SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
Information to be Included in Statements Filed Pursuant
to Rule 13d-1(a) and Amendments Thereto Filed Pursuant to
Rule 13d-2(a)
(Amendment No. 3)
THE PRESLEY COMPANIES
(Name of Issuer)
Series A Common Stock $0.01 Par Value Per Share
(Title of Class of Securities)
741030-10-0
(CUSIP Number)
General William Lyon
c/o William Lyon Homes, Inc.
4490 Von Karman
Newport Beach, California 92660
(949) 833-3600
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
with a copy to:
David A. Krinsky, Esq.
O'Melveny & Myers LLP
610 Newport Center Drive, Suite 1700
Newport Beach, California 92660-6429
(949) 823-7902
December 30, 1998
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-
1(e), 13d-1(f) or 13d-1(g), check the following box: [ ]
<PAGE>
CUSIP No. 741030-10-0 Schedule 13D
---------------------------------------------------------
| 1 | NAME OF REPORTING PERSON |
| | S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON|
| | General William Lyon |
|---------------------------------------------------------|
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: |
| | (a) |
| | (b) |
|---------------------------------------------------------|
| 3 | SEC USE ONLY |
|---------------------------------------------------------|
| 4 | SOURCE OF FUNDS<1> |
| | |
| | PF |
|---------------------------------------------------------|
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS |
| | REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |
| | |
| | [ ] |
|---------------------------------------------------------|
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION |
| | |
| | United States of America |
|---------------------------------------------------------|
| | 7 | SOLE VOTING POWER |
| Number of | | |
| Shares | | 7,939,589 |
| Beneficially | | |
| Owned by | | |
| Each Reporting | | |
| Person With | | |
| |--------------------------------|
| | 8 | SHARED VOTING POWER |
| | | |
| | | 0 |
| |--------------------------------|
| | 9 | SOLE DISPOSITIVE POWER |
| | | |
| | | 7,939,589 |
|---------------------------------------------------------|
| | 10 | SHARED DISPOSITIVE POWER |
| | | |
| | | 0 |
|---------------------------------------------------------|
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH |
| | REPORTING PERSON |
| | |
| | 7,939,589 |
|---------------------------------------------------------|
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 |
| | EXCLUDES CERTAIN SHARES<1> |
| | |
|---------------------------------------------------------|
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 |
| | |
| | 15.2% |
|---------------------------------------------------------|
| 14 | TYPE OF REPORTING PERSON<1> |
| | IN |
- ----------------------------------------------------------
[FN]
<1>SEE INSTRUCTIONS BEFORE FILLING OUT!
</FN>
<PAGE>
Item 4. Purpose of Transaction
Item 4 of this Statement on Schedule 13D, filed
byGeneral William Lyon (the "Reporting Person") with respect
to theSeries A Common Stock, $0.01 par value, of The Presley
Companies, a Delaware corporation (the "Company"), is hereby
amended and supplemented as follows:
On December 31, 1998, the Company, The Presley
Companies, a California corporation ("Presley-Cal.") and a wholly
owned subsidiary of the Company, and William Lyon Homes, Inc.
("WL Homes"), a corporation which is controlled by the
Reporting Person, entered into a non-binding letter of intent
(the "Letter of Intent") with respect to (i) the proposed
purchase by Presley-Cal. of all or substantially all of the
assets of WL Homes for a cash purchase price of two times (2x)
book value (approximately $48 million) and the assumption of all
or substantially all of the liabilities of WL Homes (the
"Acquisition"), and (ii) the proposed concurrent purchase by WL
Homes pursuant to a tender offer (the "Offer") of between 40% and
49% of the outstanding Common Stock of the Company (other than
shares held by William Lyon) for a purchase price of $0.62 per
share. The full text of the Letter of Intent, which is filed as
Exhibit 1 hereto, is incorporated herein by reference.
The Acquisition and the Offer (collectively, the
"Transactions") are subject to the negotiation and execution of a
definitive agreement among the parties and various other terms
and conditions as set forth in the Letter of Intent. Their can
be no assurances that the parties will ultimately enter into a
definitive agreement with respect to the Transactions or that the
conditions to the Transactions will be satisfied.
The Company and WL Homes have agreed in the Letter of
Intent that, subject to the fiduciary duties of their respective
boards of directors, they will negotiate exclusively with each
other towards a definitive agreement until March 31, 1999.
Except as described in this Item 4, as amended, the
Reporting Person currently does not have any plans or proposals
that relate to or would result in any of the matters described in
subparagraphs (a) through (j) of Item 4 of Schedule 13D.
Item 7. Material To Be Filed as Exhibits
Exhibit 1 Letter of Intent, as described in Item 4 of this Schedule 13D.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that this statement is true,
complete and correct.
/s/ William Lyon
------------------
William Lyon
Dated: December 31, 1998
<PAGE>
EXHIBIT 1
Letter of Intent
December 30, 1998
The Presley Companies
19 Corporate Plaza
Newport Beach, California 92660
Attention: General James Dalton
Re: Agreement in Principle Concerning
The Presley Companies and
William Lyon Homes, Inc.
Ladies and Gentlemen:
This letter sets forth our mutual, preliminary
Understanding with respect to the proposed acquisition by
The Presley Companies, a Delaware corporation ("Presley-
Del."), of substantially all of the assets of William Lyon
Homes, Inc., a California corporation ("WL Homes"), and the
purchase by WL Homes of between 40% and 49% of the outstanding
Common Stock of Presley-Del.
1. The Transaction. On the conditions set forth
below and to be included in a definitive agreement (the
"Definitive Agreement"):
(a) The Presley Companies, a California
corporation and a wholly owned subsidiary of Presley-Del.
("Presley-Cal.," and together with Presley-Del.,
"Presley"), will purchase all or substantially all
of the assets of WL Homes for a cash purchase price
of two times (2x) book value and the assumption of all
or substantially all of the liabilities of WL Homes
(such purchase and assumption being referred to herein
as the "Acquisition"); and
(b) WL Homes will make a tender offer (the
"Offer") to purchase between 40% and 49% of the outstanding
Common Stock of Presley-Del. for a purchase price of
$0.62 per share. In the event that more than 49% of
the outstanding Common Stock of Presley Del. is
tendered, WL Homes will purchase shares from each tendering
stockholder on a pro rata basis.
The Acquisition and the Offer are hereinafter
Referred to collectively as the "Transactions."
<PAGE>
2. Terms and Conditions. Our preliminary
understanding includes the following additional terms and
conditions, which will be addressed in greater detail in the
Definitive Agreement:
(a) The consummation of the Acquisition and the
Offer shall each be conditioned upon the successful
Completion and closing of the other.
(b) The Offer is premised on (i) Presley-Del.
having an aggregate of 52,195,678 shares of Series A Common
Stock and Series B Common Stock outstanding, (ii) there being
No outstanding options to acquire Presley-Del. Common Stock
with an exercise price of less than $1.00 per share, and
(iii) there being no other securities outstanding which are
convertible into or exchangeable for shares of Common Stock
of Presley-Del.
(c) The Offer shall be conditioned upon there
being tendered and not withdrawn prior to expiration of the
Offer a number of shares which constitutes at least 40%
of the outstanding shares of Common Stock of Presley-Del.
(d) Concurrent with the execution and delivery
of the Definitive Agreement, each of the following entities
shall have consented to the Transactions and executed a
written agreement (in form and substance satisfactory to WL
Homes) to tender their shares of Presley-Del. Common Stock
in the Offer:
(i) Foothill Capital Corporation;
(ii) The Foothill Group, Inc.;
(iii) Pearl Street, L.P.;
(iv) First Plaza Group Trust; and
(v) International Nederlande (U.S.) Capital
Corporation.
(e) The parties contemplate that Presley-Del.'s
12 1/2% Senior Notes due 2001 (the "Presley Notes") shall
remain outstanding without modification following
consummation of the Transactions. The parties shall use
reasonable efforts to structure the Transactions so as to
eliminate the need to obtain any consents to the
Transactions from holders of the Presley Notes.
(f) Presley and WL Homes shall have received
all required regulatory approvals (including, without
limitation, expiration of the applicable waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act)
and third party consents (including, without limitation,
lender consents), in each case without the imposition
of any condition which is reasonably unacceptable to
Presley or WL Homes. The parties shall use reasonable
efforts to structure the Transactions so as to eliminate
the need to obtain any consents to the Transactions from
the lenders under Presley's existing bank credit facility
(the "Presley Bank Facility").
<PAGE>
(g) The respective Boards of Directors of
Presley and WL Homes shall have approved the
Definitive Agreement by March 31, 1999 and caused
the Definitive Agreement to have been executed by
such date (unless the term of this letter is extended
by mutual agreement of the parties).
(h) Presley shall have received a fairness
opinion or opinions with respect to the Transactions from
Warburg Dillon Read LLC (or such other investment banking
firm or firms of national standing and reasonably
acceptable to Presley and WL Homes), which opinion
or opinions shall include an opinion to the effect that the
Acquisition is fair to Presley from a financial point of
view. With respect to the real property to be acquired from
WL Homes by Presley Cal., Presley shall also have received
A determination of value by a real estate appraisal firm
which is of egional standing in the region in which the
subject property is located and is MAI certified, in
form and substance reasonably satisfactory to Presley
and WL Homes. In addition, Presley shall
have received a solvency opinion from a firm of
national standing with respect to the solvency of
Presley following the consummation of the Transactions.
(i) The parties shall structure the Transactions
(including, if necessary, the amendment of Presley's
certificate of incorporation and bylaws to restrict
transfers of shares) so as to avoid triggering the change
of control tax provisions that would result in the loss of
Presley-Del.'s net operating losses for tax purposes
(NOL's"). Shareholders of Presley-Del. which,
after giving effect to the proposed Transactions, would
exceed any applicable percentage ownership limitations shall
have approved and agreed to be bound by such restrictions,
and, to the extent required by applicable law, such
amendments shall have been approved by Presley-Del.
shareholders.
(j) Prior to the execution of the Definitive
Agreement, Presley shall have completed to its satisfaction
its due diligence review of the business, financial
condition, assets, liabilities, results of operations
and prospects of WL Homes.
(k) The closing of the Offer shall be
conditioned upon the absence of any material adverse
change in the business, financial condition, assets,
liabilities, operations or prospects of Presley. The
closing of the Acquisition shall be conditioned upon
the absence of any material adverse change in the business,
financial condition, assets, liabilities, results of
operations or prospects of WL Homes.
(l) The Closing of the Acquisition shall be
conditioned upon Presley (i) having borrowing capacity
under the terms of the Presley Bank Facility, and/or
(ii) obtaining other bank or third-party financing on
terms reasonably acceptable to Presley, in any case, in
an amount sufficient to enable Presley to finance the
Transactions as contemplated herein.
3. The Definitive Agreement. The Definitive
Agreement shall contain terms, conditions, representations,
warranties and covenants customary and appropriate for
transactions of the type contemplated, including those
summarized herein, together with a commitment on behalf
of Presley to issue a favorable recommendation to its
shareholders with respect to the Offer, such obligation
being subject to the Presley-Del. Board of Directors'
fiduciary duties under applicable law. The Definitive
Agreement may be terminated at any time by mutual
<PAGE>
consent of the parties, or, among other circumstances,
unilaterally by either party (provided that such party
is not then in breach of the Definitive Agreement) if
(a) the closing of the Transactions has not occurred by
June 30, 1999, or (b) there has been a material
adverse change in the business, financial condition, assets,
liabilities, results of operations or prospects of the other
party.
4. Exclusive Negotiations. To induce the parties
to expend money and otherwise devote resources to structure and
negotiate the proposed Transactions, each of the parties agrees
that until 11:59 p.m. PST on March 31, 1999 (the "Exclusivity
Period"), it will negotiate exclusively with the other party
hereto with respect to any proposal to acquire (whether by
merger, stock or asset purchase, direct investment, or
otherwise) any equity interest in the other party hereto,
any of its subsidiaries, or all or any material portion of
its assets (except with respect to sales of homes in the
ordinary course of business). Any such proposal is
hereinafter referred to as an "Acquisition Proposal."
Each of the parties further agrees that, during the
Exclusivity Period, neither it nor any of its directors,
officers, employees, representatives or agents (including
financial advisors and attorneys) (collectively referred to
herein as "Representatives") will (i) solicit, initiate,
encourage or facilitate the submission of, or consider, enter
into discussions concerning or agree to, any Acquisition
Proposal other than from the other party hereto, or (ii) provide
Any information concerning it or its assets or business
operations to any person or permit any person to visit its
premises in connection with or for the purpose of soliciting
or facilitating any Acquisition Proposal, in each case, other
than the other party hereto and its Representatives. In the
event any other potential acquiror or Representative thereof
contacts a party or any of its Representatives with respect to
an Acquisition Proposal, such party shall notify the other party
hereto and provide such party with the details of such contact.
Further, the person so contacted will inform the contacting party
that the party is in a period of exclusive negotiations and
terminate such contact without disclosing any details concerning
the negotiations with the other party hereto.
Notwithstanding the foregoing provisions of this
Section 4, if prior to the execution of a Definitive Agreement,
the Board of Directors of Presley-Del. or WL Homes, as the case
may be, after receiving advice from outside legal counsel,
determines that a failure to act would be inconsistent with
such Board of Directors' fiduciary duties to stockholders under
applicable law, such party may (a) furnish information with
respect to such party to any person in response to an unsolicited
request pursuant to a confidentiality agreement with terms and
conditions similar to those contained in the confidentiality
agreements by and between Presley-Del. and WL Homes, and (b)
participate in discussions and negotiations regarding any
potential Acquisition Proposal. Such party shall promptly
notify the other party hereto of any request received by such
party with respect to a potential competing Acquisition Proposal.
If a party receives a competing Acquisition Proposal, such party
Shall promptly, and in any event at least three (3) business
days prior to entering into any agreement with respect to such
Competing Acquisition Proposal, notify the other party of the
receipt of such competing Acquisition Proposal, specifying the
material terms and conditions of the proposal and identifying
the person making such proposal. If a party enters into a definitive
agreement with respect to a competing Acquisition Proposal, such
party shall concurrently with entering into such agreement pay,
or cause to be paid, all fees and expenses incurred by the other
party through such date in
<PAGE>
connection the proposed Transactions (including, without
limitation, all attorneys', accountants', financial advisors',
bankers', appraisers' and similar professional fees and
expenses).
Notwithstanding the Exclusivity Period, the parties
agree to use their best efforts to structure the proposed
Transactions and to draft and complete negotiation of the
Definitive Agreement as soon as practicable.
5. Access; Confidentiality. Each party, subject to
the need to preserve attorney-client privilege, will make
available such financial, legal, business and other documents
and information concerning its business, assets, liabilities
and operations as the other party may reasonably request.
All such documents and information provided hereunder shall
be subject to, and governed by, the applicable confidentiality
agreements existing between WL Homes and Presley. Presley
acknowledges that General William Lyon and Wade Cable, directors
of Presley, have participated in the preparation of WL Homes'
proposal and are sharing information regarding Presley with
WL Homes' advisors in connection with the proposed Transactions.
In furtherance of the foregoing, WL Homes shall,
promptly following the execution and delivery of this letter by
each of the parties hereto, provide Presley and its
Representatives with access to copies of all loan agreements,
instruments and other documents governing or relating to any
indebtedness of WL Homes which is proposed to be assumed by
Presley in connection with the Acquisition.
6. Publicity. Presley and WL Homes shall endeavor to
coordinate all publicity relating to the proposed Transactions.
No party herein shall issue any press release, publicity
statement or other notice relating to the proposed Transactions
or this letter without the prior consent of the other parties
hereto unless required under applicable securities laws (in which
case each party agrees to give reasonable notice to and consult
with the other parties prior to issuing any such release,
statement or other notice).
7. Finder's Fee. Each party represents that it has
not engaged or authorized any broker, finder or similar agent
who would be entitled to a commission or other fee in respect of
the proposed Transactions, except for Presley's engagement of
Warburg Dillon Read LLC, whose fees will be paid by Presley.
It is further understood that, in connection with the
Transactions, Presley may, after consultation with WL Homes,
engage additional Firms with respect to the fairness opinions,
appraisals and Solvency issues set forth in Section 2(h) hereof.
8. Expenses. Subject to Section 4 hereof,
(a) Presley shallpay all fees, costs and expenses incurred in
connection with obtaining the fairness and solvency opinions
referenced in Section 2(h) hereof and any appraisals of Presley
assets that may be required in connection with the Transactions,
and (b) WL Homes shall pay all fees, costs and expenses incurred
in connection with obtaining any financing commitments and any
appraisals of WL Homes assets that may be required in connection
with the Transactions. Except as provided in Section 4 hereof
and in the foregoing sentence of this Section 8, each party shall
otherwise pay its own expenses incurred in connection with the
proposed Transactions.
9. Not an Offer. This letter is not intended as an
offer tostockholders of Presley. The Offer by WL Homes will be
made pursuant to and only in compliance with applicable federal
and state securities laws.
<PAGE>
10. Effect of Letter; Enforceability. Except as
provided inthis Section, this letter is not intended to be, and
does notconstitute, a binding or enforceable agreement, but is
merely an outline of intention to facilitate the negotiation
and preparation of a Definitive Agreement and related documents.
This letter merely lists proposed points that may or may not
become part of a Definitive Agreement. It is not based on any
existing agreement between the parties and (except as provided
in this Section) is not intended to impose any obligation
whatsoever on any party, including but not limited to any
obligation to bargain in good faith or in any way other than
at arms' length. Except as to Sections 4 through 9 above,
and this Section 10, no legal or equitable duties,
responsibilities or rights are created hereby. Each party
covenants not to institute or participate in any proceeding
seeking to establish a contrary position. Neither
party may reasonably rely on any promises inconsistent with
this Section.
This Section supersedes any and all other conflicting
or ambiguous language in this letter or any contemporaneous or
other communication preceding this letter.
11. Term. This letter, unless extended by mutual
agreement, shall terminate (other than Sections 6 through 9,
which shall survive) at 11:59 p.m. PST on March 31, 1999 or
upon the earlier to occur of either of the following:
(a) the execution of the Definitive Agreement;
or
(b) ten days following the delivery of written
notice by Presley to WL Homes (together with copies of all
supporting correspondence received from Presley's financial
advisors) to the effect that (i) Presley and its financial
advisors have substantially completed the appraisal and due
diligence processes contemplated in Sections 2(h) and 2(j)
hereof, and (ii) one or more of Presley's financial
advisors have confirmed to Presley in writing that they do
not reasonably believe that they will be able to render the
fairness or solvency opinions contemplated in
Section 2(h) hereof.
<PAGE>
12. Compliance. All matters referred to herein
are subject to and conditioned upon compliance with all
applicable laws and the consistency of the terms hereof with
any material rights of any third parties.
If this letter is satisfactory to you as a basis for
proceeding toward a Definitive Agreement, please so signify on
the enclosed copy of this letter and return it to us at the
above address.
WILLIAM LYON HOMES, INC.,
a California corporation
By: /s/ William Lyon
-------------------------
William Lyon
Chairman, President & CEO
AGREED, AS OF DECEMBER 31, 1998:
THE PRESLEY COMPANIES,
a Delaware corporation
By: /s/ Nancy Harlan
---------------------
Nancy Harlan
Senior Vice President and General Counsel
By: /s/ Linda Foster
---------------------
Linda Foster
Vice President and Corporate Secretary
THE PRESLEY COMPANIES,
a California corporation
By: /s/ Nancy Harlan
---------------------
Nancy Harlan
Senior Vice President and General Counsel
By: /s/ Linda Foster
--------------------
Linda Foster
Vice President and Corporate Secretary
