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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 9, 1997
Armstrong World Industries, Inc.
(Exact name of registrant as specified in its charter)
Pennsylvania 1-2116 23-0366390
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) dentification Number)
313 West Liberty Street, P.O. Box 3001, Lancaster, Pennsylvania 17604
(Address of principal executive offices) (ZIP Code)
Registrant's telephone number, including area code: (717) 397-0611
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Item 5. Other Events.
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(a) The registrant announced its intention to commence an all cash
offer to purchase all of the outstanding shares of Domco Inc., a Canadian
corporation ("Domco"), at CDN$23.00 per share, equivalent to US$16.67, for a
total purchase price of CDN$488, equivalent to US$354 million (the "Offer").
The Offer is conditioned upon two-thirds of Domco's outstanding shares on a
fully-diluted basis being validly tendered in the offer and not withdrawn,
approval of the appropriate regulatory authorities and other customary
conditions. The press release attached hereto as Exhibit 99.01 more fully
describes the terms of the Offer and related matters.
(b) In a related matter, the registrant also announced that it had
filed a ten count complaint in the United Stated District Court for the Eastern
District of Pennsylvania against Sommer Allibert, S.A. ("Sommer Allibert"), a
corporation organized under the laws of France which is the controlling
shareholder of Domco. In its complaint, the registrant seeks a preliminary and
permanent injunction to enjoin Sommer Allibert from merging its floor covering
business, including Domco, with Tarkett A.G., a corporation organized under the
laws of Germany ("Tarkett"). The registrant alleges in its complaint that Sommer
Allibert fraudulently induced the registrant to provide confidential information
to Sommer Allibert during the course of negotiations concerning a proposed
acquisition of Sommer Allibert's world-wide floor covering business for US$775
million (FF4.5 billion). The registrant's complaint alleges that Sommer Allibert
then used the registrant's confidential information, including information
concerning the registrant's proposed cash acquisition of Sommer Allibert's floor
covering business, to fashion a combination with Tarkett. The registrant has
also alleged that the misappropriation of its confidential information was in
breach of a confidentiality agreement entered into between it and Sommer
Allibert. In the complaint, the registrant seeks a court order enjoining Sommer
Allibert from consummating the proposed combination with Tarkett, a court order
enjoining Sommer Allibert from continuing to misappropriate the registrant's
confidential information, and unspecified compensatory, exemplary and punitive
damages. The press release attached hereto as Exhibit 99.02 more fully describes
the complaint and the relief sought by the registrant.
Item 7. Financial Statements and Exhibits.
---------------------------------
(c) Exhibits.
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Exhibit No. Description Reference
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<S> <C> <C>
99.01 Press Release (June 9, 1997) Filed herewith
99.02 Press Release (June 9, 1997) Filed herewith
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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 thereunto duly authorized.
ARMSTRONG WORLD INDUSTRIES, INC.
Dated: June 9, 1997 By: /s/ L. A. Pulkrabek
---------------------------------
L. A. Pulkrabek
Senior Vice President, Secretary
and General Counsel
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Exhibit Index
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Sequential Page No. or
Exhibit No. Description Reference
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<S> <C> <C>
99.01 Press Release (June 9, 1997) Filed herewith at page 5
99.02 Press Release (June 9, 1997) Filed herewith at page 12
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Exhibit 99.01
Media Contact: Cam L. Collova Investor Contact: Warren M. Posey
VP, Corporate Relations Assistant Treasurer
(717) 396-2169 (717) 396-2216
Tom Daly/David Kronfeld
Kekst and Company
(212) 521-4800
In Europe: Seth Goldschlager
Idees/Dialogue Conseil
(33) 01-44-43-79-42
In Canada: Ken Cavanagh
NATIONAL Public Relations
(514) 843-2386
ARMSTRONG WORLD INDUSTRIES OFFERS CDN $23.00 PER SHARE
IN CASH FOR ALL SHARES OF DOMCO INC.
LANCASTER, PA, June 9, 1997 -- Armstrong World Industries, Inc. (NYSE: ACK)
announced today its intention to commence an all cash offer to purchase all the
outstanding shares of Domco Inc. (MSE:DOC; TSE:DOC) at CDN$23.00 per share, for
a total purchase price of CDN$488 million representing a premium of almost 56%
over Friday's closing price. The offer will include an offer for Domco's
convertible debentures, warrants and other convertible securities of an
equivalent basis. The offer is conditioned upon two-thirds of the outstanding
shares on a fully-diluted basis being tendered in the offer, approval of the
appropriate regulatory authorities and other customary conditions. The offer is
not subject to financing and has been unanimously approved by Armstrong's Board
of Directors. The offer will commence as soon as practicable after receipt of
the shareholder list requested from Domco today.
This morning, Armstrong sent a letter to the Board of Directors of Domco, and
another to the President of Sommer Allibert S.A., Domco's majority shareholder,
describing its offer.
The texts of both letters follow.
Armstrong is a global manufacturer and marketer of interior furnishings,
including floor coverings and ceiling systems, with sales of $2.156 billion in
1996.
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ARMSTRONG
GEORGE A. LORCH
CHAIRMAN and
CHIEF EXECUTIVE OFFICER
717/396-3463 June 9, 1997
Board of Directors
c/o Mr. Jean Malliotte, Chairman
Domco Inc.
1001 Yamaska Street East
Farnham, Quebec
Canada J2N 1J7
Gentlemen:
This morning, Armstrong World Industries, Inc. is announcing that it will
commence an offer for all the outstanding shares and convertible securities of
Domco Inc., a company which we have long regarded with great respect as a fellow
participant in the flooring industry. We believe that our offer will be heartily
welcomed by most of your shareholders and we hope that it will be considered
seriously and regarded objectively by your controlling shareholder. My purpose
in writing to you today is to inform you directly of our offer and to outline
our thoughts as to why it makes such clear and indisputable sense, both from a
business perspective and from the perspective of all those who have an interest
in Domco, including all of its shareholders, its employees and the communities
in which it operates.
The terms of our offer are simple: Armstrong will purchase all the outstanding
shares (including convertible securities) of Domco for CDN$23.00 per share in
cash, for a total purchase value of CDN$488 million, equivalent to US$354
million. Our offer will commence as soon as practicable. When commenced, the
offer will be conditioned upon two-thirds of the outstanding shares on a fully-
diluted basis being tendered in the offer, approval of the appropriate
regulatory authorities and other customary conditions. All of the necessary
financing is in place and our Board has unanimously approved the transaction.
Surely you will agree that our offer is extremely attractive for all Domco
shareholders. At CDN$23.00 per share, it represents a premium of almost 56
percent over Friday's closing price. Our offer for Domco is substantially above
the valuation of Domco implied in the Sommer Allibert-Tarkett transaction.
The logic of the business fit between Armstrong and Domco is compelling. The two
companies have very complementary, high-quality product lines, with minimal
overlap. We both have well
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regarded and recognized brands in an increasingly segmented marketplace. By
uniting these product lines under one structure, both would be able to grow
strongly and simultaneously along separate, parallel paths, with multiple
distribution options in the U.S. and Canada, aided by the financial strength
of Armstrong. The Domco factories would strengthen Armstrong's own universe of
facilities, without redundancy, providing continued employment for its current
work force. We could combine our technical expertise and achieve economies of
scale of our operations across our corporate activities. Together, our two
companies would combine to be one of the world leaders in the flooring
products industry.
We also strongly believe that this offer will benefit all of Domco's
constituencies more than will the complicated, highly-leveraged business
combination with Tarkett A.G., a German flooring manufacturer, that Sommer
Allibert S.A., your controlling shareholder, is currently proposing for all
of its flooring assets. That transaction provides no value whatsoever to the
minority shareholders of Domco, whose shares would simply continue to trade on
the open market, with no premium from the transaction and little hope of reaping
any additional benefit. Your new majority shareholder, Sommer Allibert-Tarkett,
which will have separate groups of public minority shareholders, will compete
with Domco directly in North America through Tarkett's existing North American
operations. The potential for conflict between these two entities controlled by
a combined Sommer Allibert-Tarkett is obvious.
Furthermore, as I explained above, we do not envision any manufacturing
redundncies in our combination. This is extremely important for Domco
employees. Such an excellent fit would not necessarily be the case if Domco
becomes part of a Sommer Allibert-Tarkett entity, which was expressly pointed
out by the principals in that transaction in press coverage at the time of its
announcement.
Our combination would also be of particular importance to Quebec, which would
enjoy increased export potential. This is a region to which Armstrong has
already demonstrated its commitment over the past forty years. We expect to
continue to manage Domco from Quebec.
We hope that you will agree that our offer is very attractive to all who would
be affected by it. We believe the Domco Board's fiduciary duties to its
constituencies require a full and objective consideration of our offer, a
favorable recommendation and a consummation of our offer. We are open to
discuss these matters with you in a manner which would be most productive to
providing these better values for Domco and all of its constituencies.
Together, Armstrong and Domco would enjoy a bright future. As predominantly
U.S. and Canadian participants in the same core businesses, Domco and Armstrong
are much more
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suitable partners than Domco and Sommer Allibert-Tarkett, a holding company
whose main activities are in Europe. I am confident that our two companies
would mesh well in terms of products, distribution, facilities, workforce
opportunities, technical capabilities and corporate culture.
I have attached the letter which we have sent to the President of Sommer
Allibert.
Sincerely
/s/ George A. Lorch
George A. Lorch
Chairman and Chief Executive Officer
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ARMSTRONG
GEORGE A. LORCH
CHAIRMAN and
CHIEF EXECUTIVE OFFICER
717/396-3463
June 9, 1997
Monsieur Marc Assa
President du Directoire
Sommer Allibert
2, rue de I Egalite
92748 Nanterre Cedex
France
Dear Mr. Assa:
This morning, Armstrong World Industries, Inc. is announcing that it will
commence an all cash offer for all the outstanding common shares and convertible
securities of Domco Inc., in which Sommer Allibert S.A. has a majority equity
interest. My purpose in writing to you today is to inform you directly of our
offer and to explain why it makes such clear and indisputable sense, both from a
business perspective and from the perspective of all those who have an interest
in Domco, including Sommer Allibert, Domco's public shareholders, its employees
and the communities in which it operates.
The terms of our offer are simple: Armstrong will purchase all the outstanding
shares (including convertible securities) of Domco for CDN$23.00 per share in
cash, for a total purchase value of CDN$488 million, equivalent to US$354
million. Our offer will commence as soon as practicable. When commenced, the
offer will be conditioned upon two-thirds of the outstanding shares on a fully-
diluted basis being tendered in the offer, approval of the appropriate
regulatory authorities, and other customary conditions. All of the necessary
financing is in place and our Board has unanimously approved the transaction.
The logic of the business fit between Armstrong and Domco is compelling. The
two companies have very complementary, high-quality product lines, with minimal
overlap. We both have well regarded and recognized brands in an increasingly
segmented marketplace. By uniting these product lines under one structure, both
would be able to grow strongly and simultaneously along separate, parallel
paths, with multiple distribution options in the U.S. and Canada, aided by the
financial strength of Armstrong. The Domco factories would strengthen
Armstrong's own universe of facilities, without redundancy, providing continued
employment for its current work force. We could combine our technical expertise
and achieve economies of scale of
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our operations across our corporate activities. Together, the two companies
would be one of the world leaders in the flooring products industry.
Over the course of the past 12 months, as you know, Armstrong and Sommer
Allibert have been in serious and extensive discussions in which we explored a
variety of business transactions. In direct response to your invitation and
solicitation, and with the understanding that you were negotiating only with us,
on April 17 we submitted a proposal to Sommer Allibert to purchase its worldwide
flooring and wall covering business. This of course included a proposal for all
of Domco, including the minority shares, and totaled US$775 million (FF4.5
billion). After making what you yourself characterized as a full and fair
proposal, we waited in good faith for your response.
Therefore, after having serious discussions with you for such an extended period
of time, and having been exclusively invited to submit a proposal under the
mutual restrictions of a confidentiality agreement, we were disappointed when
you, less than 48 hours after our proposal was rejected, announced that Sommer
Allibert would enter into a complicated, highly-leveraged business combination
with Tarkett A.G., a German flooring manufacturer. Tarkett offered US$562
million (FF3.3 billion) for Sommer Allibert's flooring assets, substantially
less than the amount proposed by Armstrong on a comparable basis. This
transaction, you later informed us, was negotiated at the same time you
requested us to make our proposal. Even more striking, the Sommer Allibert-
Tarkett transaction provides no value whatsoever to the minority shareholders of
Domco, compared to our prior proposal, through which they would have enjoyed a
significant premium to the price at which their shares were trading, and
continue to trade. Indeed, it is unclear whether or not the Domco Board ever
reviewed or was even ever informed of our prior proposal. And I must say, we
were shocked and disappointed that our confidentiality agreement with Sommer
Allibert was so obviously violated.
Our new offer today is only for the North American operations controlled by
Sommer Allibert, represented by Domco, whose shares are traded publicly. This
offer reflects our continued effort to provide you with yet another avenue for
enhancing shareholder value; at the same time, Sommer Allibert would preserve
its operational involvement in this industry on a worldwide basis.
Surely you will agree that our offer is extremely attractive for all Domco
---
shareholders. At CDN$23.00 per share, it represents a premium of 56 percent
over Friday's closing price. Our offer for Domco is substantially above the
valuation of Domco implied in the Sommer Allibert-Tarkett transaction.
Our offer will not only be highly preferable for Domco shareholders; it should
also be beneficial for all of Sommer Allibert's shareholders, who have seen an
unenthusiastic response by the marketplace to your plans, and a fall in the
value of their shares by approximately 7 percent since your acquisition plans
with Tarkett were announced on May 28. By providing more value, in a
significantly shorter time frame, for Sommer Allibert's Domco holdings, it will
benefit your shareholders and will even provide value for shareholders of
Tarkett by reducing the leverage
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that would be placed upon Sommer Allibert in its currently contemplated business
combination with Tarkett.
Of course, the offer would also be highly beneficial to Domco's employees and
the communities in which it operates, as I explained above. We do not envision
any manufacturing redundancies in our combination. This would not necessarily be
the case if Domco remained as part of the Sommer Allibert-Tarkett entity, as was
intimated by principals to the transaction in press coverage at the time of
Sommer Allibert's announcement.
We hope that you will agree with us that this transaction is very attractive to
all the many constituents who will be affected by it. We believe that the
fiduciary duties to these constituencies of the respective Boards of Sommer
Allibert and Domco require a full and objective consideration, and consummation,
of our offer. We are open to discuss these matters with you; our strong
preference is to enter into a negotiated transaction.
We look forward to hearing from you as soon as possible.
Sincerely,
/s/ George A. Lorch
George A. Lorch
Chairman and Chief Executive Officer
7
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Exhibit 99.02
Media Contact: Camilla L. Collova Investor Contact: Warren Posey
V.P. & Director Assistant Treasurer
Corporate Relations (717) 396-2216
(717) 396-2169
Tom Daly/David Kronfeld
Kekst and Company
(212) 521-4800
ARMSTRONG WORLD INDUSTRIES, INC. FILES COMPLAINT AGAINST SOMMER ALLIBERT, S.A.
IN UNITED STATES DISTRICT COURT
LANCASTER, PA., June 9, 1997--Armstrong World Industries, Inc. (NYSE: ACK)
announced today that it has filed a ten count complaint in the United States
District Court for the Eastern District of Pennsylvania against Sommer Allibert,
S.A., a French corporation that is also the controlling shareholder of Domco
Inc., a Canadian corporation (MSE:DOC; TSE:DOC). Earlier today, Armstrong
announced its intention to commence an all cash offer to purchase all of the
outstanding shares of Domco at CDN$23.00 per share.
In its complaint, Armstrong seeks a preliminary and permanent injunction to
enjoin Sommer Allibert from merging its floor covering business, including
Domco, with Tarkett A.G., a corporation organized under the laws of Germany,
which also competes with Armstrong in the floor covering business. The proposed
merger was announced on May 28, 1997.
Armstrong's complaint alleges that Sommer Allibert fraudulently induced
Armstrong to provide confidential information to Sommer Allibert during the
course of negotiations between Armstrong and Sommer Allibert concerning a
proposed acquisition of Sommer Allibert's world-wide floor covering business by
Armstrong for US$775 million (FF4.5 billion). The complaint further alleges that
Sommer Allibert (and other as-yet unnamed co-conspirators), contrary to the
express provisions of a confidentiality agreement entered into between it and
Armstrong, used certain confidential information provided by Armstrong,
including information concerning Armstrong's proposed cash acquisition of Sommer
Allibert's floor covering business, to fashion the Sommer Allibert/Tarkett
combination. Sommer Allibert's actions, according to the complaint, are in
breach not only of the confidentiality agreement, but also of Sommer Allibert's
obligation to deal and negotiate in good faith.
In addition to asking the Court to enjoin Sommer Allibert from entering
into an agreement with Tarkett, Armstrong also seeks to enjoin Sommer Allibert
from continuing to misuse Armstrong's confidential information. The complaint
also seeks compensatory, exemplary and punitive damages.
Armstrong is a global manufacturer and marketer of interior furnishings,
including floor coverings and ceilings systems, with sales of $2.156 billion in
1996.
