<PAGE>
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): September 25, 1998
DAY RUNNER, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
0-19835 95-3624280
(Commission File Number) (I.R.S. Employer Identification No.)
15295 Alton Parkway
Irvine, CA 92618
(Address of principal executive offices)
Registrant's telephone number, including area code: 714/680-3500
<PAGE>
ITEM 5. OTHER EVENTS.
On September 25, 1998, Day Runner, Inc. a Delaware corporation (the
"Registrant") announced that it has reached agreement with the Board of
Directors of Filofax on the terms of a recommended cash tender offer for
Filofax. This follows Day Runner's announcement yesterday of a
non-recommended cash tender offer for Filofax and subsequent discussions
between the two companies.
The recommended offer is for L2.10 (approximately US$3.53) per share for
a total of approximately US$84,500,000. As stated in yesterday's
announcement, the proposed acquisition will be funded by bank debt.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Exhibits
-------------
Item No. Exhibit Index
-------- -------------
99.1 Press Release (US version) issued September 25, 1998 by
the Registrant
99.2 Press Release (UK version) issued September 25, 1998 by
the Registrant
SIGNATURE
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.
DAY RUNNER, INC.
by: /s/ JAMES E. FREEMAN, JR.
--------------------------------------
James E. Freeman, Jr.
Chief Executive Officer
Dated: September 25, 1998
<PAGE>
EXHIBIT INDEX
Exhibit Number Description Page No.
99.1 Press Release (US version) issued September
25, 1998 by he Registrant
99.2 Press Release (UK version) issued September
25, 1998 by the Registrant
<PAGE>
FOR IMMEDIATE RELEASE CONTACT: Day Runner, Inc.
Judy Tucker
Vice President, Business Development
714/680-3500, ext. 3171
Jenifer Kirtland
Director, Investor Relations
714/680-3500, ext. 3697
DAY RUNNER AND FILOFAX AGREE ON RECOMMENDED OFFER
IRVINE, CA., September 25, 1998. Day Runner, Inc. (Nasdaq/DAYR), a
marketer of broad-based personal organizing products to broad consumer
audiences through retail distribution and the leading producer of paper-based
organizers for the U.S. retail market, today announced that it has reached
agreement with the Board of Directors of Filofax on the terms of a
recommended cash tender offer for Filofax. This follows Day Runner's
announcement yesterday of a non-recommended cash tender offer for Filofax and
subsequent discussions between the two companies.
The recommended offer is for L2.10 (approximately US$3.53) per share for
a total of approximately US$84.5 million. The offer represents a trailing
p/e of 14.0 on earnings from continuing operations and a premium of 50.0%
over the September 23rd closing mid-market price, which represented a
trailing p/e of 9.3. As stated in yesterday's announcement, the proposed
acquisition will be funded by bank debt.
Day Runner chairman Mark Vidovich commented, "We are delighted that
Filofax's Board is recommending our offer to their stockholders. We're
confident that the Filofax brand will be an excellent complement to Day
Runner's current product lines, and we believe that Filofax's established
distribution in key markets outside the U.S. offers substantial opportunities
for the international growth of the combined business."
Day Runner owns or has obtained irrevocable commitments from Filofax
stockholders to accept the recommended offer for a total of 5,568,211 shares,
representing approximately 23.2% of Filofax's outstanding shares.
- MORE -
<PAGE>
DAY RUNNER AND FILOFAX AGREE ON RECOMMENDED OFFER
PAGE 2
Filofax is a manufacturer and supplier of stationery products, including
Filofax, Lefax and Microfile brand personal organizers. In addition to its
core personal organizer business, Filofax markets business forms and high-end
pens. Filofax has wholly owned sales subsidiaries in France, Germany, Hong
Kong, Scandinavia, the UK and the U.S. and sells primarily through retail
distribution channels in each market. Filofax's sales from continuing
operations for fiscal 1998 were L37.7 million (approximately US$63.3
million), with 86%, or approximately US$54.6 million, to markets outside the
U.S.
As is usual under UK takeover practice, the offer is subject to an
"acceptance condition" to the effect that Day Runner must acquire not less
than 90% of the Filofax shares (or such lesser percentage down to 50% as Day
Runner may decide) either through acceptances of the offer or by purchases
outside the offer. The offer will be open for acceptance for a minimum of 20
business days, although this period may be extended by Day Runner for up to
60 days in total. The offer is also subject to anti-trust and other usual
conditions that must be satisfied (unless waived by Day Runner) no later than
21 days after the acceptance condition is satisfied. Accordingly, the
outcome of the offer is likely to be determined in Day Runner's fiscal 1999
second quarter ending December 31, 1998.
With the exception of actual reported financial results and statements
of historical fact, the statements made in this news release or other
statements that may be made about the transaction, including, without
limitation the effect of the acquisition of Filofax on Day Runner's earnings,
are forward looking, reflect Day Runner's current expectations and involve
certain risks and uncertainties. There can be no assurance that the
Company's actual future performance will meet its expectations. As discussed
in the Company's fiscal 1997 Annual Report on Form 10-K, the Company's future
operating results are difficult to predict and subject to significant
fluctuations. Factors that may cause future results to differ materially
from the Company's current expectations include, among others: the timing
and size of orders from large customers, timing and size of orders for new
products, large customers' inventory management, competition, general
economic conditions, the health of the retail environment, supply constraints
and supplier performance. In addition, unanticipated events and
circumstances may render the acquisition of Filofax by Day Runner less
beneficial than expected, and the differences may be significant.
<PAGE>
- MORE -
DAY RUNNER AND FILOFAX AGREE ON RECOMMENDED OFFER
PAGE 3
Day Runner is a marketer of personal organizing products to broad-based
consumer audiences through retail distribution. The Company is the leading
developer, manufacturer and marketer of paper-based organizers for the U.S.
retail market and also develops, manufactures and markets a number of related
organizing products, including telephone/address books, appointment books,
executive accessories, products for children and students, organizing and other
wall boards and flexible, laminated wall planners, among others. Day Runner's
products are carried by more than 20,000 retail stores across the U.S. and are
available in a number of countries in North America, Europe and the Asia-Pacific
region.
This announcement does not constitute an offer or an invitation to purchase
any securities, directly or indirectly, in Canada, Australia or Japan. Further,
this release is not for distribution in Canada, Australia or Japan.
###
Day Runner is a registered trademark of Day Runner, Inc. All other
trademarks remain the property of their respective companies.
<PAGE>
PRESS RELEASE 25 September 1998
FOR IMMEDIATE RELEASE
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO CANADA, AUSTRALIA OR
JAPAN
DAY RUNNER UK PLC
REVISED AND RECOMMENDED OFFER
FOR
FILOFAX GROUP PLC
SUMMARY
Following a meeting between representatives of Day Runner UK and Filofax last
night, the Boards of Day Runner UK and Filofax announce that they have agreed
the terms of a Recommended Offer for Filofax. The Recommended Offer is being
made by Wasserstein Perella on behalf of Day Runner UK, a wholly owned
subsidiary of Day Runner. Cazenove is broker to the Recommended Offer.
The Recommended Offer:
- is 210 pence in cash for each Filofax Share
- values the entire issued ordinary share capital of Filofax at
approximately L50.3 million
- represents a premium of 50.0 per cent. over the closing middle market
price of 140 pence per Filofax Share on 23 September 1998, the day
before Day Runner UK announced its original offer terms
- represents a multiple of 14.0x Filofax's 1998 earnings per share,
before the loss attributable to Henry Ling
Day Runner owns or has irrevocable undertakings to accept the Recommended
Offer in respect of 5,568,211 Filofax Shares representing approximately
23.2 per cent. of the Filofax issued share capital.
<PAGE>
Commenting on the Recommended Offer, Robin Field, Chairman of Filofax, said
today:
"The Board of Filofax unanimously recommends Day Runner's offer, which we
believe fairly recognises the value which we have worked so hard to build. The
Filofax brand will be an excellent complement to Day Runner's existing products
and should provide a significant opportunity for the international growth of the
enlarged business."
Mark Vidovich, Chairman of Day Runner added:
"I am delighted to have achieved this result. This is an excellent acquisition
for Day Runner. It brings us a valuable European brand and creates a strong
platform for our future international growth."
PRESS ENQUIRIES:
DAY RUNNER:
Day Runner Mark Vidovich Tel: 0171 446 8000
Judy Tucker Tel: 0171 446 8000
Wasserstein Perella Howard Covington Tel: 0171 446 8000
Karen Dodd Tel: 0171 446 8000
Cazenove Julian Cazalet Tel: 0171 825 9350
Ed Byers Tel: 0171 825 9113
Brunswick James Bradley Tel: 0171 404 5959
Lucas van Praag Tel: 0171 404 5959
FILOFAX:
Filofax Robin Field Tel: 0171 432 3000
Rothschild Tony Allen Tel: 0171 280 5000
Hoare Govett Mark Astaire Tel: 0171 601 0101
Ludgate Terry Garrett Tel: 0171 253 2252
The Recommended Offer is not being made, directly or indirectly, in or into, or
by use of the mails of, or by any means or instrumentality (including, without
limitation, telephonically or electronically) of interstate or foreign commerce
of, or any facilities of a national securities exchange of, Canada, Australia or
Japan and the Recommended Offer will not be capable of acceptance by any such
use, means, instrumentality or facilities or from within Canada, Australia or
Japan, except pursuant to any applicable exemption.
The Loan Notes which may be issued pursuant to the Recommended Offer have not
been, and will not be, registered under the Securities Act or under any of the
relevant securities laws of any State of the United States, Canada, Australia or
Japan. Accordingly, unless an exemption under the Securities Act or such
relevant securities laws is applicable, the Loan Notes may not be offered, sold,
resold, delivered or distributed, directly or indirectly, in or into the United
States, Canada, Australia or Japan and will not be available to US Persons.
Wasserstein Perella, which is regulated in the UK by The Securities and Futures
Authority Limited, is acting for Day Runner and Day Runner UK and no one else in
connection with the Recommended Offer and will not be responsible to anyone
other than Day Runner and Day
<PAGE>
Runner UK for providing the protections afforded to customers of Wasserstein
Perella nor for giving advice in relation to the Recommended Offer.
Rothschild, which is regulated in the UK by The Securities and Futures Authority
Limited, is acting for Filofax and no one else in connection with the
Recommended Offer and will not be responsible to anyone other than Filofax for
providing the protections afforded to customers of Rothschild nor for giving
advice in relation to the Recommended Offer.
THIS SUMMARY SHOULD BE READ IN CONJUNCTION WITH THE ATTACHED ANNOUNCEMENT.
<PAGE>
PRESS RELEASE 25 September 1998
FOR IMMEDIATE RELEASE
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO CANADA, AUSTRALIA OR
JAPAN
DAY RUNNER UK PLC
REVISED AND RECOMMENDED OFFER
FOR
FILOFAX GROUP PLC
INTRODUCTION
Following a meeting between representatives of Day Runner UK and Filofax last
night, the Boards of Day Runner UK and Filofax announce that they have agreed
the terms of a Recommended Offer for Filofax. The Recommended Offer is being
made by Wasserstein Perella on behalf of Day Runner UK, a wholly owned
subsidiary of Day Runner, for the entire issued and to be issued ordinary
share capital of Filofax not already owned by Day Runner UK. Cazenove is
broker to the Recommended Offer.
THE RECOMMENDED OFFER
The Recommended Offer is being made on the following basis:
FOR EACH FILOFAX SHARE 210 PENCE IN CASH
The Recommended Offer values Filofax's issued share capital at approximately
L50.3 million.
THE BOARD OF FILOFAX, WHICH HAS BEEN SO ADVISED BY ROTHSCHILD, CONSIDERS THE
TERMS OF THE RECOMMENDED OFFER TO BE FAIR AND REASONABLE. IN PROVIDING
ADVICE TO THE BOARD OF FILOFAX, ROTHSCHILD HAS TAKEN INTO ACCOUNT THE
COMMERCIAL ASSESSMENTS OF THE DIRECTORS OF FILOFAX. ACCORDINGLY, THE
DIRECTORS OF FILOFAX UNANIMOUSLY RECOMMEND ALL SHAREHOLDERS TO ACCEPT THE
RECOMMENDED OFFER AS THEY INTEND TO DO IN RESPECT OF THEIR FILOFAX SHARES.
THE DIRECTORS OF FILOFAX HAVE GIVEN IRREVOCABLE UNDERTAKINGS TO ACCEPT THE
RECOMMENDED OFFER IN RESPECT OF 590,264 FILOFAX SHARES HELD BY THEM,
REPRESENTING APPROXIMATELY 2.5 PER CENT. OF FILOFAX ISSUED SHARE CAPITAL.
<PAGE>
The Recommended Offer represents a premium of 50.0 per cent. to the closing
middle market price of 140 pence per Filofax Share on 23 September 1998, the day
before Day Runner UK announced its original offer terms. It represents a
multiple of 14.0x Filofax's 1998 earnings per share, before the loss
attributable to Henry Ling.
The Recommended Offer will be subject to the conditions and on the terms set out
in Appendix I and on the further terms to be set out in the Recommended Offer
Document.
Filofax Shares will be acquired pursuant to the Recommended Offer fully paid and
free from all liens, equities, charges, encumbrances and other interests and
together with all rights now or hereafter attaching thereto, including, without
limitation, the right to receive and retain all dividends and other
distributions announced, declared, made or paid after 31 March 1998. Filofax
Shareholders on the register on 2 October 1998 will be entitled to receive and
retain the final dividend of 2.42 pence per Filofax Share payable on 30 October
1998.
The Recommended Offer will extend to all existing issued Filofax Shares and any
Filofax Shares which are unconditionally allotted or issued prior to the date on
which the Recommended Offer closes (or such earlier date not (without the
consent of the Panel) being earlier than the date on which the Recommended Offer
becomes or is declared unconditional as to acceptances or, if later, the first
closing date of the Recommended Offer, as Day Runner UK may decide) as a result
of the exercise of options under the Filofax Share Schemes or otherwise.
BACKGROUND TO AND REASONS FOR THE RECOMMENDED OFFER
Day Runner is a logical international partner for Filofax. Day Runner and
Filofax are complementary both in geographical coverage and in distribution
channels. The combination of Day Runner and Filofax will create a strong
platform to develop the Filofax brand.
INFORMATION ON DAY RUNNER UK
Day Runner UK is an indirect wholly owned subsidiary of Day Runner, and has been
established in order to implement the Recommended Offer. To date, Day Runner UK
has engaged in no activities other than those incidental to its incorporation
and the making of the Recommended Offer.
INFORMATION ON DAY RUNNER
Day Runner markets personal organising products to broad-based consumer
audiences through retail distribution channels. It is the leading producer
of paper-based personal organisers for the US retail market and also supplies
a number of related organising products. Day Runner is headquartered in
Irvine, California. Its shares are quoted on The Nasdaq Stock Market in the
US (ticker symbol "DAYR"), and it has a market capitalisation of
approximately US$ 229 million (L136 million).
In the year ended 30 June 1998, Day Runner reported audited consolidated
operating profit of US$25.6 million (L15.2 million) on sales of US$167.8
million (L99.9 million). This represented
<PAGE>
sales growth of 31.8 per cent. over the prior year. At 30 June 1998, Day
Runner had shareholders' funds of US$74.5 million (L44.4 million).
INFORMATION ON FILOFAX
Filofax is a manufacturer and supplier of stationery products. Filofax's
core business is the supply of ring binder organisers under the Filofax and
Microfile brands. Other products include time management systems, business
forms and telephone message pads and up-market writing instruments.
In the year ended 31 March 1998, Filofax's audited consolidated turnover was
L42.2 million (L37.7 million for continuing operations) and operating profit
was L4.3 million (L6.1 million for continuing operations). Net assets at 31
March 1998 were L10.5 million.
THE LOAN NOTE ALTERNATIVE
Instead of some or all of the cash consideration which would otherwise be
receivable by them under the Recommended Offer, Filofax Shareholders (other
than certain overseas persons) accepting the Recommended Offer will be
entitled to elect to receive Loan Notes on the following basis:
FOR EACH L1 OF CASH CONSIDERATION
UNDER THE RECOMMENDED OFFER L1 NOMINAL OF LOAN NOTES
The Loan Notes will be unsecured obligations of Day Runner UK and will be
issued, credited as fully paid, in amounts and integral multiples of L1
nominal value; all fractional entitlements will be disregarded and not paid.
The Loan Notes will bear interest (from the date of issue to the relevant
holder of Loan Notes) at a rate of 1.0 per cent. per annum below LIBOR.
Interest on the Loan Notes will be payable annually in arrears on 30
September (or, if not a business day in any year, on the first business day
thereafter), commencing 30 September 1999. The Loan Notes will be redeemable
at the option of the holders on each interest payment date from and including
30 September 1999 (or, if not a business day, on the first business day
thereafter ). Unless previously redeemed or purchased, the Loan Notes will
be redeemed on 30 September 2003 or, if not a business day, on the first
business day thereafter. The Loan Notes will, subject to certain conditions,
be transferable but no application is intended to be made for the Loan Notes
to be listed, or dealt in, on any stock exchange. Payment of principal of
and interest on the Loan Notes will be guaranteed by Day Runner. The Loan
Notes have not been, and will not be, registered under the Securities Act or
under any other securities laws and should not be offered, sold, resold,
delivered or distributed, directly or indirectly, in or into the United
States, Canada, Australia or Japan and will not be available to US Persons
(in any such case except in transactions exempt from or not subject to the
registration requirements of the Securities Act or the relevant securities
laws of any State of the United States, Canada, Japan or Australia).
The Loan Note Alternative will be conditional on the Recommended Offer
becoming or being declared unconditional in all respects and will remain open
for so long as the Recommended Offer remains open for acceptance. No Loan
Notes will be issued unless, by the time the Recommended Offer becomes or is
declared wholly unconditional, valid elections from
<PAGE>
accepting Filofax Shareholders have been received for at least L5 million
nominal value of Loan Notes (or such lesser value as Day Runner UK may
decide). If insufficient elections are received, Filofax Shareholders who
validly elect for the Loan Note Alternative will instead receive cash in
accordance with the terms of the Recommended Offer. Details of the principal
terms of the Loan Notes will be contained in the Recommended Offer Document.
FINANCING FOR THE RECOMMENDED OFFER
Day Runner will finance the Recommended Offer out of medium term credit
facilities which it has put in place both for this purpose and to provide
working capital for the Day Runner Group in future.
EMPLOYEES
The Board of Day Runner has confirmed that the existing employment rights,
including pension rights, of the employees of Filofax will be fully
safeguarded.
FILOFAX SHARE SCHEMES
The Recommended Offer extends to any Filofax Shares unconditionally allotted
or issued prior to the date on which the Recommended Offer closes (or such
earlier date as Day Runner UK may determine) as a result of the exercise of
options granted under the Filofax Share Schemes. To the extent that such
options are not or cannot be exercised in full, it is intended that
appropriate proposals will be made to option holders under the Filofax Shares
Schemes in due course, once the Recommended Offer has become unconditional in
all respects.
IRREVOCABLE UNDERTAKINGS AND SHAREHOLDINGS
Day Runner UK has received irrevocable undertakings to accept the Recommended
Offer from the Directors and a former director of Filofax and from certain
members of their families and associated interests in respect of holdings
amounting, in aggregate, to 4,168,211 Filofax Shares representing
approximately 17.4 per cent. of the Filofax issued share capital. The
irrevocable undertakings extend to any further Filofax Shares acquired
hereafter including any Filofax Shares issuable on exercise of share options
granted under the Filofax Share Schemes and give no right of withdrawal in
the event that a higher offer is made.
Following the announcement of the original offer terms on 24 September 1998,
Day Runner UK acquired 1.4 million Filofax Shares by means of market
purchases and now owns or has irrevocable undertakings to accept the
Recommended Offer in respect of 5,568,211 Filofax Shares representing
approximately 23.2 per cent. of the Filofax issued share capital.
Save as set out above, neither Day Runner nor Day Runner UK, nor any of their
respective directors nor, so far as Day Runner UK is aware, any person acting
in concert with Day Runner or Day Runner UK, owns or controls any Filofax
Shares or has any option to acquire any Filofax Shares, or has entered into
any derivative referenced to securities of Filofax which remains outstanding.
<PAGE>
GENERAL
The Recommended Offer Document, setting out details of the Recommended Offer
(including the Loan Note Alternative) and the Form of Acceptance will be posted
to Filofax Shareholders as soon as practicable. The Recommended Offer will be
open for at least twenty business days from the date of the Recommended Offer
Document.
The availability of the Recommended Offer and any election thereunder to persons
outside the UK may be affected by the laws of the relevant jurisdiction. Such
persons should inform themselves about and observe any applicable requirements.
This announcement does not constitute an offer or an invitation to purchase any
securities.
Certain terms used in this announcement are defined in Appendix II.
Day Runner is a registered trademark.
PRESS ENQUIRIES:
DAY RUNNER:
Day Runner Mark Vidovich Tel: 0171 446 8000
Judy Tucker Tel: 0171 446 8000
Wasserstein Perella Howard Covington Tel: 0171 446 8000
Karen Dodd Tel: 0171 446 8000
Cazenove Julian Cazalet Tel: 0171 825 9350
Ed Byers Tel: 0171 825 9113
Brunswick James Bradley Tel: 0171 404 5959
Lucas van Praag Tel: 0171 404 5959
FILOFAX:
Filofax Robin Field Tel: 0171 432 3000
Rothschild Tony Allen Tel: 0171 280 5000
Hoare Govett Mark Astaire Tel: 0171 601 0101
Ludgate Terry Garrett Tel: 0171 253 2252
Wasserstein Perella, which is regulated in the UK by The Securities and
Futures Authority Limited, is acting for Day Runner and Day Runner UK and no
one else in connection with the Recommended Offer and will not be responsible
to anyone other than Day Runner and Day Runner UK for providing the
protections afforded to customers of Wasserstein Perella nor for giving
advice in relation to the Recommended Offer.
<PAGE>
Rothschild, which is regulated in the UK by The Securities and Futures
Authority Limited, is acting for Filofax and no one else in connection with
the Recommended Offer and will not be responsible to anyone other than
Filofax for providing the protections afforded to customers of Rothschild nor
for giving advice in relation to the Recommended Offer.
The Recommended Offer is not being made, directly or indirectly, in or into,
or by use of the mails of, or by any means or instrumentality (including,
without limitation, telephonically or electronically) of interstate or
foreign commerce of, or any facilities of a national securities exchange of,
Canada, Australia or Japan and the Recommended Offer will not be capable of
acceptance by any such use, means, instrumentality or facilities or from
within Canada, Australia or Japan except pursuant to any applicable exemption.
The Loan Notes which may be issued pursuant to the Recommended Offer have not
been, and will not be, registered under the Securities Act or under any of
the relevant securities laws of any State of the United States, Canada,
Australia or Japan. Accordingly, unless an exemption under the Securities
Act or such relevant securities laws is applicable, the Loan Notes may not be
offered, sold, resold, delivered or distributed, directly or indirectly, in
or into the United States, Canada, Australia or Japan and will not be
available to US Persons.
<PAGE>
APPENDIX I
CONDITIONS AND CERTAIN FURTHER TERMS OF THE RECOMMENDED OFFER
The Recommended Offer, which is being made by Wasserstein Perella on behalf of
Day Runner UK, will comply with the applicable rules of the London Stock
Exchange and the Code and with US federal securities laws (except to the extent
that exemptive relief has been granted by the SEC). In addition, the
Recommended Offer (which includes the Loan Note Alternative) will be subject to
the following conditions:
(i) valid acceptances being received (and not, where permitted, withdrawn) by
not later than 3.00 pm (London time) on the first closing date of the
Recommended Offer (or such later time(s) and/or date(s) as Day Runner UK
may, subject to the rules of the Code, decide) in respect of not less than
90 per cent. (or such lesser percentage as Day Runner UK may decide) in
nominal value of the Filofax Shares to which the Recommended Offer relates,
provided that this condition shall not be satisfied unless Day Runner UK
and/or its wholly owned subsidiaries shall have acquired or agreed to
acquire, whether pursuant to the Recommended Offer or otherwise, Filofax
Shares carrying in aggregate more than 50 per cent. of the voting rights
then exercisable at a general meeting of Filofax. For the purposes of this
condition:
(a) to the extent, if any, required by the Panel, Filofax Shares that are
unconditionally allotted but not issued before the Recommended Offer
becomes or is declared unconditional as to acceptances, whether
pursuant to the exercise of any outstanding subscription or conversion
rights or otherwise, shall be deemed to carry the voting rights they
will carry upon issue; and
(b) the expression "Filofax Shares to which the Recommended Offer relates"
shall be construed in accordance with Sections 428 to 430F of the
Companies Act;
(ii) an announcement being made indicating in terms satisfactory to Day Runner
UK that it is not the intention of the Secretary of State for Trade and
Industry to refer the proposed acquisition of Filofax by Day Runner UK, or
any matters arising therefrom, to the Monopolies and Mergers Commission;
(iii) no relevant authority having intervened in a way that would or might
reasonably be expected to:
(a) make the Recommended Offer or its implementation or the acquisition or
proposed acquisition by any member of the Wider Day Runner Group of
any Filofax Shares, or the acquisition of control of any member of the
Wider Filofax Group by any member of the Wider Day Runner Group, void,
unenforceable and/or illegal or directly or indirectly restrain,
restrict, prohibit, delay or otherwise interfere with the
implementation thereof, or impose additional conditions or obligations
with respect thereto, or otherwise challenge or hinder the Recommended
Offer or its implementation or the acquisition or proposed acquisition
of any Filofax Shares, or the acquisition of control of any member of
the Wider Filofax Group by any member of the Wider Day Runner Group;
(b) require, prevent or delay the divestiture or alter the terms of any
proposed divestiture by any member of the Wider Day Runner Group or
the Wider Filofax Group of all or any part of their respective
businesses, assets or properties or impose any limitation on the
ability of any of them to conduct any of their respective businesses
or to own any of their respective assets or properties or any part
thereof;
(c) impose any limitation on, or result in a delay in, the ability of any
member of the Wider Day Runner Group or of any member of the Wider
Filofax Group, directly or indirectly, to acquire or hold or exercise
effectively any rights of ownership of shares or loans or securities
convertible into shares or any other securities (or the equivalent) in
any member
<PAGE>
of the Wider Filofax Group or to exercise management control over any
such member of the Wider Filofax Group;
(d) require any member of the Wider Day Runner Group or the Wider Filofax
Group to acquire or to offer to acquire any shares or other securities
(or the equivalent) or interest in any member of the Wider Day Runner
Group or the Wider Filofax Group or any asset owned by any third party
or to sell, or to offer to sell, any shares or other securities (or
the equivalent) or interest in or any asset owned by any member of the
Wider Day Runner Group or the Wider Filofax Group;
(e) result in a material delay in the ability of any member of the Wider
Day Runner Group, or render any member of the Wider Day Runner Group
unable, to acquire some or all of the shares or other securities (or
the equivalent) or interest in, or control of, any member of the Wider
Filofax Group or require or prevent or delay divestiture by any member
of the Wider Day Runner Group or the Wider Filofax Group of the same;
(f) impose any material limitation on the ability of any member of the
Wider Day Runner Group or the Wider Filofax Group to co-ordinate all
or any part of its business with all or any part of the business of
any other member of the Wider Day Runner Group or the Wider Filofax
Group; or
(g) otherwise materially and adversely affect the business, assets,
profits or prospects of any member of the Wider Day Runner Group or
Wider Filofax Group,
and all applicable waiting and other time periods during which any relevant
authority could have intervened, in respect of the Recommended Offer or the
acquisition or proposed acquisition of any shares or other securities (or
the equivalent) or interest in, or control of, any member of the Wider
Filofax Group by any member of the Wider Day Runner Group, having expired,
lapsed or terminated;
(iv) all necessary notifications and filings having been made, all regulatory
and statutory obligations having been complied with, all appropriate
waiting or other time periods under any applicable legislation or
regulations in any jurisdiction having expired, lapsed or terminated in
each case in respect of the Recommended Offer or the acquisition or
proposed acquisition of any shares or other securities (or the equivalent)
or interest in, or control of, any member of the Wider Filofax Group by any
member of the Wider Day Runner Group and all authorisations and
determinations necessary or appropriate in any jurisdiction for or in
respect of the Recommended Offer or the acquisition or proposed acquisition
of any shares or other securities (or the equivalent) or interest in, or
control of, any member of the Wider Filofax Group by any member of the
Wider Day Runner Group or in relation to the affairs of any member of the
Wider Filofax Group having been obtained in terms and in a form
satisfactory to Day Runner UK from all relevant authorities or (without
prejudice to the generality of the foregoing) from any persons or bodies
with whom any member of the Wider Filofax Group has entered into
contractual arrangements and such authorisations and determinations
together with all authorisations and determinations necessary or
appropriate for any member of the Wider Filofax Group to carry on its
business remaining in full force and effect at the time at which the
Recommended Offer becomes otherwise unconditional in all respects and all
filings necessary for such purpose having been made and there being no
notice of any intention to revoke, suspend, restrict, modify or not renew
any of the same having been received;
(v) there being no provision of any agreement, arrangement, licence, permit or
other instrument to which any member of the Wider Filofax Group is a party
or by or to which any such member or any of its assets may be bound,
entitled or subject which would or might reasonably be expected to, as a
result of (i) the Recommended Offer, (ii) the proposed acquisition by any
member of the Wider Day Runner Group of the shares or other securities (or
the equivalent) or interest in any member of the Wider Filofax Group or any
of them, or (iii) a change in the control or management of any member of
the Wider Filofax Group, result in, in any such case to an extent or having
a significance that is material in the context of the Wider Filofax Group
as a whole:
<PAGE>
(a) any moneys borrowed by, or any other indebtedness, actual or
contingent, of or any grant available to any such member being or
becoming repayable or capable of being declared repayable immediately
or prior to its stated maturity, or the ability of any such member to
borrow moneys or incur any indebtedness being withdrawn or inhibited;
(b) any such agreement, arrangement, licence, permit or other instrument
being terminated or modified or any obligation or liability arising or
any action being taken or arising thereunder;
(c) the rights, liabilities, obligations or interests of any such member
under any such agreement, arrangement, licence, permit or instrument
or the interests or business of any such member in or with any other
person, firm, company or body (or any arrangements relating to any
such interests or business) being terminated or modified or affected;
(d) any such member ceasing to be able to carry on its business under any
name under which it at present does so or ceasing to be able to use in
its business any names, trademarks or other intellectual property
rights which it at present uses, in each case on the same basis and
terms as at present apply;
(e) any assets or interests of any such member being or falling to be
disposed of or charged or any right arising under which any such asset
or interest could be required to be disposed of or charged;
(f) the creation of any mortgage, charge or other security interest over
the whole or any part of the business, property or assets of any such
member or any such security interest (whenever and wherever arising or
having arisen) becoming enforceable;
(g) the value of, or financial or trading position or prospects of, any
such member being prejudiced or adversely affected; or
(h) the creation of any liability, actual or contingent, by any such
member;
and no event having occurred which, under any provision of any agreement,
arrangement, licence, permit or other instrument to which any member of the
Wider Filofax Group is a party or by or to which any such member or any of
its assets may be bound, entitled or subject, would or might reasonably be
expected to result in any of the events or circumstances as are referred to
in subparagraphs (a) to (h) of this condition (v), in any such case to an
extent or having a significance that is material in the context of the
Wider Filofax Group as a whole;
(vi) no member of the Wider Filofax Group having since 31 March 1998 (save as
disclosed in the annual report and accounts of Filofax for the year ended
31 March 1998 or otherwise announced on or before 23 September 1998 by
Filofax on the London Stock Exchange (information which has been disclosed
or announced in such manner and on or before such date being "publicly
announced")):
(a) (save as between Filofax and members of the Wholly owned Filofax Group
or upon the exercise of rights to subscribe for Filofax Shares
pursuant to the exercise of options granted under any of the Filofax
Share Schemes on or prior to 31 March 1998 or disclosed in writing by
Filofax to the Offeror prior to the issue of this announcement) issued
or allotted or agreed to issue or allot or authorised or proposed the
issue or allotment of additional shares of any class, or of securities
convertible into, or rights, warrants or options to subscribe for or
acquire, any such shares or convertible securities;
(b) recommended, declared, paid or made or proposed to recommend, declare,
pay or make any bonus, dividend or other distribution other than to a
member of the Wholly owned Filofax Group, save for the final dividend
of 2.42 pence per Filofax Share payable on 30 October 1998;
<PAGE>
(c) acquired or disposed of or transferred, mortgaged or charged or
created any security interest over any assets or any rights, title or
interest in any asset (including shares and trade investments) in any
such case that is material in the context of the Wider Filofax Group
as a whole or merged with or demerged any body corporate or authorised
or proposed or announced any intention to propose any such merger,
demerger, acquisition, disposal, transfer, mortgage, charge or
security interest;
(d) made or authorised or proposed or announced an intention to propose
any change in its share or loan capital (save for any Filofax Shares
allotted upon exercise of options granted on or before 31 March 1998
or disclosed in writing by Filofax to the Offeror prior to the issue
of this announcement under the Filofax Share Schemes);
(e) issued, authorised or proposed the issue of any debentures or incurred
or increased any indebtedness or contingent liability;
(f) purchased, redeemed or repaid or proposed the redemption or repayment
of any of its own shares or other securities (or the equivalent) or
reduced or proposed the reduction of any of its share or loan capital;
(g) entered into any contract, reconstruction, amalgamation, commitment or
other transaction or arrangement otherwise than in the ordinary course
of business and which is material or (save as disclosed in writing by
Filofax to the Offeror prior to the issue of this announcement)
entered into or varied, or announced its intention to enter into or
vary, any contract with or in relation to any of the directors or
senior executives or consultants of the Wider Filofax Group;
(h) entered into or varied or authorised or proposed any contract,
transaction or commitment (whether in respect of capital expenditure
or otherwise) which is of a material and long-term, onerous or unusual
nature or magnitude or which involves or could involve an obligation
of such a nature or magnitude;
(i) entered into any contract, transaction or arrangement which consents
to or may result in any material restriction of the scope of the
business of any member of the Wider Filofax Group or of the Wider Day
Runner Group and no member of the Wider Filofax Group being a party to
or otherwise affected by any such contract, transaction or arrangement
whether the same was entered into before or after 31 March 1998;
(j) waived or compromised any claim which is material in the context of
the Wider Filofax Group as a whole;
(k) taken any corporate action or had any legal proceedings started or
threatened against it for its winding-up, dissolution or
reorganisation or for the appointment of a receiver, administrator,
administrative receiver, trustee or similar officer of all or any of
its assets or revenues or any analogous proceedings or appointment in
any jurisdiction or had any such person appointed;
(l) made or agreed or consented to any significant change to the terms of
the trust deeds constituting the pension schemes established for its
directors, employees or their dependants or the benefits which accrue,
or to the pensions which are payable, thereunder, or to the basis on
which qualifications for, or accrual or entitlement to, such benefits
or pensions are calculated or determined or to the basis upon which
the liabilities (including pensions) of such pension schemes are
funded or made, or agreed or consented to any change to the trustees
involving the appointment of a trust corporation or allowed any
deficit (actual or contingent) to arise or persist in relation to the
funding of any such scheme;
<PAGE>
(m) been unable or admitted in writing that it is unable, to pay its debts
or having stopped or suspended (or threatened to stop or suspend)
payment of its debts generally or ceased or threatened to cease
carrying on all or substantial part of any business;
(n) made any alteration to its memorandum or articles of association, or
other incorporation documents; or
(o) entered into an agreement, contract, arrangement or commitment or
passed any resolution or made any offer (which remains open for
acceptance) or proposal with respect to any of the circumstances or
events, referred to in this condition (vi);
(vii) since 31 March 1998, and save as publicly announced:
(a) no material adverse change or deterioration having occurred in the
business, assets, financial or trading position or profits or
prospects of Filofax or any other member of the Wider Filofax Group;
(b) no material litigation or arbitration proceedings, prosecution or
other legal proceedings to which any member of the Wider Filofax Group
is or may become a party (whether as plaintiff or defendant or
otherwise) or which may otherwise affect any such member having been
announced, instituted or threatened by or against or remaining
outstanding by or against any member of the Wider Filofax Group or
which may otherwise affect any such member and no investigation by any
relevant authority against or in respect of or affecting any member of
the Wider Filofax Group having been threatened, announced or
instituted or remaining outstanding and which in any such case might
materially and adversely affect any member of the Wider Filofax Group;
(c) there having been no receiver, administrator, administrative receiver,
trustee or similar officer appointed over any of the assets or
revenues of any member of the Wider Filofax Group or any analogous
proceedings or steps having taken place under the laws of any
jurisdiction and there having been no petition presented for the
administration of any member of the Wider Filofax Group or any
analogous proceedings or any steps having taken place under the laws
of any other jurisdictions; and
(d) no contingent or other liability having arisen or become apparent or
increased that might be likely to have a material adverse effect on
any member of the Wider Filofax Group;
(viii) Day Runner UK not having discovered that:
(a) any financial, business or other information concerning Filofax or the
Wider Filofax Group that has been publicly disclosed at any time by or
on behalf of any member of the Wider Filofax Group is misleading,
contains a misrepresentation of fact or omits to state a fact
necessary to make the information contained therein not misleading and
which was not corrected by subsequent public announcement made on the
London Stock Exchange on or before 23 September 1998; or
(b) any member of the Wider Filofax Group or any partnership in which any
member of the Wider Filofax Group has a significant economic interest
having any liability (contingent or otherwise) that is not publicly
announced and that is material in the context of the Wider Filofax
Group as a whole;
(ix) Day Runner UK not having discovered that:
(a) any past or present member of the Wider Filofax Group has not complied
with all applicable legislation or regulations of any jurisdiction
with regard to the storage, carriage, disposal, discharge, spillage,
leak or emission of any waste or hazardous substance or any substance
likely to impair the environment or harm human health, which
non-compliance or any other
<PAGE>
disposal, discharge, spillage, leak or emission which has occurred
would be likely to give rise to any material liability (whether
actual or contingent) on the part of any member of the Wider Filofax
Group; or
(b) there has been a disposal, discharge, spillage, emission or leak of
waste or any hazardous substance or any substance likely to impair the
environment or harm human health on or about, or there has been an
emission or discharge of any waste or any hazardous substance or any
substance likely to impair the environment or harm human health from,
any land or other asset owned, occupied or made use of by any member
of the Wider Filofax Group, or in which any such member may have an
interest, which would be likely to give rise to any material liability
or cost (whether actual or contingent) on the part of any member of
the Wider Filofax Group; or
(c) there is or is likely to be any material liability (whether contingent
or otherwise) to make good, repair, reinstate or clean up any property
now or previously owned, occupied or made use of by any past or
present member of the Wider Filofax Group, or in which any such member
may now or previously have had or be deemed to have or have had an
interest, under any environmental legislation, regulation, notice,
circular or order of any relevant authority, or to contribute to the
cost thereof or associated therewith or indemnify any person in
relation thereto; or
(d) circumstances exist whereby a person or class of persons would be
likely to have any claim or claims in respect of any product,
by-product or process of manufacture or service or materials used
therein now or previously manufactured, supplied, sold or carried out
or in any way dealt with or handled by any past or present member of
the Wider Filofax Group which claim or claims would be likely
materially and adversely to affect any member of the Wider Filofax
Group.
For the purposes of these conditions:
(a) "relevant authority" means any government, government department or
governmental, quasi-governmental, supranational, statutory or regulatory
body, court, trade agency, professional association or institution or
environmental body or any other body or person in any jurisdiction;
(b) a relevant authority shall be regarded as having "intervened" if it has
instituted, implemented, threatened or communicated its intention to take
any action, proceedings, suit, investigation, inquiry or reference, or
made, enacted or proposed any statute, regulation, decision or order, or
taken any measures or other steps or otherwise having indicated that it may
do any of the foregoing and "intervene" shall be construed accordingly;
(c) "authorisations" means authorisations, orders, grants, recognitions,
determinations, confirmations, consents, licences, clearances, permissions,
exemptions and approvals;
(d) "the Wider Filofax Group" means Filofax and its subsidiary undertakings,
associated undertakings and any other undertakings in which Filofax and
such undertakings (aggregating their interests) have a substantial interest
and "the Wider Day Runner Group" means Day Runner, any holding company and
any subsidiary undertaking, associated undertakings and any other
undertaking in which Day Runner and such undertakings (aggregating their
interests) have a substantial interest and, for these purposes, "holding
company", "subsidiary undertaking", "associated undertaking" and
"undertaking" have the meanings given by the Companies Act (but for this
purpose ignoring paragraph 20(1)(b) of Schedule 4A to the Companies Act)
and "substantial interest" means a direct or indirect interest in 15 per
cent. or more of the equity or voting capital of an undertaking; and
(e) "the Wholly owned Filofax Group" means Filofax and those of its
subsidiaries in which it has a direct or indirect interest in 100 per cent.
of the equity and voting capital.
<PAGE>
Day Runner UK reserves the right to waive all or any of the above conditions,
in whole or in part, except condition (i). The Recommended Offer will lapse
unless all the above conditions have been satisfied or (if capable of waiver)
waived, or, where appropriate, have been determined by Day Runner UK in its
reasonable opinion to be or remain satisfied, by midnight on the day which is
21 days after the later of the first closing date of the Recommended Offer
and the date on which the Recommended Offer becomes or is declared
unconditional as to acceptances, or such later date as Day Runner UK may,
with the consent of the Panel, decide, provided that Day Runner UK shall be
under no obligation to waive or treat as satisfied any of conditions (ii) to
(ix) inclusive by a date earlier than the latest date specified or referred
to above for the satisfaction thereof notwithstanding that any such condition
or the other conditions of the Recommended Offer may at such earlier date
have been waived or satisfied and that there are at such earlier date no
circumstances indicating that any of such conditions may not be capable of
being satisfied.
The Recommended Offer will lapse if the acquisition of Filofax is referred to
the Monopolies and Mergers Commission before the later of 3.00 pm (London
time) on the first closing date of the Recommended Offer and the date on
which the Recommended Offer becomes or is declared unconditional as to
acceptances. In such circumstances, the Recommended Offer will cease to be
capable of further acceptance and Day Runner UK and accepting Filofax
Shareholders shall thereupon cease to be bound by forms of acceptance
submitted at or before the time when the Recommended Offer so lapses.
If Day Runner UK is required by the Panel to make an offer for Filofax Shares
under the provisions of Rule 9 of the Code, Day Runner UK may make such
alterations to the terms and conditions of the Recommended Offer as are
necessary to comply with the provisions of that Rule.
<PAGE>
APPENDIX II
DEFINITIONS
The following definitions apply throughout this document, unless the context
requires otherwise:
"business day" any day, other than a Saturday or Sunday or a
US federal holiday or UK Bank Holiday and
consisting of the time period from 12.01 am
until and including 12.00 (midnight) (New York
City time);
"Cazenove" Cazenove & Co.;
"Code" The City Code on Takeovers and Mergers;
"Companies Act" the Companies Act 1985, as amended;
"Daily Official List" the Daily Official List of the London Stock
Exchange;
"Day Runner" Day Runner, Inc.;
"Day Runner Group" the group of companies of which Day Runner is
the ultimate holding company;
"Day Runner UK" or the Day Runner UK plc, a wholly owned subsidiary of
"Offeror" Day Runner;
"Filofax" Filofax Group plc;
"Filofax Group" the group of companies of which Filofax is the
ultimate holding company;
"Filofax Share Schemes" the Filofax Employee Sharesave Scheme, the
Filofax Group plc 1998 Sharesave Scheme, the
Filofax approved Executive Share Option Scheme
and the Filofax unapproved Executive Share
Option Scheme;
"Filofax Shareholders" holders of Filofax Shares;
"Filofax Shares" the existing unconditionally allotted or issued
and fully paid ordinary shares of 5 pence each
in the capital of Filofax and any further such
shares that are unconditionally allotted or
issued at or prior to the time at which the
Recommended Offer ceases to be open for
acceptance (or, subject to the provisions of the
Code, such earlier time and/or date as Day
Runner UK may decide);
"Form of Acceptance" the Form of Acceptance, Authority and Election
for use by Filofax Shareholders in connection
with the Recommended Offer;
"Henry Ling" the company formerly named Henry Ling & Son
(London) Limited and renamed Elijo (London)
Limited on 9 April 1998;
"LIBOR" London Interbank Offered Rate for one year
sterling deposits;
"Loan Note Alternative" the alternative whereby Filofax Shareholders
(other than certain overseas persons) validly
accepting the Recommended Offer may elect to
receive Loan Notes instead of all or part of the
cash consideration to which they would otherwise
be entitled under the Recommended Offer;
"Loan Note Instrument" the loan note instrument constituting the Loan
Notes;
"Loan Notes" the floating rate, guaranteed, unsecured loan
notes to be issued by Day Runner UK pursuant to
the Loan Note Alternative;
<PAGE>
"London Stock Exchange" the London Stock Exchange Limited;
"Recommended Offer" the Recommended Offer by Wasserstein Perella on
behalf of Day Runner UK to acquire all of the
Filofax Shares (other than those already owned
by Day Runner UK) on the terms and subject to
the conditions to be set out in the Recommended
Offer Document and the Form of Acceptance
including, where the context so requires, any
subsequent revision, variation, extension or
renewal of such offer;
"Recommended Offer Document" the document by means of which the Recommended
Offer is made;
"Rothschild" N M Rothschild & Sons Limited;
"Panel" The Panel on Takeovers and Mergers;
"SEC" the US Securities and Exchange Commission;
"Securities Act" the US Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder;
"UK" or "United Kingdom" the United Kingdom of Great Britain and Northern
Ireland;
"United States, US or USA" the United States of America, its territories
and possessions, any State of the United States
of America and the District of Columbia, and all
other areas subject to its jurisdiction;
"US$" or "US dollar" the lawful currency of the US;
"US Person" as defined in Regulation S under the Securities
Act;
"Wasserstein Perella" Wasserstein Perella & Co. Limited.
BASES OF CALCULATION IN THIS DOCUMENT
Foreign exchange rate L1 = $1.68
