SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
Amendment No. 9
To
SCHEDULE 14D-9
(WITH RESPECT TO THE TENDER OFFER
BY IMPERIAL CHEMICAL INDUSTRIES PLC)
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
______________________
GROW GROUP, INC.
(Name of Subject Company)
GROW GROUP, INC.
(Name of Person(s) Filing Statement)
Common Stock, par value $0.10 per share
(Title of Class of Securities)
399820 10 9
(CUSIP Number of Class of Securities)
Lloyd Frank, Esq.
Secretary
Grow Group, Inc.
200 Park Avenue
New York, N.Y. 10166
(212) 599-4400
(Name, address and telephone number of person authorized to receive
notice and communication on behalf of the person(s) filing statement).
With a Copy to:
Daniel E. Stoller, Esq.
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, N.Y. 10022
(212) 735-3000
This Amendment supplements and amends as Amendment No. 9 the
Solicitation/Recommendation Statement on Schedule 14D-9,
originally filed on May 4, 1995 (the "ICI Schedule 14D-9"), by
Grow Group, Inc., a New York corporation (the "Company"),
relating to the tender offer (the "Offer") by GDEN Corporation, a
New York corporation (the "Purchaser") and an indirect wholly-
owned subsidiary of Imperial Chemical Industries PLC, a
corporation organized under the laws of England ("Parent"),
initially disclosed in a Tender Offer Statement on Schedule 14D-
1, dated May 4, 1995, to purchase all outstanding shares of
common stock, par value $0.10 per share (the "Common Stock" or
the "Shares"), of the Company, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated May 4, 1995,
as amended by the Supplement thereto filed on May 22, 1995 (the
"Supplement"), and the revised Letter of Transmittal.
Capitalized terms used and not otherwise defined herein shall
have the meanings set forth in the ICI Schedule 14D-9.
Certain information contained in this Amendment No. 9 has
previously been disclosed in prior amendments to the ICI Schedule
14D-9, but is included herein for the information of the
Company's shareholders.
Item 2. Tender Offer of the Bidder.
Item 2 of the ICI Schedule 14D-9 is hereby amended and
supplemented by adding the following information:
On May 22, 1995, the Purchaser filed an Amendment to its
Schedule 14D-1 which included as exhibits the Supplement and a
revised Letter of Transmittal (which together with the Offer to
Purchase and the Supplement constitute the "Amended Offer"). The
Supplement amends and supplements the Offer to Purchase to, among
other things, (i) increase the price being offered pursuant to
the Offer from $18.10 to $22.00 per Share, net to the seller in
cash, and (ii) extend the expiration date of the Offer to June 5,
1995 (such date, as further extended by the Purchaser, being
referred to as the "Expiration Date"), provided, however, that if
the Minimum Condition (as defined in the Offer) has not been
satisfied by the Expiration Date, Parent and the Purchaser have
agreed to extend the Expiration Date for one or more periods for
up to an aggregate of 30 calendar days until the Minimum
Condition is satisfied.
Item 3. Identity and Background.
Item 3(b) of the ICI Schedule 14D-9 is hereby amended and
supplemented by adding the following information:
Stock Options.
In connection with the Merger, all outstanding Options
will become fully exercisable and vested. Each Option will then be
cancelled and the holder of the Option will receive an amount equal
to the product of (A) the excess, if any, of $22.00 over the
exercise price per Share of each such Option and (B) the number of
Shares relating to such Option.
Set forth below is a revised table indicating the
treatment in the Merger of currently outstanding Options held by
executive officers and non-employee directors of the Company. For
purposes of the table, it has been assumed that outstanding Options
will not be exercised.
Amounts Payable with respect to Company
Options
in the Merger
Number of Options/ Amount Payable upon
Exercise Price Cancellation of Options
Non-Employee
Directors
Harold G. Bittle . . 10,000/$14.00 $ 80,000.00
Tully Plesser . . . . 10,000/$14.00 $ 80,000.00
Arthur W. Broslat . . 10,000/$12.00 $100,000.00
Philippe Erard . . . 10,000/$11.81 $101,900.00
William H. Turner . . 10,000/$18.13 $ 38,700.00
Executive Officers
Russell Banks . . . . 423/$10.54 $ 4,847.58
23,712/$10.54 $271,739.52
10,000/$14.75 $ 72,500.00
Joseph M. Quinn . . . 5,000/$7.25 $ 73,750.00
25,000/$9.81 $304,750.00
15,000/$14.75 $108,750.00
John F. Gleason . . . 4,500/$14.75 $ 32,625.00
Stephen L. Dearborn . 10,000/$14.75 $ 72,500.00
Lloyd Frank . . . . . 7,875/$10.54 $ 90,247.50
4,000/$14.75 $ 29,000.00
Frank V.Esser . . . . 5,250/$10.54 $ 60,165.00
2,000/$14.75 $ 14,500.00
Henry W. Jones . . . 3,500/$14.75 $ 25,375.00
ESOP
Effective as of May 11, 1995, Messrs. Banks, Frank and Keane
(each of whom is a director of the Company) resigned from their
positions as trustees of the ESOP and the Company appointed an
independent financial institution as successor trustee. Pursuant to
the applicable documents governing the ESOP, the successor trustee
of the ESOP, who is required to act in accordance with its fiduciary
obligations under the Employee Retirement Income Security Act of
1974, as amended, has the authority to determine whether to tender
or otherwise dispose of the Shares held in the ESOP.
The Amended Merger Agreement.
On May 21, 1995, the Company, the Purchaser and Parent executed
Amendment No. 1 to the Merger Agreement ("Amendment No. 1") which
provides, among other things, (i) that Parent will cause the
Purchaser to amend and supplement the Offer to Purchase to reflect
the terms of the Amended Offer, and (ii) that the Company has agreed
to pay to Parent a $16,000,000 "break-up" fee, in addition to the
$8,000,000 break-up fee provided for in the Merger Agreement, under
the circumstances described in the following paragraph. A copy of
Amendment No. 1 has been filed as Exhibit 32 hereto and is
incorporated herein by reference. The Merger Agreement, as amended
by Amendment No. 1, is herein referred to as the "Amended Merger
Agreement."
Break-up Fee. In addition to the $8,000,000 fee that the Company
has agreed to pay Parent after the occurrence of a Trigger Event (as
defined below), the Company has agreed to pay Parent in respect of
Parent's expenses and lost opportunity costs an amount in
immediately available funds equal to $16,000,000 promptly, but in no
event later than two business days, after the occurrence of the
events specified below in both clauses (A) and (B):
(A) a Trigger Event shall have occurred at any time from or
after May 21, 1995 and, as a result thereof, the Amended Merger
Agreement is terminated; and
(B) within six months after such termination of the Amended
Merger Agreement has occurred, an Acquisition Transaction (as
defined below) shall have been consummated with any Person (as
defined in Sections 3(a)(9) and 13(d)(3) of the Exchange Act)
other than Parent or a subsidiary or other Affiliate (as
defined in Rule 12b-2 under the Exchange Act) of Parent.
The term "Acquisition Transaction" means (i) a merger or
consolidation, or any similar business combination transaction,
involving the Company; (ii) a purchase, lease or acquisition of all
or substantially all of the assets of the Company and its
subsidiaries taken as a whole; or (iii) the purchase or acquisition
by any Person of securities representing more than 50% of the then
outstanding Shares.
The occurrence of any of the following events shall constitute
a "Trigger Event":
(i) the Company shall have entered into, or shall have
publicly announced its intention to enter into, an agreement or
an agreement in principle with respect to any Acquisition
Proposal (as defined in the Merger Agreement) other than the
transactions contemplated by the Merger Agreement;
(ii) the Board of Directors of the Company shall have
withdrawn or materially modified its approval or recommendation
of the Offer or the Merger Agreement other than as a result of
Parent's breach of the Merger Agreement; or
(iii) any person or group (as defined in Section 13(d)(3) of
the Exchange Act) (other than Parent or any of its affiliates)
shall have become the beneficial owner (as defined in Rule 13d-
3 promulgated under the Exchange Act) of at least 25% of any
class or series of capital stock of the Company (including the
Shares), or shall have acquired, directly or indirectly, at
least 25% of the assets of the Company other than acquisitions
of securities for bona fide arbitrage purposes only and other
than Corimon or its affiliates; or Corimon and its affiliates
shall beneficially own more than 28% of the Shares.
The $16,000,000 fee referred to above is in addition to, and
not in lieu of or offset by, the $8,000,000 fee referred to above
and included in the original Merger Agreement.
Corimon Option Agreement.
As a result of the increased price offered in the Amended
Offer, pursuant to the terms of the Corimon Option Agreement, the
Corimon Purchase Price has automatically increased from $17.50 per
Share to $21.40 per Share.
Item 4. The Solicitation or Recommendation.
Item 4 of the ICI Schedule 14D-9 is hereby amended and
supplemented by adding the following information:
(a) Recommendation of the Board of Directors.
The Board of Directors has unanimously determined that the
consideration to be paid for each Share in the Amended Offer and the
Merger is fair to the shareholders of the Company and that the
Amended Offer and the Merger are otherwise in the best interests of
the Company and its shareholders, has approved and adopted the
Amended Merger Agreement and the transactions contemplated thereby,
including the Amended Offer and the Merger, and recommends that all
holders of Shares accept the Amended Offer and tender their Shares
pursuant to the Amended Offer.
A letter to the Company's shareholders communicating the
Board's recommendation and a press release announcing the Amended
Merger Agreement and related transactions are filed herewith as
Exhibits 33 and 34, respectively, and are incorporated herein by
reference.
(b) Background; Reasons for the Board's Recommendation.
Background. On May 8, 1995, The Sherwin-Williams Company
("Sherwin-Williams") through its wholly-owned subsidiary GGI
Acquisition, Inc. ("GGI"), commenced an unsolicited tender offer to
purchase all outstanding Shares (and associated stock purchase
rights) at a price of $19.50 per Share, net to the seller in cash,
upon the terms and subject to the conditions set forth in the Tender
Offer Statement on Schedule 14D-1, dated May 8, 1995. GGI is making
the offer to purchase all outstanding Shares at a price of $19.50
per Share, net to the seller in cash, upon the terms and subject to
the conditions in an Offer to Purchase, dated May 8, 1995, and the
related Letter of Transmittal (which together constitute the
"Sherwin-Williams Offer").
Also, on May 8, 1995, Sherwin-Williams commenced litigation
against the Company and the members of its Board of Directors.
The Company's Board of Directors met on the night of May 9,
1995 to review and discuss the Sherwin-Williams Offer.
Representatives of Wertheim Schroder and the Company's legal counsel
attended the meeting.
On May 10, 1995, the Company issued a press release announcing
that its Board of Directors had authorized management of the Company
and the Company's financial and legal advisors to engage in
discussions and negotiations with, and disclose certain non-public
information concerning the Company to, Sherwin-Williams in
connection with the Sherwin-Williams Offer. The foregoing actions
were taken based on the Board's determination of its fiduciary
duties under applicable law as advised by counsel and in accordance
with the applicable provisions of the Merger Agreement as described
in Item 3 of the ICI Schedule 14D-9.
On May 10, 1995, representatives of the Company met with
representatives of Sherwin-Williams to discuss the Sherwin-Williams
Offer and, in particular, issues relating to the conditionality of
the Sherwin-Williams Offer. At that meeting, Sherwin-Williams'
representatives stated that Sherwin-Williams was prepared to enter
into a merger agreement with the Company at a price of $19.50 per
Share without conducting a due diligence review of the Company, but
that Sherwin-Williams was requesting a due diligence review in order
to be in a position to consider increases in the price it would be
prepared to pay to acquire the Company. This was confirmed to the
Company in a letter dated May 10, 1995 from a representative of
Sherwin-Williams.
On May 11, 1995, Sherwin-Williams delivered to the Company and
its counsel a draft merger agreement proposed by counsel to Sherwin-
Williams.
Also, on May 11, 1995, the Company's counsel and Sherwin-
Williams' counsel negotiated the terms of a Confidentiality
Agreement, and the Confidentiality Agreement was executed by
Sherwin-Williams on the morning of May 12, 1995. See Item 7 below
for a description of the Sherwin-Williams Confidentiality Agreement.
Upon execution of the Sherwin-Williams Confidentiality Agreement,
representatives of Sherwin-Williams commenced business and legal
due diligence with respect to the Company at the Company's New York
headquarters. On May 15, 1995, Sherwin-Williams extended its due
diligence to an on-site review at various of the Company's plants
and facilities, which on-site due diligence continued through May
19, 1995.
On May 12, 1995, the Company's legal counsel sent a letter to
Sherwin-Williams' legal counsel suggesting that on May 13, 1995
representatives of the Company and representatives of Sherwin-
Williams discuss the draft merger agreement furnished by Sherwin-
Williams. The Company's legal counsel made the same request to
Sherwin-Williams' legal counsel by telephone later in the day on May
12, 1995. Representatives of Sherwin-Williams did not promptly
respond to such request and, accordingly, no discussions concerning
the draft merger agreement prepared by Sherwin-Williams were held
prior to the time the Board met to consider the Sherwin-Williams
Offer.
On May 15, 1995, the Company's Board of Directors met to
consider the Sherwin-Williams Offer. The terms of the Sherwin-
Williams Offer, which had been reviewed and discussed by the Board
of Directors at its meeting on May 9, 1995, were again reviewed and
discussed. Representatives of Wertheim Schroder and the Company's
legal counsel attended the meeting and discussed the Sherwin-
Williams Offer with the directors.
After discussion and further analysis, the Company's Board of
Directors unanimously decided to express no opinion and remain
neutral towards the Sherwin-Williams Offer for the reasons described
in the Schedule 14D-9 Solicitation/Recommendation Statement pursuant
to Section 14(d)(4) of the Exchange Act, originally filed on May 16,
1995 (the "Sherwin-Williams Schedule 14D-9"), in connection with the
Sherwin-Williams Offer, a copy of which has been mailed to the
Company's shareholders.
Prior to the opening of business on May 16, 1995, the Company
issued a press release announcing the position of the Board of
Directors with respect to the Sherwin-Williams Offer.
On May 16, 1995, the Company issued a press release announcing
that it had been advised by the Federal Trade Commission that Parent
had received early termination of the Hart-Scott-Rodino ("HSR")
waiting period with respect to the Offer and that Sherwin-Williams
will receive early termination of the HSR waiting period with
respect to the Sherwin-Williams Offer. Sherwin-Williams received
such early termination later that day.
In the evening of May 16, 1995, the Board of Directors of the
Company held a meeting to discuss the status of the competing
offers. Representatives of Wertheim Schroder and the Company's
legal counsel attended the meeting. At such meeting, the Board
determined that in light of the circumstances, it was in the best
interests of the Company and its shareholders to institute formal
bidding procedures in order to bring an orderly and prompt
conclusion to the process. On May 17, 1995, the Company issued a
press release announcing that in light of the competing tender
offers by Parent and Sherwin-Williams, the Company's Board of
Directors instituted a formal bidding process (the "Bidding
Process"). Also on May 17, 1995, the Company sent the following
letter to Parent and Sherwin-Williams:
May 17, 1995
Imperial Chemical Industries PLC
9 Millbank
London SWIP 3JF
England
Attention: Mr. John Thompson
The Sherwin-Williams Company
101 Prospect Avenue, N.W.
Cleveland, OH 44115-1075
Attention: Louis Stellato, Esq.
Re: Rules and Procedures for Submission of Proposals to
Acquire Grow Group, Inc.
Gentlemen:
The Board of Directors of Grow Group, Inc. (the "Company" or
"Grow") has determined that under current circumstances it is in the
best interests of the shareholders of the Company that there be
instituted a formal bidding process for the Company.
The Board of Directors of the Company (the "Board" or "Board of
Directors") has further determined that this process must be
conducted in a fair, impartial and orderly manner. The interests of
Grow's shareholders, employees, and other constituencies can and
will be best served by such an approach. The Board of Directors
recognizes that the process in which the Company is currently
engaged presents certain risks, particularly if the process is
unduly prolonged, including disruption to the Company's business and
overall uncertainty among the Company's constituencies as to the
Company's future. In order to mitigate these risks, the Board of
Directors believes that the most prudent course of action is to
bring this process to a prompt and orderly close.
Accordingly, the Board of Directors has established the rules
and procedures specified below to provide both Imperial Chemical
Industries PLC ("ICI") and The Sherwin-Williams Company ("Sherwin-
Williams") with the opportunity to submit improved acquisition
proposals to acquire the Company ("Proposals"). The rules and
procedures are designed to constitute a single and final round of
bidding, and accordingly each of you should submit your best and
highest offer.
The purpose of this letter is to invite each of you to submit
Proposals, pursuant to the rules and procedures set forth below.
The Board of Directors believes that agreement to such rules and
procedures is in the best interests of the Company and its
shareholders and, accordingly, submission of a Proposal will
constitute for all purposes an agreement to be bound by such rules
and procedures. The Board of Directors reserves the right not to
consider or recommend any Proposal made by a party who has not
agreed to the rules and procedures specified below.
The following rules and procedures will govern the submission
of Proposals:
1. Proposals should be addressed and delivered in a sealed
envelope to the Board of Directors of the Company: c/o Daniel E.
Stoller, Esq., Skadden, Arps, Slate, Meagher & Flom, 919 Third
Avenue, 33rd Floor, New York, New York 10022. Proposals must be
received on Sunday, May 21, 1995 by no later than 12:00 Noon, New
York time (the "Submission Time"), unless extended by notice to each
of you.
2. Your Proposal must be stated as a single cash amount
(expressed in U.S. dollars and cents) per share of Common Stock of
the Company (the "Shares") and may not make reference to, be
contingent upon, or in any way vary based upon, the terms (including
the consideration offered) of the other party's Proposal. The
submission of a Proposal will constitute your agreement to be bound
by these rules and procedures and will also constitute your
agreement that your Proposal is irrevocable until midnight on
Tuesday, May 23, 1995. You may not make any Proposal, or modify or
amend any pending Proposal, to purchase the Company, except in
accordance with these rules and procedures.
3. Until the Company has accepted one of the Proposals, the
Company will not, except as may be required by law, publicly
disclose the terms of either of your Proposals or communicate them
to the other of you. The Company reserves the right, however, to
discuss any Proposal with the party submitting it. Submission of
your Proposal constitutes a representation that you have kept and
will keep your Proposal confidential until 9:00 a.m., New York time,
on Monday, May 22, 1995 and that you have no knowledge of the other
party's Proposal. In addition, each of ICI and Sherwin-Williams
agrees that they and their respective representatives will not
directly or indirectly contact or communicate with the other or the
other's representatives concerning their or the other party's
Proposal or the submission of any Proposal. By submitting a
Proposal, ICI agrees to waive the Company's notice obligation
contained in Section 6.04 of the Agreement and Plan of Merger, dated
as of April 30, 1995, by and among the Company, ICI and GDEN
Corporation (the "ICI Merger Agreement") with respect to any
Proposal submitted by Sherwin-Williams.
4. Not later than 10:00 a.m. on Thursday, May 18, 1995, the
Company will deliver to both of your respective counsels copies of
(i) a form of amendment to the ICI Merger Agreement (the "ICI Form
of Amendment") and (ii) a form of Agreement and Plan of Merger among
Sherwin-Williams, GGI Acquisition, Inc., a wholly-owned subsidiary
of Sherwin-Williams ("GGI"), and the Company, together with
disclosure schedules (the "Sherwin-Williams Form of Merger
Agreement"). ICI's Proposal shall be accompanied by an executed
copy of the ICI Form of Amendment, executed by ICI and GDEN
Corporation, an indirect wholly-owned subsidiary of ICI. Sherwin-
Williams' Proposal shall be accompanied by an executed copy of the
Sherwin-Williams Form of Merger Agreement. The extent and nature of
any changes proposed by ICI to the ICI Form of Amendment or proposed
by Sherwin-Williams to the Sherwin-Williams Form of Merger Agreement
will be taken into consideration by the Board of Directors. If
either party makes changes to the form of agreement furnished by the
Company, the executed agreement shall be accompanied by a marked
copy which shows any such changes.
5. The Sherwin-Williams Form of Merger Agreement will contain
a provision identical to the provisions of Section 11.04(b) of the
ICI Merger Agreement. Both the Sherwin-Williams Form of Merger
Agreement and the ICI Form of Amendment will include a provision in
the form of Appendix A hereto, which provides for the payment of an
additional fee of $16 million, under circumstances specified
therein, if an Acquisition Transaction (as defined therein) has been
consummated within six months of termination of the applicable
merger agreement with ICI or Sherwin-Williams, as the case may be.
6. It is the intention of the Board of Directors that the
winning Proposal will be accepted as promptly as practicable after
12 Noon, New York time, on Sunday, May 21, 1995. It is requested
that each of you and your financial and legal advisors be available
commencing at 12 Noon, New York time, on Sunday, May 21, 1995 and
continuing through 9:00 a.m., New York time, on Monday, May 22,
1995.
7. As soon as practicable following the Submission Time, the
Board of Directors, with the advice and assistance of its financial
and legal advisors, will evaluate the Proposals. The Board intends
to accept the Proposal which it determines in its reasonable good
faith judgment is the best value reasonably obtainable for the
shareholders of the Company. A Proposal will be accepted only by
countersignature by the Company on the ICI Form of Amendment or the
Sherwin-Williams Form of Merger Agreement, as the case may be.
8. The party whose Proposal is not accepted agrees to
immediately terminate its pending tender offer to acquire Shares and
to not purchase or offer to purchase any Shares following the
Submission Time.
9. Representatives of the Company and its financial and legal
advisors are prepared to meet with either of you or your respective
legal and financial advisors to discuss these rules and procedures
and to discuss the provisions of the ICI Form of Amendment and the
Sherwin-Williams Form of Merger Agreement.
10. The Board of Directors reserves the right, in its sole
discretion, consistent with its fiduciary duties and without stating
a reason therefor, to modify or terminate any or all of the rules
and procedures set forth in this letter. If the Board of Directors
modifies these rules and procedures, it intends promptly to notify
both of you orally, with subsequent confirmation in writing.
Very truly yours,
ON BEHALF OF THE
BOARD OF DIRECTORS OF
GROW GROUP, INC.
By: /s/ Russell Banks
Russell Banks
cc: Paul R. Kingsley, Esq.
Davis, Polk & Wardwell
(Counsel to Imperial Chemical Industries PLC)
John A. Healy, Esq.
Rogers & Wells
(Counsel to The Sherwin-Williams Company)
Appendix A
The Company agrees to pay Buyer in respect of Buyer's
expenses and lost opportunity costs an amount in immediately
available funds equal to $16,000,000 promptly, but in no event later
than two business days, after the occurrence of the events specified
below in both clauses (A) and (B):
(A) A Trigger Event within the meaning of and as specified
in Section 11.04(b) of this Agreement shall have occurred at any
time from or after the date hereof and, as a result thereof, this
Agreement is terminated, and (B) within six months after such
termination of this Agreement has occurred, an Acquisition
Transaction shall have been consummated with any Person (as defined
in Sections 3(a)(9) and 13(d)(3) of the Exchange Act) other than
Parent or a subsidiary or other Affiliate (as defined in Rule 12b-2
under the Exchange Act) of Parent.
For purposes of this Section, "Acquisition Transaction" shall
mean (i) a merger or consolidation, or any similar business
combination transaction, involving the Company; (ii) a purchase,
lease or acquisition of all or substantially all of the assets of
the Company and its subsidiaries taken as a whole; or (iii) the
purchase or acquisition by any Person of securities representing
more than 50% of the then outstanding Shares.
On May 18, 1995, the Company issued a press release announcing
that a Justice of the Supreme Court of the State of New York, after
a hearing which occurred on May 18, 1995, rejected Sherwin-Williams'
motion, in connection with the New York Action, to grant a temporary
restraining order to prevent the Company from conducting the Bidding
Process.
In the evening of May 18, 1995, the Board of Directors met to
review and discuss the Bidding Process, including written comments
received from Sherwin-Williams' counsel, and the developments that
had occurred since the Board meeting held on May 11, 1995. After
giving full consideration to Sherwin-Williams' comments, the Board
determined to make no changes to the Bidding Process at such time.
Shortly before the noon bidding deadline on May 21, 1995,
Parent submitted its $22.00 per Share bid.
Shortly before the noon bidding deadline on May 21, 1995,
Sherwin-Williams delivered the following letter (the "Sherwin-
Williams May 21 Letter") setting forth its $20.00 per Share bid:
May 21, 1995
BY HAND DELIVERY
Board of Directors
Grow Group, Inc.
200 Park Avenue
New York, NY 10166
Dear Sirs:
As you know, Sherwin-Williams has serious concerns with the
auction procedures outlined in Daniel Stoller's May 17 letter.
Sherwin-Williams strongly believes that an open, multiple round
bidding process is the most effective means of ensuring that Grow's
stockholders receive the highest value for their Grow stock.
On May 8, 1995, Sherwin-Williams commenced a cash tender
offer at a price of $19.50 per share of Grow common stock. As of
the time we are submitting this letter to you, the Sherwin-Williams
bid is the highest offer by a substantial margin being presented to
Grow's stockholders. Nonetheless, because Sherwin-Williams wishes
to be constructive in your effort to bring the auction process to a
swift conclusion, by means of this letter and the enclosed merger
agreement Sherwin-Williams hereby offers to purchase all of the
outstanding shares of Grow's common stock at a price of $20.00 per
share in cash.
Sherwin-Williams is prepared to respond promptly to a higher
bid submitted by ICI. Accordingly, in order for you to obtain the
best value for your stockholders, it is essential that Sherwin-
Williams be given an opportunity to participate further in an
ongoing bidding process. Thus, we expect you will promptly advise
us of any ICI proposal that is equal to or in excess of our offer in
order to permit us the opportunity to respond quickly to any
proposal ICI may make, and we request that you do so.
Enclosed with this letter are two originally executed copies
of an Agreement and Plan of Merger in the same form as the "Sherwin-
Williams Form of Merger Agreement" that Mr. Stoller delivered to our
counsel on May 18, 1995 reflecting our $20.00 cash offer.
We urge you not to enter into any binding agreement with ICI
or any other party, particularly one containing a break-up fee or
other provisions that could prevent your stockholders from receiving
maximum value for their shares, without first giving us the
opportunity to make a better bid.
This letter is not intended to, and does not, conform to the
bidding procedures set forth in Mr. Stoller's May 17 letter.
Sherwin-Williams expressly reserves the right to submit this bid and
any further bids which do not conform to such procedures. We do not
agree to be bound by any of the limitations purportedly imposed
under those procedures, including the purported requirement to
accept any determination of Grow's Board as to the manner of
bidding, the Grow Board's determination of the "winning" bid, or the
purported requirement that the "losing" bidder withdraw its tender
offer and not make any further offer.
We look forward to hearing from you as soon as possible. You
can contact me at any time through Rogers & Wells at 878-8281.
Sincerely,
Conway G. Ivy
Starting in the afternoon of May 21, 1995, the Company's Board
of Directors met to consider Parent's revised offer of $22.00 per
Share and Sherwin-Williams' revised offer of $20.00 per Share, each
of which was submitted in response to the Company's May 17, 1995
letter to Parent and Sherwin-Williams pertaining to the submission
of bids. The terms of the proposals submitted by Parent and
Sherwin-Williams were presented to and reviewed by the Company's
Board of Directors. Wertheim Schroder and legal counsel made
presentations to the Board of Directors. Wertheim Schroder
delivered its opinion as to the fairness, from a financial point of
view, of the $22.00 per Share cash consideration offered by Parent
to the public shareholders of the Company. The full Board discussed
the proposals made by Parent and Sherwin-Williams.
After discussion and further analysis, the Company's Board of
Directors unanimously decided to accept the Amended Offer for
the reasons described below, and it approved the Amended Merger
Agreement and the transactions contemplated thereby and unanimously
recommended that shareholders accept the Amended Offer and tender
their Shares pursuant thereto. The Board also unanimously
determined to modify its prior neutral recommendation with respect
to the Sherwin-Williams Offer and is now recommending that
shareholders reject the Sherwin-Williams Offer and not tender their
Shares pursuant to the Sherwin-Williams Offer.
Immediately following the May 21, 1995 Board meeting, the
Company executed Amendment No. 1, which had been submitted with
Parent's bid.
Reasons for the Board's Recommendation; Factors Considered by
the Board. In approving the Amended Merger Agreement and the
transactions contemplated thereby and recommending that all holders
of Shares tender their Shares pursuant to the Amended Offer, the
Board of Directors reviewed the factors it had originally considered
in connection with approving the Offer as set forth in Item 4(b) of
the ICI Schedule 14D-9 and considered a number of additional factors
including:
1. the fact that in the Bidding Process Parent has offered the
Company's shareholders consideration in the amount of $22.00 per
Share while Sherwin-Williams has proposed to pay $20.00 per Share;
2. the fact that both Parent and Sherwin-Williams had a fair
and ample opportunity to submit bids in the Bidding Process, which
was conducted in a fair, equitable and even-handed manner and, based
on the advice of the Company's financial advisor, was designed to
maximize shareholder value;
3. the fact that the Company had advised both parties that the
Bidding Process was designed as a single and final round of bidding
and that the Company urged both Parent and Sherwin-Williams to
submit their best and highest offer in the Bidding Process;
4. the Board's concern about the significant uncertainties and
substantial expenses created by the competing offers and the Board's
conclusion that it was in the best interest of the Company, its
shareholders and other constituencies to bring the Bidding Process
to a prompt and orderly conclusion;
5. the position of Sherwin-Williams set forth in the Sherwin-
Williams May 21 Letter;
6. the fact that the Amended Merger Agreement provides that the
Company is obligated, under the circumstances described in the
following paragraph, to pay to Parent a "break-up" fee of $16
million (in addition to the $8 million "break-up" fee which had
already been provided for in the Merger Agreement prior to being
amended by Amendment No. 1), and that while such provision would
make it more expensive for a third party to bid for the Company, it
does not preclude Sherwin-Williams or any other third party from
making further bids;
7. the fact that the additional $16 million "break-up" fee
becomes payable only after both (i) the termination of the Amended
Merger Agreement as a result of the occurrence of a Trigger Event,
and (ii) the occurrence of an Acquisition Transaction within six
months after such termination of the Amended Merger Agreement has
occurred, thereby protecting the Company from having to pay such
additional $16 million unless and until an Acquisition Transaction
is consummated;
8. the presentation of Wertheim Schroder at the May 21, 1995
Board of Directors' meeting and the opinion of Wertheim Schroder to
the effect that, as of the date of its opinion and based upon and
subject to certain matters stated therein, the $22.00 per Share cash
consideration to be received by the holders of Shares pursuant to
the Amended Offer and the Merger is fair, from a financial point of
view, to the public shareholders of the Company. (As used in the
Wertheim Schroder opinion and as used herein, "public shareholders"
means all shareholders other than Corimon.) The full text of
Wertheim Schroder's written opinion, which sets forth the
assumptions made, matters considered and limitations on the review
undertaken by Wertheim Schroder, is attached hereto as Exhibit 35
and is incorporated herein by reference. Shareholders are urged to
read the opinion of Wertheim Schroder carefully in its entirety;
9. the historical market prices of, and recent trading activity
in, the Shares, particularly the fact that the Amended Offer and the
Merger will enable the shareholders of the Company to realize a
significant premium (58.6%) over the closing price of the Shares on
the last trading day prior to the public announcement on January 26,
1995 that the Company was reviewing alternatives to enhance
shareholder value, and a premium (30.4%) over the closing price of
the Shares on the last trading day prior to the public announcement
on April 28, 1995 that the Company was in negotiations relating to
the proposed Merger; and
10. the fact that the proposed structure of the Amended Offer
and Merger involves only a slight delay to the timing of the
existing Offer and that the Amended Offer will be followed by the
Merger in which the public shareholders who do not tender their
Shares will receive the same consideration paid in the Amended
Offer, thereby enabling the Company's public shareholders to obtain
cash for their Shares at the earliest possible time.
The Board of Directors did not assign relative weights to the
factors or determine that any factor was of particular importance.
Rather, the Board of Directors viewed their position and
recommendation as being based on the totality of the information
presented to and considered by it.
Item 5. Persons Retained, Employed or to be Compensated.
Item 5 of the ICI Schedule 14D-9 is hereby amended and
supplemented by adding the following information:
The Company agreed to pay Wertheim Schroder a fee of $50,000 on
the date the letter agreement between the Company and Wertheim
Schroder was signed and an additional fee of 1% of the aggregate
consideration (as defined in the letter agreement with Wertheim
Schroder) if the Company consummates a Sale Transaction, against
which the $50,000 fee will be credited; accordingly, if the Amended
Offer and Merger are consummated, the Company will pay Wertheim
Schroder a fee of approximately $3.5 million.
Item 7. Certain Negotiations and Transactions by the Subject Company.
(a) Except as set forth in the ICI Schedule 14D-9, the Company
is not engaged in any negotiation in response to the Amended 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.
(b) Except as described below and in Item 3(b) (the provisions
of which are hereby incorporated by reference), there are no
transactions, board resolutions, agreements in principle or signed
contracts in response to the Amended Offer which relate to or would
result in one or more of the matters referred to in paragraph (a) of
this Item 7.
At a meeting of the Board of Directors held on May 15, 1995,
the Company's Board of Directors adopted a resolution directing that
the management of the Company need not disclose in any Schedule 14D-
9 or amendment thereto, the possible terms of any transaction or
proposal or the parties thereto until an agreement in principle is
reached which relates to or would result in one or more of the
matters referred to in Item 7(a) of Schedule 14D-9 under the
Exchange Act, including any agreement in principle with respect to
modifications of the Merger Agreement, the Offer or the Sherwin-
Williams Offer.
Sherwin-Williams Confidentiality Agreement
On May 12, 1995, the Company and Sherwin-Williams entered into
a Confidentiality Agreement (the "Sherwin-Williams Confidentiality
Agreement"). The following is a summary of certain provisions of
the Sherwin-Williams Confidentiality Agreement, a copy of which has
previously been filed as Exhibit 24 to Amendment No. 5 to the ICI
Schedule 14D-9 and is incorporated herein by reference. Pursuant to
the Sherwin-Williams Confidentiality Agreement, Sherwin-Williams
agreed, among other things, to keep confidential certain information
furnished to it by the Company, provided that Sherwin-Williams is
permitted to disclose such of the information as it is advised by
counsel is legally required to be disclosed under the federal
securities laws.
Sherwin-Williams has further agreed that, except as provided in
the next paragraph, for a period of three years, neither Sherwin-
Williams nor any of its affiliates will, without the prior written
consent of the Company: (i) acquire, offer to acquire, or agree to
acquire, directly or indirectly, by purchase or otherwise, any
voting securities or direct or indirect rights to acquire any voting
securities of the Company or any subsidiary thereof, or any assets
of the Company or any subsidiary or division thereof; (ii) make, or
in any way participate in, directly or indirectly, any solicitation
of proxies to vote, or seek to advise or influence any person or
entity with respect to the voting of, any voting securities of the
Company; (iii) make any public announcement with respect to, or
submit a proposal for, or offer of (with or without conditions) any
extraordinary transaction involving the Company or any of its
subsidiaries or their securities or assets; (iv) form, join or in
any way participate in a "group" (as defined in Section 13(d)(3) of
the Exchange Act) in connection with any of the foregoing; (v) seek
to acquire control of the Company or influence the Board of
Directors, management or policies of the Company; (vi) induce any
other person or entity to do any of the foregoing; or (vii) request
the Company or any of its representatives, directly or indirectly,
to amend or waive any of the foregoing provisions.
Notwithstanding the foregoing restrictions, Sherwin-Williams or
any direct or indirect wholly-owned subsidiary of Sherwin-Williams
is permitted to acquire Shares pursuant to the Sherwin-Williams
Offer for all outstanding Shares at a price not less than $19.50 net
per Share in cash to the seller or such higher price in cash that
Sherwin-Williams or one of its direct wholly-owned subsidiaries may
offer to pay for Shares pursuant to the Sherwin Williams Offer;
provided, however, Sherwin-Williams is permitted to acquire Shares
pursuant to a cash tender for all outstanding Shares by Sherwin-
Williams or any direct or indirect wholly-owner subsidiary of
Sherwin-Williams made in accordance with Regulation 14D under the
Exchange Act at the amount per Share offered (or any greater amount
per Share offered) in any merger, tender offer or similar
transaction that shall have been approved by the Company's Board of
Directors within 90 days prior to the commencement of such cash
tender offer by Sherwin-Williams or its direct or indirect wholly-
owner subsidiary, except that this proviso is not applicable to
approval by the Company's Board of Directors of the Offer.
Item 8. Additional Information to be Furnished.
Item 8 of the ICI Schedule 14D-9 is hereby amended and
supplemented by adding the following information:
On May 11, 1995, the Company received a telephone call from the
New York State Attorney General's Office requesting that the Company
furnish the Attorney General's Office with copies of certain of the
Company's public filings with the SEC since June 30, 1994 and copies
of press releases relating to material corporate developments issued
by the Company between June 30, 1994 and January 1995. The Company
complied with such request for information.
Certain Litigation.
In addition to the litigation disclosed in the ICI Schedule
14D-9 originally filed on May 4, 1995, the Company has disclosed
certain other litigation in prior Amendments to the ICI Schedule
14D-9, which additional litigation has been described in the
Sherwin-Williams Schedule 14D-9, a copy of which has previously been
mailed to the Company's shareholders.
Rights Plan.
On May 10, 1995, the Company issued a press release announcing
that it has extended the distribution date ("Distribution Date") of
the stock purchase rights (the "Rights") associated with the Shares
until May 31, 1995 or such later date as may be determined by the
Company's Board of Directors or a committee thereof. Until such
date, the Rights will continue to trade together with the Shares.
Item 9. Material to Be Filed as Exhibits.
Exhibit No.
32 Amendment No. 1 to the Merger Agreement, dated as of May 21,
1995, among the Company, Parent and the Purchaser.
33 Letter to Shareholders of the Company, dated May 22, 1995.*
34 Press Release, dated May 22, 1995, issued by the Company.
35 Opinion of Wertheim Schroder & Co. Incorporated, dated May
21, 1995. *
36 Letter, dated May 21, 1995, from Sherwin-Williams to the
Company.
37 Letter, dated May 21, 1995, from Parent and the Purchaser to
the Company.
--------------------
* Included in copies of the ICI Schedule 14D-9 mailed to
shareholders.
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.
Dated: May 22, 1995
GROW GROUP, INC.
By /s/ Lloyd Frank
Title: Secretary
EXHIBIT INDEX
Exhibit
Number
Description
32 Amendment No. 1 to the Merger Agreement, dated as of May 22,
1995, among the Company, Parent and the Purchaser.
33 Letter to Shareholders of the Company, dated May 22, 1995.*
34 Press Release, dated May 22, 1995, issued by the Company.
35 Opinion of Wertheim Schroder & Co. Incorporated, dated May
21, 1995. *
36 Letter, dated May 21, 1995, from Sherwin-Williams to the
Company.
37 Letter, dated May 21, 1995, from Parent and the Purchaser to
the Company.
--------------------
* Included in copies of the ICI Schedule 14D-9 mailed to
shareholders.
ICI FORM OF AMENDMENT
AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER
Amendment No. 1 ("Amendment No. 1") dated as of
May 21, 1995, amending the Agreement and Plan of Merger,
dated as of April 30, 1995 ("Agreement"), among Grow
Group, Inc., a New York corporation (the "Company"),
Imperial Chemical Industries PLC, a corporation organized
under the laws of England ("Buyer"), and GDEN
Corporation, a New York corporation and an indirect
wholly owned subsidiary of Buyer ("Merger Subsidiary").
WHEREAS, the parties hereto desire to amend the
Agreement in certain respects in accordance with Section
11.03 of the Agreement;
NOW, THEREFORE, in consideration of the mutual
agreements herein contained and intending to be legally
bound hereby, the parties hereto agree as follows:
1. Definitions. Capitalized terms used herein
and not otherwise defined herein shall have the meaning
provided therefor in the Agreement.
2. Amendments to Agreement. The Agreement is
hereby amended as set forth in this Section 2:
(i) Section 1.01 of the Agreement is
amended to add the following new paragraphs (c) and (d):
(c) Pursuant to an offer to
purchase, dated May 4, 1995 (the "Offer to
Purchase"), Merger Subsidiary has offered
to purchase all of the outstanding Shares
at a price of $18.10 per Share, net to the
seller in cash (the "Offer"). On or prior
to the close of business on May 23, 1995,
Buyer shall cause Merger Subsidiary to
amend and supplement the Offer to Purchase
to (i) increase the price being offered
pursuant to the Offer from $18.10 to
$22.00 per Share (the "New Offer Price"),
net to the seller in cash, subject to any
amounts required to be withheld under
applicable federal, state, local, or
foreign income tax regulations, and (ii)
extend the expiration date of the Offer to
the date which is ten (10) business days
subsequent to the date that such amendment
and supplement to the Offer to Purchase is
first filed with the SEC (the "Expiration
Date"); provided, however, that if the
Minimum Condition has not been satisfied
by the Expiration Date, Buyer and Merger
Subsidiary agree to extend the Expiration
Date for one or more periods for up to an
aggregate of 30 calendar days until the
Minimum Condition is satisfied. The Offer
as amended pursuant to the provisions
hereof is herein referred to as the
"Amended Offer" and unless the context
otherwise requires, all references in the
Agreement to the "Offer" shall mean the
"Amended Offer" and all references in the
Agreement to the "Offer Price" shall mean
the "New Offer Price".
(d) On the date the Offer is
amended, Buyer and Merger Subsidiary shall
file (i) with the SEC an amendment to the
Tender Offer Statement on Schedule 14D-1
filed on May 4, 1995 (such Schedule 14D-1
together with all other amendments and
supplements thereto, the "Schedule 14D-
1"), which shall include as exhibits a
supplement to the Offer to Purchase (the
"Supplement") and a revised letter of
transmittal which provides for the Amended
Offer; and (ii) with the Attorney General
of the State of New York, an Amendment
with respect to the Registration Statement
filed on May 4, 1995 in accordance with
the Security Takeover Disclosure Act.
Buyer and the Company each agrees promptly
to correct any information provided by it
for use in the Offer Documents if and to
the extent that it shall have become false
or misleading in any material respect.
Buyer agrees to take all steps necessary
to cause the Offer Documents as so
corrected to be filed with the SEC and
with the Attorney General of the State of
New York and to be disseminated to holders
of the Shares, in each case as and to the
extent required by applicable federal and
state laws. The Company and its counsel
shall be given a reasonable opportunity to
review and comment on the amended Offer
Documents, including the Supplement, prior
to their being filed with the applicable
authorities.
(ii) Section 1.02 of the Agreement is
amended to add the following new paragraphs (d) and (e):
(d) The Company hereby consents
to the Amended Offer and represents that
its Board of Directors at a meeting duly
called and held on May 21, 1995, (i) has
determined that the Amended Offer is fair
to, and in the best interests of, the
stockholders of the Company; (ii) has
approved this Amendment No. 1 and the
Amended Offer; and (iii) has resolved to
recommend approval and adoption of this
Amendment No. 1 and acceptance of the
Amended Offer by the Company's
stockholders; provided that such
recommendation may be withdrawn, modified
or amended if, in the opinion of the Board
of Directors, after consultation with
independent legal counsel, such
recommendation would be inconsistent with
its fiduciary duties to the Company's
stockholders under applicable law. The
Supplement may contain reference to the
recommendation of the Board of Directors
that the Company's stockholders accept the
Amended Offer. The Company shall promptly
file with the SEC and mail to the holders
of Shares an amendment to the
Solicitation/Recommendation Statement on
Schedule 14D-9 previously filed on behalf
of the Company with the SEC (the "Schedule
14D-9 Amendment"), which amendment shall
reflect such recommendation of the Board
of Directors.
(e) The Company agrees promptly
to correct any information in the Schedule
14D-9 Amendment which shall have become
false or misleading in any material
respect and take all steps necessary to
cause the Schedule 14D-9 Amendment as so
corrected to be filed with the SEC and
disseminated to holders of Shares, as and
to the extent required by applicable law.
Buyer and its counsel shall be given a
reasonable opportunity to review and
comment on the Schedule 14D-9 Amendment
prior to its being filed with the
applicable authorities.
(iii) Section 2.05(a), clause (i) of the
Agreement is hereby amended to read in its entirety as
follows:
(i) the excess, if any, of the Merger
Consideration over the applicable exercise
price of such Option by
(iv) Section 11.04 of the Agreement is
hereby amended to add the following new paragraph (c) at
the end of Section 11.04:
(c) The Company agrees to pay
Buyer in respect of Buyer's expenses and
lost opportunity costs an amount in
immediately available funds equal to
$16,000,000 promptly, but in no event
later than two business days, after the
occurrence of the events specified below
in both clauses (A) and (B):
(A) A Trigger Event within the
meaning of and as specified in Section
11.04(b) of this Agreement shall have
occurred at any time from or after the
date hereof and, as a result thereof, this
Agreement is terminated, and (B) within
six months after such termination of this
Agreement has occurred, an Acquisition
Transaction shall have been consummated
with any Person (as defined in Sections
3(a)(9) and 13(d)(3) of the Exchange Act)
other than Buyer or a subsidiary or other
Affiliate (as defined in Rule 12b-2 under
the Exchange Act) of Buyer.
For purposes of this Section,
"Acquisition Transaction" shall mean (i) a
merger or consolidation, or any similar
business combination transaction,
involving the Company; (ii) a purchase,
lease or acquisition of all or
substantially all of the assets of the
Company and its subsidiaries taken as a
whole; or (iii) the purchase or
acquisition by any Person of securities
representing more than 50% of the then
outstanding Shares.
4. Miscellaneous. Except as expressly amended
hereby, the terms and conditions of the Agreement shall
continue in full force and effect. This Amendment No. 1
is limited precisely as written and shall not be deemed
to be an amendment to any other term or condition of the
Agreement or any of the documents referred to therein.
Wherever "Agreement" is referred to in the Agreement or
in any other agreements, documents and instruments, such
reference shall be to the Agreement as amended hereby.
4. Counterparts. This Amendment No. 1 may be
executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original but
all of which taken together shall constitute one and the
same agreement.
5. Governing Law. This Amendment No. 1 shall
be governed by and construed in accordance with the laws
of the State of New York without giving effect to the
provisions thereof relating to conflicts of law.
IN WITNESS WHEREOF, this Amendment No. 1 has
been duly executed and delivered by the Company, Buyer
and Merger Subsidiary on the date first above written.
GROW GROUP, INC.
By:/s/ R. Banks
Name: Russell Banks
Title: President & CEO
IMPERIAL CHEMICAL INDUSTRIES PLC
By:/s/ John Thompson
Name: John Thompson
Title: Attorney-in-Fact
GDEN CORPORATION
By:/s/ John Thompson
Name: John Thompson
Title: President
[Grow Group, Inc. Letterhead]
May 22, 1995
Dear Shareholder:
As you know, Imperial Chemical Industries PLC
("ICI") and The Sherwin-Williams Company ("Sherwin-
Williams"), have been seeking to acquire Grow Group, Inc.
("Grow"). In response to the competing tender offers by
ICI and Sherwin-Williams, your Board of Directors last
week initiated formal bidding procedures designed to
bring this process to a fair and orderly conclusion.
Grow requested both ICI and Sherwin-Williams to
submit their best and final offers by 12:00 noon on
Sunday, May 21, 1995. Following receipt of bids from
both parties, Grow's Board of Directors accepted the
higher bid and entered into an Amendment to its existing
Merger Agreement with ICI pursuant to which ICI has
increased its pending tender offer from $18.10 to $22.00
per share.
Your Board of Directors based upon, among other
things, the advice and written opinion of Wertheim
Schroder & Co. Incorporated, Grow's financial advisor,
unanimously recommends that shareholders accept the
amended ICI offer and tender their shares to ICI. Your
Board has also determined to reject Sherwin-Williams'
existing $19.50 per share tender offer and recommends
that shareholders not tender their shares to Sherwin-
Williams. In accordance with Corimon's existing
agreement with ICI, Corimon, which owns approximately 25%
of Grow's shares, will sell its Grow shares to ICI at a
price of $21.40 per share if the ICI tender offer is
consummated.
Information with respect to the bidding process
and ICI's revised tender offer is contained in the
enclosed Schedule 14D-9 Amendment. ICI is also
furnishing a Supplement to its original Offer to Purchase
and related materials, including a revised Letter of
Transmittal to be used for tendering your shares. We
urge you to read the enclosed material and consider this
information carefully.
Sincerely,
Russell Banks
President and
Chief Executive Officer
CONTACTS:
Jennifer R. Wall
D.F. King & Co., Inc.
212/269-5550
FOR IMMEDIATE RELEASE
GROW GROUP ACCEPTS $22.00 BID FROM ICI
ICI OUTBIDS SHERWIN-WILLIAMS IN AUCTION
New York, New York, May 22, 1995 ... Grow Group, Inc.
("Grow") (NYSE: GRO) announced today that it has accepted an
increased bid of $22.00 per share from Imperial Chemical Industries
PLC ("ICI"). Grow and ICI have entered into an Amendment to their
Merger Agreement to provide for the increase in price.
On May 17, 1995, Grow announced that its Board of
Directors had instituted a formal bidding process. In a letter
delivered to both ICI and The Sherwin-Williams Company ("Sherwin-
Williams") on that date, Grow stated that the bidding "rules and
procedures are designed to constitute a single and final round of
bids, and accordingly each of you should submit your best and
highest offer."
Prior to the noon bidding deadline on May 21, 1995, ICI
submitted its $22.00 per share bid and Sherwin-Williams submitted a
$20.00 per share bid.
In submitting its bid, Sherwin-Williams stated that it
has serious concerns with, and does not agree to be bound by, the
bidding procedures established last week by Grow's Board of
Directors, and Sherwin-Williams reserved the right to submit
further bids.
Grow's Board of Directors is unanimously recommending
that all shareholders tender their shares pursuant to ICI's amended
$22.00 offer. Grow's Board of Directors also unanimously
determined to modify its prior neutral recommendation with respect
to Sherwin-Williams' pending tender offer and is now recommending
that shareholders not tender to Sherwin-Williams.
Russell Banks, Grow's President and Chief Executive
Officer, stated: "We are extremely pleased that both ICI and
Sherwin-Williams participated in the formal bidding process and
increased their prior bids. We believe that Grow's shareholders
have benefited greatly from the auction process established by the
Board, and we look forward to the prompt completion of Grow's
acquisition by ICI."
The Amended Merger Agreement with ICI continues to
provide for the $8 million "break-up" fee previously agreed to
between ICI and Grow. In addition, as ICI and Sherwin-Williams
were previously advised, the Amended Merger Agreement provides for
an additional $16 million "break-up" fee in the event that the
agreement with ICI is terminated under certain circumstances and
Grow is thereafter acquired by another party within six months
after such termination. The identical "break-up" fees would have
been included in an agreement with Sherwin-Williams had Sherwin-
Williams submitted the winning bid.
In accordance with the terms of an existing agreement
between ICI and Corimon, a Venezuelan company which owns
approximately 25% of Grow's shares, Corimon will sell its shares to
ICI at a price of $21.40 per share. ICI's purchase of the shares
owned by Corimon is conditioned upon ICI's prior consummation of
its tender offer.
May 21, 1995
The Board of Directors
Grow Group, Inc.
200 Park Avenue
New York, NY 10166
Members of the Board:
We understand that, pursuant to the terms and conditions
set forth in the Agreement and Plan of Merger among
Imperial Chemical Industries PLC ("ICI"), GDEN
Corporation and Grow Group, Inc. ("Grow Group" or the
"Company") dated as of April 30, 1995 (the "Merger
Agreement"), as amended by Amendment No. I to the Merger
Agreement dated May 21, 1995 (the "Amended Merger
Agreement"), ICI is contemplating the acquisition of (i)
all of the outstanding shares of Grow Group Common Stock,
$0.10 par value per share ("Grow Group Common Stock"), of
which there are 16,101,712 shares issued and outstanding
as of the date hereof; and (ii) options to acquire
318,699 shares of Grow Group Common Stock exercisable at
an average price of $12.74 per share which are
outstanding under an incentive stock option plan (the
"Transaction"). The terms of the Amended Merger
Agreement provide, among other things, that either
pursuant to a tender offer to be made by ICI or at the
closing of the Transaction, the shareholders of the Grow
Group Common Stock, other than Corimon Corporation
("Corimon"), would receive $22.00 in cash in exchange for
each share of Grow Group Common Stock and option holders
(excluding option holders who exercise their options
prior to the closing of the Transaction) would receive in
cash the positive difference, if any, between $22.00 and
the exercise price of each option (the "Merger
Consideration"). The shareholders of the Grow Group
Common Stock other than Corimon are referred to herein as
the "Public Shareholders."
In accordance with the terms of the engagement letter
dated as of April 27, 1995, you have requested that
Wertheim Schroder & Co. Incorporated ("Wertheim
Schroder") render an opinion (the "Opinion"), as
investment bankers, as to the fairness, from a financial
point of view, of the Merger Consideration to be received
by Grow Group's Public Shareholders. It is understood
that (i) the Opinion shall be used by the Company solely
in connection with its consideration of the Transaction,
and (ii) the Company will not furnish the Opinion or any
other material prepared by Wertheim Schroder (including
this letter) to any other person or persons or use or
refer to the Opinion or this letter for any other
purposes without Wertheim Schroder's prior written
approval; provided, however, that the Company may furnish
the Opinion to ICI in its entirety and publish the
Opinion in its entirety in any documents distributed to
its shareholders in connection with the Transaction.
Wertheim Schroder, as part of its investment banking
business, is continually engaged in the valuation of
businesses and their securities in connection with
mergers and acquisitions, negotiated underwritings,
secondary distributions of listed and unlisted
securities, private placements and valuations for estate,
corporate and other purposes. Wertheim Schroder has
acted as financial advisor to Grow Group in its
negotiations with ICI.
In connection with the Opinion set forth herein, we have,
among other things:
i) reviewed the Merger Agreement and Amended Merger
Agreement;
ii) reviewed the recent published financial statements
of Grow Group, including its Forms 10K (1990, 1991,
1992, 1993 and 1994) and Forms 10Q (quarters ended
September 30, 1994, and December 31, 1994), and its
filings on Form 8K since June 30, 1994;
iii) reviewed historical financial results of Grow Group
by operating division prepared by management;
iv) reviewed forecasts and projections of Grow Group
prepared by Grow Group management for the fiscal
years ending June 30, 1995 through 1997;
v) had discussions with Grow Group management regarding
the business, operations and prospects of the
Company and reviewed management's financial
projections for the fiscal years ending June 30,
1995 through 1997;
vi) reviewed research reports and news articles on Grow
Group;
vii) performed various valuation analyses, as we deemed
appropriate, of Grow Group using generally accepted
analytical methodologies, including: (i) the
application of the public trading multiples of
comparable companies to the financial results of
Grow Group; (ii) the application of the multiples
reflected in recent mergers and acquisitions for
comparable businesses to the financial results of
Grow Group; and (iii) discounted cash flow, leveraged
buyout and leveraged recapitalization analyses of
Grow Group's operations;
viii) reviewed the historical trading prices and
volumes of Grow Group Common Stock; and
ix) performed such other financial studies, analyses,
inquiries and investigations as we deemed
appropriate.
In rendering the Opinion, we have relied upon the
accuracy and completeness of all information supplied or
otherwise made available to us by Grow Group or obtained
by us from other sources, and we have not assumed any
responsibility for independently verifying such
information, undertaken an independent appraisal of the
assets or liabilities (contingent or otherwise) of Grow
Group, or been furnished with any such appraisals. With
respect to financial forecasts for Grow Group, we have
been advised by Grow Group, and we have assumed, without
independent investigation, that they have been reasonably
prepared and reflect the best currently available
estimates and judgment as to the expected future
financial performance of Grow Group.
The Opinion is necessarily based upon financial,
economic, market and other conditions as they exist, and
the information made available to us, as of the date
hereof. We disclaim any undertaking or obligation to
advise any person of any change in any fact or matter
affecting the Opinion which may come or be brought to our
attention after the date of the Opinion unless
specifically requested to do so.
Our advisory services and the opinion expressed herein
are provided solely for the use of Grow Group's Board of
Directors in evaluating the Transaction. The opinion is
not being rendered on behalf of, and is not intended to
confer rights or remedies upon, ICI, any stockholder of
Grow Group or ICI, or any other person other than Grow
Group's Board of Directors. The Opinion relates solely
to the question of the fairness, from a financial point
of view, to Grow Group's Public Shareholders of the
Merger Consideration. We have not been asked to express,
and we have not expressed, any opinion as to the fairness
of the consideration to be received by Corimon.
Based upon and subject to all the foregoing, we are of
the opinion, as investment bankers, that as of the date
hereof, the Merger Consideration is fair, from a
financial point of view, to Grow Group's Public
Shareholders.
Very truly yours,
Wertheim Schroder & Co. Incorporated
May 21, 1995
BY HAND DELIVERY
Board of Directors
Grow Group, Inc.
200 Park Avenue
New York, NY 10166
Dear Sirs:
As you know, Sherwin-Williams has serious
concerns with the auction procedures outlined in Daniel
Stoller's May 17 letter. Sherwin-Williams strongly
believes that an open, multiple round bidding process is
the most effective means of ensuring that Grow's
stockholders receive the highest value for their Grow
stock.
On May 8, 1995, Sherwin-Williams commenced a
cash tender offer at a price of $19.50 per share of Grow
common stock. As of the time we are submitting this
letter to you, the Sherwin-Williams bid is the highest
offer by a substantial margin being presented to Grow's
stockholders. Nonetheless, because Sherwin-Williams
wishes to be constructive in your effort to bring the
auction process to a swift conclusion, by means of this
letter and the enclosed merger agreement Sherwin-Williams
hereby offers to purchase all of the outstanding shares
of Grow's common stock at a price of $20.00 per share in
cash.
Sherwin-Williams is prepared to respond
promptly to a higher bid submitted by ICI. Accordingly,
in order for you to obtain the best value for your
stockholders, it is essential that Sherwin-Williams be
given an opportunity to participate further in an ongoing
bidding process. Thus, we expect you will promptly
advise us of any ICI proposal that is equal to or in
excess of our offer in order to permit us the opportunity
to respond quickly to any proposal ICI may make, and we
request that you do so.
Enclosed with this letter are two originally
executed copies of an Agreement and Plan of Merger in the
same form as the "Sherwin-Williams Form of Merger
Agreement" that Mr. Stoller delivered to our counsel on
May 18, 1995 reflecting our $20.00 cash offer.
We urge you not to enter into any binding
agreement with ICI or any other party, particularly one
containing a break-up fee or other provisions that could
prevent your stockholders from receiving maximum value
for their shares, without first giving us the opportunity
to make a better bid.
This letter is not intended to, and does not,
conform to the bidding procedures set forth in Mr.
Stoller's May 17 letter. Sherwin-Williams expressly
reserves the right to submit this bid and any further
bids which do not conform to such procedures. We do not
agree to be bound by any of the limitations purportedly
imposed under those procedures, including the purported
requirement to accept any determination of Grow's Board
as to the manner of bidding, the Grow Board's
determination of the "winning" bid, or the purported
requirement that the "losing" bidder withdraw its tender
offer and not make any further offer.
We look forward to hearing from you as soon as
possible. You can contact me at any time through Rogers
& Wells at 878-8281.
Sincerely,
Conway G. Ivy
IMPERIAL CHEMICAL INDUSTRIES PLC
GDEN CORPORATION
May 21, 1995
The Board of Directors of Grow Group, Inc.
c/o Daniel E. Stoller, Esq.
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue, 33rd Floor
New York, NY 10022
Dear Sirs:
We refer to your letter of May 17, 1995 setting
out the rules and procedures for submission of proposals
to acquire Grow Group, Inc. (the "Company").
We propose to increase the price payable in the
offer being made pursuant to the Merger Agreement dated
as of April 30, 1995 among the Company, Imperial Chemical
Industries PLC and GDEN Corporation to US $22.00 per
share of Common Stock of the Company.
We enclose the ICI Form of Amendment (as
defined in your above mentioned letter) executed by both
Imperial Chemical Industries PLC and GDEN Corporation.
If you wish to discuss any aspect of our
proposal please telephone the undersigned at 212-450-4722
or Paul Kingsley at 212-450-4277.
Yours faithfully,
John K. Thompson
