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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
UNDER SECTION 14(D)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
UNITED ASSET MANAGEMENT CORPORATION
(Name of Subject Company)
UNITED ASSET MANAGEMENT CORPORATION
(Name of Person Filing Statement)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
909420101
(CUSIP Number of Class of Securities)
JOSEPH R. RAMRATH, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
UNITED ASSET MANAGEMENT CORPORATION
ONE INTERNATIONAL PLACE
BOSTON, MASSACHUSETTS 02110
(617) 330-8900
(Name, Address and Telephone Number of Person
Authorized to Receive Notice and Communications
On Behalf of the Person Filing Statement)
with a copy to:
ADAM O. EMMERICH
WACHTELL, LIPTON, ROSEN & KATZ
51 WEST 52ND STREET
NEW YORK, NEW YORK 10019
(212) 403-1000
_
|_| Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
<PAGE>
On July 26, 2000, United Asset Management Corporation issued a press
release containing the following text:
UAM Contacts: Juliana M. Coyle (Investors)
Jonathan V. Hubbard (Media)
(617) 330-8900
Internet: www.uam.com
FOR IMMEDIATE RELEASE
UAM REPORTS STRONG SECOND QUARTER 2000 RESULTS
BOSTON, July 26, 2000--United Asset Management Corporation (NYSE: UAM)
today reported gains in financial and operating results for the second quarter
ended June 30, 2000. These included increased per-share Cash Earnings (net
income plus amortization and depreciation) and diluted earnings, revenues, and
net income compared to prior-year results. On June 19, the Company announced
that it had agreed to be acquired by Old Mutual plc, a United Kingdom-based
financial services group that is expanding its asset management businesses in
the United States and Europe. Old Mutual launched its tender offer to acquire
UAM common stock on July 17, 2000.
FINANCIAL RESULTS
Cash Earnings per share, calculated under the same method used for diluted
earnings per share, rose 11% to $.89 in the second quarter compared to $.80 in
the corresponding 1999 period. UAM's Cash Earnings are used to invest in
affiliates, repurchase shares of the Company's common stock, pay dividends to
shareholders and fund acquisitions. Cash Earnings are presented on a per-share
basis as an additional measure of operating performance and are not a substitute
for earnings per share.
Second quarter 2000 revenues were $249.6 million, up 14% compared to $219.3
million in the 1999 second quarter. At $19.5 million, net income in the quarter
was 31% ahead of the $14.9 million in 1999, and diluted earnings per share were
$.34 versus $.25 last year, an increase of 36%. Cash Earnings in the 2000 second
quarter were $50.9 million, up 7% over $47.5 million in last year's second
quarter. Earnings before interest, taxes, depreciation and amortization (EBITDA)
rose 9% to $81.8 million from $75.1 million in the 1999 quarter.
The Company's assets under management totaled $195.4 billion as of June 30,
2000, compared to $203.2 billion at the start of the quarter and $202.6 billion
at the beginning of the year. During the quarter, market performance subtracted
$3.3 billion from UAM's assets under management, reflecting declines in equity
markets worldwide. Negative net client cash flow reduced these assets by $4.3
billion, and a UAM affiliate
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sold a small segment of its business totaling approximately $200 million during
the period.
Compared to a year earlier, UAM's second quarter revenues rose 14%, driven
by the rise of securities markets in the United States and other countries, and
partially offset by the effect of negative net client cash flow and the
divestiture of three small UAM affiliates. The 31% rise in net income reflected
higher revenues and a lower tax rate. The increase in Cash Earnings per share
during the period reflected both higher earnings and a reduction in shares
outstanding from 58.9 million shares to 57.2 million shares due to share
repurchases.
FUTURE OUTLOOK
"UAM registered solid gains in Cash Earnings, revenues, and net income
during the quarter," said James F. Orr III, President and Chief Executive
Officer. "Our Cash Earnings per share for the period were nearly triple reported
earnings per share. Meanwhile, the process of change at UAM is continuing
through increased investment in our firms to support product development, client
service, technology and other areas. Our investments encompass all business
segments within UAM -- institutional, mutual fund and high-net-worth -- and span
a variety of firms ranging from large to small. We are also vigorously pursuing
our re-equitization initiative, which involves transferring minority interests
in certain affiliates to the principals of those firms in order to provide
appropriate incentives to attract and retain the most talented professionals.
"The agreement we announced on June 19 to be acquired by Old Mutual plc for
$25 per share in cash offers significant benefits to both organizations," Mr.
Orr added. "It delivers value to our shareholders and provides our affiliates
with the opportunity to be part of a global financial service organization with
strong and growing distribution. For its part, UAM is a product-rich
organization that will bring Old Mutual a wide range of investment products and
styles in the largest investment market in the world."
UNITED ASSET MANAGEMENT CORPORATION
One of the largest independent investment management organizations in the
world, United Asset Management Corporation provides a broad range of investment
management services to institutions, mutual funds and high-net-worth investors.
These services are offered through a diverse group of operating firms that
managed over $195 billion on June 30, 2000 for clients throughout the United
States, Canada and abroad.
Each of UAM's investment management firms maintains its own identity,
together with investment and operating independence, in order to provide
superior, focused and individualized service to its clients. UAM supports its
affiliates through marketing and service initiatives, and invests alongside its
firms in areas such as professional development, investment technology, client
service, new products, marketing and distribution.
<PAGE>
FORWARD-LOOKING STATEMENTS
THIS PRESS RELEASE CONTAINS "FORWARD-LOOKING STATEMENTS." THESE STATEMENTS
INCLUDE DESCRIPTIONS OF UAM'S OPERATIONAL PLANS, EXPECTATIONS ABOUT FUTURE
EARNINGS AND OTHER RESULTS OF OPERATIONS, VIEWS OF FUTURE INDUSTRY OR MARKET
CONDITIONS, AND OTHER STATEMENTS THAT INCLUDE WORDS LIKE "MAY," "EXPECTS,"
"BELIEVES," AND "INTENDS," AND THAT DESCRIBE OPINIONS ABOUT FUTURE EVENTS.
INVESTORS SHOULD NOT RELY ON THESE STATEMENTS AS THOUGH THEY WERE
GUARANTEES. THESE STATEMENTS ARE CURRENT ONLY WHEN THEY ARE MADE. UAM'S
MANAGEMENT HAS NO OBLIGATION TO REVISE OR UPDATE THESE STATEMENTS BASED ON
FUTURE DEVELOPMENTS. KNOWN AND UNKNOWN RISKS, INCLUDING THOSE RELATING TO THE
ACQUISITION OF UAM BY OLD MUTUAL, MAY CAUSE UAM'S ACTUAL RESULTS AND
PERFORMANCES TO BE MATERIALLY DIFFERENT FROM THOSE EXPRESSED OR IMPLIED BY THESE
STATEMENTS. SOME OF THESE RISKS, UNCERTAINTIES AND OTHER FACTORS ARE THAT: MOST
OF UAM'S REVENUES ARE BASED ON THE MARKET VALUE OF MANAGED ASSETS AND,
THEREFORE, WILL RISE AND FALL WITH CHANGES IN THE ECONOMY AND FINANCIAL MARKETS;
THE INVESTMENT MANAGEMENT BUSINESS IS HIGHLY COMPETITIVE; THE INVESTMENT
MANAGEMENT BUSINESS IS SUSCEPTIBLE TO INTERNAL SHIFTS AND FREQUENTLY REQUIRES
FIRMS TO ADAPT; UAM'S AFFILIATED FIRMS DEPEND SIGNIFICANTLY ON KEY EMPLOYEES;
AND THE CHANGE IN CONTROL OF UAM WILL NECESSITATE A TRANSITION PERIOD OF
UNCERTAIN DURATION AND EFFECT. CERTAIN OF THESE AND OTHER RISK FACTORS ARE
IDENTIFIED AND MORE THOROUGHLY EXPLAINED IN EXHIBIT 99.1 TO UAM'S ANNUAL REPORT
ON FORM 10-K FILED ON MARCH 21, 2000 WITH THE U.S. SECURITIES AND EXCHANGE
COMMISSION (SEC).
MERGER AGREEMENT BETWEEN OLD MUTUAL AND UAM
PURSUANT TO THE MERGER AGREEMENT BETWEEN OLD MUTUAL AND UAM, OLD MUTUAL
FILED A TENDER OFFER STATEMENT AND UNITED ASSET MANAGEMENT FILED A
SOLICITATION/RECOMMENDATION STATEMENT WITH THE SEC ON JULY 17. THESE TENDER
OFFER MATERIALS HAVE BEEN MAILED TO THE SHAREHOLDERS OF UAM. CONSUMMATION OF THE
TENDER OFFER IS SUBJECT TO CUSTOMARY CONDITIONS, INCLUDING ACCEPTANCES BY
HOLDERS OF A MAJORITY OF UAM'S OUTSTANDING SHARES AND RECEIPT OF REGULATORY AND
CLIENT APPROVALS.
INVESTORS AND SECURITY HOLDERS ARE STRONGLY ADVISED TO READ BOTH THE TENDER
OFFER STATEMENT AND THE SOLICITATION/RECOMMENDATION STATEMENT, BECAUSE THEY
CONTAIN IMPORTANT INFORMATION. INVESTORS AND SECURITY HOLDERS MAY OBTAIN, FOR
FREE, COPIES OF THESE STATEMENTS, AS WELL AS COPIES OF PERIODIC REPORTS AND
OTHER INFORMATION FILED WITH THE SEC BY UAM AT THE SEC'S WEB SITE AT
WWW.SEC.GOV. THE SOLICITATION/ RECOMMENDATION STATEMENT AND OTHER DOCUMENTS
FILED BY UAM MAY BE OBTAINED BY VISITING THE UAM WEB SITE AT WWW.UAM.COM.
(tables follow)
<PAGE>
UNITED ASSET MANAGEMENT CORPORATION
FINANCIAL HIGHLIGHTS
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Three Months Ended June 30, 2000 1999 Change
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Revenues $249,607,000 $219,342,000 14%
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Net income $19,457,000 $14,901,000 31%
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Cash Earnings (1) $50,892,000 $47,499,000 7%
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EBITDA (2) $81,821,000 $75,147,000 9%
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Basic earnings per share $.34 $.25 36%
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Diluted earnings per share $.34 $.25 36%
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Cash Earnings per share (3) $.89 $.80 11%
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Average common shares outstanding 56,549,000 58,922,000 -
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Six Months Ended June 30, 2000 1999 Change
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Revenues $488,655,000 $437,037,000 12%
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Net income $37,918,000 $30,002,000 26%
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Cash Earnings (1) $101,203,000 $94,274,000 7%
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EBITDA (2) $161,963,000 $149,054,000 9%
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Basic earnings per share $ .67 $.50 34%
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Diluted earnings per share $ .67 $.50 34%
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Cash Earnings per share (3) $1.78 $1.57 13%
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Average common shares outstanding 56,665,000 59,733,000 -
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Common shares outstanding at June 30 57,177,000 58,870,000 -
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Assets under management at
June 30 $195,395,000,000 $205,904,000,000 -5%
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(1) Net income plus amortization and depreciation.
(2) Earnings before interest, taxes, depreciation and amortization.
(3) Calculated under the same method used for diluted earnings per share and
presented as an additional measure of operating performance, not as a
substitute for earnings per share.
<PAGE>
UNITED ASSET MANAGEMENT CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
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(Unaudited)
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Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
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REVENUES $249,607,000 $219,342,000 $488,655,000 $437,037,000
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OPERATING EXPENSES:
Compensation and related
expenses 128,005,000 110,311,000 253,080,000 219,380,000
Amortization of cost
assigned to contracts
acquired 25,778,000 26,507,000 52,072,000 52,595,000
Other operating expenses
44,219,000 38,791,000 82,467,000 77,937,000
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198,002,000 175,609,000 387,619,000 349,912,000
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Operating income 51,605,000 43,733,000 101,036,000 87,125,000
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NON-OPERATING EXPENSES:
Interest expense, net 17,349,000 16,502,000 34,138,000 32,336,000
Other amortization 1,219,000 1,184,000 2,358,000 2,343,000
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18,568,000 17,686,000 36,496,000 34,679,000
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Income before income
tax expense 33,037,000 26,047,000 64,540,000 52,446,000
Income tax expense 13,580,000 11,146,000 26,622,000 22,444,000
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NET INCOME $19,457,000 $14,901,000 $37,918,000 $30,002,000
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Basic earnings per share $.34 $.25 $.67 $.50
Diluted earnings per share $.34 $.25 $.67 $.50
Dividends declared per share $.20 $.20 $.40 $.40
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UNITED ASSET MANAGEMENT CORPORATION
CONSOLIDATED BALANCE SHEET
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June 30, December 31,
2000 1999
(Unaudited)
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ASSETS
Current assets:
Cash and cash equivalents $168,036,000 $123,754,000
Investment advisory fees receivable 170,685,000 169,566,000
Other current assets 11,990,000 11,621,000
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TOTAL CURRENT ASSETS 350,711,000 304,941,000
Fixed assets, net 34,956,000 37,391,000
Cost assigned to contracts acquired, net
of accumulated amortization of
$741,347,000 in 2000 and 700,410,000
in 1999 785,910,000 841,454,000
Other assets 147,316,000 137,905,000
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TOTAL ASSETS $1,318,893,000 $1,321,691,000
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $105,101,000 $134,556,000
Accrued compensation 106,565,000 87,994,000
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TOTAL CURRENT LIABILITIES 211,666,000 222,550,000
Senior notes payable 732,426,000 700,401,000
Subordinated notes payable 176,762,000 181,737,000
Deferred income taxes - 31,883,000
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TOTAL LIABILITIES 1,120,854,000 1,136,571,000
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Commitments and contingencies
Stockholders' equity:
Common stock, par value $.01 per share:
Authorized - 200,000,000 shares
Issued - 68,992,132 shares in 2000 and
70,346,577 shares in 1999 690,000 703,000
Capital in excess of par value 356,657,000 361,808,000
Retained earnings 129,074,000 139,044,000
Accumulated other comprehensive income (11,000,000) (6,495,000)
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475,421,000 495,060,000
Less treasury shares at cost -
11,814,728 shares in 2000
and 13,173,451 in 1999 (277,382,000) (309,940,000)
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TOTAL STOCKHOLDERS' EQUITY 198,039,000 185,120,000
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,318,893,000 $1,321,691,000
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UNITED ASSET MANAGEMENT CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
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(Unaudited)
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Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
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CASH FLOW RELATED TO OPERATING
ACTIVITIES:
Net income $19,457,000 $14,901,000 $37,918,000 $30,002,000
Adjustments to reconcile
net income to net cash
flow from operating
activities:
Amortization of cost
assigned to contracts
acquired 25,778,000 26,506,000 52,072,000 52,595,000
Depreciation 3,504,000 4,098,000 6,985,000 7,716,000
Amortization of
goodwill and other 2,153,000 1,993,000 4,228,000 3,961,000
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NET INCOME PLUS AMORTIZATION
AND DEPRECIATION 50,892,000 47,499,000 101,203,000 94,274,000
Changes in assets
and liabilities:
Decrease (increase)
in investment
advisory fees
receivable 3,963,000 (7,884,000) (1,888,000) 5,517,000
Decrease (increase)
in other current
assets 812,000 (1,782,000) (23,000) (3,227,000)
Increase (decrease)
in accounts payable
and accrued
expenses (18,731,000) 4,342,000 29,539,000 (19,901,000)
Increase (decrease)
in accrued
compensation 27,752,000 5,137,000 18,624,000 (22,894,000)
Decrease in deferred
income tax
liabilities and
other (36,342,000) (2,050,000) (41,377,000) (1,576,000)
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NET CASH FLOW FROM
OPERATING ACTIVITIES 28,346,000 45,262,000 47,000,000 52,193,000
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Cash flow related to
investing activities:
Cash additions to cost
assigned to contracts
acquired - (137,000) - (5,134,000)
Change in other assets (3,402,000) (697,000) (9,638,000) (4,482,000)
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NET CASH FLOW USED IN
INVESTING ACTIVITIES (3,402,000) (834,000) (9,638,000) (9,616,000)
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Cash flow related to
financing activities:
Purchase of treasury
shares - (16,936) (13,149,000)(88,095,000)
Additions to (reductions)
notes payble, net (3,080,000) (23,578,000) 32,313,000 23,751,000
Issuance or reissuance
of equity securities 11,231,000 2,468,000 12,075,000 13,742,000
Dividends paid (11,298,000) (11,896,000) (22,757,000) (24,186,000)
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NET CASH FLOW FROM (USED IN)
FINANCING ACTIVITIES (3,147,000) (49,942,000) 8,482,000 (74,788,000)
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EFFECT OF FOREIGN
EXCHANGE RATE CHANGES
ON CASH FLOW (1,130,000) (502,000) (1,562,000) (1,352,000)
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NET INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS 20,667,000 (6,016,000) 44,282,000 (33,563,000)
Cash and cash equivalents
at beginning of
period 147,369,000 126,069,000 123,754,000 153,616,000
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CASH AND CASH
EQUIVALENTS AT END
OF PERIOD $168,036,000 $120,053,000 $168,036,000 $120,053,000
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