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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1/A
TENDER OFFER STATEMENT PURSUANT TO SECTION
14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
----------------
ALUMAX INC.
(NAME OF SUBJECT COMPANY)
AMX ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
ALUMINUM COMPANY OF AMERICA
(BIDDERS)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
022197 10 7
(CUSIP NUMBER OF CLASS OF SECURITIES)
LAWRENCE R. PURTELL, ESQ.
ALUMINUM COMPANY OF AMERICA
425 SIXTH AVENUE
PITTSBURGH, PENNSYLVANIA 15219
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE
NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDER)
----------------
With copies to:
J. MICHAEL SCHELL, ESQ.
MARGARET L. WOLFF, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
919 THIRD AVENUE
NEW YORK, NEW YORK 10022
TELEPHONE: (212) 735-3000
MARCH 20, 1998
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This Amendment No. 1 to the Tender Offer Statement on Schedule 14D-1 (this
"Amendment") relates to the offer by AMX Acquisition Corp., a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of Aluminum
Company of America, a Pennsylvania corporation (the "Parent"), to purchase up
to 27,000,000 shares of common stock, par value $.01 per share (the "Shares"),
of Alumax Inc., a Delaware corporation (the "Company"), at a price of $50.00
per Share, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Purchaser's Offer to Purchase, dated March 13,
1998, (the "Offer to Purchase") and in the related Letter of Transmittal
(which together constitute the "Offer").
ITEM 10. ADDITIONAL INFORMATION
Item 10(e) is hereby amended and supplemented as follows:
On March 18, 1998, an amended class action complaint was filed in Kwalbrun
v. Brown et al. The amended complaint adds AMX Acquisition Corp. as a
defendant and alleges, among other things, that the Schedules 14D-1 and 14D-9
purportedly fail to disclose certain information necessary for the Company's
stockholders to make an informed decision regarding the Offer and the other
transactions contemplated by the Merger Agreement, including the following:
(i) that the Schedule 14D-9 purportedly fails to disclose the efforts made (or
not made) by the Board of Directors of the Company to comply with their
fiduciary duties to solicit indications of interest or competing bids from
third parties in the transactions contemplated by the Merger Agreement, (ii)
that no explanation or rationale is offered for the individual defendants'
purported failure to explore other strategic alternatives, (iii) that the
individual defendants purportedly fail to disclose the Company's rationale in
directing its financial advisor not to conduct a formal auction of the Company
or at least to solicit competing bids, (iv) that purportedly none of the
information contained in the various documents relied upon by BT Wolfensohn in
rendering its fairness opinion is provided to stockholders or accounted for in
the fairness opinion of BT Wolfensohn, (v) that the Schedule 14D-9 and the
fairness opinion purportedly fail to disclose what evaluation methodologies
were employed by BT Wolfensohn in rendering its fairness opinion, (vi) that
the Schedule 14D-1 purportedly fails to provide any information about the
Company's growth and profitability, and (vii) that the Schedule 14D-9
purportedly fails to disclose any detailed or meaningful information about
certain employment agreements between the Company and certain members of the
Company's senior management. In addition, such amended complaint alleges that
the Merger Agreement purportedly creates disabling conflicts of interest by
conferring extraordinary benefits on the Company's senior management, that the
individual defendants allegedly failed to act in an informed manner and to
maximize stockholder value, and that the Parent allegedly aided and abetted
the breaches of fiduciary duty committed by the individual defendants. The
amended complaint seeks the same relief requested by the plaintiffs in the
original complaint.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
Item 11 is hereby amended and supplemented by adding the following Exhibit:
(g)(2)(i) Amended Class Action Complaint filed in Kwalbrun v. Brown et al.,
Court of Chancery of the State of Delaware in and for New Castle
County, March 18, 1998.
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SIGNATURE
After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is
true, complete and correct.
AMX Acquisition Corp.
/s/ Richard B. Kelson
By: _________________________________
Name: Richard B. Kelson
Title: Vice President and
Treasurer
Dated: March 20, 1998
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SIGNATURE
After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is
true, complete and correct.
Aluminum Company of America
/s/ Richard B. Kelson
By: _________________________________
Name: Richard B. Kelson
Title: Executive Vice President
and Chief Financial Officer
Dated: March 20, 1998
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGES IN SEQUENTIAL
NO. NUMBERING SYSTEM
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<C> <S> <C>
(g)(2)(i) Amended Class Action Complaint filed in
Kwalbrun v. Brown et al., Court of Chancery of
the State of Delaware in and for New Castle
County, March 18, 1998.
</TABLE>
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EXHIBIT (g)(2)(i)
IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- ------------------------------------- x
ROBIN KWALBRUN, :
:
Plaintiff, :
:
v. :
:
HAROLD BROWN, PIERRE DES MARIAS, II, : C.A. No. 16228-NC
J. DENNIS BONNEY, L. DON BROWN, JAMES :
C. HUNTINGTON, JR., W. LOEBER LANDAU, :
ALLEN BORN, PAUL V. MCAVOY, ANNE :
WEXLER, ALUMAX INC., and ALUMINUM :
COMPANY OF AMERICA, :
:
Defendants. :
- ------------------------------------- x
NOTICE OF FILING AMENDED CLASS ACTION COMPLAINT
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TO: Alumax, Inc. Anthony W. Clark, Esquire
All Individual Defendants Skadden Arps Slate Meagher & Flom
c/o Corporation Trust Co. One Rodney Square
1209 Orange Street Wilmington, DE 19801
Wilmington, DE 19801 Attorneys for Aluminum Co. of America
PLEASE TAKE NOTICE that plaintiff herewith files the attached Amended Class
Action Complaint as of right pursuant to Rule 15(a).
In compliance with Rule 15(aa), plaintiff avers that the Amended Complaint
is in full substitution for the Complaints heretofore filed on March 9, 1998.
ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A.
By:
-------------------------------------
Suite 1401, Mellon Bank Center
P.O. Box 1070
Wilmington, DE 19899-1070
(302) 656-4433
Attorneys for Plaintiff
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IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- ------------------------------------- x
ROBIN KWALBRUN, :
:
Plaintiff, :
:
v. :
:
HAROLD BROWN, PIERRE DES MARIAS, II, : C.A. No. 16228-NC
J. DENNIS BONNEY, L. DON BROWN, JAMES :
C. HUNTINGTON, JR., W. LOEBER LANDAU, :
ALLEN BORN, PAUL V. MCAVOY, ANNE :
WEXLER, ALUMAX INC., ALUMINUM :
COMPANY OF AMERICA, and AMX :
ACQUISITION CORP. :
:
Defendants. :
- ------------------------------------- x
AMENDED CLASS ACTION COMPLAINT
------------------------------
Plaintiff alleges upon information and belief, except for paragraphs 1
and 2 hereof, which is alleged upon knowledge, as follows:
1. Plaintiff brings this action pursuant to Rule 23 of the Rules of
the Court of Chancery as a class action on behalf of all persons, other than
defendants and those in privity with them who own the common stock of Alumax,
Inc. ("Alumax" or the "Company").
2. Plaintiff has been the owner of the common stock of Alumax since
prior to the transaction herein complained of and continuously to date.
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3. Alumax is a corporation duly organized and existing under the
laws of the State of Delaware. The Company is an integrated aluminum company
that produces and sells primary aluminum and semifabricated products as sheet,
plate, extrusions and foil, and other fabricated products.
4. Aluminum Company of America ("Alcoa") is a Delaware corporation
based in Pittsburgh, Pennsylvania and is the world's largest integrated aluminum
concern.
5. Defendant AMX Acquisition Corp., ("AMX") is a Delaware
corporation and a wholly owned subsidiary of Alcoa.
6. Defendant Allen Born is Chairman of the Board and Chief Executive
Officer of the Company.
7. Defendants Harold Brown, Pierre Des Marias, II, J. Dennis Bonney,
L. Don Brown, James C. Huntington, Jr., W. Loeber Landau, Allen Born, Paul V.
McAvoy, and Anne Wexler are Directors of Alumax.
8. The Individual Defendants are in a fiduciary relationship with
Plaintiff and the other public stockholders of Alumax and owe them the highest
obligations of good faith and fair dealing.
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CLASS ACTION ALLEGATIONS
------------------------
9. Plaintiff brings this action on its own behalf and as a class
action, pursuant to Rule 23 of the Rules of the Court of Chancery, on behalf of
all common stockholders of the Company (except the defendants herein and any
person, firm, trust, corporation, or other entity related to or affiliated with
any of the defen dants) and their successors in interest, who are or will be
threatened with injury arising from defendants' actions as more fully described
herein.
10. This action is properly maintainable as a class action because:
(a) The Class is so numerous that joinder of all members is
impracticable. As of March 31, 1997, there were approximately 54,913,013 shares
of Alumax common stock outstanding owned by hundreds, if not thousands, of
record and beneficial holders.
(b) There are questions of law and fact which are common to the class
including, inter alia, the following: (i) whether defendants have breached
----- ----
their fiduciary and other common law duties owned by them to plaintiff and the
members of the class; and (ii) whether the class is entitled to injunctive
relief or damages as a result of the wrongful conduct committed by defendants.
(c) Plaintiff is committed to prosecuting this action and has retained
competent counsel experienced in litigation of this nature. The claims of the
plaintiff are typical of the claims of other members of the class and plaintiff
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has the same interests as the other members of the class. Plaintiff will fairly
and adequately represent the class.
(d) Defendants have acted in a manner which affects plaintiff and all
members of the class alike, thereby making appropriate injunctive relief and/or
corresponding declaratory relief with respect to the class as a whole.
(e) The prosecution of separate actions by individual members of the
Class would create a risk of inconsistent or varying adjudications with respect
to individual members of the Class, which would establish incompatible standards
of conduct for defendants, or adjudications with respect to individual members
of the Class which would, as a practical matter, be dispositive of the interests
of other members or substantially impair or impede their ability to protect
their interests.
SUBSTANTIVE ALLEGATIONS
-----------------------
11. Alumax is an integrated aluminum company that produces and sells
primary aluminum products, semi-fabricated and fabricated aluminum products.
Primary aluminum products include t-ingot, extrusion billet, slab and foundry
ingot. These products are consumed by both the Company's downstream operations
and third party customers. The Company's semi-fabricated products include
sheet, plate, circles and blanks used for building products, transportation
products, consumer
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durables, machinery and equipment and aluminum foil for the flexible packaging,
food service, converter and pharmaceutical markets. The Company's fabricated
products consist of architectural aluminum products and a wide range of products
used in the construction industry.
12. On March 9, 1998, Alumax and Alcoa announced that they had
entered into a definitive merger agreement whereby Alcoa will acquire Alumax in
a transaction valued at $3.8 billion. Under the terms of the transaction as
presently proposed, AMX will first commence a cash tender offer for a majority
and up to 27 million shares of Alumax common shares at a price of $50 per share.
Following the tender offer, the second step of the proposed transaction will be
a merger in which Alumax will be merged into AMX and the remaining outstanding
shares of Alumax will each be converted into 0.6975 of a share of Alcoa common
stock.
13. The proposed transaction is structured to coerce the shareholders
of Alumax into tendering their shares in the first step of the proposed
transaction, in order to avoid the risk of receiving the uncertain consideration
offered in the second step merger.
14. On or about March 13, 1998, the Company filed with the United
States Securities and Exchange Commission a Solicitation/Recommendation
Statement on Schedule 14D-9 (the "14D-9") and AMX filed a Tender Offer Statement
on Schedule 14D-1 (the "14D-1"). The 14D-1 and 14D-9 were mailed to
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Alumax shareholders on or about March 17, 1998 and purportedly described, inter
-----
alia, the merger transaction, the history of the negotiations between the
- ----
companies, the opinion of Alumax's financial advisor and certain other
purportedly relevant information.
THE 14D-9 FAILS TO DISCLOSE MATERIAL INFORMATION
------------------------------------------------
A. Defendants' Failure to Shop the Company
---------------------------------------
15. The 14D-1 and 14D-9 fails to disclose material information
necessary for Alumax shareholders to make an informed decision. The 14D-9 is
completely silent with respect to the efforts made (or not made) by the Alumax
Board to comply with their fiduciary duties to solicit indications of interest
or competing bids from third parties in this change of control transaction. No
explanation or rationale is offered by defendants for their apparent failure to
explore other strategic alternatives.
16. Attached to the 14D-9 is a letter dated March 8, 1998 from BT
Wolfensohn. Alumax's financial advisor, to the Company's Board of Directors
(the "fairness opinion") opining that the proposed transaction is fair to
Alumax's public shareholders from a financial point of view. The fairness
opinion states: "we have
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not been authorized by Alumax or its Board of Directors to solicit, nor have we
solicited, any alternative transactions to the Transaction."
17. Given the lack of information provided concerning the potential
value to be received in competing bids, investors are unable to properly
consider the Merger because they have no way of knowing if the Merger price is
low in relation to what Alumax could receive in an open market auction or, at
the very least, by soliciting other bids. Defendants fail to disclose the
company's purported rationale in directing its financial advisor not to conduct
a formal auction of the company or at least to solicit competing bids.
B. The Incomplete Description Of
The Financial Advisors Analysis
-------------------------------
18. The fairness opinion recites a litany of various documents relied
on by BT Wolfensohn in rendering the fairness opinion, including "certain
internal analyses and other information furnished to it by Alumax and the
Acquirer and/or their respective advisers." Yet none of this information is
provided to shareholders or accounted for in the fairness opinion.
19. Furthermore, neither the 14D-9 nor the fairness opinion contains
a discussion of the various financial analysis presumably performed by BT
Wolfensohn. The 14D-9 and the fairness opinion are silent with respect to what
valuation methodologies were employed by BT Wolfensohn in rendering its fairness
opinion. Accordingly, Alumax shareholders cannot determine from these materials
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whether there was any deviation from standardized investment banking practices
and what the intrinsic value of the shares is and why the proposed acquisition
by Alcoa is preferable to other alternatives or is fair.
C. The Absence of Projections or Information
Regarding the Company's Prospects
---------------------------------
20. The 14D-1 fails to provide any information about the Company's
prospects for growth and profitability, despite the fact that Alcoa undoubtedly
was given access to confidential financial information and forecasts. Moreover,
this deficiency is not cured by the 14D-9, which contains no projections or
other information about the Company's prospects and anticipated growth and
profitability. This information is vital to the ability of Alumax shareholders
to properly evaluate Alcoa's offer, but has not been disclosed to Alumax
shareholders.
THE INDIVIDUAL DEFENDANTS HAVE
SUBSTANTIAL CONFLICTS WITH THE CLASS
------------------------------------
21. The merger agreement creates disabling conflicts of interest by
conferring extraordinary benefits on the management of Alumax. Defendant Born
and 18 members of senior management have been rewarded with employment
agreements and enhanced termination benefits which increase the lump sum cash
payment due to the executive from 1.5 to 3 times the officers' annual and full
year bonuses in the case of termination. Furthermore, the 14D-9 fails to
disclose any
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detailed or meaningful information about these employment agreements with
Alumax's senior management.
DEFENDANTS HAVE FAILED TO ACT IN AN INFORMED
MANNER AND TO MAXIMIZE SHAREHOLDER VALUE
----------------------------------------
22. By entering into the Merger agreement with Alcoa, the Alumax
Board has initiated a process to sell the Company which imposes heightened
fiduciary responsibilities and requires enhanced scrutiny by the Court.
However, the terms of the proposed transaction were not the result of an auction
process or active market check: they were arrived at without a full and
thorough investigation by the Individual Defendants; and they are intrinsically
unfair and inadequate from the standpoint of the Alumax shareholders.
23. The Individual Defendants failed to make an informed decision, as
no market check of the Company's value was obtained. In agreeing to the Merger,
the Individual Defendants failed to properly inform themselves of Alumax's
highest transactional value.
24. The Individual Defendants have violated their fiduciary duties
owed to the public shareholders of Alumax. The Individual Defendants' agreement
to the terms of the transaction, its timing, and the failure to auction the
Company and invite other bidders, and defendants' failure to provide a market
check demonstrate a
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clear absence of the exercise of due care and of loyalty to Alumax's public
shareholders.
25. The Individual Defendants' fiduciary obligations under these
circumstances require them to:
(a) Undertake an appropriate evaluation of Alumax's net worth as
a merger/acquisition candidate; and
(b) Engage in a meaningful auction with third parties in an
attempt to obtain the best value for Alumax's public shareholders.
26. The Individual Defendants have breached their fiduciary duties by
reason of the acts and transactions complained of herein, including their
decision to merge with Alcoa without making the requisite effort to obtain the
best offer possible.
27. Plaintiff and other members of the Class have been and will be
damaged in that they have not and will not receive their fair proportion of the
value of Alumax's assets and business, and will be prevented from obtaining fair
and adequate consideration for their shares of Alumax common stock.
28. The consideration to be paid to class members in the proposed
Merger is unfair and inadequate because, among other things:
(a) The intrinsic value of Alumax's common stock is materially in
excess of the amount offered for those securities in the Merger giving
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due consideration to the anticipated operating results, net asset value, cash
flow, and profitability of the Company;
(b) The Merger price is not the result of an appropriate
consideration of the value of Alumax because the Alumax Board approved the
proposed Merger without undertaking steps to accurately ascertain Alumax's value
through open bidding or at least a "market check mechanism"; and
(c) By entering into the agreement with Alcoa, the Individual
Defendants have allowed the price of Alumax stock to be capped, thereby
depriving plaintiff and the Class of the opportunity to realize any increase in
the value of Alumax stock.
29. By reason of the foregoing, each member of the Class will suffer
irreparable injury and damages absent injunctive relief by this Court.
ALCOA IS AN AIDER AND ABBETTOR
------------------------------
30. Alcoa has knowingly aided and abetted the breaches of fiduciary
duty committed by the Individual Defendants. Alcoa has agreed to the employment
agreements and enhanced severance packages for certain of Alumax's senior
officers and directors to assure their agreement and cooperation in and to a
transaction which will not maximize value for Alumax shareholders. Alcoa has so
agreed to enable it to acquire Alumax at the lowest possible price although this
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favorable treatment has necessarily injected personal motives into the
negotiations and compromised the undivided loyalty which the Individual
Defendants owe to Alumax's public shareholders.
31. Plaintiff and other members of the Class have no adequate remedy
at law.
WHEREFORE, plaintiff and members of the Class demand judg ment against
defendants as follows:
A. Declaring that this action is properly maintainable as a class
action and certifying plaintiff as the representative of the Class;
B. Preliminarily and permanently enjoining defendants and their
counsel, agents, employees and all persons acting under, in concert with, or for
them, from proceeding with, consummating, or closing the proposed transaction;
C. In the event that the proposed transaction is consummated,
rescinding it and setting it aside, or awarding rescissory damages to the Class;
D. Awarding compensatory damages against defendants, individ ually
and severally, in an amount to be determined at trial, together with pre-judg
ment and post-judgement interest at the maximum rate allowable by law, arising
from the proposed transaction;
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E. Awarding plaintiff its costs and disbursements and reasonable
allowances for fees of plaintiffs counsel and experts and reimbursement of
expenses; and
F. Granting plaintiff and the Class such other and further relief as
the Court may deem just and proper.
Dated: March 18, 1998
ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A.
By:
-------------------------------------
Suite 1401, Mellon Bank Center
P.O. Box 1070
Wilmington, DE 19899-1070
(302) 656-4433
Attorneys for Plaintiff
OF COUNSEL:
BERNSTEIN LIEBHARD & LIFSHITZ
274 Madison Avenue
New York, NY 10016
(2120 779-1414
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CERTIFICATE OF SERVICE
----------------------
I, Norman M. Monhait, do hereby certify on this 18/th/ day of March, 1998
that I caused copies of the foregoing Notice of Filing and Amended Class Action
Complaint to be served via hand delivery upon:
TO: Alumax, Inc. Anthony W. Clark, Esquire
All Individual Defendants Skadden Arps Slate Meagher & Flom
c/o Corporation Trust Co. One Rodney Square
1209 Orange Street Wilmington, DE 19801
Wilmington, DE 19801 Attorneys for Aluminum Co. of America
_________________________________
Norman M. Monhait
