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) June 5, 1995
BIG O TIRES, INC.
(Exact name of registrant as specified in its charter)
Nevada 1-8833 87-0392481
(State or other juris- (Commission (I.R.S. Employer
diction of incorporation) File No.) Identification No.)
11755 East Peakview Avenue, Englewood, Colorado 80111
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (303) 790-2800
8 Total Pages
Item 5. Other Events.
On June 5, 1995, the Company announced that it had received a letter from a
group of its management and Big O Tire Dealers of America, a group of
franchise dealers, proposing to acquire the Company (the "Acquisition Group")
at a price of $16.50 per share (the "Acquisition Proposal"). The Company had
previously announced on April 6, 1995, that it had received a proposal from
the Acquisition Group to acquire the Company for a cash price of $16.00 per
share. On April 13, 1995, the Company announced that it had requested further
negotiations with the Acquisition Group. The Investment Committee of the
Company has indicated that it will review this latest proposal at its next
meeting.
The Acquisition Proposal is subject to a number of conditions, including the
ability of the Acquisition Group to obtain financing commitments on acceptable
terms, participation in the Acquisition Group of not less than 80% of the
shares held by the Company's Employee Stock Ownership Plan ("ESOP"),
participation in the group of not less than 85% of the Company's franchised
Big O Tire dealers, and the negotiation of a definitive merger agreement. The
Acquisition Group has also asked that all expenses of the group in connection
with the negotiation of a merger be reimbursed.
Unless accepted by the Company, the offer expires by its terms 8:00 a.m. on
June 7, 1995.
Item 7. Financial Statements and Exhibits.
(10.1) Acquisition Proposal to the Investment Committee of the Board of
Directors from certain members of management and a representative of Big O
Tire Dealers of America dated June 2, 1995.
[Signatures follow on next page.]
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:
Date: June 6, 1995
BIG O TIRES, INC.
By: /s/ Philip J. Teigen
General Counsel and Secretary
EXHIBITS
1. (10.1) Acquisition Proposal to the Investment Committee of the
Board of Directors from certain members of management and a
representative of Big O Tire Dealers of America dated June
2, 1995.
June 2, 1995
VIA FACSIMILE
Investment Committee of the Board of Directors
Big O Tires, Inc.
11755 East Peakview Avenue
Englewood, Colorado 80111
Attn: Frank L. Carney
Gentlemen:
As you are aware, over the past two months the undersigned members of
the senior management of Big O Tires, Inc. ("Big O") and the directors of Big
O Tire Dealers of America ("BOTA") have been working together to formulate a
financeable acquisition proposal to acquire the outstanding stock of Big O
following the Investment Committee's rejection of our offer to acquire such
stock at the price of $16.00 per share.
Based upon our efforts, we continue to believe that the combination of
Big O's senior management and dealers can offer the best price available and
can close a transaction in the shortest time. Thus, we are now in a position
to submit to you for your consideration a new proposal on behalf of a group to
be formed by an entity comprised of those franchised Big O Tire Dealers who
elect to participate and the undersigned members of Big O's senior management
to acquire all outstanding shares of common stock of Big O for $16.50 per
share in a cash merger. Our proposal is subject to:
(i) The obtaining of financing commitments on acceptable terms
sufficient to finance the acquisition. As you are aware, we have made
substantial progress in arranging the necessary elements of financing and
believe commitments will be in place within 10 days of the execution of a
merger agreement.
(ii) Participation in the acquisition group by not less than 80% of the
shares held by Big O's ESOP and the ability of the ESOP to obtain an
acceptable fairness opinion.
(iii) Participation in the acquisition group by not less than 85% of
franchised Big O Tire Dealers.
(iv) Negotiation of a definitive merger agreement.
In consideration of our efforts to consummate the proposed merger, we
request that Big O agree that:
(1) This letter agreement shall not supersede or amend the terms of
any of our prior agreements with respect to fees or indemnification.
(2) Big O will promptly advance or reimburse the expenses incurred by
the undersigned from February 9, 1995 through the execution of a definitive
merger agreement in such efforts in excess of the amount previously agreed to
in our prior letters, subject to: (i) our agreement to submit such expenses
incurred after your acceptance of this offer to you for reimbursement in
increments of approximately $25,000, and (ii) your ability to halt, at any
time, upon 24 hours notice in writing to John B. Adams, your reimbursement
obligation hereunder with respect to future expenses not yet incurred. We
agree that should we not consummate the proposed merger for any reason other
than the reason set forth in the following sentence, we will reimburse Big O
for 20% of the expenses reimbursed to us by Big O pursuant to this paragraph
in excess of the amounts previously agreed to in our letter of December 13,
1994. The undersigned shall not be obligated to reimburse any of Big O's
expense reimbursements pursuant to the preceding sentence if the proposed
merger is not consummated because the Investment Committee fails to recommend
or withdraws its recommendation of the consummation of the proposed
transaction because of the possibility of engaging in another transaction
either (x) on terms which the Investment Committee has not determined in good
faith to be less favorable to Big O and its shareholders than the transaction
proposed by the undersigned or (y) at a per share price in excess of $16.50.
(3) Subject to applicable Nevada corporate law, Big O will indemnify
and hold harmless the undersigned and any other Big O dealers who participate
in the negotiations of the proposed transaction and each of their respective
employees, managers, and agents, for all costs and expenses (including
attorney fees) in connection with or arising out of any actions brought or
threatened relating to, directly or indirectly, the proposed transaction.
Such indemnification shall survive the termination of this letter agreement.
(4) While a definitive merger agreement is being negotiated, no
material expenditures will be made by Big O without the written consent of the
undersigned and no expenditures of any amount will be made by Big O in
contemplation of a restructuring or a reorganization introducing business
units.
We reserve the right to withdraw our proposal without prior notice in
the event that Big O solicits further proposals from any third party or
initiates any action which would result in a major change in the assets,
capitalization or corporate structure of Big O (including the incurrence of
additional debt other than for seasonal working capital needs for inventory
and receivables).
<PAGE>
If this proposal is acceptable to you and you agree to the indemnification
and reimbursement requests made in this letter, please indicate your acceptance
and agreement by signing in the space provided below on the enclosed copy and
returning such copy to Steve Cloward or John Adams no later than 8:00 a.m.,
June 7, 1995, at which point this proposal, unless accepted, will expire.
Very truly yours,
Management participants:
Steven P. Cloward John B. Adams
Ron Lautzenheiser Brad Findlay
Thomas L. Staker Philip J. Teigen
Bruce H. Ware Gregory L. Roquet
Dennis J. Fryer Kelly A. O'Reilly
Allen E. Jones BOTA
By: /s/ Steven P. Cloward By:
Steven P. Cloward Wes Stephenson, President
ACCEPTED AND AGREED TO:
Big O Tires, Inc.
By:
Frank L. Carney, Chairman of the Investment Committee
Date: June __, 1995<PAGE>
Big O Tires, Inc.
June 2, 1995
Page 3
If this proposal is acceptable to you and you agree to the indemnification and
reimbursement requests made in this letter, please indicate your acceptance
and agreement by signing in the space provided below on the enclosed copy and
returning such copy to Steve Cloward or John Adams no later than 8:00 a.m.,
June 7, 1995, at which point this proposal, unless accepted, will expire.
Very truly yours,
Management participants:
Steven P. Cloward John B. Adams
Ron Lautzenheiser Brad Findlay
Thomas L. Staker Philip J. Teigen
Bruce H. Ware Gregory L. Roquet
Dennis J. Fryer Kelly A. O'Reilly
Allen E. Jones BOTA
By: By: /s/ Wes Stephenson
Steven P. Cloward Wes Stephenson, President
ACCEPTED AND AGREED TO:
Big O Tires, Inc.
By:
Frank L. Carney, Chairman of the Investment Committee
Date: June __, 1995
