UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)*
Sparta Foods, Inc.
(Name of Issuer)
Common Stock, $.01 par value per share
(Title of Class of Securities)
846573301
(CUSIP Number)
David Kastelic, Associate General Counsel, Cenex Harvest States Cooperatives
5500 Cenex Drive, Inver Grove Heights, Minnesota 55077
(651) 306-3712
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
November 12, 1999
(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 that is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box [ ].
Note: Schedules filed in paper format shall include a signed original and five
copies of the Schedule, including all exhibits. See ss. 240.13d-7(b) for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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CUSIP NO. 846573301 SCHEDULE 13D
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1 NAME OF REPORTING PERSON, IRS IDENTIFICATION NO. OF ABOVE PERSON
Cenex Harvest States Cooperatives
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Minnesota
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7 SOLE VOTING POWER
NUMBER OF 1,617,652 (1)(2)(3)
SHARES -----------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH -----------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 1,617,652 (1)(2)(3)
WITH -----------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,617,652(1)(2)(3)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*[ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.7% (based on 10,191,416 shares outstanding on July 30, 1999)
(1)(2)(3)
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14 TYPE OF REPORTING PERSON
CO
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(1) Includes 1,515,152 shares of Issuer's Common Stock issuable upon
conversion of 2,500 shares of Preferred Stock, Series 1998, par value
$1,000.00 per share ("Issuer's Preferred Stock").
(2) Includes 6,000 shares of Issuer's Common Stock issuable within 60 days of
the date hereof upon exercise of the vested portion of an option to
purchase 15,000 shares of Issuer's Common Stock held by John D. Johnson,
President and General Manager of Cenex Harvest States Cooperatives, as
previously reported on this Schedule 13D.
(3) Includes 4,000 shares of Issuer's Common Stock owned by Duane Risan, a
director of Cenex Harvest States Cooperatives, as previously reported on
this Schedule 13D.
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AMENDMENT NO. 3
TO
SCHEDULE 13D
This Amendment No. 3 amends the Schedule 13D, filed February 6, 1998
(as previously amended) of Cenex Harvest States Cooperatives, a Minnesota
corporation (formerly Harvest States Cooperatives) ("Cenex Harvest States"),
with respect to the common stock, $.01 par value ("Issuer's Common Stock"), of
Sparta Foods, Inc., a Minnesota corporation (the "Issuer"), to report additional
action taken by Cenex Harvest States. This amendment amends only those portions
of the information previously reported that have changed since the prior filing.
Item 4. Purpose of Transaction.
As previously disclosed, Cenex Harvest States and the Issuer entered
into a Stock Purchase Agreement, dated February 24, 1998, pursuant to which
Cenex Harvest States purchased 2,500 shares of the Preferred Stock, Series 1998,
$1,000.00 par value per share, of the Issuer (the "Initial Investment").
Pursuant to the terms of the Initial Investment, John D. Johnson, President and
General Manager of Cenex Harvest States, has served as a director of the Issuer
since that time. In his capacity as a director, Mr. Johnson has received
non-public information about the Issuer. In addition, other representatives of
Cenex Harvest States have received certain non-public information about the
Issuer from representatives of the Issuer from time to time.
In October and early November, Jim Tibbetts, Executive Vice President,
Food Group of Cenex Harvest States, had discussions with representatives of the
Issuer regarding an additional investment in or acquisition of the Issuer.
On November 12, 1999, Cenex Harvest States and the Issuer jointly
announced that Cenex Harvest States and the Issuer have entered into an
agreement by which Cenex Harvest States has been granted until December 31, 1999
the exclusive right to negotiate the acquisition of the Issuer. Any acquisition
would depend on satisfactory due diligence by Cenex Harvest States, negotiation
of a mutually acceptable purchase price and negotiation of a satisfactory
definitive agreement. In any acquisition, shareholders of the Issuer would
receive cash in exchange for Issuer's Common Stock.
Item 7. Materials to Be Filed as Exhibits
(a) Exclusivity Letter, dated November 12, 1999, by and between Cenex
Harvest States Cooperatives and Sparta Foods, Inc.
(b) Press Release of Cenex Harvest States and Sparta Foods, Inc., dated
November 12, 1999.
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Signature
After reasonable inquiry and to the best of the knowledge and belief of
the undersigned, the undersigned certifies that the information set forth in
this statement by or about the undersigned is true, complete and correct.
Date: November 15, 1999
CENEX HARVEST STATES COOPERATIVES
By /s/ John Schmitz
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John Schmitz
Senior Vice President and
Chief Financial Officer
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<PAGE>
Exhibit A
CENEX HARVEST STATES COOPERATIVES
5500 CENEX DRIVE
INVER GROVE HEIGHTS, MN 55077
November 12, 1999
Mr. Joel P. Bachul
President and Chief Executive Officer
Sparta Foods, Inc.
1565 First Avenue NW
New Brighton, MN 55112
Dear Joel:
Based upon your recent conversations with Jim Tibbetts, we are excited
about the prospect of combining the business of Sparta Foods with the resources
of Cenex Harvest States. Subject to completion of due diligence, negotiation of
a mutually acceptable purchase price and negotiation of a satisfactory
definitive agreement (the "Agreement"), we contemplate the acquisition of Sparta
Foods. We will present our initial valuation to you within the next few days.
The execution of this letter agreement would be announced in a joint press
release, to be released today.
Any acquisition would take the form of a cash-out merger, pursuant to
which Sparta Foods would become a wholly owned subsidiary of Cenex Harvest
States. Cenex Harvest States and Sparta Foods will proceed in good faith toward
negotiation and execution of the Agreement, which would contain mutually
agreeable terms, representations, conditions, covenants and indemnities. If the
Agreement has not been executed by 5:00 p.m. (Central Time), on December 31,
1999 ("Termination Time"), this letter shall automatically terminate. The
obligations of the parties will be subject to the terms of the Agreement, but
the obligations pursuant to the numbered paragraphs below are intended to be
binding and enforceable obligations of the parties.
Cenex Harvest States and Sparta Foods agree that:
1. Until the Termination Time, (a) Sparta Foods shall not,
directly or indirectly, through any representative or otherwise,
solicit or entertain offers from, negotiate with, furnish information
(other than publicly available information) to or in any manner
encourage, discuss, accept or consider any proposal of any other person
relating to the acquisition of Sparta Foods, its assets or business, in
whole or in part, whether directly or indirectly, through purchase,
merger, consolidation or otherwise (other than sales of inventory in
the ordinary course); (b) Sparta Foods shall immediately notify the
undersigned regarding any contact between the Sparta Foods or its
representatives and any other person regarding any such offer or
proposal or any related inquiry; and (c) Sparta Foods shall immediately
suspend all discussions with other potential buyers.
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2. Until the Termination Time, Sparta Foods shall negotiate
exclusively with Cenex Harvest States and afford Cenex Harvest States
full and free access to Sparta Foods, its management, properties,
contracts, books and records, and all other documents and data and
shall operate its business in the ordinary course and refrain from any
extraordinary transactions.
3. Except as contemplated above, without the prior written
consent of the other party, prior to the Termination Time neither Cenex
Harvest States nor Sparta Foods shall, directly or indirectly, make any
public comment, statement or communication with respect to, or
otherwise disclose or permit the disclosure of the existence of
discussions regarding, a possible transaction between the parties or
any of the terms, conditions or other aspects of the transaction
proposed in this letter. If a party is required by law to make any such
disclosure, it shall first provide to the other party the content of
the proposed disclosure, the reasons that such disclosure is required
by law, and the time and place that the disclosure will be made.
Except as provided in the numbered paragraphs above, this letter does not
constitute and will not give rise to any legally binding obligation on the part
of either of the parties. Except as provided in the numbered paragraphs above,
no past or future action, course of conduct or failure to act relating to the
transactions contemplated hereby will give rise to or serve as a basis for any
obligation or other liability on the part of either of the parties.
Please contact me at (651) 306-6527 if you have any questions regarding
the content of this letter. Otherwise, please indicate your concurrence below by
returning a copy to me. I look forward to the successful combination of Sparta
Foods with Cenex Harvest States.
Very truly yours
CENEX HARVEST STATES COOPERATIVES
By: /s/ Patrick Kluempke
------------------------------------
Title: Senior Vice President--
Business Planning
Agreed to and accepted:
SPARTA FOODS, INC.
By: /s/ Joel P. Bachul
- -------------------------------
Title: President and
Chief Executive Officer
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<PAGE>
Exhibit B
SPARTA FOODS IN EXCLUSIVE NEGOTIATIONS TO BE ACQUIRED BY
CENEX HARVEST STATES COOPERATIVES
ST. PAUL, Minn., Nov. 12 -- Sparta Foods, Inc. (Nasdaq: SPFO), and Cenex
Harvest States Cooperatives jointly announced today that they have entered into
an agreement under which Cenex Harvest States has been granted until Dec. 31,
1999, the exclusive right to negotiate the acquisition of Sparta Foods. Any
acquisition would depend on satisfactory due diligence by Cenex Harvest States,
negotiation of a mutually acceptable purchase price and negotiation of a
satisfactory definitive agreement.
Sparta shareholders would receive cash in exchange for their Sparta Foods
common shares in any such acquisition. At present, Cenex Harvest States is the
beneficial holder of convertible preferred and common shares of Sparta foods
equivalent to, if the preferred shares were to be converted, approximately 14
percent of Sparta Foods' outstanding common shares.
Further details of the transaction will not be disclosed until completion
of the negotiations.
Cenex Harvest States Cooperatives, with headquarters in suburban St. Paul,
Minn., is a producer-to-consumer cooperative system owned by farmers, ranchers
and their local co-ops from the Great Lakes to the Pacific Northwest, and from
the Canadian border to Texas. Through a broad range of partnerships, this fully
integrated agricultural foods cooperative also markets and distributes petroleum
products, agronomic inputs and feed to rural America, as well as grain and
processed food products to customers worldwide.
Sparta Foods, Inc., located in New Brighton, Minn., and Phoenix, Ariz., is
a regional market leader in the production and distribution of tortillas and
value-added tortilla products to the retail and foodservice industries. The
Company's product lines include tortillas, tortilla chips and other snack
products, and picante and other salsas. Sparta Foods distributes its food
products to retail grocery chains and general merchandise retailers throughout
the Midwest and Southwest U.S. principally under the Arizona Brand(R), Cruz(R),
La Campana Paradiso(R), La Canasta(R), and Spanish Bell(R) labels. Foodservice
customers include Perkins Family Restaurants, Friendly's Restaurants and other
nationally-known restaurants and distributors.
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11/12/99
