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)
GIANT FOOD INC.
(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)
David W. Rutstein, Esq.
Senior Vice President and General Counsel
Giant Food Inc.
6300 Sheriff Road
Landover, Maryland 20785
(301) 341-4100
(Name, address and telephone number of person
authorized to receive notice and communications
on behalf of the person(s) filing statement)
Copy to:
Wayne K. Johnson, Esq.
Jorden Burt Boros Cicchetti Berenson & Johnson LLP
Suite 400 East
1025 Thomas Jefferson Street, N.W.
Washington, D.C. 20007
(202) 965-8100
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This Amendment No. 1 amends and supplements Items 4, 7 and 9 of the
Solicitation/Recommendation Statement on Schedule 14D-9 filed on May 29, 1998
(the "Schedule 14D-9") on behalf of Giant Food Inc., a Delaware corporation (the
"Company"), relating to the 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 of the Company's Class A Common
Stock (Non-Voting), par value $1.00 per share (the "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 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 The 1224 Corporation, a Delaware
corporation ("1224") (the "Stock Purchase Agreement"). All capitalized terms not
defined herein are used as defined in the Schedule 14D-9.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
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 considered a number of factors.
The members of the Board 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 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, each of which it
believed supported its recommendation, included the following:
(i) The Board considered (1) the determination made by the
Special Committee at its meeting on May 18, 1998 that the Offer is fair
to and in the best interests of the Company and the holders of the
Shares, (2) the recommendation of the Special Committee made to the
Board at its meeting on May 28, 1998 that the Board recommend
acceptance of the Offer by the holders of the Shares, and (3) that the
Special Committee, in reaching such determination and making such
recommendation, had the benefit of the financial advice of Wasserstein,
including Wasserstein's written opinion, dated May 18, 1998, that as of
that date and based upon the review and subject to the assumptions and
limitations set forth therein, the consideration to be received by the
holders of the Shares pursuant to the Offer is fair, from a financial
point of view, to such holders, which opinion was confirmed by letter
dated May 28, 1998 addressed to the Special Committee. Copies of the
written opinion dated May 18, 1998 of Wasserstein, which sets forth the
assumptions made, factors considered and scope of the review undertaken
by Wasserstein, and the confirmation of such opinion dated May 28,
1998, are attached hereto as Annex B and Annex C, respectively. Holders
of Shares are urged to read the full text of such opinion and
confirmation.
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(ii) The Board considered that the cash offer price of $43.50
per Share provided for in the Stock Purchase Agreement represented a
premium of approximately 15% over $37.69, the reported closing price of
Shares on the American Stock Exchange on May 18, 1998, the last trading
day prior to the public announcement of the Stock Purchase Agreement
and the Offer, and represents a significant premium over the historical
trading prices for the Shares.
(iii) The Board considered, as had the Special Committee in
making its determination and recommendation to the Board with respect
to the Offer, that: (1) the market price for the Shares prior to the
Offer reflected to a significant degree an anticipated takeover of the
Company; (2) 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; (3) 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; and (4) 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.
(iv) The Board considered, as had the Special Committee in
making its determination with respect to the Offer, the Company's
business, prospects, financial condition, results of operations and
current business strategy and the nature of the Company's industry
position, and the Board considered its belief, as had the Special
Committee its belief, 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 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.
(v) The Board considered, as had the Special Committee in
making its determination and recommendation, 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 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."
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ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY.
Item 7(a) of the Schedule 14D-9 is hereby amended by adding a new
sentence immediately prior to the last sentence of such Item 7(a)and by amending
and restating in its entirety such last sentence, as follows:
"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 by the Purchaser, the Purchaser will seek to cause such a
merger to become effective or as to the timing of any such merger.
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 Exhibit:
Exhibit 13 -- Form of letter to participants in the Company's Automatic
Dividend Reinvestment Plan, dated June 4, 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.
GIANT FOOD INC.
By: /s/ David W. Rutstein
----------------------------------
David W. Rutstein
Senior Vice President and General
Counsel
Dated: June 10, 1998
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EXHIBIT 13
Giant Food Inc.
6300 Sheriff Road
Landover, Maryland 20875
June 10, 1998
To: Participants in the Company's
Automatic Dividend Reinvestment Plan
Dear Stockholder:
As you know, Koninklijke Ahold N.V. (Royal Ahold) ("Ahold") has made a
tender offer to purchase all the outstanding shares of the Company's Class A
(Non-Voting) Common Stock (the "Shares") at a price of $43.50 per Share, net to
the seller in cash, without interest thereon (the "Tender Offer"). Ahold has
also entered into agreements with The 1224 Corporation and J Sainsbury plc to
acquire all the outstanding voting securities of the Company. Due to the pending
acquisition of the Company by Ahold, the Company has terminated its Automatic
Dividend Reinvestment Plan (the "Plan").
As a result of the termination of the Plan, participants in the Plan
will receive checks for the $.20 per Share dividend payable by the Company on
June 5, 1998 to record holders of Shares as of May 8, 1998, rather than having
such amounts invested in additional Shares pursuant to the Plan. These dividend
checks are being mailed to stockholders under separate cover.
In addition, American Stock Transfer & Trust Company ("AST&T"), which
has administered the Plan, is distributing to you a stock certificate for the
number of whole Shares in your Plan account. It is also distributing to you a
check for the value of any fractional Share in your Plan account. AST&T
aggregated and sold all such fractional Shares in the market on May 22, 1998 at
a price of $42.83 per Share. The stock certificate and check in lieu of a
fractional Share relating to the termination of your Plan account are enclosed
herewith.
Also enclosed, for the convenience of participants wishing to tender
their Shares to Ahold pursuant to the Tender Offer, are a form of Letter of
Transmittal and an envelope addressed to The Bank of New York as the Depositary
for the Tender Offer.
Please contact Mark Iskandar, the Company's director of Investor
Relations, at 301-341-8792 if you have any questions regarding the termination
of the Plan.
Sincerely yours,
Pete L. Manos
Chairman of the Board, President
and Chief Executive Officer
Enclosures
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