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Filed by Delhaize America, Inc.
Pursuant to Rule 425 under the Securities
Act of 1933 and deemed filed pursuant to
Rule 14a-12 under the Securities
Exchange Act of 1934
Subject Company: Delhaize America, Inc.
Commission File No. 1-15275
CONTACTS:
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Delhaize Group Delhaize America
Europe: Press:
Guy Elewaut +32 (0) 2 412 29 48 Tawn Earnest: (704) 633-8250, ext. 2185
Geoffroy d'Oultremont +32 (0) 2 412 83 21
United States (Edelman Financial): Investors:
Michael Geczi (323) 857-9100 Dave Hogan: (704) 633-8250, ext. 2529
(212) 642-7778
Shoreen Maghame (323) 857-9100
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DELHAIZE GROUP AND DELHAIZE AMERICA ANNOUNCE
SHARE EXCHANGE AGREEMENT
BRUSSELS, BELGIUM, AND SALISBURY, NORTH CAROLINA, NOVEMBER 16, 2000 - Delhaize
"Le Lion" ("Delhaize Group" - Brussels Stock Exchange: Reuters DELBt.Br -
Bloomberg DEHT BB) and Delhaize America, Inc. (NYSE: DZA, DZB) today announced
an agreement for a statutory share exchange pursuant to which Delhaize Group
will exchange each outstanding Class A and B share of Delhaize America not
currently held directly or indirectly by Delhaize Group for 0.4 shares of
Delhaize Group. The public shareholders of Delhaize America will be offered the
option to receive either Delhaize Group shares or American Depositary Shares in
the form of American Depositary Receipts ("ADRs") listed on the New York Stock
Exchange. The transaction is expected to be closed in Spring 2001.
Public shareholders of Delhaize America will continue to receive quarterly cash
dividends on their Delhaize America shares payable on dates before the closing
of the transaction. If the transaction closes prior to the Delhaize Group annual
shareholders meeting in May 2001, the shareholders of Delhaize America will
receive a full dividend on their Delhaize Group shares for fiscal year 2000, to
be distributed in May 2001. The share exchange has been structured so that it
should be tax-free to Delhaize America shareholders for United States federal
income tax purposes.
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The exchange offer is expected to be accretive on reported earnings per Delhaize
Group share (after goodwill amortization) and cash earnings per share (before
goodwill amortization) in 2001.
At a meeting of the Delhaize Group shareholders to be held on December 15, 2000,
the Board of Directors of Delhaize Group will request shareholder approval of a
proposal that would authorize the Delhaize Group to repurchase up to 10% of its
outstanding capital. Delhaize Group intends to purchase, following the closing
of the share exchange, Delhaize Group shares up to EUR 400 million (USD 350
million). Depending upon the market price of the Delhaize Group share at the
time of purchase, a repurchase program of up to EUR 400 million, upon completion
of the program, should represent in excess of 7 to 8 % of the post transaction
market value of Delhaize Group.
The share exchange is the result of an agreement between Delhaize Group and a
four-person Special Committee of independent Delhaize America Directors. The
share exchange was unanimously approved by the Board of Directors of Delhaize
Group and Delhaize America. The share exchange was unanimously recommended to
the Delhaize America Board of Directors by the Special Committee. The Special
Committee received an opinion from Credit Suisse First Boston that the exchange
ratio is fair from a financial point of view to Delhaize America public
shareholders.
"This transaction is a win-win for the shareholders, employees and customers of
both companies", stated Pierre-Olivier Beckers, President and Chief Executive
Officer of Delhaize Group. "The transaction will enable us to maximize the
upward potential of this combination and deliver added value to our shareholders
by streamlining and strengthening the Group's capital and corporate structure.
In turn, this will enable us to leverage our financial strength, human resources
and international presence."
"Delhaize America has maintained a productive partnership with the Delhaize
Group for over a quarter century, and this transaction further solidifies this
long-standing relationship", said Bill McCanless, Chief Executive Officer of
Delhaize America. "At the same time, we want to assure our customers that they
can continue to rely on all 1,400 Food Lion, Hannaford and Kash n' Karry stores
to provide the same high level of service they have come to expect."
ADDITIONAL INFORMATION
To represent the U.S. interests in the Delhaize Group, the Board of Directors of
Delhaize Group will propose, prior to, as of or immediately following the
closing of the share exchange, the nomination to the Delhaize Group Board of
Bill McCanless, Chief Executive Officer of Delhaize America, Hugh Farrington,
Vice Chairman of Delhaize America and Chief Executive Officer of Hannaford. At
the same time, the Board of Directors of Delhaize Group will propose the
nomination of three
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independent directors to its Board who are reasonably acceptable to the Special
Committee.
Delhaize Group, directly and indirectly, owns approximately 37% of Delhaize
America's Class A (non-voting) common stock and 56% of Delhaize America's Class
B (voting) common stock, or 45% of Delhaize America's total outstanding common
stock.
Based on the stock price of Delhaize Group on November 15, 2000, the aggregate
value of the Delhaize America transaction would be EUR 2.2 billion (USD 1.9
billion). Delhaize Group currently has 52 million shares outstanding. An
addition of approximately 40.6 million new Delhaize Group shares will be issued
pursuant to the transaction. At the Delhaize Group's November 15, 2000 closing
price of EUR 53.7, a repurchase program of EUR 400 million would represent 7.5
million Delhaize Group shares. This would result in a total of 85.1 million
Delhaize Group shares publicly held.
The share exchange is contingent upon approval by the Delhaize America
shareholders, certain approvals by the Delhaize Group shareholders at a
shareholders meeting scheduled to be convened on December 15, 2000, and other
conditions customary in transactions of this type.
Prior to closing, Delhaize Group will apply for listing on the New York Stock
Exchange of the ADRs evidencing the Delhaize Group shares. After the share
exchange is completed, shareholders of Delhaize Group and the former
shareholders of Delhaize America will, through ordinary shares and ADRs, hold
one single class of voting stock. The Bank of New York is to be retained as the
depositary bank and transfer agent for the ADR program. The Delhaize Group
shares, including the new shares to be issued in the share exchange, will
continue to trade on the Brussels Stock Exchange (Euronext Brussels).
AN OPERATION IN THE INTEREST OF ALL SHAREHOLDERS AND OTHER STAKEHOLDERS
The transaction has been structured to:
o simplify the Group's capital structure into one voting security in the
U.S. and Europe, eliminating the two classes of stock in the U.S. and
the different voting rights that currently exist.
o increase the liquidity and visibility of Delhaize Group shares on a
global basis.
o offer ongoing equity participation in a highly successful international
food retailer with strong U.S. and European bases, strong strategic
positions in Eastern and Southern Europe, and high-growth potential in
Southeast Asia.
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o be accretive in 2001 and 2002 on reported earnings per share (after
goodwill amortization) and cash earnings per share (before goodwill
amortization) of Delhaize Group.
o generate USD 20 million of pretax synergies (0.1% of sales), with
savings resulting from the implementation of best practices across the
Group.
o ensure continuity, as all companies will continue to operate under
their local banner, thereby maintaining their operational and cultural
identity, and serving their customers with increased synergies and
competitive strength.
o allow the company to continue to reward the management of Delhaize
America consistent with current practices in the American food retail
sector.
ABOUT DELHAIZE GROUP
Delhaize Group is a food retailer headquartered in Belgium and listed on the
Brussels Stock Exchange (Euronext). At the end of the third quarter of 2000,
Delhaize Group operated 2,300 stores in 11 countries on three continents. In
1999, Delhaize Group achieved sales of EUR 14.3 billion (USD 15.3 billion) and
net earnings of EUR 169.9 million (USD 181.0 million). Delhaize Group employs
145,000 persons.
ABOUT DELHAIZE AMERICA
Delhaize America is the parent company of Food Lion, Hannaford Bros. and Kash n'
Karry Food Stores. With more than 1,400 stores from Maine to Florida, Delhaize
America is the fifth-largest supermarket operator in the U.S. In 1999, Delhaize
America achieved sales of EUR 10.2 billion (USD 10.9 billion) and net earnings
of EUR 280 million (USD 300.4 million).
FINANCIAL ADVISORS
Delhaize Group has been advised in this transaction by Schroder Salomon Smith
Barney and the Special Committee by Credit Suisse First Boston.
INFORMATION FOR INVESTORS
Delhaize Group has established a toll-free U.S. hotline at 800-619-3688 for
investor questions. Questions can also be emailed to [email protected],
and additional information will be posted on the company's website at
http://www.delhaizegroup.com. This press release is available in English, French
and Dutch.
Investors are urged to read the relevant documents that will be filed with the
Securities and Exchange Commission by Delhaize Group and Delhaize America in
connection with the share exchange. These documents will contain important
information, including the identities of the participants in any solicitation of
proxies or
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consents from Delhaize America shareholders and a description of such
participants' interests in any such solicitation. Free copies of the documents
filed with the Securities and Exchange Commission will be available at either
Delhaize Group headquarters in Brussels, the Delhaize America headquarters in
Salisbury, North Carolina or on the Securities and Exchange Commission web site
(http://www.sec.gov).
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SAFE HARBOR
This press release is not an offer or the solicitation of an offer to acquire
any securities of Delhaize America and no such offer or solicitation will be
made except in compliance with applicable securities laws.
This press release includes forward-looking statements (statements that are not
historical facts and relate to future activities and performance) that involve
risks and uncertainties. These forward-looking statements include statements
about strategic options, future strategies and the anticipated benefits of these
strategies, and they are subject to risks and uncertainties. Actual results may
differ materially from those stated in any forward-looking statements based on a
number of factors, including the early stage of Delhaize Group's consideration
of these strategic options and strategies, the possibility that Delhaize Group
may decide not to implement any particular strategy, the ability of Delhaize
Group to successfully implement these strategies if and when Delhaize Group
decides to implement them or any of them, and the possibility that the
anticipated benefits of these strategies are not achieved. Delhaize Group
assumes no obligation to update the information contained in this press release.
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