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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9/A
(AMENDMENT NO. 1)
SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO
SECTION 14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
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THE LOEWEN GROUP INC.
(Name of Subject Company)
THE LOEWEN GROUP INC.
(Name of Person(s) Filing Statement)
COMMON SHARES, WITHOUT PAR VALUE
(AND ASSOCIATED SHARE PURCHASE RIGHTS)
6.00% CUMULATIVE REDEEMABLE CONVERTIBLE FIRST
PREFERRED SHARES, SERIES C, WITHOUT PAR VALUE
(Title of Class of Securities)
54042L100
54042L407
(CUSIP Number of Class of Securities)
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Peter S. Hyndman
Vice President, Law and Corporate Secretary
The Loewen Group Inc.
4126 Norland Avenue
Burnaby, British Columbia
Canada V5G 3S8
(604) 299-9321
(Name, Address and Telephone Number of Person Authorized to Receive
Notice and Communications on Behalf of the Person(s) Filing Statement)
WITH A COPY TO:
Lyle G. Ganske, Esq.
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
(216) 586-3939
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ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
Except for Exhibit 43 which is filed herewith, the following Exhibits
were previously filed with the Schedule 14D-9:
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Exhibit 1 -- Letter from L. William Heiligbrodt to Raymond L. Loewen, dated September 17,
1996.
Exhibit 2 -- Letter from L. William Heiligbrodt to Raymond L. Loewen, dated September 18,
1996.
Exhibit 3 -- Letter to Shareholders from Raymond L. Loewen, dated September 24, 1996.
Exhibit 4 -- Letter to L. William Heiligbrodt from Raymond L. Loewen, dated September 24,
1996.
Exhibit 5 -- [Intentionally omitted].
Exhibit 6 -- Press Release issued by Loewen, dated September 17, 1996.
Exhibit 7 -- [Intentionally omitted].
Exhibit 8 -- Press Release issued by Loewen, dated September 24, 1996.
Exhibit 9 -- Press Release issued by Loewen, dated September 27, 1996.
Exhibit 10 -- Press Release issued by Loewen, dated October 1, 1996.
Exhibit 11 -- Press Release issued by SCI, dated October 2, 1996.
Exhibit 12 -- Press Release issued by Loewen, dated October 2, 1996.
Exhibit 13* -- Press Release issued by Loewen, dated October 10, 1996.
Exhibit 14 -- Complaint in KRIM V. BAGNELL, ET AL. (Superior Court of the State of
California).
Exhibit 15 -- First Amended Complaint in SERVICE CORPORATION INTERNATIONAL V. THE LOEWEN GROUP
INC. (United States District Court for the Southern District of Texas).
Exhibit 16 -- Complaint in THE LOEWEN GROUP INC., ET AL. V. SERVICE CORPORATION INTERNATIONAL,
ET AL. (United States District Court for the Eastern District of New York).
Exhibit 17* -- Opinion letter of Smith Barney Inc. to Loewen Board of Directors, dated October
10, 1996.
Exhibit 18* -- Opinion letter of Nesbitt Burns Inc. to Loewen Board of Directors, dated October
10, 1996.
Exhibit 19 -- Pages 15 - 20 and 32 - 34 of The Loewen Group Inc. Proxy Statement, dated April
9, 1996.
Exhibit 20 -- The Loewen Group Inc. Employee Stock Option Plan (United States).
Exhibit 21 -- The Loewen Group Inc. Employee Stock Option Plan (Canada).
Exhibit 22 -- Form of The Loewen Group Inc. Employee Stock Option Plan Agreement (Directors of
Loewen Group International, Inc.).
Exhibit 23 -- Form of The Loewen Group Inc. Employee Stock Option Plan Agreement (Directors of
subsidiaries).
Exhibit 24 -- Form of The Loewen Group Inc. Employee Stock Option Plan Agreement (employees).
Exhibit 25 -- The Loewen Group Inc. Employee Share Purchase Plan (United States).
Exhibit 26 -- The Loewen Group Inc. Employee Share Purchase Plan (Canada).
Exhibit 27 -- The Loewen Group Inc. 1994 Management Equity Investment Plan.
Exhibit 28 -- Form of The Loewen Group Inc. 1994 Management Equity Investment Plan Investment
Option Agreement.
Exhibit 29 -- The Loewen Group Inc. Supplement to 1994 Management Equity Investment Plan.
Exhibit 30 -- The Loewen Group Inc. Addendum to 1994 Management Equity Investment Plan.
Exhibit 31 -- Form of The Loewen Group Inc. Management Equity Investment Plan Borrowing
Agreement.
Exhibit 32 -- Form of The Loewen Group Inc. Management Equity Investment Plan Executive
Agreement.
Exhibit 33 -- Form of The Loewen Group Inc. Management Equity Investment Plan 1994
Exchangeable Floating Rate Debenture due July 15, 2001.
Exhibit 34 -- The Loewen Group Inc. 1994 Outside Director Compensation Plan.
Exhibit 35 -- The Loewen Group Inc. Employee Stock Bonus Plan.
Exhibit 36 -- The Loewen Group Inc. Shareholder Protection Rights Plan Agreement and
Amendments.
Exhibit 37 -- Employment Agreement with Timothy R. Hogenkamp.
Exhibit 38 -- [Intentionally omitted].
Exhibit 39 -- Form of Indemnification Agreement with Outside Directors.
Exhibit 40 -- Form of Indemnification Agreement with Officers.
Exhibit 41 -- Form of The Loewen Group Inc. Severance Agreement.
Exhibit 42 -- The Loewen Group Inc. Severance Pay Plan.
Exhibit 43* -- Letter to Shareholders from Raymond L. Loewen, dated October 10, 1996.
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* Exhibits distributed to Shareholders.
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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 Schedule 14D-9 is true, complete
and correct.
THE LOEWEN GROUP INC.
By: /s/ Peter S. Hyndman
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Name: Peter S. Hyndman
Title: Vice President, Law and
Corporate Secretary
Dated: October 11, 1996
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EXHIBIT 43
[LOEWEN LETTERHEAD]
October 10, 1996
Dear Shareholder:
I would like to take this opportunity to advise you that following a
thorough and careful analysis and discussions with its financial and legal
advisors, your Board of Directors has unanimously determined that the exchange
offer proposed by Service Corporation International (SCI) is inadequate and not
in the best interests of the Company or its shareholders. As a result, your
Board recommends that you not tender your shares, if and when the proposed offer
is commenced.
The Board determined by unanimous vote of the directors present that the
best way to maximize value for shareholders is through continued implementation
of the Company's long-term business plan as an independent company. The Board
believes the Company will continue to build shareholder value through growth,
especially growth through acquisitions, and through enhanced profitability.
In rejecting the proposed exchange offer, the Board relied, in part, on
written inadequacy opinions from Smith Barney Inc. and Nesbitt Burns Inc., the
Company's financial advisors.
SCI's proposal is subject to significant conditions, including: the
tendering of 75% of each class of Loewen's outstanding common and preferred
shares; SCI shareholder approval of the corporate reorganization of SCI and the
issuance of shares in connection with the proposal; and the elimination of
Loewen's Shareholder Protection Rights Plan. These conditions are in addition to
the satisfaction of all U.S. and Canadian regulatory concerns, including
antitrust issues.
Among the key factors the Board considered in arriving at its recommendation
were the serious regulatory, industry and financial issues the SCI proposal
raises, including these factors:
- SCI CLEARLY WANTS TO BUY LOEWEN ON THE CHEAP, FOLLOWING AN UNFORTUNATE AND
UNJUSTIFIED JURY VERDICT IN MISSISSIPPI. This one-time event, which
depressed Loewen's share price but not its ability to grow, provided SCI
with an opportunity to attempt to grab Loewen at a price that the Board
has again determined is simply not in the best interests of the Company or
its shareholders.
- SCI CLEARLY WANTS TO BE "THE PREFERRED BUYER" IN THE INDUSTRY... BUT
CAN'T, BECAUSE LOEWEN ALREADY IS. SCI's acquisition strategies and
techniques are very different than those of Loewen, and an integration of
the strategies and techniques of the Company and SCI may be difficult,
resulting in an entity with significantly different characteristics than
Loewen currently enjoys. Since the first of the year, Loewen has closed or
signed approximately US$730 million in acquisitions. That is on top of our
investments with The Blackstone Group, one of the premier merchant banking
firms in the world, to acquire Prime Succession Inc. and Rose Hills
Memorial Park Association, two of the most prized assets in the industry,
for an aggregate of US$535 million. Loewen has in recent years
significantly expanded its acquisition program, and acquisition targets
have shown a preference for acquisition by Loewen rather than SCI.
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- SCI CLEARLY INTENDS TO ELIMINATE COMPETITION IN A RAPIDLY CONSOLIDATING
INDUSTRY. The anti-competitive effects of the proposal have already
prompted regulatory scrutiny in several states, including New York,
Florida, Hawaii, Texas, California and Tennessee and from the Federal
Trade Commission. In addition, the Canadian Competition Bureau is
investigating the effects of the proposal under the Canadian Competition
Act, and in that respect has made a request for information from the
Company. As a result of the significant antitrust issues relating to the
combination of the Company and SCI, both in Canada and in the U.S., there
is significant uncertainty as to whether the conditions of the SCI
proposal will be met. In addition, the Company has filed an antitrust
lawsuit in the United States District Court for the Eastern District of
New York against SCI and Equity Corporation International, of which SCI
owns approximately 40%.
Let me close by emphasizing that the Board is committed to protecting the
best interests of the Company and its shareholders and to maximizing shareholder
value. To achieve these objectives, the Board believes the Company should
continue to pursue its strategies aimed at enhancing shareholder value as an
independent company. Over the past five years Loewen has generated compounded
annual revenue and earnings growth, excluding the Gulf National and Provident
legal settlements, of 41.5% and 36.8% respectively. We have the right strategy,
and it's working. We have the right team and a reputation as a provider of
superior services. We are in the right industry at the right time. And we have
built a strong foundation for significant growth in revenues and profitability
in the future.
A more detailed description of the factors considered by your Board is
contained in the enclosed Schedule 14D-9. We urge you to read it carefully and
in its entirety so that you will be fully informed as to the Board's
recommendation.
We deeply appreciate your support and will keep you up-to-date on whatever
new developments come along. In the meantime, we urge you not to tender your
shares, if and when SCI's proposal is commenced.
Sincerely,
/s/ Raymond L. Loewen
Chairman and Chief Executive Officer
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