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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
Date of Report (date of earliest event reported): January 12, 1996
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CEDAR GROUP, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-10372 23-2577796
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State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation or
organization
500 Rue Notre Dame,
Lachine
Quebec, H8S 2B2
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(Address of principal executive office)
Registrant's telephone number: (514) 634-3550
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
Not Applicable.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Not Applicable.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
Not Applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Not Applicable.
ITEM 5. OTHER EVENTS.
On January 12, 1996, Cedar Group, Inc. (the "Registrant") executed an
Agreement whereby the Registrant acquired the right to purchase 19.9% of the
total issued ordinary shares of McConnell Dowell Corporation Limited ("MDC"), a
corporation publicly traded in Australia, from Morrison Knudsen Corporation
("MK") for a cash purchase price of Australian $10,341,606.25
(US$5,747,012.32). MDC is an Australian infrastructure, including pipeline,
mechanical and electrical, engineering and construction group with operations
throughout Asia, Australia and New Zealand. The purchase of the shares of MDC
is to occur in two phases through the Registrant's wholly-owned subsidiary,
Cedar Group Australia Pty Ltd. ("CGA"). The first phase occurred on January
19, 1996 which consisted of an acquisition of 6,194,570 shares of MDC,
representing approximately 14.9% of the total issued ordinary shares of MDC, in
exchange for Australian $7,743,212.50.
The second phase of the acquisition, whereby CGA acquires 2,078,715
shares of MDC in exchange for Australian $2,598,393.75, is conditioned upon the
Registrant receiving certain approvals including permission from the Australian
Foreign Investment Review Board for the acquisition of the additional 5%
interest of MDC.
The amount of consideration paid by CGA was determined by negotiation
between and among representatives of the Registrant and MK.
The payment for the purchase price of the ordinary shares of MDC was
obtained by the Registrant through the funds raised by a private placement
("TCI Placement") undertaken by a wholly-owned subsidiary of the Registrant,
Cedar Group TCI Inc., LLC ("TCI"). To date, TCI has accepted subscriptions
aggregating $8.5 million and in continuing with the placement, TCI is desirous
of raising a further $15 million, however, there can be no assurance this
additional placement amount will be raised. The shares issued by TCI on the
accepted subscriptions are convertible into shares of Common Stock of the
Registrant at $8.50 per share.
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In addition to the acquisition of 14.9% of the issued shares of MDC
and the anticipated additional 5%, on January 18, 1996, the Registrant
announced that through CGA, it intends to make an offer to acquire all of the
remaining ordinary shares of MDC. This tender offer by the Registrant for the
balance of the shares not already acquired will be for cash and will be subject
to approval by the Australian Foreign Investment Review Board. The offer will
be contingent upon the Registrant acquiring an aggregate minimum of 40.1% of
the ordinary shares of MDC pursuant to the tender offer. The Registrant
anticipates filing the tender offer documentation by February 15, 1996 and
intends to have the offer remain open for a period of forty-five (45) days
after the filing of the tender offer documentation.
Prior to the acquisition, no material relationship existed between MDC
and the Registrant or any of its affiliates, any director or officer of the
Registrant, or any associate of any such director or officer.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.
Not Applicable.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired.
Not Applicable.
(b) Proforma financial information.
Not Applicable.
(c) Exhibits (referenced to Item 601 of Regulation S-K).
2. Agreement dated January 12, 1996.
99. Press Release dated January 18, 1996.
ITEM 8. CHANGE IN FISCAL YEAR.
Not Applicable.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CEDAR GROUP, INC.
Dated: January 26, 1996 By: /s/ Michel L. Marengere
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Michel L. Marengere,
Chairman and CEO
(Chief Executive Officer)
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number
(Referenced to
Item 601 of
Reg. S-K) Description of Exhibit
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<S> <C>
2. Agreement dated January 12, 1996.
99. Press Release dated January 18, 1996.
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(CEDAR GROUP, INC. LETTERHEAD)
January 12, 1995
Cedar Group, Inc.
500 Notre Dame Street
Lachine, Quebec
Attention: Steinar Knai
BY FAX: 514-634-3550
Dear Sirs:
Morrison Knudsen Corporation ("MK") offers to sell to Cedar Group, Inc. or its
subsidiary ("Cedar") at a price of A$1.25 per share, a number of issued shares
in McConnell Dowell Corporation Limited ("MDC") equivalent to 19.9% of the
total issued ordinary shares of MDC, based on the total MDC ordinary shares
issued as of the closing date of phase two as set forth below. MK warrants
that there are only 41,574,298 MDC shares on issue. This transaction will take
place in two phases of total payments of A$10,341,606.25 as follows:
1. Phase One. A cash payment of A$7,743,212.50 in
exchange for 6,194,570 shares of MDC, representing
14.9% of the total issued share capital of MDC. This
phase will take place and be effective as of the date
of acceptance of this offer. Closing will take place
at a location mutually acceptable to both parties on
the fifth business day after acceptance of the
present offer, when MK will ensure that any existing
encumbrance on the shares is released and deliver
executed share transfers and share certificates in
respect of the shares sold, and confer on Cedar clear
title to the shares sold, and Cedar shall wire
transfer immediately available funds or deliver a
bank check for the consideration payable pursuant to
written instructions from MK.
2. Phase Two. A second cash payment of A$2,598,393.75
in exchange for 2,078,715 shares of MDC, representing
5% of the total issued share capital of MDC, subject
to FIRB approval. If this offer is accepted, Cedar's
obligations to purchase the additional 5% of the
total issued share capital of MDC will be conditional
upon, and shall be of no force or effect until Cedar
has received written advice from the Australian
Treasurer under the Foreign Acquisitions and
Takeovers Act 1975 of
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Australia ("FATA") to the effect that the
Commonwealth Government has no objection to such
acquisition, which is either unconditional or subject
to conditions which are acceptable to Cedar, or the
period provided under FATA during which the Treasurer
may make an order under FATA (including an interim
order under section 22) in relation to such
acquisition, passing without such an order being made
or, if an interim order under section 22 is made, the
subsequent period for making a final order
prohibiting such acquisition passing without a final
order being made Cedar will give the required
notification of such acquisition under FATA promptly
following acceptance of this offer. Upon receipt of
FIRB approval, Cedar must notify MK. Closing will
take place at a location mutually acceptable to both
parties on the fifth business day after receipt of
FIRB approval, when MK will ensure that any existing
encumbrance on the shares is released and deliver
executed share transfers and share certificates in
respect of the shares sold, and confer on Cedar clear
title to the shares sold, Cedar shall wire transfer
immediately available funds or deliver a bank check
for the consideration payable, pursuant to written
instructions from MK.
It is understood by both parties that the contract of purchase following
Cedar's acceptance of this offer is conditional upon no further shares being
issued by MDC and, for as long as MK shall continue to be the beneficial holder
of MDC shares and within the limits of Australian law, MK undertakes to cause
MDC nor to issue any further shares beyond the 41,574,298 already issued.
Each party shall bear its own costs in relation to the agreement arising on
acceptance of this offer, but Cedar shall bear any Australian stamp duty
chargeable on that agreement or the transfer of shares under that agreement,
including any fine or penalty caused by Cedar's actions. Cedar shall indemnify
MK on demand against any liability for the stamp duty.
Cedar will not make any public disclosure of this transaction unless such
disclosure is mandated by law or is authorized by MK. MK will not unreasonably
withhold its authorization. In the event of disclosure, MK and Cedar will
coordinate the wording and timing of such disclosure.
MK has sought and obtained from its banks a waiver enabling MK to go forward
with this transaction. The bank waiver is conditional
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upon the consummation of the contemplated transaction by March 31, 1996. The
waiver is also conditional upon documentation satisfactory to the bank
co-agents (Mellon Bank and Bank of America National Trust and Savings
Association) and satisfactory escrow agreements necessary to protect the banks'
security interest in the MDC shares. It is understood that Cedar will not be
party to any such escrow agreement.
Yours sincerely Accepted on behalf of
Morrison Knudsen Corporation Cedar Group, Inc.
/s/ Jim P. O'Donnell /s/ Nicolas Matossian
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Vice President Nicolas Matossian
President & COO
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FOR IMMEDIATE RELEASE
NEWS RELEASE
CONTACTS:
Nicolas Matossian Stan Altschuler/Richard Cooper
President and Chief Operating Strategic Growth International
Officer (516) 829-7111
Cedar Group, Inc.
(514) 634-3550
CEDAR GROUP, INC. ANNOUNCES TAKEOVER OFFER
FOR AUSTRALIAN INFRASTRUCTURE/ENGINEERING COMPANY
MONTREAL, CANADA, JANUARY 18, 1996 - CEDAR GROUP, INC.'S (NASDAQ/NMS: CGMV;
VSE: CGM) Chairman, Michel L. Marengere, today announced that Cedar Group,
Inc., through its Australian subsidiary, Cedar Group Australia Pty Ltd.,
intends to make an offer to acquire all of the shares of McConnell Dowell
Corporation ("MDC"). Cedar Group, Inc. has already contracted to acquire for
cash 19.9% of the shares of MDC from Morrisson Knudsen Corporation of Boise,
Idaho.
The tender offer for the balance of the shares not already acquired will be for
cash and will be subject to FIRB (Foreign Investment Review Board) approval and
to Cedar Group, Inc. acquiring an aggregate minimum 60% of the shares of MDC.
Cedar Group, Inc. will submit the tender offer documents to the Australian
Stock Exchange within 14 days, and the offer will remain open for a period of
45 days thereafter.
MDC is a major Australian infrastructure engineering and construction group,
with operations throughout Asia, Australia and New Zealand. MDC sales were
A$316 million in fiscal year ending June, 1995 (US$237 million) and its pre-tax
earnings were A$28 million (US$21 million) up from a loss of A$5.5 million
(US$4.1 million), after extraordinary loss of A$12.5 million (US$9.4 million),
in fiscal 1994. MDC's has a backlog of more than A$200 million (US$150
million). MDC shares are listed on the stock exchanges of Australia and New
Zealand (Symbol MDC).
This transaction will be an important step in Cedar Group, Inc.'s strategy to
globalize its operations and will give it immediate access to the rapidly
growing Asian infrastructure market as well as synergy with Cedar Group, Inc.'s
subsidiaries, Dominion Bridge, and Steen Contractors Limited for their Pacific
Rim operations.
CEDAR GROUP, INC., a Delaware corporation registered in Conshohocken, PA, is an
international engineering, infrastructure, project management and industrial
metal and composite materials transformation company with operations and
projects in North American, Europe and Asia.
This news release is neither approved nor disapproved by the Vancouver Stock
Exchange.
