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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) October 10, 1996
THE LOEWEN GROUP INC.
(Exact name of registrant as specified in its charter)
British Columbia, Canada 0-18429 98-0121376
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(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
4126 Norland Avenue, Burnaby, British Columbia V5G 3S8
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code 604-299-9321
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N/A
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(Former name or former address, if changed since last report)
Exhibit Index is on page 3
Page 1 of 6
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ITEM 5. OTHER EVENTS.
Pursuant to Form 8-K, General Instructions F, registrant hereby incorporates by
reference the press release attached hereto as Exhibit 99.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
Exhibit No. Description
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Exhibit 99 The Loewen Group Inc. Press Release dated
October 10, 1996
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: October 11, 1996
THE LOEWEN GROUP INC.
By: PETER S. HYNDMAN
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Name: Peter S. Hyndman
Title: Corporate Secretary
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EXHIBIT INDEX
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Sequential
Number Exhibit Page Number
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99 The Loewen Group Inc. 4
Press Release dated October 10, 1996
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Stock Symbols: Investor Contacts:
NYSE: LWN Paul Wagler, Senior Vice President, Finance
TSE: LWN Dwight Hawes, Vice President, Finance
ME: LWN The Loewen Group Inc.
Tel: (800) 347-7010
Media Contacts:
Dave Laundy, Vice President, Communications
The Loewen Group Inc.
Tel: (604) 293-7857
Thomas C. Franco
Broadgate Consultants, Inc.
(212) 229-2222
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FOR IMMEDIATE RELEASE
LOEWEN BOARD UNANIMOUSLY REJECTS SERVICE CORPORATION EXCHANGE OFFER PROPOSAL
- - SCI'S Second Proposal Termed Inadequate
- - Loewen Holders Urged Not to Tender If and When Bid Is Made
- - Federal Antitrust Lawsuit Filed Against SCI and Equity Corporation
International
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VANCOUVER, October 10, 1996 -- The Loewen Group Inc. (NYSE, TSE, ME: LWN) today
announced that following a thorough and careful analysis and discussions with
its financial and legal advisors, its 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. The Board recommended that the Company's shareholders not
tender their shares, if and when the proposed offer is commenced. The Company
also announced that today it filed an antitrust lawsuit in the United States
District Court for the Eastern District of New York against SCI and Equity
Corporation International, Inc., of which SCI owns approximately 40%.
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.
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In rejecting SCI's 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.
In a letter to shareholders, Raymond L. Loewen, chairman and chief executive
officer, noted that the Company would continue to execute its business plan.
"We have the right strategy, and it's working. We have the right team and a
reputation as a provider of superior services. We're 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."
Mr. Loewen also told shareholders that, "SCI's proposal is subject to
significant conditions, including: the tendering of 75% each 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."
In reviewing SCI's proposal, Mr. Loewen noted that the Board considered the
regulatory, industry and financial issues it 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 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 $730 million in
acquisitions. That is on top of the Company's 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 $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.
- - 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
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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.
Separately, the Company said that to retain and attract key executives and
managers in the context of a threatened takeover of Loewen, the Board
authorized the adoption of retention and severance plans to be applicable in
the event of a change in control of the Company. Mr. Loewen noted that this
precaution is a prudent and appropriate step given the anxieties and
uncertainties resulting from the threat of a hostile takeover.
With respect to the Federal court antitrust action against SCI and Equity
Corporation International, the Company said that its lawsuit alleges SCI's
proposed acquisition would, if successful, substantially lessen competition in
the markets for locally-offered funeral and cemetery services, "pre-need"
funeral services, and the funeral home and cemetery acquisition markets. The
complaint alleges that SCI and Equity Corporation International are
"co-conspirators" in actions that are designed to eliminate Loewen as a
competitive factor. The complaint also alleges that if SCI were to acquire
Loewen, SCI would own or have investment in all but one of the companies that
currently are competing as consolidators in numerous local markets throughout
the United States.
"Unfortunately, the hostile takeover bid by SCI for Loewen will reduce
competition. We hope that regulatory agencies will carefully scrutinize this
proposed transaction; we think they will reach the same conclusion we have,"
said R.W. Breece, Sr. a well-known independent industry figure and former
President of the North Carolina Funeral Directors Association. Mr. Breece is
owner of Rogers and Breece Funeral Home of Fayetteville, North Carolina.
With corporate offices in Vancouver, The Loewen Group employs over 13,000
people, and operates 931 funeral homes and 271 cemeteries across the United
States and Canada. More than 90 percent of the Company's revenue is generated
in the United States.
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.
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