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. 12)
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
Four Times Square
New York, New York 10036-6522
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 (the
"Schedule 14D-9"), relating to the offer (the "Chesapeake 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 (the
"Rights Agreement"), between Shorewood and The Bank of New York (the
"Rights Agent").
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
Item 4 is hereby amended and supplemented as follows:
In the early evening on February 16, 2000, Greenhill & Co., LLC,
the financial advisor to the Special Committee to the Shorewood Board,
received the following letter from Chesapeake:
February 16,2000
Mr. Scott L. Bok
Managing Director
Greenhill & Co., LLC
31 West 52nd Street, 16 th Floor
New York, NY 10004
Dear Scott:
We are in receipt of your letter of February 15, which appears to
set an artificial deadline of 4:00 PM today for Chesapeake to provide
Shorewood with its "best and final proposal."
As you are well aware, since November 10, 1999, Chesapeake has
repeatedly invited Shorewood's Board to engage in serious negotiations
regarding the price and structure of our offer. During that three month
period, Shorewood claims to have made available due diligence materials,
and engaged in substantive discussions, with other interested parties
regarding a possible transaction, while excluding Chesapeake from that
process. Only after the sweeping decision of the Delaware Chancery Court
which, among other things, found that the Shorewood Board acted in a
"grossly inadequate" and "grossly uninformed" fashion in the face of
Chesapeake's proposal, did Shorewood offer Chesapeake access to any due
diligence materials.
It now appears that Shorewood's due diligence offer may be
illusory. As you know, the parties entered into a confidentiality agreement
late on Monday, February 14. Thereafter, Shorewood provided us with less
than 60 pages of the most rudimentary information. The very next day --
before any opportunity for access to customary due diligence materials or
discussions -- we received your letter with its 24 hour trigger and threat
that the Shorewood Board may enter into a transaction with a third party
later today, possibly including the grant of a breakup fee.
We believe that such deadline and threat are patently unreasonable,
and that Chesapeake has not been afforded a level playing field in its
attempts to refine its offer for Shorewood. Accordingly, Chesapeake
reserves the right to challenge in court any such alternative transaction
by Shorewood.
As you know, within 24 hours of receiving Shorewood's rudimentary
information package, representatives of Chesapeake met in New York with Mr.
Howard Liebman, President & CFO of Shorewood, to review the information.
During the course of that 2 hour meeting, we were advised of certain
material non-public information concerning Shorewood's recent performance
In light of that non-public information, and our stated requirement
for customary, limited due diligence to permit us to refine our offer, we
delivered a short due diligence request list to Mr. Liebman this morning.
As we advised your counsel this afternoon, we stand ready to work with
Shorewood to accommodate Shorewood's concerns about disclosing
competitively sensitive information and information that would be unduly
burdensome to assemble. We continue to expect that, with prompt and
reasonable access to due diligence materials and the opportunity for
meaningful face-to-face negotiations, Chesapeake will be in a position to
advise you of any revisions to our offer in advance of the expected record
date for our consent solicitation.
Chesapeake remains willing to negotiate in good faith with the
Shorewood Board regarding our fully financed $17.25 per share all cash
offer. We believe it is in the best interests of Shorewood's stockholders
for Chesapeake to have the benefit of access to customary due diligence,
and the opportunity for face-to-face negotiations, to develop our "best and
final offer and proposal."
We trust that Shorewood will reconsider its unreasonable deadline,
and will enter into prompt and constructive negotiations with Chesapeake.
Very truly yours,
Andrew J. Kohut
On February 17, 2000, Chesapeake issued a press release announcing
that it would permit the Chesapeake Offer to expire at midnight, New York
City time, on February 18, 2000 in accordance with its terms. Also on such
date, Chesapeake advised Shorewood that it was withdrawing its request for
a record date in connection with its consent solicitation of written
consents from Shorewood stockholders.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY.
Item 7 is hereby amended and supplemented as follows:
On February 16, 2000, Shorewood entered into a definitive merger
agreement (the "Merger Agreement") with International Paper Company, a New
York corporation ("Parent"), and International Paper - 37, Inc., a Delaware
corporation ("Purchaser") and a wholly owned subsidiary of Parent. The
Merger Agreement provides that Purchaser will commence a tender offer (the
"IP Offer") to purchase all of the outstanding shares of common stock, par
value $.01 per share (together with the associated preferred share purchase
rights, the "Shares"), of Shorewood at a price of $21 per Share, net to the
seller in cash, without interest. Pursuant to the Merger Agreement, upon
the terms and subject to the conditions set forth therein, and in
accordance with the General Corporation Law of the State of Delaware (the
"DGCL"), as soon as practicable following completion of the IP Offer,
Purchaser will be merged with and into Shorewood (the"Merger"), with
Shorewood continuing as the surviving corporation. The text of the press
release issued by Shorewood announcing the execution of the Merger
Agreement is filed as Exhibit 31 hereto and is incorporated by reference
herein.
In connection with the execution of the Merger Agreement, Marc P.
Shore (on behalf of himself, the Shore family partnership and certain
testamentary trusts created under the terms of Paul B. Shore's will),
Andrew N. Shore and Howard M. Liebman (collectively, the "Stockholders")
have entered into a Stockholders Agreement (the "Stockholders Agreement")
with Parent and Purchaser pursuant to which the Stockholders have agreed to
tender their Shares into the IP Offer, vote in favor of the Merger and vote
against any competing transaction.
On February 16, 2000, in connection with the execution and delivery
of the Merger Agreement, the Shorewood Board approved an amendment to the
Rights Agreement (the "Amendment to the Rights Agreement"), in order to,
among other things, (i) prevent Parent or Purchaser from becoming or being
deemed an Acquiring Person (as defined in the Rights Agreement), and (ii)
prevent a Stock Acquisition Date or a Distribution Date (each as defined in
the Rights Agreement) from occurring, in each case, as a result of (a) the
execution of the Merger Agreement or the Stockholders Agreement, (b) the
consummation of the IP Offer, (c) the merger of Purchaser with and into
Shorewood as provided for in the Merger Agreement, (d) the acquisition of
beneficial ownership of the Shares pursuant to the Stockholders Agreement,
or (e) any of the other transactions contemplated by the Merger Agreement
or the Stockholders Agreement.
INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE
SOLICITATION/RECOMMENDATION STATEMENT REGARDING THE TENDER OFFER REFERENCED
IN THE FOREGOING INFORMATION, WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL
CONTAIN IMPORTANT INFORMATION. THE SOLICITATION/RECOMMENDATION STATEMENT
WILL BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BY SHOREWOOD
PACKAGING CORPORATION. INVESTORS AND SECURITY HOLDERS MAY OBTAIN A FREE
COPY OF THE SOLICITATION/RECOMMENDATION STATEMENT (WHEN AVAILABLE) AND
OTHER DOCUMENTS FILED BY SHOREWOOD PACKAGING CORPORATION WITH THE
COMMISSION AT THE COMMISSION'S WEB SITE AT www.sec.gov. THE
SOLICITATION/RECOMMENDATION STATEMENT AND SUCH OTHER DOCUMENTS MAY ALSO BE
OBTAINED FOR FREE FROM SHOREWOOD PACKAGING CORPORATION BY DIRECTING SUCH
REQUEST TO: SHOREWOOD PACKAGING CORPORATION, 277 PARK AVENUE, 30TH FLOOR,
NEW YORK, NEW YORK 10172, ATTENTION: HOWARD M. LIEBMAN, TELEPHONE: (212)
371-1500, E-MAIL: [email protected].
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
Item 9 is hereby amended and supplemented as follows:
Exhibit No. Description
- ---------- -----------
31. Press release issued by Shorewood Packaging Corporation on
February 17, 2000.
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: February 17, 2000
EXHIBIT 31
FOR IMMEDIATE RELEASE:
- ---------------------
CONTACTS:
Sard Verbinnen & Co.
David Reno/Paul Caminiti/Brandy Bergman
(212) 687-8080
SHOREWOOD PACKAGING AGREES TO BE ACQUIRED BY
INTERNATIONAL PAPER FOR $21 PER SHARE
INTERNATIONAL PAPER WILL COMMENCE TENDER OFFER FOR ALL
OUTSTANDING SHOREWOOD SHARES
STRATEGIC COMBINATION PROVIDES INTERNATIONAL PAPER WITH
LEADING SPECIALTY PACKAGING BUSINESS
------------------------------------------------------------------------
NEW YORK, NY, FEBRUARY 17, 2000 - Shorewood Packaging Corporation
(NYSE:SWD) today announced that it has reached a definitive merger
agreement providing for International Paper Company (NYSE:IP) to acquire
Shorewood for $21 per share in cash. International Paper will also assume
Shorewood's approximately $275 million in outstanding debt, giving the
transaction a total value of approximately $875 million. The Boards of both
International Paper and Shorewood have unanimously approved the
transaction.
Pursuant to the definitive merger agreement, International Paper
will shortly commence a cash tender offer of $21 per share for all of
Shorewood's outstanding shares. Marc P. Shore, Shorewood's Chairman and
Chief Executive Officer, and the Shore family, who together control
approximately 17% of Shorewood stock, have agreed to tender their shares
into the International Paper offer.
The strategic acquisition of Shorewood will improve International
Paper's position in the value added, specialty packaging business.
Shorewood brings to International Paper state-of-the-art, printed packaging
capabilities in the music and home entertainment, tobacco, cosmetics and
toiletries, and hair coloring industries, among others. Shorewood will
benefit from becoming part of a stronger, more diversified and
international organization that is among the global leaders in the paper
and packaging industry.
Under the terms of the transaction, Shorewood will become the
premium retail packaging operation of IP with the existing IP operations
combined with Shorewood into a single business unit under the Shorewood
name. Marc Shore will become President of Shorewood under IP's ownership,
and Howard M. Liebman, currently Shorewood's President and Chief Financial
Officer, will become Executive Vice President of the Shorewood business.
The transaction is subject to antitrust approval and other customary
conditions, and is expected to close by the end of March 2000.
William Slowikowski, International Paper's Senior Vice President
for Consumer Packaging, stated, "Shorewood is a premier franchise with a
reputation for high quality, value added products and outstanding customer
service. The acquisition of Shorewood is a very significant step in
International Paper's efforts to deliver more value to our customers."
Marc Shore stated, "Our goals have always been very clear - to
enhance shareholder value, provide for employee continuity and continue our
focus on serving the interests of our customers. Consistent with those
goals, we believe that International Paper is the ideal partner for
Shorewood. International Paper has the industry breadth, expertise and
global presence to leverage Shorewood's existing businesses and take them
to the next level. We're confident that our customers and employees will
benefit from this strategic combination."
Shore continued, "We are especially pleased that we were able to
achieve an appropriate valuation for Shorewood shareholders - representing
a 22% premium to Chesapeake's (NYSE:CSK) inadequate offer and an all-time
high price for Shorewood shares. I'm extremely proud of the Shorewood
Board, which after looking at a number of alternatives to enhance value,
was able to arrive at a deal that is clearly in the best interests of
Shorewood shareholders, employees and customers."
Shore added, "We view this as a new chapter for Shorewood. We're
confident that the greatest period of growth and opportunity for our
business lies ahead, in the context of our new partnership with
International Paper. We look forward to quickly consummating this
transaction."
Separately, Shorewood also announced that, based on preliminary
data, it expects revenues for the Company's third quarter, ended January
31, 2000, to be approximately $134 million compared to the $141 million
reported for the comparable period last year. The Company also expects that
operating and net earnings will be lower than those reported in the
comparable period last year. The Company's actual financial results for the
quarter will be disclosed by mid-March.
International Paper (http://www.internationalpaper.com) is the
world's largest forest products company. Businesses include printing paper,
packaging, building materials, chemical products and distribution. As the
largest private landowner in the U.S., the company manages its forest under
the Sustainable Forestry Initiative (SFIsm) program, a system that ensures
the perpetual growing and harvesting of trees while protecting wildlife,
plants, soil, air and water quality. Headquartered in the United States at
Purchase, New York, IP has operations in nearly 50 countries, employs
nearly 100,000 people and exports its products to more than 130 nations.
Shorewood Packaging Corporation is a leading value-added provider of high
quality printing and paperboard packaging for the computer software,
cosmetics and toiletries, food, home video, music, 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 (the "Act"). While the safe harbors intended
to be created by the Act are not available to statements made in connection
with a tender offer, it has not been judicially determined whether such
safe harbor provisions apply to forward-looking statements made in
connection with a consent solicitation conducted in connection with a
tender offer. However, the consent solicitation by Chesapeake Corporation
is intended to facilitate its tender offer, and the statements made herein
may be deemed to have been made in connection with such tender offer.
Accordingly, such statements may not be covered by the safe harbor
provisions of the Act. Any forward-looking statements made herein are only
predictions, subject to risks and uncertainties that exist in the business
environment which could render actual outcomes and results materially
different from those expressed in such statements, including, but not
limited to, 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, net long, 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.
The special committee of independent directors (the "Special Committee") of
the Shorewood Board of Directors, formed to evaluate strategic alternatives
which could enhance stockholder value, has retained Greenhill & Co., LLC
("Greenhill") as its financial advisor. In connection with Greenhill's role
as financial advisor to the Special Committee, Greenhill and the following
investment banking employees of Greenhill 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: Robert F. Greenhill (Chairman), Scott L. Bok
(Managing Director), James M. Wildasin (Vice President) and Joseph A.
McMillan, Jr. (Associate). Greenhill has informed Shorewood that, as of the
date hereof, Greenhill held, net long, no shares of Common Stock for its
own account.
# # #
