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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________
SCHEDULE 13E-3
Rule 13e-100
Transaction Statement under Section 13(e)
of the Securities Exchange Act of 1934 and Rule 13e-3 thereunder
(Final Amendment)
____________________________
KENETECH CORPORATION
____________________________
(Name of the Issuer)
KC HOLDING CORPORATION
VALUEACT CAPITAL PARTNERS, L.P.
VA PARTNERS, L.L.C.
____________
(Name of Person(s) Filing Statement)
Common Stock, par value $0.0001 per share
____________
(Title of Class of Securities)
488878109
____________
(CUSIP Number of Class of Securities)
KC HOLDING CORPORATION
C/O VALUEACT CAPITAL PARTNERS, L.P.
ONE MARITIME PLAZA
SUITE 1400
SAN FRANCISCO, CALIFORNIA 94111
ATTN: JEFFREY W. UBBEN
(415) 362-3700
____________
(Name, Address and Telephone Number of Persons Authorized to
Receive Notices and Communications on Behalf of Person(s) Filing Statement)
____________
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This statement is filed in connection with (check the appropriate box):
a.[_] The filing of solicitation materials or an information statement
subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the Securities
Exchange Act of 1934.
b.[_] The filing of a registration statement under the Securities Act of
1933.
c.[x] A tender offer.
d.[_] None of the above.
Check the following box if the soliciting materials or information
statement referred to in checking box (a) are preliminary copies:[_]
Check the following box if the filing is a final amendment reporting the
results of the transaction:[x]
____________
Calculation of Filing Fee
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Transaction Valuation* AMOUNT OF FILING FEE**
________________________________________________________________________________
$34,549,971 6,910
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*Estimated for purposes of calculating the amount of the filing fee only.
Calculated by multiplying $1.04, the per share tender offer price, by
33,220,164, the sum of (i) 31,970,164 currently outstanding shares of Common
Stock sought in the Offer, (ii) outstanding options with respect to 750,000
shares of Common Stock and (iii) outstanding warrants with respect to 500,000
shares of Common Stock, in each case as of October 20, 2000.
**Calculated as 1/50 of 1% of the transaction value.
[x] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
[CAPTION]
AMOUNT PREVIOUSLY PAID: $6,910 FILING PARTY: KC MERGER CORP.
Form or Registration No.: Schedule TO/13E-3 KC HOLDING CORPORATION
VALUEACT CAPITAL
PARTNERS, L.P.
Date Filed: November 7, 2000
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INTRODUCTION
This Final Amendment (the "Final Amendment") to the Transaction Statement
on Schedule 13E-3, as amended (the "Schedule 13E-3"), relates to the offer by KC
Merger Corp., a Delaware corporation ("Purchaser") and a wholly owned subsidiary
of KC Holding Corporation, a Delaware corporation ("Parent"), as set forth in
the Tender Offer Statement on Schedule TO, dated November 7, 2000 (the "Schedule
TO"), to purchase all of the outstanding shares of common stock of KENETECH
Corporation, a Delaware corporation ("KENETECH"), par value $.0001 per share, at
a price of $1.04 per share, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated November 6,
2000 (the "Initial Offer to Purchase"), a copy of which is attached hereto as
Exhibit (a)(1)(i), the supplement to the Offer to Purchase dated November 26,
2000 (the "Supplement"), a copy of which is attached hereto as Exhibit
(a)(1)(vii) (the Initial Offer to Purchase and the Supplement are together
referred to herein as the "Offer to Purchase") and in the related Letter of
Transmittal, a copy of which is attached hereto as Exhibit (a)(1)(ii) (which,
together with the Offer to Purchase, as amended or further supplemented from
time to time, constitute the "Offer"). The Schedule TO was originally filed by
Purchaser, Parent and ValueAct Capital Partners, L.P. ("ValueAct") with the
Securities and Exchange Commission on November 7, 2000.
Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Offer to Purchase.
The information contained in this Schedule 13E-3 and/or the Offer to
Purchase concerning each filing person other than Parent, ValueAct and VA
Partners, L.L.C. was supplied by each such filing person and no other filing
person, including Parent, ValueAct and VA Partners, L.L.C., takes responsibility
for the accuracy of any information not supplied by such filing person.
ITEM 3.
This Final Amendment is being filed on behalf of Parent, ValueAct and VA
Partners, L.L.C.
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ITEM 5.
Item 5 of the Schedule 13E-3 is hereby amended and supplemented by the
following:
"As more fully described in Item 6 hereof, Purchaser and KENETECH entered
into a Stock Purchase Agreement, dated December 29, 2000 (the "Stock Purchase
Agreement"), a copy of which is attached hereto as Exhibit (d)(11), pursuant to
which Purchaser purchased certain additional Shares of Common Stock, as further
described in Item 6, in consideration for an aggregate amount of $14,934,728.64
(the "Stock Purchase Consideration")."
ITEM 6.
Item 6 of the Schedule 13E-3 is hereby amended and supplemented by the
following:
"On December 28, 2000, Purchaser accepted for purchase and payment,
pursuant to the Offer, all Shares which were validly tendered and not withdrawn
as of the expiration of the Offer at 12:00 midnight, New York City time, on
December 27, 2000. Based on information provided by Mellon Investor Services,
L.L.C., the depositary for the Offer, 16,021,160 Shares (including 49,502 Shares
tendered pursuant to notices of guaranteed delivery) were validly tendered
pursuant to the Offer and not withdrawn. Immediately after the purchase of the
tendered Shares, Purchaser owned approximately 86% of the outstanding Shares.
On December 29, 2000, Purchaser and KENETECH entered into the Stock
Purchase Agreement providing for the sale by KENETECH of 14,360,316 Shares of
Common Stock to Purchaser for the purchase price amount of $1.04 per Share of
Common Stock or an aggregate amount of $14,934,728.64 (the "Stock Purchase").
Effective upon the consummation of the Stock Purchase, Purchaser owned at
least 90% of the outstanding Shares of Common Stock. On December 29, 2000,
pursuant to the terms and conditions of the Merger Agreement, Purchaser was
merged with and into KENETECH in accordance with the General Corporation Law of
the State of Delaware, with KENETECH continuing as the surviving corporation
(the "Surviving Corporation").
Upon the Merger becoming effective, (i) each issued and outstanding share
of common stock, par value $0.01 per share, of Purchaser was converted into one
validly issued, fully paid and nonassessable share of common stock of the
Surviving Corporation; (ii) each issued and outstanding Share of Common Stock
held in KENETECH's treasury or held by Parent or any wholly owned subsidiary of
Parent was canceled without any consideration being delivered therefor; and
(iii) each issued and outstanding Share of Common Stock, other than Shares
canceled as described above and other than Shares held by stockholders properly
exercising appraisal rights pursuant to the provisions of applicable law, was
converted into the right to receive from the Surviving Corporation the Merger
Consideration.
In connection with the Merger: (i) each then outstanding option to
purchase any Shares (in each case an "Option") was canceled by the KENETECH and
in consideration for such cancellation, the holder of the Option received the
right to receive from the Surviving Corporation cash in an amount equal to (A)
the product of (1) the number of Shares subject to such Option and (2) the
excess, if any, of the Merger Consideration over the exercise price per share
for the purchase of Shares subject to such Option, minus (B) all applicable
federal, state and local taxes required to be withheld with respect to such
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payment; and (ii) each holder of a then outstanding warrant to purchase any
Shares (in each case a "Warrant") received the right to receive in cash an
amount (the "Warrant Consideration") equal to (A) the product of (1) the number
of Shares subject to such Warrant and (2) the excess, if any, of the Merger
Consideration over the exercise price per share for the purchase of the Shares
subject to the Warrant, minus (B) all applicable federal, state and local taxes
required to be withheld with respect to such payment, as a result, such holder
agreeing that, after the effective time of the Merger, each such Warrant held by
such holder represented the right to receive from the Surviving Corporation the
Warrant Consideration.
As a result of the Merger, the Surviving Corporation became a wholly owned
subsidiary of Parent.
A Form 15 has been filed with the Commission in order to deregister the
Shares. A press release relating to the consummation of the Merger is attached
as Exhibit (a)(1)(xiv) and is incorporated herein by reference."
ITEM 10. SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION.
Item 10 of the Schedule 13E-3 is hereby amended and supplemented by the
following:
"The Stock Purchase was funded by a capital contribution from Parent to
Purchaser, which in turn was funded from the proceeds of the issuance of a
promissory note in the face amount of $14,934,728.64 from Parent to ValueAct
Capital Partners, L.P. ("ValueAct") with a stated interest rate of 8% per annum
(the "Note"). The Note, a copy of which is attached hereto as Exhibit (b)(1),
will be repaid by the Surviving Corporation from cash on hand promptly following
the consummation of the Merger."
ITEM 16. EXHIBITS.
Item 16 of the Schedule 13E-3 is hereby amended and supplemented by the
following:
(a)(1)(xiv) Press Release issued by Parent dated January 2, 2001
(incorporated by reference to Amendment No. 7 to Schedule 13D
filed by Parent, KENETECH, ValueAct and VA Partners, L.L.C.
on January 2, 2001)
(b)(1) Promissory Note, dated as of December 29, 2000, issued by
Parent in favor of ValueAct
(d)(8) Stock Purchase Agreement, dated as of December 29, 2000, by
and between Purchaser and KENETECH (Incorporated by reference
to Amendment No. 7 to Schedule 13D filed by Parent,KENETECH,
ValueAct and VA Partners, L.L.C. on January 2, 2001)
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SIGNATURES
After due inquiry and to the best of his or her knowledge and belief, each
of the undersigned certifies that the information set forth in this statement is
true, complete and correct.
Dated: January 2, 2001 KC HOLDING CORPORATION
By: /s/ Jeffrey W. Ubben
--------------------
Name: Jeffrey W. Ubben
Title: Secretary/Treasurer
VALUEACT CAPITAL PARTNERS, L.P.
By: VA Partners, L.L.C.
its General Partner
/s/ Jeffrey W. Ubben
--------------------
Name: Jeffrey W. Ubben
Title: Managing Member
VA PARTNERS, L.L.C.
/s/ Jeffrey W. Ubben
--------------------
Name: Jeffrey W. Ubben
Title: Managing Member
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EXHIBIT INDEX
Exhibit No.
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(a)(1)(i) Offer to Purchase, dated November 6, 2000.
(a)(1)(ii) Form of Letter of Transmittal
(a)(1)(iii) Form of Notice of Guaranteed Delivery.
(a)(1)(iv) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(1)(v) Form of Letter to Clients for use by Brokers, Dealers, Commerical
Banks, Trust Companies and Other Nominees.
(a)(1)(vi) Form of Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(1)(vii) Supplement to Offer to Purchase, dated November 26, 2000.
(a)(1)(viii) Press Release issued by Purchaser on November 29, 2000.
(a)(1)(ix) Press Release issued by the Company on December 12, 2000.
(a)(1)(x) Press release issued by Purchaser on December 12, 2000.
(a)(1)(xi) Amendment No. 1 to Merger Agreement.
(a)(1)(xii) Press Release issued by Purchaser and the Company on December 19,
2000.
(a)(1)(xiii) Press Release issued by Purchaser on December 28, 2000.
*(a)(1)(xiv) Press Release issued by Parent on January 2, 2001 (incorporated
by reference to Exhibit E of Amendment No. 7 to Schedule 13D
filed by Parent, the Company, ValueAct and VA Partners, L.L.C. on
January 2, 2001).
(a)(5)(i) KENETECH Corporation Press Release, dated October 25, 2000.
(a)(5)(ii) KC Holding Corporation Press Release, dated November 7, 2000.
(a)(5)(iii) Pages 16 through 35 of the Annual Report on Form 10-K filed by
the Company for the year ended December 31, 1999 (incorporated by
reference to the Form 10-K filed by the Company on March 28,
2000).
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(a)(5)(iv) Pages 4 through 17 of the Quarterly Report on Form 10-Q filed by
the Company for the quarterly period ended June 30, 2000
(incorporated by reference to the Form 10-Q filed by the Company
on August 14, 2000).(a)(5)(v) Notice of Motion and Motion for
Leave to File Second Amended and Supplemental Complaint in the
action styled Kohls v. Duthie, et al.
(a)(5)(v) Notice of Motion and Motion for Leave to File Second Amended and
Supplemental Complaint in the action styled Kohls v. Duthie, et
al.
(a)(5)(vi) Pages 3 through 28 of the Quarterly Report on Form 10-Q filed by
the Company for the quarterly period ended September 30, 2000
(incorporated by reference to the Form 10-Q filed by the Company
on November 14, 2000).
(a)(5)(vii) Memorandum Opinion, dated December 11, 2000, in the action styled
Kohls v. Duthie, et al.
*(b)(1) Promissory Note, dated as of December 29, 2000, issued by Parent
in favor of ValueAct.
(c)(1) Fairness Opinion to Houlihan Lokey Howard & Zukin Financial
Advisors, Inc. (included as Annex A to Offer to Purchase).
(c)(2) Presentation to the Company's Special Committee and Board of
Directors by Houlihan Lokey Howard & Zukin Financial Advisors,
Inc., dated October 25, 2000.
(c)(3) Schedule of the 823 U.S. acquisitions considered by Houlihan
Lokey.
(c)(4) Feasibility Assessment of the Proposed Astoria Energy Project.
(d)(1) Agreement and Plan of Merger, dated as of October 25, 2000, among
Parent, Purchaser and the Company (included as Schedule D to
Offer to Purchase).
(d)(2) Confidentiality Agreement, dated June 29, 2000, between ValueAct
and the Company.
(d)(3) Employment Agreement, dated October 25, 2000, between Purchaser
and Mark D. Lerdal.
(d)(4) Voting Agreement, dated October 25, 2000, among Purchaser, Parent
and Mark D. Lerdal.
(d)(5) Subscription and Contribution Agreement, dated October 24, 2000,
among Parent, ValueAct and Mark D. Lerdal.
(d)(6) Guaranty, dated October 25, 2000, executed by ValueAct for the
benefit of the Company.
(d)(7) Form of Stockholders Agreement, among Parent, Mark D. Lerdal, and
the persons named therein.
*(d)(8) Stock Purchase Agreement, dated as of December 29, 2000, by and
between Purchaser and the Company (incorporated by reference to
Exhibit E of Amendment No. 7 to Schedule 13D filed by Parent, the
Company, ValueAct and VA Partners, L.L.C. on January 2, 2001).
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(f) Section 262 of the General Corporation Law of State of Delaware;
Chapter 13 of the General Corporation Law of the State of
California (included as Schedule C to Offer to Purchase).
(g) None.
(h) None.
*Filed herewith.
