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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Amendment No. 3
to
SCHEDULE 14D-9
(AS AMENDED AND RESTATED AT JANUARY 6, 1998)
Solicitation/Recommendation Statement Pursuant
to Section 14(d)(4) of the
Securities Exchange Act of 1934
________________
SAFETY-KLEEN CORP.
(Name of Subject Company)
SAFETY-KLEEN CORP.
(Names of Person(s) Filing Statement)
Common Stock, Par Value $0.10 Per Share
(Including the Associated Common Share Purchase Rights)
(Title of Class of Securities)
786484105
(CUSIP Number of Class of Securities)
DONALD W. BRINCKMAN
Chairman And Chief Executive Officer
One Brinckman Way
Elgin, Illinois 60123-7857
(847) 697-8460
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications
on Behalf of the Person(s) filing Statement)
________________
With a copy to:
DENNIS N. NEWMAN, ESQ.
Sonnenschein Nath & Rosenthal
Sears Tower
Chicago, Illinois 60606
(312) 876-8000
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INTRODUCTION
Safety-Kleen Corp. ("Safety-Kleen") hereby amends and supplements its
Solicitation/Recommendation Statement on Schedule 14D-9, as amended and restated
at January 6, 1998 and amended on January 9, 1998 and January 12, 1998 (as
amended, the "Schedule 14D-9"), with respect to the exchange offer made by LES
Acquisition, Inc., a wholly-owned subsidiary of Laidlaw Environmental Services,
Inc., for all of the outstanding Shares. Capitalized terms not defined herein
have the meanings assigned thereto in the Schedule 14D-9.
Item 9. Materials to be Filed as Exhibits.
Item 9 of the Schedule 14D-9 is hereby amended and supplemented by adding
the following text thereto:
Exhibit 24 Definitive Additional Materials.
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SIGNATURE
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.
SAFETY-KLEEN CORP.
By: /s/ Donald W. Brinckman
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Name: Donald W. Brinckman
Title: Chairman and Chief Executive Officer
Dated: January 13, 1998
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EXHIBIT INDEX
Except as noted below, the following Exhibits have been previously filed in
connection with this Statement.
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<CAPTION>
Exhibit No. Description
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<S> <C>
Exhibit 1 Excerpts from Safety-Kleen's Proxy Statement, dated March 28,
1997, relating to Safety-Kleen's 1997 Annual Meeting of
Shareholders.
Exhibit 2 Share Ownership of Certain Beneficial Owners and Management.
Exhibit 3 Agreement and Plan of Merger, dated as of November 20, 1997, by
and among SK Parent Corp., SK Acquisition Corp. and Safety-Kleen
Corp.
Exhibit 4 Form of Change of Control Severance Agreement.
Exhibit 5 Letter to Shareholders of Safety-Kleen, dated January 6, 1998.
Exhibit 6 Press Release issued by Safety-Kleen Corp., dated December 22,
1997.
Exhibit 7 Text of September 24, 1997 letter from Laidlaw Environmental
Services, Inc.
Exhibit 8 Text of November 4, 1997 letter from Laidlaw Environmental
Services, Inc.
Exhibit 9 Text of November 13, 1997 letter from Laidlaw Environmental
Services, Inc.
Exhibit 10 Complaint filed by Safety-Kleen Corp. v. Laidlaw Environmental
Services, Inc. (dated November 17, 1997, United States District
Court for the Northern District of Illinois Eastern Division)
Exhibit 11 Opinion of William Blair & Company L.L.C., dated November 20,
1997
Exhibit 12 Text of November 20, 1997 letter from Laidlaw Environmental
Services, Inc.
Exhibit 13 Verified Answer, Affirmative Defenses, and Counterclaim filed by
Laidlaw Environmental Services, Inc. v. Safety-Kleen Corp., et.
al. (dated November 24, 1997, United States District Court for
the Northern District of Illinois Eastern Division)
Exhibit 14 Opinion of William Blair & Company L.L.C., dated December 20,
1997
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<TABLE>
<CAPTION>
Exhibit No. Description
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<S> <C>
Exhibit 15 Complaint filed by William Steiner against Donald W. Brinckman,
et al. (dated November 4, 1997, Circuit Court of Cook County,
Illinois County Department, Chancery Division).
Exhibit 16 Complaint filed by Josh Kaplan against Donald W. Brinckman, et
al. (dated November 5, 1997, Circuit Court of Cook County,
Illinois County Department, Chancery Division).
Exhibit 17 Complaint filed by Gershon Knoll against Richard T. Farmer, et
al. (dated November 5, 1997, Circuit Court of Cook County,
Illinois County Department, Chancery Division).
Exhibit 18 Complaint filed by Larry Hanon against Safety-Kleen Corp. et al.,
(dated November 5, 1997, Circuit Court of Cook County, Illinois
County Department, Chancery Division).
Exhibit 19 Complaint filed by Robin Fernhoff against Safety-Kleen Corp., et
al. (dated November 6, 1997, Circuit Court of Cook County,
Illinois County Department, Chancery Division).
Exhibit 20 Complaint filed by Epstein Family Trust against Safety-Kleen
Corp., et al. (dated November 12, 1997, Circuit Court of Cook
County, Illinois County Department, Chancery Division).
Exhibit 21 Complaint filed by David Steinberg against Safety-Kleen Corp., et
al. (dated December 5, 1997, Circuit Court of Cook County,
Illinois County Department, Chancery Division).
Exhibit 22 Press Release issued by Safety-Kleen Corp., dated January 8,
1998.
Exhibit 23 Press Release issued by Safety-Kleen Corp., dated January 9,
1998.
Exhibit 24* Definitive Additional Materials.
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*Filed herewith.
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Exhibit 24
1
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INTRODUCTION
DONALD BRINCKMAN
CHAIRMAN OF THE BOARD
SAFETY-KLEEN CORP.
MEETING OBJECTIVE 2
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. Why Safety-Kleen initiated exploration of strategic options
. Options that the Board considered
. The enhancement of market value
. Evaluation and rejection of the Laidlaw offer
. The recommendation of the Philip Merger
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STRATEGIC OPTIONS
CONSIDERED 3
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. The Board's strategic review process considered numerous options in two
primary categories:
- Independent S-K
. Accelerated rollout of new growth businesses over 2-3 year time
horizon
- Sale of all or part of Company
. Substantial interest from parties suggested ability to enhance value on
an accelerated basis
SHARE PRICE GROWTH 4
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. Since initiating the process August 8, 1997
- S-K share price has increased 50% (close on 1/9)
- More than $500 million has been added in total market value
- S-K shareholders will receive cash value immediately on closing of the
merger with an affiliate of Philip Service Corp.
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RECOMMENDATION OF
PHILIP'S MERGER 5
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. Best financial deal for shareholders - $27 all cash
. Represents 52% premium to trading price prior to Board's exploration of
alternatives
. Combines companies with compatible recycling and business philosophies
WHO IS LAIDLAW
ENVIRONMENTAL (LLE) 6
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. Established in 1997 via reverse merger with Rollins Environmental Services
. Highly leveraged
- LLE(pro-forma) debt/equity: 62.5%
- SK debt/equity: 33.2%
. Potential environmental liabilities
. Currently controlled by 67% owner - Laidlaw Inc.
. Majority owner wishes to deconsolidate financial results
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LLE'S BUSINESS BURDENS 7
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. Waste Incineration 6 facilities - North America's largest incinerator
operator
. Landfills 13 hazardous and industrial chemical waste landfills
. Excess capacity in market
. LLE has shut down significant incineration capacity in past 4 years
. Incineration pricing has halved over past four to five years
. Landfills present long-term remediation risks
LLE ENVIRONMENTAL RESERVES 8
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. Projected Expenditures: $280 Million
. Current Reserve: $183.1 Million (+/- $26 Million)
. Government Required Closure/Post Closure Care (financial assurance): $450
Million
- Pinewood, S.C.: $140 Million (1 of 12 LLE hazardous waste landfills)
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THE LAIDLAW OFFER 9
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. The Claim: $15 cash
- $15 per share before fees & expenses equals $13.83 per share net
. The Claim: $15 stock
- Can the synergies be achieved?
- Does the collar adequately protect shareholders? Below collar as of 1/9.
- Can the 1998 P/E multiple of 23 be maintained?
- Has Laidlaw understated its proforma Depreciation and Amortization?
- What is the impact on LLE stock value from issuance of additional
162-202 million shares?
LLE'S "CLAIMED" SYNERGIES 10
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. LLE "Claimed" Synergies
$100-130 million
. Internalization of SK waste to LLE incineration - $13.5-25 million
. Close Branch facilities - $35-67.5 million
. Close processing facilities - $10-12.5 million
. SG&A savings due to closing Elgin Headquarters - $45-60 million
. S-K "Realistic" Synergies
$ 26-28 million
. Waste internalization (less LLE processing and freight) - $2 million.
. Branch savings of $200K per 25 branches - $5 million. Facility
close/consolidation -$5 million.
. G&A staff reductions. Minimal overlap in sales/marketing - $14.5 mil.
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11
LLE SYNERGY EVALUATION
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. S-K culture and customer focus is reuse/recycle - incompatible with
landfills and incineration.
. Majority of SK service activities are not common to Laidlaw. Minimal
overlap in the nearly 5 million services performed by S-K.
. 25% of Company sales are similar but small quantity generators - require
extensive route network to service.
- elimination of reps/branches would significantly impact service quality,
revenue and profit.
12
LLE STOCK EVALUATION
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. Factors which could impact LLE stock price:
- Continued trading volatility
- Falling street expectations based on lower synergy forecasts
- LLE P/E multiple contraction
- Further review of LLE as an investment
. No meaningful trading volume
. Overhang of Parent Co. ownership
. Leverage
. Liability risks
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RISK FACTORS 13
per Laidlaw's Exchange Offer
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. Dividends
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- "LLE has not paid cash dividends during the past two years and does not
presently anticipate paying any cash dividends in the future. LLE's
existing credit facility, and its proposed credit facility...preclude
the payment of cash dividends."
. Leverage
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- "After consummation of the merger, Laidlaw Environmental will be highly
leveraged with substantial debt service obligations...Therefore, LLE
will be particularly susceptible to adverse changes in its industry, the
economy and the financial markets generally."
- "LLE's ability to obtain additional debt financing will be limited by
restrictive covenants...those limits on financing may therefore limit
LLE's ability to service its existing debt obligations through
additional (debt) financing if cash flow from operations is insufficient
to service such obligations."
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THE CHOICE IS CLEAR 14
The Laidlaw Offer
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. Uncertain value of offer - both cash and stock
. With LLE proposal, SK shareholders will become majority owners of the new
entity (assumes issuance of LLE stock at midpoint of collar)
. Safety-Kleen shareholders will be subject to risk of continuing operations
of LLE - significant debt and environmental liabilities - which they did
not have before
THE CHOICE IS CLEAR 15
The Philip Offer
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. The $27 all-cash deal from the Philip Group is the best offer
. The Board of Directors has fully endorsed the Philip Merger
. Shareholders in Safety-Kleen will not be exposed to risks from ongoing
operations with Philip
