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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 (Date of earliest event reported) December 21, 1994
PRICE/COSTCO, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 0-20355 33-0572969
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
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10809 120TH AVENUE N.E., KIRKLAND, WASHINGTON 98033
(Address of principal executive offices) (Zip Code)
(206) 828-8100
Registrant's telephone number, including area code
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(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On December 21, 1994, Price/Costco, Inc. ("PriceCostco") completed its
exchange offer pursuant to which it offered to exchange one share of common
stock, par value $.0001 per share ("Price Enterprises Common Stock"), of Price
Enterprises, Inc. ("Price Enterprises") for each share of common stock, par
value $.01 per share, of PriceCostco ("PriceCostco Common Stock"), up to a
maximum of 27 million shares of Price Enterprises Common Stock (constituting all
of the outstanding shares of Price Enterprises Common Stock), upon the terms and
subject to the conditions set forth in an Offering Circular/Prospectus dated
November 21, 1994 (the "Offering Circular/Prospectus"), as supplemented by a
Supplement dated December 7, 1993 (the "Supplement"), and the related Letters of
Transmittal (which, together with the Offering Circular/Prospectus and the
Supplement, constituted the "Exchange Offer"). The Exchange Offer expired at
12:00 midnight, New York City time, on December 20, 1994 in accordance with its
terms. Pursuant to the Exchange Offer, 23,231,016 shares of PriceCostco Common
Stock were properly tendered and accepted by PriceCostco for exchange and
23,231,016 shares of Price Enterprises Common Stock were issued in exchange
therefor. Following such exchange, PriceCostco holds 3,768,984 shares of Price
Enterprises Common Stock. Pursuant to an Agreement of Transfer and Plan of
Exchange, dated July 28, 1994 (as amended, the "Transfer and Exchange
Agreement"), a copy of which was included as Annex II to the Offering Circular/
Prospectus, PriceCostco is required, at its option, either (i) to distribute
such shares of Price Enterprises Common Stock pro rata to holders of PriceCostco
Common Stock or (ii) to sell such shares to Price Enterprises in exchange for a
promissory note. No decision has yet been made with respect to what action
PriceCostco will take.
Pursuant to the Transfer and Exchange Agreement, as of August 28, 1994,
PriceCostco caused to be transferred, or, in certain cases will cause to be
transferred, to Price Enterprises certain commercial real estate and other
assets specified in the Transfer and Exchange Agreement (the "Transferred
Assets") in exchange for 27 million shares of Price Enterprises Common Stock and
the assumption by Price Enterprises of certain liabilities of PriceCostco
relating to the Transferred Assets.
The foregoing is only a summary of such transactions and is qualified in its
entirety by reference to the Offering Circular/Prospectus, as amended by the
Supplement, each of which is hereby incorporated by reference herein.
ITEM 5. OTHER EVENTS.
On December 19, 1994, a lawsuit was filed by alleged stockholders of
PriceCostco in the United States District Court, Western District of Washington,
captioned GEORGE SNYDER AND JACK FARBER V. PRICE/COSTCO, INC., ET AL., Case No.
C 94-1874. PriceCostco, certain of its current and former officers, directors
and stockholders and Price Enterprises are named as defendants. The lawsuit
purports to be a class action and derivative action. The complaint alleges,
among other things, violation of certain state and federal securities laws in
connection with the Exchange Offer. Plaintiffs seek unspecified damages and
declaratory and equitable relief. Although it is too soon to predict the outcome
of the case with any certainty, based on its current knowledge of the facts,
PriceCostco denies plaintiffs' allegations, believes the case is without merit
and will vigorously defend the action.
PriceCostco, Price Enterprises, Mexico Clubs, L.L.C. ("Mexico Clubs"), Price
Club de Mexico, S.A. de C.V. ("Price Club Mexico") and Controladora Comercial
Mexicana, S.A. de C.V. ("Comercial Mexicana") have extended the deadline to
January 10, 1995 to execute definitive agreements with respect to the
transactions contemplated by a Memorandum of Understanding dated December 1,
1994 (the "Memorandum of Understanding"). The previous deadline was December 31,
1994. Comercial Mexicana has indicated that it is reviewing the terms of the
proposed transaction in light of the recent peso devaluation. The Memorandum of
Understanding contemplates (i) the proposed purchase by Comercial Mexicana or
its assignee of the 50% interest in Price Club Mexico owned indirectly by Mexico
Clubs and (ii) PriceCostco and Price Club Mexico entering into certain
agreements, in connection with such transaction, with respect to the use of the
"Price Club" name by Price Club Mexico, the sourcing of certain merchandise to
Price Club Mexico by PriceCostco, the use of certain computer software by Price
Club Mexico and the training of employees of Price Club Mexico by PriceCostco.
The Memorandum of Understanding expresses the non-binding intent of the parties
and is not intended to be a binding agreement, preliminary or otherwise.
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Consummation of the transactions contemplated by the Memorandum of Understanding
is subject to the execution of definitive agreements. If definitive agreements
are not executed on or before January 10, 1995, the Memorandum of Understanding
will have no further force and effect.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(b) PRO FORMA FINANCIAL INFORMATION.
The information set forth under the caption "PRICECOSTCO UNAUDITED
PRO FORMA CONDENSED FINANCIAL INFORMATION" in the Offering
Circular/Prospectus is incorporated by reference herein.
(c) EXHIBITS.
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2.1 Amended and Restated Agreement of Transfer and Plan of Exchange,
dated as of November 14, 1994, between Price/Costco, Inc. and Price
Enterprises, Inc. (included as Annex II to the Offering
Circular/Prospectus).
99.1 Offering Circular/Prospectus, dated November 21, 1994 (incorporated
herein by reference to Exhibit (a)(1) to the Issuer Tender Offer
Statement on Schedule 13E-4 of Price/Costco, Inc. filed with the
Securities and Exchange Commission on November 21, 1994).
99.2 Supplement, dated December 7, 1994 (incorporated herein by reference
to Exhibit (a)(10) to Amendment No. 1 to the Issuer Tender Offer
Statement on Schedule 13E-4 of Price/Costco, Inc. filed with the
Securities and Exchange Commission on December 7, 1994).
99.3 Press Release, dated December 21, 1994.
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SIGNATURE
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 hereunto duly authorized.
PRICE/COSTCO, INC.
By: /s/ DONALD E. BURDICK
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Name: Donald E. Burdick
Title: Vice President
Dated: January 3, 1995
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EXHIBIT INDEX
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2.1 Amended and Restated Agreement of Transfer and Plan of Exchange, dated as of November 14, 1994,
between Price/Costco, Inc. and Price Enterprises, Inc. (included as Annex II to the Offering
Circular/Prospectus).
99.1 Offering Circular/Prospectus, dated November 21, 1994 (incorporated herein by reference to Exhibit
(a)(1) to the Issuer Tender Offer Statement on Schedule 13E-4 of Price/Costco, Inc. filed with the
Securities and Exchange Commission on November 21, 1994).
99.2 Supplement, dated December 7, 1994 (incorporated herein by reference to Exhibit (a)(10) to
Amendment No. 1 to the Issuer Tender Offer Statement on Schedule 13E-4 of Price/Costco, Inc. filed
with the Securities and Exchange Commission on December 7, 1994).
99.3 Press Release, dated December 21, 1994.
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PriceCostco
Contact: Richard A. Galanti
(206) 803-8203
Robert Nelson
(206) 803-8255
Price Enterprises
Contact: Daniel T. Carter
(619) 581-4889
FOR IMMEDIATE RELEASE
PRICECOSTCO AND PRICE ENTERPRISES ANNOUNCE COMPLETION OF
EXCHANGE OFFER RESULTING IN THE SPIN-OFF OF PRICE ENTERPRISES;
APPROXIMATELY 23 MILLION SHARES TENDERED
Kirkland, Washington; San Diego, California -- December 21, 1994 --
PriceCostco, Inc. (NASDAQ: PCCW) and Price Enterprises, Inc. (NASDAQ: PREN)
today announced the completion of the exchange offer in which PriceCostco
offered to exchange one share of Price Enterprises common stock for each share
of PriceCostco common stock tendered, up to a maximum of 27 million shares of
Price Enterprises common stock. The exchange offer expired Tuesday, December 20,
1994 at 12:00 midnight, New York City time, in accordance with the terms of the
exchange offer.
Price Costco stated that, according to the exchange agent's preliminary
count, approximately 23 million shares of PriceCostco common stock were tendered
by physical delivery, book-entry transfer or notice of guaranteed delivery. All
properly tendered shares of PriceCostco common stock have been accepted for
exchange and the issuance of certificates representing shares of Price
Enterprises common stock will begin promptly.
Based on the exchange agent's preliminary count, following the issuance of
shares of Price Enterprises common stock in the exchange offer, PriceCostco will
hold approximately four million shares of Price Enterprises common stock.
Pursuant to an agreement between PriceCostco and Price Enterprises, PriceCostco
is required, at its option, either (i) to distribute the remaining shares of
Price Enterprises common stock on a pro rata basis to PriceCostco stockholders
or (ii) to sell such shares to Price Enterprises in exchange for a promissory
note. PriceCostco has stated that no decision has yet been made as to what
action it will take.
As a result of the exchange offer, Price Enterprises is now a separate,
publicly-traded company. Price Enterprises common stock will be traded on The
Nasdaq Stock Market's National Market under the symbol "PREN" effective today.
