UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
December 2, 1996
PROLER INTERNATIONAL CORP.
(Exact name of registrant as
specified in its charter)
Delaware 1-5276 74-0494529
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) Number)
4265 San Felipe, Suite 900
Houston, Texas 77027
(Address of principal executive offices)
Registrant's telephone number, including area code (713) 627-3737
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) On December 2, 1996, Schnitzer Steel Industries, Inc. ("Schnitzer")
announced that it had completed its tender offer to purchase all of the
Company's common stock at $9.00 per share (the "Tender Offer"). Schnitzer stated
in its press release announcing the completion of the Tender Offer that, at the
expiration of the Tender Offer at midnight on Friday, November 29, 1996, 4.1
million shares of the Company's common stock (approximately 86% of the
outstanding shares) had been tendered, and that all tendered shares had been
accepted for payment by PIC Acquisition Corporation, a wholly-owned subsidiary
of Schnitzer ("PIC Acquisition"). A copy of Schnitzer's December 2, 1996 press
release is attached hereto as Exhibit 99.1 and is incorporated herein by
reference.
As previously disclosed in the Company's Current Report on Form 8-K dated
September 15, 1996, the Company entered into an Agreement and Plan of Merger
(the "Merger Agreement") with Schnitzer and PIC Acquisition on September 15,
1996, pursuant to which Schnitzer commenced the Tender Offer on September 20,
1996 to purchase all of the outstanding shares of the Company's Common Stock for
$7.50 per share. As discussed in Schnitzer's Tender Offer Statement on Schedule
14D-1 filed with the Commission on September 20, 1996, as amended (the "Tender
Offer Statement"), the Tender Offer was subsequently extended, and its terms
amended, by Schnitzer prior to the closing of the Tender Offer at midnight on
November 29, 1996.
As disclosed in Schnitzer's Tender Offer Statement, PIC Acquisition
obtained the funds for its purchase of the Company's common stock from
Schnitzer, and Schnitzer obtained such funds from its existing $100 million
unsecured revolving credit facility provided pursuant to a Credit Agreement
dated as of March 27, 1995 among Schnitzer, the syndicate of lenders parties
thereto, and the First National Bank of Chicago, as Agent. The facility was not
obtained for the particular purpose of acquiring control of the Company.
Pursuant to the Merger Agreement, PIC Acquisition became entitled upon
completion of the Tender Offer to designate that number of directors on the
Company's Board of Directors equal to the number of directors on the Company's
Board multiplied by the percentage of outstanding shares of the Company's common
stock owned by PIC Acquisition following consummation of the Tender Offer.
Accordingly, on December 4, 1996, five of the Company's six directors resigned
from the Company's Board of Directors, and three directors designated by
Schnitzer and PIC Acquisition were elected to the Company's Board of Directors.
Following consummation of the Tender Offer, PIC Acquisition acquired
additional shares of the Company's common stock, and as of December 6, 1996, PIC
Acquisition owned approximately 94% of Proler's common stock. Accordingly,
pursuant to the Merger Agreement, on December 6, 1996 PIC Acquisition was merged
with and into the Company in a second-step merger, as a result of which the
shares of common stock of the Company (other than shares owned by the Company or
a subsidiary of the Company, Schnitzer, PIC Acquisition or any other subsidiary
of Schnitzer) that were not tendered to PIC Acquisition in the Tender Offer were
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converted into the right to receive $9.00 per share, such shares were
automatically canceled and retired, and the Company became a wholly-owned
subsidiary of Schnitzer. A copy of Schnitzer's December 6, 1996 press release
announcing the merger is attached hereto as Exhibit 99.2 and is incorporated
herein by reference.
Immediately following the filing of this Current Report on Form 8-K, the
Company intends to file with the Commission a Form 15 suspending its duty to
file reports pursuant to Sections 13 and 15(d) of the Securities Exchange Act of
1934. The Company has also informed the New York Stock Exchange of the merger,
and has been informed that the Exchange will suspend trading of the Company's
Common Stock following the close of business on December 6, 1996, and that the
Exchange will proceed with the delisting of the Company's common stock.
(b) The Company is not aware of any arrangements the operation of which
may at a subsequent date result in a change in control of the Company.
ITEM 7. EXHIBITS
Exhibit 99.1 Press Release issued by Schnitzer Steel Industries, Inc., dated
December 2, 1996.
Exhibit 99.2 Press Release issued by Schnitzer Steel Industries, Inc., dated
December 6, 1996.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PROLER INTERNATIONAL CORP.
Dated: December 6, 1996 By: /s/ DAVID JUENGEL
Name: David Juengel
Title: Vice President
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PROLER INTERNATIONAL CORP.
EXHIBIT INDEX
to
FORM 8-K CURRENT REPORT
Date of Report: December 2, 1996
Exhibit
Number Description
- ------- -----------
99.1 Press Release issued by Schnitzer Steel Industries, Inc., dated
December 2, 1996
99.2 Press Release issued by Schnitzer Steel Industries, Inc., dated
December 6, 1996.
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EXHIBIT 99.1
[Schnitzer Steel Industries, Inc. letterhead]
PRESS RELEASE
December 2, 1996
FOR IMMEDIATE RELEASE
Contact: Tom Zelenka (503)323-2821
SCHNITZER ANNOUNCES COMPLETION OF PROLER TENDER OFFER
Portland, Oregon - December 2, 1996, Schnitzer Steel Industries, Inc.
(NASDAQ:SCHN) today announced that it successfully completed its tender offer to
acquire the common stock of Proler International Corp. (Proler) at $9.00 per
share. At the expiration of the tender offer at midnight on Friday, November 29,
1996, 4.1 million shares of Proler stock (or about 86% of the outstanding
shares) had been tendered, and all tendered shares have been accepted for
payment by a Schnitzer subsidiary. "We are pleased to have completed the
acquisition of Proler," stated Robert W. Philip, president of Schnitzer. "This
acquisition is consistent with our belief in the long-term growth of the scrap
business. We believe that this acquisition will be additive to earnings. We also
look forward to working with the Hugo Neu organization to grow the Proler and
Hugo New joint venture operations."
The preceding paragraph contains a forward looking statement regarding the
effect of the Proler acquisition on future earnings. The impact of the
acquisition on earnings will depend primarily on the profitability of the joint
ventures as well as scrap market conditions generally. Future market conditions
are subject to supply and demand conditions and decisions of other market
participants over which the Company has no control and which are inherently
difficult to predict.
Schnitzer operates one of the largest scrap recycling businesses in the Western
United States. The Company supplies ferrous scrap to Asian and domestic steel
producers through its scrap collection, processing and deep water facilities
located in Oakland, California; Portland, Oregon; and Tacoma, Washington. The
Company also operates collection and processing facilities in Eugene, Bend,
White City and Grants Pass, Oregon; and Sacramento and Fresno, California.
Schnitzer's subsidiary, Cascade Steel Rolling Mills, Inc. (Cascade) operates the
only vertically integrated mini-mill in the Western United States which can
obtain its entire scrap requirements from its own scrap operations. Cascade's
steel mini-mill in McMinnville, Oregon manufactures rebar, merchant bar, fence
posts, special sections and grape stakes. In addition, Cascade maintains mill
depots in Union City and El Monte, California.
Proler is an environmental services company involved in the recovery and
recycling of scrap metals and industrial wastes to produce high-quality,
commercial products.
EXHIBIT 99.2
[SCHNITZER STEEL INDUSTRIES, INC. LETTERHEAD]
PRESS RELEASE
December 6, 1996
FOR IMMEDIATE RELEASE
Contact: Tom Zelenka (503)323-2821
SCHNITZER ANNOUNCES CONCLUSION OF PROLER ACQUISITION
Portland, Oregon - December 6, 1996, Schnitzer Steel Industries, Inc.
(NASDAQ:SCHN) today announced the completion of a merger between a Schnitzer
subsidiary and Proler International Corp. (Proler) thereby concluding
Schnitzer's acquisition of Proler. As a result of the merger, all remaining
outstanding shares of Proler Common Stock were converted into the right to
receive the same $9.00 per share in cash paid in the tender offer.
Following the completion of its tender offer for Proler Common Stock on November
29, 1996, in which the Schnitzer subsidiary acquired 4.1 million shares of
Proler Common Stock (or about 86% of the outstanding shares), and prior to the
merger, the Schnitzer subsidiary acquired an additional 342,600 shares at the
same $9.00 per share in cash paid in the tender offer. These acquisitions
brought the Schnitzer subsidiary's total ownership of Proler Common Stock to
more than 4.4. million shares (or about 94% of the outstanding shares).
Schnitzer operates one of the largest scrap recycling businesses in the Western
United States. The Company supplies ferrous scrap to Asian and domestic steel
producers through its scrap collection, processing and deep water facilities
located in Oakland, California; Portland, Oregon; and Tacoma, Washington. The
Company also operates collection and processing facilities in Eugene, Bend,
White City and Grants Pass, Oregon; and Sacramento and Fresno, California.
Schnitzer's subsidiary, Cascade Steel Rolling Mills, Inc. (Cascade) operates the
only vertically integrated mini-mill in the Western United States which can
obtain its entire scrap requirements from its own scrap operations. Cascade's
steel mini-mill in McMinnville, Oregon manufactures rebar, merchant bar, fence
posts, special sections and grape stakes. In addition, Cascade maintains mill
depots in Union City and El Monte, California.
Proler is an environmental services company involved in the recovery and
recycling of scrap metals and industrial wastes to produce high-quality,
commercial products.
