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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): AUGUST 5, 1996
ARCADIAN CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-13774 76-0275035
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification No.)
6750 POPLAR AVENUE, SUITE 600 38138-7419
MEMPHIS, TENNESSEE (Zip Code)
(Address of principal
executive offices)
(901) 758-5200
(Registrant's telephone number,
including area code)
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ARCADIAN CORPORATION
TABLE OF CONTENTS
FOR
CURRENT REPORT ON FORM 8-K
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Page
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Item 5. Other Events . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Item 7. Financial Statements and Exhibits . . . . . . . . . . . . . . . . 2
Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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ITEM 5. OTHER EVENTS
On August 5, 1996, Arcadian Corporation ("Arcadian") entered into a
non-binding letter of intent with Freeport- McMoRan Inc. ("FTX") regarding a
potential business combination between Arcadian and FTX. Copies of the letter
of intent and a related press release are filed herewith as Exhibits 99.1 and
99.2, respectively.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS
The following materials are filed as exhibits to this Current
Report on Form 8-K:
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Exhibit
Number Description of Exhibit
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99.1 -- Letter of Intent between Arcadian Corporation and
Freeport-McMoRan Inc. dated August 5, 1996.
99.2 -- Press release issued by Arcadian Corporation on
August 7, 1996.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Current Report on Form 8-K to be signed on
its behalf by the undersigned, thereunto duly authorized, on August 7, 1996.
ARCADIAN CORPORATION
By: /s/ Peter H. Kesser
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Peter H. Kesser
Vice President - Law,
General Counsel and Secretary
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EXHIBIT INDEX
Exhibit
Number Description of Exhibit
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99.1 -- Letter of Intent between Arcadian Corporation and
Freeport-McMoRan Inc. dated August 5, 1996.
99.2 -- Press release issued by Arcadian Corporation on
August 7, 1996.
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EXHIBIT 99.1
August 5, 1996
Arcadian Corporation
6750 Poplar Avenue, Suite 600
Memphis, Tennessee 38138-7419
Attention: Mr. William A. McMinn
Chairman of the Board
Re: Business Combination of Arcadian Corporation
and Freeport-McMoRan Inc.
Gentlemen:
This Letter of Intent, when executed by you, will constitute a
non-binding statement of the intention of Arcadian Corporation ("Arcadian") and
Freeport-McMoRan Inc. ("Freeport") concerning the proposed combination (the
"Combination") of the businesses of Arcadian and Freeport into a newly-formed
corporation ("Newco"), pursuant to which it is contemplated that (i) the
outstanding capital stock of Arcadian and Freeport will be converted into
capital stock of Newco, (ii) Newco will become the ultimate parent corporation
of Arcadian and Freeport, and (iii) Arcadian and Freeport will become
wholly-owned direct or indirect subsidiaries of Newco. It is also intended
that, while not a condition to the Combination, Freeport will provide to
Freeport-McMoRan Resource Partners, Limited Partnership ("FRP") an opportunity
to participate in a transaction that would convert the publicly-held limited
partnership units of FRP into common stock of Newco.
There will be a period (the "Negotiation Period") commencing on the
date of this Letter of Intent and ending one month thereafter during which (i)
each of the parties will complete its due diligence and evaluation of the other
party and of FRP and (ii) the parties will use their reasonable good faith
efforts to
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Arcadian Corporation
August 5, 1996
Page 2
negotiate a mutually acceptable definitive agreement to implement the
Combination. During the Negotiation Period and thereafter until two weeks
following receipt by Arcadian or Freeport of written notice from the other that
the notifying party has terminated this Letter of Intent, neither Arcadian nor
Freeport shall, directly or indirectly, through any director, officer,
employee, affiliate, or other representative, solicit, encourage, furnish any
information concerning, participate in negotiations or discussions concerning,
consider, entertain, accept or consummate any proposal of any person relating
to the acquisition of its business in whole or in part, whether through the
purchase of assets or stock, or through a merger, consolidation, share exchange
or otherwise; provided, however that the foregoing limitation shall not apply
to Freeport's discussions with IMC Global, Inc. regarding any role that IMC
Global may play in the Combination; and provided further that the foregoing
limitation shall not apply to Arcadian or Freeport if, in the good faith
judgment of its Board of Directors after consultation with legal counsel and
financial advisors, compliance with such limitation would not be prudent in
view of such directors' duties under applicable law. During the Negotiation
Period, Arcadian and Freeport will consult with each other and use their good
faith efforts to agree upon the form and substance of all public statements or
announcements with respect to the Combination (except that, after such
consultation, either Arcadian or Freeport may make such statements as it in
good faith deems to be required by applicable law, stock exchange rules or
otherwise). Either party may terminate this Letter of Intent at any time by
written notice to the other party, and upon such termination (except as stated
above), neither party shall have any obligation with respect to the Combination
hereunder or otherwise or any liability to the other party hereunder or
relating in any way to the proposed Combination.
The definitive agreement will, among other things, provide:
1. That the Combination will constitute a tax-free transfer to a
controlled corporation under Section 351 and/or a reorganization under Section
368 of the Internal Revenue Code of
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Arcadian Corporation
August 5, 1996
Page 3
1986, as amended. Subject to the conditions set forth below, in the
Combination (i) each outstanding share of common stock of Arcadian (including
shares of common stock resulting from the exercise of the Holders' Opt-Out
Right as described in Arcadian's Certificate of Incorporation) shall be
converted into 0.658 shares of common stock of Newco, (ii) each outstanding
share of common stock of Freeport shall be converted into one share of common
stock of Newco, (iii) each outstanding share of Arcadian's Mandatorily
Convertible Preferred Stock, Series A will be converted into one share of
Mandatorily Convertible Preferred Stock of Newco containing substantially
equivalent terms and privileges as the Arcadian issue, except that such shares
will be convertible into 0.658 shares of Newco common stock (subject to
adjustment as set forth in Arcadian's Certificate of Incorporation), and (iv)
appropriate mutually agreeable provisions will be made for Arcadian's and
Freeport's outstanding options, warrants, SARS and other similar rights.
2. For representations, warranties and covenants acceptable to Arcadian
and Freeport, concerning, among other things, the organization, business, and
financial condition of, and litigation affecting, Arcadian and Freeport and, if
the parties so agree, appropriate provisions governing fiduciary
responsibilities, termination fees and voting arrangements. Such
representations and warranties will not survive the closing of the Combination.
3. That the closing of the Combination shall be subject to, among other
things: (a) board of directors' approvals by each of Freeport and Arcadian; (b)
requisite approval by the stockholders of Freeport and Arcadian; (c) the
completion of appropriate filings under the Hart-Scott-Rodino Antitrust
Improvements Act and the expiration or termination of all applicable waiting
periods thereunder; and (d) the obtaining of all other necessary governmental
and third party consents and approvals.
While not a condition to the Combination, it is the intent of the parties
that Newco will provide to FRP an opportunity to participate in a transaction
that would convert the publicly-held
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Arcadian Corporation
August 5, 1996
Page 4
limited partnership units of FRP into common stock of Newco at a conversion
rate that is satisfactory to Freeport, Arcadian and FRP. In its capacity as
Administrative Managing General Partner of FRP, Freeport will appoint a special
committee of its Board of Directors to act on behalf of the holders of limited
partnership units of FRP and will authorize such committee to engage
independent financial advisors and counsel to assist such committee in
evaluating the proposed transaction.
Please confirm that this letter accurately sets forth our mutual
understanding by executing two copies of this letter and returning a fully
executed copy to Freeport. It is recognized that the definitive agreement will
include terms, provisions, conditions, representations and warranties in
addition to and in modification of those discussed above. It is our expectation
that the parties would enter into a definitive agreement within one month after
your execution and return of this letter, that the stockholders' meetings of
Arcadian and Freeport will be held as soon as practicable thereafter and that
the closing will take place as soon as practicable after such meetings.
Except for the obligations of Arcadian and Freeport set forth in the
second and third sentences of the second paragraph of this letter, this letter
shall not be deemed to be a binding agreement and shall create no legal
obligation on the part of Freeport, Arcadian or any of their respective
officers, directors, employees, agents or affiliates. Any such agreement or
obligation shall be created solely by a written, executed and delivered
definitive agreement.
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Arcadian Corporation
August 5, 1996
Page 5
If the foregoing is in accordance with your understanding, kindly execute
and return the enclosed copy of this letter as provided above.
Very truly yours,
FREEPORT-MCMORAN INC.
By: /s/ JAMES R. MOFFETT
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James R. Moffett
Chairman of the Board
Confirmed:
ARCADIAN CORPORATION
By: /s/ WILLIAM A. McMINN
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William A. McMinn
Chairman of the Board
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EXHIBIT 99.2
[ARCADIAN CORPORATION LETTERHEAD]
Satisfying customer needs with quality products and services.
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ARCADIAN CORPORATION AND FREEPORT-MCMORAN INC.
ANNOUNCE BUSINESS COMBINATION
Memphis, Tennessee, and New Orleans, Louisiana, August 7, 1996 --
Arcadian Corporation (NYSE:ACA;ACA.PRA) and Freeport-McMoRan Inc. (NYSE:FTX)
announced today that they have signed a non-binding letter of intent for the
combination of their businesses into a newly formed corporation, pursuant to
which it is contemplated that (i) the outstanding common stock of Arcadian and
FTX would be converted into common stock of the new company, (ii) the new
company would become the ultimate parent corporation of Arcadian and FTX, and
(iii) Arcadian and FTX would become wholly-owned direct or indirect
subsidiaries of the new company. Although it is not a condition to the
combination, it is also intended that Freeport-McMoRan Resource Partners,
Limited Partnership (NYSE:FRP) will be offered an opportunity to participate in
a transaction that would convert the publicly held limited partnership units of
FRP into capital stock of the new company. An application will be made to list
the common stock of the new company on the New York Stock Exchange, and its
aggregate market value would be approximately $3 billion based on current
trading prices and assuming that FRP public unitholders elect to participate in
the transaction.
In the proposed combination, each share of common stock of Arcadian
would be exchanged for 0.658 share of the new company's common stock, and each
share of common stock of FTX would be exchanged for one share of the new
company's common stock. Arcadian's common stock closed yesterday at $20.625 per
share, and FTX's common stock closed yesterday at $36.50 per share. In
addition, each share of Arcadian's Mandatorily Convertible Preferred Stock,
Series A, outstanding immediately prior to the combination would be converted
into one share of a newly created Mandatorily Convertible Preferred Stock of
the new company with substantially equivalent rights and preferences as the
Arcadian stock, except that it would be convertible into up to 0.658 share of
the new company's common stock. In the proposed transaction with FRP, each
public limited partnership unit would be converted into capital stock of the
new company at a conversion rate to be agreed upon by FTX, FRP and Arcadian,
and approved by a vote of the FRP public unitholders. The transactions are
expected to be tax-free to Arcadian, FTX and FRP as well as to the shareholders
of Arcadian and FTX and the public unitholders of FRP.
William A. McMinn, Chairman of the Board of Arcadian Corporation,
said: "This proposed transaction would combine leading participants in two of
the three major fertilizer nutrients. Arcadian's position as the largest
producer and marketer of nitrogen fertilizers and chemicals in the Western
Hemisphere, and Freeport-McMoRan's leadership role in phosphates through
IMC-Agrico, would create a unique platform to participate in the world's
expanding needs for fertilizer inputs which make efficient food production
possible."
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James R. Moffett, Chairman of the Board of Freeport-McMoRan Inc., said:
"The combination of Freeport-McMoRan and Arcadian would create an enterprise
with over $2 billion in estimated consolidated annual revenues, over $500
million of estimated consolidated annual operating cash flow (including the
revenues and cash flow attributable to FRP), and a very strong capital
structure, which would be an industry leader in its current operations and an
aggressive participant in worldwide agricultural mineral opportunities." The
reporting of these amounts on a consolidated basis is consistent with FTX's
historical presentation.
Rene L. Latiolais, Chief Executive Officer of Freeport-McMoRan Inc.
and Freeport-McMoRan Resource Partners, said: "This transaction, if approved by
FRP public unitholders, would simplify the corporate structure of Freeport-
McMoRan while allowing the FRP public unitholders an enhanced opportunity to
participate in the growing demand for crop nutrients brought on by the
worldwide agricultural revolution."
Among other required conditions contained in the letter of intent, the
proposed combination of FTX and Arcadian is subject to the negotiation and
execution of a definitive merger agreement (which would include customary
conditions to closing), completion of due diligence, approval by the Boards of
Directors of Arcadian and FTX, approval by the shareholders of Arcadian and
FTX, and approval under the Hart-Scott-Rodino Anti-Trust Improvements Act.
Completion of the combination is also subject to such rights as IMC Global,
Inc. (NYSE:IGL) may have to participate in the transaction under its
partnership agreement with FRP governing their IMC-Agrico Company joint
venture. The proposed transaction with FRP would also be subject to approval of
a special committee of the FTX Board of Directors representing the interests of
FRP public unitholders and to a vote of those unitholders. The companies intend
to complete the definitive merger agreement in approximately 30 days.
The terms of the transaction, including the offering of the new
company's shares, will be set forth by means of a joint proxy
statement/prospectus.
Arcadian Corporation is the largest producer and marketer of nitrogen
fertilizers and chemicals in the Western Hemisphere.
Freeport-McMoRan Inc. owns a 51.6% interest in Freeport-McMoRan
Resource Partners, which is engaged in the production and sale of phosphate
fertilizers and animal feed ingredients as well as the mining and sale of
phosphate rock through IMC-Agrico Company; the mining, transporting,
terminalling and marketing of sulphur; and the development and production of
oil and gas reserves.
Contacts: John R. Hunt, Director - Investor Relations
A. L. Williams, Vice President - Finance and Chief
Financial Officer
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