UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934 *
MARKETSPAN CORPORATION
----------------------
(Name of Issuer)
Common Stock, par value $.01
----------------------------
(Title of Class of Securities)
57061V07
--------
(CUSIP Number)
Norris Nissim Matthew Nimetz
John A. Levin & Co., Inc. Paul, Weiss, Rifkind,
One Rockefeller Plaza Wharton & Garrison
New York, New York 1285 Avenue of the Americas
10020 New York, New York 10019-6064
(212) 332-8400 (212) 373-3000
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
July 21, 1998
-------------
(Date of Event which Requires Filing of
this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ].
Exhibit Index is at Page 8
<PAGE>
CUSIP NO. 57061V107
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
John A. Levin & Co., Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 SOLE VOTING POWER
1,176,503 shares of Common Stock
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY OWNED 3,323,323 shares of Common Stock
BY EACH REPORTING
PERSON 9 SOLE DISPOSITIVE POWER
WITH
1,165,842 shares of Common Stock
10 SHARED DISPOSITIVE POWER
7,128,016 shares of Common Stock
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,293,858 shares of Common Stock
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.2%
14 TYPE OF REPORTING PERSON
IA
2
<PAGE>
CUSIP NO. 57061V107
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Baker, Fentress & Company
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 SOLE VOTING POWER
1,176,503 shares of Common Stock
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY OWNED 3,323,323 shares of Common Stock
BY EACH REPORTING
PERSON 9 SOLE DISPOSITIVE POWER
WITH
1,165,842 shares of Common Stock
10 SHARED DISPOSITIVE POWER
7,128,016 shares of Common Stock
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,293,858 shares of Common Stock
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.2%
14 TYPE OF REPORTING PERSON
IV
3
<PAGE>
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
Item 1. Security and Issuer
The class of equity securities to which this Schedule 13D relates is the Common
Stock (the "Common Stock") of MarketSpan Corporation ("MarketSpan"). The
principal executive offices of MarketSpan are located at One Metrotech Center,
Brooklyn, New York 11201-3850.
Item 2. Identity and Background
This statement is being filed by John A. Levin & Co., Inc. ("Levco") and Baker,
Fentress & Company ("BKF"), both of which are incorporated in Delaware. Levco is
an investment adviser registered under the Investment Advisers Act of 1940, as
amended, and BKF is a closed-end investment company registered under the
Investment Company Act of 1940, as amended. Levco owns 100% of Levco GP, Inc.
("Levco GP"), the general partner of several private investment partnerships,
and for the purposes of this Schedule 13D, the term "Levco" includes Levco GP,
Inc. The principal office of Levco is located at One Rockefeller Plaza, 25th
Floor, New York, NY 10020. BKF has its offices at 200 West Madison Street,
Chicago, IL 60606. In the last five years, neither Levco nor BKF has been
convicted in a criminal proceeding, nor has either such company in the last five
years been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction that has resulted in a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or in a finding of any violation with
respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
The acquisitions by the reporting persons are being made by Levco on behalf of
client accounts. The source of funds is the capital of each client. Levco
manages a portfolio of publicly traded securities owned by BKF, and BKF holds
shares of MarketSpan in this portfolio. In managing client portfolios, including
that of BKF, Levco generally does not utilize margin or other forms of
borrowing. Certain private, pooled investment vehicles managed by Levco or its
wholly-owned subsidiary, Levco GP, Inc., however, do use margin in implementing
their investment strategies.
Item 4. Purpose of Transaction
Levco has purchased the common stock of MarketSpan for its clients for
investment purposes. Levco intends to review its holdings with respect to
MarketSpan on a continuing basis. Depending on its evaluation of MarketSpan's
business and prospects, and upon future developments (including market prices
for the Common Stock, availability and alternative uses of funds, management's
business plan, conditions in the securities markets and general economic and
industry conditions), Levco may acquire additional shares of Common Stock or
other securities of MarketSpan, sell all or a portion of its shares of Common
Stock or other securities of MarketSpan, now owned or hereafter acquired, or
maintain its position at current levels.
As an investor, Levco makes it a practice to play a supportive and interactive
role with the boards of directors and managements of the companies in which it
invests. Levco has communicated to management and the Board of Directors its
belief that MarketSpan should engage in a substantial stock buyback program in
view of the undervaluation of the shares. Levco believes that this could be
followed by a merger with another utility company to realize value for the
shareholders and rate reductions for consumers. Levco has also communicated its
opposition to the use of more than a relatively small portion of MarketSpan's
$1.975 billion ($12 per share) in available cash for acquisitions. Levco is
concerned that MarketSpan maximize shareholder value and not use the cash to
transform itself into an energy conglomerate, which in Levco's view would be
likely to depress share value further. Levco believes that acquisitions in
excess of an aggregate of $250 million be subject to a shareholder vote until
the next shareholders meeting. Furthermore, in the event that the management
structure approved at the last shareholder meeting does not remain in place,
Levco would propose that an interim chairman, who is not presently a director,
should be appointed until a special meeting of shareholders can be convened,
which meeting should be held as soon as practicable. The appointment of the
interim chairman should facilitate shareholders and management coming to a
consensus as to the future direction MarketSpan should take. Toward the same
end, Levco would propose that a special committee of directors be formed to
address shareholder concerns. Levco believes it is appropriate that a special
committee be formed in order to meet and work with shareholders in determining,
in a timely fashion, the future direction of the company. The special committee
should retain an independent investment banker to help determine what actions
would best increase shareholder value.
Except as described above and in this paragraph, Levco has no present plans or
proposals which relate to, or would result in, any of the matters enumerated in
paragraphs (b) through (j), inclusive, of Item 4 of Schedule 13D. Levco may, at
any time and from time to time, review or reconsider its position with respect
to MarketSpan and formulate plans or proposals with respect to any of such
matters. Levco intends to continue to make its views about the Company known to
management, the Board of Directors and other interested parties. In view of its
sizable holdings in the Company, Levco will closely monitor the Company's
actions and, if it believes the Company's management and board are not
responsive to the need to address the undervaluation of MarketSpan's equity,
Levco would consider taking further action to promote the best interest of the
shareholders.
Item 5. Interest in Securities of Issuer
The responses to Items 7, 8, 9, 10, 11 and 13 of the inside cover pages of this
Schedule 13D are hereby incorporated by reference in response to this Item 5.
The trading dates, number of shares of Common Stock purchased and average price
per share for all transactions in the Common Stock by Levco during the past 60
days are set forth on Exhibit
4
<PAGE>
99.1 hereto. All such transactions were open market transactions and were
effected on the New York Stock Exchange. Also included are transactions during
such period in the securities of Long Island Lighting Company, MarketSpan's
predecessor.
The shares of Common Stock held by Levco are held for the benefit of its
investment advisory clients, including BKF. Each such client has the right to
receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of, the securities held in such person's account. No such person
has any of the foregoing rights with respect to more than 5% of the Common
Stock.
Item 6. Contracts, Arrangements, Understandings or Relationships with respect to
Securities of the Issuer.
BKF is the sole shareholder of Levin Management Co., Inc., which in turn is the
sole shareholder of John A. Levin & Co., Inc., which in turn is the sole
shareholder of Levco GP. Levco, as an investment advisor, beneficially owns the
shares of Common Stock it holds for the accounts of its investment advisory
clients. Except as described herein, there are no contract arrangements,
understandings or relationships (legal or otherwise) among the persons named in
Item 2 hereof and between such persons and any person with respect to any
securities of MarketSpan, including, but not limited to, transfer or voting of
any of the securities, finder's fees, joint ventures, loan or option agreements,
puts or calls, guarantees of profits, division of profits or loss, or the giving
or withholding of proxies.
Item 7. Exhibits
The following are filed herewith as exhibits to this Schedule 13D:
99.1 Table of Transactions in Common Stock by Levco.
99.2 Joint Filing Agreement dated as of July 27, 1998.
5
<PAGE>
SIGNATURE
After reasonable inquiry and to their best knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.
Dated: July 27, 1998
JOHN A. LEVIN & CO., INC.
By: /s/ John A. Levin
---------------------
John A. Levin
Chairman and Chief Executive Officer
BAKER, FENTRESS & CO., INC.
By: /s/ John A. Levin
---------------------
John A. Levin
President
6
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
99.1 Table of Transactions in Common Stock by Levco.
99.2 Joint Filing Agreement dated as of July 27, 1998.
7
Exhibit 99.1
TRANSACTIONS IN COMMON STOCK BY LEVCO
LONG ISLAND LIGHTING COMPANY
<TABLE>
<CAPTION>
<S> <C> <C> <C>
NO. OF SHARES AVERAGE PRICE DATE BUY/SELL
425 27.7637647 5/26/98 sl
1853 28.1249757 5/26/98 by
112592 27.9124957 5/27/98 by
103369 28.146339 5/27/98 sl
30707 30.1479799 5/28/98 sl
4580 29.2614629 5/28/98 by
34517 30.4139699 5/29/98 by
<PAGE>
MARKETSPAN CORPORATION
<S> <C> <C> <C>
NO. OF SHARES AVERAGE PRICE DATE BUY/SELL
11888 33.96964 6/1/98 by
17 34.4629429 6/1/98 sl
10864 33.6223 6/2/98 by
468 32.796.71 6/2/98 sl
3778 32.76529 6/3/98 by
2524 31.9746 6/4/98 cs
2736 31.81393 6/4/98 sl
3696 32 6/4/98 by
3723 32.58428 6/5/98 by
165 32.49879 6/5/98 sl
2296 33.25419 6/8/98 by
21 32.93476 6/8/98 sl
2417 33 6/9/98 by
56 32.81107 6/9/98 sl
13741 31.94154 6/10/98 sl
2602 32.10049 6/10/98 by
2719 31.87501 6/11/98 by
603 30.99896 6/12/98 sl
3083 31.12501 6/12/98 by
46 30.87391 6/15/98 sl
2162 31.03 6/15/98 by
7900 30.77322 6/16/98 sl
<PAGE>
<S> <C> <C> <C>
NO. OF SHARES AVERAGE PRICE DATE BUY/SELL
1201 30.75 6/16/98 by
109 31.47257 6/17/98 sl
3825 31.25 6/17/98 by
18 30.81111 6/18/98 sl
4753 30.87502 6/18/98 by
534 30.5085 6/19/98 sl
1310 30.37501 6/19/98 by
30 30.24867 6/22/98 sl
2273 30.43751 6/22/98 by
10711 29.39925 6/23/98 sl
37124 29.65113 6/23/98 by
3267 29.62501 6/24/98 by
179 29.55972 6/24/98 sl
22058 29.38957 6/25/98 sl
2271 29.7076 6/25/98 by
23381 29.52025 6/26/98 by
20 29.4985 6/26/98 sl
3690 30.21971 6/29/98 by
337 30.18644 6/29/98 sl
3241 30.31251 6/30/98 by
64 29.99875 6/30/98 sl
4642 29.97387 7/1/98 by
23 29.9987 7/1/98 sl
1729 30.18752 7/2/98 by
1088 30.08912 7/2/98 sl
<PAGE>
<S> <C> <C> <C>
NO. OF SHARES AVERAGE PRICE DATE BUY/SELL
3352 30.43752 7/6/98 by
72 30.31125 7/6/98 sl
5581 30.52889 7/7/98 by
74 28.76405 7/7/98 sl
3139 30.2293 7/8/98 by
127 29.94882 7/8/98 sl
5074 29.93043 7/9/98 by
120 29.8765 7/9/98 sl
4984 29.62501 7/10/98 by
72 29.43625 7/10/98 sl
10015 29.84809 7/13/98 by
8484 29.07488 7/13/98 sl
25262 28.13118 7/14/98 by
11 28.49818 7/14/98 sl
36786 28.00529 7/15/98 by
26420 27.88289 7/16/98 by
119 27.74899 7/16/98 sl
69285 26.88498 7/17/98 by
40 26.93625 7/17/98 sl
266358 27.06674 7/20/98 by
178 27.18652 7/20/98 sl
139096 27.51243 7/21/98 by
</TABLE>
Exhibit 99.2
JOINT FILING AGREEMENT
Pursuant to Rule 13d-1(k)(1) promulgated under the Securities Exchange
Act of 1934, as amended, the undersigned agree that the Statement to which this
Exhibit is attached is filed on behalf of each of them.
Dated: July 27, 1998
JOHN A. LEVIN & CO., INC.
By: /s/ John A. Levin
---------------------
John A. Levin
Chairman and Chief Executive Officer
BAKER, FENTRESS & CO., INC.
By: /s/ John A. Levin
---------------------
John A. Levin
President
9
