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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: April 7, 2000
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(Date of earliest event reported)
SEAWAY FOOD TOWN, INC.
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(Exact name of Registrant as specified in its charter)
Ohio 0-00080 34-4471466
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(State or other jurisdiction (Commission (I.R.S. employer
of incorporation) file number) identification no.)
1020 Ford Street, Maumee, Ohio 43537
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (419) 893-9401
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ITEM 5. OTHER EVENTS.
On April 7, 2000, the registrant, Seaway Food Town Inc., an Ohio
corporation ("Seaway") entered into a merger agreement with Spartan Stores,
Inc., a Michigan corporation ("Spartan") and Spartan Acquisition Corp., a
Michigan corporation and a wholly-owned subsidiary of Spartan ("Merger Sub").
Under the terms of the proposed merger, Seaway will be merged with and into
Merger Sub, and each outstanding share of Seaway will be converted into the
right to receive a cash payment of $5.00 per share and one share of Spartan
common stock. In connection with the merger, Spartan shareholders will receive a
dividend of 0.336 shares of Spartan common stock with respect to each share they
currently own. The merger agreement provides that the closing of the transaction
is conditioned upon, among other things, the approval of the holders of a
majority of the outstanding shares of Seaway common stock, approval of proposed
charter amendments by the holders of a majority of the outstanding shares of
Spartan common stock, the accuracy of the respective parties' representations
and warranties and their compliance with covenants contained in the agreement,
the effectiveness of a registration statement covering the shares of Spartan
common stock to be issued in the merger, and the receipt of customary regulatory
approvals.
Concurrently with the execution of the merger agreement, certain
stockholders of Seaway entered into a voting agreement with Spartan pursuant to
which they agreed to vote shares representing 19.99% of the outstanding shares
of Seaway common stock in favor of the merger, the adoption of the merger
agreement, and the transactions contemplated thereby. A similar agreement was
entered into with Seaway by certain shareholders and directors of Spartan, under
which they agreed to vote shares representing approximately 16.52% of the
outstanding shares of Spartan common stock in favor of the proposed charter
amendments.
For additional information concerning the merger agreement and related
transactions, reference is made to a press release announcing the merger
agreement, a copy of which is attached hereto as Exhibit 99.1 and incorporated
herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(C) Exhibits. The following exhibits are filed with this report
99.1 Press release dated April 7, 2000.
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SEAWAY FOOD TOWN, INC.
By: /s/ Richard B. Iott
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Richard B. Iott
President and Chief Executive Officer
Date: April 13, 2000
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EXHIBIT 99.1
SEAWAY NEWS RELEASE
FOOD TOWN, INC.
1020 FORD STREET, MAUMEE, OHIO 43537
(419) 893-9401
FOR IMMEDIATE RELEASE
Contact: Dan Spaulding Waldo Yeager
Spartan Stores Seaway Food Town
(800) 435-9539 (419) 891-4207
SPARTAN STORES, INC. TO MERGE WITH SEAWAY FOOD TOWN, INC.
AND APPLY FOR LISTING ON NASDAQ NATIONAL MARKET
MAUMEE, OHIO.--April 7, 2000--Grand Rapids-based Spartan Stores, Inc. and
Toledo-based Seaway Food Town, Inc. (NASDAQ: SEWY) today announced that the
companies have reached a definitive agreement to merge. According to Jim Meyer,
Spartan Stores' President and Chief Executive Officer, the merger is a major
step forward in expanding retail operations, a key strategy for Spartan Stores'
long-term profitable growth. According to Rich Iott, Seaway's President and
Chief Executive Officer, the merger should also strengthen Seaway's competitive
position. Seaway, with 47 Food Town supermarkets and 26 The Pharm deep discount
drugstores, will be Spartan Stores' largest supermarket chain, more than
doubling the number of retail stores it operates.
Spartan Stores is a premier regional food retailer and distributor with pro
forma sales and EBITDA (earnings before interest, taxes, depreciation and
amortization) of approximately $3.0 billion and $75.5 million, respectively, for
the trailing 12-month period ended January 1, 2000, giving pro forma effect to
three acquisitions completed by Spartan Stores during the period. The merger
will consolidate Seaway, a leading regional food retailer with approximately
$680 million in sales and $32.6 million of EBITDA for the trailing 12-month
period ended February 26, 2000, into Spartan's retail network. Seaway's EBITDA
results do not include $710,000 (pre-tax) "one-time" expenses, relating to the
Company's strategic planning project, included and reported in fourth quarter,
1999. The acquisition will significantly expand Spartan Stores' retail presence
into southeast Michigan and northwest Ohio.
Meyer stated, "We are impressed with the business Seaway's management and
associates have built in the greater Toledo area. In our opinion, Seaway has
built strong customer loyalty as the local supermarket in Toledo. We plan to
focus our efforts on continuing Seaway's strong
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position in that market and the contributions it has made to the community."
Iott commented, "We have been seeking a strategic partnership like this one.
This is a great opportunity for Seaway and its customers, employees and
shareholders. The merger with Spartan Stores makes Seaway part of a larger
regional player with retail and wholesale expertise. This is the beginning to
what we believe to be a very exciting future for the merged company."
Spartan Stores management expects annual synergies to exceed $6 million in the
first full fiscal year ending March 31, 2002, increasing thereafter, primarily
from purchasing leverage, volume efficiencies and corporate overhead cost
reductions. Meyer said, "In this increasingly consolidating and competitive
market, we have recognized the necessity of owning and operating retail stores.
It enables Spartan to offer the best products and services at the best price to
our own stores and our wholesale customers. As we seek to compete with the
national supermarket chains and food distributors, Seaway will further expand
our retail store base to 120 stores with 94 supermarkets and will strengthen our
regional presence."
Under the terms of the merger agreement, Seaway shareholders will receive a cash
payment of $5.00 per share and one share of Spartan Stores new common stock for
each share of Seaway common stock. Seaway currently has approximately 6.7
million shares outstanding. Immediately prior to consummation of the merger,
Spartan Stores' shareholders will exchange their existing shares of Spartan
Stores Class A common stock for approximately 13.2 million shares of Spartan
Stores new common stock. Upon consummation of the merger, Spartan Stores will
have approximately 20 million shares of new common stock outstanding, with
current Spartan Stores shareholders owning 66.5% and current Seaway shareholders
owning the remaining 33.5%.
In connection with the merger, Spartan Stores will register its newly issued
shares with the Securities and Exchange Commission and apply to list for trading
on the Nasdaq National Market the approximately 20 million shares to be
outstanding after consummation of the merger. "We are very pleased by the
prospect of becoming a publicly traded company," Meyer said. "Being a publicly
traded company provides access to a capital market that can help finance our
future growth plans."
The boards of directors of both companies have approved the merger. The
completion of the transaction is subject to certain customary regulatory
approvals and conditions as well as the approval of both companies' shareholders
at specially scheduled shareholder meetings. Seaway's Chairman Wallace Iott and
his wife Jeanette Iott and Chief Executive Officer Rich Iott have agreed to vote
shares representing 19.9% of the outstanding shares of Seaway in favor of the
merger. Similar voting commitments have been provided by Spartan Stores'
directors.
Spartan Stores, Inc. is a Grand Rapids, Michigan-based grocery retailer and
wholesaler, providing products and services to 400 supermarkets in Michigan,
Indiana and Ohio. Spartan's subsidiary companies include: Family Fare, Inc.,
which owns and operates 47 supermarkets in Michigan; L&L/Jiroch, J. F. Walker
Company, Inc. and United Wholesale Grocery Company, which supply products to
over 9,200 convenience stores in the Midwest; and Shield Insurance Services,
which provides a full line of business and personal insurance offerings.
Seaway Food Town, Inc. is a leading food and drug retailer operating 73 retail
units--47 Food
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Town Supermarkets and 26 deep discount drugstores operating under the name of
The Pharm. All stores are located in northwestern and central Ohio and
southeastern Michigan.
The parties are required to file documentation with the Securities and Exchange
Commission concerning the transaction. WE URGE INVESTORS TO READ THE
PROSPECTUS/JOINT PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED
WITH THE SEC, WHEN THEY BECOME AVAILABLE, BECAUSE THEY CONTAIN IMPORTANT
INFORMATION. Upon filing, investors will be able to obtain the documents free of
charge at the SEC's Web site, www.sec.gov. In addition, documents filed with the
SEC by Spartan Stores will be available free of charge by directing a request to
the Secretary of Spartan Stores, Inc. at 850 76th Street S.W., P.O. Box 8700,
Grand Rapids, Michigan 49518. Documents filed with the SEC by Seaway Food Town
will be available free of charge by directing a request to the Secretary of
Seaway Food Town, Inc. at 1020 Ford Street, Maumee, Ohio 43537. Spartan Stores,
its directors, executive officers and certain other members of Spartan Stores'
management and employees may be soliciting proxies from Spartan Stores
shareholders in favor of the merger transition. Information concerning the
participants will be set forth in the Prospectus/Joint Proxy Statement when it
is filed with the SEC. Seaway, its directors, executive officers and certain
other members of Seaway management and employees may be soliciting proxies from
Seaway shareholders in favor of the merger transaction. Information concerning
the participants will be set forth in the Prospectus/Joint Proxy Statement when
it is filed with the SEC.
FORWARD-LOOKING STATEMENTS
This news release contains estimates, projections and other forward-looking
statements that involve significant risks and uncertainties. Actual results may
differ materially from the results discussed in these forward-looking
statements. Internal and external factors that might cause such a difference
include, but are not limited to: (1) expected cost savings and other synergies
from the merger might not be fully realized or realized within the expected time
frame; (2) revenues following the merger may be lower than expected; (3)
competitive pressures among food retail and distribution companies may increase
significantly; (4) costs or difficulties related to the integration of the
business may be encountered; (5) changes in the interest rate environment may
reduce net interest income; (6) general economic conditions may deteriorate,
either nationally or in the states in which the combined company will operate;
(7) legislation or regulatory changes may adversely affect the businesses in
which the combined company would be engaged; (8) approvals by certain regulatory
bodies or by each company's shareholders may not be obtained; and (9) the
combined company may not meet the listing requirements of the Nasdaq National
Market.
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