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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Amendment No. 1
UNDER THE SECURITIES EXCHANGE ACT OF 1934
SCHERER HEALTHCARE, INC.
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(Name of issuer)
Common Stock, $.01 Par Value
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806530-10-1
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(Cusip Number)
Bruce L. Newberg Jon Brooks
11601 Wilshire Boulevard 265 East 66th Street, #25F
Los Angeles, CA 90025 New York, NY 10021
-with copies to-
Joseph F. Mazzella, Esq.
NUTTER MCCLENNEN & FISH, LLP
Boston, Massachusetts 02110
(617) 439-2000
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
July 18, 2000
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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CUSIP No. 806530-10-1 SCHEDULE 13D/A Page 2 of 5 Pages
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1. NAME OF REPORTING PERSON/S.S. OR I.R.S. IDENTIFICATION
NO. OF ABOVE PERSON
BRUCE L. NEWBERG
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [X]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
WC, OO
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
USA
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7. SOLE VOTING POWER
0
NUMBER OF --------------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY
OWNED BY 203,748.78
EACH --------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON
WITH: 0
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10. SHARED DISPOSITIVE POWER
203,748.78
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
203,748.78
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.7%
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14. TYPE OF REPORTING PERSON
IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE
ATTESTATION.
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CUSIP No. 806530-10-1 SCHEDULE 13D/A Page 3 of 5 Pages
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1. NAME OF REPORTING PERSON/S.S. OR I.R.S. IDENTIFICATION
NO. OF ABOVE PERSON
JON BROOKS
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [X]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
PF
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
USA
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7. SOLE VOTING POWER
121,425
NUMBER OF --------------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0
EACH --------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON
WITH: 121,425
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10. SHARED DISPOSITIVE POWER
0
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
121,425
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.8%
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14. TYPE OF REPORTING PERSON
IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE
ATTESTATION.
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CUSIP No. 806530-10-1 SCHEDULE 13D/A Page 4 of 5 Pages
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THIS SCHEDULE 13D AMENDS AND SUPPLEMENTS THAT CERTAIN SCHEDULE 13D FILED ON
SEPTEMBER 17 , 1999.
ITEM 4. PURPOSE OF THE TRANSACTION
This Amendment reports the making of a proposal by the Reporting Persons to
acquire all of the outstanding capital stock of the Issuer for a price of $5.00,
or higher, per share in cash. Such offer was made by letters dated July 17, 2000
(attached hereto as Exhibit B). Such proposal is not subject to any purchaser
financing contingency, but is subject to completion of due diligence and
execution of definitive purchase agreements.
The Reporting Persons have made several prior requests to discuss with the
issuer's Board of Directors one or more transactions that could benefit public
shareholders of the issuer. Such recommended transactions included payment of
dividends, sale or merger of the Issuer, the repurchase of the Issuer's stock
from the Reporting Person, and from all public shareholders, or the sale of the
public minority stock interest to Robert Scherer, or other members of
management. Such transactions could have the effect of changing the management,
Board of Directors or capital structure of the issuer, and the sale of the
Issuer to the Reporting Persons would result in the deregistration of the
Issuer's shares under the Securities Exchange Act of 1934.
The Reporting Persons further informed the Board that one or more of the
transactions described above would benefit shareholders in light of the Board's
failure to adequately address the stagnation of stockholder value that has
occurred during recent years, and allegations of sexual harrassment and other
improper conduct against Robert Scherer, the Company's chief executive officer.
The Reporting Persons, or either of them individually, may communicate with
other shareholders, with management, and with third parties, including potential
purchasers, with respect to their investments and their proposals regarding the
Company. The Reporting Persons may modify their proposals and intentions based
upon developments in the Issuer's business, discussions with the Issuer, actions
of management or a change in market or other conditions. The Reporting Persons
will continually monitor and evaluate their investment position, or may take
other steps, change their intentions, or trade in the Issuer's securities at any
time, or from time to time.
ITEM5. THE REPORTING PERSONS HAVE NOT ENTERED INTO ANY TRANSACTIONS IN
SECURITIES OF THE ISSUER WITHIN THE PAST 60 DAYS.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit B. Letters dated July 18, 2000 to the Issuer's Board of Directors
Exhibit C. Press Release dated July 18, 2000
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CUSIP No. 806530-10-1 SCHEDULE 13D Page 5 of 5 Pages
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After reasonable 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.
This statement may be executed in any number of counterparts, each of which
shall be deemed an original and all of which shall constitute one (1)
instrument.
Date: July 18, 2000 /S/ Bruce L. Newberg
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Bruce L. Newberg
Date: July 18, 2000 /S/ Jon Brooks
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Jon Brooks
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Exhibit B-1
July 18, 2000
Board of Directors of
Scherer Healthcare, Inc.
120 Interstate N. Parkway S.E.,
Suite 305
Atlanta, GA 30339
Dear Sirs:
As you know, over the last two years we have attempted on numerous
occasions to meet with members of the Board to discuss the significant
unrealized enterprise value of Scherer Healthcare, Inc. (the "Company") and
various means of realizing that value for shareholders. During that time, we
have made several specific proposals, ranging from the sale of the Company to a
strategic buyer or to management, to a broad premium priced repurchase to be
offered to all shareholders, to selected repurchase of large holder shares
without current premium, to the payment of capital dividends. Still, the Board
has repeatedly refused to meet with us, notwithstanding that we are among the
largest independent shareholders of the Company.
At the same time, outside Board members claim to be anxious to pursue
specific proposals that would deliver higher value for shareholders. We are
pleased today to deliver just such a proposal that will result in shareholders
realizing a cash premium of approximately 40% over average trading prices of
recent years. We hereby formally propose that a corporation ("Newco") to be
formed and funded by the undersigned and certain other investors ("Holding Co.")
acquire 100% of the ownership of the Company for $5.00 per share, in cash. The
transaction would be consummated through a merger of the Company with Newco, or
other mutually acceptable manner in which shareholders would receive an all-cash
price for their shares (the "Acquisition").
As independent shareholders, we consider this an opportunity for the
Board to demonstrate that it is in fact willing to legitimately discharge its
fiduciary duties to public shareholders.
Our proposed price of $ 5.00 per share, in cash, is based on publicly
available financial information, and is subject only to standard due diligence
and execution of a definitive purchase agreement. After such due diligence we
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Page 2
may be open to further discussion of price and other terms, as the results may
in fact lead to a higher per share consideration being made available to
shareholders. We are proposing to pay the entire purchase price in cash, and, as
described below, our offer does not have a financing contingency.
We request that the Board promptly agree to open negotiations with us
regarding our proposal by executing a copy of this letter, after which we will
immediately execute a customary confidentiality agreement and commence due
diligence and preparation of draft acquisition documents. While we believe this
is an appropriate basis to begin negotiations, we are open to proceeding in any
alternative process so long as it results in a timely and legitimate exploration
of our offer. We caution the Board against rejecting this offer on the basis of
any single term not being fully described or accepted. We have set forth more
detail of our proposal, below.
1. FORM OF TRANSACTION. We propose that the acquisition of all of the
outstanding shares of the Company, for cash, be effected through a merger of the
Company with Newco (the "Merger"). We are open to discussing other structures
that may benefit Company shareholders and lead to the consummation of the
Acquisition on an accelerated basis. As described below, we are prepared to
provide all equity necessary to consummate the Acquisition and therefore, do not
require that any member of management, or any other shareholder, retain or
acquire an investment in the resulting business. Accordingly, we would be making
the cash consideration equally available to all shareholders of the Company on
the same terms.
2. CASH CONSIDERATION. The aggregate consideration due to shareholders in the
Merger would be $5.00 per share, based upon the Company's reported shares
outstanding.
3. FULLY FUNDED NATURE OF THE PROPOSAL. The cash necessary to consummate the
Acquisition, and to pay related transaction expenses, will be provided by the
undersigned as principal shareholders of Holding Co., and by a limited number of
other investors and financing sources to which we have access. As a result of
the resources available to us, upon signing a definitive acquisition agreement,
we are prepared to be unconditionally committed to closing the Acquisition and
would not require a financing contingency.
4. DEFINITIVE AGREEMENT. The parties would promptly begin preparation of a
definitive purchase agreement which would have customary representations and
warranties, provisions regarding conduct of the business pending closing, and
other standard conditions to closing (including satisfaction of any government
filing or other requirements). Until execution of the definitive agreement,
neither the Company nor we would be bound, other than by the terms of this
Letter Proposal, where applicable.
5. EXPENSES; TERMINATION FEE. The Company and we will each pay our respective
fees and expenses (including the fees and expenses of legal counsel, investment
bankers, brokers or other representatives or consultants) incurred in connection
with the transactions contemplated hereby. In the event the Company determines
to pursue a competing acquisition proposal, or declines to enter into a
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definitive purchase agreement at the price set forth herein, the Company shall
have no obligation to the undersigned, other than to reimburse us for
reasonable, documented out-of-pocket expenses incurred by us in connection with
this letter, and preparation toward the definitive purchase agreement
contemplated herein.
6. ACCESS. Holding Co. and its authorized representatives shall, upon reasonable
request and during normal business hours, have full access to the properties,
assets, management, books, and records of the Company. The Company hereby
authorizes their accountants and legal counsel to cooperate with Holding Co. and
its authorized representatives as they may reasonably request, including review
of accounting work papers and legal documents, except for documents protected by
attorney/client privilege.
7. TERMINATION. This letter (i) may be terminated (a) by our mutual written and
(b) upon written notice by Holding Co. or the Company to the other party if the
definitive agreement has not been executed within sixty (60) days of your
countersignature on this letter; (ii) shall terminate automatically on the date
upon which a definitive agreement is fully executed; and (iii) may be terminated
by the Company upon its decision to pursue an alternative proposal. Upon
termination, the parties will have no further obligations under this letter,
except for the Binding Provisions (as hereinafter defined), which will survive
any such termination.
8. MISCELLANEOUS. This letter shall be governed by and construed in accordance
with the laws of the State of Delaware and may be signed in any number of
counterparts.
This letter reflects our understanding of the matters in them, but does
not constitute a complete statement of, or a legally binding or enforceable
agreement or commitment on the part of us or the Company with respect to the
matters described therein, other than the provisions in Sections 5, until set
forth in a definitive agreement to be entered into by and among the parties.
If you are in agreement with the foregoing, please indicate your
acceptance by signing below and returning an executed copy of this letter to us.
If you have any questions about our offer, please contact the undersigned, or
our counsel, Joseph F. Mazzella, Esquire of Nutter, McClennen & Fish, LLP,
Boston, MA, 617-439-2000.
Very truly yours,
/s/ Bruce Newberg
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/s/ Jon Brooks
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cc: David M. Calhoun, Esq. (via fax)
Craig M. Frankel, Esq. (via fax)
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Acknowledged and agreed to this _____ day of ____________________.
SHERER HEALTHCARE, INC.
By: _______________________________
<PAGE>
Exhibit B-2
July 18, 2000
Non-Employee Members of the
Board of Directors
Scherer Healthcare Inc.
120 Interstate N. Parkway, S.E.
Suite 305
Atlanta, Georgia 30339
Dear Sirs;
We are attaching a copy of a firm proposal by the undersigned to
acquire all of the outstanding stock of the Company for $5.00 per share in
cash--more than a 40% premium over the closing price on July 14, 2000. Our offer
is not subject to any financing contingency, and we are open to increasing the
value offered, depending upon the results of a standard due diligence
investigation.
For nearly two years, we have voiced our concern that the Company did
not pursue a legitimate, premium offer that was made by a qualified buyer in
1998. Now that we have made our own specific, all cash offer, in writing, the
Board has the clear opportunity and responsibility to achieve a premium value
for stockholders. Doing so will demonstrate the Board's willingness to manage
Company affairs for the benefit of public shareholders. Failing to do so will
only confirm our view that the Board's role is purely cosmetic.
As you know, we have made several prior proposals which we believe
would benefit public shareholders, including sale to a strategic buyer or to
management, repurchase of shares, and the payment of dividends. The Board's
repeated refusal even to discuss these alternatives indicates to us that outside
Board members are content to let year-after-year pass without any real effort to
deliver to public shareholders a return on their investment, or to otherwise
consider the interests of public shareholders. Recent announcements of earnings
only emphasize the need to reverse this course as soon as possible.
While investors have waited patiently,
o The Company has held large amounts of unused cash and
liquid capital that could be returned to shareholders.
Instead, this capital is being committed to ill-advised
ventures, and remains dormant.
o The Company has failed to pursue previous offers by
qualified buyers, or to engage in meaningful discussions
about strategies to return value to outside shareholders.
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Page 2
o Robert Scherer has been accused of seeking sex from a then
28-year old administrative manager of certain of his
family assets, who he then appointed as President of the
Company. The Board approved this appointment.
o That officer left the Company after, she alleged, she had
to rebuff Robert Scherer's continued sexual advances, and
witnessed his use of racial and other slurs.
o You have announced that no wrongdoing occurred, but agreed
to pay $140,000 in settlement of the claim. Full terms of
the settlement have not been disclosed, so we do not know
what admissions of wrongdoing may have been made, or what
apologies may have been given. However, we do know that
the Company did not report any contribution by Robert
Scherer to that settlement, or any disciplinary action
being taken against him.
Perhaps the Board considers Mr. Scherer's conduct and position to be
untouchable as a result of his personal stock holdings. If so, then it appears
that Scherer Healthcare is "publicly-owned" in name only and the Company's
outside shareholders have little prospect of realizing value from their
investment.
Robert Scherer is only one of the Company's directors, with one vote on
the Board. His stock ownership position does not prevent the other directors
from taking appropriate and necessary action as a Board. We believe that
appropriate business judgment would require exploration of the possibility of
sale, or approving a stock repurchase for all shareholders, either of which can
be taken without Robert Scherer's approval or consent.
If the Board is to fufill its duties, then it will take action to
protect the public stockholders, and contact us immediately to discuss our
proposal. If you have any questions about our offer, please contact the
undersigned, or our counsel, Joseph F. Mazzella, Esquire of Nutter, McClennen &
Fish, LLP, Boston, MA, 617-439-2000.
Very truly yours,
/s/ Bruce Newberg
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/s/ Jon Brooks
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cc: David M. Calhoun, Esq. (via fax)
Craig M. Frankel, Esq. (via fax)
<PAGE>
Exhibit C
STOCKHOLDER GROUP MAKES $5.00 CASH BID TO ACQUIRE SCHERER HEALTHCARE. INC.
July 18, 2000. Boston, Massachusetts. Two long-time stockholders of
Scherer Healthcare Inc. (NASDAQ: SCHR) reported today that they had delivered to
the Company's Board of Directors a written offer to acquire all common stock of
the Company for a cash price of $5.00 per share. The proposal represents
approximately a 40% premium above market prices for the stock, and is higher
than any market price of the stock in over 2 years.
The stockholders, Bruce L. Newberg and Jon Brooks, already own over 7%
of the Company's stock and have repeatedly asked the Board to pursue achieving
higher value for shareholders through a sale, repurchase of shares from
stockholders, or a going-private merger. Their $5 offer, contained in a letter
dated July 18, 2000, responds to the Board's requirement that such discussions
be based on a specific written proposal. Their offer letter and related
correspondence are included in a 13D filing made with the SEC.
The two wrote to the Board that "For nearly two years we have voiced
our concern that the Company did not pursue a legitimate, premium offer that was
made by a qualified buyer in 1998. Now that we have made our own firm cash
offer, in writing, the Board has the clear opportunity and responsibility to
achieve a premium value for stockholders. Doing so will demonstrate the Board's
willingness to manage Company affairs for the benefit of public shareholders.
Failing to do so will only confirm our view that the Board's role is purely
cosmetic."
The acquisition proposal follows five years during which Scherer
Healthcare's stock has traded as low as approximately $1.50 per share, while the
Company has failed to return to take steps to return to shareholders as much as
$3.00 per share that the Company has held in cash and marketable securities. It
also follows a recent lawsuit alleging that Robert Scherer, 67, its Chairman and
Chief Executive Officer sexually harassed a former administrative assistant,
then 28. In the suit, which the Company agreed to settle, the woman alleged that
she was appointed President of the Company while Scherer pursued a sexual
relationship with her, and was verbally abused when she refused his continued
advances. The Company and Mr. Scherer formally denied the accusations, but made
a cash payment of $140,000 to the woman in settlement of the claim. Complete
terms of the settlement have not been disclosed.
The acquisition price of $5 per is based solely on the Company's
publicly available financial information, and the stockholders' requested that
the Board commence discussions on price and other terms as soon as possible. The
proposal does not contemplate a financing contingency.
