UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. _____)1
Sybron Chemicals Inc.
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(Name of Issuer)
Common Stock, $.01 par value
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(Title of Class of Securities)
870903101
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(Cusip Number)
Daniel R. Tisch
c/o Mentor Partners, L.P.
500 Park Avenue
New York, New York 10022
(212) 935-7640
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
January 23, 1998
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(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 [ ]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
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1 The remainder of this cover page shall be filled out for a reporting
persons'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.).
Page 1 of 12 Pages
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SCHEDULE 13D
CUSIP No. 870903101 Page 2 of 12 Pages
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1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Mentor Partners, L.P. Employer I.D.# 06-126-0469
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
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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
State of Delaware
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NUMBER OF 7 SOLE VOTING POWER
SHARES 297,400
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BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
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EACH 9 SOLE DISPOSITIVE POWER
REPORTING 297,400
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PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
297,400
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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)
5.2%
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14 TYPE OF REPORTING PERSON*
PN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 2 of 12 Pages
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Item 1. Security and Issuer.
This statement relates to shares (the "Shares") of the Common Stock, $.01
par value, of Sybron Chemicals Inc., a Delaware corporation (the "Company"). The
Company's principal executive offices are located at Birmingham Rd., P.O. Box
66, Birmingham, New Jersey 08011.
Item 2. Identity and Background.
This statement is filed on behalf of Mentor Partners, L.P., a Delaware
limited partnership (the "Partnership") with respect to Shares of the Company
(a) owned by the Partnership and (b) owned by Mentor Offshore Fund Limited
("Offshore"), a Cayman Islands company. The general partner of the Partnership
is WTG & Co., L.P., a Delaware limited partnership (the "General Partner") and
the general partner of the General Partner is D. Tisch & Co., Inc., a Delaware
corporation ("D. Tisch & Co."), all of the common stock of which is owned by
Daniel R. Tisch (collectively with D. Tisch & Co. and the General Partner, the
"Control Persons").
The address of the principal offices and principal business of the
Partnership and each of the Control Persons is 500 Park Avenue, New York, New
York 10022.
The Partnership's principal business is investment in securities, primarily
in connection with "merger" (or "risk") arbitrage and, to a lesser extent,
classic arbitrage, including
Page 3 of 12 Pages
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convertible securities arbitrage. The principal business of the General Partner
is serving as the general partner of the Partnership. The General Partner acts
as the investment advisor to Offshore and votes shares held by Offshore. The
sole business of D. Tisch & Co. is serving as the general partner of the General
Partner, and other than such service, D. Tisch & Co. has no investment or
operating history of any kind. Daniel R. Tisch's principal occupation is that of
President and sole Director of D. Tisch & Co., and he is a United States
citizen.
Neither the Partnership nor, to its best knowledge, any of the Control
Persons has during the last five years: (i) been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, Federal or State securities laws or finding any
violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
The $8,671,171.37 used to purchase Shares of the Company for the
Partnership came from the Partnership's working capital, which may at any given
time include funds borrowed in the ordinary course of its business activities
from margin accounts. All Shares of the Company acquired by the Partnership were
Page 4 of 12 Pages
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purchased in the ordinary course of business.
The $1,159,120.40 used to purchase Shares of the Company for Offshore was
furnished from Offshore's investment capital, which at any given time include
funds borrowed in the ordinary course of its business activities from margin
accounts. All of the Shares of the Company acquired for Offshore were purchased
in the ordinary course of business.
Item 4. Purpose of Transaction.
The Partnership and Offshore acquired the Shares of the Company for
investment purposes, and only in the ordinary course of business.
In the ordinary course of business, the Partnership and/or Offshore from
time to time evaluate their holdings of securities, and based on such
evaluation, the Partnership and/or Offshore may determine to acquire or dispose
of securities of specific issuers.
Neither the Partnership nor, to its knowledge, any of the Control Persons
or Offshore have any present plans or intentions which would result in or relate
to any of the transactions described in subparagraphs (a) through (j),
inclusive, of Item 4 of Schedule 13D. As noted in its letter of January 30, 1998
to Citicorp, which is hereby incorporated herein as Exhibit B, the Partnership
is bothered by the conduct of Citicorp and its employees in regard to their
refusal to consider a superior
Page 5 of 12 Pages
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proposal from GenCorp relating to the Shares of the Company.
Item 5. Interest in Securities of the Issuer.
(a) As of the date hereof, the Partnership owns beneficially an aggregate
of 262,400 Shares of the Company (or approximately 4.6% of the Company's Common
Stock outstanding on September 30, 1997) and the Partnership may be deemed to
own beneficially an aggregate of an additional 35,000 Shares of the Company (or
0.6% of the Company common stock outstanding on September 30, 1997) owned by
Offshore, in each case based on the number of 5,672,061 Shares of Company Common
Stock then outstanding as set forth in the Company's most recent filing with the
Securities and Exchange Commission.
(b) The Partnership (through the Control Persons) has the sole power to
vote, and dispose of, all the Shares beneficially owned by the Partnership. In
addition, the General Partner is a party to investment management agreements
pursuant to which the General Partner has investment responsibility with respect
to the Company's Shares owned by Offshore. Pursuant to such agreements, Mr.
Tisch has the power to dispose of (or to direct the disposition of) the Shares
of the Company owned by Offshore.
(c) Except as set forth in Exhibit A, which is hereby incorporated herein
by reference, no transactions in the Shares have been effected during the past
sixty days by the Partnership or, to its best knowledge, any of the Control
Persons or
Page 6 of 12 Pages
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Offshore.
(d) Neither the Partnership nor, to its best knowledge, any of the Control
Persons or Offshore have or know any other person who has the right to receive
or the power to direct the receipt of dividends from, or the proceeds from the
sale of, any Shares beneficially owned by the Partnership or Offshore.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationship
with Respect to Securities of the Issuer.
Except as referred or described above, there are no contracts,
arrangements, understandings or relationships (legal or otherwise) among the
persons named in Item 2 or between any of such persons and any other person with
respect to any securities of the Company.
Item 7. Material to be Filed as Exhibits.
Exhibit A -- Acquisitions of Shares by the Partnership and
Offshore During the Past Sixty Days.
Exhibit B -- Letter, dated January 30, 1998, from the
Partnership to Citicorp.
Page 7 of 12 Pages
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
February 2, 1998
----------------
(Date)
/s/ Daniel Tisch
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(Signature)
Daniel R. Tisch
Authorized Signatory
MENTOR PARTNERS, L.P.
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(Name/Title)
Page 8 of 12 Pages
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EXHIBIT INDEX
Exhibit A -- Acquisitions of Shares by the Partnership and
Offshore During the Past Sixty Days.
Exhibit B -- Letter, dated January 30, 1998, from the
Partnership to Citicorp.
Page 9 of 12 Pages
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EXHIBIT A
Acquisitions of Shares by the Partnership
and Offshore During the Past Sixty Days
---------------------------------------
Date of Number Aggregate Price Per
Entity Transaction of Shares Price Share
Partnership December 12, 1997 27,900 936,324.00 33.560
December 15, 1997 5,000 167,800.00 33.560
December 17, 1997 200 6,712.00 33.560
December 29, 1997 9,800 327,870.76 33.456
December 30, 1997 5,000 166,550.00 33.310
January 23, 1998 35,000 1,218,350.00 34.810
January 28, 1998 2,200 76,582.00 34.810
January 29, 1998 700 24,367.00 34.810
January 30, 1998 4,500 156,645.00 34.810
Offshore December 12, 1997 6,100 204,716.00 33.560
December 15, 1997 3,900 130,884.00 33.560
January 23, 1998 5,000 174,050.00 34.810
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All Shares acquired by the Partnership and Offshore were purchased in
transactions on the American Stock Exchange.
Page 10 of 12 Pages
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EXHIBIT B
MENTOR PARTNERS, L.P.
500 PARK AVENUE
NEW YORK, N.Y. 10022
(212) 935-6655
January 30, 1998
Mr. John S. Reed
Citicorp
399 Park Avenue
New York, New York 10043
Re: Sybron Chemicals, Inc.
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Dear Mr. Reed,
Recently 399 Venture Partners, Inc., a wholly owned subsidiary of Citibank,
N.A., was a party to the proposed acquisition of Sybron Chemicals, Inc. (the
"Company") by an investor group. Based on a recent 13-D, 399 Venture Partners
owned 2,025,000 shares or approximately 35% of the Company. Paul C. Schorr, Vice
President of Citicorp Venture Capital, Ltd. is a director of Sybron Chemical.
The involvement of Citibank and the manner in which this proposed takeover was
handled raises many concerns.
Sybron Chemicals was brought public in an IPO in March of 1992 at $20 per
share. Based on figures supplied in the Company's own proxy statement for the
1997 Annual Meeting the cumulative total return for an investment in Sybron from
the IPO through December 31, 1996 was a loss of 20%. During the same period the
return in the S&P 500 and the S&P Specialty Chemical Index were 83.5% and 40.7%,
respectively. Clearly management has not delivered value.
On October 20, 1997 Sybron Chemical announced that it had received a
$32-$33 per share buyout offer from an investor group comprised of Citicorp
Venture Capital and members of the Company's management. The group stated that
it owned about 45% of the outstanding shares of Sybron Chemical.
On December 12, 1997 the Company agreed to be acquired for $34.50 a share
in cash. Additional consideration would be paid if the company were sold within
18 months after the merger.
On January 7, 1998 Sybron Chemicals announced that it had rejected an
unsolicited offer by GenCorp Inc. to acquire all of Sybron's stock for $38 a
share in cash. The Company stated that it had rejected the offer as not viable
because the investor group that controlled 45% of the stock of the Company had
indicated that they intend to remain shareholders.
Subsequently an amended 13-D was filed by the investor group indicating
that with the addition of new members they now control in excess of 50% of
Sybron
Page 11 of 12 Pages
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Chemicals.
The conduct of Citicorp in connection with the events in Sybron Chemicals
over the past number of months raises a number of serious questions. Clearly Mr.
Schorr has breached his fiduciary duty to all shareholders by refusing to
consider the superior proposal from GenCorp. We believe that the
responsibilities of the directors of Sybron Chemicals to seek the highest
possible price for the Company are spelled out by the Revlon decision in the
Delaware courts. Citicorp will profit at the public shareholders' expense if the
Investor group buyout is permitted to succeed. We believe that financing for the
inferior offer will be provided by Citicorp, generating both lucrative fees and
a ready source of interest for Citibank.
Congress in eliminating some of the barriers of Glass-Steagall did not
intend for the American banks to use their new found powers to the detriment of
the public. Federal banking regulators have repeatedly expressed concern that
conflicts of interest occur when components of a banking organization play
multiple roles in an investment transaction such as this. It was this concern
that led to the adoption of the Glass-Steagall Act and continues to bolster
those who do not wish to see it further watered down or rescinded. Advocates of
a repeal of the Glass-Steagall restrictions have sought to assure Congress and
the public that fears of conflicts of interest are unfounded. We doubt that in
this day and age that either the Congress or the Federal Reserve Board would
view favorably Citicorp's use of power and position to continue to short circuit
the open, free markets that have been the cornerstone of our economic strength.
We also note that the background to the proposed acquisition of DavCo
Restaurants indicates that Citicorp Venture Capital might have abused their
power and ownership position in this company in a similar manner to the
detriment of the public shareholders.
We strongly urge you and your advisors to reconsider the decisions made by
the managers of Citicorp Venture Capital in the Sybron affair, and to do so
quickly before it becomes impossible to further pursue the GenCorp proposal.
Very truly yours,
MENTOR PARTNERS, L.P.
By: /s/ Daniel R. Tisch
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Daniel R. Tisch, Authorized Signatory
Page 12 of 12 Pages
