SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
December 6, 1999
KANSAS CITY SOUTHERN INDUSTRIES, INC.
(Exact name of company as specified in its charter)
DELAWARE 1-4717 44-0663509
(State or other jurisdiction (Commission file (IRS Employer
of incorporation) number) Identification Number)
114 West 11th Street, Kansas City, Missouri 64105
(Address of principal executive offices) (Zip Code)
Company's telephone number, including area code:
(816) 983 - 1303
Not Applicable
(Former name or former address if changed since last report)
<PAGE>
Item 5. Other Events
On December 6, 1999, Kansas City Southern Industries, Inc. ("KCSI" or "Company")
announced that it commenced cash tender offers and consent solicitations for the
Company's outstanding $400 million in Notes and Debentures.
On December 20, 1999, KCSI announced that as of 5:00 p.m., New York City Time on
Friday, December 17, 1999, the Company had received tenders and the requisite
consents from the holders of more than a majority of the outstanding aggregate
principal amount of each series of its Notes and Debentures.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit No. Document
(99) Additional Exhibits
99.1 Press Release issued by Kansas City Southern
Industries, Inc. dated December 6, 1999
entitled, "Kansas City Southern Industries
Announces $400 Million Debt Tender and
Consent Solicitation Offer", is attached
hereto as Exhibit 99.1
99.2 Press Release issued by Kansas City
Southern Industries, Inc. dated December
20, 1999 entitled, "Kansas City Southern
Industries, Inc. Announces Successful
Consent Solicitation", is attached
hereto as Exhibit 99.2
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this Report to be signed on its behalf by the undersigned
hereunto duly authorized.
Kansas City Southern Industries, Inc.
Date: December 21, 1999 By: /s/ Louis G. Van Horn
-------------------------------------------
Louis G. Van Horn
Vice President and Comptroller
(Principal Accounting Officer)
<PAGE>
EXHIBIT 99.1
Contact: KCSI
Landon H. Rowland (816-983-1393) Kansas City Southern Industries, Inc.
Chairman, President and Chief Executive Officer 114 West 11th Street
Kansas City, Missouri 64105
Joseph D. Monello (816-983-1213)
Vice President & Chief Financial Officer
NYSE Symbol: KSU
Release No.: 1999-12: Date: December 6, 1999
NEWS RELEASE
KANSAS CITY SOUTHERN INDUSTRIES ANNOUNCES $400 MILLION DEBT
TENDER AND CONSENT SOLICITATION OFFER
Kansas City, Missouri
Kansas City Southern Industries, Inc. ("Company", NYSE : KSU) today
announced that it has commenced cash tender offers and consent solicitations for
the Company's outstanding $400 million in Notes and Debentures.
The following table sets forth information for each of the Notes and Debentures
to which the offers apply.
<TABLE>
Outstanding
Aggregate Redemption Earliest
Principal Security Amount Redemption Reference Fixed
CUSIP No. Amount Description per $1,000 Date Security Spread
<S> <C> <C> <C> <C> <C> <C>
485170AB0 $100,000,000 7.875% $1,000.0 7/1/02 6.25% 0.35%
Notes Due 6/30/02
Due 7/1/02
485170AD6 $100,000,000 6.625% $1,000.0 3/1/05 5.875% 0.50%
Notes Due 11/15/04
Due 3/1/05
485170AC8 $100,000,000 8.8% $1,040.4 7/1/02 6.25% 0.50%
Debentures Due 6/30/02
Due 7/1/22
485170AF1 $100,000,000 7% $1,000.0 12/15/25 5.25% 0.875%
Debentures Due 2/15/29
Due 12/15/25
Total $400,000,000
</TABLE>
<PAGE>
The tender offers are being made upon the terms and subject to the conditions
set forth in the Offer to Purchase and Consent Solicitation Statement which are
being mailed to the holders of the Notes and Debentures on or about December 6,
1999.
Under the terms of the tender offers, the consideration for each $1,000
principal amount of Notes and Debentures will be calculated based on the yield
on an applicable United States Treasury reference security, plus an applicable
fixed spread, less the consent payment described below. The consideration will
also include accrued and unpaid interest. The consideration will be fixed two
days prior to the expiration of the tender offers. The tender offers will expire
at 9:00 a.m., New York City time, on Tuesday, January 11, 2000 unless extended
or earlier terminated by the Company.
The Company is also soliciting consents from the holders of Notes and Debentures
to amend the indenture under which the Notes and Debentures were issued. Under
the terms of the consent solicitations, each holder who tenders Notes and
Debentures and validly consents to the proposed amendments prior to the
applicable consent time and does not revoke such consent will be paid $25.00 in
cash for each $1,000 in principal amount of Notes or Debentures for which
consents have been delivered. The consent time, in order to receive such consent
payment, for each consent solicitation is 5:00 p.m., New York City time, on
Friday, December 17, 1999. Holders tendering their Notes or Debentures will be
required to consent to amendments which will eliminate or modify certain of the
covenants contained in the Indenture governing the Notes and the Debentures.
Merrill Lynch & Co. is the exclusive dealer manager and consent solicitation
agent for the tender offers and the consent solicitations.
The offers and consent solicitations are being made in connection with the
Company's planned separation of its financial services businesses from its
transportation businesses. The Company expects that the separation will be
effected through a spin-off of its financial services businesses by distributing
to its stockholders as a dividend all of the outstanding common stock of
Stilwell Financial, Inc. ("Stilwell"), a wholly-owned subsidiary to which the
Company transferred all of the capital stock of its financial services
subsidiaries and other related assets. Once the spin-off is completed, the
Company will continue under the KCSI name as a company primarily in the
transportation business.
The separation is currently expected to occur promptly following the payment for
Notes and Debentures tendered and accepted by the Company pursuant to the tender
offers.
If the requisite consents to a supplemental indenture are obtained and the
supplemental indenture with respect to any series of Notes or Debentures becomes
effective, any Notes or Debentures of such series not tendered and accepted for
payment will not have the benefits of certain covenants and other related
provisions that will be eliminated, amended or waived by the proposed
amendments. Furthermore, after the expected spin-off of Stilwell is completed,
the Company must derive the cash flows necessary to make interest and principal
payments on any remaining outstanding Notes or Debentures only from its
transportation businesses. The Company expects that the separation will result
in the debt ratings by Standard & Poor's and Moody's Investor Services on any
outstanding Notes or Debentures being downgraded below investment grade.
The Company has secured a loan commitment from The Chase Manhattan Corporation
for senior secured debt financing that is sufficient to fund the payments
pursuant to the offers and consent
<PAGE>
solicitation and the refinancing of the Company's existing credit facilities
which would otherwise terminate at the time of the Company's planned spin-off of
Stilwell. The funding of this financing is subject to certain conditions,
including without limitation, the substantial completion by the bank of its due
diligence by an agreed upon date, there being no adverse change in the condition
(financial or otherwise) of the Company and no disruption in the syndication
markets, and other conditions customarily applicable to credit facilities of a
similar nature and amount.
This news release is neither an offer to purchase the Notes or Debentures nor a
solicitation of an offer to sell the Notes. The tender offers and consent
solicitations are only made pursuant to the offering documents. Questions
regarding the terms of the tender offers and consent solicitations may be
directed to Merrill Lynch & Co. at 888-654-8637, attention: Liability Management
Group. Copies of the offering documents may be obtained by calling Beacon Hill
Partners, Inc., at 212-843-8500 (call collect) or 800-755-5001 (toll free).
KANSAS CITY SOUTHERN INDUSTRIES, INC. is a diversified holding company with
operation in the railroad transportation and financial services industries. Its
primary railroad transportation subsidiary operations are held with in Kansas
City Southern Lines, Inc. and include: The Kansas City Southern Railway Company
and Gateway Western Railway along with equity interests in Transportacion
Ferroviaria Mexicana S.A. de C.V. and Mexrail, Inc. KCSI's primary financial
services subsidiary operations are held with in Stilwell Financial, Inc. and
include: Janus Capital Corporation, Berger LLC and Nelson Money Managers plc
along with an equity interest in DST Systems,. Inc. The Company is headquartered
in Kansas City, Missouri. In fiscal year 1998, KCSI reported total revenues of
$1.3 billion with total assets of $2.6 billion..
--------------------------------
This news release includes statements concerning potential future events
involving the Company, which could materially differ from the events that
actually occur. The differences could be caused by a number of factors including
those factors identified in KCSI's December 31, 1998 Form 10-K and the Current
Report on Form 8-K/A dated June 3, 1997, each filed by the Company with the
Securities and Exchange Commission (Commission file no. 1-4717). The Company
will not update any forward-looking statements in this news release to reflect
future events or developments.
EXHIBIT 99.2
Contact: KCSI
Landon H. Rowland (816) 983-1393 Kansas City Southern Industries, Inc.
Chairman, President and Chief Executive Officer 114 West 11th Street
Kansas City, Missouri 64105
Joseph D. Monello (816) 983-1213
Vice President & Chief Financial Officer
NYSE Symbol: KSU
Release No.: 1999-12: Date: December 20, 1999
NEWS RELEASE
KANSAS CITY SOUTHERN INDUSTRIES, INC.
ANNOUNCES SUCCESSFUL CONSENT SOLICITATION
Kansas City, Missouri
Kansas City Southern Industries, Inc. announces successful consent solicitation
for 7.875% Notes due July 1, 2002, 6.625% Notes due March 1, 2005, 8.8%
Debentures due July 1, 2022 and 7% Debentures due December 15, 2025.
Kansas City Southern Industries, Inc. ("KCSI" or the "Company", NYSE : KSU)
announced today that as of 5:00 p.m., New York City Time, on Friday, December
17, 1999, it had received tenders and the requisite consents from the holders of
more than a majority of the outstanding aggregate principal amount of each
series of its 7.875% Notes due July 1, 2002, its 6.625% Notes due March 1, 2005,
its 8.8% Debentures due July 1, 2002, and its 7% Debentures due December 15,
2025 (collectively, the "Debt Securities").
Accordingly, upon the terms and subject to the conditions set forth in the Offer
to Purchase and Consent Solicitation Statement dated December 6, 1999, the
Company and the indenture trustee have signed a supplemental indenture with
respect to each such series of Debt Securities that eliminates certain covenants
and waives certain other provisions of the indenture governing the Debt
Securities. The amendments implemented by each supplemental indenture will not
become operative until the Company accepts the applicable validly tendered Debt
Securities following the expiration of the offer to purchase the Debt Securities
at 9:00 a.m., New York City time, January 11, 2000, unless extended. The
consideration to be paid for Debt Securities tendered in the offer will be
calculated at 12:00 noon, New York City time, on January 7, 2000, unless the
expiration for the offer is extended.
Merrill Lynch & Co. is the exclusive Dealer Manager for the tender offer and the
exclusive Solicitation Agent for the consent solicitation. Questions or requests
for assistance may be directed to Merrill Lynch (telephone: 888-654-8637).
Requests for documentation may be directed to Beacon Hill Partners, Inc., the
Information Agent (telephone: 800-755-5001).
Kansas City Southern Industries, Inc. is a diversified holding company with
operations in the railroad transportation and financial services industries.
KCSI's wholly owned railroad transportation subsidiaries, Kansas City Southern
Railway and Gateway Western Railway, are held within Kansas
<PAGE>
City Southern Lines, Inc. In addition, KCSI has an equity interest in
Transportacion Ferroviaria Mexicana, S.A. de C.V. and Mexrail, Inc. KCSI's
financial services subsidiary operations are held within Stilwell Financial,
Inc., including primarily: Janus Capital Corporation, Berger LLC and Nelson
Money Managers plc along with an equity interest in DST Systems, Inc.
KCSI expects to complete the spin-off of Stilwell from the Company promptly
following the payment for Debt Securities tendered and accepted by the Company
pursuant to the tender offers. KCSI is headquartered in Kansas City, Missouri.
In fiscal year 1998, the Company reported total revenues of $1.3 billion with
total assets of $2.6 billion.
*************************************************
This news release includes statements concerning potential future events
involving the Company, which could materially differ from the events that
actually occur. The differences could be caused by a number of factors including
those factors identified in KCSI's December 31, 1998 Form 10-K and the Current
Report on Form 8-K/A dated June 3, 1997, each filed by the Company with the
Securities and Exchange Commission (Commission file no. 1-4717). The Company
will not update any forward-looking statements in this news release to reflect
future events or developments.
