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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
(Amendment No. 15)
Solicitation/Recommendation Statement Pursuant to
Section 14(d)(4) of the Securities Exchange Act of 1934
WLR FOODS, INC.
(Name of Subject Company)
WLR FOODS, INC.
(Name of Person(s) Filing Statement)
Common Stock, No Par Value
(including the associated preferred stock purchase rights)
(Title of Class of Securities)
929286 10 2
(CUSIP Number of Class of Securities)
Delbert L. Seitz
Chief Financial Officer
WLR Foods, Inc.
P.O. Box 7000
Broadway, Virginia 22815
(703) 896-7001
(Name, address and telephone number of person authorized to receive notice
and communications on behalf of the person(s) filing statement)
Copies to:
Neil T. Anderson, Esq. John W. Flora, Esq.
Sullivan & Cromwell Wharton, Aldhizer & Weaver
125 Broad Street 100 South Mason Street
New York, New York 10004 Harrisonburg, Virginia 22801
(212) 558-4000 (703) 434-0316
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This Amendment No. 15 amends and supplements the
Solicitation/Recommendation Statement on Schedule 14D-9, dated March 14,
1994, as amended (the "Schedule 14D-9"), filed by WLR Foods, Inc., a
Virginia corporation (the "Company"), relating to the tender offer
disclosed in the Schedule 14D-1, dated March 9, 1994, as amended (the
"Schedule 14D-1"), of the bidder, Tyson Foods, Inc., a Delaware corporation
(the "Bidder"), to, through its wholly-owned subsidiary, WLR Acquisition
Corp., purchase all of the outstanding Shares upon the terms and subject to
the conditions set forth in the Offer to Purchase, dated March 9, 1994, and
the related Letter of Transmittal (together, the "Offer"). Capitalized
terms used and not defined herein shall have the meanings set forth in the
Schedule 14D-9.
Item 9. Material to be Filed as Exhibits.
Item 9 is hereby amended and supplemented by adding thereto the
following:
Exhibit 39 -- Form of Letter to Poultry Producers, dated May 18, 1994.
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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.
Dated: May 18, 1994
WLR FOODS, INC.
By: /s/ James L. Keeler
Name: James L. Keeler
Title: President and Chief
Executive Officer
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Exhibit 39
[WLR FOODS, INC. LETTERHEAD]
May 18, 1994
Dear Poultry Producer:
On Monday, THE WASHINGTON POST featured the enclosed story that I thought
you would enjoy reading. I look forward to seeing many of you at this
Saturday's Shareholders' Meeting. We continue to be so very impressed with
the courage of your leadership and commitment in supporting WLR Foods
throughout this hostile takeover attempt.
Just as it always has done, the WLR Foods Board of Directors remains
committed to the best interests of its shareholders. We very much
appreciate the support you provide in assuring the high quality of Wampler-
Longacre(R) poultry products. We are dedicated to provide a profitable
future for you, our employees and our shareholders for our employees for
years to come.
Sincerely,
James L. Keeler
President and Chief Executive Officer
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The Washington Post
May 16, 1994
WASHINGTON BUSINESS
A HIGH-STAKES GAME OF CHICKEN
Wall Street's Fowl Play: The Bitter
Merger Fight Of Tyson and WLR Foods
[Cartoon of a Tyson Foods' representative
waving a fistful of dollars at a WLR
Foods poultry producer]
By Jerry Knight
Washington Post Staff Writer
BROADWAY, Va.
The chicken is the king of the Shenandoah Valley and the turkey the
queen. Their palaces -- low-slung and longer than football fields -- guard
the hillsides. Their chariots laden with ground grain and birds on their
way to market patrol the byways. The sweet fragrance of their very
existence wafts on the spring breezes, mixing with the scents of dogwoods
and cherry trees.
Almost 120 million birds are raised here each year, bringing
$1 billion to the Valley and neighboring parts of West Virginia. This year
they brought something more -- out-of-state corporate raiders.
Call it a chicken coup d'etat: In January, Tyson Foods Inc., of
Springdale, Ark., America's biggest poultry company, launched a surprise
unfriendly bid to take over Broadway-based WLR Foods Inc., Virginia's most
successful poultry company.
The invaders from Arkansas are being welcomed with the same Southern
hospitality Union troops found when they marched down the Valley 130 years
ago this month -- only to be routed by Confederate forces a few miles east
of here at the Battle of New Market.
Just as the teenage cadets from Virginia Military Institute in
Lexington volunteered to defend the honor of the Old Dominion at New
Market, the whole community has turned out to defend Virginia's biggest
agribusiness. Ronald Courier, the president of James Madison University in
Harrisonburg, has rallied the locals for the "Battle of Broadway," joined
by the Rockingham County super-
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SHUFFLING THE PECKING ORDER
Halcyon Shenandoah Valley Seems the Unlikeliest of
Spots for a Bitter Takeover Fight
[Picture of James L. Keeler] [Picture of Don Tyson]
At the heart of the takeover battle are James L.
Keeler, left, president of the pursued WLR Foods
Inc., and Don Tyson, chairman of the pursuer, Tyson
Foods Inc.
visors, a couple of chambers of commerce, hundreds of chicken farmers,
the local newspapers and most of the Virginia investors who own WLR Foods
shares.
"Our shareholders have told [Tyson Foods Chairman] Don Tyson face to
face, in letters, phone calls, petitions and letters to the editor that
they do not want WLR Foods to be the latest acquisition by a corporate
raider," WLR Foods President James L. Keeler said.
The Tyson-Keeler fight has escalated into the first corporate
takeover battle folks in this bucolic valley have ever seen, let alone
gotten caught up in. And it's a takeover fight the likes of which Wall
Street has never seen, either.
After all, it's not every day that a billionaire corporation chairman
pursues his dream of building America's only meat conglomerate by sitting
down with chicken farmers in the basement of a small-town restaurant where
the Knights of Pythias meet.
And there's probably never been a takeover battle decided not only on
such abstract legal issues as the constitutionality of Virginia's
securities law but also on down-to-earth matters such as whether baby
chickens should eat out of little dishes or off long rolls of paper.
Tyson Foods tells its chicken growers to follow tradition and use
dishes -- which spill and have to be washed -- while WLR Foods lets its
chicks eat off brown paper. If it means doing dishes, some farmers say
they aren't interested in doing business with Tyson Foods.
Such subtleties may be lost on the Wall Street speculators who gamble
on corporate takeovers. They've bid the price of WLR Foods stock up from
less than $20 a share to $30, the price Tyson says it is willing to pay for
the whole company.
So far Tyson Foods has acquired only about 5 percent of WLR Foods'
stock and its offer to buy more stock has found so few takers that it has
been extended until June 3.
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Tyson has made clear it's a take-it-or-leave-it offer and turning it
down will cost stockholders their chance to make profits of as much as
$100 million. If shareholders vote against Tyson at a special meeting
later this month, "Tyson will sell our 600,000 WLR shares and take our
losses, along with you," the bidder said in a blunt letter published in the
News-Record of Harrisonburg.
Tyson himself has been crisscrossing the Shenandoah Valley in a
Chrysler minivan, hoping to persuade the chicken and turkey growers and
other local WLR Foods shareholders to join his camp.
Though he has been unable to buy his way in, Tyson has forced WLR
Foods to call a special stockholders' meeting to hear his proposal. The
board obliged by scheduling the meeting for Saturday, May 21 -- right after
the annual Virginia Poultry Festival Parade.
==========
You know you're in Rockingham County when you come to the turkey.
Bronze and bigger than life, it stands at the county line alongside
Route 11, welcoming anyone who can't whiff the wind to the Shenandoah's
poultry capital. Right across the road is the restored 19th century manor
house that is the home of Keeler, who happens to raise cattle instead of
chickens.
A successful Harrisonburg accountant and investor in several local
ventures, Keeler decided to go to law school at the University
"OUR SHAREHOLDERS HAVE TOLD DON TYSON ... THAT THEY
DO NOT WANT WLR FOODS TO BE THE LATEST ACQUISITION
BY A CORPORATE RAIDER."
WLR Foods President James L. Keeler
of Virginia after his kids went off to college. After practicing only a
couple of years, he was recruited in 1988 to be chief executive of WLR
Foods, the biggest business in this part of Virginia.
The W in WLR is for Wampler, an old Virginia family that has been
growing and processing poultry for decades. Brothers Bill and Charlie
Wampler are on the WLR Foods board and the family owns more than 10 percent
of the company.
The L is for Longacre, a family that merged its turkey business with
the Wamplers' but sold its stock five years ago and is no longer involved
in the company.
The R is for the Rockingham County Poultry Cooperative, a farmer-owned
chicken processor that joined up with Wampler-Longacre
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in 1988. That deal meant several hundred chicken farmers wound up owning
about a third of WLR Foods' stock, and most have hung onto it. The stock
represented the farmers' equity in the nonprofit co-op and didn't cost them
anything.
If these farmers decide not to sell, they could deny Tyson Foods a
majority of the stock. If they take the $30 a share Tyson Foods is
offering, though, they could collect $100 million -- pure profit. WLR
Foods stock closed Friday at $31 a share.
WLR Foods may be homegrown, but it is no mom-and-pop outfit, selling
$616 million worth of poultry products last year. Just last month it broke
into the Fortune 500, taking the 498th spot in the hierarchy of corporate
America.
With its Wampler-Longacre brand, WLR Foods is the nation's third
largest turkey producer. It is the 14th-largest chicken producer, packing
9.8 million pounds a week, compared with Perdue Farms Inc.'s 28 million
pounds a week and Tyson Foods' 84 million pounds.
It was all those turkeys that caught Tyson's eye. While Frank Perdue
may be more famous, Tyson is America's true chicken king: Tyson Foods'
annual chicken production ranks right behind that of China -- producing
almost twice as many birds as either
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[Following material through "SOURCE: Annual Reports" appears in a
box within article.]
'FEATHERS FLY: TYSON VS. WLR'
Name: Tyson Foods Inc. Name: WLR Foods Inc.
Headquarters: Springdale, Headquarters: Broadway,
Ark. Va.
Chairman: Don Tyson Chairman: Charles Wampler
Jr.
President: Leland Tollett
(CEO) President: James L.
Keeler (CEO)
Employees: 50,000
Employees: 6,500
Business: Producer,
processor and marketer of Business: Nation's
poultry-based foods. third-largest turkey
Brand names include producer and 14th-largest
Tyson, Holly Farm, chicken producer. Brand
Weaver, Mexican Original names include Wampler-
and Artic Ice. Nation's Longacre and Round Hill
largest chicken producer. Foods. Subsidiaries
One of the country's include Cassco Ice & Cold
largest tortilla manufac- Storage.
turers.
1993 revenues: $616.7
1993 revenues: $4.7 million
billion
1993 profit: $14.6
1993 profit: $180.3 million
million
Chickens produced per
Chickens produced per week: 9.8 million lbs.
week: 84 million lbs.
[To the right of the above appears] [To the right of the above appears]
RECENT STOCK ACTIVITY RECENT STOCK ACTIVITY
WEEKLY CLOSES WEEKLY CLOSES
Line graph showing weekly stock Line graph showing weekly stock
activity of Tyson Foods, Inc. activity of WLR Foods, Inc.
beginning Jan. 7 $24.50 and beginning Jan. 7 $18.50 and
ending Friday, May 13 $20.50 ending Friday, May 13 $31.00
superimposed over picture of a superimposed over picture of a
baby chicken. baby chicken.
SOURCE: Annual Reports
France or Japan, the company's annual report boasts.
Standing in the parking lot of the Southern Kitchen restaurant in New
Market after a recent meeting with growers, Tyson explained that buying WLR
and its turkey business would take him closer to achieving his goal of
making Tyson Foods the General Motors of meat.
"When we go to a customer -- whether it's a restaurant like this or a
big institution or a frozen food distributor -- we want to go in there
every day with all the meats he needs," he said.
In addition to chickens, Tyson Foods owns a handful of beef-packing
plants. It also is the only company that breeds, feeds and processes its
own hogs, and it bought two fish companies in 1992. That's everything
except turkey. Acquiring WLR Foods would make Tyson Foods a top bird in
the turkey business and would bring its total chicken output about even
with China.
Tyson is cut from the same cloth as another Arkansas business legend,
the late Sam Walton, who continued to drive to
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work in a dusty old pickup long after Wal-Mart Stores Inc. made him the
richest man in America. In Tyson's case, that cloth is khaki. Like
everybody in his company but the lawyers, who get to keep their pinstripes,
the chairman of the board wears tan work pants and matching shirt with a
Tyson logo over the left pocket and his first name embroidered on the
right.
Tyson may go to work in khakis, but it's to an office modeled after
the Oval Office, where he presides over the $4.7 billion-a-year business
from a desk copied from the one Thomas Jefferson used at Monticello.
A gold chain peeks out from beneath his khaki collar and a Rolex
rests on his wrist, but even Tyson's enemies say he's no phony. Says
chicken farmer Noah Turner, a WLR Foods shareholder who started a petition
urging Tyson to go back to Arkansas: "I've got nothing against Mr. Tyson,
he seems like a good country boy."
Like a good country boy, Tyson loves to tell how his company got
started in Arkansas back in the Depression, "when my daddy came down from
Missouri and ran out of gas money."
Stock in the family company now trades on the New York Stock Exchange
and Tyson himself owns about half of it, a stake that rounds off to
$1 billion.
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Nothing Paltry About Poultry Wars
[Picture of baby chicken]
THE BIG CHICKEN
World's biggest producers of broiler meat
PRODUCER AMOUNT*
Brazil 3.1 million
China 2.3 million
TYSON FOODS 2.1 MILLION
Japan 1.2 million
France 1.2 million
*1993 metric tons
SOURCE: Tyson Foods Inc.
Tyson has built his company mostly by buying up rivals. "I think I
got that farmer disease -- my dad used to call it the 'joining disease,'"
he said during one of his Shenandoah Valley stops. "You know the one: You
own a piece of land and all you want is the one that joins it, and then the
one that joins that and. . . ."
Like a rooster on steroids, Tyson Foods has grown so big that it now
wants to rule the whole barnyard.
Adding WLR Foods would put Tyson Foods in a dominant position in the
Shenandoah Valley poultry business, turning what is now a three-way
competition into a two-company race in which Tyson Foods would have the
lion's share of the business.
Its only rival here would be smaller, privately-owned Rocco Farms.
Growers, who sell birds to the big companies, say they fear the
takeover would put them at the mercy of the chicken king.
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"The growers here are making good money, all of them, because we have
competition [among the buyers]," said Turner, whose farm is just outside
Stanley, Va. "Other areas don't have competition, like down in North
Carolina, and [the growers] don't do as well."
When Turner started circulating a petition opposing Tyson Food's
takeover bid, 500 fellow farmers signed up.
Most growers would rather work for a local company "and keep the
money in the community" even if it means passing up a big profit on their
stock," Turner said. "As far as everybody is concerned, they're going to
be better off if things stay exactly like they are."
Tyson, however, has a reputation for not taking no for an answer.
When he started going after Holly Farms Corp., the Memphis-based
poultry processor wasn't for sale either. Buy Tyson made an offer, then
raised it and raised it again. After a year, Holly was his.
Tyson made his first feint toward WLR in December, calling Keeler out
of the blue. "I told him we were not for sale," Keeler recalled.
But Tyson suggested the two meet for lunch at the Watergate Hotel in
Washington. Against the advice of the company's lawyers, Keeler drove up
Interstate 81 to see Tyson.
Tyson talked $30 a share and Keller recalled telling him, "the
company is not for sale and even if it were, that's not going to get
anybody's attention."
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Keeler hoped his firm rejection would be the end of it. But Tyson
started a public fight, filing documents with the Securities and Exchange
Commission declaring he had purchased about 5 percent of WLR's stock and
was ready to buy all the rest.
While Keeler and Tyson were talking, there was an unusual flurry of
action in WLR stock. Usually, only a few thousand shares of the company's
stock change hands each day. But on Jan. 3, the day of Tyson's first,
unpublicized meeting with Keeler, 54,100 shares changed hands. On Jan. 11,
following a second meeting, 66,800 shares traded. Trading volume grew
steadily, climbing from 2,900 shares on Jan. 17 to 67,100 shares on
Jan. 24, the day before the offer was made public.
A dozen of the people trading stock those days were in Arkansas and
more than 100 were from Virginia. The SEC and the National Association of
Securities Dealers are investigating to see whether any of them were
trading on illegal inside information about the deal.
In the meantime, most of the fighting is taking place in the little
federal courthouse in Harrisonburg, where Tyson has filed a lawsuit
challenging a state law which makes it difficult for raiders like Tyson to
oust the management of a company incorporated in Virginia.
The case is likely to go to the Fourth Circuit Court of Appeals in
Richmond.
Hiring Wall Street lawyers to help fight Tyson cost WLR Foods
$1 million in the first three months of this year alone, the company
recently informed its shareholders, and that is only the down payment on a
war chest that is going to run into the millions.
"We're going to spend a whole lot of money that our shareholders
could be getting instead of the lawyers and investment bankers," Keeler
laments.
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The Washington Post
May 16, 1994
DOWN ON THE FARM GOES HIGH TECH
By Jerry Knight
Washington Post Staff Writer
[Picture of Noah Turner]
Noah Turner, who along with his family produces more
than 3 million chickens a year in the Shenandoah
Valley, outside one of the family's new chicken
houses.
STANLEY, Va.
Raising chickens these days is more like manufacturing cars than
farming.
The state-of-the-art chicken machine is 400 feet long, 40 feet wide,
fully automated and turns out 24,000 broilers every seven weeks, said Noah
Turner, who has been raising chickens for more than 30 years.
Turner, two of his brothers and two of his sons are all in the
chicken business. One of his sons just laid out almost $250,000 to build
two new chicken houses, giving the Turner clan 22 houses, which is the way
poultry production capacity is measured here.
The Turners can turn out 3 million chickens a year. That makes them
serious players -- but by no means the biggest of the more than 1,000
chicken and turkey growers in the Shenandoah Valley and nearby West
Virginia.
When you're handling chickens in batches of 20,000 or more and
turning over six or seven generations a year, it's a big business. And
because the process is low-risk and highly automated, "It's probably the
easiest money I ever made in my life," Turner said.
Like all but a handful of the local poultry farmers, the Turners are
contract growers who raise birds for WLR Foods Inc., Tyson Foods Inc. or
Rocco Farms, the three big poultry companies in the Shenandoah Valley.
Under this system, the growers do not have to worry about the
vagaries of the grain market, fluctuating chicken prices or the other
market risks that make farming such a hazardous business.
The poultry companies provide both the baby chicks and the food. The
growers' job is to give the chickens a home and keep
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them well-fed and happy. For this they get between 4 cents and 4.5 cents
for every pound of chicken they produce.
Managing a chicken house takes only about 2 1/2 hours a day. It's
considered an ideal family business, often with the husband working in town
or doing other farming and the wife tending the flocks.
The Turners also raise cattle and run a sod farm, both synergistic
ventures when you're raising chickens. The manure cleaned out of their
chicken houses is used as fertilizer for the sod -- and as feed for the
cattle, an organic, recycling system that gives city folks pause. "It's
real high in protein," Turner said.
The chicken business is so specialized that Turner knows exactly what
happens to the birds he raises. In fact the fate of most chickens is
determined while they are still a gleam in a rooster's eye.
Fast-food chains want mostly white meat, so special strains of
chickens with plump breasts are bred to meet their needs. The export
markets and nugget makers prefer more dark meat, so birds with thicker legs
are created for them.
Such genetic engineering and precise nutritional balancing of the
chickens' diet reflect lessons the poultry producers learned form the late
Edwards Demming, the quality control guru who is as popular with chicken
companies as he is with Japanese automakers.
Chicken-growing techniques are now so fine-tuned that when a house
full of 24,000 chickens from a grower like Turner goes to slaughter, the
ready-to-cook birds will vary in weight by less than four ounces.
