SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2
TO
SCHEDULE 14D-9
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SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
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AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
(Name of Subject Company)
AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
(Names of Person Filing Statement)
COMMON STOCK, PAR VALUE $1.00 PER SHARE
(INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
(Title of Class of Securities)
03070M 10 0
(Cusip Number of Class of Securities)
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CHARLES R. FOLEY
PRESIDENT AND CHIEF EXECUTIVE OFFICER
AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
168 LOUIS CAMPAU PROMENADE, SUITE 400
GRAND RAPIDS, MICHIGAN 49503
(616) 336-9400
(Name, address and telephone number of person authorized to receive
notices and communications on behalf of the person(s) filing statement)
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With a Copy to:
WILLIAM R. KUNKEL, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM (ILLINOIS)
333 WEST WACKER DRIVE
CHICAGO, ILLINOIS 60606
(312) 407-0700
INTRODUCTION
Ameriwood Industries International Corporation (the "Company") hereby
amends and supplements its Solicitation/Recommendation Statement on
Schedule 14D-9, as filed on April 3, 1998, as amended on April 17, 1998
(the "Schedule 14D- 9"), with respect to the tender offer made by Horizon
Acquisition, Inc. ("Purchaser"), a wholly-owned subsidiary of Dorel
Industries Inc. ("Parent"), for all of the outstanding Shares. Capitalized
terms not defined herein have the meanings assigned thereto in the Schedule
14D-9.
Item 4 of the Schedule 14D-9 is hereby amended and restated as
follows:
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
Recommendation of the Board of Directors. The Board of Directors of
the Company has unanimously approved the Merger Agreement, the Offer and
the Merger, and has determined that each of the Offer and the Merger is
fair to and in the best interests of the Company and its shareholders. The
Board unanimously recommends that all shareholders of the Company accept
the Offer and tender their Shares pursuant to the Offer.
Background; Reasons for the Recommendation. The ready-to-assemble
("RTA") furniture industry, while exhibiting growth above the general
economy, is very competitive and in recent years has experienced
intensified competition. There has been consolidation of both industry
participants and customers, and in addition, there have been technological
advances in production allowing for greater production efficiencies and
expanded capabilities. The largest industry participants significantly
influence the competitiveness of the industry by their manufacturing
capacity and efficiency as well as their economies of scale in servicing
customers. In view of this industry environment, in September 1996,
management of the Company began work on a three year strategic plan (the
"Plan") which was then presented to the Board of Directors in November
1996. Following review of the Plan, the Board of Directors decided that a
further study of the Company's capital expenditure needs was required and a
consultant for such study was retained. The consultant rendered a
preliminary report in February 1997 and, at the meeting of the Board of
Directors in April 1997, the final report was submitted and reviewed. Also
at the meeting, management of the Company reported on recent developments
in the industry and the Company's position in the industry.
From May 1997 through August 1997, management of the Company and the
Board of Directors commenced a thorough reexamination of the Company's Plan
and its implementation. The reexamination of the Plan indicated that while
the Company had made progress in increasing its manufacturing capabilities
and raising productivity, the Company's long-term competitive position was
nonetheless subject to substantial risks. In particular, substantial
capital expenditures would be required to keep the Company competitive in
an environment of significantly larger industry participants, with greater
financial resources than the Company, pursuing a consolidating customer
base. As a result, the Board of Directors and the Company's management
determined that the Company should conduct a systematic review of its
strategic alternatives, including alternatives to remaining an independent
company, in order to increase shareholder value.
At the Board meeting held in August, the Board of Directors
authorized senior management to contact outside financial advisors with
respect to the consideration and implementation of possible strategic
alternatives for the company. In October 1997, ABN AMRO Incorporated
("AAI") was retained. During the period from October through November 1997,
AAI approached a number of companies on a confidential basis to discuss
their interest in entering into a strategic transaction with the Company.
Certain of these companies, including Parent, entered into confidentiality
and standstill agreements with the Company and received financial and other
information regarding the Company in order to conduct a due diligence
review.
In December 1997, the Company's senior management and representatives
of AAI reported to the Board the results of their preliminary discussions
with potential strategic partners, including preliminary indications of
interest in pursuing a transaction from three of these potential strategic
partners.
From January through February 1998, these three potential strategic
partners continued to conduct their due diligence review, which included
tours of Company facilities and presentations by senior management of the
Company. During this period, AAI was notified by one of the parties that it
no longer was interested in pursuing a strategic relationship with the
Company. On February12, 1998, the Board of Directors held a special meeting
to explore further the company's strategic and financial alternatives. The
Company's senior management and representatives of AAI reported to the
Board the status of discussions with the remaining two potential strategic
partners.
During the last two weeks of February 1998 and the first two weeks of
March 1998, the two potential strategic partners and their respective
representatives and legal advisors reviewed due diligence documents and had
numerous discussions with senior management of the Company.
During the week of March 9, 1998, representatives of AAI indicated to
each of the potential strategic partners that, although no determination
had been made to sell the Company, the Company was willing to consider
proposals related to potential transactions with the Company and requested
that proposals be submitted on March 12, 1998. On March 12, 1998, the
Company received and initially evaluated proposals from the two parties.
After the Company further reviewed the proposals with its legal and
financial advisors at a Board meeting on March 13, 1998, the Company's
financial and legal advisors contacted the parties to clarify and discuss
their proposals and resolve due diligence items which remained open. On
March 23, 1998, AAI contacted the two parties to solicit revised proposals
on March 24, 1998. After receiving and evaluating revised proposals on
March 24, 1998, AAI contacted the interested parties to solicit their best
proposals by March 26, 1998.
On March 26, 1998, a meeting of the Board of Directors was held in
Chicago. After a presentation by AAI to the Board of Directors, the terms
of the proposed transactions and related merger agreements were presented
to and reviewed by the Board. The Board of Directors analyzed and discussed
the proposed transactions and agreements. Following the meeting, the
Company's financial advisors contacted each of the interested parties to
confirm that both parties had submitted their best and final proposals.
Parent later submitted a revised proposal and the other interested party
advised representatives of AAI that its previous proposal constituted its
best and final proposal. The proposal from the other interested party was
at a price lower than $9.625 per Share and contained other terms and
conditions which were deemed by the Board to be less favorable to the
Company or, in some cases, still unresolved by the parties. Because of
these factors, the Board decided to continue to pursue only the proposal
from Parent. Negotiations with Parent continued, culminating in the Company
and Parent agreeing upon a form of definitive agreement to be presented for
review by the Board of Directors at a meeting scheduled for March 27, 1998.
On March 27, 1998, at a meeting of the Board of Directors, the terms
of the proposed transaction with Parent and the Merger Agreement were
presented to and reviewed by the Board. AAI made a presentation to the
Board of Directors and delivered its opinion as to the fairness of the
$9.625 per Share cash consideration to be received in the Offer and the
Merger by the holders of outstanding Shares. The Board of Directors
analyzed and discussed the Offer, the Merger Agreement and the Merger and
reviewed proposed resolutions related to the transaction. After discussion
and further analysis, the Board of Directors unanimously recommended that
all holders of Shares accept the Offer and tender their Shares pursuant to
the Offer. With respect to the Merger, the Board of Directors unanimously
recommended that, if a shareholder vote is required by applicable law, the
shareholders of the Company vote in favor of approval and adoption of the
Merger Agreement and the Merger. A copy of a press release announcing the
transaction is attached hereto as Exhibit 3 and incorporated herein by
reference. A copy of a letter to shareholders of the Company, which
accompanies this Statement, is attached hereto as Exhibit 4 and
incorporated herein by reference.
In approving the Merger Agreement and the transactions contemplated
thereby and recommending that all holders of Shares tender their Shares
pursuant to the Offer, the Board of Directors considered a number of
factors including:
(i) the terms of the Merger Agreement;
(ii) presentations by the President and Chief Executive Officer
of the Company and the Company's financial advisors (at such meeting
and at previous Board of Directors' meetings) regarding the financial
condition, results of operations, capital expenditure needs and
business and prospects of the Company, including the prospects if the
Company were to remain independent;
(iii) the results of the process undertaken to identify and
solicit indications of interest from third parties to enter into a
strategic transaction with the Company;
(iv) the trading price of the Shares over the last three years
and that the $9.625 per Share Offer price represents a premium of
approximately 50% over the closing sales price for the Shares on the
Nasdaq National Market on March 26, 1998, the last trading day prior
to the date of execution of the Merger Agreement;
(v) the presentation of AAI at the March 26 and March 27, 1998
Board of Directors' meetings and the opinion of AAI to the effect
that, as of the date of the opinion, the $9.625 per Share cash
consideration to be received by the holders of the Shares in the
Offer and the Merger is fair to such holders, from a financial point
of view. A copy of the opinion of AAI, which accompanies this
Statement, is attached hereto as Exhibit 5 and incorporated herein by
reference. SHAREHOLDERS ARE URGED TO READ THE OPINION OF AAI
CAREFULLY IN ITS ENTIRETY;
(vi) that the Merger Agreement permits the Company to furnish
nonpublic information and access in response to unsolicited proposals
by third parties pursuant to confidentiality agreements, and to
participate in discussions and negotiations with any third party
making a proposal to submit an Acquisition Proposal to the Company,
if the Board of Directors determines in good faith, after
consultation with AAI or another financial adviser of nationally
recognized standing, that such third party is reasonably likely to
submit an Acquisition Proposal which is a Superior Proposal and
determines in good faith, based upon advice of outside legal counsel,
that the failure to take any of such actions is reasonably likely to
be inconsistent with the Board's fiduciary duties under applicable
law;
(vii) the termination provisions of the Merger Agreement, which
were a condition to Parent's proposal, providing that Parent could be
entitled to (x) a fee of $1.5 million and (y) reimbursement of
expenses up to $1.5 million upon the termination of the Merger
Agreement under certain circumstances, including the modification or
withdrawal of the Board of Directors' recommendation to the
shareholders with respect to the Offer and the Merger; and
(viii) the Board's belief, based in part on the factors
referred to above, including the significant changes that have
occurred in the RTA furniture industry, that the combined company
would have the economies of scale to make the capital expenditures
and achieve the operating efficiencies required to respond
effectively to the needs of customers and markets and the increased
competitiveness of the RTA furniture industry.
The foregoing discussion of the information and factors considered
and given weight by the Board is not intended to be exhaustive. In view of
the variety of factors considered in connection with its evaluation of the
Offer, the Board did not find it practicable to and did not quantify or
otherwise assign relative weights to the specific factors considered in
reaching its determinations and recommendation. In addition, individual
members of the Board may have given different weight to different factors.
The Board viewed its position and recommendation as being based on the
totality of the information presented to and considered by it.
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: April 23, 1998 AMERIWOOD INDUSTRIES INTERNATIONAL
CORPORATION
By: /S/ CHARLES R. FOLEY
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Name: Charles R. Foley
Title: President and Chief
Executive Officer
