SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 14D-9
Solicitation/Recommendation Statement under
Section 14(d)(4) of the Securities Exchange Act of 1934
(Amendment No. ___________)
ProVantage Health Services, Inc.
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(Name of Subject Company)
ShopKo Stores, Inc.
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(Names of Persons Filing Statement)
Common Stock, $0.01 par value
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(Title of Class of Securities)
743725103
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(CUSIP Number of Class of Securities)
Richard D. Schepp
ShopKo Stores, Inc.
700 Pilgrim Way
Green Bay, Wisconsin 54307-9060
(920) 429-2211
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(Name, address and telephone numbers of person
authorized to receive notice and communications
on behalf of the persons filing statement)
With copies to:
Randall J. Erickson
Godfrey & Kahn, S.C.
780 North Water Street
Milwaukee, Wisconsin 53202
(414) 273-3500
[X] Check the box if the filing relates solely to
preliminary communications made before the commencement
of a tender offer.
<PAGE>
ShopKo
NEWS RELEASE
For more information contact:
Media - Sheree Olson
(920) 429-4186
Investors - Vicki Shamion
(920) 429-7039
SHOPKO ANNOUNCES AGREEMENT FOR MERCK TO PURCHASE
PROVANTAGE HEALTH SERVICES, INC.
GREEN BAY, WIS. (May 4, 2000) ShopKo Stores, Inc.
today announced a definitive agreement for Merck & Co.,
Inc. (NYSE: MRK - news) to acquire ShopKo's ProVantage
Health Services, Inc. (NYSE: PHS - news) subsidiary.
Merck has agreed to pay ShopKo and other ProVantage
shareholders $12.25 per share in a transaction that
values ProVantage at approximately $222 million.
ShopKo currently owns 64.5 percent of the 18,150,000
outstanding ProVantage shares, which were trading at
$7.625 at the close of trading on May 3, 2000. The
boards of directors of Merck, ProVantage and ShopKo
have approved the transaction. Merrill Lynch & Co. has
served as financial advisor to ProVantage and has
rendered a fairness opinion to the ProVantage board.
Under the terms of the proposed transaction, a
subsidiary of Merck will commence a $12.25 cash tender
offer for all of ProVantage's outstanding shares.
ShopKo has agreed to support the transaction and tender
its shares. ShopKo has also granted Merck an option to
purchase its ProVantage shares under certain
circumstances at the tender offer price. The tender
offer, which is contingent upon customary conditions,
is expected to commence on or about May 10, 2000. The
acquisition is expected to close by the end of ShopKo's
second quarter. ProVantage will continue to operate
from its headquarters in Waukesha, Wisconsin.
<PAGE>
"Given ProVantage's rapid growth and the consolidation
in the health care industry, we believe this
transaction is in the best interest of ProVantage,
Merck, ShopKo, their respective shareholders and
ProVantage teammates," said William J. Podany, ShopKo
chairman, president and chief executive officer.
Podany described the transaction as a win-win
situation. "Merck-Medco is a leader in the fiercely
competitive pharmacy benefit management industry and
possesses the strong capital structure necessary to
fund the future growth of ProVantage. This transaction
will give ShopKo more time to focus on its core
discount retailing business."
ShopKo is considering various strategic and financial
uses of the proceeds from the transaction, which will
be approximately $143 million on a pre-tax basis.
Potential uses are the acquisition or construction of
stores or other retail businesses, stock repurchase,
debt reduction or other corporate purposes.
THE TENDER OFFER FOR THE OUTSTANDING SHARES OF
PROVANTAGE COMMON STOCK DESCRIBED IN THIS ANNOUNCEMENT
HAS NOT YET COMMENCED. AT THE TIME A SUBSIDIARY OF
MERCK & CO., INC. COMMENCES ITS OFFER, IT WILL FILE A
TENDER OFFER STATEMENT WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION AND PROVANTAGE WILL FILE A
SOLICITATION/RECOMMENDATION STATEMENT WITH RESPECT TO
THE OFFER. SECURITY HOLDERS SHOULD READ EACH OF THE
TENDER OFFER STATEMENT AND THE
SOLICITATION/RECOMMENDATION STATEMENT WHEN IT IS
AVAILABLE BECAUSE EACH CONTAINS IMPORTANT INFORMATION.
INVESTORS CAN GET THE TENDER OFFER STATEMENT (INCLUDING
AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL
AND OTHER OFFER DOCUMENTS), THE
SOLICITATION/RECOMMENDATION STATEMENT AND OTHER FILED
DOCUMENTS FOR FREE AT THE SECURITIES AND EXCHANGE
COMMISSION'S WEBSITE AT WWW.SEC.GOV. AN OFFER TO
PURCHASE, THE RELATED LETTER OF TRANSMITTAL AND CERTAIN
OTHER OFFER DOCUMENTS, AS WELL AS THE
SOLICITATION/RECOMMENDATION STATEMENT, WILL BE MADE
AVAILABLE TO SHAREHOLDERS OF PROVANTAGE AT NO EXPENSE
TO THEM.
ShopKo Stores, Inc., a Fortune 500 company
headquartered in Green Bay, Wis., operates 319 retail
stores in 22 states, primarily in the Midwest, Western
Mountain and Pacific Northwest regions. Retail
operations include 160 specialty discount stores
operating under the ShopKo name in mid-sized and larger
cities, and 159 Pamida discount stores in smaller, rural
<PAGE>
communities. The company also serves the rapidly
growing managed health care industry through its
subsidiary ProVantage Health Services, Inc. ProVantage
is a leading health benefit management company
providing health benefit management services, pharmacy
mail services, vision benefit management services and
health information and clinical support services. For
more information about ShopKo, Pamida or ProVantage,
visit our web site at www.shopko.com.
This press release contains forward-looking statements
within the meaning of the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Such
statements are subject to important factors which could
cause ShopKo's actual results to differ materially from
those anticipated by the forward-looking statements.
These factors include those referenced in ShopKo's
current Annual Report on Form 10-K or as may be
described from time to time in ShopKo's subsequent SEC
filings.
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