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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): November 22, 1998
LOWE'S COMPANIES, INC.
(Exact Name of Registrant as Specified in its Charter)
NORTH CAROLINA 1-7898 56-0578072
(State Of Incorporation) (Commission (IRS Employer
File Number) Identification No.)
Highway 268 East
North Wilkesboro, NC 28656
(336) 658-4000
(Address and Telephone Number of Registrant's Principal Executive Offices)
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ITEM 5. OTHER EVENTS.
On November 22, 1998, Lowe's Companies, Inc., a North Carolina
corporation (the "Company"), Eagle Hardware & Garden, Inc., a Washington
corporation ("Eagle"), and Mariner Merger Corporation, a Washington
corporation and wholly owned subsidiary of the Company ("Sub"), entered into
an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which
Sub will be merged with and into Eagle (the "Merger"), with Eagle surviving
the Merger and becoming a wholly-owned subsidiary of the Company. At the
effective time of the Merger, each share of Eagle's Common Stock (excluding
shares held by Eagle or the Company, in each case other than in a fiduciary
capacity, and excluding shares held by shareholders who perfect their
statutory dissenters' rights under Washington state law) issued and
outstanding immediately prior to the effective time of the Merger shall cease
to be outstanding and shall be converted into and exchanged for the right to
receive that multiple (rounded to the nearest 1/10,000) of a share of the
Company's Common Stock obtained by dividing $29.00 by the "Base Period Trading
Price" (defined to mean the average of the daily closing prices for the shares
of the Company's Common Stock for the ten (10) consecutive trading days on
which such shares are actually traded on the New York Stock Exchange (as
reported by The Wall Street Journal or, if not reported thereby, any other
authoritative source selected by the Company) ending at the close of trading
on the fifth trading day immediately preceding the closing date of the
Merger); provided, that for purposes of this calculation, the Base Period
Trading Price shall be deemed to equal (i) $45.31 in the event the Base Period
Trading Price is greater than $45.31 or (ii) $33.49 in the event the Base
Period Trading Price is less than $33.49. Eagle shall not be obligated to
consummate the Merger if the "Lowe's Ratio" is less than 70%. The "Lowe's
Ratio" shall mean the quotient obtained by dividing the Base Period Trading
Price by $39.40. It is the intention of the Company and Eagle that the Merger
for federal income tax purposes will be tax-free to Eagle's shareholders and
for accounting purposes will qualify as a pooling of interests. In addition,
the consummation of the Merger is subject to certain other conditions
contained in the Merger Agreement, including approval of the Merger Agreement
by Eagle's shareholders. Each of Eagle's directors has entered into an
agreement (the "Shareholder Agreement") to vote his shares in favor of the
Merger.
On November 22, 1998, the Company and Eagle issued a joint news release
announcing the execution of the Merger Agreement, which news release is
attached hereto as Exhibit 99.1(a) and incorporated by reference herein.
The information set forth above shall not be deemed to constitute an
offer to sell any security. Any such offer to sell will be made only by means
of a prospectus.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(c) Exhibits.
99.1(a) Press release dated November 22, 1998 announcing the
execution of the Merger Agreement.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LOWE'S COMPANIES, INC.
Date: November 25, 1998
By: /S/ THOMAS E. WHIDDON
Thomas E. Whiddon
Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description
99.1(a) Press release dated November 22, 1998 announcing the
execution of the Merger Agreement.
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EXHIBIT 99.1(a)
LOWE'S ACQUIRES EAGLE IN MOVE THAT STRENGTHENS
WEST COAST MARKET ENTRY
North Wilkesboro, NC and Renton, WA (November 22, 1998) - Lowe's Companies,
Inc. (NYSE: LOW), the nation's second largest retailer of home improvement
products, and Eagle Hardware & Garden, Inc. (NASDAQ: EAGL), today jointly
announced that they have entered into a definitive agreement under which
Lowe's will acquire Eagle in a stock-for-stock merger transaction. This
strategic move is expected to strengthen and accelerate Lowe's entry into the
Western United States.
The Boards of Directors for both companies have unanimously approved the
transaction, which is expected to be complete during the first quarter of
1999. The deal, which is valued at approximately $1 billion, is subject to
2000. customary closing conditions including approval of the merger by
2001. Eagle's shareholders and certain regulatory approvals.
"This merger allows Lowe's to accelerate our West Coast expansion program and
gives us an immediate presence in a number of key metropolitan markets in the
West. But more importantly, we're aligning ourselves with a company that
shares so much of Lowe's way of doing business - a strong focus on customer
service and a broad array of product and service offerings in the store,"
said Bob Tillman, chairman and CEO of Lowe's.
Lowe's growth strategy remains on track with the acquisition of Eagle, which
will enhance Lowe's expansion in the Western United States. Eagle's 32-store
presence in nine Western states comes in addition to Lowe's plans to open 100
stores in the region over the next three to four years, as announced earlier
this year.
"The timing of this partnership is right for our shareholders, employees, and
most importantly our loyal customers. We immediately gain access to more
capital and buying power, plus our employees will benefit greatly from the
career advancement opportunities related to Lowe's phenomenal growth," said
Eagle's Chairman David J. Heerensperger.
The merger is structured as a tax-free exchange of Lowe's shares for Eagle's
shares, and will be accounted for as a "pooling of interests." Under the
terms of the agreement, Lowe's will issue shares to Eagle's shareholders
valued at $29 per Eagle share. Eagle's shareholders will receive that number
of Lowe's shares obtained by dividing $29 by the average of the daily closing
price of Lowe's Common Stock on the New York Stock Exchange in a 10-day
trading period ending on the fifth trading day before closing of the
transaction. In no event will the number of shares issued per Eagle share be
less than .6400 or more than .8659. The merger is expected to be modestly
accretive to Lowe's earnings in fiscal 1999.
"This is a tremendous opportunity for Eagle to partner with a nationwide
retailer that's widely regarded as one of the best employers in the country,"
said Richard T. Takata, president and CEO of Eagle. "Our companies share
many similarities in our approach to the business - we both have an
unwavering commitment to customer service and invest heavily in employee
training and development."
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"Eagle is one of the most respected names in home improvement in a number of
key markets in the Western United States," said Tillman. "We are acquiring
good sites, successful stores and well-trained people with valuable
experience in the industry. We are very impressed with their store
management and employees."
Takata will oversee the transition efforts and remain as President and Chief
Operating Officer of Eagle after the acquisition is complete. He will report
directly to Bob Tillman.
Founded in 1989, Eagle has over 6,000 employees and operates its warehouse
home improvement centers in Washington, Utah, Colorado, Hawaii, Alaska,
California, Idaho, Montana and Oregon. The company's home centers average
128,000 square feet of retail selling space and feature more than 65,000
products under its "More of EverythingT" merchandising philosophy.
Lowe's Companies, Inc., is one of the nation's leading home improvement
retailers, operating 465 stores in 26 states. Lowe's employs more than
65,000 people nationally and was selected this year by Fortune magazine as
one of "The 100 Best Companies to Work for in America."
Merrill Lynch & Co. served as financial advisor to Lowe's; NationsBanc
Montgomery Securities advised Eagle.
This news release contains, among other things, certain forward-looking
statements regarding the combined company following the merger, including
statements relating to accretion to reported earnings that may be realized
from the merger, and enhanced store expansion plans in the Western region.
Such forward-looking statements involve certain risks and uncertainties,
including a variety of factors that may cause the combined company's actual
results to differ materially from the anticipated results or other
expectations expressed in such forward-looking statements. Factors that
might cause such a difference include, but are not limited to: (1) expected
cost savings from the merger may not be fully realized; (2) real estate for
the combined company's store expansion plans in the Western region may not be
available as anticipated, and development of new stores may encounter
regulatory obstacles; (3) earnings following the merger may be lower than
expected; (4) competitive pressure among home improvement warehouse chains
may increase more than anticipated; (5) costs or difficulties related to the
integration of the business of Eagle into Lowe's may be greater than
expected; and (6) general economic or business conditions, either nationally
or in the Western states where Eagle does business, may be less favorable
than expected, resulting in, among other things, reduced demand for the
combined company's products and services.
LOWE'S CONTACTS: EAGLE CONTACTS:
Media Inquiries: Richard T. Takata
Brian Peace 336-658-4170 425-227-5740
Shareholders' and Security Analysts' Inquiries: Ron Maccarone
Robert Niblock 336-658-4860 425-227-5740
Carson Anderson 336-658-4385
