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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ___)*
____________________
LONGS DRUG STORES CORPORATION
(Name of Issuer)
Common Stock
(Title of Class of Securities)
543162101
(CUSIP Number of Class of Securities)
John W. Rogers, Jr.
Chairman of the Board
and Chief Executive Officer
and
Franklin L. Morton
Senior Vice President
Ariel Capital Management, Inc.
307 North Michigan Avenue, Suite 500
Chicago, Illinois 60601
(312) 726-0140
(Name, Address and Telephone Number of Persons Authorized to
Receive Notices and Communications)
September 18, 2000
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check
the following box. :
* 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.
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Schedule 13D
CUSIP NO. 543162101 Page 2 of 12 Pages
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1. NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Ariel Capital Management, Inc. John W. Rogers, Jr.
IRS ID # 36-3219058
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [_]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS*
OO: Funds of investment advisory clients
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Illinois
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7. SOLE VOTING POWER
NUMBER OF Ariel - 5,188,325 Rogers-0
SHARES -----------------------------------------------------------
8. SHARED VOTING POWER
BENEFICIALLY
Ariel - 0 Rogers-0
OWNED BY
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EACH 9. SOLE DISPOSITIVE POWER
REPORTING Ariel - 5,555,575 Rogers-0
PERSON -----------------------------------------------------------
10. SHARED DISPOSITIVE POWER
WITH
Ariel - 6,000 Rogers-0
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Ariel - 5,561,575 Rogers-0
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12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Ariel - 5,561,575/37,383,582 = 14.88% Rogers-0%
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14. TYPE OF REPORTING PERSON (See Instructions)
Ariel - IA Rogers-HC
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* See instructions before filling out.
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Schedule 13D
CUSIP No. 543162101 Page 3 of 12 Pages
Item 1. Security and Issuer.
This statement on Schedule 13D (this "Statement" or the "Schedule
13D") relates to shares of common stock ("Issuer Shares") of Longs Drug Stores
Corporation, a Maryland corporation ("Issuer"). The Issuer's principle
executive offices are located at 141 North Civic Drive, Walnut Creek, California
94596.
Item 2. Identity and Background.
(a), (b) and (c) Ariel Capital Management, Inc. ("Ariel") is filing
this Statement. Ariel is an investment advisor registered with the Securities &
Exchange Commission under the Investment Advisers Act of 1940, as amended.
Ariel provides portfolio management services on a discretionary basis to a
limited number of institutional clients, consisting of private and public
pension plans, charitable foundations, university endowments, trusts,
corporations and Taft-Hartley organizations. Ariel also serves as investment
adviser and manager to the Ariel Growth Fund (d/b/a Ariel Investment Trust),
which is composed of three separate portfolios: the Ariel Fund, the Ariel
Appreciation Fund and the Ariel Premier Bond Fund. Ariel's affiliate, Ariel
Distributors, Inc., serves as the underwriter and distributor for the Ariel
Growth Fund. Ariel also serves as investment advisor for selected individual
and other portfolios through the Ariel Managed Fund Account Program. Ariel's
principal executive offices are located at 307 North Michigan Avenue, Chicago,
Illinois 60601.
Other than executive officers and directors, there are no persons or
entities controlling or ultimately controlling Ariel.
The Issuer Shares reported in Item 5 were acquired on behalf of
Ariel's investment advisory clients under sole or shared discretionary authority
granted to Ariel. None of the Issuer Shares are owned by or on behalf of Ariel
or by any of its directors or officers. To the best of Ariel's knowledge, no
single client of Ariel owns 5% or more of the Issuer Shares.
Mr. John W. Rogers, Jr., Ariel's Chairman of the Board and Chief
Executive Officer, also is filing this Statement in the event he could be deemed
to be an indirect beneficial owner of the Issuer Shares reported by Ariel
through the exercise of voting control and/or dispositive power over the Issuer
Shares as the result of his official positions or ownership of voting securities
of Ariel. Neither Ariel nor Mr. Rogers owns any Issuer Shares for its or his own
account and each disclaims beneficial interest in any of the Issuer Shares
reported.
(d) During the last five years, neither Ariel nor, to the best of
Ariel's knowledge, any of its executive officers and/or directors has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, neither Ariel nor, to the best of
Ariel's knowledge, any of its executive officers and/or directors has been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction which resulted in, or was 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 a finding of any violation with
respect to such laws.
(f) Ariel is a corporation organized and existing under the laws of
the State of Illinois. Mr. Rogers is a citizen of the United States. Each of
Ariel's directors and executive officers is a citizen of the United States. The
name, address and present principal occupation of each of Ariel's directors and
executive officers are set forth in Schedule I.
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Schedule 13D
CUSIP No. 543162101 Page 4 of 12 Pages
Item 3. Source and Amount of Funds or Other Consideration.
John W. Rogers, Jr. owns no Issuer Shares directly. Ariel directed
the purchase of 5,561,575 Issuer Shares for its investment advisory clients for
an aggregate purchase price of $140,227,187. All of the shares were paid for by
cash assets in the respective clients' accounts and/or margin borrowings
pursuant to standard margin agreements.
Item 4. Purpose of Transaction.
Ariel is engaged in the business of investment management of its
clients' assets and pursues an investment philosophy of identifying undervalued
situations and acquiring positions in undervalued companies for long-term
investment on behalf of its clients. All purchases of Issuer Shares were made
for investment purposes only, in Ariel's ordinary course of business as a
registered investment advisor. Ariel has invested in the Issuer since 1991 for
the long term as a passive investor.
In the ordinary course of business, Ariel contacts management and the
Board of Directors to inquire about the Issuer's financial and stock market
performance. Over the past 10 fiscal years, the Issuer's earnings per share
have risen from $1.51 to $1.76, reflecting a compounded annual growth rate of
only 1.5%. Moreover, the Issuer Shares have declined 20% in value over the past
decade, from a peak of $24 per share in 1989 to the present value of
approximately $19 per share. Consequently, Ariel has contacted management and
the Board of Directors to inquire as to what strategies the Issuer plans to
undertake to enhance shareholder value.
Ariel may, from time to time, purchase or sell additional Issuer
Shares in open market or privately negotiated transactions. In determining
whether to purchase or sell additional shares, Ariel intends to consider and
review various factors on a continuous basis, including the Issuer's financial
condition, business prospects, other developments concerning the Issuer, the
price and availability of Issuer Shares, other investment and business
opportunities available to Ariel, and general economic and stock market
conditions.
Except as set forth in this Item 4, Ariel has no present plans or
proposals that relate to or that would result in any of the actions specified in
clauses (a) through (j) of Item 4 of Schedule 13D of the Act. Ariel reserves the
right to change its plans and intentions at any time, as it deems appropriate.
Item 5. Interest in Securities of the Company.
(a) The aggregate number and percentage of Issuer Shares to which
this Statement relates is 5,561,575 shares, representing 14.88% of the issued
and outstanding Issuer Shares. All such shares were purchased in open market
transactions.
(b) As of the date of this filing, Ariel has the discretionary power
to direct the vote of 5,188,325 Issuer Shares and the disposition of 5,555,575
Issuer Shares held for its investment clients.
(c) All purchase or sale transactions effected by Ariel in Issuer
Shares during the past 60 days are set forth on Schedule II.
(d) Ariel's investment advisory clients have the sole right to
receive and, subject to notice, to withdraw the proceeds from the sale of the
Issuer Shares, and the sole power to direct the receipt of dividends from any of
the Issuer Shares held for their respective accounts. Such clients also may
terminate the investment advisory agreements without penalty upon appropriate
notice. Ariel does
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Schedule 13D
CUSIP No. 543162101 Page 5 of 12 Pages
not have an economic interest in any of the Issuer Shares. To the best of
Ariel's knowledge, other than the Issuer Shares reported, no single client has
such interest relating to 5% or more of the outstanding class of securities.
(e) Not applicable.
Item 6. Contracts, Arrangements or Understandings with Respect to Securities
of the Company.
The powers of disposition with respect to Issuer Shares owned by
Ariel's discretionary private accounts are established in written investment
advisory agreements between clients and Ariel, which are entered into in the
normal and usual course of Ariel's business as a registered investment advisor
and which are generally applicable to all securities purchased for the benefit
of each such discretionary private account. There are no special or different
agreements relating to the Issuer Shares.
The written investment advisory agreements with clients do not contain
provisions relating to borrowing of funds to finance the acquisition of Issuer
Shares, acquisition of control, transfer of securities, joint ventures, or any
of the other transactions listed in the instructions to Item 7 of Schedule 13D
other than voting of proxies. In connection with voting, Ariel may be allowed
or directed to vote the proxies received by accounts classified as
"discretionary" or "shared" accounts. Such authority generally is retained by
the clients for accounts classified as "non-discretionary."
Item 7. Material to be Filed as Exhibits.
Exhibit A Joint Filing Agreement
Exhibit B Power of Attorney
Schedule I Information with Respect to Directors and Executive Officers
of Ariel Capital Management, Inc.
Schedule II Purchase and Sale Transactions within the Past 60 Days
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Schedule 13D
CUSIP No. 543162101 Page 6 of 12 Pages
SIGNATURES
After reasonable inquiry and to the best of each of the undersigned's
knowledge and belief, each of the undersigned certifies that the information set
forth in this Statement is true, complete and correct.
Dated: September 18, 2000
ARIEL CAPITAL MANAGEMENT, INC.
By: /s/ Franklin L. Morton
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Franklin L. Morton
Senior Vice President
JOHN W. ROGERS, JR., individually
By: /s/ Franklin L. Morton
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Franklin L. Morton, as attorney-in-fact*
* Franklin L. Morton signs this document on behalf of John W. Rogers, Jr.
pursuant to the power of attorney attached as Exhibit B to this Statement.
