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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20545
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SCHEDULE 14D-9
(AMENDMENT NO. 5)
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(D)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
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METROMAIL CORPORATION
(Name of Subject Company)
METROMAIL CORPORATION
(Name of Person Filing Statement)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of Class of Securities)
591680 103
(CUSIP Number of Class of Securities)
Thomas J. Quarles
Senior Vice President, General Counsel,
Chief Administrative Officer and Secretary
Metromail Corporation
360 East 22nd Street
Lombard, IL 60148
(630) 620-3300
(Name, address and telephone number of person)
authorized to receive notice and communication
on behalf of the person filing statement)
With copies to:
Carter W. Emerson, P.C.
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
(312) 861-2000
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Item 4. The Solicitation or Recommendation.
The following is added to the disclosure in this section:
As described in Exhibits 44 and 45, on March 17, 1998 American Business
Information, Inc. ("ABI") sued the Company, certain of its officers and
directors and Parent in Delaware seeking to enjoin the Merger and on March 18,
1998 the Company received ABI's offer of at least $33 per Share in cash. The
Board of Directors met on March 19, 1998 and discussed such lawsuit and offer
and concluded that the Merger Agreement permitted the Company to discuss ABI's
offer with ABI and authorized the Company's representatives and advisors to do
so, including exploring ABI's ability to obtain the necessary cash for its
offer. The initiation of discussions with ABI was reported in a press release on
the same day, and the Board's determination at such meeting to postpone the
Company's annual meeting was also disclosed. Discussions with ABI and its
lender, including responding to their additional due diligence requests,
commenced and the Company began responding to discovery requests of ABI in the
litigation, conducting its own discovery and preparing for the March 27 hearing
the Delaware Court had scheduled on ABI's motion for a preliminary injunction.
The Board met again on March 24, 1998 to review the status of the lawsuit and
the discussions with ABI. At such meeting, the directors compared (i) the
transactions contemplated by the Merger Agreement with Parent and (ii) ABI's
offer. The Board concluded that, although ABI's proposed merger agreement did
not contain a financing condition, the consummation of the ABI proposal was less
certain than the Offer and the Merger because ABI's offer depended on it
borrowing large sums and such offer would remain subject to customary conditions
(such as material adverse change) for at least 20 business days, whereas Parent
had cash on hand (the Company was advised that parent had $840 million in cash
on hand at January 27, 1998) for its offer and most of the conditions in the
Merger Agreement expire on March 31, 1998. As a result, the Board directed that
a letter be sent to ABI setting out what terms and verifications (such as
completion of due diligence) the Board wished to have as part of the ABI offer,
particularly in terms of certainty of completion. This included a request for a
letter of credit or other form of earnest money payment of $100 million to the
Company if the ABI transaction was not consummated. Parent was not requested to
provide a letter of credit because of the large amount of cash it has. Such
letter was sent to ABI on March 24, 1998 and stated that ABI should indicate its
highest price by noon on March 26. On March 25, 1998, ABI provided its initial
response to such letter, once again confirming its offer of at least $33 per
share and restating its counsel's February 25, 1998 offer on behalf of ABI to
pay $0.25 more than the next highest bona fide bid. Such letter from ABI, among
the things, stated that while ABI did not believe there was a reasonable basis
for the requested $100 million letter of credit, it would be prepared to post
such a letter if other bidders, including Parent, were required to do so. The
Company responded to such letter on the same day in another letter which
requested further clarification regarding ABI's proposal, pointed out that
Parent's transaction was more certain of completion and told ABI (as it had been
told before) that the Board would not consider bids subject to escalation of the
bids of others. On March 26 and March 27, the Chairman of the Company attempted
to reach the Chairman of ABI to make clear to him the importance of certainty to
the Company's Board. When ABI's Chairman could not be reached, such message was
given to ABI's investment bank and counsel. Mid-day on March 26, the Company
received a letter from ABI reiterating its offer of at least $33 per share or
$0.25 more than the next bona fide bid and stating that ABI would supply a
letter of credit in the Company's favor within 72 hours after signing a merger
agreement with the Company. Counsel to the Company told ABI's counsel that such
72 hour delay would not be acceptable because it would create the risk that such
letter of credit would never be obtained, yet the Company would have had to
terminate the Merger Agreement with Parent and lose the certainty it provided.
During such day, as it had since ABI's offer was made, Lehman Brothers discussed
with ABI's investment bank and its lender how to make ABI's financing
commitments more firm. When the Company was advised by Parent's representatives
early in the evening on March 26, 1998 that Parent would be sending a letter
that evening discussing its offer, the Company advised ABI that it should make
its best offer by 9:30 p.m. Chicago time that night. Prior to such time, the
Company received a letter from Parent stating that Parent was increasing the
Offer to $34.50 (filed herewith as Exhibit 48). Shortly thereafter, such letter
was provided to ABI. At about 9:30 p.m., ABI sent the letter (filed herewith on
Exhibit 49) restating its previous offer price and stating that it would post a
$35 million letter of credit at the time of signing a merger agreement and
responding to the Company's proposed conditions for drawing on such letter of
credit with conditions less favorable to the Company. When questioned on the
meaning of such letter in light of Parent's $34.50 offer, ABI's counsel
confirmed that ABI's offer was $34.75 per share. The Company announced the
increased Parent and ABI offer in a press release on the morning of March 27,
1998 (filed herewith as Exhibit 50). The Company's Board met again on the
morning of March 27 and was informed of the developments since the preceding
Board meeting. Also that morning counsel to ABI called the Company's counsel and
said that ABI was continuing to work with its lender on financing its increased
offer and hoped to provide evidence of such financing and an agreement
reflecting such offer or possibly a higher offer by the evening of March 27.
On the morning of March 27, 1998, the Delaware Chancery Court held a
hearing on ABI's request for a preliminary injunction to enjoin the Merger. The
shareholder plaintiffs withdrew their request for an injunction in view of
Parent's increased offer of March 26. The Delaware Chancery Court denied ABI's
request for an injunction. As of the time of filing of this disclosure, ABI's
counsel advised Company counsel that ABI was considering an appeal of such
ruling to the Delaware Supreme Court.
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SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
METROMAIL CORPORATION
By: /s/ Thomas J. Quarles
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Name: Thomas J. Quarles
Title: Senior Vice President, General
Counsel, Chief Administrative
Officer and Secretary
Dated: March 27, 1998
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Exhibit 48
THE GREAT UNIVERSAL STORES P.L.C.
VIA FACSIMILE AND MESSENGER
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Metromail Corporation Kirkland & Ellis
360 East 22nd Street 200 East Randolph Drive
Lombard, Illinois 60148 Chicago, Illinois 60601
Attention: General Counsel Attention: Carter W. Emerson, P.C.
Gentlemen:
The Great Universal Stores P.L.C. ("GUS") exercises its right under Section
1.1 of the Merger Agreement dated March 12, 1998 (the "Merger Agreement")
between GUS and Metromail Corporation ("Metromail") to increase the price per
Share offered pursuant to the Offer to $34.50, net to the seller in cash, upon
the terms and subject to the conditions set forth in the Merger Agreement. In
view of the importance of GUS having a binding, unconditional agreement to
acquire a majority of the outstanding Shares on a fully-diluted basis by March
31, 1998 in order to achieve the desired treatment of the Merger under UK
accounting rules, this increase in the Purchase Price is conditioned upon the
Merger Agreement and the Stock Purchase Agreements continuing in full force and
effect in accordance with their terms.
In addition, pursuant to Section 6.1 of the Merger Agreement, GUS consents
to allow the Board of Directors of Metromail to waive the provisions of any
standstill agreement between Metromail and American Business Information ("ABI")
to permit the negotiation of, and agreement for, a consensual transaction
between ABI and Metromail, subject to the terms of the Merger Agreement
(including, without limitation, Section 6.8 thereof).
Capitalized terms used but not defined herein have the meanings assigned to
such terms in the Merger Agreement.
I have asked our counsel to furnish a copy of this letter to Hambrecht &
Quist and counsel to ABI.
THE GREAT UNIVERSAL STORES P.L.C.
By: John Peace
Director
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Exhibit 49
Hambrecht & Quist LLC
One Bush Street
San Francisco, CA 94104
(415)439-3300
Mark J. Zanoli
Principal
DIRECT: (433) 499-9451
FAX (413) 439-3145
Via Facsimile
March 26, 1998
The Board of Directors
of Metromail Corporation
360 East 22nd Street
Lombard, Illinois 60148-4989
c/o Mr. Carter Emerson
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Gentlemen,
I am writing in response to several of the oral requests we have received today.
We are confirming our March 26 letter stating that ABI is willing to pay $33 per
share plus any amount recovered from voiding improper payments, as set forth in
ABI's merger agreement previously submitted. We are also confirming ABI's
commitment to pay $0.25 per share more than the next highest bona fide written
offer which is made on the same terms as the ABI offer.
With respect to your request for a letter of credit commitment, ABI will post a
$35 million letter of credit concurrent with the execution of the definitive
agreement you have previously received. Please find the summary of conditions to
payments under the letter of credit attached. ABI's good faith intent in posting
the letter of credit is to mitigate the Board's concern as to certainty of
completion of the transaction.
We would also like to confirm that you have received, directly from First Union,
the executed financing commitment letter and related agreements. Also attached
are the revised executed agreements which have been modified to address certain
of the items raised in the hand marked copy of such agreements received from Mr.
Emerson's office.
We look forward to your prompt response to our proposal.
Sincerely,
/s/ Mark Zanoli
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Mark Zanoli
cc: Mr. Vinod Gupta, Chairman, American Business Information, Inc.
Attachments
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Exhibit 50
[LOGO]METROMAIL
NEWS RELEASE
METROMAIL ANNOUNCES THAT GUS INCREASES ITS PRICE PER SHARE TO $34.50 AND ABI
INTENDS TO INCREASE ITS PRICE TO AT LEAST $34.75
LOMBARD, Ill. March 27, 1998 Metromail Corporation (NYSE:ML), announced that
yesterday The Great Universal Stores P.L.C. (GUS) increased the cash purchase
price of GUS's tender offer for all the outstanding shares of Metromail
Corporation common stock from $31.50 to $34.50 per share and GUS consented to
Metromail's waiving the provisions of the standstill agreement between Metromail
and American Business Information, Inc. (ABI) to permit negotiations between
Metromail and ABI.
Metromail also announced that yesterday ABI indicated that it would increase the
cash purchase price of ABI's proposal to purchase all the outstanding shares of
Metromail common stock from $33.00 to at least $34.75 per share. Metromail is
continuing to study the ABI proposal.
Metromail Corporation (www.metromail.com) is a leading provider of direct
marketing, database marketing and reference products and services in the United
States and United Kingdom. Metromail helps its customers identify and reach
targeted audiences, utilizing its comprehensive, proprietary consumer database
encompassing 95 percent of U.S. households, as well as providing database
marketing software and related services. Sales for the year ended December 31,
1997 increased almost 17 percent over the prior year to approximately $328
million. The company has 3,200 employees and is headquartered in Lombard,
Illinois.
For more information, contact:
Julie Springer (Media Relations)
Director, Corporate Communications
Metromail Corporation
(630) 932-2627
