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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DECEMBER 24, 1997
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(Date of earliest event reported)
GENERAL HOST CORPORATION
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(Exact name of registrant as specified in its charter)
New York 1-1066 13-0762080
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
General Host Corporation
One Station Place, P.O. Box 10045
Stamford, CT 06904
Copy to:
6501 East Nevada
Detroit, MI 48234
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(Address of principal executive offices) (Zip Code)
(313) 366-8400
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(Registrant's telephone number, including area code)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
On December 24, 1997, Cyrus Acquisition Corp. ("Cyrus"), a company formed
by The Cypress Group L.L.C. ("Cypress"), acquired 21,981,164 shares of common
stock, par value $1.00 per share ("Common Stock"), of General Host Corporation
(the "Company") for a price of $5.50 per share pursuant to Cyrus' tender offer
for all outstanding Common Stock (the "Common Stock Tender Offer").
Simultaneously with the consummation of the Common Stock Tender Offer, Cyrus
purchased from the Company an additional 4,709,091 shares of Common Stock,
which, together with the Common Stock purchased in the Common Stock Tender
Offer, constituted approximately 91.6% of the outstanding Common Stock. The
Common Stock Tender Offer and share purchase were each effected pursuant to the
Agreement and Plan of Merger (the "Merger Agreement"), dated as of November 22,
1997, between Cyrus and the Company.
On January 7, 1998, the Company and Cyrus completed the merger of Cyrus
with and into the Company (the "Merger") pursuant to the Merger Agreement. In
the Merger, each share of Common Stock outstanding immediately prior to the
Merger (other than shares held by Cyrus, the Company or any subsidiary of the
Company and shares as to which dissenters' rights are properly exercised) was
converted into the right to receive $5.50 per share in cash. As a result of the
Merger, the Company is now privately owned by affiliates of Cypress and related
investors.
ITEM 5. OTHER EVENTS.
Pursuant to the Merger Agreement, the Company conducted a tender offer and
consent solicitation (the "Senior Notes Tender Offer") for its 11-1/2% Senior
Notes Due 2002 (the "Senior Notes") simultaneously with the Common Stock Tender
Offer conducted by Cyrus. On December 24, 1997, the Company purchased
$52,765,000 in aggregate principal amount of the Senior Notes pursuant to the
Senior Notes Tender Offer. In connection with Senior Notes Tender Offer, the
Company and the trustee under the Senior Notes indenture executed a supplemental
indenture, dated as of December 17, 1997 (the "Senior Notes Supplemental
Indenture"), with respect to the Senior Notes. The Senior Notes Supplemental
Indenture, which became effective upon the consummation of the Senior Notes
Tender Offer, eliminated and waived certain provisions of the Senior Notes
indenture as contemplated by the Senior Notes Tender Offer.
In connection with the consummation of the Senior Notes Tender Offer, the
Company and its operating subsidiary Frank's Nursery & Crafts, Inc. ("Frank's")
entered into a $195 million credit facility with a syndicate of lenders led by
The Chase Manhattan Bank and Goldman Sachs Credit Partners L.P. providing up to
$85 million of term loans and a $110 million revolving credit facility to
Frank's. The credit facility is guaranteed by the Company and secured by
substantially all the assets of the Company, Frank's and the Company's other
subsidiaries, excluding real property mortgaged by Frank's to other lenders, and
requires the Company and Frank's, among other things, to maintain certain
minimum financial ratios. Simultaneously with the closing of the credit
facility, the Company and Frank's terminated the $25 million secured revolving
credit facility provided by Comerica Bank and refinanced
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approximately $10.2 million of loans, including loans made by MetLife Capital
Financial Corporation.
In connection with the Merger, the Company and the trustee under the
indenture with respect to the Company's 8% Convertible Subordinated Notes Due
2002 (the "Convertible Notes") entered into a supplemental indenture, dated
January 7, 1998, with respect to the Convertible Notes providing that, upon and
following the effective time of the Merger, the Convertible Notes would no
longer be convertible into Common Stock or other equity interests of the Company
or its subsidiaries, but would instead be convertible solely into an amount in
cash equal to $644.431 per $1,000 principal amount so converted. The above cash
conversion ratio equals the amount of cash which would have been received by a
holder of Convertible Notes who had converted such Convertible Notes into Common
Stock immediately prior to the Merger at the then-current stock conversion ratio
and then received the cash merger consideration in respect thereof in the
Merger.
Copies of the press releases announcing the consummation of the Common
Stock Tender Offer, the Senior Notes Tender Offer, the Merger and the other
transactions described above, among other things, are attached hereto as
Exhibits 99.1 and 99.2 and are incorporated by reference in this Current Report.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(c) EXHIBITS.
4.07(c) Supplemental Indenture, dated as of December 17, 1997,
among the Company, certain guarantors named therein and
Bankers Trust Company, as Trustee.
4.08(c) Supplemental Indenture, dated as of January 7, 1998,
between the Company and United States Trust Company of
New York, as Trustee.
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99.1 Press Release issued by the Company on December 24,
1997.
99.2 Press Release issued by the Company on January 7, 1998.
4
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GENERAL HOST CORPORATION
By: /s/ J. Theodore Everingham
--------------------------------
Name: J. Theodore Everingham
Title: Vice President and
General Counsel
January 8, 1998
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EXHIBIT INDEX
EXHIBIT NO. EXHIBIT
4.07(c) Supplemental Indenture, dated as of December 17, 1997,
among the Company, certain guarantors named therein and
Bankers Trust Company, as Trustee.
4.08(c) Supplemental Indenture, dated as of January 7, 1998,
between the Company and United States Trust Company of
New York, as Trustee.
99.1 Press Release issued by the Company on
December 24, 1997.
99.2 Press Release issued by the Company on
January 7, 1998.
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EXHIBIT 4.07(c)
SUPPLEMENTAL INDENTURE, dated as of December 17, 1997, by and among
General Host Corporation, a New York corporation (the "Company"), Frank's
Nursery & Crafts, Inc., General Host Holding Corp., AMS Industries, Inc., AMS
Salt Industries, Inc., Bay Resources, Inc. and Nursery Distributors, Inc. as
guarantors (each, a "Guarantor" and, collectively, the "Guarantors") and Bankers
Trust Company, as Trustee (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company, the Guarantors and the Trustee have heretofore
executed and delivered an Indenture, dated as of February 28, 1992 (the
"Indenture"), providing for the issuance of 11-1/2% Senior Subordinated Notes
due 2002 of the Company (the "Notes");
WHEREAS, Section 10.02 of the Indenture provides that the Company, the
Guarantors and the Trustee may, with the consent of the Holders (such defined
term and each other capitalized term used but not defined in these recitals
having the meanings assigned thereto in Article One of this Supplemental
Indenture) of not less than a majority in aggregate principal amount of the
outstanding Notes, enter into a supplemental indenture for the purpose of (i)
adding any provisions to or changing in any manner or eliminating certain
provisions of the Indenture or (ii) modifying in any manner certain rights of
the Holders under the Indenture, subject to certain exceptions;
WHEREAS, the Company has offered to purchase for cash all of the
outstanding Notes upon the terms and subject to the conditions set forth in the
Offer to Purchase and the Consent Solicitation Statement dated November 25,
1997, as the same may be amended, supplemented or modified (the "Statement") and
in the accompanying Consent and Letter of Transmittal (the "Consent and Letter
of Transmittal" and, together with the Statement, the "Offer");
WHEREAS, Cyrus Acquisition Corp., a New York corporation (the
"Purchaser"), has commenced a tender offer to purchase for cash all of the
issued and outstanding shares of common stock of the Company, par value $1.00
per share (the "Shares") (together with the associated common stock purchase
rights issued pursuant to the Rights Agreement, dated as of March 7, 1990 and
subsequently amended by Amendment No. 1 thereto, dated as of March 1, 1995
between the Company and ChaseMellon Shareholder Services, L.L.C., as successor
to Chemical Bank, as rights agent), at a purchase price of $5.50 per Share and
associated rights (the "Equity Tender Offer");
WHEREAS, the Offer is conditioned upon, among other things, the
execution by the Trustee of a supplemental indenture implementing the proposed
amendments and waivers (the "Proposed Amendments") to the Indenture set forth
herein following receipt of the Requisite Consents (as defined in the Statement)
from Holders of not less than a majority in aggregate principal amount of the
outstanding Notes;
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2
WHEREAS, following completion of the Offer and the Equity Tender
Offer, the Purchaser shall merge (the "Merger") with and into the Company upon
the terms and subject to the conditions set forth in the Agreement and Plan of
Merger, dated as of November 22, 1997 (the "Merger Agreement"), by and between
the Purchaser and the Company;
WHEREAS, the Company has received and delivered to the Trustee the
Requisite Consents to effect the Proposed Amendments under the Indenture;
WHEREAS, each of the Company and each Guarantor has been authorized by
Board Resolutions of its Board of Directors to enter into this Supplemental
Indenture; and
WHEREAS, all other acts and proceedings required by law, by the
Indenture and by the certificate of incorporation and by-laws of the Company and
each of the Guarantors to make this Supplemental Indenture a valid and binding
agreement for the purposes expressed herein, in accordance with its terms, have
been duly done and performed.
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, and for other good and valuable consideration the
receipt of which is hereby acknowledged, and for the equal and proportionate
benefit of the Holders of the Notes, the Company, the Guarantors and the Trustee
hereby agree as follows:
ARTICLE ONE
SECTION 101. DEFINITIONS.
Capitalized terms used in this Supplemental Indenture and not
otherwise defined herein shall have the meanings assigned to such terms in the
Indenture.
ARTICLE TWO
SECTION 201. WAIVER OF COMPLIANCE WITH SECTIONS 5.16, 6.01(4) AND 11.01.
Effective upon, and subject only to, the Company's acceptance of Notes
for purchase pursuant to the Offer (the "Acceptance"), the Trustee waives
compliance with and application of the provisions of Sections 5.16, 6.01(4) and
11.01 of the Indenture and with any events of default set forth therein and with
respect thereto, to the extent required to effect or otherwise in connection
with the Offer, the Equity Tender Offer, the Merger and the other transactions
contemplated by the Merger Agreement (collectively, the "Transactions"),
including, without limitation, (i) the execution and delivery of the Credit
Agreement (the "Credit Agreement") among Frank's Nursery and Crafts, Inc. (the
"Borrower"), the Purchaser, the Company, the Lenders (as defined therein) and
The Chase Manhattan Bank, as administrative agent and collateral agent and
Goldman Sachs Credit Partners L.P. as documentation agent, (ii) the execution
and delivery of certain related security documents by the Purchaser, the Company
and certain of its subsidiaries in connection with the Credit Agreement, (iii)
the borrowing of up to $220,000,000 by the Borrower pursuant to the Credit
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3
Agreement, (iv) the payment of cash consideration to holders of the Shares in
connection with the consummation of the Equity Tender Offer and the Merger, and
(v) any and all other actions that are taken by the Company, by the Purchaser or
any of their respective subsidiaries in connection with the consummation of the
Transactions.
ARTICLE THREE
SECTION 301. AMENDMENT OF SECTION 1.01.
Effective upon, and subject only to, the Acceptance, Section 1.01 of
the Indenture is amended by deleting, in their entirety, those terms, and the
respective meanings assigned thereto, that are referred to in the provisions of
only those Sections of the Indenture that have been amended by deleting the text
of such Section in its entirety, as a result of the execution of this
Supplemental Indenture.
SECTION 302. AMENDMENT OF SECTION 5.12.
Effective upon, and subject only to, the Acceptance, the provisions of
Section 5.12 of the Indenture are amended by deleting the text of such Section
in its entirety and inserting in lieu thereof the phrase "[intentionally
omitted]" and any events of default arising from the Transactions relating
solely to the breach of such Section are waived.
SECTION 303. AMENDMENT OF SECTION 5.13
Effective upon, and subject only to, the Acceptance, the provisions of
Section 5.13 of the Indenture are amended by deleting the text of such Section
in its entirety and inserting in lieu thereof the phrase "[intentionally
omitted]" and any events of default arising from the Transactions relating
solely to the breach of such Section are waived.
SECTION 304. AMENDMENT OF SECTION 5.14
Effective upon, and subject only to, the Acceptance, the provisions of
Section 5.14 of the Indenture are amended by deleting the text of such Section
in its entirety and inserting in lieu thereof the phrase "[intentionally
omitted]" and any events of default arising from the Transactions relating
solely to the breach of such Section are waived.
SECTION 305. AMENDMENT OF SECTION 5.15
Effective upon, and subject only to, the Acceptance, the provisions of
Section 5.15 of the Indenture are amended by deleting the text of such Section
in its entirety and inserting in lieu thereof the phrase "[intentionally
omitted]" and any events of default arising from the Transactions relating
solely to the breach of such Section are waived.
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SECTION 306. AMENDMENT OF SECTION 5.17
Effective upon, and subject only to, the Acceptance, the provisions of
Section 5.17 of the Indenture are amended by deleting the text of such Section
in its entirety and inserting in lieu thereof the phrase "[intentionally
omitted]" and any events of default arising from the Transactions relating
solely to the breach of such Section are waived.
SECTION 307. AMENDMENT OF SECTION 5.18
Effective upon, and subject only to, the Acceptance, the provisions of
Section 5.18 of the Indenture are amended by deleting the text of such Section
in its entirety and inserting in lieu thereof the phrase "[intentionally
omitted]" and any events of default arising from the Transactions relating
solely to the breach of such Section are waived.
SECTION 308. AMENDMENT OF SECTION 5.19
Effective upon, and subject only to, the Acceptance, the provisions of
Section 5.19 of the Indenture are amended by deleting the text of such Section
in its entirety and inserting in lieu thereof the phrase "[intentionally
omitted]" and any events of default arising from the Transactions relating
solely to the breach of such Section are waived.
SECTION 309. AMENDMENT OF SECTION 5.20
Effective upon, and subject only to, the Acceptance, the provisions of
Section 5.20 of the Indenture are amended by deleting the text of such Section
in its entirety and inserting in lieu thereof the phrase "[intentionally
omitted]" and any events of default arising from the Transactions relating
solely to the breach of such Section are waived.
ARTICLE FOUR
SECTION 401. CONTINUING EFFECT OF INDENTURE.
Except as expressly provided herein, all of terms, provisions and
conditions of the Indenture and the Notes outstanding thereunder shall remain in
full force and effect.
SECTION 402. CONSTRUCTION OF SUPPLEMENTAL INDENTURE.
The Supplemental Indenture is executed as and shall constitute an
indenture supplemental to the Indenture and shall be construed in connection
with and as part of the Indenture. This Supplemental Indenture shall be
governed by and construed in accordance with the laws of the State of New York.
SECTION 403. TRUST INDENTURE ACT CONTROLS.
If any provision of this Supplemental Indenture limits, qualifies or
conflicts with another provision of this Supplemental Indenture or the Indenture
that is required to be
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5
included by the Trust Indenture Act of 1939, as amended, as in force at the date
this Supplemental Indenture is executed, the provision required by said Act
shall control.
SECTION 404. TRUSTEE DISCLAIMER.
The recitals contained in this Supplemental Indenture shall be taken
as the statements of the Company, and the Trustee assumes no responsibility for
the correctness of the same. The Trustee makes no representations as to the
sufficiency of this Supplemental Indenture.
SECTION 405. COUNTERPARTS.
This Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the day and year first above written.
GENERAL HOST CORPORATION, as Issuer
By: /S/ ROBERT M. LOVEJOY, JR.
-----------------------------------
Name: Robert M. Lovejoy, Jr.
Title: Vice President - Treasurer
FRANK'S NURSERY & CRAFTS, INC., as
Guarantor
GENERAL HOST HOLDING CORP., as Guarantor
AMS INDUSTRIES, INC., as Guarantor
AMS SALT INDUSTRIES, INC., as Guarantor
BAY RESOURCES, INC., as Guarantor
NURSERY DISTRIBUTORS, INC., as Guarantor
By: /S/ ROBERT M. LOVEJOY, JR.
-----------------------------------
Name: Robert M. Lovejoy, Jr.
Title: Vice President - Treasurer
BANKERS TRUST COMPANY, as Trustee
By: /S/ SUSAN JOHNSON
-----------------------------------
Name: Susan Johnson
Title: Assistant Vice President
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EXHIBIT 4.08(c)
SUPPLEMENTAL INDENTURE, dated as of January 7, 1998, by and between
GENERAL HOST CORPORATION, a New York corporation (the "Company"), and UNITED
STATES TRUST COMPANY OF NEW YORK, as Trustee (the "Trustee"), with respect to
the Indenture, dated as of February 28, 1992 (the "Indenture"; capitalized terms
used but not defined herein are used herein as therein defined), by and between
the Company, as Issuer, and the Trustee.
W I T N E S S E T H:
WHEREAS, the Company and the Trustee have heretofore executed and
delivered the Indenture providing for the issuance of 8% Convertible
Subordinated Notes Due 2002 of the Company (the "Notes");
WHEREAS, effective as of the date hereof Cyrus Acquisition Corp.
("Cyrus"), a New York corporation, has merged with and into the Company (the
"Merger") pursuant to an Agreement and Plan of Merger, dated as of November 22,
1997, between the Company and Cyrus pursuant to which, among other things, each
outstanding share of the Company's Common Stock, par value $1.00 per share (the
"Common Stock"), other than shares held by Cyrus, the Company or its
subsidiaries or shares as to which dissenter's rights are properly perfected,
was converted into the right to receive $5.50 in cash, without interest thereon;
WHEREAS, immediately prior to the Merger, pursuant to the terms of the
Notes and the Indenture, the principal amount of each Note was convertible, at
the option of the Holder thereof, into shares of Common Stock at a conversion
price of $8.53466 per share; and
WHEREAS, pursuant to Sections 10.01 and 14.11 of the Indenture, the
Company is required to and desires to make appropriate adjustments to the right
of conversion of the Notes to reflect the Merger.
NOW, THEREFORE, in consideration of the premises contained herein, and
for the equal and proportionate benefit of the Holders of the Notes, the Company
delivers to the Trustee this Supplemental Indenture providing as follows:
ARTICLE ONE
SECTION 101. ADJUSTMENT OF CONVERSION RIGHT.
Upon and following the effective time of the Merger (the "Effective
Time"), each Note (or any portion thereof which is $1,000 or an integral
multiple amount thereof) shall be convertible, at the option of the Holder
thereof and pursuant to the conversion procedures set forth in the Note and the
Indenture, solely into an amount in cash equal to $644.431 (without any interest
thereon) per $1,000 principal amount so converted. Under no circumstances will
any Note be convertible into Common Stock or any other equity interest in the
Company or any of its subsidiaries upon and following the Effective Time.
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ARTICLE TWO
SECTION 201. CONTINUING EFFECT OF INDENTURE.
Except as expressly provided herein, all of the terms, provisions and
conditions of the Indenture and the Notes outstanding thereunder shall remain in
full force and effect.
SECTION 202. CONSTRUCTION OF SUPPLEMENTAL INDENTURE.
This Supplemental Indenture is executed as and shall constitute an
indenture supplemental to the Indenture and shall be construed in connection
with and as part of the Indenture. This Supplemental Indenture shall be
governed by and construed in accordance with the laws of the State of New York.
SECTION 203. TRUST INDENTURE ACT CONTROLS.
If any provision of this Supplemental Indenture limits, qualifies or
conflicts with another provision of the Indenture that is required to be
included by the Trust Indenture Act of 1939, as amended, as in force at the date
this Supplemental Indenture is executed, the provision required by said Act
shall control.
SECTION 204. TRUSTEE DISCLAIMER.
The recitals contained in this Supplemental Indenture shall be taken
as the statements of the Company, and the Trustee assumes no responsibility for
the correctness of the same. The Trustee makes no representation as to the
sufficiency of this Supplemental Indenture.
SECTION 205. COUNTERPARTS.
This Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the day and year first above written.
GENERAL HOST CORPORATION, as Issuer
By: /S/ J. THEODORE EVERINGHAM
-----------------------------------
Name: J. Theodore Everingham
Title: Vice President and Secretary
UNITED STATES TRUST COMPANY
OF NEW YORK, as Trustee
By: /S/ JAMES E. LOGAN
-----------------------------------
Name: James E. Logan
Title: Vice President
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Contact: General Host The Cypress Group
Robert Lovejoy Owen Blicksilver
313-366-8400 212-303-7603
THE CYPRESS GROUP ACQUIRES IN EXCESS OF 90%
OF GENERAL HOST CORPORATION IN CASH TENDER OFFER;
GENERAL HOST CONSUMMATES NEW BANK FINANCING
AND DEBT TENDER OFFER
STAMFORD, CT, December 24, 1997 -- The Cypress Group L.L.C. and General Host
Corporation (NYSE: GH) today announced the acquisition by Cyrus Acquisition
Corp., a company formed by Cypress, of in excess of 90% of the outstanding
common stock of General Host Corporation pursuant to Cyrus' $5.50 per share cash
tender offer. In addition, General Host announced the completion of its tender
offer and consent solicitation for its 11-1/2% Senior Notes. Each of the tender
offers expired, as scheduled, at midnight, New York City time, on Tuesday,
December 23, 1997.
Cypress and General Host said that based on information provided by the
depositary, at the expiration of the offers a total of approximately 21,983,422
shares of General Host (or approximately 90% of the outstanding shares of
General Host before giving effect to the stock sale described below), were
validly tendered and not properly withdrawn pursuant to Cyrus' offer (including
approximately 378,033 shares subject to guarantees of delivery), and that
$52,760,000 in aggregate principal amount of Senior Notes (or approximately 68%
of the total outstanding principal amount) were validly tendered and not
properly withdrawn pursuant to General Host's tender offer and consent
solicitation (including $49,932,000 in aggregate principal amount tendered prior
to the deadline for consents). Cyrus Acquisition Corp. has accepted for payment
all such shares, and General Host has accepted for payment all such Senior
Notes, validly tendered and not withdrawn.
The tender offers were made pursuant to an agreement and plan of merger between
General Host and Cyrus. Also pursuant to the merger agreement, simultaneously
with the closing of the tender offers Cyrus purchased approximately 4.7 million
additional shares of General Host stock for approximately $25.9 million in cash,
which, together with the acceptance of the shares in the offer, resulted in
Cyrus' ownership of in excess of 92% of General Host's outstanding common stock.
In the second step of the acquisition, Cyrus will be merged with and into
General Host and each remaining General Host share (and any in-the-money
options) will be cashed out at $5.50 per share.
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2
Simultaneously with the closing of the tender offers, Frank's Nursery & Crafts,
Inc., General Host's primary operating subsidiary, entered into a $195 million
credit facility with a syndicate of lenders led by The Chase Manhattan Bank and
Goldman Sachs Credit Partners L.P. providing for up to $85 million of term loans
and a $110 million revolving credit facility.
Pursuant to the merger agreement, C. Whitcomb Alden, Jr., Edward H. Hoornstra,
Philip B. Harley, Christopher A. Forster, S. Joseph Fortunato and Kelly Ashton
Sant Albano have resigned as directors of General Host, and Joseph R. Baczko,
James A. Stern, David P. Spalding, Jeffrey P. Hughes, James L. Singleton and
Bahram Shirazi, as Cypress designees, have been elected to serve as directors of
General Host until their successors are elected and qualified. Joseph R. Baczko
has been named the new Chairman, Chief Executive Officer and President of
General Host and Frank's, and Larry T. Lakin has been named Chief Financial
Officer of the companies.
Larry Lakin was previously the Chief Financial Officer and a principal of
Shiara, Inc., a private fragrance and cosmetics venture. Prior to Shiara, Mr.
Lakin had served as Chief Financial Officer and/or Vice President of Finance of
Faberge International, LJN Toys (a former subsidiary of MCA), Toys "R" Us -
International and Max Factor's international operations and Controller of
Chrysler - France.
General Host is the operator of Frank's Nursery & Crafts, Inc., Detroit, the
nation's largest chain of specialty retail stores devoted to the sale of lawn
and garden products, crafts, Christmas merchandise and pet food and supplies --
including more than 200 different proprietary lawn and garden products. General
Host operates 258 Frank's stores in 15 states, mostly in the East and Midwest,
and had 1996 revenues in excess of $530 million.
The Cypress Group manages a private equity fund which closed in February 1996
with more than $1 billion in commitments. Cypress invests in privately
negotiated transactions, targeting established operating businesses and
investing with management to foster continued growth. Investments made by
Cypress include Cinemark USA, Inc., Amtrol Inc., and Scotsman Holdings, as well
as The Multicare Companies via a new joint venture company called Genesis
ElderCare Corp. The Cypress Group, based in New York City, is headed by its four
partners, James A. Stern, Jeffrey P. Hughes, James L. (Jamie) Singleton and
David P. Spalding.
# # #
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EXHIBIT 99.2
FOR IMMEDIATE RELEASE
Contact: General Host/Frank's The Cypress Group
Larry Lakin Owen Blicksilver
313-564-2267 212-303-7603
THE CYPRESS GROUP COMPLETES BUYOUT
OF GENERAL HOST/FRANK'S; 2 SENIOR EXECUTIVES ADDED
DETROIT, January 7, 1998 - The Cypress Group L.L.C. and General Host Corporation
today announced the completion of the acquisition of General Host and its sole
operating subsidiary, Frank's Nursery & Crafts, Inc., by the merger of Cyrus
Acquisition Corp., a company formed by Cypress, into General Host. The merger
followed the acquisition by Cyrus of more than 90% of the outstanding General
Host common stock on December 24, 1997 pursuant to a cash tender offer.
As a result of the merger, which was effective today, all remaining General Host
shares were converted into the right to receive $5.50 per share, subject to
dissenters' rights. Holders of share certificates will shortly be receiving
documentation by which they can surrender their certificates and receive cash
consideration. In addition, General Host's 8% Convertible Subordinated Notes Due
2002, which prior to the merger were convertible into General Host common stock,
are now convertible solely into cash at the rate of $644.431 per $1,000
principal amount.
General Host also announced the appointments of Adam Szopinksi, previously a
senior executive with Toys "R" Us, Inc., as Executive Vice President and Chief
Operating Officer, and Larry Lakin as Executive Vice President and Chief
Financial Officer. Both executives will report to Joseph R. Baczko, Chairman,
President and Chief Executive Officer, and will join Mr. Baczko and
representatives of Cypress on the Boards of Directors of General Host and
Frank's.
Prior to joining Frank's, Szopinski, 52, was Vice President of Operations for
the International Division of Toys "R" Us, a position which he held since 1989.
During that time, he was responsible for directing the operational development
for that company's $2.7 billion international business extending across 27
countries and a total of 394 superstores. Mr. Szopinski's career with Toys "R"
Us spanned 31 years during which he occupied positions of increasing
responsibility in virtually all areas of Toys "R" Us domestic and international
store and distribution operations.
Immediately prior to his appointment, Lakin, 54, was a principal and CFO of
Shiara, Inc. a private fragrance and cosmetic venture. Prior to Shiara, Mr.
Lakin had served as Chief Financial Officer of Faberge International, LJN Toys
(a former subsidiary of MCA), and Max Factor's international operations; Vice
President of Finance for Toys "R" Us International and Controller of
Chrysler-France.
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"I am very pleased with the addition of these two executives to Frank's senior
management team," Mr. Baczko said. "We have developed very successful retailing
businesses together in the past. Both Adam and Larry bring us a wealth of
experience and proven talent in specialty retailing. I am confident that, in
their new positions, they will contribute significantly to the profitable growth
of our company." Mr. Baczko was formerly President and Chief Operating Officer
of Blockbuster Entertainment Corp. and President of the International Division
of Toys "R" Us.
Following the merger, the Boards of Directors of General Host and Frank's will
consist of Mr. Baczko, Mr. Szopinski and Mr. Lakin, as well as David P.
Spalding, James A. Stern and Bahram Shirazi of Cypress.
Frank's Nursery & Crafts, Inc., Detroit, is the nation's largest chain of
specialty retail stores devoted to the sale of lawn and garden products and
services. Frank's operates 258 stores in 15 states, mostly in the East and
Midwest, and had 1996 revenues in excess of $530 million.
The Cypress Group manages a private equity fund, which closed in February 1996
with more than $1 billion in commitments. Cypress invests in privately
negotiated transactions, targeting established operating businesses and
investing with management to foster continued growth. Investments made by
Cypress include Cinemark USA, Inc., Amtrol Inc., and Scotsman Holdings, as well
as The Multicare Companies via a new joint venture company called Genesis
ElderCare Corp. The Cypress Group, based in New York City, is headed by its four
partners, James A. Stern, Jeffrey P. Hughes, James L. (Jamie) Singleton and
David P. Spalding.
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