SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 3)
SHOREWOOD PACKAGING CORPORATION
(Name of Subject Company)
SHOREWOOD PACKAGING CORPORATION
(Name of Person(s) Filing Statement)
Common Stock, Par Value $0.01 Per Share
(Title of Class of Securities)
825229107
(CUSIP Number of Class of Securities)
Andrew N. Shore, Esq.
Vice President, General Counsel and Secretary
Shorewood Packaging Corporation
277 Park Avenue
New York, New York 10172
Telephone: (212) 371-1500
(Name, Address and Telephone Number of Person Authorized to Receive
Notice and Communications on Behalf of the Person(s) Filing Statement).
With a Copy to:
Jeffrey W. Tindell, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022-3897
Telephone: (212) 735-3000
Facsimile: (212) 735-2000
Shorewood Packaging Corporation, a Delaware corporation
("Shorewood"), hereby amends and supplements its
Solicitation/Recommendation Statement on Schedule 14D-9 initially filed
with the Securities and Exchange Commission on December 16, 1999, relating
to the offer (the "Offer") by Sheffield, Inc., a Delaware corporation and a
wholly owned subsidiary of Chesapeake Corporation, a Virginia corporation,
to purchase all of the issued and outstanding common stock, par value $0.01
per share, of Shorewood, including the associated rights to purchase
preferred stock issued pursuant to the Rights Agreement, dated as of June
12, 1995, between Shorewood and The Bank of New York, as Rights Agent.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
Item 4 is hereby amended and supplemented as follows:
On December 21, 1999, Shorewood issued the following press release
which contained the full text of a letter which Mr. Shore delivered on that
date to Mr. Johnson:
FOR IMMEDIATE RELEASE:
CONTACTS:
Sard Verbinnen & Co.
David Reno/Paul Caminiti
(212) 687-8080
SHOREWOOD SENDS LETTER TO CHESAPEAKE
---------------------------------------------------------
NEW YORK, DECEMBER 21, 1999 - Shorewood Packaging Corporation (NYSE:
SWD) today sent the following letter to Tom Johnson, President and Chief
Executive Officer of Chesapeake Corporation (NYSE: CSK):
December 21, 1999
Mr. Thomas H. Johnson
President and Chief Executive Officer
Chesapeake Corporation
1021 E. Cary Street
Richmond, Virginia 21218
Dear Tom:
I have read your letter dated December 17, 1999.
You are correct that our Board of Directors has authorized management
and our financial advisors to explore alternatives available to Shorewood
to enhance stockholder value. I understand that despite your commencement
of a highly conditional, inadequate tender offer, you now seek to have
discussions with us regarding your offer. We decline your request for a
meeting for the following reasons:
The current Chesapeake offer has been found by Shorewood's Board of
Directors to be inadequate; among other factors, it represents a 15% to
20% discount to analysts' short-term trading targets for Shorewood shares.
We believe that Section 203 of the Delaware corporate law effectively
prevents Chesapeake from completing a merger with Shorewood for at least
three years.
We are concerned that the inadequate offer you have made is also
highly conditional. For example, Chesapeake's proposed bank financing does
not appear to contemplate the situation where Chesapeake could be a
majority stockholder with fiduciary duties to the minority, which would
preclude it from utilizing Shorewood's cash for its own use and otherwise
consolidating operations. Although Chesapeake has stated that it is a
"willing" buyer, we question whether it is financially "ready" or "able."
As fiduciaries, we consider the best interests of all stockholders.
In this regard we seek value and certainty on behalf of the entire
stockholder base and are reluctant to support any transaction which is
fraught with serious contingencies.
Due to concerns regarding the inadequacy of your offer, your
conditional financing and completion risks, we do not believe it is in the
best interests of our stockholders to pursue your inadequate proposal.
Sincerely,
/s/ Marc P. Shore
Marc P. Shore
Shorewood Packaging Corporation is a leading value-added provider of
high quality printing and paperboard packaging for the music, computer
software, cosmetics and toiletries, food, home video, tobacco and general
consumer markets in North America and China, with 16 plants in the United
States, Canada and China.
# # #
Certain statements included in this press release constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are typically identified by
their inclusion of phrases such as "Shorewood anticipates," "Shorewood
believes"' and other phrases of similar meaning. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
that may cause the actual results, performance or achievements of Shorewood
to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others: general economic and business conditions;
competition; political changes in international markets; raw material and
other operating costs; costs of capital equipment; changes in foreign
currency exchange rates; changes in business strategy or expansion plans;
the results of continuing environmental compliance testing and monitoring;
quality of management; availability, terms and development of capital;
fluctuating interest rates and other factors referenced in this release and
in Shorewood's Annual Report on Form 10-K and quarterly reports on Form
10-Q.
THIS PRESS RELEASE DOES NOT CONSTITUTE A SOLICITATION TO REVOKE
CONSENTS IN CONNECTION WITH THE CONSENT SOLICITATION OF CHESAPEAKE
CORPORATION. ANY SUCH SOLICITATION WILL BE MADE ONLY BY MEANS OF SEPARATE
CONSENT SOLICITATION MATERIALS COMPLYING THE REQUIREMENTS OF SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER.
CERTAIN INFORMATION CONCERNING PARTICIPANTS
Shorewood Packaging Corporation ("Shorewood") and certain other
persons named below may be deemed to be participants in the solicitation of
revocations of consents in response to the consent solicitation being
conducted by Chesapeake Corporation ("Chesapeake"). The participants in
this solicitation may include: (i) the directors of Shorewood (Marc P.
Shore (Chairman of the Board and Chief Executive Officer), Howard M.
Liebman (President and Chief Financial Officer), Leonard Verebay (Executive
Vice President), Andrew N. Shore (Vice President and General Counsel),
Kevin J. Bannon, Sharon R. Fairley, Virginia A. Kamsky, R. Timothy
O'Donnell and William P. Weidner; and (ii) William H. Hogan (Senior Vice
President, Finance and Corporate Controller). As of the date of this
communication, the number of shares of common stock, par value $0.01 per
share ("Common Stock"), beneficially owned by the Shorewood participants
(including shares subject to stock options exercisable within 60 days) is
as follows: Marc P. Shore (4,750,485), Howard M. Liebman (233,269), Leonard
J. Verebay (500,180), Andrew N. Shore (169,052), Kevin J. Bannon (33,000),
Virginia A. Kamsky (4,500), R. Timothy O'Donnell (326,118); William P.
Weidner (57,000); and William H. Hogan (30,500).
Shorewood has retained Bear, Stearns & Co. Inc. ("Bear Stearns") and
Jefferson Capital Group, Ltd. ("Jefferson Capital") to act as its
co-financial advisors in connection with the tender offer (the "Offer") by
Chesapeake and its wholly owned subsidiary, Sheffield, Inc., to purchase
shares of Common Stock for $17.25 per share net to the seller in cash, for
which Bear Stearns and Jefferson Capital may receive substantial fees, as
well as reimbursement of reasonable out-of-pocket expenses. In addition,
Shorewood has agreed to indemnify Bear Stearns, Jefferson Capital and
certain related persons against certain liabilities, including certain
liabilities under the federal securities laws, arising out of their
engagement. Neither Bear Stearns nor Jefferson Capital admit that they or
any of their partners, directors, officers, employees, affiliates or
controlling persons, if any, is a "participant" as defined in Schedule 14A
promulgated under the Securities Exchange Act of 1934, as amended, in the
solicitation of consent revocations, or that Schedule 14A requires the
disclosure of certain information concerning Bear Stearns and Jefferson
Capital, respectively.
In connection with Bear Stearns' role as co-financial advisor to
Shorewood, Bear Stearns and the following investment banking employees of
Bear Stearns may communicate in person, by telephone or otherwise with a
limited number of institutions, brokers or other persons who are
stockholders of Shorewood and may solicit consent revocations therefrom:
Terence Cryan (Senior Managing Director), Charles Edelman (Senior Managing
Director), Mark A. Van Lith (Managing Director) and Karen Duffy (Vice
President). Bear Stearns engages in a full range of investment banking,
securities trading, market-making and brokerage services for institutional
and individual clients. In the normal course of its business Bear Stearns
may trade securities of Shorewood for its own account and the accounts of
its customers, and accordingly, may at any time hold a long or short
position in such securities. Bear Stearns has informed Shorewood that, as
of the date hereof, Bear Stearns held no shares of Common Stock for its own
account. Bear Stearns and certain of its affiliates may have voting and
dispositive power with respect to certain shares of Common Stock held in
asset management, brokerage and other accounts. Bear Stearns and such
affiliates disclaim beneficial ownership of such shares of Common Stock.
In connection with Jefferson Capital's role as co-financial advisor
to Shorewood, Jefferson Capital and the following investment banking
employees of Jefferson Capital may communicate in person, by telephone or
otherwise with a limited number of institutions, brokers or other persons
who are stockholders of Shorewood and may solicit consent revocations
therefrom: R. Timothy O'Donnell (President) and Louis W. Moelchert (Vice
President). R. Timothy O'Donnell is the beneficial owner of 276,118 shares
of Common Stock. Louis W. Moelchert is the beneficial owner of 1,500 shares
of Common Stock. Jefferson Capital has informed Shorewood that, as of the
date hereof, it held 22,231 shares of Common Stock in its investment
account.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
Item 9 is hereby amended and supplemented as follows:
Exhibit No. Description
- ----------- -----------
24. Press Release issued by Shorewood Packaging Corporation on
December 21, 1999.
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.
SHOREWOOD PACKAGING CORPORATION
By: /s/ Andrew N. Shore
-------------------------------
Name: Andrew N. Shore
Title: Vice President, General Counsel and
Secretary
Dated: December 21, 1999
EXHIBIT 24
FOR IMMEDIATE RELEASE:
CONTACTS:
Sard Verbinnen & Co.
David Reno/Paul Caminiti
(212) 687-8080
SHOREWOOD SENDS LETTER TO CHESAPEAKE
---------------------------------------------------------
NEW YORK, DECEMBER 21, 1999 - Shorewood Packaging Corporation (NYSE:
SWD) today sent the following letter to Tom Johnson, President and Chief
Executive Officer of Chesapeake Corporation (NYSE: CSK):
December 21, 1999
Mr. Thomas H. Johnson
President and Chief Executive Officer
Chesapeake Corporation
1021 E. Cary Street
Richmond, Virginia 21218
Dear Tom:
I have read your letter dated December 17, 1999.
You are correct that our Board of Directors has authorized management
and our financial advisors to explore alternatives available to Shorewood
to enhance stockholder value. I understand that despite your commencement
of a highly conditional, inadequate tender offer, you now seek to have
discussions with us regarding your offer. We decline your request for a
meeting for the following reasons:
The current Chesapeake offer has been found by Shorewood's Board of
Directors to be inadequate; among other factors, it represents a 15% to
20% discount to analysts' short-term trading targets for Shorewood shares.
We believe that Section 203 of the Delaware corporate law effectively
prevents Chesapeake from completing a merger with Shorewood for at least
three years.
We are concerned that the inadequate offer you have made is also
highly conditional. For example, Chesapeake's proposed bank financing does
not appear to contemplate the situation where Chesapeake could be a
majority stockholder with fiduciary duties to the minority, which would
preclude it from utilizing Shorewood's cash for its own use and otherwise
consolidating operations. Although Chesapeake has stated that it is a
"willing" buyer, we question whether it is financially "ready" or "able."
As fiduciaries, we consider the best interests of all stockholders.
In this regard we seek value and certainty on behalf of the entire
stockholder base and are reluctant to support any transaction which is
fraught with serious contingencies.
Due to concerns regarding the inadequacy of your offer, your
conditional financing and completion risks, we do not believe it is in the
best interests of our stockholders to pursue your inadequate proposal.
Sincerely,
/s/ Marc P. Shore
Marc P. Shore
Shorewood Packaging Corporation is a leading value-added provider of
high quality printing and paperboard packaging for the music, computer
software, cosmetics and toiletries, food, home video, tobacco and general
consumer markets in North America and China, with 16 plants in the United
States, Canada and China.
# # #
Certain statements included in this press release constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are typically identified by
their inclusion of phrases such as "Shorewood anticipates," "Shorewood
believes"' and other phrases of similar meaning. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
that may cause the actual results, performance or achievements of Shorewood
to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others: general economic and business conditions;
competition; political changes in international markets; raw material and
other operating costs; costs of capital equipment; changes in foreign
currency exchange rates; changes in business strategy or expansion plans;
the results of continuing environmental compliance testing and monitoring;
quality of management; availability, terms and development of capital;
fluctuating interest rates and other factors referenced in this release and
in Shorewood's Annual Report on Form 10-K and quarterly reports on Form
10-Q.
THIS PRESS RELEASE DOES NOT CONSTITUTE A SOLICITATION TO REVOKE
CONSENTS IN CONNECTION WITH THE CONSENT SOLICITATION OF CHESAPEAKE
CORPORATION. ANY SUCH SOLICITATION WILL BE MADE ONLY BY MEANS OF SEPARATE
CONSENT SOLICITATION MATERIALS COMPLYING THE REQUIREMENTS OF SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER.
CERTAIN INFORMATION CONCERNING PARTICIPANTS
Shorewood Packaging Corporation ("Shorewood") and certain other
persons named below may be deemed to be participants in the solicitation of
revocations of consents in response to the consent solicitation being
conducted by Chesapeake Corporation ("Chesapeake"). The participants in
this solicitation may include: (i) the directors of Shorewood (Marc P.
Shore (Chairman of the Board and Chief Executive Officer), Howard M.
Liebman (President and Chief Financial Officer), Leonard Verebay (Executive
Vice President), Andrew N. Shore (Vice President and General Counsel),
Kevin J. Bannon, Sharon R. Fairley, Virginia A. Kamsky, R. Timothy
O'Donnell and William P. Weidner; and (ii) William H. Hogan (Senior Vice
President, Finance and Corporate Controller). As of the date of this
communication, the number of shares of common stock, par value $0.01 per
share ("Common Stock"), beneficially owned by the Shorewood participants
(including shares subject to stock options exercisable within 60 days) is
as follows: Marc P. Shore (4,750,485), Howard M. Liebman (233,269), Leonard
J. Verebay (500,180), Andrew N. Shore (169,052), Kevin J. Bannon (33,000),
Virginia A. Kamsky (4,500), R. Timothy O'Donnell (326,118); William P.
Weidner (57,000); and William H. Hogan (30,500).
Shorewood has retained Bear, Stearns & Co. Inc. ("Bear Stearns") and
Jefferson Capital Group, Ltd. ("Jefferson Capital") to act as its
co-financial advisors in connection with the tender offer (the "Offer") by
Chesapeake and its wholly owned subsidiary, Sheffield, Inc., to purchase
shares of Common Stock for $17.25 per share net to the seller in cash, for
which Bear Stearns and Jefferson Capital may receive substantial fees, as
well as reimbursement of reasonable out-of-pocket expenses. In addition,
Shorewood has agreed to indemnify Bear Stearns, Jefferson Capital and
certain related persons against certain liabilities, including certain
liabilities under the federal securities laws, arising out of their
engagement. Neither Bear Stearns nor Jefferson Capital admit that they or
any of their partners, directors, officers, employees, affiliates or
controlling persons, if any, is a "participant" as defined in Schedule 14A
promulgated under the Securities Exchange Act of 1934, as amended, in the
solicitation of consent revocations, or that Schedule 14A requires the
disclosure of certain information concerning Bear Stearns and Jefferson
Capital, respectively.
In connection with Bear Stearns' role as co-financial advisor to
Shorewood, Bear Stearns and the following investment banking employees of
Bear Stearns may communicate in person, by telephone or otherwise with a
limited number of institutions, brokers or other persons who are
stockholders of Shorewood and may solicit consent revocations therefrom:
Terence Cryan (Senior Managing Director), Charles Edelman (Senior Managing
Director), Mark A. Van Lith (Managing Director) and Karen Duffy (Vice
President). Bear Stearns engages in a full range of investment banking,
securities trading, market-making and brokerage services for institutional
and individual clients. In the normal course of its business Bear Stearns
may trade securities of Shorewood for its own account and the accounts of
its customers, and accordingly, may at any time hold a long or short
position in such securities. Bear Stearns has informed Shorewood that, as
of the date hereof, Bear Stearns held no shares of Common Stock for its own
account. Bear Stearns and certain of its affiliates may have voting and
dispositive power with respect to certain shares of Common Stock held in
asset management, brokerage and other accounts. Bear Stearns and such
affiliates disclaim beneficial ownership of such shares of Common Stock.
In connection with Jefferson Capital's role as co-financial advisor
to Shorewood, Jefferson Capital and the following investment banking
employees of Jefferson Capital may communicate in person, by telephone or
otherwise with a limited number of institutions, brokers or other persons
who are stockholders of Shorewood and may solicit consent revocations
therefrom: R. Timothy O'Donnell (President) and Louis W. Moelchert (Vice
President). R. Timothy O'Donnell is the beneficial owner of 276,118 shares
of Common Stock. Louis W. Moelchert is the beneficial owner of 1,500 shares
of Common Stock. Jefferson Capital has informed Shorewood that, as of the
date hereof, it held 22,231 shares of Common Stock in its investment
account.
