<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 5
TO
SCHEDULE 14D-1
Tender Offer Statement
Pursuant to Section 14(d)(1) of the Securities Exchange Act of 1934
PROLER INTERNATIONAL CORP.
(Name of Subject Company)
PIC ACQUISITION CORPORATION
AND
SCHNITZER STEEL INDUSTRIES, INC.
(Bidders)
COMMON STOCK, $1.00 PAR VALUE
(Including the associated rights)
(Title of Class of Securities)
743396-10-3
(CUSIP Number of Class of Securities)
ANTON U. PARDINI
SCHNITZER STEEL INDUSTRIES, INC.
3200 N.W. YEON AVENUE
PORTLAND, OREGON 97210
(503) 323-2807
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidder)
COPY TO:
STUART W. CHESTLER
STOEL RIVES LLP
900 SW FIFTH AVENUE, SUITE 2300
PORTLAND, OREGON 97204-1268
<PAGE>
CUSIP No. 743396-10-3
14D-1
<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------------------------
1. Name of reporting person
SS or I.R.S. Identification No. of above person
PIC Acquisition Corporation, I.R.S. No.: 93-1219503
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2. Check the appropriate box if a member of a group (a) / /
(b) / /
- -------------------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------------------
4. Sources of Funds
AF
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5. Check box if disclosure of legal proceedings is required pursuant to Items 2(e) /X/
OR 2(f)
- -------------------------------------------------------------------------------------------
6. Citizenship or place of organization
Delaware
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7. Aggregate amount beneficially owned by each reporting person
None (0)
- -------------------------------------------------------------------------------------------
8. Check box if the aggregate amount in row (7) excludes certain shares. / /
- -------------------------------------------------------------------------------------------
9. Percent of class represented by amount in row (7)
None (0)
- -------------------------------------------------------------------------------------------
10. Type of reporting person
CO
- -------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
CUSIP No. 743396-10-3
14D-1
<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------------------------
1. Name of reporting person
SS or I.R.S. Identification No. of above person
Schnitzer Steel Industries, Inc., I.R.S. No.: 93-0341923
- -------------------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group (a) / /
(b) / /
- -------------------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------------------
4. Sources of Funds
BK
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5. Check box if disclosure of legal proceedings is required pursuant to Items 2(e) /X/
OR 2(f)
- -------------------------------------------------------------------------------------------
6. Citizenship or place of organization
Oregon
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7. Aggregate amount beneficially owned by each reporting person
None (0)
- -------------------------------------------------------------------------------------------
8. Check box if the aggregate amount in row (7) excludes certain shares. / /
- -------------------------------------------------------------------------------------------
9. Percent of class represented by amount in row (7)
None (0)
- -------------------------------------------------------------------------------------------
10. Type of reporting person
CO
- -------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
PIC Acquisition Corporation and Schnitzer Steel Industries, Inc. hereby
amend and supplement their Tender Offer Statement on Schedule 14D-1 (the
"Statement"), originally filed on September 20, 1996, as amended by Amendment
Nos. 1 - 4, with respect to their offer to purchase all outstanding shares of
Common Stock, par value $1.00 per share, of Proler International Corp. (the
"Company"), a Delaware corporation, together with the associated stock rights as
set forth in this Amendment No. 5. Capitalized terms not defined herein have the
meanings assigned thereto in the Statement.
ITEM 10. ADDITIONAL INFORMATION.
(f) On November 19, 1996, the Company issued a press release including a
letter it intends to send to stockholders describing the status of the pending
sale of the Company. The letter describes, among other things, the extension of
the Offer, the increase in the Offer Price and the practical effect of the
waiver by the Bidders of certain conditions to the Offer previously announced by
the Bidders. Although the Bidders are not able to verify independently all of
the information set forth in the letter, a copy of the Company's press release
and the letter to stockholders is attached hereto as Exhibit 99(c)(7).
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a) (1) Offer to Purchase, dated September 20, 1996.+
(2) Letter of Transmittal.+
(3) IRS Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.+
(4) Form of Summary Advertisement, dated September 20, 1996.+
(5) Form of Notice of Guaranteed Delivery.+
(6) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees.+
(7) Form of Letter to Clients for Use by Brokers, Dealers, Commercial
Banks, Trust Companies and other Nominees.+
(8) Press Release, dated September 16, 1996.+
(9) Press Release, dated October 7, 1996.+
(10) Press Release, dated October 18, 1996.+
(11) Press Release, dated November 1, 1996+
(12) Press Release, dated November 15, 1996.+
(b) Credit Agreement dated as of March 27, 1995, among Schnitzer, the
syndicate of lenders party thereto and The First National Bank of
Chicago, as Agent.+
(c) (1) Agreement and Plan of Merger, dated September 15, 1996, among the
Purchaser, Schnitzer and the Company.+
(2) Agreement with Depositary.+
(3) Agreement with Information Agent.+
(4) Confidentiality Agreement dated as of June 11, 1996.+
(5) Letter from Schnitzer Steel Industries, Inc. to Mr. Bruce Wilkerson
of Proler International Corp. dated November 13, 1996.+
(6) Letter from Proler International Corp. to Mr. Robert Philip of
Schnitzer Steel Industries, Inc. dated November 13, 1996.+
(7) Press Release issued by Proler International Corp. dated November 19,
1996 and attached letter dated November 19, 1996 from the Board of
Directors of Proler International Corp. to stockholders.
(d) Not applicable.+
(e) Not applicable.+
(f) The Offer to Purchase and the Letter of Transmittal are incorporated
herein by reference.+
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* Filed herewith.
+ Previously filed.
4
<PAGE>
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.
Date: November 20, 1996
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PIC ACQUISITION CORPORATION
By:
-----------------------------------------
Name: Anton U. Pardini
-----------------------------------
Title: Assistant Secretary and General Counsel
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SCHNITZER STEEL INDUSTRIES, INC.
By:
-----------------------------------------
Name: Barry Rosen
-----------------------------------
Title: Vice President of Finance
-----------------------------------
<PAGE>
NEWS RELEASE
CONTACT: MICHAEL LOY
713/963-5904
FOR IMMEDIATE RELEASE
PROLER INTERNATIONAL CORP. AFFIRMS RECOMMENDATION OF
SCHNITZER TENDER OFFER AND MERGER
Houston, Texas, Nov. 19, 1996 - Proler International Corp announced today
that it is transmitting to its stockholders a letter describing the status of
the pending sale of the Company and outlining factors that the Proler Board
anticipates will continue to be of paramount concern in its deliberations.
As previously reported, Schnitzer Steel Industries, Inc. is conducting an
all cash, all shares tender offer for Proler stock at $9.00 per share under a
merger agreement with Proler. The Schnitzer offer is scheduled to close on
November 29, 1996, subject to clearance under the Hart Scott Rodino Act and
certain other conditions.
Hugo Neu Corporation has also announced a proposal to acquire Proler through
a tender offer and merger at $9.00 per share. Hugo Neu's proposal involves
contingencies not applicable to Schnitzer's offer, including the arrangement of
financing and the satisfaction of certain conditions.
In its letter to Stockholders, Proler's Board reaffirms its recommendation
that Proler stockholders accept the Schnitzer offer and tender their shares.
The text of the Proler letter to stockholders follows.
Proler is an environmental services company involved in the recovery and
recycling of scrap metals and industrial wastes to produce high-quality,
commercial products. Its shares are traded on the New York Stock Exchange under
the symbol PS.
<PAGE>
PROLER INTERNATIONAL CORP.
NOVEMBER 19, 1996
Dear Proler Stockholder:
Since we last wrote to you on September 20, 1996, announcing the signing of
the merger agreement between Proler International Corp. and Schnitzer Steel
Industries, Inc., there have been a number of important developments affecting
our company and our stockholders. The purpose of this letter is both to describe
the status of the pending sale of the Company and to explain certain factors
that the Board anticipates will continue to be of paramount concern in its
deliberations.
PROLER'S MERGER AGREEMENT WITH SCHNITZER
As previously announced, Schnitzer has modified its pending tender offer and
merger commitment to acquire all of Proler's outstanding shares in three
important ways.
- Schnitzer has extended its tender offer and related withdrawal rights
through November 29, 1996.
- Schnitzer has increased the price in its tender offer and second step
merger from $7.50 to $9.00 in cash for each Proler share.
- Schnitzer has waived key conditions to its obligation to consummate its
offer.
In the judgment of Proler's Board, the practical consequence of Schnitzer's
waiver of conditions is that there are now only two substantive conditions
remaining to be satisfied in order for Proler stockholders to be able to receive
cash for their shares at expiration of the Schnitzer offer: (1) tender of a
majority of Proler's shares and (2) receipt of antitrust clearance from the
United States Department of Justice as required by the Hart Scott Rodino Act. As
of November 18, 1996, approximately 52% of Proler's shares had been tendered.
Based upon the advice of Proler's special antitrust counsel, the Board is
hopeful that Hart Scott Rodino Act clearance will be obtained prior to the
November 29, 1996, expiration date for Schnitzer's offer. Schnitzer has
represented in the merger agreement that it has sufficient financial resources
to consummate its offer, and its offer is not subject to obtaining any
financing. Schnitzer is a public company, and its publicly disclosed financial
statements are considered by the Board to provide adequate assurance that
Schnitzer's offer is not subject to any financing contingency.
In short, the Schnitzer transaction appears to the Proler Board to be highly
likely to be capable of consummation in the near future.
MERGER PROPOSAL FROM HUGO NEU
Hugo Neu Corporation has publicly proposed that Proler terminate its merger
agreement with Schnitzer and enter into a merger agreement with Hugo Neu, also
providing for a cash tender offer and second step merger at $9.00 in cash per
share. In the judgment of Proler's Board of Directors, the proposal from Hugo
Neu differs from Proler's existing agreement with Schnitzer in several ways that
are of serious concern to Proler's Board, including the following:
- FINANCING. Hugo Neu's current proposal does not contain an express
financing condition. However, Hugo Neu is a privately owned company, and
the information we have received to date indicates that its financial
ability to consummate its proposal is dependent upon completion of
approximately $122 million of financing to refinance Hugo Neu's business,
to fund its purchase of Proler and to refinance Proler's existing bank
debt. Proler's management and financial advisors are currently undertaking
to evaluate the proposals Hugo Neu has obtained for this financing, as
well as Hugo Neu's overall financial strength.
- CONDITIONS. Hugo Neu has not matched Schnitzer's waiver of key conditions
to its obligation to purchase Proler shares.
<PAGE>
(1) Hugo Neu has conditioned its obligation on the continuing accuracy of
Proler's representations and warranties under its proposed merger
agreement. These representations and warranties cover matters that
are beyond Proler's control.
(2) Hugo Neu has conditioned its offer on the absence of any future event
having an actual or reasonably foreseeable material adverse effect on
Proler.
In the judgment of Proler's Board, and particularly in view of Proler's
financial condition and operating difficulties (discussed below), Hugo Neu's
imposition of these conditions creates a risk that Hugo Neu might not in
fact consummate its proposed purchase of Proler shares.
- TIMING. Under provisions of the Securities Exchange Act, Hugo Neu's
proposed tender offer for Proler shares could not be completed until, at
the earliest, 20 business days after Hugo Neu commenced its tender offer.
That period would be subject to extension under certain circumstances,
such as any delay in obtaining clearance under the Hart Scott Rodino Act
(which has occurred in the case of the Schnitzer offer).
- SCHNITZER AGREEMENT. In order to enter into a merger agreement with Hugo
Neu, Proler would be required to terminate its merger agreement with
Schnitzer. This would release Schnitzer from its obligation to purchase
Proler shares and would require Proler to pay Schnitzer up to $3 million.
Proler's Board has communicated to Hugo Neu its concerns about Hugo Neu's
current proposal.
LITIGATION WITH HUGO NEU
Hugo Neu, directly and through a subsidiary, is engaged in three joint
ventures with Proler subsidiaries. These joint ventures account for the bulk of
Proler's value. After Proler announced its merger agreement with Schnitzer, Hugo
Neu commenced legal proceedings against Proler in New York to compel purported
arbitration proceedings under the joint venture agreements, seeking to block
consummation of the Schnitzer transaction. Proler sued Hugo Neu in Houston,
Texas, for tortious interference with the Schnitzer transaction.
All claims of the parties are now before the court in Houston. After
hearings, United States District Judge Lynn N. Hughes ruled that the
transactions contemplated by Proler's merger agreement with Schnitzer are not
subject to arbitration under the joint venture agreements. The court therefore
denied Hugo Neu's motion to compel arbitration. Hugo Neu has filed a notice of
appeal. Judge Hughes' ruling also denied, without prejudice, Proler's motion for
a preliminary injunction against Hugo Neu's interference with the Schnitzer
transaction.
The most important consequence of these rulings is that, unless the rulings
are reversed on appeal, the Schnitzer transaction can now proceed.
PROLER'S FINANCIAL CONDITION
For some months, Proler has had, and disclosed, growing concerns regarding
its liquidity position. The Company's liquidity problems reflect three main
factors. (1) A continued build-up of inventory by the joint ventures,
exacerbated by declining margins on joint venture sales, has resulted in
increased working capital requirements that have strained Proler's financial
resources. Proler has advised its joint venture partners that it cannot continue
to fund its proportionate share of what it regards as excessive joint venture
inventory levels. (2) Proler's non-joint venture operations have not generated
satisfactory cash flow or earnings, primarily as a result of continuing poor
results from Proler's wholly owned copper recycling plant in Coolidge, Arizona.
(3) In pursuing and defending the opportunity afforded to Proler stockholders
under the Schnitzer merger agreement, Proler has incurred extraordinary costs,
including very substantial legal fees and expenses as a result of Hugo Neu's
efforts to block the Schnitzer transaction through litigation and purported
arbitration proceedings.
2
<PAGE>
As of November 18, 1996, under its bank line of credit, Proler had
outstanding borrowings of approximately $25.8 million out of a total borrowing
capacity (based on the most recent required borrowing base computation) of
approximately $27.3 million. Proler is dependent upon this bank line of credit
for liquidity. The line of credit expires on January 31, 1997.
If, for any reason, Proler is not acquired in the near future, the Board
believes that in the absence of an unanticipated material improvement in
operating results the Company would need additional capital resources to sustain
itself as a going concern. There is no assurance that such resources would be
available. Proler has disclosed details of its financial condition and liquidity
problems to both Schnitzer and Hugo Neu.
MAXIMIZING VALUE FOR PROLER STOCKHOLDERS
The Board of Directors believes that Proler's assets clearly have
substantial value, as evidenced by the $9.00 per share cash price that has been
agreed to by Schnitzer and proposed by Hugo Neu. At the same time, the Board
believes that Proler's current financial condition makes it essential to
consummate a sale of the Company in the near future in order to translate that
value into cash for Proler stockholders.
Proler's Board of Directors is committed to obtaining the highest value for
you, the stockholders, that is reasonably achievable under the circumstances. In
the context of Proler's present financial condition and operating business
results, the Board believes that promptness and certainty of consummation are
critical factors in assessing the value apparently offered by any potential
alternative to the Schnitzer transaction.
We currently anticipate obtaining Hart Scott Rodino Act clearance for the
Schnitzer transaction within a short period of time, and Schnitzer has waived
the other conditions about which the Board has the greatest concern. Both J.C.
Bradford & Co. and Chase Securities Inc., Proler's financial advisors, confirmed
to the Board on November 15, 1996, their opinions that the Schnitzer offer is
fair, from a financial point of view, to Proler stockholders. And a majority of
Proler's shares have been tendered to Schnitzer. The Proler Board therefore
considers the pending Schnitzer offer to be at a fair price, essentially
unconditional and highly likely to be capable of consummation in the near
future.
Accordingly, the Board of Directors of Proler continues to recommend that
you accept Schnitzer's tender offer and tender your shares.
By Order of the Board of Directors
Herman Proler
CHAIRMAN OF THE BOARD OF DIRECTORS
Bruce W. Wilkinson
PRESIDENT
Contact:Proler International Corp,
Houston
Michael F. Loy, 713/963-5904
3
