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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): January 5, 1996
Magma Copper Company
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(Exact name of registrant as specified in its charter)
Delaware 1-10122 86-0219794
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(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of corporation) Identification No.)
7400 N. Oracle Rd.
Tucson, Arizona 85704
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(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (520) 575-5600
N/A
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(Former name or former address, if changed since last report.)
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Item 1. CHANGES IN CONTROL OF REGISTRANT.
On January 5, 1996, a change in control of Magma Copper Company, a
Delaware corporation (the "Company"), occurred when BHP Sub Inc., a Delaware
corporation ("Purchaser") and an indirect wholly owned subsidiary of The Broken
Hill Proprietary Company Limited, a Victoria, Australia corporation ("BHP"),
announced that it would accept for payment all shares of capital stock of the
Company validly tendered pursuant to a cash tender offer commenced on December
5, 1995 (the "Offer").
The following shares were acquired upon consummation of the Offer: (i)
51,000,596 shares of common stock, par value $0.01 per share (the "Common
Shares"), of the Company, at a price of $28.00 per share net to the seller in
cash; (ii) 1,230,962 shares of 5-5/8% Cumulative Convertible Preferred Stock,
Series D, par value $0.01 per share (the "Series D Preferred Shares") of the
Company, at a price of $96.544 per share net to the seller in cash and (iii)
1,417,432 shares of 6% Cumulative Convertible Preferred Stock, Series E, par
value $0.01 per share (the "Series E Preferred Shares" and, together with the
Common Shares and the Series D Preferred Shares, the "Shares") of the Company,
at a price of $100.646 per share net to the seller in cash. In addition, on
January 10, 1996, Purchaser acquired 17,500 Series D Preferred Shares
(representing 1.31% of such shares) and 25,800 Series E Preferred Shares
(representing 1.76% of such shares) from a single holder at the same price and
on the same terms as Shares accepted in the Offer. The aggregate number of
Shares held by Purchaser after such acquisition represents approximately
99.2%, 93.1%, and 90.3% of the total number of Common Shares, Series D
Preferred Shares and Series E Preferred Shares outstanding, respectively.
Because the Series D Preferred Shares and the Series E Preferred Shares are
convertible at any time into Common Shares, the number of shares outstanding
of any class is subject to change.
The Offer was conducted pursuant to an Agreement and Plan of Merger
(the "Merger Agreement"), dated as of November 30, 1995, by and among BHP, BHP
Holdings (USA) Inc. ("Sub"), a Delaware corporation and an indirect subsidiary
of BHP, Purchaser and the Company, pursuant to which Purchaser is to acquire the
Company in a two-step transaction. Under the Merger Agreement, Purchaser agreed
(i) to purchase all outstanding Shares of the Company validly tendered in the
Offer, and (ii) that each Share not acquired by Purchaser pursuant to the Offer
or otherwise would be exchanged for the same consideration payable pursuant to
the Offer in cash upon the contemplated merger (the "Merger") of Purchaser with
and into the Company. Pursuant to the Merger Agreement, the parties will cause
the Merger to become effective as soon as practicable after the expiration of
the Offer without a meeting of stockholders of the Company in accordance with
Section 253 of the Delaware General Corporation Law.
Purchaser has estimated that the total amount of funds required by
Purchaser to purchase the Shares pursuant to the Offer and the Merger and to pay
related fees and expenses will be approximately U.S.$1.83 billion, of which
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approximately $1.69 billion was paid to purchase Shares tendered pursuant to the
Offer. BHP has informed the Company that it has obtained such funds through
intercompany funding arrangements.
The cash needs of the BHP group of companies (the "BHP Group") are
generally financed through arrangements with BHP Finance Limited ("BFL"), a
wholly owned subsidiary of BHP. BFL in turn may, from time to time, borrow funds
pursuant to its general corporate financing program.
BFL has access to a variety of sources of financing including a number
of credit agreements and standby facilities. BFL has access to additional
financing through a number of major banks with whom it has working
relationships. In order to meet the forecasted general corporate cash needs of
the BHP Group (including cash which may be used to purchase the Shares pursuant
to the Offer), BFL has recently entered into additional loan agreements in an
aggregate amount of approximately Australian Dollars $2 billion. The maturities
of BFL's borrowings generally vary from one to ten years and the interest rates
are generally linked to LIBOR or Australian Bank Bill Rates, and generally are
payable at periods of one, three or six months.
All current and anticipated borrowings of BFL are unsecured; however,
the payment obligations of BFL are guaranteed by BHP. It is expected that the
cash flow of the BHP Group, in the ordinary course of business, will be
sufficient to enable BFL to repay its borrowings.
The information contained in this Current Report concerning BHP, BFL,
Sub, Purchaser and their respective affiliates either is based on information
set forth in Purchaser and its affiliates' Schedule 13D filed with respect to
the Company or has been furnished to the Company by BHP.
The Merger Agreement provides that, promptly upon the purchase by
Purchaser of such number of Shares as represents at least a majority of the
outstanding Common Shares (on a fully diluted basis) and from time to time
thereafter, Purchaser shall be entitled to designate such number of directors,
rounded up to the next whole number, on the Board of Directors of the Company
(the "Board of Directors") as will give Purchaser representation on the Board of
Directors equal to the product of (a) the number of directors on the Board of
Directors (after giving effect to the appointment of such directors) and (b) the
percentage that such number of Common Shares so purchased bears to the number of
Common Shares outstanding, and the Company will, upon request by Purchaser,
promptly (i) increase the size of the Board of Directors to the extent permitted
by its Restated Certificate of Incorporation and By-Laws of the Company (and
amend the Restated Certificate of Incorporation and By-Laws, if so required, to
increase the size of the Board of Directors to allow for such additional
directors), and/or (ii) take all steps necessary and appropriate to secure the
resignations of such number of directors as is necessary to enable BHP's
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designees to be elected to the Board of Directors (and will hold a Board of
Directors meeting for such purpose); provided, however, that the Company is
required to maintain no fewer than three (3) Continuing Directors (as such term
is defined in its Restated Certificate of Incorporation of the Company) of whom
at least two are Independent Directors (as such term is defined in the
Standstill Agreement, dated November 30, 1988, between the Company and Warburg,
Pincus Capital Company, L.P.); and (iii) shall cause BHP's designees to be so
elected.
On January 8, 1996, following the acceptance for payment by
Purchaser of Shares tendered pursuant to the Offer, Messrs. Christopher W.
Brody, Judd R. Cool, Pedro-Pablo Kuczynski, Thomas W. Rollins, Henry B.
Sargent, Simon D. Strauss and John L. Vogelstein resigned from the Board of
Directors and seven designees of BHP -- Messrs. Glen F. Andrews, Robert N.
Hickman, Ross N. James, T. Rognald Dankmeyer, Donald E. Egan, Stefano
Giorgini and A.E. Michael Anglin -- were elected by the directors then in
office. Information regarding such persons is contained in the Information
Statement pursuant to Section 14(f) of the Exchange Act sent to the holders
of Common Shares.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired: None
(b) Pro Forma Financial Information: None
(c) Exhibits:
1. Agreement and Plan of Merger, dated as of
November 30, 1995, by and among The Broken Hill
Proprietary Company Limited, BHP Holdings
(USA) Inc., BHP Sub Inc. and Magma Copper
Company. (incorporated herein by reference from
exhibit 1 to the Company's Solicitation/
Recommendation Statement on Schedule 14D-9, filed
with the Securities and Exchange Commission on
December 5, 1995)
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act, of
1934, the registrant has duly caused this Report to be signed on its behalf by
the undersigned hereunto duly authorized.
MAGMA COPPER COMPANY
Date: January 17, 1996 By: /s/ Douglas J. Purdom
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Name: Douglas J. Purdom
Title: Vice President
