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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION
14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2)
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MOORCO INTERNATIONAL INC.
(NAME OF SUBJECT COMPANY)
MII ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
FMC CORPORATION
(BIDDER)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
(TITLE OF CLASS OF SECURITIES)
61559L10
(CUSIP NUMBER OF CLASS OF SECURITIES)
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ROBERT L. DAY, ESQ.
FMC CORPORATION
200 EAST RANDOLPH DRIVE
CHICAGO, ILLINOIS 60601
TELEPHONE: (312) 861-6000
(NAMES AND ADDRESSES AND TELEPHONE NUMBERS OF PERSONS AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDER)
COPY TO:
GLEN E. HESS, P.C.
KIRKLAND & ELLIS
CITICORP CENTER
153 EAST 53RD STREET
NEW YORK, NEW YORK 10022-4675
TELEPHONE: (212) 446-4800
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MII Acquisition Corp., a Delaware corporation ("Purchaser") and FMC
Corporation, a Delaware corporation ("FMC"), hereby amend and supplement their
Tender Offer Statement on Schedule 14D-1, filed with the Securities and
Exchange Commission on May 5, 1995, with respect to Purchaser's offer to
purchase all of the outstanding shares of Common Stock, par value $0.01 per
share (the "Shares"), of Moorco International Inc., a Delaware corporation (the
"Company"), not presently owned by Parent, including the associated Preferred
Stock Purchase Rights (the "Rights") issued pursuant to the Rights Agreement,
dated as of November 8, 1994, between the Company and The Bank of New York, a
New York banking corporation, as Rights Agent, at a purchase price of $20.00
per Share and associated Right, net to the seller in cash.
ITEM 10. ADDITIONAL INFORMATION.
(e) The information set forth in paragraph (e) of Item 10 of the Schedule
14D-1 is hereby amended and supplemented by adding thereto the following:
On May 5, 1995, the Company commenced litigation in the District Court of
Nueces County of the State of Texas against FMC alleging, among other
things, that acting under false pretenses, FMC obtained information from
the Company essential to its corporate decision-making and seeking, among
other things, a temporary injunction restraining, prohibiting and enjoining
FMC to:
(a) withdraw its unsolicited offer for the Company and enter into the
confidentiality and standstill agreement which has been offered by the
Company to FMC;
(b) refrain from utilizing the allegedly fraudulently obtained
confidential information in aid or preparation for any offer to
purchase the Company;
(c) refrain from utilizing the allegedly fraudulently obtained
confidential information in assisting or encouraging any other bid or
offer for the Company by any entity;
(d) turn over to the Company all records, reports, notes, or other
documents of whatsoever description recording, analyzing, referring to,
or otherwise reflecting any information obtained by FMC from its tours
of the Company's facilities; and
(e) turn over to the Company all nonpublic documents created by or on
behalf of the Company received from any source.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
Item 11 is hereby amended by adding thereto the following exhibits:
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<S> <C>
11(a)(9) Press Release issued by FMC on May 5, 1995 relating to Complaint seeking
Declaratory and Injunctive Relief filed in the Court of Chancery in the
State of Delaware on May 5, 1995.
11(g)(2) The Company's Original Petition and Application for Injunctive Relief
complaining of FMC, filed in the District Court of Nueces County in the
State of Texas on May 5, 1995.
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II-1
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SIGNATURE
AFTER DUE 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.
FMC Corporation
/s/ Robert L. Day, Esq.
By: _________________________________
Robert L. Day, Esq.
Secretary
MII Acquisition Corp.
/s/ Charlotte Mitchell Smith
By: _________________________________
Charlotte Mitchell Smith
Secretary
Dated: May 8, 1995
II-2
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EXHIBIT INDEX
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SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGES
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<C> <S> <C>
11(a)(9) Press Release issued by FMC on May 5, 1995 relating
to Complaint seeking Declaratory and Injunctive
Relief filed in the Court of Chancery in the State of
Delaware on May 5, 1995.
11(g)(2) The Company's Original Petition and Application for
Injunctive Relief complaining of FMC, filed in the
District Court of Nueces County in the State of Texas
on May 5, 1995.
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[FMC LOGO] EXHIBIT 11(a)(9)
News Release
INVESTOR
RELATIONS: MEDIA:
For Release Contact Cheryl Francis Pat Brozowski
Immediate (312) 861-6674 (312) 861-6104
FMC FILES LAWSUIT AGAINST MOORCO
CHICAGO, May 5, 1995 -- FMC Corporation said today that in connection with its
tender offer announced this morning for all shares of Moorco International Inc.
at $20 per share in cash, it has commenced litigation in the Court of Chancery
of the State of Delaware against Moorco and members of its board of directors.
The lawsuit seeks a declaratory judgment that directors have breached
their fiduciary duties by delaying negotiations, refusing to negotiate actively
with FMC and threatening to exclude FMC from any process that may lead to the
sale of Moorco. FMC is seeking an order by which Moorco will be preliminarily
and permanently enjoined to negotiate in good faith with FMC and not exclude FMC
from any process that may lead to a transaction. FMC also is seeking to enjoin
Moorco from taking any action to effectuate the terms of its "poison pill"
Rights Plan or bringing suit against FMC based on the facts in this litigation.
# # #
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NO. 95-2595-F
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MOORCO INTERNATIONAL, INC. (S) IN THE DISTRICT COURT OF
a Delaware corporation, (S)
(S)
Plaintiff, (S)
(S) NUECES COUNTY, TEXAS
v. (S)
(S)
FMC CORPORATION, (S)
a Delaware corporation, (S)
(S)
Defendant. (S) _____ JUDICIAL DISTRICT
PLAINTIFF'S ORIGINAL PETITION
AND APPLICATION FOR INJUNCTIVE RELIEF
-------------------------------------
TO THE HONORABLE JUDGE OF SAID COURT:
Plaintiff Moorco International Inc. files this Original Petition and
Application for Injunctive Relief complaining of FMC Corporation, and in support
thereof would show this Court the following:
I
INTRODUCTION
1. This action arises out of Defendant FMC Corporation's ("FMC")
fraudulent and unlawful scheme to injure Plaintiff Moorco International Inc.
("Moorco"), its business, its shareholders, and its employees. Acting under
false pretenses, FMC obtained confidential information from Moorco essential to
FMC's corporate decisionmaking. This information was obtained by agents of FMC
who knowingly and fraudulently represented to Moorco that they sought
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the information solely for purposes of establishing a customer/supplier
relationship with Moorco. In fact, at all relevant times FMC's purported
interest in entering into such a business relationship was a subterfuge;
throughout this entire period, FMC was in fact actively considering an effort to
obtain ownership and/or control of Moorco. The nonpublic information FMC sought
about Moorco was intended to be used solely to determine whether Moorco was a
desirable property and to aid FMC in deciding how much to pay for Moorco. As
explained below, FMC's unlawful, unethical, and indefensible conduct threatens
to irreparably injure Moorco, its business, its shareholders, and its employees.
II
THE PARTIES
2. Moorco International Inc., is a corporation organized and existing
under the laws of the State of Delaware with its principal executive offices in
Houston, Texas. Moorco supplies fluid measurement and pressure control products
to the petroleum, industrial process, and electric power industries. Moorco's
operating subsidiary Smith Meter Inc. serves as a manufacturer of Moorco's
electronic metering systems and equipment.
3. FMC Corporation is a corporation organized and existing under the laws
of the State of Delaware with its principal place of business in Chicago,
Illinois. FMC maintains one or more offices
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in Texas, including one in Houston, and is qualified to do business in the State
of Texas. FMC may be served with process through its registered agent CT
Corporation, located at 350 N. St. Paul Street, Dallas, Texas, 75201.
III
JURISDICTION AND VENUE
PERSONAL JURISDICTION
4. This Court has jurisdiction over FMC Corporation because, as described
more fully below, FMC is licensed to do business in Texas, has committed a tort
in whole or in part in Texas, and has continuous and systematic contacts with
Texas.
SUBJECT MATTER JURISDICTION
5. This Court has jurisdiction over this controversy because the relief
sought is within the jurisdictional purview of this Court.
VENUE
6. Venue is proper in this Court under Tex. Civ. Prac. Rem. Code Ann.
(S)(S) 15.001, 15.037 because all or part of Moorco's causes of action arose in
Nueces County, Texas and because FMC is a foreign corporation, not incorporated
under the laws of Texas, that is doing business in Texas.
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IV
THE FACTS
7. In December 1994, officials of Kongsberg Offshore A/S ("Kongsberg")
contacted Moorco's Smith Meter subsidiary in Europe regarding the possibility of
visiting Smith Meter's manufacturing facilities in the United States. Kongsberg
is, and was at all relevant times, a wholly owned subsidiary of FMC. At all
relevant times, Kongsberg acted as an agent of FMC, and Kongsberg employees
remained in close contact with FMC officials. The December 1994 contact from
Kongsberg occurred at approximately the same time as FMC determined to proceed
with an acquisition of Moorco, which FMC had been considering for some time
previous.
8. Kongsberg officials told Smith Meter representatives that Kongsberg
needed a new supplier for various types of metering systems and metering systems
components. Kongsberg officials further represented that the company was
specifically interested in creating such a supply relationship with Moorco's
Smith Meter subsidiary and voiced special interest in its capabilities in
systems fabrication. They requested the opportunity to meet with Smith Meter
officials and to tour Smith Meter facilities to learn more about its products
and manufacturing capabilities. A copy of the facsimile documenting Kongsberg's
request is attached as Exhibit A to this petition.
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9. Kongsberg's representations concerning the purpose of the visit were
entirely false, and were made with knowledge of that falsity. In fact, at the
same time Kongsberg officials were making those representations to Moorco's
Smith Meter subsidiary, Kongsberg's parent company, FMC, was moving forward with
plans to make a hostile bid to acquire Moorco, including obtaining FMC board
authorization for an acquisition proposal and retaining an investment banking
firm to advise FMC. As part of its plan, FMC intended to and did use its
Kongsberg subsidiary to gather proprietary information about Moorco to be used
in FMC's takeover bid, under the false pretense that Kongsberg was interested in
entering into a supply relationship with Smith Meter. Moorco and its Smith
Meter subsidiary were unaware of FMC's acquisition plans at the time, and had no
reason to disbelieve Kongsberg's false representations as to its purpose.
10. In reliance on these representations concerning a commercial
relationship between Kongsberg and Moorco's Smith Meter subsidiary. Moorco
officials organized a special tour of Moorco facilities for two Kongsberg
representatives: Edmund-Hugo Lunde and Herjinder Hawkins. Lunde represented
that he was a development manager in the metering systems division. Hawkins was
represented to be a mechanical engineer with Kongsberg. In fact, Hawkins works
in FMC's strategic development group.
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11. On January 18, 1995, Moorco official at its Smith Meter plant in Erie,
Pennsylvania escorted Lunde and Hawkins on a private tour of Moorco's
manufacturing facility. The tour lasted a full day and covered various
confidential and proprietary aspects of Moorco's Erie operations. Indeed, Lunde
and Hawkins were given access to the most sensitive areas of Moorco's facility.
They toured, among other areas at the plant, Smith Meter's research and
development center, its flow test laboratory, and its electronics development
center.
12. Because Lunde and Hawkins claimed to be particularly interested in new
products development, Moorco officials also provided them with proprietary
information about new Moorco products. The information revealed to the
Kongsberg officials on the basis of these representations included discussions
of proprietary designs and strategies that have not yet been publicly announced.
For example, Lunde and Hawkins were shown a new liquid flow computer that was in
development and that had not yet been publicly disclosed. They were also show a
prototype mass-meter that represented a new, and nonpublic, Smith Meter product
development.
13. Furthermore, the detailed tour allowed Lunde and Hawkins to gather
important basic information about how the Smith Meter facility operated and the
techniques and technology employed by the
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company. As a result, they gained valuable knowledge about Moorco's processes
and manufacturing capacity. This information is confidential and nonpublic.
14. Finally, Lunde and Hawkins also asked a variety of detailed questions
designed to elicit other types of confidential information from Moorco. For
example, they asked for and were given an organizational chart. Moorco
officials responded to these questions in good faith because they were induced
to believe that Kongsberg would only enter into a supply relationship with
Moorco if Moorco provided detailed information about its operations.
15. On January 28, 1995, Lunde and Hawkins also toured Moorco's Smith
Meter facility in Corpus Christi, Texas. The Kongsberg officials were again
provided this tour in response to their stated purpose of considering Moorco as
a future supplier.
16. Like the Erie tour, the Corpus Christi tour was a private tour that
provided Lunde and Hawkins with detailed information about Moorco's operations.
Lunde and Hawkins repeatedly represented their deep interest in Moorco's
products and facilities. As a direct result of these representations, they were
shown several competitively sensitive pieces of equipment during the course of
their tour. Lunde and Hawkins also witnessed a demonstration of control room
consoles for metering systems destined for Russia, and they were given a tour of
a
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subcontractor's facility where a Smith Meter Metering system was under
construction.
17. The two plant tours allowed FMC to gain confidential information about
Moorco's current business, revenues, productivity, marketing strategies, costs
of doing business, new product development, and manufacturing techniques and
processes. This information is all confidential and some of it constitutes
Moorco's trade secrets. None of this information would have been revealed but
for the false representations by Kongsberg officials regarding the purpose of
their visits and the prospects for a supply relationship between Kongsberg and
Moorco.
18. After having fraudulently induced Moorco to provide it with
confidential, proprietary information. FMC used this nonpublic information to
formulate and make a hostile bid to acquire the company. On April 3, 1995, FMC
made an unsolicited offer to purchase Moorco at a price of $20.00 per share.
FMC falsely claimed in it offer letter that its decision to purchase Moorco was
"[b]ased upon study and analysis of publicly available information." FMC
subsequently released its April 3 letter to the public. A copy of the letter is
attached hereto as Exhibit B.
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V
CLAIMS AGAINST FMC
FIRST CAUSE OF ACTION: FRAUD
19. Moorco repeats and realleges the allegations in paragraphs 1-18.
20. FMC has engaged in two instances of actionable fraud. First,
representatives of FMC's Kongsberg subsidiary fraudulently misrepresented the
nature and purpose of their January 1995 visits to Moorco's Smith Meter
facilities in Erie and Corpus Christi. Lunde and Hawkins represented that
Kongsberg wished to enter into a supply relationship with Moorco. In fact,
Lunde and Hawkins were engaged in a covert effort to gather highly confidential
and proprietary information about Moorco in order to facilitate FMC's hostile
takeover bid for Moorco. These material misrepresentations were relied upon by
Moorco to its detriment. Absent these representations of interest in forming a
commercial relationship between Kongsberg and Moorco, Moorco would not have
permitted Lunde and Hawkins to inspect Moorco's Erie and Corpus Christi
facilities, nor would it have provided confidential product and manufacturing
information to them. These material misrepresentations allowed FMC to acquire
confidential information about all aspects of Moorco's Smith Meter operations
that would otherwise be unobtainable.
21. Second, FMC has committed fraud by concealing its
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possession of the highly confidential and proprietary information that it has
unlawfully obtained and by falsely representing to the public that its bid is
based solely on "publicly available information." While FMC is clearly in
possession of confidential information gathered by its Kongsberg subsidiary, FMC
continues to maintain that its bid for Moorco is based entirely on an assessment
of publicly available information. This misrepresentation deliberately and
materially distorts the character of the offer FMC has made for Moorco and
severely disadvantages Moorco's shareholders' ability to evaluate the FMC offer.
SECOND CAUSE OF ACTION: MISAPPROPRIATION OF TRADE SECRETS
22. Moorco repeats and realleges the allegations in paragraph 1-21.
23. FMC's conduct constitutes multiple violations of trade secrets laws.
The misrepresentations by Lunde and Hawkins concerning the nature of their
visits allowed them to acquire confidential, competitively sensitive information
about Moorco manufacturing processes and new product developments. This
information constitutes Moorco's trade secrets, the discovery of which through
improper means is tortious conduct. In addition, FMC has improperly used the
confidential trade secrets information it acquired through its Kongsberg
subsidiary. Kongsberg came into possession of Moorco's trade secrets by falsely
claiming an
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interest in forming a supply relationship with Moorco. It then turned the
information over to FMC, which used it to formulate a hostile bid for Moorco.
Because the trade secrets information originally imported to FMC through its
Kongberg subsidiary was not intended for this purpose, FMC has misused the trade
secrets information obtained from Moorco. This action constitutes tortious
conduct as well.
THIRD CAUSE OF ACTION : BREACH OF FIDUCIARY DUTY
24. Moorco repeats and realleges the allegations in paragraphs 1-23.
25. FMC has breached the fiduciary duty its owes to Moorco. This fiduciary
duty arises out of the relationship of special trust and confidence created by
Kongsberg's contacts with Smith Meter Inc. Kongsberg, by falsely representing
to Smith Meter that it was interested in forming a supply relationship with
Smith Meter and by then asking for confidential and proprietary information
purportedly required to form that relationship, created a confidential
relationship between the two companies regarding that information. Pursuant to
that confidential relationship, Smith Meter revealed to Kongsberg confidential
and proprietary information about its business. Kongsberg was under a duty to
use that information only as necessary to facilitate the formation of a supply
relationship between Smith Meter and itself. The
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subsequent use of the confidential and proprietary information Kongsberg
acquired to facilitate FMC's hostile bid for Moorco violated the relationship of
special trust and confidence formed by Kongsberg's initial representations to
Smith Meter. This violation of a special relationship continues an actionable
breach of fiduciary duty under Texas law.
CLAIM FOR INJUNCTIVE RELIEF
26. Moorco repeats and realleges the allegations in paragraphs 1-25.
27. FMC's hostile bid to acquire Moorco must be enjoined. Moorco has no
adequate remedy at law for the actions of the Defendant, and if FMC is not
enjoined from proceeding with its unsolicited offer, Moorco will suffer imminent
and irreparable harm. FMC used its Kongsberg subsidiary as an agent to covertly
gather confidential and proprietary information about Moorco, a company FMC now
admits to having long considered as a possible target of acquisition. It then
used this information as the basis for its hostile bid to acquire Moorco. These
activities will cause irreparable harm to Moorco.
28. Moorco is suffering such harm now. By falsely representing to the
investment public that its offer to Moorco is a bona fide offer based on public
information, FMC has manipulated the price of Moorco stock and caused a dramatic
change in the
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composition of Moorco's stock ownership. In the aftermath of FMC's unilateral
decision to announce its offer and to falsely represent that it was based solely
on public information, numerous short-term investors and arbitrageurs purchased
positions in Moorco. In Wall Street parlance, FMC has used its confidential
information to put Moorco "in play" as a takeover candidate. This creates
enormous uncertainty about Moorco's future, and this uncertainty adversely
affects Moorco's ability to obtain orders, to maintain customer relationships,
to contract and retain key personnel, to pursue acquisitions, to pursue its
strategic objectives, and otherwise to manage its business in the interest of
its shareholders.
29. Furthermore, by its fraud, by its unlawful acquisition and use of
Moorco's protectible trade secrets, and by its breach of a relationship of
special trust and confidence, absent an injunction, FMC will have obtained
through fraud the entire object of its scheme: the acquisition of Moorco at an
inadequate price through conduct that violates applicable law. Such a result
constitutes irreparable injury to Moorco, its employees, and its shareholders,
since once FMC's scheme succeeds and FMC acquires Moorco, FMC will cause this
litigation to be discontinued.
30. Finally, the harm caused to Moorco by FMC's unlawful conduct can only
increase if FMC's hostile bid is allowed to
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proceed on its current basis. FMC intends to consummate its acquisition plans
for Moorco by making an offer directly to Moorco's shareholders. In order to
comply with applicable law, in any such offer FMC will have to reveal the
confidential business information it unlawfully obtained through the conduct
described herein. Disclosure of such information will irreparably harm
plaintiff and its business prospects.
31. Moorco has no remedy as law adequate to address these harms. FMC has
already acquired Moorco's confidential and proprietary information. The fruit
of this unlawful acquisition is FMC's hostile tender offer to purchase Moorco
announced May 5, 1995. FMC seeks to use the information it has fraudulently
obtained to consummate its purchase of Moorco, allowing it to avoid all of
Moorco's claims at law.
VI
CONCLUSION AND PRAYER FOR RELIEF
Wherefore, premises considered, Moorco prays that this Court, after notice
and hearing thereon, issue a temporary injunction, and that after such final
hearing, the Court continue and make permanent such injunction restraining,
prohibiting, and enjoining the Defendant to:
(1) withdrawal its unsolicited offer for the Plaintiff which was made based
upon fraudulently obtained confidential information and enter into the
confidentiality and standstill agreement which has been offered by
Plaintiff
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to Defendant;
(2) refrain from utilizing the fraudulently obtained confidential
information in aid or preparation for any offer to purchase Plaintiff;
(3) refrain from utilizing the fraudulently obtained confidential
information in assisting or encouraging any other bid or offer for the
Plaintiff by any entity;
(4) turn over to Plaintiff all records, reports, notes, or other documents
of whatsoever description recording, analyzing, referring to, or
otherwise reflecting any information obtained by Defendant from its
tours of Plaintiff's facilities; and
(5) turn over to Plaintiff all nonpublic documents created by or on behalf
of Moorco received from any source.
Plaintiff further prays for recovery of all costs of Court, reasonable
attorney's fees and for such other and further relief at law or in equity,
special and general, to which it may show itself justly entitled.
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Respectfully submitted,
ALLISON, HUERTA, HASTINGS & ALLISON
By/s/ Rebecca E. Hamilton
-----------------------
Guy H. Alison
State Bar No. 01086000
Rebecca E. Hamilton
State Bar No. 08827050
920 Leopard Street
P.O. Box 23080
Corpus Christi, Texas 78403
(312) 884-1632
(312) 884-7013 (Fax)
BAKER & BOTTS, L.L.P.
Joseph D. Cheavens
State Bar No. 04170000
James Edward Maloney
State Bar No. 12881500
Paul R. Elliott
State Bar No. 06547500
910 Louisiana
Houston, Texas 77002
(713) 229-1234
(713) 229-1522 (Fax)
ATTORNEYS FOR PLAINTIFF
MOORCO INTERNATIONAL INC.
OF COUNSEL:
WACHTELL, LIPTON, ROSEN & KATZ
Paul K. Rowe\51 West 52nd Street
New York, New York 10019
(212) 402-1000
(212) 403-2000 (Fax)
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