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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE TO
TENDER OFFER STATEMENT
UNDER SECTION 14(D)(1) OR 13(E)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
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U.S. FOODSERVICE
(Name of Subject Company)
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KONINKLIJKE AHOLD N.V. (ROYAL AHOLD)
SNOW ACQUISITION, INC.
(Names of Filing Persons)
COMMON STOCK, PAR VALUE $.01 PER SHARE,
(Title of Class of Securities)
90331R101
(CUSIP Number of Class of Securities)
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TON VAN TIELRADEN, ESQ.
KONINKLIJKE AHOLD N.V.
ALBERT HEIJNWEG 1
1507 EH ZAANDAM
THE NETHERLANDS
011-31-75-659-9111
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Filing Persons)
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Copy to:
JOHN M. REISS, ESQ.
OLIVER C. BRAHMST, ESQ.
WHITE & CASE LLP
1155 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
(212) 819-8200
CALCULATION OF FILING FEE
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Transaction Valuation* Amount of Filing Fee
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Not applicable Not applicable
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* Set forth the amount on which the filing fee is calculated and state how it
was determined.
[ ] Check the box if any part of the fee is offset as provided
by Rule 0-11 (a) (2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
Amount Previously Paid: None.
Form or Registration No: Not applicable.
Filing Party: Not applicable.
Date Filed: Not applicable.
[X] Check the box if the filing relates solely to preliminary
communications made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[ ] third-party tender offer subject to Rule 14d-1.
[ ] issuer tender offer subject to Rule 13e-4.
[ ] going-private transaction subject to Rule 13e-3.
[ ] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the
results of the tender offer: [ ]
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Ahold set to acquire U.S. Foodservice
National food service distributor with sales of
USD 7 billion provides major boost to Ahold growth
Highlights
o New additional growth vehicle for Ahold in USA
o U.S. Foodservice prominent in food service industry
o Considerable synergies with Ahold operations
o U.S. Foodservice well positioned in e-commerce
o USD 26.00 in cash per share - in transaction worth USD 3.6 billion
o Positive impact on EPS growth
o Closing anticipated May 2000
Zaandam, The Netherlands / Columbia, Maryland (US), March 7, 2000 - Royal Ahold,
the leading international food provider with major operations in the US, Europe
and Latin America, today announced it has entered into a merger agreement with
America's second largest food service distributor, U.S. FoodserviceTM, to
acquire all 101.5 million common shares outstanding. Ahold is offering USD 26.00
in cash per share for a total transaction size of approximately
USD 3.6 billion, including debt.
U.S. Foodservice (NYSE: UFS), with annual sales of over USD 7 billion,
distributes food and related products to restaurants and institutional food
service establishments across the United States. The transaction turns Ahold USA
into a USD 30 billion multi-channel food provider servicing over 20 million US
households through its solid store network, institutional operations and the
internet.
Leading market position U.S. Foodservice
U.S. Foodservice is the second largest food distributor in the rapidly-growing
US food service market. Annual sales now total over USD 7 billion, including two
recent acquisitions. Its sales in fiscal 1999 (July 1, 1998 to June 30, 1999)
amounted to USD 6.2 billion.
<PAGE>
On January 31, 2000, U.S. Foodservice disclosed second quarter sales growth of
9.3%, net earnings growth of 53% and earnings per share growth of 29%. U.S.
Foodservice is listed on the New York Stock Exchange (NYSE:UFS). The company
distributes food and related products to restaurants and institutional food
service establishments across the United States. Its customer base also includes
sports stadiums, hospitals, schools, company cafeterias, government and military
facilities. Overall, U.S. Foodservice currently provides over 140,000 companies
of varying size with a broad range of items including national signature and
private-label brands as well as kitchen equipment and restaurant supplies. The
company employs 13,250 people.
Nationwide network for Ahold with major synergy benefits
The acquisition of U.S. Foodservice grants Ahold access to a nationwide food
distribution and sales network. The company operates 40 distribution centers
with marketing and sales offices, from the Atlantic Ocean, down to Texas across
to California and the areas in between. The activities blend well with Ahold's
retail operations along the US eastern seaboard. The acquisition presents Ahold
with opportunities for nationwide growth in a food service market that has
double the growth rate of food retail, is still fragmented and has sales of
approximately USD 150 billion.
Ahold generated 1999 sales of USD 20.3 billion in the United States and Euros
33.6 billion worldwide. The company sees considerable growth for its US store
operations, both autonomously and through acquisitions such as U.S. Foodservice
which further expands Ahold's overall business by adding a new strategic and
complementary marketing channel for food and related products. Significant
synergy benefits in procurement, logistics and distribution, IT, and private
label development, are anticipated.
In the food service sector there are further synergies. Ahold operates
successfully through its wholly-owned Dutch subsidiary, Deli XL, servicing
30,000 customers in The Netherlands with 1999 sales of Euros 800 million.
Ahold's prospective Scandinavian partner, ICA, is also active in the field and
holds a leading market position. The acquisition of U.S. Foodservice and Ahold's
food service activities in The Netherlands and Scandinavia will total
approximately USD 9 billion in sales.
Financial details
The planned transaction to acquire all outstanding shares of U.S. Foodservice
amounts to approximately USD 3.6 billion, including debt of USD 925 million. In
line with past practice, Ahold intends to finance the transaction through 50%
equity and 50% debt. In Spring 2000, the company plans to issue equity and/or
equity linked instruments for an amount of approximately Euros 3 billion.
Royal Ahold will commence a cash tender offer to purchase all of the outstanding
common shares on March 13, 2000. The tender offer will remain open for 20
business days, unless extended in accordance with the merger agreement, and is
conditioned on the tender of a sufficient number of shares to give Royal Ahold
ownership of at least a majority of the outstanding shares on a fully diluted
basis. Shares not purchased pursuant to the tender offer will be converted into
the right to receive the same USD 26 per share in cash in a subsequent merger.
The tender offer will also be subject to other customary closing conditions,
including the need to obtain antitrust approvals.
The offering also takes into account proportional financing of its stakes in the
ICA operation announced December 1999 and transactions in Spain and Central
America. Upon completion of the U.S. Foodservice acquisition expected by May
2000, Ahold's annualized US sales will total approximately USD 30 billion.
Synergies and cost savings from this transaction are expected to amount to a
minimum of USD 75 million by 2001. The acquisition is expected to have a
positive impact on Ahold's earnings per share growth in 2000, increasing
thereafter.
E-commerce gathers pace at UFS
U.S. Foodservice launched a large-scale e-commerce initiative last November.
Through a new business-to-business website which covers the United States
(www.nextdaygourmet.com), customers can order a large variety of kitchen
equipment, restaurant supplies and specialty food items.
These activities currently are expected to generate sales of approximately USD
100 million annually and are growing fast. The profitable operation, gaining
popularity throughout the US, is considered one of the best food services on the
internet. U.S. Foodservice's distribution network takes care of next day
deliveries. The e-commerce activities also provide categorized health
information, such as diet and nutritional advice.
Comments Cees van der Hoeven, Ahold President/CEO
Ahold President Cees van der Hoeven described the planned acquisition of U.S.
Foodservice as `fully in line with our growth strategy and our ambition to
become the world's best multi-channel food provider. This is a great opportunity
and considerably expands our US geographical reach. It provides us with
significant additional growth. U.S. Foodservice has enormous potential as it has
a solid infrastructure in place and management professionals at the helm.
Critical mass and economies of scale along with new synergies will positively
impact all our businesses. We're excited and see a very positive future ahead.'
Comments Jim Miller, Chairman and President/CEO U.S. Foodservice
`Teaming up with Ahold is a magnificent step forward for U.S. Foodservice. The
new economies of scale now available, the financial means and the sharing of
know-how and experience will greatly help U.S. Foodservice to speed up the gains
to be made through the huge potential of the food service market. We realized we
couldn't do this on our own and needed a strong partner that knows the food
business inside out. The transaction with Ahold enables U.S. Foodservice to
accelerate its already rapid growth and use today's momentum to the maximum.
Joining Ahold and benefiting from their expertise in the food business is going
to strengthen U.S. Foodservice's position. It provides access to a global
market.'
Comments Bob Tobin, President/CEO Ahold USA
`For Ahold, the planned acquisition of U.S. Foodservice is a major strategic
leap forward. We now have direct access to the rapidly expanding US food service
market and enter this new business channel in a prominent position. We see food
services complementing our operations in a natural way with some of U.S.
Foodservice's activities also proving highly valuable for our existing stores.
This acquisition opens up a new growth corridor and elevates us from the
position of supermarket operator to multi-channel food provider. I'm also
particularly excited that this acquisition makes us a national player for the
first time. The distribution and marketing network across the US adds tremendous
value to our company, including the e-commerce business with home delivery, as
started by U.S. Foodservice. We're gaining a second platform for considerable
growth and that's wonderful news. We are also familiar with their excellent
management team. They share our values and strategies and have a culture that
will welcome knowledge sharing and business synergies.'
Royal Ahold
Royal Ahold operates 4,000 supermarkets, hypermarkets, and other store formats
in the United States, Europe, Latin America and Asia. 1999 sales amounted to
Euros 33.6 billion. Ahold services the food needs of over 30 million loyal
customers every week. Last year, the company announced its intention to become
50% owner of the ICA Group, Scandinavia's leading food retail group, adding a
further 3,100 stores to its tally and ranking Ahold among Europe's major
players. After completion of the transaction with U.S. Foodservice, Ahold will
rank 4th in the US in terms of sales. On March 7, 2000 Ahold also announced
record earnings for 1999. Increasing by 37% net profit amounted to Euros 752.1
million with 25% earnings per share growth and a 29% dividend increase. Ahold
shares are listed in Amsterdam (Ahold) and as ADRs on the New York Stock
Exchange (AHO). Ahold shares are also listed in Zurich, Switzerland. Ahold's
website can be found at www.ahold.com.
Ahold in the US
Ahold has been active in the US since 1977 and currently owns five large and
highly successful supermarket operating companies along the eastern seaboard.
The combined store count is 1,063 and 1999 sales amounted to USD 20.3 billion.
The five Ahold operating companies are: Tops Markets, Stop & Shop,
Giant-Landover, Giant-Carlisle and BI-LO.
Ahold Public Relations: +31 75 659 5720.
After office hours: Hans Gobes +31 655 822 298, Jan Hol +31 622 933 137.
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Royal Ahold press releases may contain `forward-looking' statements. Actual
results may differ from such statements as they may have been influenced by
factors beyond the Company's ability to control, as more fully discussed in
Royal Ahold's Annual Report on Form 20-F.
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This press release contains certain statements that are neither reported
financial results nor other historical information. These statements are
forward-looking statements within the meaning of the safe-harbor provisions of
the U.S. federal securities laws. These forward-looking statements are subject
to risks and uncertainties that could cause actual results to differ materially
from those expressed in the forward looking statements. Many of these risks and
uncertainties relate to factors that are beyond Ahold's ability to control or
estimate precisely, such as future market and economic conditions, the behavior
of other market participants, the ability to successfully integrate acquired
businesses and achieve anticipate synergies and the actions of government
regulators. These and other risk factors are detailed in Ahold's publicly filed
reports. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this press
release. Ahold does not undertake any obligation to publicly release any
revisions to these forward-looking statements to reflect events or circumstances
after the date of these materials.
U.S. Foodservice stockholders are advised to read the tender offer statement
regarding the acquisition of U.S. Foodservice referenced in this press release,
which will be filed by Ahold Acquisition Inc. and Koninklijke Ahold N.V. with
the U.S. Securities and Exchange Commission and the related
solicitation/recommendation statement which will be filed by U.S. Foodservice
with the Commission. The tender offer statement (including an offer to purchase,
letter of transmittal and related tender offer documents) and the
solicitation/recommendation statement will contain important information which
should be read carefully before any decision is made with respect to the offer.
These documents will be made available to all stockholders of U.S. Foodservice,
at no expense to them, by contacting information agent, Morrow & Co., Inc.
Stockholders please call US 800 566 9061. These documents also will be available
at no charge at the SEC's website at www.sec.gov.
