SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
AMENDMENT NO. 3
TO
SCHEDULE 14D-9
(WITH RESPECT TO THE TENDER OFFER BY
THE SHERWIN-WILLIAMS COMPANY)
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. 3 the
Solicitation/Recommendation Statement on Schedule 14D-9,
originally filed on May 16, 1995 (the "Sherwin-Williams Schedule
14D-9"), by Grow Group, Inc., a New York corporation (the
"Company"), relating to the tender offer by GGI Acquisition,
Inc., a New York corporation ("GGI") and a wholly owned
subsidiary of The Sherwin-Williams Company, an Ohio corporation
("Sherwin-Williams"), initially disclosed in a Tender Offer
Statement on Schedule 14D-1, dated May 8, 1995, to purchase all
outstanding shares of common stock, par value $0.10 per share
(the "Common Stock" or the "Shares"), of the Company 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 Offer to Purchase,
dated May 8, 1995, and the related Letter of Transmittal.
Capitalized terms used and not otherwise defined herein shall
have the meanings set forth in the Sherwin-Williams Schedule 14D-9.
ITEM 3. IDENTITY AND BACKGROUND.
Item 3(b) of the Sherwin-Williams Schedule 14D-9 is hereby
amended and supplemented by adding the following information:
THE AMENDED ICI MERGER AGREEMENT.
On May 21, 1995, the Company, ICI and GDEN executed
Amendment No. 1 to the ICI Merger Agreement ("Amendment No. 1 to the
ICI Merger Agreement") which provides, among other things, (i)
that ICI will cause GDEN to amend and supplement the GDEN Offer to
Purchase to, among other things, increase the price being offered
pursuant to the ICI Offer from $18.10 to $22.00 per share (the
"Amended ICI Offer"), and (ii) that the Company has agreed to pay
to ICI a $16,000,000 "break-up" fee, in addition to the
$8,000,000 break-up fee provided for in the ICI Merger Agreement,
under the circumstances described in the following paragraph. A
copy of Amendment No. 1 to the ICI Merger Agreement has been
filed as Exhibit 30 hereto and is incorporated herein by
reference. The ICI Merger Agreement, as amended by Amendment No.
1, is herein referred to as the "Amended ICI Merger Agreement."
Break-up Fee. In addition to the $8,000,000 fee that the Company
has agreed to pay ICI after the occurrence of a Trigger Event (as
defined below), the Company has agreed to pay ICI in respect of
ICI'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 ICI Merger Agreement is terminated; and
(B) within six months after such termination of the
Amended ICI 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 ICI or a subsidiary or other
Affiliate (as defined in Rule 12b-2 under the Exchange Act)
of ICI.
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 ICI Merger Agreement) other than
the transactions contemplated by the ICI Merger Agreement;
(ii) the Board of Directors of the Company shall have
withdrawn or materially modified its approval or
recommendation of the Amended ICI Offer or the Amended ICI
Merger Agreement other than as a result of ICI's breach of
the Amended ICI Merger Agreement; or
(iii) any person or group (as defined in Section
13(d)(3) of the Exchange Act) (other than ICI 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 ICI Merger Agreement.
CORIMON OPTION AGREEMENT.
As a result of the increased price offered in the Amended
ICI 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.
STOCK OPTIONS.
In connection with the ICI 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 table indicating the treatment in
the ICI Merger of currently outstanding Options held by executive
officers and non-employee directors of the Company. For purposes
of this table, it has been assumed that outstanding Options will
not be exercised.
Amounts Payable with respect to Company
Options
in the ICI 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
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
Item 4 of the Sherwin-Williams Schedule 14D-9 is hereby
amended and supplemented by adding the following information:
(A) RECOMMENDATION OF THE BOARD OF DIRECTORS.
At a meeting held on May 21, 1995, the Board of Directors
unanimously determined to modify its position and now recommends
that shareholders reject the Sherwin-Williams Offer and not
tender their Shares into the Sherman-Williams Offer. Previously,
the Board of Directors had expressed no opinion and remained
neutral with respect to the Sherwin-Williams Offer. A press
release announcing such determination is filed herewith as
Exhibit 29 and is incorporated herein by reference.
(B) BACKGROUND; REASONS FOR THE BOARD'S RECOMMENDATION.
Background. On May 16, 1995, the Company issued a press
release announcing that it had been advised by the Federal Trade
Commission that ICI had received early termination of the Hart-
Scott-Rodino ("HSR") waiting period with respect to the ICI Offer
and that Sherwin-Williams would 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 ICI 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 ICI 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
Sherwin-Williams 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 16, 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,
ICI 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 the Amended ICI Offer of
$22.00 per Share and Sherwin-Williams' revised offer of $20.00
per Share, each of which was submitted in response to Grow's May
17, 1995 letter to ICI and Sherwin-Williams pertaining to the
submission of bids. The terms of the proposals submitted by ICI
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. The full
Board discussed the proposals made by ICI and Sherwin-Williams.
After discussion and further analysis, the Company's Board
of Directors, for the reasons described below, 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. The
Board also determined to approve the Amended ICI Merger Agreement
and to recommend that shareholders accept the Amended ICI Offer.
Immediately following the May 21, 1995 Board meeting, the
Company executed the Amended ICI Merger Agreement, which had been
submitted with ICI's bid.
Reasons for the Board's Recommendation; Factors Considered
by the Board. In recommending that shareholders reject the
Sherwin-Williams Offer and not tender their Shares pursuant to
the Sherwin-Williams Offer, the Board of Directors considered a
number of factors including:
1. the fact that in the Bidding Process ICI has offered the
Company's shareholders consideration in the amount of $22.00 per
Share in the Amended ICI Offer while Sherwin-Williams has
proposed to pay $20.00 per Share;
2. the fact that both Sherwin-Williams and ICI 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 ICI and Sherwin-Williams
to submit their best and highest offer in the Bidding Process;
4. the fact that Sherwin-Williams had been given ample
opportunity to conduct a due diligence review of the Company
which would allow Sherwin-Williams to submit its best and highest
offer to acquire the Company;
5. 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;
6. the position of Sherwin-Williams set forth in the
Sherwin-Williams May 21 Letter;
7. the fact that the Amended ICI Merger Agreement provides
that the Company is obligated, under the circumstances described
in such agreement, to pay to ICI an additional "break-up" fee of
$16 million (in addition to the $8 million "break-up" fee which
had already been provided for in the ICI Merger Agreement prior
to being amended), 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; and
8. the Board of Directors' familiarity with the business of
the Company, its prospects, financial condition, results of
operations, employees, customer base, current business strategy
and industry position.
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 8. ADDITIONAL INFORMATION TO BE FURNISHED
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.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit No.
28 Letter to Shareholders of the Company, dated May 22, 1995.
29 Press Release, dated May 22, 1995, issued by the Company.
30 Amendment No. 1 to the Agreement and Plan of Merger,
dated as of May 21, 1995, among the Company, ICI and
GDEN.
31 Letter, dated May 21, 1995, from Sherwin-Williams to the
Company.
32 Letter, dated May 21, 1995, from ICI and GDEN to the
Company.
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
28 Letter to Shareholders of the Company, dated May 22, 1995.
29 Press Release, dated May 22, 1995, issued by the Company.
30 Amendment No. 1 to the Agreement and Plan of Merger,
dated as of May 21, 1995, among the Company, ICI and
GDEN.
31 Letter, dated May 21, 1995, from Sherwin-Williams to the
Company.
32 Letter, dated May 21, 1995, from ICI and GDEN to the
Company.
[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.
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
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
