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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 13E-3
(AMENDMENT NO. 1)
RULE 13E-3 TRANSACTION STATEMENT
(PURSUANT TO SECTION 13(e) OF THE SECURITIES EXCHANGE ACT OF 1934)
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VWR Scientific Products Corporation
(Name of the Issuer)
EM Subsidiary, Inc.
EM Laboratories, Incorporated
Merck KGaA, Darmstadt, Germany
(Name of Persons Filing Statement)
Common Shares, par value $1.00 per share
(Title of Class of Securities)
918435108 - Common Shares
(CUSIP Number of Class of Securities)
Stephen J. Kunst
Vice President and Secretary
EM Subsidiary, Inc.
c/o EM Laboratories, Incorporated
7 Skyline Drive
Hawthorne, New York 10532
Telephone: (914) 592-4660
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of Person(s) Filing Statement)
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with a copy to:
Klaus H. Jander, Esq.
Richard T. McDermott, Esq.
Rogers & Wells LLP
200 Park Avenue
New York, New York 10166-0153
Telephone: (212) 878-8000
This statement is filed in connection with (check the appropriate box):
a. / / The filing of solicitation materials or an information
statement subject to Regulation 14A, Regulation 14C, or Rule
13e-3(c) under the Securities Exchange Act of 1934
b. / / The filing of a registration statement under the Securities
Exchange Act of 1933.
c. |X| A tender offer.
d. / / None of the above.
Check the following box if the soliciting materials or information
statement referred to in checking box (a) are preliminary copies. / /
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This Amendment No. 1 to the Rule 13e-3 Transaction Statement on
Schedule 13E-3 (this "Amendment") is being filed by (i) Merck KGaA,
Darmstadt, Germany, a German company ("Merck KGaA"), (ii) EM Laboratories,
Incorporated, a New York corporation ("Parent") and an indirect subsidiary
of Merck KGaA and (iii) EM Subsidiary, Inc., a Pennsylvania corporation
("Purchaser") and a wholly-owned subsidiary of Parent, pursuant to Section
13(e) of the Securities Exchange Act of 1934, as amended, and Rule 13e-3
thereunder in connection with the tender offer by Purchaser, Parent and
Merck KGaA to purchase all outstanding shares of common stock, par value
$1.00 per share of VWR Scientific Products Corporation, a Pennsylvania
corporation (the "Company"), at $37.00 per Share, net to the seller in cash
without interest thereon, upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated June 14, 1999, of Purchaser, Parent
and Merck KGaA (the "Offer to Purchase") and in the related Letter of
Transmittal (which, together with any supplements or amendments thereto,
collectively constitute the "Offer").
ITEM 16. ADDITIONAL INFORMATION
(a) Item 16(f) is hereby amended by amending and restating the first four
paragraphs under "6. Fairness of the Transaction" in the Offer to Purchase as
follows:
Merck KGaA, Parent and Purchaser understand as follows
concerning the determination by the Board of the Company of the
fairness of the Offer and the Merger. The Company's Board, by unanimous
vote of the Unaffiliated Directors acting as a quorum of the full
Company Board, based upon, among other things, the unanimous
recommendation and approval of the Special Committee, has determined
that the Merger Agreement and the transactions contemplated thereby,
including each of the Offer and the Merger (collectively, the
"Transactions"), are fair to, and in the best interests of, the Company
and the shareholders of the Company not affiliated with Merck KGaA (the
"Public Shareholders"), approved the Merger Agreement, the Offer and
the Merger, and resolved to recommend that shareholders accept the
Offer and tender their Shares pursuant to the Offer and subsequently to
approve the Merger Agreement, if such approval is required by law.
In making the recommendation to the Company's Board and
approving the Merger Agreement and the Transactions, the Unaffiliated
Directors considered a number of factors, including, but not limited
to, the following:
(a) the financial and other terms and conditions of the Merger
Agreement, including the proposed structure of the Offer and the Merger
involving a cash tender offer of $37.00 per Share for all outstanding
Shares, to be followed by a merger for the same consideration;
(b) various risks and uncertainties associated with any
expansion of the Company's distribution business to meet the needs of
its global customers;
(c) the historical market prices of the Shares, including the
fact that the Offer price and the Merger price of $37.00 per Share
represented premiums of approximately 29.0%, 32.1% and 32.7% over the
closing prices per Share on the NASDAQ Stock Market June 3, 4, and 7,
1999, respectively, the last three full trading days prior to the June
8, 1999 announcement of the Transactions, and represented a premium of
approximately 40% over the closing price for the Shares on the NASDAQ
Stock Market on the date 30 days prior to the announcement of the
Transactions;
(d) according to Bloomberg LP, the $37.00 per Share to be paid
to the Public Shareholders in the Offer and the Merger exceeded the
highest price at which the Shares have closed on the NASDAQ Stock
Market since the Company became a public company in 1986;
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(e) neither the Offer nor the Merger is subject to any
financing condition, and Parent has represented that it has available
to it from or through Merck KGaA or its affiliates, sufficient funds to
consummate the Offer, the Merger and the transactions contemplated
thereby;
(f) the separate opinions, each dated June 8, 1999, to the
Company's Board and Special Committee, of BT Alex. Brown Incorporated
("BT Alex. Brown") (now merged with Deutsche Bank Securities Inc., and
known as Deutsche Banc Alex. Brown) and Warburg Dillon Read LLC
("Warburg Dillon Read") to the effect that, as of the date of such
opinions and based upon and subject to certain matters stated therein,
the $37.00 per Share cash consideration to be received in the Offer and
the Merger by the holders of Shares (other than Merck KGaA and its
affiliates) was fair, from a financial point of view, to such holders.
The full text of the written opinions of BT Alex. Brown and Warburg
Dillon Read dated June 8, 1999, the analyses and conclusions of which
were concurred with and adopted by the Company's Board and Special
Committee and set forth the assumptions made, matters considered and
limitations on the review undertaken, are attached as Schedule II and
Schedule III, respectively, to this Offer to Purchase and are
incorporated herein by reference. The opinions of BT Alex. Brown and
Warburg Dillon Read are directed to the Company's Board and Special
Committee, address only the fairness of the $37.00 per Share cash
consideration to be received in the Offer and the Merger by the holders
of Shares (other than Merck KGaA and its affiliates) from a financial
point of view, and do not constitute a recommendation to any
shareholder as to whether or not such shareholder should tender Shares
in the Offer or as to how such shareholder should vote with respect to
the proposed Merger. Holders of Shares are urged to read such opinions
carefully in their entirety;
(g) the terms of the Merger Agreement were determined through
arm's-length bargaining between the Special Committee and its legal and
financial advisors, on one hand, and representatives of Parent, on the
other, and provide for the Offer in order to allow Public Shareholders
to receive payment for their Shares; and
(h) Parent and its affiliates informed the Special Committee
that they would not be interested in a third-party sale of the Company;
the Special Committee and its financial advisors were not authorized
to, and did not, solicit third-party indications of interest for the
acquisition of the Company (which they deemed highly unlikely to
receive in light to the aggregate ownership of the Company by Merck
KGaA and its affiliates and their affirmative disinterest in a third
party sale of the Company), nor were any offers from third parties
received; although the Unaffiliated Directors recognized that this
factor did not necessarily support its determination regarding the
fairness of the Transactions, the Unaffiliated Directors concluded that
this factor was substantially outweighed by the totality of the other
factors it considered in arriving at its determination.
The Unaffiliated Directors recognized that the Merger had not
been structured to require the approval of a majority of the Shares
held by the Public Shareholders and that following successful
completion of the Offer, Merck KGaA and its affiliates would have
sufficient voting power to approve the Merger Agreement without the
affirmative vote of any other shareholder of the Company. However, the
Unaffiliated Directors, including all of the members of the Special
Committee, believed that the Transactions were procedurally fair
because, among other things:
(a) the Special Committee was appointed to represent the
interests of the Public Shareholders;
(b) by reason of the Standstill Agreement, completion of the
Offer (and thus completion of the Merger) is conditioned upon its
acceptance by the holders of a majority of the
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Shares not owned by Parent and its affiliates; such condition may not
be waived by Purchaser without the consent of the Company and is
designed to assure that the Public Shareholders holding a majority of
the shares owned by all Public Shareholders have determined to accept
the terms of the Offer prior to any vote on the Merger;
(c) prior to consummation of the Offer, the Company's Board of
Directors may cause the Offer to be terminated if it receives an
unsolicited proposal to be acquired by a third-party and, in the
opinion of the Company's outside legal counsel, failure to consider
such a proposal would result in a breach of the fiduciary duties of the
Company's Board of Directors under applicable law. Under such
circumstances, the Company would be required to reimburse Parent for
its reasonable documented out-of-pocket expenses in an amount up to $8
million;
(d) the Special Committee retained BT Alex. Brown and Warburg
Dillon Read as its independent financial advisors to assist it in
evaluating and negotiating a potential transaction with the Parent and
its affiliates;
(e) the Special Committee engaged in deliberations to evaluate
the Transactions and alternatives thereto;
(f) the $37.00 per Share price and the other terms and
conditions of the Transaction resulted from active arm's-length
bargaining between representatives of the Special Committee, on the one
hand, and representatives of Parent and its affiliate, on the other;
and
(g) Public Shareholders may obtain "fair value" for their
Shares if they exercise and perfect their appraisal rights under the
PBCL.
The approval and recommendation of the Company's Board of
Directors was based on the totality of the information considered by
it. The Company's Board of Directors did not assign relative weights to
the factors considered by it or determine that any one factor was of
primary importance.
(b) Item 16(f) is hereby amended by amending and restating the paragraph under
"6. Fairness of the Transaction - Position of Merck KGaA, Parent and Purchaser
regarding Fairness of the Offer and Merger" in the Offer to Purchase as follows:
MerckKGaA, Parent and Purchaser believe that the consideration
to be received by the Public Shareholders, pursuant to the Offer and
the Merger, is fair to the Public Shareholders. Merck KGaA, Parent and
Purchaser based their belief on a number of factors, including, but not
limited to:
(a) the fact that the Unaffiliated Directors and the Special
Committee unanimously concluded that the Offer and the Merger are fair
to, and in the best interests of, the Company and the Public
Shareholders;
(b) the financial and other terms and conditions of the Merger
Agreement, including the proposed structure of the Offer and the Merger
involving a cash tender offer of $37.00 per Share for all outstanding
Shares, to be followed by a merger for the same consideration;
(c) various risks and uncertainties associated with any
expansion of the Company's distribution business to meet the needs of
its global customers;
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(d) the historical market prices of the Shares, including the
fact that the Offer price and the Merger price of $37.00 per Share
represented premiums of approximately 29.0%, 32.1% and 32.7% over the
closing prices per Share on the NASDAQ Stock Market June 3, 4, and 7,
1999, respectively, the last three full trading days prior to the June
8, 1999 announcement of the Transactions, and represented a premium of
approximately 40% over the closing price for the Shares on the NASDAQ
Stock Market on the date 30 days prior to the announcement of the
Transactions;
(e) according to Bloomberg LP, the $37.00 per Share to be
paid to the Public Shareholders in the Offer and the Merger exceeded
the highest price at which the Shares have closed on the NASDAQ Stock
Market since the Company became a public Company in 1986;
(f) neither the Offer nor the Merger is subject to any
financing condition, and that Parent has represented that it has
available to it from or through Merck KGaA or its affiliates,
sufficient funds to consummate the Offer, the Merger and the
transactions contemplated thereby;
(g) notwithstanding the fact that BT Alex. Brown's and Warburg
Dillon Read's opinions were provided solely for the information and
assistance of the Company's Board and Special Committee and that Merck
KGaA, Parent and Purchaser are not entitled to rely on such opinions,
the fact that the Company's Board and Special Committee received an
opinion from each of BT Alex. Brown and Warburg Dillon Read as to the
fairness, from a financial point of view, to the holders of Shares
(other than Merck KGaA and its affiliates) of the $37.00 per Share cash
consideration to be received by such holders in the Offer and the
Merger. The full text of the written opinions of BT Alex. Brown and
Warburg Dillon Read dated June 8, 1999, which set forth the assumptions
made, matters considered and limitations on the review undertaken, are
attached as Schedules II and III, respectively, to this Offer to
Purchase, and are incorporated herein by reference. The opinions of BT
Alex. Brown and Warburg Dillon Read are directed to the Company's Board
and Special Committee, address only the fairness of the $37.00 per
Share cash consideration to be received in the Offer and the Merger by
the holders of Shares (other than Merck KGaA and its affiliates) from a
financial point of view, and do not constitute a recommendation to any
shareholder as to whether or not such shareholder should tender Shares
in the Offer or as to how such shareholder should vote with respect to
the proposed Merger. Holders of Shares are urged to read such opinions
carefully in their entirety;
(h) the terms of the Merger Agreement were determined through
arm's-length bargaining between the Special Committee and its legal and
financial advisors, on one hand, and representatives of Parent, on the
other, and provide for the Offer in order to allow Public Shareholders
to receive payment for their Shares; and
(i) Parent and its affiliates informed the Special Committee
that it would not be interested in a third-party sale of the Company;
the Special Committee and its financial advisors were not authorized
to, and did not, solicit third-party indications of interest for the
acquisition of the Company (which they deemed highly unlikely to
receive in light to the aggregate ownership of the Company by the
Parent and its affiliates and their affirmative disinterest in a third
party sale of the Company), nor were any offers from third parties
received; although the Unaffiliated Directors recognized that this
factor did not necessarily support its determination regarding the
fairness of the Offer and the Merger, the Unaffiliated Directors
concluded that this factor was substantially outweighed by the totality
of the other factors it considered in arriving at its determination.
Merck KGaA, Parent and Purchaser have reviewed the factors
considered by the Unaffiliated Directors in support of their decision,
as described in the Schedule 14D-9 and above,
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and had no basis to question their consideration of or reliance on
those factors. In concluding that the terms of the Offer and the Merger
are fair to the Public Shareholders, Merck KGaA, Parent and Purchaser
viewed all of the factors listed above as supporting such conclusion.
Merck KGaA, Parent and Purchaser found it impracticable to assign, and
they did not assign, relative weights to the individual factors
considered in reaching their conclusion as to fairness, but viewed the
totality of the factors considered in reaching their conclusion. Merck
KGaA, Parent and Purchaser recognize that the Merger had not been
structured to require the approval of a majority of the Shares held by
the Public Shareholders and that following the successful completion of
the Offer, Parent and its affiliates would have sufficient voting power
to approve the Merger Agreement without the affirmative vote of any
other shareholders of the Company. Without assigning relative weights
to the factors considered by Unaffiliated Directors, including the
Special Committee, or determining that any one of such factors was of
primary importance, Merck KGaA, Parent and Purchaser believe that the
Offer and the Merger are procedurally fair for the reasons cited by the
Unaffiliated Directors, including the Special Committee, which factors
include, without limitation, that by reason of the Standstill
Agreement, completion of the Offer (and thus completion of the Merger)
is conditioned upon its acceptance by the holders of a majority of the
Shares owned by the Public Shareholders; such condition may not be
waived by Purchaser without the consent of the Company and is designed
to assure that the shareholders holding a majority of the Shares owned
by all Public Shareholders have determined to accept the terms of the
Offer prior to any vote on the Merger. See "6. Fairness of the
Transaction."
(c) Item 16(f) is hereby amended by amending and restating the third paragraph
under "6. Fairness of the Transaction - Opinion of BT Alex. Brown Incorporated;
Other Factors" in the Offer to Purchase as follows:
The preparation of a fairness opinion is a complex analytic
process involving various determinations as to the most appropriate and
relevant methods of financial analyses and the application of those
methods to the particular circumstances and, therefore, a fairness
opinion is not readily susceptible to a summary description. BT Alex.
Brown arrived at its ultimate opinion based on the results of all of
the analyses undertaken by it and assessed as a whole. BT Alex. Brown
did not draw conclusions from or with regard to any one factor or
method of analysis. Rather, BT Alex. Brown believed that the totality
of the factors considered and analyses performed by BT Alex. Brown in
connection with its opinion operated collectively to support its
determination as to the fairness of the per Share cash consideration to
be received in the Offer and the Merger from a financial point of view.
Accordingly, BT Alex. Brown believes that its analyses and the summary
above must be considered as a whole and that selecting portions of its
analyses and factors or focusing on information presented in tabular
format, without considering all analyses and factors or the narrative
description of the analyses, could create a misleading or incomplete
view of the process underlying BT Alex. Brown's analyses and opinion.
(d) Item 16(f) is hereby amended by amending and restating the sixth paragraph
under "6. Fairness of the Transaction - Opinion of BT Alex. Brown Incorporated;
Other Factors" in the Offer to Purchase as follows:
BT Alex. Brown is an internationally recognized investment
banking firm and, as a customary part of its investment banking
business, is engaged in the valuation and their securities in
connection with mergers and acquisitions, negotiated underwritings,
private placements and valuations for estate corporate and other
purposes. The Company selected BT Alex. Brown based on BT Alex. Brown's
reputation, expertise and familiarity with the Company. BT Alex. Brown
and its affiliates have in the past provided financial services to the
Company and Merck KGaA unrelated to the Offer and Merger, for which
services BT Alex. Brown and its affiliates have received compensation.
During the past two years, BT Alex. Brown has received aggregate
compensation of approximately $451,815 for its financial services to
the Company.
(e) Item 16(f) is hereby amended by amending and restating the sixth paragraph
under "6. Fairness of the Transaction - Opinion of Warburg Dillon Read LLC" in
the Offer to Purchase as follows:
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Warburg Dillon Read believes that its analyses and the summary
below must be considered as a whole and that selecting portions of its
analyses and factors or focusing on information presented in tabular
format, without considering all analyses and factors or the narrative
description of the analyses, could create a misleading or incomplete
view of the process underlying Warburg Dillon Read's analyses and
opinion. None of the analyses performed by Warburg Dillon Read was
assigned a greater significance by Warburg Dillon Read than any other.
Warburg Dillon Read arrived at its ultimate opinion based on the
results of all the analyses undertaken by it and assessed as a whole.
Warburg Dillon Read did not draw conclusions from or with regard to any
one factor or method of analysis. Rather, Warburg Dillon Read believes
that the totality of the factors considered and analyses performed by
Warburg Dillon Read in connection with its opinion operated
collectively to support its determination as to the fairness of the per
Share cash consideration to be received in the Offer and the Merger
from a financial point of view.
(f) Item 16(f) is hereby amended by amending and restating the title of the
table concerning the 1999 Budget Balance Sheet of VWR Scientific Products under
"8. Certain Information Concerning the Company" in the Offer to Purchase as
follows:
VWR Scientific Products
1999 Budget Balance Sheet
(In millions)
(g) Item 16(f) is hereby amended by amending and restating in its entirety the
last paragraph under "8. Certain Information Concerning the Company - Other
Financial Information" in the Offer to Purchase as follows:
The foregoing information was prepared by the Company solely
for internal use and not for publication or with a view to complying
with the published guidelines of the Commission regarding projections
or with the guidelines established by the American Institute of
Certified Public Accountants and are included in this Offer to Purchase
only because they were furnished to Merck KGaA and Parent. The
foregoing information is "forward-looking" and inherently subject to
significant uncertainties and contingencies, many of which are beyond
the control of the Company, including industry performance, general
business and economic conditions, changing competition, adverse changes
in applicable laws, regulations or rules governing environmental, tax
or accounting matters and other matters. It is not possible to predict
whether the assumptions made in preparing the foregoing information
will be accurate, and actual results may be materially higher or lower
than those described above. The Company has advised Merck KGaA, Parent
and Purchaser that the foregoing information was prepared based upon
the following assumptions: The budgeted profit and loss data for the
Company for 1999 assumes a sales growth of 11.6%, which is comprised
of an 8% growth in the Company's core business, with the remaining
growth coming from a full year's effect of the acquisitions effected
by the Company during 1998 (the "1998 Acquisitions"). (See Note 2 of
the Financial Statements of the Company, annexed as Schedule V hereto,
which describes the 1998 Acquisitions more fully.) The substantial
portion of the budgeted gross margin improvement is the projected
result of a full year effect of the 1998 Acquisitions in the education
market, which historically earns higher margins. In addition, to a
lesser extent, the gross margin percentage improvement is projected
from the continued focus on internal efficiency improvement in the
Company's core business. Operating expenses as a percent of sales are
projected to increase slightly over the prior year as a result of the
full year's effect of the 1998 Acquisitions.
The balance sheet assumptions are a combination of the flow
through impact of the 1999 budgeted profit and loss statement,
combined with the projected days sales outstanding and planned FIFO
inventory days therein reflected. Capital expenditures are budgeted at
$16.0 Million and the projected net change in net property during 1999
is the result of regular depreciation charges.
The inclusion of this information should not be regarded as
an indication that Parent, Purchaser, Merck KGaA, the Company or
anyone who received this information considered it a reliable
predictor of future events, and this information should not be relied
upon as such. None of Parent, Purchaser or Merck KGaA assumes any
responsibility for the validity, reasonableness, accuracy or
completeness of the projections and the Company has made no
representations to Parent, Purchaser or Merck KGaA regarding the
financial information described above. None of the Company, Parent,
Purchaser, Merck KGaA or any other party intends publicly to update or
otherwise publicly revise the projections even if experience or future
changes make it clear that the projections will not be realized.
(h) The first paragraph under "14. Conditions of the Offer" in the Offer to
Purchase will be amended as follows:
Purchaser will not be required to accept for payment or,
subject to any applicable rules and regulations of the Commission,
including Rule 14e-1(c) under the Exchange Act (relating to Purchaser's
obligation to pay for or return tendered Shares after termination or
withdrawal of the Offer), pay for, and (subject to any such rules or
regulations) may delay the acceptance for payment of any tendered
Shares and (except as provided in the Merger Agreement) amend or
terminate the Offer (whether or not any Shares have been previously
purchased or paid for pursuant to the Offer) (A) unless on or before
the Expiration Date the following conditions shall have been satisfied:
(i) there shall be validly tendered and not withdrawn prior to the
expiration of the Offer a number Shares which represents a majority of
the total number of outstanding Shares of the Company, excluding any
Shares held by Parent, Purchaser or any affiliate thereof and (ii) any
applicable waiting period
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under the HSR Act or any similar applicable foreign law, including but
not limited to the requirement of the German federal antitrust
supervisory authority (Bundeskartelamt), shall have expired or been
terminated prior to the expiration of the Offer and the required
approval of any governmental entity for the Merger Agreement or the
consummation of the transactions contemplated by the Merger Agreement
shall have been obtained or (B) if at any time after the date of the
Merger Agreement and before the Expiration Date, any of the following
events shall occur and be continuing:
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SIGNATURE
After due 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.
July 2, 1999
EM SUBSIDIARY, INC.
By: /s/ Dieter Janssen
-------------------------------------
Name: Dieter Janssen
Title: President
EM LABORATORIES, INCORPORATED
By: /s/ Stephen J. Kunst
-------------------------------------
Name: Stephen J. Kunst
Title: Vice-President & Secretary
MERCK KGaA, DARMSTADT, GERMANY
By: /s/ Klaus-Peter Brandis
-------------------------------------
Name: Klaus-Peter Brandis
Title: Departmental Director
(Abteilungsdirektor)
