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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
SCHEDULE 13E-4/A
(Amendment No. 4)
Issuer Tender Offer Statement
(Pursuant to Section 13(e)(1) of the Securities Exchange Act of 1934)
THE LIMITED, INC.
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(Name of issuer and person filing statement)
Common Stock, $.50 par value
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(Title of class of securities)
53271610
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(CUSP number of class of securities)
SAMUEL P. FRIED
Senior Vice President and
General Counsel
THE LIMITED, INC.
Three Limited Parkway
P.O. Box 16000
Columbus, Ohio 43230
Telephone: (614) 415-7000
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(Name, address and telephone number of person
authorized to receive notices and communications
on behalf of the person filing statement)
Copies to:
DENNIS S. HERSCH
DAVID L. CAPLAN
DAVIS POLK & WARDWELL
450 Lexington Avenue
New York, New York 10017
(212) 450-4000
May 4, 1999
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(Date tender offer first published, sent or given to security holders)
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<PAGE>
This Amendment No. 4 amends and supplements the Issuer Tender Offer
Statement on Schedule 13E-4 filed on May 4, 1999, as amended on May 6, 1999,
May 18, 1999 and May 25, 1999 (the "Schedule 13E-4"), by The Limited, Inc., a
Delaware corporation (the "Company"), relating to its offer to purchase up to
15,000,000 outstanding shares of its common stock, $0.50 par value per share
(the "Shares") at a price specified by stockholders, not greater than $55.00
per Share and not less than $50.00 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 4, 1999 (the "Offer to Purchase") and in the related Letter of
Transmittal, copies of which are attached as Exhibits (a)(1) and (a)(2) to the
Schedule 13E-4.
Terms used but not defined herein are used as defined in the Offer to
Purchase.
Item 1. Security and Issuer.
The expiration date, proration period and withdrawal rights associated
with the Offer have been extended to occur at 12:00 midnight, New York City
time, on Thursday, June 3, 1999.
Item 7.
In accordance with Amendment No. 3, Item 7 of the Schedule 13E-4 is hereby
restated in its entirety as follows:
Summary Historical Financial Information. Set forth below is certain
consolidated historical financial information of the Company and its
subsidiaries. The historical financial information (other than the ratios of
earnings to fixed charges) was derived from the audited consolidated financial
statements included in the Company's Annual Report on Form 10-K for the year
ended January 30, 1999 (the "Company's 1998 Annual Report"), and other
information and data contained in the Company's 1998 Annual Report. More
comprehensive financial information is included in such reports and the
financial information which follows is qualified in its entirety by reference
to such reports and all of the financial statements and related notes contained
therein, copies of which may be obtained as set forth below under "Additional
Information About the Company".
THE LIMITED, INC. AND SUBSIDIARIES
Summary Historical Financial Information
(In thousands, except per share data and financial ratios)
<TABLE>
Year Ended
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January 30, January 31,
1999 1998
----------- -----------
<S> <C> <C>
Condensed Consolidated Statements of Income:
Net sales.......................................... $ 9,346,911 $ 9,188,804
Operating income................................... 2,437,473(4) 480,099(5)
Net income......................................... 2,053,646 217,390
Net income per share:
Basic........................................... 8.52 0.80
Diluted......................................... 8.32 0.79
Weighted average number of shares outstanding:
Basic........................................... 240,907 271,898
Diluted......................................... 246,319 274,483
Ratio of earnings to fixed charges(1).............. 9.14 2.44
</TABLE>
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<TABLE>
Year Ended
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January 30, January 31,
1999 1998
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<S> <C> <C>
Condensed Consolidated Balance Sheets:
Assets
Total current assets............................ $ 2,318,184 $ 2,031,151
Total assets.................................... 4,549,708 4,300,761
Total assets less intangible assets(2).......... 4,331,896 4,172,381
Liabilities and Shareholders' Equity
Total current liabilities....................... $ 1,247,935 $ 1,093,412
Long-term debt.................................. 550,000 650,000
Total liabilities............................... 2,316,405 2,255,804
Shareholders' equity............................ 2,233,303 2,044,957
Book value per share outstanding(3)............. 9.86 7.50
Shares outstanding at end of period............. 226,572 272,800
</TABLE>
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(1) For the purpose of calculating the ratio of earnings to fixed charges,
earnings consists of pretax income excluding minority interests plus fixed
charges consisting of interest and the portion of minimum rent considered
representative of interest.
(2) Intangible assets include: unamortized catalogue costs, goodwill,
trademarks and non-compete agreements.
(3) Book value per share outstanding is based upon actual shares outstanding
net of shares held in treasury and does not include the dilutive effect of
stock options and restricted stock.
(4) Includes $1.740 billion in special and nonrecurring items comprised of the
following:
o $1.651 billion tax-free gain related to the exchange offer that
established A&F as an independent company.
o $93.7 million gain from the sale of the Company's remaining interest
in Brylane.
o $5.1 million charge for severance and other associate termination
costs related to the closing of five of six Henri Bendel stores.
(5) Includes $213 million in special and nonrecurring charges comprised of the
following:
o $68 million in charges for the closing of the 118-store Cacique
business effective January 31, 1998.
o $82 million in charges related to streamlining the Henri Bendel
business.
o $86 million of impaired asset charges, related principally to the
women's apparel businesses.
o A $28 million provision for closing and downsizing oversized stores
and a $12 million write-down to net realizable value of a real estate
investment previously acquired in connection with closing and
downsizing certain stores.
o These charges were partially offset by a third quarter net gain of
$62.8 million related principally to the Company's sale of
approximately one-half of its investment in Brylane.
In addition, the Company recognized a $13 million cost of sales charge for
inventory liquidation at Henri Bendel.
Pro Forma Financial Information
Set forth below is certain unaudited pro forma consolidated financial
information of the Company and its subsidiaries based on historical information
which has been adjusted to reflect (i) the consummation of the Limited Too
spinoff and the related transactions described in the Notes to Summary
Unaudited Pro Forma Financial Information and (ii) the purchase of 15,000,000
Shares at an assumed price of $55.00 per Share pursuant to the Offer and the
related transactions described in the Notes to Summary Unaudited Pro Forma
Financial Information. In addition, such
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information reflects the reclassification of approximately $352 million of
restricted cash as a result of the rescission of the Contingent Stock
Redemption Agreement. The Summary Unaudited Pro Forma Consolidated Statement of
Income gives effect to the above transactions as if they occurred on February
1, 1998 and the Summary Unaudited Pro Forma Consolidated Balance Sheet gives
effect to the transactions as if they occurred on January 30, 1999. The
assumptions on which the pro forma financial information is based are further
described in the Notes to Summary Unaudited Pro Forma Financial Information.
Management of the Company believes that the assumptions used provide a
reasonable basis on which to present the Summary Unaudited Pro Forma Financial
Statements. The pro forma financial information does not purport to be
indicative of the results which would actually have been achieved if the Offer
and the Limited Too spinoff and related transactions had been completed as of
such dates or which may be achieved in the future. The pro forma financial
information should be read in conjunction with the accompanying notes thereto
and the consolidated financial statements and related notes set forth in the
Company's 1998 Annual Report, as well as the summary historical financial
information set forth above.
THE LIMITED, INC. AND SUBSIDIARIES
Summary Unaudited Pro Forma Consolidated Statement of Income
(in thousands, except per share data and financial ratios)
<TABLE>
Pro Forma
Year Ended Year Ended
January 30, Limited Too January 30,
1999 Spinoff Subtotal Tender Offer 1999
----------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Net sales..........................$ 9,346,911 $ 376,943 $ 8,969,968 $ 8,969,968
Costs of goods sold, occupancy
and buying costs................ (6,348,945) (251,531) (6,097,414) (6,097,414)
----------- ----------- ----------- -----------
Gross income....................... 2,997,966 125,412 2,872,554 2,872,554
General, administrative and store
operating expenses.............. (2,300,523) (96,956) (2,203,567) (2,203,567)
Special and nonrecurring items,
net............................. 1,740,030 1,740,030 1,740,030
----------- ----------- ----------- -----------
Operating income................... 2,437,473 28,456 2,409,017 2,409,017
Interest expense................ (68,528) (68,528) $ (3,500)(a) (72,028)
Other income, net............... 59,265 59,265 (27,000)(b) 32,265
Minority interest............... (64,564) (64,564) (64,564)
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Income before income taxes......... 2,363,646 28,456 2,335,190 (30,500) 2,304,690
Provision for income taxes......... (310,000) (11,400) (298,600) 12,200 (c) (286,400)
----------- ----------- ----------- ---------- -----------
Net income(1)......................$ 2,053,646 $ 17,056 $ 2,036,590 $ (18,300) $ 2,018,290
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Net income per share
Basic...........................$ 8.52 $ 8.93
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Diluted.........................$ 8.32 $ 8.71
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Weighted average shares
outstanding
Basic........................... 240,907 240,907 (15,000)(d) 225,907
=========== =========== ========== ===========
Diluted......................... 246,319 246,319 (15,000)(d) 231,319
=========== =========== ========== ===========
Ratio of earnings to fixed
charges(2) 9.14 9.11
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</TABLE>
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(1) Includes $1.740 billion in special and nonrecurring items comprised of the
following:
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o $1.651 billion tax-free gain related to the exchange offer that
established A&F as an independent company.
o $93.7 million gain from the sale of the Company's remaining interest
in Brylane.
o $5.1 million charge for severance and other associate termination
costs related to the closing of five of six Henri Bendel stores.
(2) For the purpose of calculating the ratio of earnings to fixed charges,
earnings consist of pretax income excluding minority interests plus fixed
charges consisting of interest and the portion of minimum rent considered
representative of interest.
The accompanying notes are an integral part of the summary Unaudited Pro
Forma Financial Statements.
THE LIMITED, INC. AND SUBSIDIARIES
Summary Unaudited Pro Forma Consolidated Balance Sheet
(in thousands, except per share data)
<TABLE>
Limited Too
Transactions Limited Too Pro Forma
January 30, ---------------------- Transaction January 30,
1999 Debt Spinoff(b) Subtotal Costs Tender Offer 1999
----------- ---------- ---------- ---------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets
Current assets
Cash and equivalents............ $ 870,317 $ 50,000(a) $ 987 $ 919,330 $ (10,000)(c) $ 351,600 (d) $ 429,930
(825,000)(e)
(6,000)(f)
Accounts receivable............. 77,715 1,440 76,275 76,275
Inventories..................... 1,119,670 27,565 1,092,105 1,092,105
Store supplies.................. 98,797 5,237 93,560 93,560
Other........................... 151,685 582 151,103 151,103
---------- -------- -------- ---------- --------- --------- ----------
Total current assets............... 2,318,184 50,000 35,811 2,332,373 (10,000) (479,400) 1,842,973
Property and equipment, net........ 1,361,761 44,894 1,316,867 1,316,867
Restricted cash.................... 351,600 351,600 (351,600)(d) --
Deferred income taxes.............. 48,782 6,313 42,469 42,469
Other assets....................... 469,381 1,250 1,250 469,381 469,381
---------- -------- -------- ---------- --------- --------- ----------
Total Assets....................... $4,549,708 51,250 88,268 $4,512,690 $ (10,000) (831,000) 3,671,690(1)
========== ======== ======== ========== ========= ========= ==========
Liabilities and Shareholders'
Equity
Current liabilities
Accounts payable................ $ 289,947 $ 3,108 $ 286,839 $ 286,839
Current portion of long-term debt 100,000 100,000 100,000
Borrowings under revolving
credit agreement............. -- 1,250 1,250 -- --
Accrued expenses................ 681,515 22,377 659,138 659,138
Income taxes.................... 176,473 8,932 167,541 167,541
---------- -------- -------- ---------- ----------
Total current liabilities.......... 1,247,935 1,250 35,667 1,213,518 1,213,518
Long-term debt..................... 550,000 50,000(a) 50,000 550,000 550,000
Other long-term liabilities........ 56,010 1,501 54,509 54,509
Minority interest.................. 110,860 110,860 110,860
Contingent stock redemption
agreement....................... 351,600 351,600 (351,600)(d) --
Total shareholders' equity......... 2,233,303 1,100 2,232,203 (10,000)(c) 351,600 (d) 1,742,803
(825,000)(e)
(6,000)(f)
---------- -------- -------- ---------- --------- --------- ----------
Total Liabilities and
Shareholders' Equity............ $4,549,708 $ 51,250 $ 88,268 $4,512,690 $ (10,000) $(831,000) $3,671,690
========== ======== ======== ========== ========= ========= ==========
</TABLE>
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<TABLE>
Limited Too
Transactions Limited Too Pro Forma
January 30, ---------------------- Transaction January 30,
1999 Debt Spinoff(b) Subtotal Costs Tender Offer 1999
----------- ---------- ---------- ---------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Shares outstanding at end of
period.......................... 226,572 226,572 (15,000)(g) 211,572
Book value per share
outstanding(2)................. $ 9.86 $ 8.24
</TABLE>
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(1) Total assets less intangible assets on a pro forma basis are $3,453,878.
(2) Book value per share outstanding is based upon actual shares outstanding
net of shares held in treasury and does not include the dilutive effect of
stock options and restricted stock.
The accompanying notes are an integral part of the Summary Unaudited Pro
Forma Consolidated Financial Statements.
NOTES TO SUMMARY UNAUDITED PRO FORMA FINANCIAL INFORMATION
1. Basis of Presentation
The following summary of pro forma adjustments is based on available
information and various estimates and assumptions. Management of the Company
believes that these assumptions provide a reasonable basis for presenting all
of the significant effects of the following transactions and events and that
the pro forma adjustments give appropriate effect to those assumptions and are
properly applied in the unaudited pro forma consolidated financial statements.
The summary unaudited pro forma financial information gives effect to the
transactions described below:
o Limited Too's financing proceeds of approximately $51 million, which
will be used to pay a dividend of $50 million to the Company and
$1.25 million in financing fees to the lenders, and the spinoff of
Limited Too to the stockholders of the Company (together, the
"Limited Too Transactions"). Limited Too's financing proceeds of
approximately $51 million would be available based on a commitment
obtained by Limited Too from a third-party lender for a two-tranche,
$100 million financing comprised of (i) a $50 million five-year
amortizing term loan and (ii) a $50 million five-year revolving
credit facility.
o The purchase of 15,000,000 Shares of the Company at an assumed price
of $55 per Share for a total of $825 million.
o The rescission of the Contingent Stock Redemption Agreement,
resulting in a reclassification of restricted cash of $351.6 million
to general cash and reclassification of temporary equity (the caption
"Contingent stock redemption agreement" in the balance sheet) to
permanent equity. Pursuant to the Contingent Stock Redemption
Agreement, through January 1, 2006, the Trust had the right to
require the Company to redeem up to 18,750,000 Shares belonging to
the Trust at a price of $18.75 per Share and, for the six-month
period beginning July 31, 2006, the Company had the right to purchase
some or all of such Shares at a price of $25.07 per Share. In order
to fund its obligations under this agreement, the Company was
required to maintain $351.6 million in a restricted cash account. On
May 3, 1999, a special committee of the Board approved the terms of
an agreement rescinding the Contingent Stock Redemption Agreement,
and the Company entered into such agreement. As a result of this
agreement, all of the Company's, Wexner's and the Trust's respective
rights and obligations under the Contingent Stock Redemption
Agreement were immediately terminated.
The historical information has been adjusted to give effect to the above
transactions and assumptions to the extent not reflected in the historical
financial statements. The Summary Unaudited Pro Forma Consolidated Statement of
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Income gives effect to the above transactions as if they occurred on February
1, 1998 and the Summary Unaudited Pro Forma Consolidated Balance Sheet gives
effect to the transactions as if they occurred on January 30, 1999.
2. Pro Forma Consolidated Statement of Income
(a) To reflect estimated interest expense on additional short-term
borrowings the Company would have incurred in 1998 if the Offer had been
completed on February 1, 1998. Estimated interest expense was calculated using
a borrowing rate of 5.6% based upon rates available to the Company during the
period. A 1/2 percentage point change in the borrowing rate would change
interest by approximately $300,000.
(b) To eliminate approximately $18.3 million interest income earned on
restricted cash of $351.6 million, set aside for the Contingent Stock
Redemption Agreement, and approximately $8.7 million interest income, at an
investment rate of 4.8%, on general cash. A 1/2 percentage point change in the
investment rate would change interest income by approximately $900,000. The
cash from the Contingent Stock Redemption Agreement and general cash is assumed
to be used to partially fund the Offer.
(c) To reflect the tax effect of the pro forma interest adjustments at an
estimated effective tax rate of 40%.
(d) To reflect the assumed number of shares purchased.
3. Pro Forma Consolidated Balance Sheet
(a) To reflect approximately $51 million of debt expected to be incurred
by Limited Too, which would be available based on a commitment from a
third-party lender, shortly before the date of spinoff. Proceeds will be used
to pay a $50 million dividend to the Company and $1.25 million in financing
fees to the lender. The debt incurred will be part of Limited Too's capital
structure after the spinoff.
(b) To reflect the spinoff of Limited Too to the stockholders of the
Company. The spinoff is recorded at historical cost as a dividend to the
Company's stockholders. Prior to the spinoff, Limited Too is expected to incur
approximately $51 million of debt, which would be available based on a
commitment from a third-party lender, the proceeds of which will be used to pay
$50 million dividend to the Company and $1.25 million in financing fees to the
lender.
(c) To reflect estimated transaction costs expected to be incurred in
fiscal 1999 in connection with the spinoff of Limited Too. These costs are not
reflected in the Summary Unaudited Pro Forma Consolidated Statement of Income.
(d) To reflect the rescission of the Contingent Stock Redemption
Agreement, resulting in a reclassification of restricted cash to general cash
and reclassification of temporary equity (the caption "Contingent stock
redemption agreement" in the balance sheet) to permanent equity, making
available restricted cash of $351.6 million.
(e) To reflect the use of cash to purchase Shares under the Offer.
(f) To reflect estimated transaction costs paid in connection with the
Offer.
(g) To reflect the assumed number of Shares purchased.
Item 9. Material to be Filed as Exhibits.
Item 9 is amended by adding the following exhibit:
(a) (17) Form of Press Release dated June 1, 1999
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SIGNATURE
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.
THE LIMITED, INC.
By: /s/ Kenneth B. Gilman
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Kenneth B. Gilman
Vice Chairman and
Chief Administrative Officer
Dated: June 2, 1999
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EXHIBIT INDEX
Exhibit Number Description
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(a)(17) Press Release issued by the Company, dated June 1, 1999
9
EXHIBIT (a)(17)
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THE LIMITED, INC. REPORTS MAY COMPARABLE STORE SALES OF 10%
DUTCH AUCTION TENDER OFFER EXTENDED 48 HOURS
TO 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, JUNE 3RD
Columbus, Ohio (June 1, 1999) -- The Limited, Inc. (NYSE/LSE: LTD)
reported comparable store sales for the four-week period ended May 29, 1999
increased 10%. The Company reported net sales of $728.4 million for the four-
week period ended May 29, 1999, an increase of 8%, compared to sales of $677.2
million for the comparable four-week period ended May 30, 1998. Net sales in
1998 include the results of Abercrombie & Fitch Co. (NYSE: ANF) through May 19,
1998. ANF became independent from The Limited, Inc. after the May 1998 exchange
offer.
The Company's comparable store sales increased 12% for the seventeen weeks
ended May 29, 1999. Sales of $2.833 billion increased 6% for the seventeen
weeks ended May 29, 1999, from sales of $2.685 billion for the same period last
year.
In order to allow shareholders adequate time to consider the information
included in this press release, the Company is extending its tender offer to
purchase up to 15 million shares of its common stock for 48 hours. The offer,
proration period and withdrawal rights will now expire at 12:00 midnight, New
York City time, on Thursday, June 3, 1999, unless further extended by the
Company. The self-tender is being made only by means of an Offer to Purchase
and related documents, copies of which were mailed to all shareholders and
filed with the Securities and Exchange Commission, and may also be obtained
from the information agent, D.F. King & Co., Inc.
The Limited, Inc., through Express, Lerner New York, Lane Bryant, Limited
Stores, Structure, Limited Too, Galyan's and Henri Bendel, presently operates
3,399 specialty stores. The Company also owns approximately 84% of Intimate
Brands, Inc. (NYSE: IBI), the leading specialty retailer of intimate apparel,
beauty and personal care products through the Victoria's Secret and Bath & Body
Works brands. Victoria's Secret products are available through 853 lingerie and
beauty stores, the Victoria's Secret Catalogue and online at
www.VictoriasSecret.com. Bath and Body Works products are available in 1,108
stores.
###
For further information, please contact: Tom Katzenmeyer
Vice President
Investor Relations
The Limited, Inc.
614-415-7076
www.limited.com
