SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
SCHEDULE l3D/A
Under the Securities Exchange Act of 1934
(Amendment No. 6)*
J.C. NICHOLS COMPANY
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(Name of Issuer)
Common Stock, par value $.01 per share
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(Title of Class of Securities)
653777102
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(CUSIP Number)
with a copy to:
Mr. Stephen Feinberg Robert G. Minion, Esq.
450 Park Avenue, 28th Floor Lowenstein Sandler PC
New York, New York 10022 65 Livingston Avenue
(212) 421-2600 Roseland, New Jersey 07068
(201) 597-2424
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(Name, Address and Telephone Number of Persons
Authorized to Receive Notices and Communications)
June 17, 1998
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule l3G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Section 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check
the following box. [ ]
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Section 240.13d-7(b) for
other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
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. 653777102
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1) Names of Reporting Persons/ I.R.S. Identification Nos. of Above Persons
(entities only):
Stephen Feinberg
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2) Check the Appropriate Box if a Member of a Group (See Instructions):
(a) Not
(b) Applicable
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3) SEC Use Only
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4) Source of Funds (See Instructions): WC
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e): Not Applicable
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6) Citizenship or Place of Organization: United States
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Number of 7) Sole Voting Power: *
Shares Beneficially 8) Shared Voting Power: *
Owned by
Each Reporting 9) Sole Dispositive Power: *
Person With: 10) Shared Dispositive Power: *
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11) Aggregate Amount Beneficially Owned by Each Reporting Person: 660,897*
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12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions): Not Applicable
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13) Percent of Class Represented by Amount in Row (11): 14.3%*
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14) Type of Reporting Person (See Instructions): IA, IN
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* 160,957 shares (3.5%) of J.C. Nichols Company common stock are owned by
Cerberus Partners, L.P., a partnership organized under the laws of
Delaware. 173,220 shares (3.8%) of J.C. Nichols Company common stock are
owned by Cerberus International, Ltd., a corporation organized under the
laws of the Bahamas. 74,500 shares (1.6%) of J.C. Nichols Company common
stock are owned by Ultra Cerberus Fund, Ltd., a corporation organized under
the laws of the Bahamas. Stephen Feinberg possesses sole voting and
investment control over all securities owned by Cerberus, International and
Ultra. In addition, 252,220 shares (5.4%) of J.C. Nichols Company common
stock are owned by various others persons and entities for which Stephen
Feinberg possesses sole voting and investment control over all securities
of J.C. Nichols Company owned by such persons and entities. See Item 5 for
further information.
<PAGE>
Item 2. Identity and Background.
The person filing this statement is Stephen Feinberg, whose business
address is 450 Park Avenue, 28th Floor, New York, New York 10022. Mr. Feinberg
serves as (i) the managing member of Cerberus Associates, L.L.C., the general
partner of Cerberus Partners, L.P. ("Cerberus"), (ii) the managing member of
Blackacre Capital Management, L.L.C. ("Blackacre") and (iii) the investment
manager for each of Cerberus International, Ltd. ("International"), Ultra
Cerberus Fund, Ltd. ("Ultra") and certain other private investment funds (the
"Funds"). Cerberus, International, Ultra, Blackacre and the Funds are engaged in
the investment in personal property of all kinds, including but not limited to
capital stock, depository receipts, investment companies, mutual funds,
subscriptions, warrants, bonds, notes, debentures, options and other securities
of whatever kind and nature.
Mr. Feinberg has never been convicted in any criminal proceeding, nor
has he been a party to any civil proceeding commenced before a judicial or
administrative body of competent jurisdiction as a result of which he was or is
now subject to a judgment, decree or final order enjoining future violations of,
or prohibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws. Mr. Feinberg is a
citizen of the United States.
Item 4. Purpose of Transaction.
On June 17, 1998, in a letter submitted to the board of directors of
the Company (the "Offer Letter"), Blackacre, along with its affiliates, offered
to acquire the Company for cash consideration of $70.00 per share of the
Company's common stock (the "Offer"). In the Offer Letter, Blackacre advised the
board of directors of the Company that, among other things, it strongly believes
that the proposed transaction between the Company and Highwoods Properties, Inc.
(the "Proposed Highwoods Transaction") is inadequate from a financial point of
view, does not reflect the values inherent in the Company, subjects the
shareholders of the Company to significant financial risks in owning shares of
Highwoods Properties, Inc. and, therefore, Blackacre and its affiliates intend
to vote against the approval of the Proposed Highwoods Transaction. Furthermore,
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in the Offer Letter, Blackacre has advised the Company that, along with its
affiliates, it has the financial ability to consummate the acquisition of the
Company.
The Offer is subject to, among other things, the completion by
Blackacre of its due diligence with respect to the Company and the termination
by the Company of the merger agreement relating to the Proposed Highwoods
Transaction on terms which limit the fees payable by the Company as a result
thereof.
Except as set forth in the Offer Letter, Stephen Feinberg has no
present plans or intentions which would relate to or would result in any of the
transactions required to be described in Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
Based upon information set forth in the Company's Proxy Statement,
dated June 1, 1998, on April 27, 1998 there were issued and outstanding
4,619,039 shares of common stock of the Company. As of June 17, 1998, Cerberus
owned 160,957 of such shares, or 3.5% of those outstanding; International owned
173,220 of such shares, or 3.8% of those outstanding; Ultra owned 74,500 of such
shares, or 1.6% of those outstanding and the Funds in the aggregate owned
252,220 of such shares, or 5.4% of those outstanding. Stephen Feinberg possesses
the sole power to vote and direct the disposition of all shares of common stock
of the Company owned by each of Cerberus, International, Ultra and the Funds. No
transactions were effected by Cerberus, International, Ultra or the Funds in
shares of common stock of the Company during the past sixty days.
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Item 7. Material to Be Filed as Exhibits.
1. Offer Letter, dated June 17, 1998, of Blackacre Capital Management,
L.L.C. to the Board of Directors of J.C. Nichols Company.
Signature
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.
June 17, 1998
/s/ Stephen Feinberg
Stephen Feinberg, in his capacity
as the managing member of Cerberus
Associates, L.L.C., the general
partner of Cerberus Partners, L.P.,
as the managing member of Blackacre
Capital Management, L.L.C. and as
the investment manager for each of
Cerberus International, Ltd., Ultra
Cerberus Fund, Ltd., and the Funds
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE FEDERAL
CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001).
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EXHIBIT 1
.
June 17, 1998
The Board of Directors
J.C. Nichols Company
310 Ward Parkway
Kansas City, Missouri 64112
Attention: Chairman of the Board
Lady and Gentlemen:
As you know, affiliates of Blackacre Capital Management LLC
("Blackacre") own approximately 14% of the outstanding shares of Common Stock of
J.C. Nichols Company (the "Company"). We have been carefully following the
proposed transaction between Highwoods Properties Inc. and the Company (the
"Proposed Highwoods Transaction"). After reviewing the proxy materials and
meeting with company representatives, we strongly believe that the Proposed
Highwoods Transaction is inadequate from a financial point of view, does not
reflect the values inherent in the Company, would subject the Company's
stockholders to significant downside equity risk in the Highwoods stock and
provides for an above market breakup fee. We believe that the Company and its
Board are not taking the best interests of all shareholders into account in
recommending this transaction. The proxy materials do not provide compelling
evidence that this transaction maximizes value for all shareholders, and in fact
we believe, given certain dynamics in the marketplace, there is significant
financial risk to any shareholder who takes Highwoods stock.
Consistent with our views of the Proposed Highwoods Transaction, we
and our affiliates intend to vote against approval of the Proposed Highwoods
Transaction and, if it is nonetheless approved, to exercise appraisal rights for
our shares of Common Stock. As you know and as we believe should be conveyed to
the Company's stockholders in supplemental proxy materials, this would have the
effect, among other things, of reducing by over 35% the amount of cash that
would otherwise be available to the Company's stockholders in the Proposed
Highwoods Transaction, thereby forcing stockholders who prefer to take cash to
take additional Highwoods shares instead.
Because we see values in the Company not reflected in the Proposed
Highwoods Transaction, we are submitting an offer to acquire the Company at
$70.00 per share in an all cash merger, subject to certain structuring for tax
advantages to shareholders as described below. If the Company furnishes us
information which establishes a higher valuation for the Company, we are
prepared to consider increasing our offer. We believe that this offer would
result in value to the Company's shareholders that is more certain and
significantly above those realizable through the Proposed Highwoods Transaction.
Although we have conducted an extensive analysis of the Company based
on publicly available information, our offer is subject to, among other things,
satisfactory completion of our due diligence of the Company. Our offer is also
subject to the Company's Board of Directors terminating the merger agreement
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relating to the Proposed Highwoods Transaction under circumstances in which the
break-up fee and expense reimbursement payable to Highwoods does not exceed
$2,500,000.
It is intended that the transaction would be structured so as to
provide to the Company's long-term stockholders with an ability to transfer
their stock on a tax-free basis. In order to facilitate this, we believe that
the Company's Employee Stock Ownership Plan and Trust (the "ESOT") would agree
to purchase (on a pro rata basis in the event of oversubscription) up to
approximately 15% of the outstanding shares of Common Stock from shareholders
desiring to effectuate a Section 1042 transaction under the Internal Revenue
Code. We believe that the ESOT would also agree to retain approximately 15%
interest in the surviving corporation following the merger.
Blackacre and its affiliates have sufficient equity capital to
complete the transaction and Blackacre is highly confident that it can secure
the debt financing necessary to refinance the existing debt of the Company.
Blackacre stands ready to commence negotiations and due diligence.
Once the Company has provided to Blackacre information and access which are
equivalent to that received by Highwoods, we believe that a definitive agreement
could be achieved expeditiously. Representatives of Blackacre and the Company
would then prepare proxy materials necessary to obtain approvals from the
Company's shareholders, which we believe would be quickly received given the
significant premium to the current Proposed Highwoods Transaction being offered
to the Company's shareholders.
Following consummation of the transaction, we intend on maintaining
the Company's corporate identity including owning and operating the Country Club
Plaza. In addition, we will honor all current employment contracts and other
related agreements with management.
We firmly believe that our all cash proposal provides shareholders of
the Company with immediate superior value over the Proposed Highwoods
Transaction as well as certainty. Highwoods common stock, a significant
component of the value in the Proposed Highwoods Transaction, is a volatile
security which will expose Company shareholders to significant market risk after
consummation of the Proposed Highwoods Transaction. In the Registration
Statement filed in connection with the Proposed Highwoods Transaction, Highwoods
has identified a number of disturbing risk factors relating to ownership of
Highwoods common stock, including, but not limited to, the following:
the potential adverse impact on share price and dilution in ownership
resulting from subsequent offerings of Highwoods common stock;
possible difficulties in integrating Highwoods and the Company;
the fact that Highwoods' management and its board of directors have
divergent interests from those of Highwoods stockholders regarding the
sale or refinancing of Highwoods' properties; and
the fact that Highwoods has no expertise in retail apartments and
homebuilding.
Moreover, since the execution of the Highwoods merger agreement, there
has been a significant decline in the Highwoods stock price as well as a
contraction in the average multiple at which larger public REITs have been
trading in the marketplace, reflecting the market's increased concern over the
inherent riskiness of such entities.
In summary, we strongly believe that our proposal represents an
extraordinary opportunity for the Company and its shareholders. Because time is
of the essence, this offer will remain open until July 2, 1998 or its earlier
termination by Blackacre upon written notice to the Company. We look forward to
meeting with the Company's Board of Directors to discuss our proposal in greater
detail at your earliest convenience. Blackacre is determined to take every
appropriate action to consummate this transaction.
Sincerely,
BLACKACRE CAPITAL MANAGEMENT LLC
