<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-1/A
TENDER OFFER STATEMENT
(AMENDMENT NO. 1)
PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
VIVRA INCORPORATED
(Name of Subject Company)
GAMBRO HEALTHCARE ACQUISITION CORP.
AND
INCENTIVE AB
(Bidder)
COMMON STOCK, $.01 PAR VALUE
(Title of Class of Securities)
92855M 10 4
(CUSIP Number of Class of Securities)
MATS WAHLSTROM
GAMBRO HEALTHCARE ACQUISITION CORP.
1185 OAK STREET
LAKEWOOD, COLORADO 80215
(303) 232-6800
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications on Behalf of Bidder)
COPY TO:
PETER D. LYONS, ESQ.
SHEARMAN & STERLING
599 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022
TELEPHONE: (212) 848-4000
MAY 20, 1997
<PAGE>
CUSIP NO. 92855M 10 4
<TABLE>
<S> <C> <C>
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Gambro Healthcare Acquisition Corp.
2 Check the Appropriate Box if a Member of a Group (See Instructions) (a) / /
(b) / /
3 SEC Use Only
4 Source of Funds (See Instructions)
AF
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to / /
Items 2(e) or 2(f)
6 Citizenship or Place of Organization
Delaware
7 Aggregate Amount Beneficially Owned by Each Reporting Person
None
8 Check if the Aggregate Amount in Row (7) Excludes Certain Shares / /
(See Instructions)
9 Percent of Class Represented by Amount in Row (7)
0%
10 Type of Reporting Person (See Instructions)
CO
</TABLE>
2
<PAGE>
CUSIP NO. 92855M 10 4
<TABLE>
<S> <C> <C>
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Incentive AB
2 Check the Appropriate Box if a Member of a Group (See Instructions) (a)/ /
(b)/ /
3 SEC Use Only
4 Source of Funds (See Instructions)
AF, BK
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to / /
Items 2(e) or 2(f)
6 Citizenship or Place of Organization
Sweden
7 Aggregate Amount Beneficially Owned by Each Reporting Person
None
8 Check if the Aggregate Amount in Row (7) Excludes Certain Shares / /
(See Instructions)
9 Percent of Class Represented by Amount in Row (7)
0%
10 Type of Reporting Person (See Instructions)
CO
</TABLE>
3
<PAGE>
This Amendment No. 1 to the Tender Offer Statement on Schedule 14D-1 (the
"Statement") relates to the offer by Gambro Healthcare Acquisition Corp., a
Delaware corporation ("Purchaser") and an indirect wholly owned subsidiary of
Incentive AB, a Swedish corporation ("Parent"), to purchase all outstanding
shares of Common Stock, par value $.01 per share (the "Shares"), of Vivra
Incorporated, a Delaware corporation (the "Company"), at a price of $35.62 per
Share, net to the seller in cash, upon the terms and subject to the conditions
set forth in Purchaser's Offer to Purchase dated May 9, 1997 (the "Offer to
Purchase") and in the related Letter of Transmittal (which together constitute
the "Offer"), copies of which are attached thereto as Exhibits (a)(1) and
(a)(2), respectively. The Statement was initially filed with the Securities and
Exchange Commission on May 9, 1997.
ITEM 10. ADDITIONAL INFORMATION.
Items 10(b)-(c) and (e) are hereby amended and supplemented by adding to the
end thereof the following:
On May 7, 1997, a putative class action was filed in the Superior Court
of the State of California for the County of San Mateo on behalf of the
stockholders of the Company alleging causes of action arising out of the
Offer and the proposed Merger. GOODMAN EPSTEIN AND FLORENCE EPSTEIN V. VIVRA
INC., ET AL., Case No. 400617. A copy of the complaint filed in connection
with the aforementioned action is filed as Exhibit (g)(1) to the Statement
and is incorporated herein by reference in its entirety. The defendants in
this action include the Company and its directors. The action alleges that
the Board breached its fiduciary duties by failing to take all necessary and
appropriate steps to obtain the maximum value realizable for the
stockholders of the Company. The action seeks, INTER ALIA, to enjoin the
defendants from consummating the proposed acquisition or alternatively for
money damages and other appropriate relief. The Company believes that the
putative class action suit is without merit and intends to defend it
vigorously.
On May 16, 1997, the Federal Trade Commission informed Parent that the
waiting period under the HSR Act applicable to the Offer has been
terminated. Accordingly, the Offer has been cleared by all applicable
governmental authorities regulating antitrust concerns. Parent and Purchaser
are unaware of any approval of any other governmental agency (domestic or
foreign) which would be required prior to the acquisition of the Shares by
Purchaser pursuant to the Offer.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
Item 11 is hereby amended and supplemented by adding the following exhibits.
(a)(9) Press Release issued by Parent on May 19, 1997.
(g)(1) Complaint, GOODMAN EPSTEIN AND FLORENCE EPSTEIN V. VIVRA INC., ET
AL., Case No. 400617, filed on May 7, 1997, in the Superior Court of
the State of California for the County of San Mateo.
4
<PAGE>
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.
May 20, 1997
GAMBRO HEALTHCARE ACQUISITION CORP.
By: /s/ MATS L. WAHLSTROM
-----------------------------------
Name: Mats L. Wahlstrom
Title: President
5
<PAGE>
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.
May 20, 1997
INCENTIVE AB
By: /s/ SOREN MELLSTIG
------------------------------------
Name: Soren Mellstig
Title: Executive Vice President
By: /s/ SVERKER LUNDKVIST
------------------------------------
Name: Sverker Lundkvist
Title: Senior Vice President
6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE IN SEQUENTIAL
NO. NUMBERING SYSTEM
- --------- ------------------------------------------------------------------------------------------------
<S> <C> <C>
(a)(1) Form of Offer to Purchase dated May 9, 1997..................................................... *
(a)(2) Form of Letter of Transmittal................................................................... *
(a)(3) Form of Notice of Guaranteed Delivery........................................................... *
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Nominees.............. *
(a)(5) Form of Letter from Brokers, Dealers, Commercial Banks, Trust Companies and Nominees to *
Clients.........................................................................................
(a)(6) Form of Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9... *
(a)(7) Summary Advertisement as published in The Wall Street Journal and The New York Times on May 9, *
1997............................................................................................
(a)(8) Press Release issued by Parent on May 5, 1997................................................... *
(a)(9) Press Release issued by Parent on May 19, 1997..................................................
(b)(1) Revolving Credit Facility Agreement, dated December 15, 1995, between Gambro AB, BNP Capital *
Markets Limited (as Arranger), certain banks named therein and Banque Nationale de Paris (as
Agent)..........................................................................................
(b)(2) Summary of Multicurrency Revolving Credit Facility Agreement, dated as of May 7, 1997, between *
Incentive Treasury AB (as Borrower), Parent (as Guarantor) and Skandinaviska Enskilda Banken
AB..............................................................................................
(b)(3) Multicurrency Revolving Credit Facility Agreement, dated as of March 4, 1996, between Incentive *
Treasury AB (as Borrower), Parent (as Guarantor), Deutsche Bank Luxembourg S.A. and Enskilda,
Skandinaviska Enskilda Banken (as Arrangers), Enskilda, Skandinaviska Enskilda Banken (as Agent)
and certain banks named therein.................................................................
(b)(4) Multicurrency Revolving Credit Facility Agreement, dated as of May 24, 1995, and amended March *
6, 1996, between Incentive Treasury AB (as Borrower), Parent (as Guarantor), Deutsche Bank
Luxembourg S.A. and Enskilda, Skandinaviska Enskilda Banken AB (as Arrangers), Deutsche Bank
Luxembourg S.A. (as Agent) and certain banks named therein......................................
(b)(5) Revolving Credit Facility Agreement, dated as of September 1, 1994, and amended December 2, *
1994, April 24, 1995, October 26, 1995 and November 5, 1996, between Parent (as First Borrower
and Guarantor), Incentive Treasury AB (as Second Borrower) and Deutsche Bank Luxembourg S.A. (as
Lender).........................................................................................
(b)(6) Summary of Multicurrency Credit Facility Agreement, dated as of December 8, 1995, between *
Nordbanken AB (as Lender), Incentive Treasury AB (as Borrower) and Parent (as Guarantor)........
(c)(1) Agreement and Plan of Merger, dated as of May 5, 1997, among Parent, Purchaser and the *
Company.........................................................................................
(c)(2) Agreement and Plan of Reorganization, dated as of May 5, 1997, by and between VSP Holdings, *
Inc., VSP Holdings II, Inc., VSP Acquisition, Inc., Vivra Specialty Partners, Inc. and the
Company.........................................................................................
(c)(3) Sections 1 and 2 of the Services Agreement, effective as of May 5, 1997, between Vivra Specialty *
Partners, Inc. and the Company..................................................................
(g)(1) Complaint, GOODMAN EPSTEIN AND FLORENCE EPSTEIN V. VIVRA INC., ET AL., Case No. 400617, filed on
May 7, 1997, in the Superior Court of the State of California for the County of San Mateo.......
</TABLE>
- ------------------------
*Previously filed.
<PAGE>
EXHIBIT 99.(a)(9)
FOR IMMEDIATE RELEASE
INCENTIVE AB ANNOUNCES HART-SCOTT-RODINO CLEARANCE
STOCKHOLM (MAY 19, 1997). Incentive AB today announced that it has
received early termination of the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 applicable to its $35.62 per share cash
tender offer for Vivra Incorporated announced on May 5, 1997. Incentive said
that the early termination became effective late Friday afternoon, May 16, 1997.
Accordingly, Incentive's tender offer has been cleared by all applicable
governmental authorities regulating antitrust concerns.
As previously announced, Incentive intends to merge Vivra's renal care
business with the Gambro Group, Incentive's wholly owned, worldwide, fully
integrated dialysis and medical technology business.
Incentive's tender offer for Vivra is scheduled to expire at midnight,
New York City time, on Friday, June 6, 1997.
Gambro is a world leader in renal care, manufacturing high quality
dialysis products and providing dialysis services to 12,100 patients worldwide.
Gambro also manufactures products used in cardiopulmonary care and equipment in
the field of blood component technology.
Incentive is a leading international industrial group with core
operations in medical technology, materials handling, development and
environment.
Press Enquiries:
Incentive AB Gambro AB Citigate Communications
Bengt Modeer Inger Larsson Raymond F. McNulty
(46-8) 613-6533 (46-46) 169-167 (212) 508-3522
Financial Advisors:
Incentive AB Gambro AB
Morgan Stanley & Co. Limited UBS Securities LLC
<PAGE>
Kevin J. Yourman (147159)
Vahn Alexander (167373)
WEISS & YOURMAN
10940 Wilshire Blvd.
24th Floor
Los Angeles, CA 90024
(310) 208-2800
Joseph H. Weiss
Weiss & Yourman
315 Fifth Avenue
New York, NY 10016
(212) 532-4171
Attorneys for Plaintiffs
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF SAN MATEO
GOODMAN EPSTEIN AND FLORENCE EPSTEIN, ) Case No. 400617
individually and on behalf of all )
other persons similarly situated, ) CLASS ACTION
)
) CLASS ACTION COMPLAINT
) FOR BREACH OF FIDUCIARY DUTIES
Plaintiffs )
)
v. )
) JURY TRIAL DEMAND
)
VIVRA INC., DAVID G. CONNOR, ) CASE MANAGEMENT CONFERENCE
RICHARD B. FONTAINE, ALAN R. HOOPS, ) REFER TO SAN MATEO COUNTY
DAVID L. LOWE, JOHN M. NEHRA, ) SUPERIOR COURT ROOM 20
STEPHEN G. PAGLIUCA, KENT J. THIRY, ) DATE: 09-25-97
LE ANNE M. ZUMWALT AND DOES 1-30, ) TIME: 9 AM
) DEPT: 10
)
Defendants. )
- --------------------------------------------
Plaintiffs, through their undersigned attorneys, for their complaint
against defendants, allege upon knowledge as to themselves and their own acts,
and upon information and belief, as to all other matters as follows.
1
<PAGE>
1. Plaintiffs bring this action, individually and as a class action on
behalf of all persons, other than defendants, who own the common stock of Vivra
Inc. ("Vivra" or the "Company") and who are similarly situated, to enjoin the
consummation of the proposed acquisition of Vivra by Incentive AB ("Incentive")
whereby Incentive will pay $35.62 per share of Vivra common stock.
Alternatively, in the event that the transaction is consummated, plaintiffs seek
to recover damages caused by the breach of fiduciary duties, described herein,
owed by the director defendants. The proposed transaction and the acts of the
direct defendants constitute a breach of the defendants' fiduciary duties to
plaintiffs and the class to take all necessary and appropriate steps to obtain
the maximum value realizable for the shareholders of Vivra.
PARTIES
2. Plaintiffs Goodman Epstein and Florence Epstein are now and have been,
since prior to the announcement of the proposed transaction described herein,
the owners of 70 shares of common stock of Vivra. Plaintiffs purchased these
shares at a price of $33.75 per share.
3. Defendant Vivra Inc. is a corporation organized under the laws of
the State of Delaware, with its principal executive offices and company
headquarters at 1850 Gateway Drive, Suite 500, San Mateo, California, 94404.
Vivra is a specialty care company. The Company provides services through
Vivra Renal Care ("VRC") and Vivra Specialty Partners ("VSP"). VRC is the
second largest provider of dialysis services in the United States. VSP
provides physician network and disease management services to managed care
2
<PAGE>
and provider organizations.
4. Defendant David G. Connor ("Connor") has served as a Director of the
Company since 1989 and currently owns 32,097 shares of the Company.
5. Defendant Richard B. Fontaine ("Fontaine") has served as a Director of
the Company since 1992 and currently owns 32,318 shares of the Company.
6. Defendant Alan R. Hoops ("Hoops") has served as a Director of the
Company since 1995 and currently owns 10,124 shares of the Company.
7. Defendant David L. Lowe ("Lowe") has served as a Director of the
Company since 1995 and currently owns 11,041 shares of the Company.
8. Defendant John M. Nehra ("Nehra") has served as a Director of the
Company since 1989 and currently owns 25,644 shares of the Company.
9. Defendant Stephen G. Pagliuca ("Pagliuca") has served as a Director of
the Company since 1992 and currently owns 26,394 shares of the Company.
10. Defendant Kent J. Thiry ("Thiry") has served as a President and Chief
Executive Officer of the Company since September 1992 and as a Director of the
Company since 1991 and currently owns 452,500 shares of the Company.
11. Defendant Le Anne M. Zumwalt ("Zumwalt") has served as Chief Financial
Officer of the Company since May 1996 and Treasurer and Secretary since march
1995 and as a Director of the Company since 1994 and currently owns 28,351
shares of the Company.
3
<PAGE>
12. The individual defendant directors, by reason of their corporate
directorship and/or executive positions, stand in a fiduciary position relative
to the Company's shareholders, which fiduciary relationship, at all times
relevant herein, required the defendants to exercise their best judgment and to
act in a prudent manner and in the best interests of the Company's shareholders.
A director is not permitted to act in his/her own self-interest to the detriment
of the shareholders.
13. Each defendant herein is sued individually as a conspirator and aider
and abettor, as well as in such defendant's capacity as an officer, director or
controlling stockholder of the Company, and the liability of each arises from
the fact that he, she, or it has engaged in all or part of the unlawful acts,
plan, schemes, or transactions complained of herein.
CLASS ACTION ALLEGATIONS
14. Plaintiffs bring this action individually on their own behalf and as a
class action, on behalf of all stockholders of the Company (except defendants
herein, and any person, firm, trust, corporation, or other entity related to or
affiliated with any of the defendants) and their successors in interest, who are
or will be threatened with injury arising from defendants' actions as more fully
described herein (the "Class").
15. This action is properly maintained as a class action.
16 The Class is so numerous that joinder of all members is impracticable.
As of April 7, 1997 there were 41,070,626 shares of Vivra common stock
outstanding. The disposition of their claims in a class action will be of
benefit to the parties and Court. The recordholders of Vivra common stock can
be easily
4
<PAGE>
determined from the stock transfer journals maintained by Vivra or its agents.
17 A class action is superior to other methods for the fair and efficient
adjudication of the claims herein asserted, and no unusual difficulties are
likely to be encountered in the management of this action as a class action.
The likelihood of individual Class members prosecuting separate claims is
remote.
18. There is a well-defined community of interests in the questions of law
and fact involved affecting the members of the Class. Among the questions of
law and fact which are common to the Class, which predominate over questions
affecting any individual Class member are, INTER ALIA, the following:
a. whether defendants have engaged in conduct constituting unfair
dealing and have engaged in a plan and scheme to deceive the public stockholders
of Vivra and to enrich themselves at the expense of the Company's public
stockholders;
b. whether the proposed transaction is grossly unfair to the public
stockholders of Vivra;
c. whether defendant shave failed to disclose all material facts
relating to the proposal including the potential and expected positive future
financial benefits which they expect to derive from Vivra;
d. whether defendants have engaged and are continuing to engage in a
plan and scheme to eliminate the public stockholders of Vivra through
fraudulent, deceptive, and coercive means and devices;
e. whether defendants willfully and wrongfully failed or refused to
obtain or attempt to obtain a purchaser for the
5
<PAGE>
assets of Vivra at a higher price than the Incentive proposal;
f. whether plaintiffs and the other members of the Class would be
irreparably damaged were the transaction complained of herein consummated;
g. whether defendants have breached or aided and abetted the breach
of the fiduciary and other common law duties owed by them to plaintiffs and the
members of the Class; and
h. whether plaintiffs have been damaged and what is the proper
measure of damages.
19. Plaintiffs are members of the Class and are committed to prosecuting
this action and have retained competent counsel experienced in litigation of
this nature. Plaintiffs' claims are typical of the claims of the other
members of the Class and plaintiffs have the same interests as the other
members of the Class. Plaintiffs do not have interests antagonistic to or in
conflict with those they seek to represent. Plaintiffs are adequate
representatives of the Class.
20. The likelihood of individual Class members prosecuting separate
individual actions is remote due to the relatively small loss suffered by each
Class member as compared to the burden and expense of prosecuting litigation of
this nature and magnitude. Absent a class action, the defendants are likely to
avoid liability for their wrongdoing, and Class members are unlikely to obtain
redress for the wrongs alleged herein. There are no difficulties likely to be
encountered in the management of the Class claims. This Court is an appropriate
forum for this dispute.
6
<PAGE>
SUBSTANTIVE ALLEGATIONS
21. On or about January 28, 1997, in a BUSINESS WIRE release entitled
VIVRA INCORPORATED ANNOUNCES YEAR END RESULTS, Vivra announced that it earned
$ 0.34 and $ 1.27 per share for the quarter and year ended November 30, 1996,
respectively and that Vivra's earnings per share growth was 21% and 19% compared
to the prior year's corresponding periods. Vivra Renal Care (VRC) achieved
operating profit growth of 28% and 32% on treatment growth of 20% and 24% for
the quarter and year ended November 30, 1996, respectively. Vivra Specialty
Partners (VSP) revenues were $ 29.8 million for the quarter and $ 95.3 million
for the year ended November 30, 1996. VSP lost $ 142,000 in the quarter.
22. The release further noted that:
VIVRA ENTERS 1997 WITH BOTH OPERATING AND STRATEGIC MOMENTUM IN ITS TWO
BUSINESS UNITS.
-- VRC ended the year with 251 dialysis centers, caring for 14,380
patients. The center total includes 20 de novo units opened during the
year.
-- VRC's 1996 ending days revenue in accounts receivable was 73,
SUBSTANTIALLY BELOW THE INDUSTRY AVERAGE.
-- THERE CONTINUES TO BE STRONG BIPARTISAN SUPPORT IN CONGRESS FOR AN
EXTENSION OF THE PRIVATE SECTOR'S COORDINATION OF BENEFITS PERIOD FROM 18
TO 30 MONTHS.
--VSP added 30 physicians, 5 capitated network contracts and 485,000
specialty lives in the quarter, bringing the current totals to 97
physicians and 44 contracts which cover 4.7 million specialty lives.
Emphasis added.
23. On or about March 31, 1997 in a Business Wire release, entitled VIVRA
INCORPORATED ANNOUNCES FIRST QUARTER RESULTS, Vivra announced that it earned
$0.34 per share for the quarter ended February 28, 1997, compared to $0.29 per
share for the same period
7
<PAGE>
of the prior year, a 17.2% increase. The Company also announced that:
For the first quarter of 1997 compared to 1996, Vivra Renal
Care's (VRC) operating profits grew 25% to $23.2 million. Dialysis
treatments increased by 23% to 556,000. VRC ended the quarter with 260
dialysis centers, caring for 15,500 patients.
Vivra Specialty Partners (VSP) lost $ 149,000, after pooling
transaction costs of $ 240,000, on revenues of $35.0 million in the
quarter. VSP currently manages 51 capitated network contracts which
cover 5.7 million specialty lives.
24. On or about May 2, 1997 a Reuters article, entitled RESEARCH ALERT -
VIVRA (V.N.) RAISED, reported that Merrill Lynch upgraded Vivra to "near-term
accumulate" from "neutral" and recommended keeping Vivra as a long-term buy. On
this news, Vivra gained 3/8 to close at 28 for the day.
25. On or about May 5, 1997 in a Business Wire release, entitled
INCENTIVE'S GAMBRO GROUP TO ACQUIRE VIVRA INC., Vivra and Incentive, a holding
company controlled by the Wallenberg family of Sweden, announced that both
companies had signed a definitive merger agreement under which Incentive would
acquire VRC, including its nephrology disease management and nephrology
physician practice management operation. Specifically, the article noted:
Incentive intends to merger VRC with the Gambro Group, its wholly
owned, worldwide, fully integrated dialysis and medical technology
business.
Pursuant to the merger agreement, a cash tender offer will be
commenced by a wholly owned subsidiary of Incentive no later than May
9, 1997, to acquire all of the outstanding shares of Vivra common
stock for $ 35.62 per share or a total cash consideration of $ 1,592
million, of which $ 33.90 represents Incentive's net consideration for
VRC, or a total cash consideration of $ 1,515 million. As part of the
transaction, Vivra has also signed a definitive agreement to sell
Vivra Specialty Partners ("VSP"), its physician network and disease
management division, to a new company formed by
8
<PAGE>
Texas Pacific Group, Hellman & Freedman Capital Partners III, L.P. AND
BAIN CAPITAL for $ 85 million, representing net after-tax proceeds of
$ 77 million or approximately $ 1.72 per Vivra share.
Emphasis added.
26. The same article also indicated that defendants Thiry and Pagliuca,
who were both prior employees of Bain & Company which is a sister company of
Bain Capital, and the remaining board of directors, had "reviewed" the merger
agreement on behalf of its stockholders and had recommended that such
stockholders tender their shares pursuant to the offer.
27. The article further noted that:
The tender offer is expected to be completed in early June. All
shares not purchased in the tender offer will be converted into the right
to receive $35.62 per share in a second-step merger following the tender
offer.
The combination of VRC with Gambro will create a company with pro
forma 1996 worldwide revenues of $ 2.0 billion and earning before interest,
taxes, depreciation, and amortization ("EBITDA") of $ 410 million. THE
TRANSACTION IS EXPECTED TO GENERATE SIGNIFICANT OPERATING SYNERGIES.
Together the companies will serve approximately 26,000 dialysis patients in
the United States.
Mikael Lilius, president and chief executive officer of Incentive
said, "THIS TRANSACTION REPRESENTS A MAJOR STRATEGIC MOVE FOR INCENTIVE AND
CONTINUES OUR STRONG THRUST INTO THE HIGH GROWTH HEALTH CARE SECTOR. We
have consistently restructured and shifted our resources into this highly
attractive area. The acquisition of Vivra Renal Care is a logical next
step in the development of Incentive Group and demonstrates our strong
commitment to shareholder value creation."
Berthold Lindqvist, president and chief executive officer of Gambro
said, "VIVRA RENAL CARE IS A WELL-MANAGED COMPANY THAT FITS WELL WITH
GAMBRO. VRC WILL STRENGTHEN OUR POSITION AS A GLOBAL LEADER IN RENAL CARE.
We pioneered the forward integration strategy in the United States and have
distinguished ourselves as high-quality care providers. With this merger,
we will strengthen Gambro's position as a leading, fully integrated, renal
care management company with multiregional presence; FURTHERMORE THIS
TRANSACTION
9
<PAGE>
WILL GENERATE SIGNIFICANT OPERATING SYNERGIES, while allowing Gambro
-----------
to continue to provide a service of the highest quality."
* * * * *
... Incentive expects the acquisition to enhance cash earnings growth
(calculated before charges for depreciation and goodwill
amortization), with an accretive impact in its first full year and
significant contributions thereafter.
28. On or about May 6, 1997 The New York Times reported, in an article
entitled SWEDISH HOLDING COMPANY TO BUY U.S. DIALYSIS PROVIDER, that Vivra
shares jumped $6.75, or 24 percent, to $35, only $.62 less than Incentive's
offer of $35.62. The article also noted that:
THE SHARE PRICES OF OTHER COMPANIES THAT OPERATE KIDNEY-DIALYSIS, OR
RENAL CARE, CENTERS JUMPED ON THE NEWS, WHICH WALL STREET ANALYSTS SAID
PRESAGED MORE CONSOLIDATION IN THE DIALYSIS INDUSTRY. Patients with
defective kidneys regularly visit the centers to have their blood purified.
Total Renal Care Holdings was up $2.375 to $36.375, and the Renal Treatment
Centers rose $3.25, to $27.25, both on the Big Board.
Vivra has a roughly 8 percent market share in the United States,
following Fresenius A.G. of Germany, the industry leader with 20
percent, said Margo Vignola, a health care analyst with Merrill Lynch.
Fresenius expanded last year with a $4.4 billion acquisition of
National Medical Care, the dialysis unit of W.R. Grace.
MS. VIGNOLA SAID THE EUROPEAN COMPANIES "WANT THE EXPERTISE OF THE
AMERICAN COMPANIES FOR INTERNATIONAL MARKETS, WHICH ARE LOT LESS
DEVELOPED THAN HERE." FRESENIUS HAS PROJECTED 40 PERCENT GROWTH IN THE
GLOBAL MARKET, TO ONE MILLION PATIENTS, BY 2000. Samuel Isaly, an
analyst with Mehta & Isaly, said of the purchase of Vivra, "this is a
smaller version of the Fresenius-National Medical Care deal."
* * * * *
David Barry, president of VRC, the renal care unit of Vivra, will be
president of Gambro Health Care Patient Services, under which name the
combined company will operate. Gambro Health Care now serves 12,100
10
<PAGE>
patients in a number of countries. Vivra has 15,800 patients at 262
centers in 28 states and the District of Columbia. GAMBRO WOULD HAVE
$ 2 BILLION IN COMBINED SALES AFTER THIS ACQUISITION. Vivra, of San
Mateo, Calif., had revenue of $517 million in the fiscal year that
ended on Nov. 30.
Incentive said it planned to sell Vivra's physician network and
disease management unit for $85 million to a new company formed by the
Teas Pacific Group, Bain Capital and Hellman & Friedman Capital
Partners. KENT J. THIRY, CHIEF EXECUTIVE OF VIVRA, WOULD HEAD THE NEW
COMPANY. Vivra would be required to buy back its 5 percent
convertible subordinated notes for the principal amount plus interest.
MS. VIGNOLA SAID INCENTIVE WAS OFFERING "BASICALLY $33 PER SHARE
FOR THE DIALYSIS BUSINESS -- 10 TIMES EARNINGS BEFORE INTEREST,
DEPRECIATION, TAXES AND AMORTIZATION" --- and about $2 a share for
the physician network, which has been losing money.
LEONARD S. YAFFE, AN ANALYST IN SAN FRANCISCO WITH MONTGOMERY
SECURITIES, SAID CONSOLIDATION WOULD BE SPURRED BY THE FURTHER SPREAD
OF MANAGED CARE INTO DIALYSIS TREATMENT. HE SAID THE FEDERAL MEDICARE
PROGRAM, THE MAIN PAYER FOR SUCH TREATMENT, WAS EXPERIMENTING WITH
CONTRACTS THAT WOULD GIVE THE CENTERS OR A HEALTH MAINTENANCE
ORGANIZATION AN ANNUAL LUMP SUM FOR EACH PATIENT'S CARE, COVERING
DIALYSIS AS WELL AS ANY HOSPITALIZATION.
Emphasis added.
29. On the same day, May 6, 1997, The Los Angeles Times further reported,
in an article entitled SWEDISH FIRM OFFERS $1.6 BILLION FOR VIVRA:
Incentive has agreed to buy Vivra Inc. for $1.6 billion, or $35.62 a
share, in cash, furthering the drive of Sweden's Wallenberg family into
high-growth technology businesses. Incentive, one of the Wallenbergs' main
investment companies, will merge San Mateo-based Vivra into its wholly
owned Gambro, making the combined companies the No. 2 dialysis services
firm in the world. THE TRANSACTION COMES AMID A WAVE OF ACQUISITIONS IN
THE DIALYSIS INDUSTRY, AS COMPANIES TRY TO COMPETE WITH FRESENIUS MEDICAL
CARE, THE WORLD'S LARGEST PROVIDER OF DIALYSIS CARE. As part of the
agreement between Incentive and Vivra' board, Vivra will sell its disease
management unit, reducing the net cost of the acquisition to $ 1.52
billion. The Incentive offer is 26% higher than Vivra's Friday closing
price of
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$ 28.25. VIVRA SHARES ROSE $ 6.75 TO CLOSE AT $ 35 ON THE NEW YORK
STOCK EXCHANGE.
Emphasis Added.
30. Also on the same day, May 6, 1997, THE DAILY TELEGRAPH stated, in an
article entitled SWEDES BUY U.S. MEDICAL COMPANY FOR $1.6BN:
The merger with Gambro will boost the combined turnover to $ 2 billion,
while profits last year would have been $ 410m, BUT DIRECTORS BELIEVE
THAT THERE ARE SUBSTANTIAL SYNERGIES TO BE EXPLOITED. The two
companies have 26,000 dialysis patients in the United States. IT IS
ESTIMATED THAT THE NUMBER OF AMERICANS REQUIRING CHRONIC DIALYSIS
SERVICES HAS GROWN FROM ABOUT 66,000 IN 1982 TO 200,000. GAMBRO'S
PRESIDENT, BERTHOLD LINDGVIST, SAID: "VIVRA RENAL CARE IS A WELL
MANAGED COMPANY THAT FITS WELL WITH GAMBRO. WITH THIS MERGER WE WILL
STRENGTHEN GAMBRO'S POSITION AS A LEADING, FULLY INTEGRATED, RENAL
CARE MANAGEMENT COMPANY WITH MULTI-REGIONAL PRESENCE."
Emphasis added.
31. Defendants' intention to pursue the above transaction in breach of
their fiduciary duties owed to Vivra's stockholders to take all necessary steps
to ensure that Vivra stockholders will receive the maximum value realizable for
their shares in any extraordinary transaction involving the Company.
32. Defendants further breached their fiduciary duties by failing to honor
their obligation to observe the highest duties in good faith and fair dealing in
their dealings with the Company and its other shareholders by exercising their
positions of control in order to obtain financial gain for themselves not
available to the other shareholders and/or at the expense of the Company.
33. In addition, no independent committee was appointed to ensure that the
proposed transaction was fair to or in the best interests of the Company and its
stockholders, a further breach in fiduciary duty.
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34. The offer being advanced and the consideration offered -- $35.62 per
share of Vivra common stock -- is a grossly unfair price; does not reflect the
significant advantages to be obtained by Incentive as a result of the
transaction; and does not offer any control premium whatsoever. The stock is
currently selling on the open market for essentially the same price -- $34.62
per share -- only one dollar less than the current offer by Incentive. The
intrinsic value of Vivra is materially greater than the consideration proposed,
taking into account, INTER ALIA, Vivra's asset value, liquidation value,
expected growth, full extent of its future earnings potential, expected increase
in profitability, strength of its business, its revenues, cash flow and earnings
power.
35. Defendant's knowledge and economic power and that of the investing
public is unequal because the individual defendants and Vivra control the
business and corporate affairs of Vivra and are in possession of material non-
public information concerning the Company's assets, businesses, and future
prospects. This disparity makes it inherently unfair for them to act to
transfer ownership of Vivra from its public stockholders at this time and at
such an unfair and grossly inadequate price.
36. The proposed transaction is not the result of arm's-length
negotiations but was fixed arbitrarily by Incentive and agreed to by defendants
as part of the unlawful plan and scheme to obtain the entire ownership of Vivra
at the lowest possible price. These facts have not been disclosed by
defendants.
37. Further, the Vivra Board's willingness to entertain the proposed offer
requires them to take all reasonable steps to
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assure the maximization of stockholder value, including the implementation of a
bidding mechanism to foster a fair auction of the Company to the highest bidder
or the exploration of strategic alternatives which will return greater or
equivalent short-term value to the plaintiffs and the Class.
38. There in no indication that Vivra's board of directors has taken any
steps to ensure that the interests of Vivra's stockholders in maximizing the
value of their holdings were protected by conducting an auction for Vivra or
otherwise seeking out other potential purchasers or the highest possible bid for
the Company or exploring strategic alternatives which will obtain the highest
possible price for Vivra's stockholders or return greater or equivalent
short-term value to the plaintiffs and the Class. If the transaction is
consummated, Vivra's shareholders will be deprived of the opportunity for
substantial gains which the Company may realize.
39. By the acts, transactions, and courses of conduct alleged herein,
defendants, individually and as part of a common plan and scheme and/or aiding
and abetting one another in total disregard of their fiduciary duties, are
attempting to deceive plaintiffs and the Class and deprive them unfairly of
their investment in Vivra.
40. The individual defendants, knowing all of the above, exercised their
positions of control in order to obtain financial gain for themselves while
failing to take the necessary and appropriate steps to obtain the maximum value
realizable for the public shareholders of Vivra.
41. The proposed transaction is wrongful, unfair, and
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harmful to Vivra's public stockholders, and represents an attempt by defendants
to aggrandize their personal and financial positions and interests and to enrich
themselves, at the expense of and to the detriment of the public stockholders of
the Company. The proposed transaction will deny Class members their right to
share proportionately in the true value of Vivra's assets, profitable business,
and future growth in profits and earnings, while usurping the same for the
benefit of Incentive at an unfair and inadequate price.
42. By reason of all of the foregoing, defendants herein have willfully
participated in unfair dealing toward plaintiffs and the other members of the
Class and have engaged in and substantially assisted and aided and abetted each
other in breach of the fiduciary duties owed by them to the Class.
43. Defendants have violated fiduciary and other common law duties owed to
the plaintiffs and the other members of the Class in that they have not and are
not exercising independent business judgment, have acted and are acting to the
detriment of the Class in order to benefit themselves and/or their colleagues.
44. As a result of the actions of the defendants, plaintiffs and the Class
have been and will be damaged in that they have been deceived, are the victims
of unfair dealing, and are not receiving the fair value, of Vivra's assets and
businesses.
45. Unless enjoined by this Court, defendants will continue to breach
their fiduciary duties owed to plaintiffs and the Class, and will succeed in
their plan to enrich themselves by excluding the Class from its fair
proportionate share of Vivra's assets and businesses, all to the irreparable
harm of the Class.
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46. Plaintiffs and the Class have no adequate remedy of law.
WHEREFORE, plaintiffs pray for judgment and relief as follows:
(1) declaring that this lawsuit is properly maintainable as a class
action and certifying plaintiffs as representatives of the Class;
(2) declaring that the defendants and each of them have committed or
aided and abetted a gross abuse of trust and have breached their fiduciary
duties to plaintiffs and the other members of the Class;
(3) declaring the transaction to be a nullity;
(4) preliminarily and permanently enjoining defendants, and all
persons acting under, in concert with, or for them, from proceeding with,
consummating or closing the transaction;
(5) in the event the transaction is consummated, rescinding it and
setting it aside;
(6) ordering defendants, jointly and severally, to account to
plaintiffs and the Class for all profits realized and to be realized by them as
a result of the transaction complained of and, pending such accounting, to hold
such profits in a constructive trust for the benefit of plaintiffs and other
members of the Class;
(7) ordering defendants to permit a stockholders' committee
comprised of Class members and their representatives only to ensure a fair
procedure, adequate procedural safe-guards and independent input by
plaintiffs and the Class in connection with any transaction for the shares of
Vivra;
(8) awarding compensatory damages against defendants,
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jointly and severally, in the amount to be determined at trial, together with
prejudgment interest at the maximum rate allowable by law;
(9) awarding plaintiffs and the Class their costs and disbursements
and reasonable allowances for plaintiffs' counsel and experts' fees and
expenses; and
(10) granting such other and further relief as may be just and proper.
JURY DEMAND
Plaintiffs demand a trial by jury of all issues so triable.
Dated: May 7, 1997
KEVIN J. YOURMAN
VAHN ALEXANDER
WEISS & YOURMAN
By: /s/ Vahn Alexander
---------------------
Vahn Alexander
10940 Wilshire Boulevard
24th Floor
Los Angeles, CA 90024
(213) 208-2800
JOSEPH H. WEISS
WEISS & YOURMAN
551 Fifth Avenue
Suite 1600
New York, NY 10176
(212) 682-3025
Attorneys for Plaintiffs
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