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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report: August 16, 1996
AirTouch Communications, Inc.
Delaware 1-12342 94-3213132
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
One California Street, San Francisco, California 94111
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (415) 658-2000
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Item 2. Acquisition or Disposition of Assets.
AirTouch Communications, Inc. ("AirTouch") has completed its
acquisition (the "Acquisition") of Cellular Communications, Inc. ("CCI")
pursuant to the Agreement and Plan of Merger dated as of April 5, 1996, as
amended and restated as of July 12, 1996 among CCI, AirTouch, and AirTouch
Cellular, Inc. ("Cellular"), a Delaware corporation and assignee of AirTouch
Cellular, a California corporation, (the "Merger Agreement"). The Acquisition
became effective at 7:30 p.m., Eastern Time, on Friday, August 16, 1996, when
CCI was merged into Cellular, a wholly-owned subsidiary of AirTouch. Capitalized
terms used herein have the meanings given them in the Merger Agreement, unless
otherwise provided. A copy of the Merger Agreement is filed as Exhibit 2.1 to
AirTouch's Registration Statement on Form S-4 (Reg. No. 333-03107) relating to
the transaction (the "Form S-4").
Holders of CCI Common Equivalent Shares had the opportunity to elect to
receive, subject to allocation, either cash or AirTouch preferred stock in
exchange for their CCI Common Equivalent Shares, or to make no election with
respect to such shares. Holders of 6,400,228 CCI Common Equivalent Shares
elected to receive AirTouch preferred stock in the Acquisition, and holders of
19,246,991 shares of CCI Common Equivalent Shares elected to receive cash.
Pursuant to the Merger Agreement, the aggregate number of CCI Common Equivalent
Shares acquired by AirTouch in exchange for cash (the Cash Election Number) was
7,149,860, which represented 27.18% of the CCI Common Equivalent Shares
outstanding at the Effective Time of the Acquisition and not held by AirTouch,
and the aggregate number of CCI Common Equivalent Shares acquired by AirTouch in
exchange for AirTouch preferred stock (the "Unit Election Number") was
19,153,218, which represented 72.82% of the CCI Common Equivalent Shares
outstanding at the Effective Time of the Acquisition and not held by AirTouch.
This ratio of cash to preferred securities reflects the effect of an adjustment
to preserve the tax-free status of the Acquisition, as provided in the Merger
Agreement.
Based upon the allocation and adjustment procedures set forth in the
Merger Agreement, holders who made a Cash Election are entitled to receive
$55.00 in cash per CCI Common Equivalent Share in exchange for approximately
37.15% of the total number of CCI Common Equivalent Shares held by such holder,
and are entitled to receive 0.900 of a share of AirTouch 6.00% Class B
Mandatorily Preferred Stock (the "Class B Preferred
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Stock") and 0.578 of a share of AirTouch 4.25% Class C Preferred Stock (the
"Class C Preferred Stock") per CCI Common Equivalent Share in exchange for
approximately 62.85% of the total number of CCI Common Equivalent Shares held by
such holder. All holders of CCI Common Equivalent Shares who elected to receive
AirTouch preferred stock or who were deemed to have made a Non-Election with
respect to their shares are entitled to receive, for all CCI Common Equivalent
Shares held by such holder, 0.900 of a share of Class B Preferred Stock and
0.578 of a share of Class C Preferred Stock for each CCI Common Equivalent Share
held by such holder. Each holder of CCI Common Equivalent Shares who would
otherwise be entitled, after taking into account all certificates delivered by
such holder, to receive a fractional share of AirTouch securities is entitled
to receive cash (without interest) in lieu of fractional shares at the rate of
$29 per share of Class B Preferred Stock and $50.00 per share of Class C
Preferred Stock.
In the aggregate, AirTouch paid approximately $393.24 million in
cash and will issue approximately 17.24 million shares of Class B Preferred
Stock and approximately 11.07 million shares of Class C Preferred Stock in the
Acquisition, excluding issuances upon conversion of Zero Coupon Convertible
Subordinated Notes or upon exercise of options held by CCI employees and
directors, as described below. The Class B Preferred Stock and Class C Preferred
Stock commenced trading on the New York Stock Exchange on Monday, August 19,
1996 under the symbols ATI Pr B and ATI Pr C. Holders of record of Class B
Preferred Stock on December 16, 1996 will be entitled to a contingent payment if
the Volume-Weighted Average Trading Price of the Class B Preferred Stock for the
period from November 16, 1996 through December 15, 1996 is below $28.736, as
described in the Proxy Statement-Prospectus included in the Form S-4.
Cellular has assumed all of the obligations of CCI under the Indenture
dated as of January 27, 1992 (the "Zero Coupon Indenture") between CCI and The
Chase Manhattan Bank (formerly known as Chemical Bank) relating to CCI's
$217,000,000 Zero Coupon Convertible Subordinated Notes Due 1999 (the "Zero
Coupon Notes"). As a result of the Acquisition, Zero Coupon Notes are
convertible into AirTouch preferred stock at the rate of 13.050 shares of Class
B Preferred Stock and 8.381 shares of Class C Preferred Stock per $1,000
Principal Amount at Stated Maturity (as defined in the Zero Coupon Indenture).
In the aggregate, the Zero Coupon Notes are convertible into 2,831,850 shares of
Class B Preferred Stock and 1,818,677 shares of Class C Preferred Stock.
Pursuant to the Zero Coupon Indenture, holders of the Zero Coupon Notes
have the right to require Cellular to purchase such notes as of the date that is
35 business days after the closing of the Acquisition, or October 7, 1996, for
an
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amount equal to the Issue Price plus Accrued Original Discount (as defined in
the Zero Coupon Indenture) through October 7, 1996. As of October 7, 1996, the
Issue Price plus Accrued Original Discount per $1,000 Principal Amount at Stated
Maturity will be $813.37. The aggregate Issue Price plus Accrued Original
Discount through October 7, 1996 on all presently outstanding Zero Coupon Notes
will be $176,501,290.
Also pursuant to the Acquisition, employee and director options to
purchase CCI stock that were outstanding at the Effective Time were converted
into options to purchase an aggregate of 1,924,001 shares of AirTouch common
stock, 16,875 shares of Class B Preferred Stock, and 10,837 shares of Class C
Preferred Stock, for exercise prices aggregating approximately $40 million.
On July 16, 1996, the Company issued $250 million in 7 1/8% Notes and
$400 million in 7 1/2% Notes, maturing in July 2001 and July 2006, respectively.
The purpose of such offering was to obtain funds necessary to satisfy the cash
component of the Merger Consideration. Pending such use, the proceeds of the
notes were used to retire then outstanding commercial paper. AirTouch then
reborrowed under its commercial paper program and used cash formerly held at CCI
to pay the cash portion of the Merger Consideration.
Prior to the Acquisition, AirTouch owned approximately 37% of the
outstanding capital stock of CCI, and had the right to appoint two of CCI's ten
directors, and AirTouch and CCI each held a 50% interest in New Par, a
partnership owning and operating cellular systems principally in Michigan and
Ohio.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired. The financial statements
of CCI for the year ended December 31, 1995 are incorporated herein by reference
to CCI's Annual Report on Form 10-K for the year ended December 31, 1995 (File
No. 1-10789). The financial statements of CCI for the period ended March 31,
1996 are incorporated herein by reference to CCI's Quarterly Report on Form
10-Q for the quarter ended March 31, 1996 (File. No. 1-10789).
It is impracticable to file at this time the financial statements for
the period ended June 30, 1996, as required by Rule 3-05(b) of Regulation S-X.
Accordingly, AirTouch will file such financial statements on an amendment to
this Form 8-K no later than 60 days after the date by which this Form 8-K must
be filed.
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(b) Pro Forma Financial Information. It is impracticable to file at
this time the pro forma financial information required by Article 11 of
Regulation S-X. Accordingly, AirTouch will file such pro forma financial
information on an amendment to this Form 8-K no later than 60 days after the
date by which this Form 8-K must be filed.
(c) Exhibits.
2.1 Agreement and Plan of Merger dated as of April 5, 1996, among AirTouch
Communications, Inc., Cellular Communications, Inc. and AirTouch
Cellular, as amended and restated as of July 12, 1996 (incorporated by
reference to Exhibit 2.1 to AirTouch's Registration Statement on Form
S-4 (Reg. No. 333-03107).
99.1 Press Release dated August 16, 1996.
99.2 Financial Statements of Cellular Communications, Inc. for the year
ended December 31, 1995 (incorporated by reference to pages F-1 to F-37
and S-1 - S-19 of Cellular Communications, Inc.'s Annual Report on
Form 10-K for the year ended December 31, 1995 (File No. 1-10789)).
99.3 Financial Statements of Cellular Communications, Inc. for the quarter
ended June 30, 1996 (incorporated by reference to Item 1 of Cellular
Communications, Inc.'s Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996 (File No. 1-10789)).
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AIRTOUCH COMMUNICATIONS, INC.
By: /s/ SAM GINN
-------------------------------------------------
Sam Ginn
Chairman of the Board and Chief Executive Officer
Date: August 23, 1996
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Exhibit Index
2.1 Agreement and Plan of Merger dated as of April 5, 1996, among AirTouch
Communications, Inc., Cellular Communications, Inc. and AirTouch
Cellular, as amended and restated as of July 12, 1996 (incorporated by
reference to Exhibit 2.1 to AirTouch's Registration Statement on Form
S-4 (Reg. No. 333-03107).
99.1 Press Release dated August 16, 1996.
99.2 Financial Statements of Cellular Communications, Inc. for the year
ended December 31, 1995 (incorporated by reference to pages F-1 to F-37
and S-1 - S-19 of Cellular Communications, Inc.'s Annual Report on
Form 10-K for the year ended December 31, 1995 (File No. 1-10789)).
99.3 Financial Statements of Cellular Communications, Inc. for the quarter
ended June 30, 1996 (incorporated by reference to Item 1 of Cellular
Communications, Inc.'s Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996 (File No. 1-10789)).
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EXHIBIT 99.1
AIRTOUCH COMPLETES ACQUISITION OF CCI
Terry Tindel Named Executive Vice President and General Manager
SAN FRANCISCO/NEW YORK -- AirTouch Communications, Inc. (NYSE: ATI) announced
today that it has completed its acquisition of Cellular Communications, Inc. The
acquisition became effective at 7:30 p.m., Eastern Time, on Friday, August 16,
1996, when CCI was merged into a wholly-owned subsidiary of AirTouch.
With the acquisition, AirTouch will add about 5 million proportionate
POPs, more than 360,000 customers, an additional $58 million of pro-forma
operating cash flow for the first half of 1996 and $90 million of pro-forma 1995
operating cash flow. The acquisition brings AirTouch's total domestic cellular
portfolio to nearly 43 million POPs, $695 million of pro-forma 1995
proportionate operating cash flow and 2.9 million customers. The Michigan and
Ohio markets, now operating under the Cellular One brand name, will convert to
the AirTouch brand, bringing the total number of states offering cellular
service under the AirTouch name to 17.
The merger was approved at a special meeting of CCI stockholders on
Friday, August 16, 1996 at 10:00 a.m. by the affirmative vote of approximately
82% of the outstanding CCI stock, or approximately 99% of the votes cast.
Effective immediately, Terry A. Tindel becomes Executive Vice President
and General Manager for AirTouch in Michigan and Ohio overseeing the 2,300
employees who provide service in 22 key midwestern markets.
Tindel previously held the position of vice president and general
manager for AirTouch Cellular in Atlanta. He joined the corporation as part of a
Paging acquisition made by Pacific Telesis Group and served a 15-year tenure
with AirTouch Paging, ultimately spending seven years as eastern regional vice
president. Tindel holds his masters in business administration in marketing from
Georgia State University and his bachelor of science degree in Industrial
Management from Georgia Institute of Technology.
Holders of CCI stock had the opportunity to elect to receive either
cash or AirTouch convertible preferred securities in exchange for their shares
of CCI stock, or to make no election with respect to such shares. Under the
terms of the merger agreement, the aggregate number of shares of CCI stock to be
acquired by AirTouch in exchange for cash was 7,149,860, which represented
27.18% of the shares of CCI stock outstanding at the effective time of the
merger and not held by AirTouch, and the aggregate number of shares of CCI stock
to be acquired by AirTouch in exchange for AirTouch preferred securities was
19,153,218, which
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represented 72.82% of the shares of CCI stock outstanding at the effective time
of the merger and not held by AirTouch. This ratio of cash to preferred
securities includes the effect of an adjustment to preserve the tax-free status
of the merger, as provided in the merger agreement. Holders of 6,400,228 shares
of CCI stock elected to receive AirTouch preferred securities in the merger, and
holders of 19,246,991 shares of CCI stock elected to receive cash.
Based upon the allocation and adjustment procedures set forth in the
merger agreement, holders who elected to receive cash will receive cash at the
rate of $55.00 per share of CCI stock in exchange for approximately 37.15% of
the total number of shares of CCI stock held by such holder, and will receive
preferred securities at the rate of 0.900 of a share of AirTouch 6.00% Class B
Mandatorily Preferred Stock and 0.578 of a share of AirTouch 4.25% Class C
Preferred Stock per share of CCI stock in exchange for approximately 62.85% of
the total number of shares of CCI stock held by such holder. All CCI
stockholders who elected to receive AirTouch preferred securities or who were
deemed to have made no election with respect to their shares of CCI stock will
receive, for all shares of CCI stock held by such holder, 0.900 of a share of
Class B Preferred Stock and 0.578 of a share of Class C Preferred Stock for each
share of CCI stock held by such holder. Each holder of CCI stock who would
otherwise be entitled, after taking into account all certificates delivered by
such holder, to receive a fractional share of AirTouch securities will receive
cash (without interest) in lieu of fractional shares at the rate of $29 per
share of Class B Preferred Stock and $50.00 per share of Class C Preferred
Stock.
In the aggregate, AirTouch will pay approximately $393.24 million in
cash and will issue approximately 17.24 million shares of Class B Preferred
Stock and approximately 11.07 million shares of Class C Preferred Stock in the
merger. The Class B Preferred Stock and Class C Preferred Stock are expected to
commence trading on the New York Stock Exchange on Monday, August 19, 1996 under
the symbols ATI Pr B and ATI Pr C.
AirTouch Communications is a global wireless communications company,
with interests in cellular, paging, personal communications services and the
Globalstar satellite system in the United States and ten other nations: Belgium,
Germany, India, Italy, Japan, Poland, Portugal, South Korea, Spain and Sweden.
The company, based in San Francisco, serves more than 6.7 million proportionate
customers worldwide.
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