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. ___)*
Daisytek International Corporation
(Name of Issuer)
Common Stock
(Title of Class of Securities)
234053106
(CUSIP Number)
Stephen M. Schultz, Esq., Kleinberg, Kaplan, Wolff & Cohen, P.C., 551 Fifth
Avenue, New York, New York 10176 Tel: (212) 986-6000 (Name, Address and
Telephone Number of Person Authorized to Receive Notices and Communications)
June 5, 2000
(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
[ ].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
(Continued on the following pages)
<PAGE>
SCHEDULE 13D
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Elliott Associates, L.P.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a)[x]
(b)[ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7. SOLE VOTING POWER
438,350
8 SHARED VOTING POWER
0
9. SOLE DISPOSITIVE POWER
438,350
10. SHARED DISPOSITIVE POWER
0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
438,350
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.5%
14. TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Westgate International, L.P.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a)[x]
(b)[ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands, British West Indies
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7. SOLE VOTING POWER
0
8. SHARED VOTING POWER
438,350
9. SOLE DISPOSITIVE POWER
0
10. SHARED DISPOSITIVE POWER
438,350
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
438,350
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.5%
14. TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Elliott International Capital Advisors, Inc.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a)[x]
(b)[ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
00
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH
REPORTING PERSON WITH
7. SOLE VOTING POWER
0
8. SHARED VOTING POWER
438,350
9. SOLE DISPOSITIVE POWER
0
10. SHARED DISPOSITIVE POWER
438,350
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
438,350
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.5%
14. TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
ITEM 1. Security and Issuer.
This statement relates to the common stock (the "Common Stock") of
Daisytek International Corporation (the "Issuer"). The Issuer's principal
executive office is located at 500 North Central Expressway, Plano, Texas 75074.
ITEM 2. Identity and Background.
(a)-(c) The names of the persons filing this statement on Schedule 13D
are: Elliott Associates, L.P., a Delaware limited partnership, and its
wholly-owned subsidiaries ("Elliott"), Westgate International, L.P., a Cayman
Islands limited partnership ("Westgate"), and Elliott International Capital
Advisors, Inc., a Delaware corporation ("International Advisors"). Paul E.
Singer ("Singer") and Elliott Capital Advisors, L.P., a Delaware limited
partnership ("Capital Advisors"), which is controlled by Singer, are the general
partners of Elliott. Hambledon, Inc., a Cayman Islands corporation
("Hambledon"), is the sole general partner of Westgate. International Advisors
is the investment manager for Westgate. International Advisors expressly
disclaims equitable ownership of and pecuniary interest in any Common Stock.
ELLIOTT
The business address of Elliott is 712 Fifth Avenue, 36th Floor, New
York, New York 10019.
The principal business of Elliott is to purchase, sell, trade and
invest in securities.
SINGER
Singer's business address is 712 Fifth Avenue, 36th Floor, New York,
New York 10019.
Singer's principal occupation or employment is that of serving as
general partner of Elliott and Capital Advisors and president of International
Advisors.
CAPITAL ADVISORS
The business address of Capital Advisors is 712 Fifth Avenue, 36th
Floor, New York, New York 10019.
The principal business of Capital Advisors is the furnishing of
investment advisory services.
The names, business addresses, and present principal occupation or
employment of the general partners of Capital Advisors are as follows:
NAME ADDRESS OCCUPATION
Paul E. Singer 712 Fifth Avenue 36th Floor General partner of Elliott
New York, New York 10019 and Capital Advisors and
President of International
Advisors
Braxton Associates, Inc. 712 Fifth Avenue 36th Floor The principal business of
New York, New York 10019 Braxton Associates, Inc.
is serving as general
partner of
Capital Advisors
The name, business address, and present principal occupation or
employment of the sole director and executive officer of Braxton Associates,
Inc. are as follows:
NAME ADDRESS OCCUPATION
Paul E. Singer 712 Fifth Avenue General partner of Elliott
36th Floor and Capital Advisors and
New York, New York 10019 President of International
Advisors
WESTGATE
The business address of Westgate is Westgate International, L.P., c/o
Midland Bank Trust Corporation (Cayman) Limited, P.O. Box 1109, Mary Street,
Grand Cayman, Cayman Islands.
The principal business of Westgate is to purchase, sell, trade and
invest in securities.
The name, business address, and present principal occupation or
employment of the general partner of Westgate are as follows:
NAME ADDRESS OCCUPATION
Hambledon, Inc. c/o Midland Bank Trust General partner of Westgate
Corporation (Cayman) Limited
P.O. Box 1109
Mary Street
Grand Cayman
Cayman Islands
HAMBLEDON, INC.
The name, business address, and present principal occupation or
employment of the sole director and executive officer of Hambledon are as
follows:
NAME ADDRESS OCCUPATION
Paul E. Singer 712 Fifth Avenue General partner of Elliott
36th Floor and Capital Advisors and
New York, New York 10019 President of International
Advisors
ELLIOTT INTERNATIONAL CAPITAL ADVISORS, INC.
The business address of International Advisors is 712 Fifth Avenue,
36th Floor, New York, New York 10019.
The principal business of International Advisors is to act as
investment manager for Westgate.
The name, business address, and present principal occupation or
employment of the sole director and executive officer of International Advisors
are as follows:
NAME ADDRESS OCCUPATION
Paul E. Singer 712 Fifth Avenue General partner of Elliott
36th Floor and Capital Advisors and
New York, New York 10019 President of International
Advisors
(d) and (e) During the last five years, none of the persons or entities
above has been (i) convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors); or (ii) a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
(f) All of the natural persons listed above are citizens of the United
States of America.
ITEM 3. Source and Amount of Funds or Other Consideration.
The source and amount of funds used by Elliott in making its purchases
of the shares of Common Stock beneficially owned by it are set forth below:
SOURCE OF FUNDS AMOUNT OF FUNDS
Working Capital $5,940,229
The source and amount of funds used by Westgate in making its purchases
of the shares of Common Stock beneficially owned by it are set forth below:
SOURCE OF FUNDS AMOUNT OF FUNDS
Working Capital $5,961,571
ITEM 4. Purpose of Transaction.
Each of Elliott and Westgate acquired the Common Stock beneficially
owned by it in the ordinary course of its trade or business of purchasing,
selling, trading and investing in securities. International Advisors has acted
as investment manager with respect to Westgate's acquisition of beneficial
ownership of Common Stock.
Depending upon market conditions and other factors that it may deem
material, each of Elliott and Westgate may purchase additional shares of Common
Stock or related securities or may dispose of all or a portion of the Common
Stock or related securities that it now beneficially owns or may hereafter
acquire.
On June 5, 2000, Elliott had a telephone conversation with the Issuer's Chief
Financial Officer expressing Elliott's desire to have the Issuer hire a
financial advisor to fully explore all strategic alternatives before proceeding
with the spin-off of PFSWeb, Inc. Although the CFO indicated that the Chairman
of the Board would call Elliott to discuss the matter, Elliott has not been
contacted and the Issuer has since announced that it would proceed with the
spin-off.
On June 9, 2000, Elliott sent a letter to the Issuer's Board of
Directors objecting to the Issuer's decision to spin-off PFSweb, Inc. without
first determining whether and at what price United is prepared to buy Daisytek.
Elliott also recommended that the Board commence a professionally managed
auction of the Issuer and postpone the spin-off until the results of the auction
can be determined. Please see the copy of the letter attached hereto as Exhibit
B.
Except as set forth herein, none of Elliott, Westgate or International
Advisors has any plans or proposals which relate to or would result in any of
the actions set forth in subparagraphs (a) through (j) of Item 4.
ITEM 5. Interest in Securities of the Issuer.
(a) Elliott beneficially owns 438,350 shares of Common Stock,
constituting 2.5% of all of the outstanding shares of Common Stock.
Westgate and International Advisors beneficially own an aggregate of
438,350 shares of Common Stock, constituting 2.5% of all of the outstanding
shares of Common Stock.
(b) Elliott has the power to vote or direct the vote of, and to dispose
or direct the disposition of, the shares of Common Stock beneficially owned by
it.
Westgate has the shared power with International Advisors to vote or
direct the vote of, and to dispose or direct the disposition of, the shares of
Common Stock owned by Westgate. Information regarding each of Westgate and
International Advisors is set forth in Item 2 of this Schedule 13D and is
expressly incorporated by reference herein.
<PAGE>
(c) The following transactions were effected by Elliott during the past
sixty (60) days:
Approx. Price per
Amount of Shs. Share (excl. of
Date Security Bought (Sold) commissions)
05/10/00 Common 20,000 $11.2875
05/11/00 Common 3,750 $12.0625
05/12/00 Common 14,000 $12.4696
05/15/00 Common 15,000 $12.4417
05/16/00 Common 35,000 $12.5080
05/18/00 Common 16,000 $12.2584
05/19/00 Common 2,500 $10.9062
05/22/00 Common 3,000 $11.1000
05/23/00 Common 2,000 $11.2500
05/24/00 Common 4,000 $10.7500
05/26/00 Common 6,450 $ 9.5281
05/30/00 Common 50,000 $ 9.5612
05/31/00 Common 83,900 $ 9.9292
06/01/00 Common 10,000 $10.7385
06/02/00 Common 30,500 $11.8885
06/05/00 Common 31,500 $11.7910
Elliott effected the above transactions on NASDAQ.
The following transactions were effected by Westgate during the past
sixty (60) days:
Approx. Price per
Amount of Shs. Share (excl. of
Date Security Bought (Sold) commissions)
05/10/00 Common 20,000 $11.2875
05/11/00 Common 3,750 $12.0625
05/12/00 Common 14,000 $12.4696
05/15/00 Common 15,000 $12.4417
05/16/00 Common 35,000 $12.5080
05/18/00 Common 16,000 $12.2584
05/19/00 Common 2,500 $10.9062
05/22/00 Common 3,000 $11.1000
05/23/00 Common 2,000 $11.2500
05/24/00 Common 4,000 $10.7500
05/26/00 Common 6,450 $ 9.5281
05/30/00 Common 50,000 $ 9.5612
05/31/00 Common 83,900 $ 9.9292
06/01/00 Common 10,000 $10.7385
06/02/00 Common 30,500 $11.8885
06/05/00 Common 31,500 $11.7910
Westgate effected the above transactions on NASDAQ.
No other transactions were effected by either Elliott or Westgate
during the past sixty (60) days.
(d) No person other than Elliott has the right to receive or the power
to direct the receipt of dividends from, or the proceeds from the sale of, the
shares of Common Stock beneficially owned by Elliott.
No person other than Westgate and International Advisors has the right
to receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of, the shares of Common Stock beneficially owned by Westgate and
International Advisors.
(e) Not applicable.
<PAGE>
ITEM 6. Contracts, Arrangements, Understandings or Relationships With Respect to
Securities of the Issuer.
Not applicable.
ITEM 7. Material to be Filed as Exhibits.
Exhibit A - Joint Filing Agreement
Exhibit B - Letter from Elliott to the Issuer
dated June 9, 2000
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of its knowledge and belief,
the undersigned each certifies that the information with respect to it set forth
in this statement is true, complete and correct.
Dated: June 9, 2000
ELLIOTT ASSOCIATES, L.P.
By: Elliott Capital Advisors, L.P.,
as General Partner
By: Braxton Associates, Inc.,
as General Partner
By: /s/ Elliot Greenberg
Elliot Greenberg
Vice President
WESTGATE INTERNATIONAL, L.P.
By: Elliott International Capital
Advisors, Inc., as attorney-in-fact
By: /s/ Elliot Greenberg
Elliot Greenberg
Vice President
ELLIOTT INTERNATIONAL CAPITAL ADVISORS, INC.
By: /s/ Elliot Greenberg
Elliot Greenberg
Vice President
<PAGE>
EXHIBIT A
JOINT FILING AGREEMENT
The undersigned hereby agree that the statement on Schedule 13D with
respect to the Common Stock of Daisytek International Corporation dated June 9,
2000 is, and any further amendments thereto signed by each of the undersigned
shall be, filed on behalf of each of the undersigned pursuant to and in
accordance with the provisions of Rule 13d-1(f) under the Securities Exchange
Act of 1934, as amended.
Dated: June 9, 2000
ELLIOTT ASSOCIATES, L.P.
By: Elliott Capital Advisors, L.P.,
as General Partner
By: Braxton Associates, Inc.,
as General Partner
By: /s/ Elliot Greenberg
Elliot Greenberg
Vice President
WESTGATE INTERNATIONAL, L.P.
By: Elliott International Capital
Advisors, Inc., as attorney-in-fact
By: /s/ Elliot Greenberg
Elliot Greenberg
Vice President
ELLIOTT INTERNATIONAL CAPITAL ADVISORS, INC.
By: /s/ Elliot Greenberg
Elliot Greenberg
Vice President
<PAGE>
EXHIBIT B
ELLIOTT ASSOCIATES, L.P.
712 FIFTH AVENUE
NEW YORK, NEW YORK 10019
--
TEL. (212) 506-2999
FAX: (212) 974-2092
June 9, 2000
Board of Directors
Daisytek International Corporation
500 North Central Expressway
Plano, Texas 75074
Dear Sirs:
Elliott Associates, L.P. and its affiliate Westgate
International, L.P. own in the aggregate more than 5% of the outstanding shares
of Daisytek International Corp. We call upon you to conduct a professionally
managed auction of Daisytek and to defer the spinoff of Daisytek's interest in
PFSweb, Inc. ("PFSW") pending the outcome of that auction. In particular, we
believe that this step is mandated by both the change in market and business
circumstances since the intention to spin off PFSW was first announced and the
conflicts of interest held by most if not all of you.
The history is instructive. Last fall, before the IPO of PFSW,
United Stationers Inc. ("United") offered to purchase Daisytek for $20 per share
in cash roughly a 43% premium over where Daisytek stock had been trading when
the bid was submitted. You rejected this offer, evidently without even
attempting to negotiate a higher price. Instead, you proceeded to sell off 19.9%
of PFSW and now propose to spin off the balance. Daisytek's stock has dropped
from about $15-$16 when the bid and your rejection of it were disclosed to about
$11 today. PFSW's stock price has dropped from the IPO price of $17 to the
present $6.88.
Your decisions of last fall have proven disastrous for
Daisytek shareholders. Even if those decisions were defensible at the time
(which we do not concede), the dramatic change in Daisytek's and PFSW's stock
prices would cry out for an objective reassessment of the spin-off strategy you
adopted several months ago, under very different circumstances. While perhaps
the Daisytek shareholders will realize, on paper, a one- or two-dollar
appreciation as a result of the spin-off of PFSW, the resulting value would
still be far from the $20 per share offered last fall by United. Simply put,
there is no defensible rationale today to reject a $20 per share cash bid by
United and instead spin off PFSW.
By like token, there is no defensible rationale today for you
to proceed with the spinoff without ascertaining whether and at what price
United is prepared to buy Daisytek. We believe that United remains interested in
buying Daisytek, and it is plausible that United would reinstate its $20 per
share bid if invited to do so. There is no need to take our word for it, since
United is fully capable of speaking to the issue for itself. United is (and
perhaps other potential bidders are) disinclined to take a position that is
hostile to Daisytek, especially in light of your prior, misguided dismissal of
United's overture. So the responsibility rests with you to invite United to
state its position. Since United has no interest in Daisytek after a spinoff of
PFSW, this step must be taken now and the spinoff must be delayed to afford time
for receipt and consideration of their response.
When you make that inquiry of United, you should similarly
ascertain whether any other potential purchasers have an interest in purchasing
Daisytek. The process should be managed by a reputable, independent investment
banker and should be handled by Daisytek's, and not PFSW's, management under the
supervision of the lone independent director of Daisytek.
This brings us to some important complication in your affairs.
Consider the following:
o All but one of Daisytek's directors are also directors of PFSW.
o Two of Daisytek's seven directors are executive officers of PFSW but not of
Daisytek.
o One of Daisytek's directors is employed by Chase H&Q
("H&Q"), which was the lead underwriter of PFSW and is
presently the financial advisor to both companies in
connection with the spin-off.
o In recent months, Daisytek's President and CEO, its Senior
VP-Business Development, its CFO, and its CIO have all
resigned and now hold similar positions at PFSW. (The
former President and CEO remains Chairman of the Board of
Daisytek.)
o The above four Daisytek executives who jumped ship to PFSW
have received a total of 335,000 PFSW options. In
addition, their outstanding Daisytek options will convert
into PFSW options upon completion of the spin-off.
o Since PFSW went public last December, Daisytek's former
CEO (still director) sold 22% of his Daisytek shares; its
former CIO sold two-thirds of his Daisytek shares; and its
new CEO and board member sold all of his Daisytek shares.
Another Daisytek director has sold 486,000 Daisytek shares
and has filed a Form 144 to sell another 200,000; these
sales would have the effect of reducing his position by
one-third.
o Last fall, H&Q evaluated and recommended against acceptance of United's
bid, which was conditioned upon the PFSW IPO being halted. By the time
United's bid was submitted, H&Q was already engaged to underwrite PFSW's
IPO, and H&Q performed that role and earned the associated fees after
United's bid was rejected. Currently, H&Q serves as financial advisor to
both Daisytek and PFSW in connection with the proposed spin-off, and one of
H&Q's employees is a director of both companies.
These circumstances call into serious question - as both a
legal and a commercial matter - the ability of the Daisytek decision-makers and
their advisors to make an objective assessment of the request we make in this
letter. While we believe that the sale of Daisytek, including its controlling
interest in PFSW, at $20 per share would be indisputably and dramatically better
than the contemplated spin-off, the opposite may well be the case from the
standpoint of PFSW's public shareholders. This observation alone demonstrates
the fundamental conflict of interest faced by the all-but-one of Daisytek's
directors who are also on PFSW's Board. This problem is substantially
exacerbated by the facts that (i) Daisytek's financial advisor also advises
PFSW, and its representative sits on both boards; (ii) the entire executive team
of Daisytek (including one of Daisytek's present directors) has departed that
company in favor of PFSW, and their vacancies at PFSW have been filled; and
(iii) Daisytek officers and directors as a group have substantially reduced
their equity positions in Daisytek since PFSW went public, have received in some
cases substantial options in PFSW, and stand to receive additional options when
the spinoff occurs. Through our lenses, the officers and directors have already
committed themselves mentally and financially to the spinoff. Accordingly, your
continued refrain from examining the alternatives is highly suspect and open to
challenge.
These concerns are heightened by the stiff-arm approach with
which you have handled your stockholders in recent months. Eminence Capital has
repeatedly made the same request that we do here. Similarly, earlier this week
my colleague Norbert Lou communicated our request to your CFO, who indicated
that your Chairman would be calling us to discuss the matter. This call has not
been made. Rather, Daisytek announced yesterday that it would proceed with the
spinoff. This dismissiveness toward your major shareholders only serves to
reinforce the perception that your decisionmaking is driven more by conflicts of
interest than by objective, studied consideration of the alternatives.
We sincerely hope that our anxieties are misplaced. It is easy
for you to disprove them: You should immediately announce the commencement of
professionally managed auction of Daisytek and postpone the spinoff until the
results of the auction can be determined. This auction can be initiated without
committing to sell the Company at any particular price, so there is no downside
to exploring the sale alternative. As we intend to challenge the spinoff by
legal action if necessary, kindly let us know by the close of business on
Monday, June 12, what action you intend to take in this regard.
We would welcome the opportunity to meet with you as well as
other substantial stockholders of Daisytek to discuss this subject. If I am
unavailable when you call, please speak with my colleague Norbert Lou.
Very truly yours,
Mark D. Brodsky
Portfolio Manager
