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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO
SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 3)
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AMERICAN MAIZE-PRODUCTS COMPANY
(NAME OF SUBJECT COMPANY)
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CERESTAR USA, INC.
ERIDANIA BEGHIN-SAY, S.A.
(BIDDERS)
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CLASS A COMMON STOCK, PAR VALUE $0.80 PER SHARE
(TITLE OF CLASS OF SECURITIES)
027339 20 9
(CUSIP NUMBER OF CLASS OF SECURITIES)
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CLASS B COMMON STOCK, PAR VALUE $0.80 PER SHARE
(TITLE OF CLASS OF SECURITIES)
027339 30 8
(CUSIP NUMBER OF CLASS SECURITIES)
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ANDREW C. HARVARD
PRESIDENT
CERESTAR USA, INC.
C/O CENTRAL SOYA COMPANY INC.
1300 FORT WAYNE NATIONAL BANK BUILDING
FORT WAYNE, INDIANA 46802
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COPY TO;
NEIL T. ANDERSON
SULLIVAN & CROMWELL
125 BROAD STREET
NEW YORK, NEW YORK 10004
(212) 558-3653
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
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This Amendment No. 3 is filed to supplement and amend the information
set forth in the Tender Offer Statement on Schedule 14D-1 filed by Cerestar
USA, Inc. (the "Purchaser") and Eridania Beghin-Say, S.A. (the "Offeror") on
February 28, 1995, as amended by Amendment No. 1 filed on March 14, 1995 and
Amendment No. 2 filed on March 24, 1995 to such schedule (the "Schedule
14D-1"), with respect to shares of Class A Common Stock, par value $0.80 per
share (the "Class A Common Stock"), and Class B Common Stock, par value $0.80
per share (the "Class B Common Stock" and together with the Class A Common
Stock, the "Shares"), of American Maize-Products Company (the "Company").
Unless otherwise indicated, the capitalized terms used herein shall have the
meanings specified in the Schedule 14D-1 including the Offer to Purchase filed
as Exhibit (a)(1) thereto.
Item 10. Additional Information.
Paragraph 14, Certain Legal Matters, subsection entitled "Certain
Litigation", is hereby amended and supplemented by adding thereto the following
information:
On March 24, 1995, the court denied the plaintiff's motion to
preliminarily enjoin the sale of additional Class B Common Stock of the
Company.
Item 11. Material to be Filed as Exhibits.
Exhibit No. Description
(a)(11) Order, dated March 24, 1995, of the Superior Court of Maine.
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SIGNATURES
After due 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: March 27, 1995
ERIDANIA BEGHIN-SAY, S.A.
By: /s/ STEFANO MELONI
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Name: Stefano Meloni
Title: Chairman
CERESTAR USA, INC.
By: /s/ ANDREW C. HARVARD
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Name: Andrew C. Harvard
Title: President
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE NO.
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<S> <C> <C>
(a)(11) Order, dated March 24, 1995,
of the Superior Court of Maine.
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EXHIBIT (A)(11)
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STATE OF MAINE SUPERIOR COURT
CIVIL ACTION
CUMBERLAND, SS. DOCKET NOS. CV-95-165 AND
CV-95-189
GIH CORPORATION AND )
WILLIAM ZIEGLER, III, )
)
PLAINTIFFS )
)
V. ) DECISION AND ORDER
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AMERICAN-MAIZE )
PRODUCTS CO., ET AL., )
)
DEFENDANTS )
Before the court is the Plaintiffs' Application for Preliminary
Injunctive Relief on the Verified Complaint. Intervenors' Motion to Intervene
was granted for purposes of this hearing. Plaintiffs, in a related case,
Steiner et al. v. William Ziegler, III, CV-95-189, moved for consolidation.
Those plaintiffs were permitted to brief and argue the pending issues, but no
final decision on the Motion for Consolidation was made. The plaintiff, William
Ziegler, III (Ziegler), seeks to enjoin the Board of Directors of
American-Maize Products Company (Maize) from issuing additional shares of its
voting stock to Eridania Beghin-Say (EBS), a French corporation, pursuant to a
stock sales agreement that will allow EBS to accumulate enough votes to approve
a merger of Maize and EBS. The defendants, Maize and the twelve members of the
Maize Board of Directors, and the Intervenors, the trustees of the Steinkraus
Trusts (major shareholders of GIH Corporation), oppose the
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motion and support the stock issuance and the merger. For the reasons stated
below, the Application for Preliminary Injunctive Relief is denied.
FINDINGS OF FACT
Maize is a Maine Corporation with principal divisions in corn and
tobacco products. GIH Corporation (GIH) is a Delaware corporation whose
principal asset is stock in Maize. The four principal stockholders of GIH are
trusts established in New York and Connecticut for the benefit of the two
branches of the William Ziegler, Jr. family; the Steinkraus family and the
Ziegler family. The two Steinkraus Trusts hold 48.25% of outstanding GIH stock
and the two Ziegler Trusts hold 48.25% of outstanding GIH stock. Helen
Steinkraus and United States Trust Company of New York are co-trustees of the
Steinkraus Trusts. Ziegler and First Fidelity, N.A. are co-trustees of the
Ziegler Trusts. The remaining shareholders of GIH are Helen Steinkraus and
Ziegler who each hold 1.75% of GIH individually. Ziegler is also President of
GIH.
In terms of the actual number of shares held, the New York Ziegler
Trust controls one share more than the New York Steinkraus Trust, a situation
that has resulted in years of litigation between the two branches of the
Ziegler family and is commonly referred to as the "One Share Litigation." The
extra share gives Ziegler and the Ziegler Trusts the controlling vote in GIH
matters. There are additional controls, however, over decisions by GIH beyond
majority control. Pursuant to proceedings in the One Share Litigation, the
Steinkrauses and the Zieglers are bound by a Settlement Agreement which
includes a Stockholders Agreement. The
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Stockholders Agreement requires notice to all directors and the affirmative
vote of three directors to authorize expenditures by GIH or transactions to
which GIH is a party, having a value in excess of five thousand dollars
($5,000). The four directors of GIH are Ziegler, his son William Ziegler, Helen
Steinkraus, and her son, Eric Steinkraus.(1)
The principal asset of GIH is stock in Maize. GIH holds 47.33% of
Maize's Class B, or voting stock, and 13.43% of the Class A stock. Individually
Ziegler owns 7.2% of Maize Class B stock. Maize has no majority shareholder.
Ziegler argues that his 7.2% of Maize, coupled with the Ziegler Trust's control
over GIH's 47.33% of Maize, equals a 54.3% "Ziegler" controlling majority of
Maize.
EBS has made several offers to merge with Maize. On February 22, 1995,
the Maize Board of Directors approved a Merger Agreement with EBS finding the
Agreement to be in the best interests of Maize stockholders. The Merger
Agreement and related Stock Purchase Agreement call for the issuance of
approved but previously unissued shares of Maize to EBS and the subsequent
acquisition of Maize through a tender offer and "cash-out" merger of $40 per
share. The transaction will result in approximately $79 million for the Maize
shares held by GIH which is a premium of approximately 52.4% of the value of
the shares on the day before EBS's interest in Maize was announced. The
Agreements include a pre-emptive rights offering to existing Maize Class B
shareholders. Ziegler opposes the sale of
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(1)The court is aware of additional developments in the One Share
Litigation. For a discussion of the impact of those developments on this
Application for Preliminary Injunctive Relief, see footnote 4.
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additional stock arguing that the only purpose for the issuance of additional
Class B stock is to thwart Ziegler's majority in Maize by diluting his status
as controlling shareholder. Ziegler instituted this action for injunctive
relief in his own name and on behalf of GIH, acting as its President. Ziegler
neither sought nor received the authorization of the GIH Board to file this
action on its behalf. The trustees of the Steinkraus Trusts have intervened in
the action as defendants. They argue that Ziegler is not authorized to bring
this action on behalf of GIH. They also support the issuance of additional
shares of Maize stock. First Fidelity, co-trustee of the Ziegler Trusts, has
neither entered, consented to, nor ratified this suit.(2)
CONCLUSIONS OF LAW
The requisites for obtaining a preliminary injunction are well
established. The moving party must demonstrate: 1) that it will suffer
irreparable injury if the injunction is not granted; 2) that such injury
outweighs any harm which granting the injunction will inflict on the defendant;
3) that there is a likelihood of success on the merits or at least a substantial
possibility of success; and 4) that the public
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(2) After the hearing, First Fidelity Bank filed a letter dated March
20, 1995. A Motion to Strike this letter has been filed. Whether the letter is
included as substantive evidence or not, the result would be the same.
Mr. Ziegler opposes the merger because the tender offer does not
represent fair value to shareholders. At hearing, the evidence was that First
Fidelity had not completed its analysis of the financial fairness of the merger
and, therefore, did not consent to or ratify this action. In its March 20
letter, First Fidelity reiterates that it has not completed its analysis of the
underlying transaction, but would support Mr. Ziegler's efforts to prevent any
unlawful dilution of his -- and theirs as trustee -- interests in GIH and
Maize. This begs the question. Only when First Fidelity takes a position on the
financial and legal merits of the proposed merger will we know whether it
supports or opposes Mr. Ziegler in this action.
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interest will not be adversely affected by granting the injunction. Ingraham v.
University of Maine at Orono, 441 A.2d 691, 693 (Me. 1982). The court begins
its analysis with the plaintiff's showing of a likelihood of success on the
merits.
In order to succeed in showing that Ziegler is being blocked from his
majority shareholder position in Maize, he must first establish that he is,
unilaterally, the current controlling shareholder. Ziegler has not established
that he is the controlling shareholder of GIH. Although the New York Ziegler
Trust has one additional share and thus is currently the controlling voting
block for GIH, Ziegler is only one of two entities which votes the Ziegler
Trust shares. Ziegler's opinion does not carry the Ziegler Trust shares without
the approval of First Fidelity because Ziegler and First Fidelity are
co-trustees of the New York Ziegler Trust.(3) The importance of this co-trustee
relationship relative to the likelihood of success on the merits is tied to
Ziegler's claim that the merger will effectively dilute his controlling
interest in GIH. Since it appears that Ziegler alone does not have a
controlling interest in GIH now, he cannot claim to be dispossessed of it by
the issuance of additional shares.
Second, there is a serious question as to whether Mr. Ziegler has the
authority to bring this suit on behalf of GIH. The Settlement Agreement
requires affirmative approval of three of the four Board members of GIH before
expending costs in excess of $5,000. The costs of this litigation have likely
exceeded $5,000 already, not to mention the enormous financial impact the
underlying transaction would have on
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(3) See footnote 2.
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GIH. The record establishes that no approval for the suit has been given. In
addition, Delaware corporate law requires a board of directors to affirmatively
authorize a lawsuit outside the ordinary course of business. Keogh Corp. v.
Howard, Weil, Labouisse, Friedrichs Inc., 827 F. Supp. 269, 272 (S.D.N.Y.
1993). This suit is extraordinary because it involves a transaction worth over
$400 million and 99% of GIH's assets. Without the authority to speak for GIH,
Ziegler's argument that his votes control Maize is further weakened.(4)
Finally, as to the likelihood of success on the merits, Maine law is
unsettled regarding the authority of a board of directors, under the Maine
Business Corporation Act, 13-A M.R.S.A. Section Section 101 et seq., to issue
additional shares of stock effectively permitting a merger without the approval
of a majority of the holders of voting stock as required by 13-A M.R.S.A.
Section 902(3). Ziegler argues that under the Articles of Incorporation of
Maize and Section 902(3), the affirmative vote of an absolute majority of the
holders of the Class B common stock of Maize, voting as a separate class, is
required for mergers. Ziegler asserts that his vote is required to constitute
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(4) The court was informed on March 22, 1995 that the New York Supreme Court,
Appellate Division, affirmed a Surrogate's decision which kept the "one
share" of GIH stock on the New York Ziegler Trust's side of the ledger. The
court was further informed that the Steinkraus parties intend to pursue further
appellate relief. The Settlement Agreement and Stockholders Agreement remain
operational until "final resolution" of the "One Share Litigation." It is not
clear whether the Appellate Division decision is a "final resolution." However,
even if it is, while it might change the court's analysis with respect to the
issue of Mr. Ziegler's authority to bring this action on behalf of GIH, it
would not change the final result. In terms of the Ingraham criteria, the
relative balance of harms still weighs against plaintiff and he has failed to
establish that he will suffer irreparable injury unless the preliminary
injunction is granted.
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affirmative approval of the merger. Since he opposes the merger, he argues that
the requisite votes are lacking and that the merger agreement is illegal and
void.
The defendants claim the protection of the business judgment rule and
13-A M.R.S.A. Section 507(1) for the Board's decision to issue the new shares.
Section 507(1) provides a board with the authority to issue approved but as yet
unissued shares subject to the pre-emptive rights of the shareholders of voting
stock. In my view, this presents a close question. Mr. Ziegler's likelihood of
success on the merits is even at best. Even if Mr. Ziegler were to demonstrate
a likelihood of success on the merits, he fails to carry his burden on the
first and second Ingraham criteria: irreparable injury and a balancing of the
equities.
Irreparable injury is an injury for which there is no adequate remedy
at law. Bar Harbor Banking & Trust Co. v. Alexander, 411 A.2d 74, 79 (Me.
1980). In this case, the Stock Sales Agreement with EBS provides for
pre-emptive rights for the current Maize Class B stockholders; the exercise of
which operates to preserve relative ownership of Class B Shares. If those
rights are exercised, the EBS merger will not occur. Ziegler has indicated that
he is unable or unwilling to take advantage of his pre-emptive rights. While
the inability to exercise pre-emptive rights may frustrate Ziegler's desire to
keep Maize in the GIH "family," the law requires only that the opportunity to
exercise the rights be provided. 13-A. M.R.S.A. Section 623 (West 1981).
Moreover, if Ziegler chooses not to exercise his pre-emptive rights, he will
receive a substantial premium for his shares of Maize. If he feels for any
reason that his shares are worth more than the $40 per share offering, he may,
as a dissenter to
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the merger, demand an appraisal of the shares and money damages pursuant to
13-A M.R.S.A. Section Section 908-09 (West 1981); In re Valuation of Common
Stock of McLoon Oil Co., 565 A.2d 997 (Me. 1989). This appears to provide an
adequate legal remedy.
Finally, in order to establish an entitlement to injunctive relief, the
plaintiff must show that the irreparable injury alleged outweighs any harm
which granting the injunction will inflict on the defendants. There is
potential harm to all the Maize shareholders if the EBS merger does not occur.
The EBS offer represents a substantial financial premium on Maize shares of
more than $140 million. Of all the parties affected by this stock sales
agreement, Ziegler is the only one known to oppose the offer. At best, Ziegler
has shown a personal desire to retain as much of an interest in Maize as
possible. By contrast, the remaining Maize shareholders stand to lose a very
substantial financial opportunity not likely to come along again soon. The
court therefore finds that the balance of harms weighs against the plaintiff.
As such, and in combination with a failure to establish irreparable injury if
the injunction is not granted, the plaintiff has not shown that he is entitled
to injunctive relief.
In his eloquent closing remarks, Mr. Ziegler claims the high ground.
Notwithstanding the obstacles he faces on the facts of this particular case, he
argues that his basic position--that majority shareholder rights can not be
diluted even through good faith business judgments by a corporate
board--deserves favorable consideration and the protection of injunctive
relief. I do not question his sincerity, only his proof.
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The entry will be:
Plaintiff's Application for Preliminary Injunctive Relief is DENIED.
Pursuant to Rule 79(a), Clerk may incorporate judgment in docket by reference.
DATED: March 24, 1995
/s/ G. Arthur Brennan
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G. Arthur Brennan
Justice, Superior Court
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