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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
(Amendment No. 3)
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. 3 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 19 -- Form of Letter to Poultry Producers, dated March 30,
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: March 30, 1994
WLR FOODS, INC.
By: /s/ James L. Keeler
Name: James L. Keeler
Title: President and Chief
Executive Officer
<PAGE> 1 Exhibit 19
[WLR Foods, Inc. Letterhead]
March 30, 1994
Dear Poultry Producer:
I'm very pleased to share with you that the Board of Directors and some
other officers of the company report that in their discussions with a
significant number of our shareholders, they have been assured that these
shareholders agree with the Board of Directors' recommendation and are not
tendering their shares to Tyson.
As you may have heard, Tyson wrote to all shareholders a letter that is
basically the text of his most recent ad, and added that he intends to
continue his "efforts to acquire WLR for as long as it takes..."
However, our producers have reported to the media that they are in the
midst of distributing petitions of support and have been speaking out more
to the media themselves against the Tyson takeover. And you know that
employees have been doing the same. This is very encouraging because it is
a morale booster for all of us, a much appreciated support for our Board
during this difficult time, and, not quite so incidentally, sends a loud
and clear message to Don Tyson that his proposal has been rejected here at
WLR Foods.
Sometimes the strategy in a hostile takeover is to make people think that
it is a done deal. This is what Tyson has done before. During the Holly
Farms takeover, Tyson was found by the Nebraska Federal District Court
(Conagra, Inc. vs. Tyson Foods, Inc. and Holly Acquisition Corporation and
CAG Acquisition Corporation, Civ. No. 89-0-65) to have released three
erroneous media releases on January 19 and 20, 1989. These Tyson Foods
releases announced that the deal with Holly was complete and that Tyson
would take over Holly. For those of you who remember, the deal was far
from complete and not agreed upon until June 1989 and completed in August
of 1989. You can continue to trust WLR Foods' corporate office and live
production offices to always provide you the latest, most factual
information.
TYSON KNOWS AS WELL AS WE DO THAT THIS IS NOT A DONE DEAL. THE SUPPORT WE
ARE RECEIVING FROM OUR SHAREHOLDERS IS REMARKABLE. DON'T LET HIM STAMPEDE
YOU INTO A BAD DECISION.
Yesterday the Tyson company jet flew into the Shenandoah Valley Airport
with an entire team of Tyson people who have been calling our producers on
the telephone and coming to their farms. They are asking at what price
will they sell their shares. This is a desperate attempt by Tyson to
increase the support for his hostile tender offer. Clearly,
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Tyson is trying to divide the producers from our company in planning their
next step.
We will keep you updated. The tender offer is scheduled to expire April 8.
I expect we will hear quite a bit this week from Arkansas as they try to
get shares tendered.
Sincerely,
James L. Keeler
President and Chief Executive Officer
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Daily News-Record
Harrisonburg, Virginia
Thursday March 24, 1994
Editorials
IMAGES MATERIALIZE IN CORPORATE WAR
Recent headlines have cast a new light on an aspect of the Tysons
Food/WLR Foods corporate conflict. It's the aspect of corporate image.
Last week The New York Times, in reporting that a top lawyer for
Tyson once helped Hillary Rodham Clinton make a quick $100,000 in the
commodities market, also reported that the Tyson firm benefited from a
variety of state actions while Bill Clinton was governor of Arkansas. The
benefits ranged from $9 million in government loans to the placement of
company executives on important state boards.
Further, according to the Times, critics in Congress and elsewhere
still complain that the Clinton administration in Washington is still too
close to Tyson and that the firm (and the poultry industry in general) has
benefited through its political ties to Clinton and the White House.
Later, it was reported by the Wall Street Journal that the federal
Securities and Exchange Commission is currently conducting an investigation
to determine if insider trading was involved when Tyson took over a seafood
company in 1992. The probe is reportedly centered on a suspicious surge in
purchases of Arctic Alaska Fisheries Corp. the week before Tyson acquired
the company.
The Wall Street Journal said that the list of those being
Thomasson, former head of the Phoenix Group investment firm and now
director of administration at the White House. Another reported target of
the SEC probe is the uncle of White House associate counsel William Kennedy
III.
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None of these disclosures indicate proof of any wrongdoing on the
part of the Tyson firm or the persons named. Corporations, like
individuals, are innocent until proven guilty. And corporations, like
individuals, should not be unfairly accused of guilt by association.
However, the list of suspicious activities does seem to point to a
pattern of questionable corporate behavior. And that behavior tends to
support the concerns expressed by some in the local business community
regarding the attempt by Tyson to acquire WLR Foods.
The primary concern is that if Tyson Foods is successful in securing
a role as a predominant member of the Valley's industrial family, it may
bring to the Valley a style of corporate conduct that is not usually seen
here. That style of corporate conduct is one that many would rather not
see here, since it is not consistent with the business standards that have
been traditionally practiced in the Valley.
Most of the major firms now operating in the Valley have established
a reputation free of the taint of undue political influence and have
managed to succeed without the shadow of independent investigations into
their practices.
The questions now being raised concerning Tyson Foods will eventually
be answered. And the corporate struggle between Tysons and WLR will
eventually be decided. But at this point, it appears that WLR is winning
the battle of corporate images.
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Richmond Times-Dispatch
Richmond, Virginia
March 29, 1994
RICHMOND PLACES SIX ON FORTUNE 500
WLR'S ADDITION KEEPS STATE TOTAL ON RANKING AT 13
by Mollie Gore
Times-Dispatch Staff Writer
An international merger knocked one Richmond company off the Fortune
500 list, leaving the city home to just six of the 500 largest industrial
companies as ranked by the New York magazine.
Specialty Coatings International Inc., which was spun off from James
River Corp. long enough to place it 471st on last year's ranking, was
bought by Bowater PLC in London last March. So its time as a Fortune 500
company was short-lived.
But like last year, Virginia still managed to place 13 companies on
the Fortune 500, with Broadway-based WLR Foods Inc. making its debut at
498th.
And, proving that one company's loss is another's gain, at least in
revenues, Falls Church-based General Dynamics sold its military aircraft
division to Lockheed, which helped Lockheed become on the fastest growing
companies on the list. Meanwhile, General Dynamics fell from 58th last
year to 112th this year.
The 39th annual Fortune 500 industrial ranking, based on 1993 sales,
is in the magazine's April 18 issue, which will go on sale April 4. The
magazine's May 30 issue will rank the country's 500 largest service
companies, including banks and insurance companies. Last year, Richmond
had seven firms among the top 500 service companies.
The Richmond companies on the industrial ranking include Reynolds
Metals Co., James River Corp., Universal Corp., Ethyl Corp., Chesapeake
Corp. and E.R. Carpenter Co. Inc.
(One footnote to the local rankings - a part of Specialty Coatings
International remains based in Richmond. After acquiring Specialty
Coatings, Bowater late last year sold the company's Custom Papers Group,
which operates five mills, to a group of local investors.)
For the first time, New York state didn't claim the most Fortune 500
headquarters. In fact, it placed third behind California and Illinois,
respectively. Virginia and Georgia tied for 13th, with 13 each.
Nationally, the Fortune 500 companies posted an impressive recovery
in profits, the magazine said, with income totaling $62.6 billion-compared
to a $196.2 million loss for last year's ranking.
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Among Virginia companies, profits for 1993 totaled $3.4 billion, more
than triple 1992's profits of $1 billion. Sales, however, dropped from
$91.7 billion in 1992 to $86.3 million for 1993, according to the magazine.
The drop was largely caused by a $4 billion drop in sales reported by
General Dynamics over the same period. General Dynamics' profits, however,
rose from 1992 to 1993.
General Motors led the Fortune 500 for the eighth straight year.
THE VIRGINIA 13
Here are the Virginia-based companies on the Fortune 500:
* Mobil Corp. (Fairfax) 6th, unchanged; $56.6 billion in sales,
$2.1 billion profit
* Reynolds Metals Co. (Richmond) 101st, was 96th; $5.3 billion in
sales; $322.1 million net loss
* General Dynamics Corp. (Falls Church) 112th, was 58th; $4.7
billion in sales; $885 million profit
* James River Corp. (Richmond) 113th, unchanged; $4.7 billion in
sales; $300,000 net loss
* Gannett Co. Inc. (Arlington) 138th, was 143rd; $3.6 billion in
sales $397.8 million profit
* Universal Corp. (Richmond) 160th, unchanged; $3 billion in
sales; $80.2 million profit
* Ethyl Corp. (Richmond) 177th, was 161st; $2.7 billion in sales,
$175.5 million profit
* Lafarge Corp.(Reston) 280th, was 271st; $1.5 billion in sales;
$5.9 million profit
* Smithfield Foods Inc. (Smithfield) 335th, was 346th; $1.1
billion in sales; $4 million profit
* Dibrell Bros. Inc. (Danville) 356th, up from 337th; $1.1
billion in sales; $39.3 million profit
* Chesapeake Corp. (Richmond) 388th, down from 387th; $885
million in sales; $10.4 million profit
* E.R. Carpenter Inc.(Richmond) 495th, was 499th; $619 million in
sales; $21 million profit
* WLR Foods Inc. (Broadway) 498th new entry; $616.7 million in
sales; $14.6 million profit
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Winston-Salem Journal
Winston-Salem, North Carolina
February 6, 1994
CHICKEN GROWER RECOUNTS STRUGGLE
AFTER TYSON BOUGHT OUT HOLLY FARMS
o Hays man, others
say Tyson sometimes
would undercount
By Vincent Morris
HAYS
For 10 years, Robert K. Sebastian raised chickens. With five chicken
houses, including one that was two stories, he had a decent operation and
made a good living.
But a few years ago, after Tyson Foods Inc. bought Holly Farms Foods
Inc., he said, things changed.
Tyson demanded that he make expensive improvements to his houses,
even when he was able to suggest less-expensive alternatives. He says he
thinks that Tyson drivers sometimes cheated him out of the feed he had paid
for, making it more expensive for his birds to put on weight.
And like nearly a dozen other past and current Wilkes County chicken
growers interviewed recently, Sebastian said he thinks Tyson undercounted
the number of chickens he raised, effectively cheating him of profits.
The same charge was made late last month by Harvey S. Wiles, a grower
who was best-known for his colorful Christmas-tree light displays. Wiles'
lawsuit, filed in U.S. District Court in Statesville, charges Tyson with
undercounting chickens as a matter of policy between 1991 and 1993.
Wiles says that Tyson no longer undercounts birds. But he showed a
visitor old receipts from Tyson that indicate that his truck loads of
chickens were often registered as being partially empty.
"None of my trucks left empty," he said indignantly.
Officials at Tyson declined to comment on the specific allegations of
the suit, saying that the matter will be decided in court. "We certainly
disagree with the allegations," said Archie Schaffer III, a spokesman at
the company's headquarters in Springdale, Ark.
SEBASTIAN SAID THAT when Tyson told him he could not use his two-
story house, he was devastated. It accounted for half of his income and he
couldn't afford to build another house. So he stopped raising chickens.
He now works at Mulberry Machines and helps his sons with their business.
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Many Wilkes growers who bring their birds to Tyson's processing plant
in Wilkesboro said they were aware of the undercounting. But they said
they feared retribution if they complained about it. "I really used to
love the chicken business," said one grower who followed his parents into
the business. But he said he is $180,000 in debt and now raises cattle to
help pay the bills on his 150-acre farm.
This concern about undercounting is a common problem, said Delton E.
Nelms, the president of the North Carolina Contract Poultry Growers
Association. Nelms, of Castalia, helped found the 3-year-old organization
to assist growers in dealing with large poultry companies.
"There's a certain amount of undercounting going on," said Nelms, who
raises chickens for Perdue. Unlike Tyson, Perdue and most other companies
pay by weight, not head count.
He noted that another form of undercounting involves charging the
grower for 100 young chicks but only delivering 97 or so. Again, he said
many growers know this is going on but are too frightened to report it.
One grower from Hays said he knows the trucks that came to pick up
his chickens were always full when they left, yet his receipts indicated
that five coops were empty.
"We have to take their word on everything," said the grower. "You
can't beat 'em."
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The Journal-Patriot
North Wilkesboro, N.C.
March 10, 1994
TYSON FOODS ANSWER TO WILES' SUIT FILED
By Jule Hubbard
Tyson Foods Inc. is denying intentionally undercounting the number of
chickens picked up from Tyson growers in an answer to the lawsuit of
Harvey S. Wiles of Route 1, Hays.
Wiles on Jan. 14 filed a suit in federal court seeking thousands
of dollars in compensation for himself and over 200 other Wilkes County
area Tyson broiler growers as a class action case.
It will be up to a judge to decide whether the case can proceed as a
class action suit, or as a suit on behalf of Wiles only. Tyson asks in its
answer, filed Feb. 24, that the request for class action status be
denied.
Tyson also asks in its answer that the suit be dismissed, that Wiles
recover nothing, that he be responsible for Tyson's attorney fees and all
costs of the suit and that the matter go before a jury.
Wiles' suit claims Tyson has since Jan. 1, 1991, automatically
deducted the number of birds gathered in computing grower pay "to
compensate for alleged double-counting of the birds actually loaded onto
trucks." The suit claims that from 90 to 100 birds per truck load from
each farm is deducted.
Tyson's answer denies this allegation and also Wiles' claim in the
suit that his contract with Tyson was terminated in January 1993. The
answer says Wiles breached his poultry growing contract with Tyson, but
doesn't specify how.
H. Gray Wilson, a Winston-Salem attorney representing Tyson, said
Wiles temporarily didn't receive chickens because he failed to meet an
obligation in the contract that Wilson declined to identify.
The suit alleges Tyson stopped supplying Wiles with chickens in
retaliation for Wiles' complaints to the company and to the Packers and
Stockyard Administration about Tyson's alleged policy of deducting a
standard number of birds and corresponding pay.
Tyson denies Wiles' claim that the only apparent reason given by
Tyson for ending his contract in January 1993 was Wiles' extensive
Christmas light display near his home on Wiles Ridge Road.
Tyson began supplying Wiles with chickens again in December 1993.
Wiles said he gets 56,000 chicks in three houses each cycle.
In his suit, Wiles seeks for himself and other Wilkes area Tyson
broiler growers:
* an amount of money based on the difference between what growers
were paid under the system of deducting birds counted and the
number of birds actually counted;
* punitive damages in excess of $10,000 for Tyson's alleged
"willful, deliberate and reckless disregard of the rights" of
Wiles and the other Tyson growers;
* punitive damage in excess of $10,000 to Wiles because of the
alleged termination of his Tyson contract in January 1993.
Tyson began supplying Wiles with chicks again this past
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December, but Wiles claims he lost over $30,000 due to
unlawful, retaliatory termination of his contract;
* a court order requiring Tyson to end the alleged policy of
automatically deducting the count on birds picked up at each
farm;
* a court order requiring Tyson to render a full accounting to
Wiles and other Wilkes area growers of the full contract prices
they should have received since the alleged practice of
deducting bird counts was started.
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The Mountain Times
Watauga County, North Carolina
August 17, 1989
TYSON FOODS GIVES LOCAL CHICKEN GROWERS THE BIRD
By Jim Thompson
[Photo 1] [Photo 2]
When the Mountain Poultry Growers association contacted Don Tyson
about continuing their contracts after Tyson Foods acquired Holly Farms, he
jokingly told them, "We need chickens so bad we're scraping them off the
road." Last month, with the multi-million dollar takeover complete, Don
Tyson gave the 53 local farmers the bird.
In a letter to Timothy Carter, Executive Director of the Ashe County
Chamber of Commerce, Tyson stated "Local Holly Farms management has
previously determined it is not feasible to continue to place chickens in
these areas because of the distance from the processing, feed mill,
hatchery facilities, and the long, difficult roads. Our management has
reviewed the decision made on the mountain growers and we do not feel that
we can reverse Holly's decision." The letter is dated July 19; the 53
farmers in the Mountain Poultry Growers did not learn of the decision until
late in the month.
Houses and Debt
In a letter to Don Tyson dated August 4, Richard Yearick, Chairman of
the Mountain Poultry Growers, attacked the decision. "We have been loyal
Holly Farms growers for more than 20 years. Our unique mountain climate
and strong mountain work ethic have made us among the highest rated growers
in the Holly system," he said. "We produced more than $10 million in
broilers last year alone."
The Tyson affirmation of Holly Farms' earlier decision leaves the
Ashe and Watanga growers with 97 chicken houses and more than $500,000 in
debt. As Yearick explained, the growers made substantial capital
investments in the past five years -- at the request of Holly Farms. "At
Holly Farms' insistence, we installed fogger systems and curtain droppers
that have left our growers with more than $500,000 in outstanding loans."
Legal Battle?
In an interview last week, Brian Crutchfield, Economic Development
Coordinator for BREMCO, told us the growers are considering legal action
against Tyson Foods on the decision. Research is under way on the growers
contracts. "The contracts say the company can reject chickens over poor
quality," he explained, "but is doesn't appear to mention anything about
economic, roads or cutbacks." The group is presently discussing the matter
with the Farm Legal Action Group (FLAG).
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Senate Investigates
The U.S. Senate will soon conduct hearings on what is called the
"chickenization" of the beef and pork industries. "In the past, bulk beef
and pork was raised, then went to market and auction, where everyone took
their chances on the floor," Brian Crutchfield said. "Now more and more
companies contract with growers to cut out the middleman. But when there
are bad times, the growers get the shaft; when times are good, the
companies keep the profits."
The Senate is concerned enough about this trend to hold the hearings,
and look at the potential impact on the nation's economy.
Turkey Eggs
While most growers in the Association would prefer to stick with
chicken farming, the group is looking into turkey eggs as an alternative.
The market is stable, with the current wholesale price between 60 cents and
80 cents each.
N.C. State is now looking at the cost to growers of converting to the
eggs. They require more labor, and may necessitate pouring concrete floors
in the houses.
End of the Line
The official cut-off date set by Holly Farms a year ago was September
1. At present, most houses will produce one more flock. "By late
September or early October, it's all over," Crutchfield said.
All over, except for the 53 farmers who will be left with an
estimated $10 million in chicken houses, $500,000 in debts -- and a
potentially permanent loss of much of their income.
As Richard Yearick stated in his letter to Don Tyson, "When we think
about the millions of dollars spent in this takeover, we know our request
appears insignificant. But to us, it means jobs, income, and keeping our
farms. We need more time to pay off loans and pursue other options. As
long time Holly Farms workers, we deserve better treatment. We did not
receive health benefits, retirement funds, or vacation pay from Holly
Farms. We were paid for hard, honest work that provides the real backbone
of the poultry industry."
Yearick asked Tyson to directly discuss the local situation, "as you
promised," he noted. Among the options suggested in the letter: taking
lower pay to make up for transportation costs or only growing chickens in
the summer months. "We can make this a 'win-win' solution," Yearick
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concluded. At press time, there had been no answer from Don Tyson or Tyson
Foods.
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Appendix
[Photo 1] Photograph of chicken
[Photo 2] Photograph of chicken
