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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934 [Amendment No. ______]
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[_] Definitive Proxy Statement
[X] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
SAFETY-KLEEN CORP.
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(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] $125 per Exchange Act Rules 0-11(c)(i)(ii), 14a-6(i)(1), 14a-6(i)(2) or
item 22(a)(2) of Schedule 14A.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11
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[_] Fee previously paid with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
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(1) Amount Previously Paid:_______________________________________________
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FOR IMMEDIATE RELEASE Contact: Maureen Fisk
847-468-2452
SAFETY-KLEEN BOARD REJECTS REVISED
LAIDLAW ENVIRONMENTAL OFFER;
WILL ADJOURN SPECIAL MEETING TO FEBRUARY 25
February 9, 1998 -- Elgin, Illinois - Safety-Kleen Corp. (SK/NYSE)
today announced that its Board of Directors has rejected Laidlaw Environmental
Services, Inc.'s ("LLE") revised hostile exchange offer. In a letter issued to
shareholders, Safety-Kleen Chairman and Chief Executive Officer Donald W.
Brinckman outlined the Board's review of the revised Laidlaw Environmental
exchange offer. The text of the letter follows:
Dear Shareholder:
The Board of Directors of Safety-Kleen continues to believe that the $27.00
all cash Merger Agreement with the Philip Group is in the best interests of
Safety-Kleen and its shareholders, and, therefore, has unanimously recommended
that all shareholders of Safety-Kleen reject the Amended Laidlaw Environmental
Exchange Offer. The Board reached its conclusions at meetings on January 31,
1998, February 3, 1998 and February 7, 1998, in which it thoroughly reviewed the
Amended Laidlaw Environmental Exchange Offer with the assistance of its
advisors. At its February 7 meeting, the Board received the advice of Philip
Services Corp. that, although bank approvals are required, it is "confident that
the commitment for funding [Philip's] portion of the SK Parent entity will be in
place in advance of the shareholder meeting and that [Philip's] funding will be
in place when required." The full text of Philip's letter is set forth in the
proxy supplement being transmitted to shareholders today.
Despite Laidlaw Environmental's late January changes to its proposal, the
ultimate value of that proposal is still affected by the value of its stock and
many of the Board's initial concerns remain. As a result of the transactions,
the combined entity would carry more than $2.3 billion of debt resulting in a
debt-to-equity ratio of more than 71% compared to Safety-Kleen's ratio of
approximately 29%. Safety-Kleen shareholders would own a substantial portion of
the stock in the highly-leveraged company.
The Board remains convinced that Laidlaw Environmental cannot achieve its
estimated $100-$130 million of synergies due to our conviction that there is
very little overlap between Safety-Kleen's core service business and Laidlaw's
landfill and incineration business. We do not believe that Laidlaw can
accomplish more than $26.4 million to $28.4 million of synergies without
significant reduction in service quality, revenue and profit. Laidlaw
Environmental's proposed transaction would not prove accretive to shareholders
without Laidlaw Environmental achieving significant synergies. It is important
to emphasize that Laidlaw Environmental has a base of 18,000 mid to large-size
customers compared with Safety-Kleen's nearly 400,000 customers consisting
primarily of smaller-quantity generators. Safety-Kleen has a very transaction-
driven business performing over five million services annually.
Your Directors also considered the value of the $12.00 common stock portion
of Laidlaw Environmental's offer which is dependent upon its stock trading above
$4.29 per share. The Laidlaw Environmental stock, which has frequently traded
below this minimum level, was viewed by the Board as relatively volatile. On
February 6, 1998, Laidlaw Environmental common stock closed at $4.19 per share.
The Board is concerned about the potential impact on the market price of Laidlaw
Environmental stock from the massive issuance of 129 million to 162 million
shares that would result from this
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transaction and other risks relating to Laidlaw Environmental stock described in
the proxy supplement, as well as general economic and market uncertainties. The
Board believes that given the risks inherent in taking Laidlaw Environmental
stock at this time, an all cash $27 per share transaction is preferable.
The significant differences between the business operations of Safety-Kleen
and Laidlaw Environmental were also evaluated as well as the expressed desire of
its parent, Laidlaw, Inc., to deconsolidate Laidlaw Environmental from its
balance sheet. Safety-Kleen recycles; Laidlaw Environmental incinerates and
puts wastes in landfills. The Board believes the latter results in much greater
potential environmental liability. If the Laidlaw Environmental transaction
were completed, Safety-Kleen shareholders would become subject to these
environmental risks from hazardous waste landfills and incinerators.
The Board, together with the principals of the Philip Group, remains
committed to seeking approval of the Merger Agreement at a special meeting of
shareholders. That meeting was originally scheduled for February 11. However, in
order to provide shareholders with additional time to consider the information
set forth in the proxy supplement and Schedule 14D-9 Amendment, the February 11
meeting will be adjourned to Wednesday, February 25, 1998, at 3:00 p.m., central
time, at the Elgin Community College Business Conference Center, 1700 Spartan
Drive, Elgin, Illinois 60123. Accordingly, no action on the Merger Agreement
will be taken at the February 11 meeting.
We firmly believe that approval of the Merger Agreement is the best
decision for all shareholders and urge you to vote "FOR" the proposal.
Your Board of Directors and I greatly appreciate your continued support and
encouragement.
Sincerely,
/s/ Donald W. Brinckman
Donald W. Brinckman
Chairman Of The Board
and Chief Executive Officer
Safety-Kleen stated today that it is filing with the Securities and Exchange
Commission supplemental proxy materials and an amended Schedule 14D-9, which
discusses in detail the factors considered by the Board (including those noted
in Mr. Brinckman's letter) in reaching its determination and conclusions. These
materials will be mailed to shareholders promptly.
Safety-Kleen is a leading environmental and industrial service company dedicated
to helping nearly 400,000 automotive and industrial businesses recycle and
process their waste streams.
