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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)
MERCOM, INC.
(Name of Issuer)
COMMON STOCK
$1.00 PAR VALUE
(Title of Class of Securities)
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58935D109
(Cusip Number)
CABLE MICHIGAN, INC.
(Name of Persons Filing Statement)
John D. Filipowicz
Senior Vice President, Assistant
General Counsel & Assistant
Secretary
CABLE MICHIGAN, INC.
105 Carnegie Center
Princeton, New Jersey 08540
Tel No.: (609) 734-3700
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
August 11, 1998
(Date of Event which Requires Filing of this Statement)
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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 statement because of Rule 13d-1(b)(3) or (4), check
the following: [ ]
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<TABLE>
<S> <C> <C> <C> <C> <C>
SCHEDULE 13D
CUSIP No. 58935D109 Page 2 of 9 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Cable Michigan, Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
00
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ]
N/A
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Pennsylvania
7 SOLE VOTING POWER
NUMBER OF SHARES 2,964,250 (See Item 5)
BENEFICIALLY OWNED BY EACH
REPORTING PERSON WITH 8 SHARED VOTING POWER
0 (See Item 5)
9 SOLE DISPOSITIVE POWER
0 (See Item 5)
10 SHARED DISPOSITIVE POWER
2,964,250 (See Item 5)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,964,250
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN [ ]
SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
61.92%
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
SEC 1746 (9-88) 2 of 7
</TABLE>
The following information amends the Schedule 13D dated October
10, 1997, as previously amended (as amended, the "Schedule 13D").
Unless otherwise indicated, each capitalized term used but not
defined herein shall have the meaning assigned to such Term in the Schedule
13D.
Item 2. Identity and Background.
The response set forth in Item 2 of the Schedule 13D is hereby
amended and supplemented by the following information:
Information as to each executive officer and director of Cable
Michigan is set forth in Schedule A attached hereto, and such Schedule is
incorporated herein by reference.
During the last five years, none of the Level 3 Companies nor,
to the best knowledge of the Level 3 Companies, any of the persons listed on
Schedule A attached hereto, has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or has 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 4. Purpose of Transaction.
The response set forth in Item 4 of the Schedule 13D is hereby
amended and supplemented by the following information.
On July 15, 1998, Avalon Cable of Michigan Inc. ("Old Merger
Sub"), a Delaware Corporation and a wholly owned subsidiary of Buyer, assigned
its rights and obligations under the Merger Agreement to Avalon Cable of
Michigan, Inc, a Pennsylvania corporation ("Merger Sub"). Also, on July 15,
1998, the Company and Buyer amended and restated the Merger Agreement to make
certain immaterial changes thereto (the Merger Agreement as amended from time
to time is hereinafter referred to as the "Merger Agreement").
Following the proposal (the "Proposal") of Cable Michigan to the
Board of Directors of the Company that Cable Michigan acquire all shares of
Common Stock not owned by Cable Michigan for $11.00 per share in cash, the
Company formed a special committee (the "Special Committee") composed of
members of the Company's Board of Directors unaffiliated with Cable Michigan to
review the Proposal. The Special Committee retained a financial advisor to
assist it in its review of the Proposal. Following a series of discussions
between the Special Committee's financial advisor and Buyer, on August 11,
1998, Buyer authorized Cable Michigan to increase the price of its Proposal to
$12.00 per share. Accordingly, on August 11, 1998, Cable Michigan, Buyer and
Merger Sub entered into Amendment No. 2 to the Merger Agreement, which
increased the price at which Cable Michigan is permitted to purchase the
minority interest in the Company to $12.00 per share. Buyer has stated that
the $12.00 price is the highest it will authorize. On August 11, 1998, Cable
Michigan increased its proposed purchase price to $12.00 per share. The
Special Committee will review the revised Proposal and is expected to reach a
decision by the week of September 7, 1998. Cable Michigan's revised Proposal
is subject to the execution of mutually satisfactory definitive documentation,
receipt of all required approvals and other customary conditions. There can be
no assurances that any transaction will take place.
Item 7. Material to be Filed as Exhibits.
The response set forth in Item 7 of the Schedule 13D is hereby
supplemented with the following information:
Exhibit 7: Amendment No. 2, dated as of August 11, 1998 to the
Agreement and Plan of Merger dated as of June 3, 1998 as amended and restated
July 15, 1998 among Cable Michigan, Merger Sub, and Buyer.
SIGNATURES
After reasonable inquiry and to the best knowledge and belief
of the undersigned, the undersigned certifies that the information set forth
in this statement is true, complete and correct.
Date: August 13, 1998
CABLE MICHIGAN, INC.
By: /s/John D. Filipowicz
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Name: John D. Filipowicz
Title: Senior Vice President
Assistant General Counsel &
Assistant Secretary
SCHEDULE A
DIRECTORS AND EXECUTIVE OFFICERS OF CABLE MICHIGAN INC.
The name, business address, citizenship, title, and present
principal occupation or employment of each of the directors and executive
officers of Cable Michigan, Inc. are set forth below.
<TABLE>
<CAPTION>
Principal Occupation or
Name and Office Held Business Address Citizenship Employment
- ------------------------------------ -------------------------- ---------------- --------------------------
<S> <C> <C> <C>
David C. McCourt 105 Carnegie Center USA Chairman,
Chairman, Chief Princeton, NJ 08540 Chief Executive
Executive Officer, Officer, Cable
Director Michigan;
Chairman, Chief
Executive Officer, RCN
Mark Haverkate 105 Carnegie Center USA President & Chief
President & Chief Princeton, NJ 08540 Operating Officer,
Operating Officer, Cable Michigan;
Director Executive Vice
President, RCN
Timothy J. Stoklosa 105 Carnegie Center USA Executive Vice
Executive Vice President Princeton, NJ 08540 President & Chief
& Chief Financial Officer, Financial Officer, Cable
Director Michigan; Senior Vice
President & Treasurer,
RCN
Bruce C. Godfrey 105 Carnegie Center USA Secretary, Cable
Secretary, Director Princeton, NJ 08540 Michigan; Executive
Vice President & Chief
Financial Officer, RCN
John J. Gdovin 105 Carnegie Center USA Senior Vice President,
Senior Vice President Princeton, NJ 08540 Cable Michigan; Senior
Vice President,
Operations, RCN
John D. Filipowicz 105 Carnegie Center USA Senior Vice President,
Senior Vice President Princeton, NJ 08540 Assistant General
Counsel and Assistant
Secretary, RCN &
Cable Michigan
Ralph S. Hromisin 105 Carnegie Center USA Vice President & Chief
Vice President Princeton, NJ 08540 Accounting Officer,
Cable Michigan; Senior
Vice President, Chief
Accounting Officer,
RCN
James J. Saile 105 Carnegie Center USA Vice President of
Vice President Princeton, NJ 08540 Taxation, Cable
Michigan & RCN
Mark Dineen 105 Carnegie Center USA Senior Vice President
Vice President Princeton, NJ 08540 Cable Michigan &
Mercom
Jeffrey Decker 105 Carnegie Center USA Controller, Cable
Controller Princeton, NJ 08540 Michigan
Raymond B. Ostroski 261 Harris Hill Road USA Former General
Director Shavertown, PA Counsel; Executive
Vice President C-TEC
Frank M. Henry 293 Old River Road USA Chairman, Frank Martz
Director Wilkes-Barre, PA 18703 Coach Company
David C. Mitchell 3627 Loggerhead Court USA Retired Corporate
Director Seabrook Island, SC Executive Vice
29955 President, President of
the Telephone Group
and Director, Rochester
Telephone Corporation
Daniel E. Knowles 1 F Place USA Retired Vice President
Director Gouldsboro, PA 18424 of Personal and
Administration,
Grumman Corp.
R. Douglas Bradbury, 3555 Farnam Street USA Executive Vice
Director Omaha, NE 68131 President, CFO, Level 3
Communications, Inc.
</TABLE>
EXHIBIT 7
AMENDMENT NO. 2
AMENDMENT NO. 2, dated as of August 11, 1998 (the "Amendment"),
to the Agreement and Plan of Merger among Cable Michigan, Inc. (the "Company"),
Avalon Cable of Michigan Holdings Inc. ("Buyer"), and Avalon Cable of Michigan
Inc. ("Merger Subsidiary") dated June 3, 1998, amended and restated July 15,
1998 (as amended from time to time, the "Agreement").
WITNESSETH:
WHEREAS, the Company, Buyer and Merger Subsidiary have agreed
that the Agreement be amended in the manner provided for in this Amendment,
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Defined Terms. Capitalized terms used but not defined herein
shall have the meanings given them in the Agreement. References in the
Agreement to the "Agreement" or "this Agreement" and other similar references
shall be deemed to refer to the Agreement as amended hereby.
2. Amendment to the Agreement. Article 7 of the Agreement is
hereby amended by replacing the words "$11.00 per share" in Section 7.07,
wherever they appear therein, with the words "$12.00 per share".
3. Representations and Warranties of the Company. The Company
hereby represents and warrants to Buyer and to Merger Subsidiary that the
execution, delivery and performance by the Company of this Amendment and the
consummation by the Company of the transactions contemplated hereby are within
the Company's corporate powers, and have been duly authorized by all necessary
corporate and shareholder action. This Amendment constitutes a valid and
binding agreement of the Company.
4. Representations and Warranties of Buyer and Merger Subsidiary.
Each of Buyer and Merger Subsidiary hereby represents and warrants to the
Company that the execution, delivery and performance by such person of this
Amendment and the consummation by such person of the transactions contemplated
hereby are within such person's corporate powers and have been duly authorized
by all necessary corporate and shareholder action. This Amendment constitutes
a valid and binding agreement of Buyer or Merger Subsidiary, as the case may
be.
5. Miscellaneous.
(a) This Amendment is limited to the matters expressly set
forth herein. Except as expressly amended, modified and
supplemented hereby, the provisions of the Agreement are
and shall remain in full force and effect.
(b) This Amendment shall be construed in accordance with and
governed by the law of the State of New York.
(c) This Amendment may be signed in two or more counterparts,
each of which shall be an original, but all of which
together constitute one and the same agreement. This
Amendment shall become effective when each party hereto
shall have received counterparts hereof signed by all of
the other parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed by their duly authorized officers as of the day
and year first above written.
CABLE MICHIGAN, INC.
By:/s/ Mark Haverkate
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Name: Mark Haverkate
Title: President and Chief Operating Officer
AVALON CABLE OF MICHIGAN
HOLDINGS INC.
By:/s/ Peggy Koenig
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Name: Peggy Koenig
Title: President and Secretary
AVALON CABLE OF MICHIGAN INC.
By:/s/ Peggy Koenig
--------------------------------
Name: Peggy Koenig
Title: President and Secretary
