<PAGE> 1
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): July 1, 1996
MICHAEL FOODS, INC.
------------------
(Exact name of registrant as specified in its charter)
DELAWARE 0-15568 41-1579532
-------- ------- ----------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification
Number)
324 PARK NATIONAL BANK BUILDING
5353 WAYZATA BOULEVARD
MINNEAPOLIS, MINNESOTA 55416
-------------------------------
(Address of principal executive offices) (Zip Code)
(612) 546-1500
--------------
(Registrant's telephone number, including area code)
NOT APPLICABLE
--------------
(Former name or former address, if changed since last report)
<PAGE> 2
ITEM 5. OTHER EVENTS
On July 1, 1996, Michael Foods, Inc., a Delaware corporation ("Michael"),
entered into an Agreement and Plan of Reorganization (the "Merger Agreement")
with Papetti's Hygrade Egg Products, Inc., a New Jersey corporation
("Papetti's") and other entities related to Papetti's ("Related Entities"),
pursuant to which, through a series of transactions, Michael will acquire the
assets of Papetti's through a merger and the assets of the Related Entities
through merger or asset purchase. The merger with Papetti's has been structured
so that it will qualify as a tax free reorganization under Section 368(a) of the
Internal Revenue Code of 1986, as amended and will be accounted for as a
purchase. The purchase price will be comprised of 3.4 million shares of Michael
common stock, assumption of approximately $28 million of debt and approximately
$48 million in cash, subject to certain adjustments. See Press Release of
Michael dated July 1, 1996 regarding the Merger Agreement filed as an Exhibit
hereto.
On July 2, 1996, Michael and North Star Universal, Inc. ("NSU") announced
that Michael and NSU have agreed to certain modifications to the Agreement and
Plan of Reorganization between Michael, NSU and NSU Merger Co. dated December
21, 1995 ("NSU Agreement") in light of the transactions between Michael,
Papetti's and the Related Entities. The modifications to the NSU Agreement
provide for a different method to determine the Michael stock price utilized to
determine the number of Michael shares effectively retired pursuant to the NSU
Agreement. NSU will set the Michael stock price by utilizing the average
closing price for Michael stock from any prior period of ten consecutive
business days beginning on the date of the 1996 annual meetings of Michael and
NSU and ending on the transactions' closing date. In addition, the Net
Indebtedness to be assumed by Michael will be in the range of $15 million to $29
million, rather than the previous range of $25 million to $38 million, and the
Michael stock price discount factor will correspondingly range between 6% and
9%. All other terms of the NSU Agreement will remain essentially the same. See
Press Release of Michael dated July 2, 1996 regarding modifications to the NSU
Agreement filed as an Exhibit hereto.
<PAGE> 3
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
Exhibit Number Description
- -------------- -----------
20 Press release of Michael, issued July 1, 1996,
regarding the Merger Agreement.
20A Press release of Michael, issued July 2, 1996,
regarding modifications to the NSU Agreement.
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 hereunto duly authorized.
Dated: July 10, 1996
MICHAEL FOODS, INC.
By: /s/ John D. Reedy
-----------------------
John D. Reedy, Vice President-Finance,
Chief Financial Officer and Treasurer
<PAGE> 4
EXHIBIT INDEX
Exhibit Number Description Page
- -------------- ----------- ----
20 Press release of Michael, issued July 1, 1996, regarding
the Merger Agreement.
20A Press release of Michael, issued July 2, 1996, regarding
modifications to the NSU Agreement.
<PAGE> 1
Michael Foods, Inc. news release of July 1, 1996
Contact: Mark D. Witmer, Assistant Treasurer, Michael Foods, Inc.
(612) 546-1500
FOR IMMEDIATE RELEASE
MICHAEL FOODS AND PAPETTI'S HYGRADE EGG PRODUCTS TO MERGE
- ---------------------------------------------------------
Minneapolis, July 1 -- Michael Foods, Inc. (Nasdaq:MIKL) and Papetti's Hygrade
Egg Products, Inc. and its affiliates ("Papetti's") today announced they have
entered into an agreement whereby Michael Foods will purchase Papetti's in a
cash and stock transaction valued at approximately $85 million. Additionally,
Michael Foods is to assume approximately $28 million of debt held by Papetti's.
Papetti's, based in Elizabeth, New Jersey, is the world's largest further
processed egg products producer with annual sales in excess of $275 million.
The net sales of Michael Foods after the merger are expected to exceed $900
million annually.
The merger, which has been approved by the Michael Foods Board of Directors,
will be accounted for as a purchase. Completion of the transaction is subject
to finalization of the companies' due diligence reviews, various regulatory
approvals and certain other conditions. It is expected that the transaction
will close this fall. The pending merger previously announced between Michael
Foods and North Star Universal, Inc. is now likely to close some time after the
third quarter due to the need to provide information regarding the Papetti's
transaction to the governmental bodies reviewing the North Star merger.
Commenting on the Papetti's merger, Gregg A. Ostrander, President and CEO of
Michael Foods, said, "We are excited about Papetti's joining forces with
Michael Foods. This is a strategic combination which will result in the
creation of a strong, broad egg products team able to globally serve customers'
needs in virtually any egg product category. The depth and breadth of our
combined product development, processing, customer service and sales
capabilities will be unparalleled in the egg products industry. With combined
egg products sales of approximately $500 million, we expect to see significant
synergies emerge in the years ahead, which will further enhance our growth
prospects and strengthen our leadership in bringing value-added products to the
market."
Arthur N. Papetti, President of Papetti's, added, "Our family has a long and
proud history in the egg products business. Aligning our resources with those
of Michael Foods will enhance our combined leadership in egg products. The
combined operations of the Papetti's and M. G. Waldbaum egg products businesses
will be able to aggressively explore growth avenues that would be more
difficult to pursue independently. We look forward to becoming a member of the
Michael Foods family of companies and to capitalizing on the opportunities that
lie ahead."
Michael Foods, Inc. is a diversified food processor and distributor with
particular interests in egg products, refrigerated grocery products, frozen and
refrigerated potato products and specialty dairy products. Principal
subsidiaries include M. G. Waldbaum Company, Crystal Farms Refrigerated
Distribution Company, Northern Star Co. and Kohler Mix Specialties, Inc.
# # #
7-1-96
<PAGE> 1
Michael Foods, Inc. news release of July 2, 1996
Contact: Peter E. Flynn, Executive Vice President, North Star Universal, Inc.
(612) 941- 3200
Contact: Mark D. Witmer, Assistant Treasurer, Michael Foods, Inc.
(612) 546-1500
FOR IMMEDIATE RELEASE
MICHAEL FOODS AND NORTH STAR UNIVERSAL AGREE TO MODIFICATIONS
- -------------------------------------------------------------
MINNEAPOLIS, July 2 -- Michael Foods, Inc. (Nasdaq-MIKL) and North Star
Universal, Inc. ("NSU") (Nasdaq-NSRU) jointly announced today that they have
agreed in principle to make certain modifications to the Agreement and Plan of
Reorganization ("Reorganization Agreement") between the two companies and NSU
Merger Co., in order to accommodate delays that may be caused by the pending
acquisition by Michael Foods of Papetti's Hygrade Egg Products, Inc. and its
affiliates.
As previously announced, under the terms of the Reorganization Agreement,
Michael Foods and North Star Universal are to merge via a series of
transactions that will result in Michael Foods repurchasing and retiring a
portion of NSU's Michael Foods stock holdings, at a discount to the average
market price of Michael Foods' stock, by assuming NSU's net outstanding debt.
NSU's remaining Michael Foods stock holdings will then be allocated pro rata to
NSU's stockholders. The repurchase transaction will be accomplished through a
tax-free business combination of Michael Foods and NSU. The resulting
publicly-held entity will be named Michael Foods, Inc. and will operate the
present businesses of Michael Foods.
In a second part to the transactions, NSU will form a new company which will
hold NSU's assets remaining at the time of the closing of the transactions.
Such assets currently include two computer networking companies and an equity
holding in CorVel Corporation (Nasdaq-CRVL). Shares of this new company,
ENStar Inc., will be spun-off tax-free to NSU's stockholders and will be
publicly traded after the spin-off. The transactions are subject to receipt of
an Internal Revenue Service ruling that the transactions are tax-free to the
stockholders of Michael Foods and NSU, the approval of both company's
stockholders, and other closing conditions.
Under the modified Reorganization Agreement, the method for determining the
stock price to which a discount will be applied has been changed. NSU will set
the Michael Foods stock price that will be utilized by fixing the average
closing price for Michael Foods' stock from any prior period of 10 consecutive
business days beginning on the date of the 1996 annual meetings of the two
companies and ending on the transactions' closing date. Also, the net
outstanding debt to be assumed by Michael Foods will be within a range of $15 -
$29 million, rather than the previously negotiated $25 - $38 million, and a
stock price discount within a range of 6% - 9% will be applied depending upon
the specific debt amount. The other terms and conditions of the Reorganization
Agreement remain essentially the same.
Michael Foods, Inc. is a diversified food processor and distributor with
particular interests in egg products, refrigerated grocery products, frozen and
refrigerated potato products and specialty dairy products. Principal
subsidiaries include M. G. Waldbaum Company, Crystal Farms Refrigerated
Distribution Company, Northern Star Co. and Kohler Mix Specialties, Inc.
North Star's direct and indirect wholly-owned subsidiaries include Americable,
Inc. and Transition Networks, Inc. Americable is a provider of connectivity
and networking products and services. Transition Networks designs,
manufactures and markets connectivity devices used in local area network
("LAN") applications. North Star also owns a 38% interest in Michael Foods,
Inc. and a 27% interest in CorVel Corporation.
# # #
7-2-96
