SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
SCHEDULE 14D-9
Solicitation/Recommendation Statement Pursuant to
Section 14(d)(4) of the Securities
Exchange Act of 1934
Giant Food Inc.
(Name of Subject Company)
The 1224 Corporation
(Name of Person(s) Filing Statement)
Class A Common Stock (Non-Voting), $1.00 par value
(Title of Class of Securities)
374478105
(Cusip Number of Class of Securities)
Samuel Kastner, Esq.
Ginsburg, Feldman and Bress
1250 Connecticut Avenue, N.W.
Washington, D.C. 20036
(202) 637-9195
(Name, address and telephone number of person
authorized to receive notice and communications
on behalf of the person(s) filing statement)
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This Amendment No. 1 amends and supplements Items 2, 3, 4, 5, 6, 8 and
9 of the Solicitation/Recommendation Statement on Schedule 14D-9 filed on May
19, 1998 (the "Schedule 14D-9") on behalf of The 1224 Corporation, a Delaware
corporation ("1224"), relating to the tender offer by Koninklijke Ahold N.V., a
public company with limited liability incorporated under the laws of The
Netherlands (the "Purchaser"), to purchase for cash all of the outstanding
shares of Class A Common Stock (Non-Voting), par value $1.00 per share (the
"Shares"), of Giant Food Inc., a Delaware corporation (the "Company"), at a
price of $43.50 per Share, net to the seller in cash, without interest thereon
(the "Offer Price"), upon the terms and subject to the conditions set forth in
the Purchaser's Offer to Purchase, dated May 19, 1998 (the "Offer to Purchase"),
and the related Letter of Transmittal and Notice of Guaranteed Delivery (which,
as may be amended and supplemented from time to time, collectively constitute
the "Offer"). The Offer is being made pursuant to a Stock Purchase Agreement,
dated as of May 19, 1998, between the Purchaser and 1224 (the "Stock Purchase
Agreement"). All capitalized terms not defined herein are used as defined in the
Schedule 14D-9.
ITEM 2. TENDER OFFER OF THE PURCHASER.
Item 2 of the Schedule 14D-9 is hereby amended by amending and
restating the first sentence of the first paragraph thereof to read as follows:
"This statement relates to a tender offer by Koninklijke Ahold
N.V., a public company with limited liability incorporated under the
laws of The Netherlands with its corporate seat in Zaandam
(Municipality Zanstaad) (the "Purchaser"), to purchase for cash all of
the outstanding Shares at a price of $43.50 per Share, net to the
seller in cash, without interest thereon (the "Offer Price"), upon the
terms and subject to the conditions set forth in the Purchaser's Offer
to Purchase, dated May 19, 1998 (the "Offer to Purchase"), and the
related Letter of Transmittal (which, as may be amended and
supplemented from time to time, together constitute the "Offer")."
Item 2 of the Schedule 14D-9 is hereby further amended by amending and
restating the third sentence of the second paragraph thereof and inserting
therein a new fourth sentence, to read together as follows:
"1224's obligation to sell the Class AC Shares to the Purchaser
pursuant to the Stock Purchase Agreement is conditioned upon, among
other things, the consummation of the Offer. Purchaser's obligation to
purchase the Class AC Shares pursuant to the Stock Purchase Agreement
is conditioned upon, among other things, that at any time on or after
the date of the Stock Purchase Agreement and at or before the time of
payment for the Class AC Shares thereunder, none of the Tender Offer
Conditions (as defined below) shall have occurred."
Item 2 of the Schedule 14D-9 is hereby further amended by deleting the
penultimate sentence of the second paragraph thereof.
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ITEM 3. IDENTITY AND BACKGROUND.
Item 3(b)(2)of the Schedule 14D-9 is hereby amended by amending and
restating the first paragraph thereof to read as follows:
"On May 19, 1998, 1224 and the Purchaser entered into the
Stock Purchase Agreement. Pursuant to the Stock Purchase Agreement,
1224 agreed to sell, and the Purchaser agreed to purchase, subject to
the terms and conditions thereof, all of the Class AC Shares at a price
of $43.00 per share. The Stock Purchase Agreement, however, provided
that if the Purchaser acquires, or enters into a binding agreement to
acquire, all of the Class AL Shares prior to the Expiration Date of the
Offer, the Offer Price of $43.00 per Share, net to the seller in cash,
would be increased to $43.50 per Share, net to the seller in cash.
Subsequent to the execution of the Stock Purchase Agreement, the
Purchaser and Sainsbury agreed, subject to agreement on documentation,
for the acquisition by the Purchaser of all of the Class AL Shares.
Thereafter, the Purchaser commenced the Offer at an Offer Price of
$43.50 per Share, net to the seller in cash. 1224 has agreed in the
Stock Purchase Agreement to tender pursuant to the Offer, upon the
terms and subject to the conditions set forth in the Stock Purchase
Agreement, all of the Shares owned by 1224. As more fully described
below, the obligation of the Purchaser to purchase the Class AC Shares
pursuant to the Stock Purchase Agreement is subject to the satisfaction
of the following conditions: the truth of 1224's representations and
warranties, the performance by 1224 of its covenants, no injunctions,
receipt of consents and approvals, the non-occurrence of any Tender
Offer Conditions, the resignation of the Directors of the Company
elected by 1224 and the approval of the Offer by the Board of Directors
of the Company. As more fully described below, the obligations of 1224
to sell the Class AC Shares is subject to the satisfaction of the
following conditions: the truth of the representations and warranties
of the Purchaser, the performance by the Purchaser of its covenants, no
injunctions, the expiration of waiting periods under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976 ("HSR Act") and consummation
of the Offer."
Item 3(b)(2)of the Schedule 14D-9 is hereby further amended by deleting
the second and third sentences of the second paragraph thereof and inserting in
lieu thereof the following sentence:
"1224 has been further advised that the Board of Directors of the
Company met on May 28 and 29, 1998, and unanimously determined that the
Offer is in the best interests of the Company and the holders of the
Shares and recommended that the holders of the Shares accept the Offer
and tender their Shares to the Purchaser pursuant to the Offer."
Item 3(b)(2)of the Schedule 14D-9 is hereby further amended by
inserting after the second paragraph thereof the following discussion of
"Conditions of the Offer":
"Conditions of the Offer. The terms of the Offer provide that,
notwithstanding any other provision of the Offer or the Stock Purchase
Agreement,the Purchaser shall not be required to accept for payment or,
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subject to any applicable rules and regulations of the Securities and
Exchange Commission (the "Commission"), including Rule 14e-1(c) under
the Securities Exchange Act of 1934 (the "Exchange Act"), pay for any
Shares tendered pursuant to the Offer and may terminate or amend the
Offer and may postpone the acceptance of and payment for Shares (i) if
the Stock Purchase Agreement shall have been terminated in accordance
with its terms or the purchase and sale of the Class AC Shares pursuant
to the Stock Purchase Agreement shall not have been consummated prior
to or simultaneously with the consummation of the purchase of the
Shares pursuant to the Offer; or (ii) if, at any time on or after May
19, 1998 and before the Expiration Date, any of the following shall
occur (each a "Tender Offer Condition"):
(a) there shall be threatened, instituted or pending
any action or proceeding by any government or governmental
authority or agency, domestic or foreign, or by any other
person, domestic or foreign, before any court or governmental
authority or agency, domestic or foreign, other than the
routine application of the waiting period provisions of the
HSR Act (including a request for additional information or
documentary material pursuant to 16 C.F.R. Sec.803.20) to the
purchase of the Class AC Shares pursuant to the Stock Purchase
Agreement, without consent of the Purchaser, (i) challenging
or seeking to, or which could reasonably be expected to make
illegal, impede, materially delay or otherwise directly or
indirectly restrain, prohibit or make more costly the
acquisition of the Class AC Shares or the Offer or seeking to
obtain material damages, (ii) seeking to prohibit or limit the
ownership or operation by the Purchaser of all, or, in the
sole judgment of the Purchaser, a portion that would
reasonably be expected to substantially impair or
substantially reduce the Purchaser's ability to control,
direct or manage on a day-to-day basis the business or affairs
of the Company or to substantially impair or substantially
reduce the overall benefits expected, as of the date of the
Stock Purchase Agreement, to be realized by the Purchaser from
the consummation of the transactions contemplated by the Stock
Purchase Agreement or would have a material adverse effect on
the business, properties, assets, liabilities, condition
(financial or otherwise), prospects, operations or results of
operations of the Purchaser and its subsidiaries taken as a
whole or the Company and its subsidiaries taken as a whole (a
"significant portion"), of the business or assets of the
Company or any of its subsidiaries or to compel the Purchaser
to dispose of or hold separately all, or, in the sole judgment
of the Purchaser, a significant portion of, the business or
assets of the Purchaser or the Company or any of its
subsidiaries, or seeking to impose any limitation on the
ability of the Purchaser to conduct such business or own such
assets which limitation, in the sole judgment of the
Purchaser, would reasonably be expected to substantially
impair or substantially reduce the Purchaser's ability to
control, direct or manage on a day-to-day basis the business
or affairs of the Company or to substantially impair or
substantially reduce the overall benefits expected, as of the
date of the Stock Purchase Agreement, to be realized by the
Purchaser from the consummation of the transactions
contemplated by the
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Stock Purchase Agreement or would have a material adverse
effect on the business, properties, assets, liabilities,
condition (financial or otherwise), prospects, operations or
results of operations of the Purchaser and its subsidiaries
taken as a whole or the Company and its subsidiaries taken as
a whole, (iii) seeking to impose limitations on the ability of
the Purchaser effectively to acquire, hold or exercise full
rights of ownership of any shares of capital stock of the
Company, which limitations, in the sole judgment of the
Purchaser, are significant or (iv) seeking to require
divestiture by the Purchaser of any shares of capital stock of
the Company;
(b) there shall be any action taken, or any statute,
rule, regulation, legislation, interpretation, judgment, order
or injunction proposed, enacted, enforced, promulgated,
amended, issued or deemed applicable to (i) the Purchaser, the
Company or any subsidiary of the Company or (ii) the Offer,
the acquisition of any shares of capital stock of the Company,
by any legislative body, court, government or governmental,
administrative or regulatory authority or agency, domestic or
foreign, other than the routine application of the waiting
period provisions of the HSR Act (including a request for
additional information or documentary materials pursuant to 16
C.F.R. Sec. 803.20) to the purchase of the Class AC Shares
pursuant to the Stock Purchase Agreement, which could
reasonably be expected to directly or indirectly, result in
any of the consequences referred to in clauses (i) through
(iv) of paragraph (a) above;
(c) any change shall have occurred or been threatened
(or any condition, event or development shall have occurred or
been threatened involving a prospective change), or the
Purchaser shall have become aware of any fact, that is
reasonably likely to have a Material Adverse Effect (as
defined below under "Stock Purchase Agreement -- Interim
Operations")on the Company;
(d) there shall have occurred (i) any general
suspension of trading in, or limitation on prices for,
securities on any national securities exchange or in the
over-the-counter market (excluding any coordinated trading
halt triggered solely as a result of a specified decrease in a
market index), (ii) a declaration of a banking moratorium or
any suspension of payments in respect of banks in the United
States, The Netherlands or any other jurisdiction of
incorporation or organization of any bank or other financial
institution in any manner involved with the financing of the
purchase of the Class AC Shares pursuant to the Stock Purchase
Agreement or the Offer, (iii) any material limitation (whether
or not mandatory) by any U.S. Federal, state or foreign
governmental authority or agency on the extension of credit by
banks or other lending institutions, (iv) a commencement or
escalation of a war or armed hostilities or other national or
international calamity directly or indirectly involving the
United States or The Netherlands or (v) in the case of any of
the
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foregoing existing at the time of the commencement of the
Offer, a material acceleration or worsening thereof;
(e) any of the representations or warranties made by
1224 in the Stock Purchase Agreement (in the case of any
representations or warranties with respect to the Company,
without regard to the knowledge of 1224) that are qualified as
to materiality shall be untrue or incorrect in any respect or
any such representations and warranties that are not so
qualified shall be untrue or incorrect in any respect which
would have a Material Adverse Effect, in each case as of the
date of the Stock Purchase Agreement and the scheduled
expiration date of the Offer as if such representation or
warranty were made at the time of such determination and
except as to any such representation or warranty which speaks
as of a specific date or for a specific period, which must be
untrue or incorrect in the foregoing respects as of such
specific date or period;
(f) (i) the Board of Directors of the Company shall
have failed to approve or recommend the Offer, (ii) the Board
of Directors of the Company shall have withdrawn or modified
in a manner adverse to the Purchaser the approval or
recommendation of the Offer or approved or recommended any
Acquisition Proposal (as defined below under "Stock Purchase
Agreement -- No Solicitation"), (iii) any corporation,
partnership, person or other entity or group shall have
entered into a definitive agreement or an agreement in
principle with the Company with respect to any Acquisition
Proposal or (iv) the Board of Directors of the Company or any
committee thereof shall have resolved to do any of the things
set forth in clauses (ii) or (iii) of this paragraph (f);
(g) 1224 shall have failed to perform in any material
respect any obligation or to comply in any material respect
with any agreement or covenant of 1224 to be performed or
complied with by it under the Stock Purchase Agreement and, in
the case only of failures to perform any agreement or covenant
of 1224 described below under "Stock Purchase Agreement --
Interim Operations", such failure to perform would have a
Material Adverse Effect or materially adversely affect the
ability of the Purchaser to consummate the transactions
contemplated by the Stock Purchase Agreement or have a
material adverse effect on the value of the Company and its
subsidiaries taken as a whole; or
(h) the Company or any of its subsidiaries shall have
(i) failed to act in accordance with (b)(iii)(A) and (B) under
"Stock Purchase Agreement -- Interim Operations" and (b)(i)(B)
and (iv) under "Stock Purchase Agreement -- No Solicitation"
or (ii) taken any of the actions listed in (c)(iii)(A)-(O)
under "Stock Purchase Agreement -- Interim Operations" or
(b)(i)(A) under "Stock Purchase Agreement -- No Solicitation"
below;
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which, in the reasonable judgment of the Purchaser, in any such case
and regardless of the circumstances giving rise to any such condition,
makes it inadvisable to proceed with such acceptance for payment or
payment.
The foregoing conditions are for the sole benefit of the
Purchaser and may be asserted by the Purchaser, or may be waived by the
Purchaser, in whole or in part at any time and from time to time in its
sole discretion. The failure by the Purchaser at any time to exercise
any of the foregoing rights shall not be deemed a waiver of any such
right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time. Any determination by the
Purchaser concerning the events described under "Conditions of the
Offer" will be final and binding upon all parties to the Stock Purchase
Agreement.
The conditions to the Offer contained in the Stock Purchase
Agreement included a condition that there be validly tendered and not
properly withdrawn prior to the Expiration Date a number of Shares
which constitutes at least 65% of the outstanding shares on a fully
diluted basis. Upon reaching agreement with Sainsbury on May 19, 1998
to acquire the Class AL Shares, the Purchaser agreed not to make this a
condition of the Offer."
Item 3(b)(2)of the Schedule 14D-9 is hereby further amended by
inserting after the discussion of "Stock Purchase Agreement -- Options," the
following discussion of "Conditions to Obligations":
"Conditions to Obligations. The obligation of the Purchaser to
purchase the Class AC Shares pursuant to the Stock Purchase Agreement
is subject to the satisfaction or waiver of a number of conditions
including: (i) the representations and warranties of 1224 contained in
the Stock Purchase Agreement being true and correct in all material
respects on and as of the Closing Date with the same effect as though
such representations and warranties had been made on and as of such
date and the representations and warranties of 1224 with respect to the
Company in the Stock Purchase Agreement being true and correct in all
material respects, without regard to the knowledge of 1224, on and as
of the Closing Date with the same effect as though such representations
and warranties had been made on such date; (ii) all of the agreements
of 1224 to be performed and all of the covenants of 1224 to be complied
with pursuant to the Stock Purchase Agreement prior to the Closing Date
shall have been duly performed or complied with, as applicable, in all
material respects; (iii) no preliminary or permanent injunction or
other order shall have been issued by any court or by any governmental
or regulatory agency, body or authority which prohibits the
consummation of the Offer, the purchase of the Class AC Shares or any
of the other transactions contemplated by the Stock Purchase Agreement;
(iv) all governmental and third-party consents, waivers and approvals,
if any, disclosed in any schedule to the Stock Purchase Agreement or
necessary to permit the consummation of the transactions contemplated
by the Stock Purchase Agreement shall have been received; all time
periods under the HSR Act applicable to the purchase of the Class AC
shares shall have expired or been terminated; and no governmental or
other instrumentality or agency shall have required that, in exchange
for approval of the transactions contemplated by the Stock Purchase
Agreement, the
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Purchaser, the Company or any of their respective affiliates sell or
otherwise dispose of, or hold separate particular assets or categories
of assets, or businesses, or withdraw from doing business in a
particular jurisdiction or take any other action that, in the
aggregate, in the sole judgment of the Purchaser, would reasonably be
expected to substantially impair or substantially reduce the
Purchaser's ability to control, direct or manage on a day-to-day basis
the business or affairs of the Company or to substantially impair or
substantially reduce the overall benefits expected, as of the date of
the Stock Purchase Agreement, to be realized by the Purchaser from the
consummation of the transactions contemplated by the Stock Purchase
Agreement or would have a material adverse effect on the business,
properties, assets, liabilities, condition (financial or otherwise),
prospects, operations or results of operations of the Purchaser and its
subsidiaries taken as a whole or the Company and its subsidiaries taken
as a whole; (v) at any time on or after the date of the Stock Purchase
Agreement and at or before the time of payment for the Class AC Shares
thereunder, none of the Tender Offer Conditions shall have occurred;
(vi) each of the persons elected by 1224 as a director of the Company
shall have delivered to the Purchaser a written resignation from such
position; and (vii) the Board of Directors of the Company shall have
recommended acceptance of the Offer by the holders of the Shares. The
obligation of 1224 to sell the Class AC Shares pursuant to the Stock
Purchase Agreement is also subject to the satisfaction or waiver of a
number of conditions including: (i) the representations and warranties
of the Purchaser contained in the Stock Purchase Agreement being true
and correct in all respects on and as of the Closing Date with the same
effect as though such representations and warranties had been made on
and as of such date; (ii) all of the agreements of the Purchaser to be
performed and all of the covenants of the Purchaser to be complied with
pursuant to the Stock Purchase Agreement prior to the Closing Date
shall have been duly performed or complied with, as applicable; (iii)
no preliminary or permanent injunction or other order shall have been
issued by any court or by any governmental or regulatory agency, body
or authority which prohibits the consummation of the Offer, the
purchase of the Class AC Shares or any of the other transactions
contemplated by the Stock Purchase Agreement; (iv) all applicable time
periods under the HSR Act shall have expired or been terminated; and
(v) the purchase of the Shares pursuant to the Offer shall be
consummated simultaneously with the purchase of the Class AC Shares
pursuant to the Stock Purchase Agreement."
Item 3(b)(2) of the Schedule 14D-9 is hereby further amended by
deleting the second sentence of the second paragraph in the discussion of "The
Offer" under the "Stock Purchase Agreement."
Item 3(b)(2) of the Schedule 14D-9 is hereby further amended by
inserting after the discussion of the "Stock Purchase Agreement" the following
discussions of the "Sainsbury Agreement," the "Confidentiality Agreement" and
the "Exclusivity Agreement":
"Sainsbury Agreement. On May 19, 1998, the Purchaser and
Sainsbury announced an agreement,subject to agreement on documentation,
(i) for Sainsbury to sell,and for the Purchaser to purchase, all of the
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Class AL Shares for an aggregate purchase price of $100,000,000 on the
terms and conditions to be agreed upon and (ii) for Sainsbury to tender
pursuant to the Offer, upon the terms and subject to the conditions set
forth in the Offer to Purchase, all of the Shares owned by Sainsbury.
Subsequently, the Purchaser entered into a Stock Purchase Agreement
dated as of May 27, 1998 with Sainsbury and JS Mass. Securities Corp.
("JS Mass") (the "Sainsbury Agreement"), a wholly-owned subsidiary of
Sainsbury, to such effect.
The following is a summary of the material terms of the
Sainsbury Agreement. The summary is qualified in its entirety by
reference to the full text of the Sainsbury Agreement which has been
filed as Exhibit 7 hereto and which is incorporated herein by
reference.
Purchase of the Class AL Shares. Pursuant to the Sainsbury
Agreement, JS Mass has agreed, and Sainsbury has agreed to cause JS
Mass, to sell, and the Purchaser has agreed to purchase, subject to the
terms and conditions thereof, all of the Class AL Shares at an
aggregate price of $100,000,000. JS Mass has agreed in the Sainsbury
Agreement to tender pursuant to the Offer, upon the terms and subject
to the conditions set forth in the Sainsbury Agreement, all of the
Shares owned by JS Mass. As more fully described below, the obligation
of the Purchaser to purchase the Class AL Shares is subject to the
satisfaction of the following conditions: the truth of Sainsbury's and
JS Mass' representations and warranties, the performance by Sainsbury
and JS Mass of their respective covenants, no injunctions, receipt of
consents and approvals, the non-occurrence of the Tender Offer
Conditions, the resignation of the Directors of the Company elected by
Sainsbury, the consummation of the purchase of the Class AC Shares
pursuant to the Stock Purchase Agreement and the consummation of the
Offer. As more fully described below, the obligation of JS Mass to, and
of Sainsbury to cause JS Mass to, sell the Class AL Shares is subject
to the satisfaction of the following conditions: the truth of the
representations and warranties of the Purchaser, the performance by the
Purchaser of its covenants, no injunctions, the consummation of the
Offer and the consummation of the purchase of the Class AC Shares
pursuant to the Stock Purchase Agreement.
No Solicitation. The Sainsbury Agreement provides that
Sainsbury, JS Mass and each of their respective officers, directors and
employees shall, and shall instruct their respective agents to,
immediately cease any discussions or negotiations with any other
parties that may be ongoing with respect to any purchase of the Class
AL Shares or any Sainsbury Acquisition Proposal (as defined below).
Neither Sainsbury nor JS Mass shall, directly or indirectly, take (and
neither Sainsbury nor JS Mass shall authorize or permit its agents to
so take) any action to (i) encourage, solicit or initiate the making of
any offer to purchase the Class AL Shares or any Sainsbury Acquisition
Proposal, (ii) enter into any agreement with respect to any offer to
purchase the Class AL Shares or any Sainsbury Acquisition Proposal, or
(iii) participate in any way in discussions or negotiations with, or
furnish or disclose any information to, any person (other than the
Purchaser) in connection with, or take any other action to facilitate
knowingly, or that such person should have known would facilitate, any
inquiries or the making
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of any proposal that constitutes, or may reasonably be expected to lead
to, any offer to purchase the Class AL Shares or any Sainsbury
Acquisition Proposal. "Sainsbury Acquisition Proposal" shall mean any
inquiry, proposal or offer from any person (other than the Purchaser)
relating to any direct or indirect acquisition or purchase of all or
any of the Class AL Shares, of a substantial amount of assets of the
Company or any of its subsidiaries or of more than 10% of any class of
equity securities of the Company or any of its subsidiaries, any tender
offer or exchange offer that if consummated would result in any person
beneficially owning more than 10% of any other class of equity
securities of the Company or any of its subsidiaries, any merger,
consolidation, business combination, sale of substantially all the
assets, recapitalization, liquidation, dissolution or similar
transaction involving the Company or any of its subsidiaries, other
than the transactions contemplated by the Sainsbury Agreement, or any
other transaction involving the Company or any of its securities or
assets the consummation of which could reasonably be expected to
impede, interfere with, prevent or materially delay the Offer, the
acquisition of the Class AL Shares pursuant to the Sainsbury Agreement
or the acquisition of the Class AC Shares pursuant to the Stock
Purchase Agreement. In addition, the Sainsbury Agreement provides that
each of Sainsbury and JS Mass shall advise the Purchaser of any request
for information or of any offer to purchase the Class AL Shares or any
Sainsbury Acquisition Proposal, or any inquiry or proposal with respect
to any offer to purchase the Class AL Shares or any Sainsbury
Acquisition Proposal, the material terms and conditions of such
request, offer or Sainsbury Acquisition Proposal and of any material
changes thereto, and the identity of the entity or person making any
such inquiry or proposal.
Conditions to Obligations. The obligation of the Purchaser to
purchase the Class AL Shares pursuant to the Sainsbury Agreement is
subject to the satisfaction or waiver of a number of conditions
including: (i) the representations and warranties of Sainsbury and JS
Mass contained in the Sainsbury Agreement being true and correct in all
material respects on and as of the Closing Date with the same effect as
though such representations and warranties had been made on and as of
such date; (ii) all of the agreements of Sainsbury and JS Mass to be
performed and all of the covenants of Sainsbury and JS Mass to be
complied with pursuant to the Sainsbury Agreement prior to the Closing
Date shall have been duly performed or complied with, as applicable, in
all material respects; (iii) no preliminary or permanent injunction or
other order shall have been issued by any court or by any governmental
or regulatory agency, body or authority which prohibits the
consummation of the Offer, the purchase of the Class AL Shares or any
of the other transactions contemplated by the Sainsbury Agreement; (iv)
all governmental and third-party consents, waivers and approvals, if
any, specifically disclosed in the Sainsbury Agreement or necessary to
permit the consummation of the transactions contemplated by the
Sainsbury Agreement shall have been received; all time periods under
the HSR Act applicable to the purchase of the Class AC Shares under the
Stock Purchase Agreement shall have expired or been terminated; and no
governmental or other instrumentality or agency shall have required
that, in exchange for approval of the transactions contemplated by the
Sainsbury Agreement, the Purchaser, the Company or any of their
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respective affiliates sell or otherwise dispose of, or hold separate
particular assets or categories of assets, or businesses, or withdraw
from doing business in a particular jurisdiction or take any other
action that, in the aggregate, in the sole judgment of the Purchaser,
would reasonably be expected to substantially impair or substantially
reduce the Purchaser's ability to control, direct or manage on a
day-to-day basis the business or affairs of the Company or to
substantially impair or substantially reduce the overall benefits
expected, as of the date of the Sainsbury Agreement, to be realized by
the Purchaser from the consummation of the transactions contemplated by
the Stock Purchase Agreement or would have a material adverse effect on
the business, properties, assets, liabilities, condition (financial or
otherwise), prospects, operations or results of operations of the
Purchaser and its subsidiaries taken as a whole or the Company and its
subsidiaries taken as a whole; (v) at any time on or after the date of
the Sainsbury Agreement and at or before the time of payment for the
Class AL Shares thereunder, none of the Tender Offer Conditions shall
have occurred; (vi) each of the persons appointed by JS Mass as a
director of the Company shall have delivered to the Purchaser a written
resignation from such position; and (vii) the purchase of all of the
Class AC Shares pursuant to the Stock Purchase Agreement shall be
consummated simultaneously with the purchase of the Class AL Shares
pursuant to the Sainsbury Agreement; and (viii) the purchase of any
Shares tendered pursuant to the Offer and not withdrawn prior to the
expiration of the Offer shall be consummated simultaneously with the
purchase of the Class AL Shares pursuant to the Sainsbury Agreement.
The obligation of JS Mass to sell the Class AL Shares pursuant to the
Sainsbury Agreement is also subject to the satisfaction or waiver of a
number of conditions including: (i) the representations and warranties
of the Purchaser contained in the Sainsbury Agreement being true and
correct in all respects on and as of the Closing Date with the same
effect as though such representations and warranties had been made on
and as of such date; (ii) all of the agreements of the Purchaser to be
performed and all of the covenants of the Purchaser to be complied with
pursuant to the Sainsbury Agreement prior to the Closing Date shall
have been duly performed or complied with, as applicable; (iii) no
preliminary or permanent injunction or other order shall have been
issued by any court or by any governmental or regulatory agency, body
or authority which prohibits the consummation of the Offer, the
purchase of the Class AL Shares or any of the other transactions
contemplated by the Sainsbury Agreement; (iv) the purchase of the
Shares pursuant to the Offer shall be consummated simultaneously with
the purchase of the Class AL Shares pursuant to the Sainsbury
Agreement; and (v) the purchase of the Class AC Shares pursuant to the
Stock Purchase Agreement shall be consummated simultaneously with the
purchase of the Class AL Shares pursuant to the Sainsbury Agreement.
Agreement to Use Best Efforts. Pursuant to the Sainsbury
Agreement and subject to the terms and conditions thereof, each of
Sainsbury, JS Mass and the Purchaser shall, with respect to matters
within their respective control, cooperate and use their respective
best efforts to (i) take, or cause to be taken, all appropriate action,
and do, or cause to be done, all reasonable things necessary and proper
under applicable law to consummate the transactions contemplated by the
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Sainsbury Agreement as promptly as practicable, (ii) obtain from any
governmental authority, regulatory organization or other
instrumentality or agency or any other third party any licenses,
permits, consents, waivers, approvals, authorizations, qualifications,
or orders required to be obtained or made by Sainsbury, JS Mass or the
Purchaser or any of their subsidiaries in connection with the
authorization, execution and delivery of the Sainsbury Agreement and
the consummation of the transactions contemplated therein, and (iii) as
promptly as practicable, make, or cause to be made, all filings
necessary, proper or advisable with respect to the Sainsbury Agreement
and the transactions contemplated therein under any applicable laws or
regulations. In addition, the Sainsbury Agreement provides that
Sainsbury, JS Mass and the Purchaser shall cooperate with each other in
connection with the making of all such filings, including providing
copies of all such documents to the non-filing party and its advisors
prior to filing and, if requested, to accept all reasonable additions,
deletions or changes suggested in connection therewith. Sainsbury, JS
Mass and the Purchaser shall use their respective best efforts to
furnish to each other all information required for any application or
other filing to be made pursuant to the rules and regulations of any
applicable law in connection with the transactions contemplated by the
Sainsbury Agreement. Notwithstanding anything to the contrary in this
paragraph, none of Sainsbury, JS Mass, the Purchaser or the Company or
any of their respective subsidiaries shall be required to sell or
otherwise dispose of, or hold separate (through the establishment of a
trust or otherwise) particular assets or categories of assets, or
business of the Purchaser, Sainsbury, JS Mass, the Company or any of
their affiliates or withdraw from doing business in a particular
jurisdiction or take any other action that, in the aggregate, in the
sole judgment of the Purchaser, would reasonably be expected to
substantially impair or substantially reduce the Purchaser's ability to
control, direct or manage on a day-to-day basis the business or affairs
of the Company or to substantially impair or reduce the overall
benefits expected, as of the date hereof, to be realized by the
Purchaser from the consummation of the transactions contemplated by the
Sainsbury Agreement or would have a material adverse effect on the
business, properties, assets, liabilities, condition (financial or
otherwise), prospects, operations or results of operations of the
Purchaser and its subsidiaries taken as a whole or the Company and its
subsidiaries taken as a whole.
Representations and Warranties. In the Sainsbury Agreement,
Sainsbury and JS Mass have made customary representations and
warranties to the Purchaser with respect to, among other things, their
organization, corporate authority, ownership of the Class AL Shares and
required consents and approvals.
Termination. If any precondition to the completion of the
transactions contemplated by the Sainsbury Agreement is not fulfilled
on or prior to December 31, 1998, then any party may terminate the
Sainsbury Agreement. In addition, the Sainsbury Agreement shall
terminate if the Stock Purchase Agreement or the Offer shall be
terminated pursuant to their respective terms prior to the purchase of
any Class AL Shares pursuant to the Sainsbury Agreement.
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Other Agreements. Without the consent of Sainsbury and JS
Mass, the Purchaser shall not (a) reduce the number of Shares to be
purchased pursuant to the Offer, (b) reduce the Offer Price, (c) modify
or add to the Tender Offer Conditions in a manner that is materially
adverse to the holders of the Shares or (d) change the form of
consideration payable in the Offer. In addition, if the Purchaser
purchases any Shares pursuant to the Offer, it will waive all
unsatisfied conditions to the Purchaser's obligations to purchase the
Class AL Shares under the Sainsbury Agreement and will purchase the
Class AL Shares and if the Purchaser purchases the Class AL Shares
pursuant to the Sainsbury Agreement, it will waive all unsatisfied
Tender Offer Conditions and will purchase any Shares validly tendered
pursuant to the Offer and not withdrawn prior to the expiration of the
Offer.
Confidentiality Agreement. The following is a summary of the
Confidentiality Agreement dated as of February 2, 1998 between the
Purchaser and 1224 (the "Confidentiality Agreement"). The summary is
qualified in its entirety by reference to the full text of the
Confidentiality Agreement, a copy of which is filed as Exhibit 8 hereto
and which is incorporated herein by reference.
Under the Confidentiality Agreement, the Purchaser agreed to
use information furnished by 1224 and the Company that is not otherwise
generally available to the public (other than as a result of disclosure
by the Purchaser or its representatives) (the "Received Material")
exclusively for the purpose of evaluating an acquisition by the
Purchaser from 1224 of the Class AC Shares. In addition, the Purchaser
agreed not to disclose any of the Received Materials other than under
certain circumstances.
Exclusivity Agreement. The following is a summary of the
Letter Agreement dated April 27, 1998, between the Purchaser and 1224
regarding exclusivity (the "Exclusivity Agreement"). The summary is
qualified in its entirety by reference to the full text of the
Exclusivity Agreement, a copy of which is filed as Exhibit 9 hereto and
which is incorporated herein by reference.
Under the Exclusivity Agreement, 1224 agreed that from the
date of the Exclusivity Agreement until May 31, 1998, neither it nor
any of its agents would, directly or indirectly, take any action to
enter into, solicit or otherwise encourage (i) any proposal to acquire
any of the Class AC Shares, a substantial amount of the assets of the
Company or more than 10% of any class of equity securities, (ii) any
tender or exchange offer, or (iii) any merger, consolidation or similar
transaction. However, pursuant to the Exclusivity Agreement, 1224
could, in response to an unsolicited acquisition proposal from J
Sainsbury (USA) Holdings Inc. or any affiliate thereof (collectively
the "Sainsbury Group"), (i) enter into negotiations with the Sainsbury
Group if 1224 determined that the unsolicited proposal from the
Sainsbury Group was superior to the proposal of the Purchaser and that
failing to consider the proposal from the Sainsbury Group would be a
breach of fiduciary duty by the Board of Directors of 1224 and (ii)
after notice to the Purchaser, enter into an acquisition agreement with
the Sainsbury
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Group if 1224 and the Purchaser are unable to enter into a stock
purchase agreement meeting certain requirements.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
Item 4(a) of the Schedule 14D-9 ("BACKGROUND AND RECOMMENDATION")is hereby
amended by amending and restating the eighth through the penultimate paragraphs
thereof to read in their entirety as follows:
"Subsequent to such meeting, representatives of PaineWebber,
Wasserstein and Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch"), the financial advisor to the Purchaser, had several
conversations regarding the transaction. At a meeting on March 31,
1998, representatives of Merrill Lynch indicated to representatives of
PaineWebber and Wasserstein that the Purchaser would be willing to
offer $41.25 for the Class AC Shares and the Shares, subject to the
condition that the Purchaser is able to acquire the Class AL Shares
from Sainsbury. The representatives of PaineWebber and Wasserstein
stated that they believed their clients would not accept such an offer.
On April 7, 1998, representatives of Merrill Lynch met with
representatives of PaineWebber and Wasserstein, at which meeting
PaineWebber and Wasserstein made a presentation regarding the Company's
financial results, stock trading history, northern division and cost
savings initiatives. On April 15, 1998, meetings were held between
representatives of Sainsbury and Mr. O'Malley, the Chairman of the
Special Committee, and later that day between representatives of 1224
and Sainsbury at which Sainsbury advised that although it was content
to maintain its current investment in the Company, it was unwilling,
based on the current market price of approximately $38.00 for the
Shares, to purchase the Class AC Shares or any additional Shares.
On April 27, 1998, the Purchaser and 1224 executed an
exclusivity agreement pursuant to which 1224 agreed from the date of
such agreement until May 31, 1998, not to solicit or encourage any
proposal to acquire the Class AC Shares, any tender or exchange offer
for the Company's common shares, or any merger or similar transaction
involving the Company, except as otherwise specifically permitted
thereby. Subsequently on such date, at a meeting among the financial
advisors to the Purchaser, 1224 and the Special Committee,
representatives of Merrill Lynch indicated that the Purchaser would be
willing to increase the price it would pay for the Class AC Shares and
the Shares to $41.75 per share. The financial advisors to 1224 and the
Special Committee responded that such price was less than what 1224 and
the Special Committee were willing to accept. On April 28, 1998, Mr.
Zwartendijk proposed in a telephone call to Mr. Manos an increased
offer price of $42.00 per share.
On April 29, 1998, Messrs. Butzelaar and Rutstein, the legal
advisors to the Purchaser, 1224 and the Special Committee and a
representative of Merrill Lynch met to continue negotiation of the
draft agreements. During a portion of such meeting, Mr. Manos and Mr.
Zwartendijk participated by conference telephone. After some discussion
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between the parties, Mr. Zwartendijk and Mr. Manos agreed to a price of
$43.50 per share for the Class AC Shares and the Class A Shares but
conditioned upon the Purchaser's acquisition of the Class AL Shares
from Sainsbury and the approval by the Executive and Supervisory Boards
of the Purchaser, the Board of Directors of 1224 and the Special
Committee. It was agreed that Mr. van der Hoeven and Mr. Manos should
separately call Lord Sainsbury, the Chairman of Sainsbury, to arrange
separate meetings with him to discuss an acquisition by the Purchaser
of Sainsbury's interest in the Company. Subsequently, Mr. van der
Hoeven and Mr. Manos separately called Lord Sainsbury and arranged
separate meetings with him in London on May 5, 1998.
On May 4, 1998, Mr. van der Hoeven met with Mr. Manos and Mr.
Rutstein at an industry conference to discuss the upcoming meetings
with Lord Sainsbury. At their May 5 meetings with Lord Sainsbury and
David Bremner, Deputy Group Chief Executive of Sainsbury, Mr. van der
Hoeven and Mr.Manos were each informed by Lord Sainsbury and Mr.Brem-
ner that Sainsbury was not interested in selling its interest in the
Company to the Purchaser at such time. After such meetings,Mr. van der
Hoeven, Mr.Manos and Mr. Rutstein met and Mr. Manos asked Mr. van der
Hoeven whether the Purchaser would be willing to drop its condition
that it acquire the Class AL Shares. Mr. van der Hoeven indicated that
he couldnot respond to such request without further discussions with
the Purchaser's Executive Board and Supervisory Board.
On May 12, Mr. Zwartendijk called Mr. Manos to inform him that
the Supervisory Board of the Purchaser had authorized the Purchaser to
proceed with an acquisition of the Class AC Shares and the Shares not
conditioned upon its acquisition of the Class AL Shares from Sainsbury
subject to approval of the final terms by the Executive Board of the
Purchaser. In such call, Mr. Zwartendijk further informed Mr. Manos
that the Purchaser was unwilling to pay the $43.50 per share price it
would have been willing to pay if Sainsbury had agreed to participate
in the transaction. In addition, Mr. Zwartendijk stated that the tender
offer would need to be subject to a 70% minimum tender condition. Mr.
Zwartendijk further informed Mr. Manos that if an agreement were
reached between the parties it would have to be approved by the
Executive Board of the Purchaser at a meeting scheduled to be held on
Monday, May 18, 1998. Mr. Manos indicated that he would have to discuss
Mr. Zwartendijk's proposal with the rest of the directors of 1224 and
with the Special Committee.
On May 13, 1998, Mr. Zwartendijk proposed to Mr. Manos a price
of $43.00 per share and a 65% minimum tender condition, subject to
approval, in the case of the Purchaser, by its Executive Board, and in
the case of 1224, by its Board of Directors, as well as the Special
Committee. On May 14, 1998, Mr. Manos phoned Mr. Zwartendijk and
indicated that the $43.00 per share price would be acceptable if the
Purchaser would agree that, if it were to acquire the Class AL Shares
during the pendency of the tender offer, the price to be paid for the
Class AC Shares and the Shares in the tender offer would be increased
to $43.50. On Friday, May 15, Mr. Butzelaar informed Mr. Rutstein by
telephone that Mr. Manos' proposal would be acceptable to the
Purchaser.
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During the period from May 13 through May 18, 1998, the
parties and their financial and legal advisors continued to negotiate
the terms of the proposed stock purchase agreement.
On May 18, 1998, the Board of Directors of 1224 reviewed the
terms of the proposed Stock Purchase Agreement. PaineWebber made a
presentation to the Board of Directors of 1224 and delivered its
opinion dated May 18, 1998 (which opinion was delivered prior to the
increase in the Offer Price from $43.00 to $43.50 per Share), that, as
of that date and based upon its review and analysis and subject to the
assumptions and qualification set forth therein, the $43.00 per share
cash consideration to be received by 1224 for the Class AC Shares is
fair to 1224 from a financial point of view. Upon consideration and
discussion of such presentation and opinion and other information
provided to it, the Board of Directors of 1224 (who are also the
holders of all the outstanding voting shares of 1224) unanimously
determined that the Purchaser's offer is fair to and in the best
interests of 1224 and the holders of the Shares and approved the
proposed Stock Purchase Agreement.
Later on May 18, 1998, the Special Committee met to review the
effect upon the Company and the holders of the Shares of the proposed
Stock Purchase Agreement. Wasserstein made a presentation to the
Special Committee and delivered its written opinion dated May 18, 1998
(which opinion was delivered prior to the increase in the Offer Price
from $43.00 to $43.50 per Share), that, as of that date and based upon
its review and analysis and subject to the assumptions and
qualifications contained therein, the $43.00 per share cash
consideration to be received by the holders of the Shares pursuant to
the Offer, is fair to such stockholders from a financial point of view.
Upon consideration and discussion of such presentation and opinion and
other information provided to it, the Special Committee unanimously
determined that the Offer is fair to and in the best interests of the
Company and the holders of the Shares and recommended to the Board of
Directors of the Company that it recommend acceptance of the Offer by
the holders of the Shares. 1224 advised the Purchaser of the action
taken by the Special Committee. On the morning of May 19, the Purchaser
and 1224 executed and delivered the Stock Purchase Agreement.
1224 has been advised that, subsequently, on May 19, 1998, Mr.
van der Hoeven informed Lord Sainsbury by telephone that the Purchaser
would announce its agreement to acquire the Class AC Shares and Offer
later that day even if Sainsbury did not expect to participate in the
Offer or otherwise sell its interest in the Company to the Purchaser.
In response, Lord Sainsbury informed Mr. van der Hoeven that Sainsbury
would be willing to tender its Shares into the Offer at the proposed
price of $43.50 per Share, if the Purchaser would agree to pay $100
million for the Class AL Shares held by Sainsbury. Mr. van der Hoeven
said that he would need to consult with the other members of the
Executive Board of the Purchaser and its advisors. After discussing
Sainsbury's proposal regarding the purchase price for the Class AL
Shares with other members of the Executive Board and the Purchaser's
financial and legal advisors, Mr. van der Hoeven called Lord Sainsbury
16
<PAGE>
and accepted the proposal, subject to documentation. As a result of
Sainsbury's agreement to participate in the transaction, the Purchaser
increased the price to be paid for the Class AC Shares pursuant to the
Offer to $43.50 per Share and agreed to waive the 65% minimum tender
condition.
1224 has been advised that the Board of Directors of the
Company (the "Board") met on May 28 and 29, 1998 to consider the Offer.
The Board reviewed the terms of the Offer and the provisions of the
Stock Purchase Agreement and received and considered the report of the
Special Committee, in which the Special Committee expressed its
determination that the Offer is fair to and in the best interests of
the Company and the holders of the Shares and recommended that the
Board recommend acceptance of the Offer by the holders of the Shares.
The Special Committee reported that, in reaching such determination and
making such recommendation, it had the benefit of the financial advice
of Wasserstein, including Wasserstein's written opinion dated May 18,
1998, as described above, which opinion was confirmed by letter dated
May 28, 1998 addressed to the Special Committee. By unanimous vote of
all the directors, the Board determined that the Offer is in the best
interests of the Company and the holders of the Shares and recommended
that the holders of the Shares accept the Offer and tender their Shares
to the Purchaser pursuant to the Offer. A copy of Wasserstein's
confirmation letter dated May 28, 1998, is attached as Annex C to the
Company's Solicitation/Recommendation Statement on Schedule 14D-9,
dated May 29, 1998, which has been mailed to holders of the Shares.
Item 4(b) of the Schedule 14D-9 ("REASONS FOR RECOMMENDATION") is hereby
amended by amending and restating such Item to read in its entirety as follows:
"(b) REASONS FOR RECOMMENDATION. In reaching its conclusion
with respect to the Offer, the Board of Directors of 1224 considered a
number of factors. The members of the Board of Directors of 1224
evaluated the factors in light of their knowledge of the business and
operations of the Company and their business judgment. In view of the
wide variety of factors considered in connection with its evaluation of
the Offer, the Board of Directors of 1224 did not find it practicable
to, and did not, quantify or otherwise attempt to assign relative
weights to the specific factors considered in reaching its
determination. The factors considered by the Board of Directors of
1224, each of which it believed supported its recommendation, included
the following:
(i) The Board of Directors of 1224 considered that the market
price for the Shares prior to the Offer reflected to a significant
degree an anticipated takeover of the Company and that the cash offer
price of $43.00 per Share (which was subsequently increased to $43.50
per Share) provided for in the Stock Purchase Agreement represents a
substantial premium over the historical trading prices for the Shares.
(ii) The Board of Directors of 1224 considered the written
opinion of PaineWebber, delivered on May 18, 1998 (which opinion was
delivered prior to the increase in the Offer Price from $43.00 to
$43.50 per
17
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Share), that, as of that date and based upon its review and analysis
and subject to the assumptions and qualifications set forth therein,
the $43.00 per share cash consideration to be received by 1224 for the
Class AC Shares is fair to 1224 from a financial point of view. A copy
of the written opinion dated May 18, 1998 of PaineWebber, which sets
forth the assumptions made, factors considered and scope of the review
undertaken by PaineWebber, is attached hereto as Annex B and is
incorporated herein by reference. Holders of Shares are urged to read
the full text of such opinion.
(iii) The Board of Directors of 1224 considered, in
consultation with PaineWebber, that (1) the sale of the Class AC Shares
was conditioned upon the consummation of the Offer to purchase the
Shares, with the same purchase price per share applicable to the Class
AC Shares and the Shares; (2) the Company's capital structure tended to
limit the attractiveness of the Company and the Shares to a strategic
buyer because acquiring a greater than 50% voting interest in the
Company and the ability to elect all of the directors of the Company
would require the acquisition of the voting securities owned by the
holder of the Class AC Shares and by the holder of the Class AL Shares;
(3) the Company's size tended to limit the number of potential
financial buyers of the Company, and the Shares would not likely be
attractive to such a buyer at a price per Share equal to or greater
than the Offer Price; and (4) the Stock Purchase Agreement did not
condition the Purchaser's obligation to purchase the Class AC Shares
and the Shares on the sale by Sainsbury of the Class AL Shares.
(iv) The Board of Directors of 1224 considered that 1224's
obligation to execute the Stock Purchase Agreement is dependent upon
the determination by the Special Committee at its meeting to be held
later on May 18, 1998 that the Offer is fair to and in the best
interests of the Company and the holders of the Shares and the
recommendation by the Special Committee that the Board of Directors of
the Company recommend acceptance of the Offer by the holders of the
Shares, which determination and recommendation by the Special
Committee, the Board of Directors of 1224 understood, in turn would be
dependent on the Special Committee's receipt from Wasserstein of an
opinion that the $43.00 per share cash consideration, as of the date of
and subject to the assumptions and qualifications stated in the
opinion, is fair to the holders of the Shares from a financial point of
view (the opinion was delivered prior to the increase of the Offer
Price from $43.00 to $43.50).
(v) The Board of Directors of 1224 considered the Company's
business, prospects, financial condition, results of operations and
current business strategy, the nature of the Company's industry
position, and the belief of the Board of Directors of 1224 that (1)
competition in the Washington, D.C. and Baltimore metropolitan areas,
where the majority of the Company's retail supermarkets are located,
has increased considerably over the past several years as additional
supermarket chains and alternative format competitors have entered the
field; (2) the Company, in its stores in Pennsylvania, New Jersey and
Delaware, is faced with intense competition from supermarket chains
which are more established in those areas and the Company's operations
18
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in these states have not yet become profitable; (3) the Company's
commitment to maintaining its current market share throughout its area
of operations by offering aggressive promotions will put continuing
pressure on profit margins and earnings; and (4)such circumstances make
it advisable that the Company become part of and share the cost savings
and efficiencies available to a larger organization such as the
Purchaser.
(vi) The Board of Directors of 1224 considered the Purchaser's
business reputation, its relationship with its existing United States
subsidiaries and its good relationship with their management and
employees, its ability to finance the acquisition, and its present
expectation, as subsequently reflected in the Offer to Purchase and
consistent with its past acquisition practices, that, initially
following the purchase of the Class AC Shares and the Class AL Shares
and the consummation of the Offer, the business and operations of the
Company will continue as they are currently conducted without
substantial change."
ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
Item 5 of the Schedule 14D-9 is hereby amended by inserting at the end
of the second paragraph thereof the following two sentences:
"If all of the shares of the Company's common stock are acquired at the
closing of the transactions described in this Statement, PaineWebber
will be entitled to a fee (less amounts previously paid and to be
credited against such fee)of approximately $6.8 million. On May 29,
1998, the Board of Directors of the Company, based on the
recommendation of the Special Committee, voted to cause the Company to
assume the obligations of 1224 under its agreement with PaineWebber."
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.
Item 6(a) of the Schedule 14D-9 is hereby amended by amending and
restating such Item to read in its entirety as follows:
"(a) Except as set forth in this Statement, no transactions in
Shares have been effected within the past 60 days by 1224 or, to the
best knowledge of 1224, any executive officer, director, subsidiary or
affiliate of 1224.
On May 20, 1998, Alvin Dobbin, a director of 1224 and of the
Company, exercised options to purchase 55,500 Shares at an average
exercise price per Share of $34.35 and sold all such Shares at a price
per Share of $42.75. Effective February 28, 1998, Mr. Dobbin retired
from his positions as an executive officer of the Company. He was
required to exercise his options to purchase Shares, if at all, within
90 days after retirement."
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ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
Item 8 of the Schedule 14D-9 is hereby amended by deleting the response
thereto and inserting in lieu thereof the following:
"The Company has stated in Item 7 ('CERTAIN NEGOTIATIONS AND
TRANSACTIONS BY THE SUBJECT COMPANY') of its
Solicitation/Recommendation Statement on Schedule 14D-9 filed on May
29, 1998, as amended by Amendment No. 1 thereto filed on June 10, 1998,
as follows:
'Item 7. Certain Negotiations and Transactions by the Subject Company.
(a) Except as set forth in this Statement, no negotiation is
being undertaken or is underway by the Company in response to the Offer
which relates to or would result in (i) an extraordinary transaction
such as a merger or reorganization, involving the Company or any
subsidiary of the Company; (ii) a purchase, sale or transfer of a
material amount of assets by the Company or any subsidiary of the
Company; (iii) a tender offer for or other acquisition of securities by
or of the Company; or (iv) any material change in the present
capitalization or dividend policy of the Company. In its Offer to
Purchase, the Purchaser states: "Upon the acquisition . . . of the
Class AC Shares from [1224] and the Class AL Shares from Sainsbury, the
Purchaser would own 100% of the outstanding capital stock of the
Company entitled to vote. As a result, the Purchaser will be able to
cause the merger of a subsidiary of the Purchaser with and into the
Company. Any remaining holders of the Shares will not be entitled to
vote on such a merger. The Purchaser anticipates that it will take all
necessary and appropriate action to cause such a merger to become
effective as soon as reasonably practicable after its acquisition of
the Class AC Shares and the Class AL Shares. At the effective time of
such merger, each outstanding Share (other than those held by the
Purchaser or any subsidiary thereof) will be converted into the highest
price paid per Share pursuant to the Offer without interest." The
Purchaser has recently proposed that it and the Company now enter into
an agreement pursuant to which, among other things, the Purchaser would
commit to effect a merger in which any Shares not acquired pursuant to
the Offer would be acquired by the Purchaser, for the Offer Price, as
promptly as practicable after consummation of the Offer and the
Purchaser's acquisition of the Class AC and the Class AL Shares. The
Company is discussing such proposal with the Purchaser. However, there
can be no assurance that the Company and the Purchaser will agree to
enter into such a merger agreement or that, following the consummation
of the Offer and the acquisition of the Class AC and Class AL Shares,
the Purchaser will seek to cause such a merger to become effective or
as to the timing of any such merger.
(b) Except as set forth in this Statement, there are no
transactions, Board resolutions, agreements in principle or signed
contracts in response to the Offer that relate to, or would result in,
one or more of the events referred to in Item 7(a) above.'"
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ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
The information contained in Item 9 of the Schedule 14D-9 is hereby
amended by adding the following additional Exhibits:
Exhibit 7 -- Copy of the Stock Purchase Agreement dated as of May 27,
1998 among J Sainsbury plc, JS Mass. Securities Corp., and
Koninklijke Ahold N.V.(incorporated by reference to Exhibit
2 to the Company's Solicitation/Recommendation Statement on
Schedule 14D-9 dated May 29, 1998)
Exhibit 8 -- Confidentiality Agreement, as of February 2, 1998, between
Koninklijke Ahold N.V. and The 1224 Corporation
(incorporated by reference to Exhibit 3 to the Company's
Solicitation/Recommendation Statement on Schedule 14D-9
dated May 29, 1998)
Exhibit 9 -- Exclusivity Agreement, dated April 27, 1998, between
Koninklijke Ahold N.V. and The 1224 Corporation
(incorporated by reference to Exhibit 4 to the Company's
Solicitation/Recommendation Statement on Schedule 14D-9
dated May 29, 1998)
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SIGNATURE
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.
THE 1224 CORPORATION
By: /s/ David W. Rutstein
------------------------------------
David W. Rutstein
Vice President
Dated: June 10, 1998
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