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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
ALLTRISTA CORPORATION
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(Name of Issuer)
Common Stock, no par value
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(Title of Class of Securities)
020040101
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(CUSIP Number of Class of Securities)
Marlin Partners II, L.P.
Attn: Martin Franklin
555 Theodore Fremd Avenue,
Suite B-302,
Rye, NY 10580
(914)967-9400
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
Copies to:
William J. Grant
Willkie Farr & Gallagher
787 Seventh Avenue
New York, NY 10019
(212) 728-8000
May 12, 2000
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(Date of Event which Requires
Filing of this Schedule)
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(b)(3) or (4), check the following: [ ]
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SCHEDULE 13D
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CUSIP No. 020040101 Page 2 of 7 Pages
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1 NAME OF REPORT PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Marlin Partners II, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
573,700
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NUMBER OF SHARES 8 SHARED VOTING POWER
BENEFICIALLY OWNED
BY EACH REPORTING 0
PERSON WITH
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9 SOLE DISPOSITIVE POWER
573,700
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10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
573,700
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.11%
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14 TYPE OF REPORTING PERSON*
PN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
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This Amendment No. 1 to Schedule 13D relates to shares of common stock, no
par value (the "Common Stock"), of Alltrista Corporation, an Indiana corporation
(the "Company"), and is being filed pursuant to Rule 13d-2 under the Securities
and Exchange Act of 1934, as amended. This Amendment No. 1 amends the initial
statement on Schedule 13D of the Reporting Person dated January 5, 2000 (the
"Initial Statement"). The address of the principal executive offices of the
Company is 5875 Castle Creek Parkway, North Drive, Suite 440, Indianapolis,
Indiana 46250. This Amendment No. 1 is being filed by the Reporting Person to
report (i) a change in the number of shares of the Reporting Person since the
date of the Initial Statement, and (ii) to report a change in the purpose for
which the Reporting Person holds the Common Stock. Capitalized terms used herein
and not otherwise defined herein shall have the meanings given to them in the
Initial Statement. The Initial Statement is supplementally amended as set forth
herein.
Item 4. Purpose of Transaction.
The Reporting Person acquired for investment purposes all of the Common
Stock reported herein as being beneficially owned by it. The Reporting Person
has become frustrated with what it perceives as the lack of progress by the
Board of Directors of the Company (the "Board") in enhancing value of the
Company's shareholders, and delays by the Board in implementing an effective
plan have caused the Reporting Person to question the resolve of the Board about
enhancing shareholder value. From time to time, the Reporting Person has
discussed with management the Reporting Person's
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suggestions for enhancing value. By letter dated March 15, 2000, Mr. Franklin
requested the Board to take action to maximize shareholder value via a
privatization of the Company, or in the alternative, to pursue other strategic
alternatives to increase shareholder value. On May 12, 2000, the Reporting
Person presented a proposal to the Board to lead a privatization of the Company
at a value of $30 per share. A copy of the letter setting forth the Reporting
Person's proposal is filed as Exhibit A to this Schedule 13D. Item
5. Interest in Securities of the Issuer.
(a) On the date of this Amendment No. 1, Marlin II beneficially owns and
has sole voting and dispositive power of 573,700 shares of Common Stock,
representing 9.11% of the issued and outstanding shares of Common Stock. The
foregoing percentage calculations are based on 6,305,816 shares of Common Stock
outstanding at March 17, 2000 as reported on the Company's Quarterly report on
Form 10-Q for the quarter ended March 31, 2000. To the best of the Reporting
Person's knowledge, none of the other persons names in Item 2 above own any
interests in the shares of Common Stock.
(b) The number of shares of Common Stock with respect to which Marlin II
(i) has sole voting power, (ii) share voting power, (iii) has sole dispositive
power, (iv) share dispositive power, are listed in the responses to Items 7, 8,
9 and 10, respectively, on the cover pages filed herewith, and such responses
are incorporated by reference herein.
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(c) Except as described in Schedule A hereto, neither Marlin II nor any
party referred to above, has acquired or disposed of, or entered into any other
transaction with respect to, any shares of Common Stock during the past 60 days.
(d) None.
(e) Not applicable
Item 7. Material to be Filed as Exhibits.
EXHIBIT A Proposal dated May 12, 2000.
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SIGNATURES
After reasonable inquiry and to the best of our knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.
Dated: May 12, 2000 MARLIN PARTNERS II, L.P.
By: Marlin Management, L.L.C.,
its General Partner
By: /s/ Martin Franklin
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Name: Martin Franklin
Title: Managing Member
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SCHEDULE A
<TABLE>
Recent Transactions in the
Common Stock of
Alltrista Corporation
<CAPTION>
Average Price
Date of Transaction Nature of Transaction Number of Shares Per Share
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<S> <C> <C> <C>
4/28/2000 Purchase 26,000 $20.79
5/1/2000 Purchase 200 $21.44
5/2/2000 Purchase 3,800 $21.50
5/4/00 Purchase 1,300 $21.50
5/5/00 Purchase 7,700 $21.50
5/8/00 Purchase 1,400 $21.50
5/10/00 Purchase 10,000 $21.50
</TABLE>
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May 12, 2000
Alltrista Corporation
5875 Castle Creek Parkway, North Drive
Indianapolis, IN 46250
Dear Members of the Board of Directors:
Following our letter to you dated March 15, 2000 (a copy of which is attached)
we have yet to see any tangible signs of progress towards creating shareholder
value at Alltrista. In fact, the full year 2000 forecast presented by Tom Clark
on the March investor conference call is already at risk due to a disappointing
first quarter performance at recently acquired Triangle Plastics. Even worse,
the Company's retired Chairman was selling Alltrista stock prior to the most
recent earnings release, exacerbating the pitifully low insider ownership at the
Board level to where non-executive directors now collectively own outright only
2,600 shares, or 0.04% of the Company.
In our previous letter, we expressed our belief that the best way of maximizing
shareholder value after a dismal five years of lackluster performance is to take
the company private. After multiple conversations with Tom Clark and Kevin Bower
and two visits to the company's headquarters, we are pleased with the enthusiasm
and candor with which both executives have professed their support for the idea
of exploring a privatization. Like the vast majority of shareholders, they too
have found the experience of public stagnation unrewarding and a drag on
recruitment, incentive and acquisition opportunity. In light of the above, we
are perplexed that the Board has not taken the initiative to create value
through privatization as the best strategic alternative for the company.
Accordingly, Marlin Partners II, L.P. has elected to put forward a proposal to
the Board of Directors to lead a privatization of the company at a value of $30
per share, nearly a 40% premium to the market price as of the close of business
yesterday. As previously stated, we have no interest in launching a "hostile"
bid, but believe that our proposal will meet with overwhelming shareholder
support. Furthermore, we believe that under a privatized structure, management
will become true partners in the ownership of Alltrista.
We have retained the services of Banc of America Securities LLC ("B of A") to
advise us on the transaction. Based on the publicly available information, we
have been advised by B of A that financing for our transaction should be
obtainable in the current climate.
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May 12, 2000
Page Two
The attached letter, which we present for signature and approval, outlines the
key terms of our all cash proposal. As owners of over 9% of Alltrista we are
keenly aware of the obligation to maximize shareholder value. Whether the
creation of shareholder value occurs through our proposed transaction or a
superior strategic alternative preferred by the Board, the time for action is
now.
Yours sincerely,
/s/ Martin E. Franklin
Martin E. Franklin
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March 15, 2000
Mr. Thomas B. Clark
President & CEO
Alltrista Corporation
5875 Castle Creek Parkway
Suite 440
Indianapolis, IN 46250-4330
Dear Tom:
As you know, our firm has followed Alltrista's progress very closely for almost
two years. We have been impressed with the strategic decisions you have made to
divest many of the non-performing assets of the portfolio you inherited from
Ball Corporation, and your efforts to enhance shareholder returns through share
repurchases and strategic acquisitions.
Over the past five years, however, Alltrista shares have traded between a low of
$18 and a high of $33. During this period, despite growth in revenue, cash flow
and earnings, Alltrista's performance for shareholders has trailed every
relevant index, whether it be the Dow Jones Industrials, S&P 500, Russel 2000 or
the industrial diversified index. The sparse research coverage enjoyed
historically by Alltrista is now non-existent, leaving investors with no
independent measure of growth prospects or valuation expectations. Furthermore,
as a result of this lack of independent analysis of future performance, you have
been forced to provide investors with your expectations for 2000 earnings; and,
although this forecast represents an increase of about 14%, it elicited no
positive reaction from Wall Street. Perhaps most disturbingly from a shareholder
returns perspective, directors and officers own an embarrassingly small amount
of stock. Despite the extremely low valuation applied to the company in the
market, not one director or officer has made a single disclosed purchase of
shares over the period in which we saw fit to invest $11.5 million in share
purchases.
In operating terms, what are the consequences of the company's stagnant stock
position? You are unable to motivate and build wealth for employees through the
stock option plan; as a result, you cannot attract new, higher caliber talent,
because the capital appreciation opportunity is poor relative to other
employment opportunities. Equally frustrating, you
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have no equity currently to pursue accretive acquisitions, a key reason to be a
public company.
Your shareholders, the owners of the business you run, are increasingly
frustrated with the extraordinarily poor performance of Alltrista's common stock
over the short, medium and long term. It is well known, and has been quoted in
press articles, that prior to the company's acquisition of Triangle Plastics,
large shareholders were urging the company to consider a privatization or
significant share repurchase. In the year since the acquisition, shareholders
have seen no returns from the investment and results for the fourth quarter of
1999 were adversely affected by performance of the Plastics operations that you
have recognized as being below expectations.
The "Alltrista Story" with three separate businesses, is a complicated one. In
an environment where you have no analyst research, a small stock float, low
capitalization a mature business and a complex corporate story, you are in
danger of being at a dead end as far as shareholder returns are concerned.
With all of the above in mind, we believe the best interests of the shareholders
would be served by first recognizing that for over five years, asset
redeployment and operating results have done little for shareholders. As a
result, we believe the time has arrived, and is in fact overdue, for the board
to retain an independent advisor to seek alternative paths to maximize
shareholder value.
Specifically, we believe that the diversified nature of Alltrista does not
support the likelihood of a strategic industrial buyer bidding for the company.
We believe the best alternative is for the company's management to orchestrate a
privatization of Alltrista or to look for another interested party to take the
company private. Based on managements' own stated forecasts and historical
performance, a purchase multiple of as low as 5.5 x 2000 EBITDA would result in
proceeds to shareholders of $33 per share, a 44.7% premium over yesterday's
close.
Furthermore, if you were to pursue equity capital for such a proposal, Marlin
Partners II, LP would be delighted to assist, lead, or participate as an
investor in such an undertaking, if invited by management. If, however,
management elects to pursue equity capital independent of Marlin or its
affiliates, Marlin would nevertheless support management's proposal at the
previously described valuation. I firmly believe such a proposal would be met
with the overwhelming support of your shareholders.
Finally, it is important to emphasize that this is not a short term fix to a
short term problem. The company's lack of value recognition on Wall Street has
lasted for over five years. Other companies in Altrista's predicament have taken
action and privatized. There is no market shift to value on the horizon nor is
there any projected by the investment community.
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I would appreciate your providing a copy of this letter to each of your
directors. Hopefully, it is their recognition of the fact that shareholder
interests have been disregarded long enough, that should spur the board into
action.
I would be available to meet in person or by telephone with any director that
wishes to explore further our comments or suggestions.
Kind regards.
Yours sincerely,
/s/ Martin E. Franklin
Martin E. Franklin
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May 12, 2000
Mr. Thomas B. Clark
Chairman, President & Chief Executive Officer
Alltrista Corporation
5875 Castle Creek Parkway, North Drive
Indianapolis, IN 46250
Letter Agreement
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Dear Mr. Clark:
The following letter agreement is presented to you with the understanding that
the only obligation is for both parties to carry out discussions in good faith.
We believe it is important for the management of Alltrista to participate in
this proposal and it is a condition of our proposal that management support the
transaction.
1) Consideration. Based on the available public information and our
discussions with management, the consideration per share payable for each
share of common stock of Alltrista acquired in the acquisition would be $30
per share payable in cash at the closing (the "Consideration"). Whether the
Consideration can be higher than this will depend on the outcome of our due
diligence review of non-public information on the Company. The transaction
would be structured as a tender offer with a back-end merger.
2) Due Diligence Investigation. From the date this letter is executed through
a date forty-five days thereafter (the "Due Diligence Period") your
management team will work with representatives of Marlin Partners II, L.P.
and its associates ("Marlin") and Banc of America Securities LLC in
conducting our due diligence investigation. During the Due Diligence
Period, the Company will permit Marlin and its representatives to have
access during business hours to the Company's premises, books and records,
and key management employees. The purpose of the Due Diligence Period is to
build an accurate financial model with management to ascertain whether
there is any room to increase the Consideration and to confirm that the
business prospects are consistent with the publicly available information.
3) Exclusivity Period. During the Due Diligence Period, Marlin and its
partners will be committing considerable time and expense to completing the
work necessary to sign a definitive agreement. As an incentive to Marlin to
spend the time and resources on this investment opportunity, the Company
hereby agrees that during the Due Diligence period it shall refrain from
soliciting any offers from third parties for the acquisition of all or any
part of the assets, securities or business of the Company.
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Letter Agreement
May 12, 2000
Page Two
Notwithstanding the foregoing, in the event that the Company receives an
unsolicited inquiry from a third party regarding the purchase of the
Company, the Company may respond to such inquiry consistent with its
fiduciary duty, provided that the Company informs Marlin of the receipt and
nature (including all substantive terms of any such proposal) of such
unsolicited inquiry.
4) Confidentiality. Marlin will agree to enter into a Confidentiality
Agreement that will prohibit disclosure of information provided by the
Company as part of the due diligence Investigation. Marlin will agree to a
Standstill Agreement that will prohibit Marlin from acquiring additional
Alltrista common stock during the Due Diligence Period. Marlin will not be
restricted under these agreements from making an offer to acquire Alltrista
or a lock-up agreement beyond the Due Diligence Period. Notwithstanding
this paragraph 5, the parties may disclose information as may be required
by law.
5) Termination. In the event that a definitive acquisition agreement has not
been entered into by the end of the Due Diligence Period, either party may
terminate this letter agreement without liability to the other party.
If the foregoing terms and conditions are acceptable, please sign where
indicated below. We very much look forward to working with you and your team on
this transaction and are confident that not only can we create significant short
term shareholder value, but also create the right environment within which the
Company can flourish in the future.
Yours sincerely,
/s/ Martin E. Franklin
Martin E. Franklin
Marlin Partners II, L.P.
Agreed:
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Thomas B. Clark
Chairman, President & Chief Executive Officer
Alltrista Corporation
