truly yours,
2
<PAGE>
[Applicable Addressee] January 3, 2001
page 3 of 4
TRAVIS STREET PARTNERS, LLC
by: Timothy J. Gollin, Manager
cc: Steve Rubin - Weil Gotshal & Manges, LLP
3
<PAGE>
[Applicable Addressee] January 3, 2001
page 4 of 4
*****
CERTAIN ADDITIONAL INFORMATION
The participants in any solicitation that may be represented by this letter (the
"TSP Participants") are TSP and the following persons who are, or have funded
capital contributions of, members of TSP: C. N. O'Sullivan; Timothy J. Gollin;
Christopher P. Scully; A. John Knapp; James D. Calaway; Charles T. McCord, III;
a joint venture between McCord and Calaway; John V. Whiting; Freeman Capital
Management LLC; Robert Whiting; Randall Grace; R. Allen Schubert; and Stephen F.
Martin. In aggregate, the TSP Participants beneficially own 1,138,300 shares of
ICO's common stock, or 5.02% of such shares outstanding (based on ICO's Annual
Report on Form 10-K for the fiscal year ended September 30, 2000). The TSP
Participants currently intend to file a proxy statement with the Securities and
Exchange Commission ("SEC") in connection with any solicitation that the TSP
Participants may make with respect to ICO. The TSP Participants advise all ICO
stockholders to read any such proxy statement when it is available because it
will contain important information. Any such proxy statement will be available
at no charge on the SEC's web site at http://www.sec.gov.
4
