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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-9
(AMENDMENT NO. 2)
SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO
SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
BUTTREY FOOD AND DRUG STORES COMPANY
(NAME OF SUBJECT COMPANY)
BUTTREY FOOD AND DRUG STORES COMPANY
(NAME OF PERSON FILING STATEMENT)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
124234 10 5
(CUSIP NUMBER OF CLASS OF SECURITIES)
WAYNE S. PETERSON
BUTTREY FOOD AND DRUG STORES COMPANY
601 6TH STREET, S.W.
GREAT FALLS, MONTANA 59404
(406) 761-3401
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS
ON BEHALF OF THE PERSON FILING THIS STATEMENT)
COPIES TO:
CYNTHIA M. DUNNETT, ESQ.
RYAN S. HONG, ESQ.
RIORDAN & MCKINZIE
300 SOUTH GRAND AVENUE
29TH FLOOR
LOS ANGELES, CALIFORNIA 90071
(213) 629-4824
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This Amendment No. 1 to Solicitation/Recommendation Statement on Schedule
14D-9 amends and supplements the Solicitation/Recommendation Statement on
Schedule 14D-9 originally filed on January 26, 1998 (the "Schedule 14D-9") by
Buttrey Food and Drug Stores Company, a Delaware corporation (the "Company"),
with respect to the offer by Albertson's, Inc., a Delaware corporation
("Parent"), and Locomotive Acquisition Corp., a Delaware corporation and a
wholly owned subsidiary of Parent ("Purchaser") to purchase all of the
outstanding shares of common stock, par value $.01 per share (the "Shares"), of
the Company at $15.50 per Share, net to the seller in cash, without interest,
upon the terms and subject to the conditions set forth in the Offer to Purchase,
dated January 26,1998 (the "Offer to Purchase"), and the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
constitute the "Offer"). Unless otherwise defined herein, all capitalized terms
used herein shall have the respective meanings given to such terms in the
Schedule 14D-9.
ITEM 4. THE SOLICITATION OR RECOMMENDATION
(1) Item 4(b)(2) is hereby amended by replacing the first paragraph of the
Section captioned "Review of the Offer" with the following paragraph:
Review of the Offer. In arriving at its decision to approve the
transactions contemplated by the Merger Agreement and to recommend
acceptance of the Offer, the Board considered, among other things, the
following factors in support of the recommendation:
(i) The terms and conditions of the Offer and the Merger Agreement,
including the amount and form of consideration being offered to the
Company's stockholders.
(ii) The consideration offered by Parent of $15.50 per share in
cash represented a premium of approximately 44% over the closing sale
price of $10.75 per share as reported on the Nasdaq National Market
System on January 16, 1998, the last trading date prior to approval and
authorization of the Merger Agreement by the Board.
(iii) The Board considered the business, operations, prospects,
properties, assets and historical and projected earnings of the Company.
It reviewed in particular the competitive factors and growth prospects
in the Company's core geographical markets (Montana, Wyoming and other
states in northwestern United States) and the resource limitations on
the Company's ability to expand into markets or through acquisitions.
(iv) The Board considered the contacts it had with and
circumstances pertaining to possible alternative buyers in the
supermarket industry. Based in part on the advice of Morgan Stanley, it
believed that financial buyers would be unable to pay a significant
premium over the Company's recent stock price of $10.75 per share.
(v) The Board considered the prices, premiums and multiples of
earnings and cash flow paid in recent acquisitions of similar companies.
Specifically, the Board reviewed the following acquisitions, with the
multiple of trailing EBITDA (earnings before interest, taxes,
depreciation and amortization) included in parentheses: Smitty's Super
Value/Yucaipa (6.2x), Wilson's Supermarkets/ Hannaford Brothers Co.
(7.4x), Star Market Company/Investcorp (6.7x), Acme Markets Stores/ Penn
Traffic Co. (5.8x), Perry Drug Stores, Inc./Rite Aid Corp. (9.2x),
Purity Supreme/Stop & Shop (7.9x), Sunshine-Jr. Stores/E-Z Serve Stores
(5.3x), Mayfair Supermarkets/Ahold (7.6x), National Convenience/Diamond
Shamrock (6.4x), Jitney Jungle/Bruckman, Rosser, Sherrill & Co. (5.9x),
Kash n' Karry/Food Lion (6.3x), Hughes/Quality Food (6.4x), Riser
Foods/Giant Eagle (7.3x), Delchamps/Jitney Jungle (6.8x). The mean
multiple of trailing EBITDA for the target company in these acquisitions
was 6.7. The Board also noted that the premiums paid in these
transactions was a mean of 25.7% above the trading price in public
company situations, in contrast to the 44% premium above the trading
price of per Share offered by Albertson's.
(vi) The Board reviewed the recent and historical market price and
trading volume of the Shares.
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(vii) The Board also factored in the provisions of the Merger
Agreement which increased the likelihood that the Offer would close in
light of the extended period of time which may be necessary to address
antitrust regulatory matters and provided operational flexibility to the
Company prior to closing.
(viii) The Board also considered the presentation of Morgan
Stanley, including the receipt at the meeting of the Board held on
January 19, 1998, of the Fairness Opinion to the effect that, as of such
date, and on the basis of the various factors described to the Board at
the January 19, 1998 meeting, the $15.50 in cash per share to be
received by the holders of Shares pursuant to the Merger Agreement is
fair from a financial point of view to such stockholders. In its
presentation, Morgan Stanley reviewed and analyzed, among other things,
(a) certain publicly available financial statements and other
information concerning the Company; (b) internal financial statements
and other financial and operating data concerning the Company prepared
by management of the Company; (c) certain financial projections prepared
by the management of the Company; (d) discussions with senior management
concerning the past and current operations and financial condition and
prospects of the Company; (e) reported price and trading activity for
the Shares; (f) comparisons of certain financial performance and stock
price and trading information of the Company with similar information
for certain other comparable publicly traded companies and their
securities; (g) the terms of recent comparable business combinations in
comparison with the terms of the proposed transaction; and (h) the
Merger Agreement and certain documents related to the Offer and the
Merger, including the Tender Agreement.
The Board concluded that each of the factors listed above supported a
recommendation to the Company's stockholders to accept the Offer.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: April 1, 1998 BUTTREY FOOD AND DRUG STORES
COMPANY
By: /s/ WAYNE S. PETERSON
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Name: Wayne S. Peterson
Title: Chief Financial Officer
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