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[LETTERHEAD OF DEWEY BALLANTINE]
December 10, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Pacific Rehabilitation & Sports Medicine, Inc.
Tender Offer Solicitation/Recommendation Statement on Schedule 14D-9
File No. 5-44531
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Ladies and Gentlemen:
On behalf of Pacific Rehabilitation & Sports Medicine, Inc. (the
"Company"), we transmit herewith for filing, pursuant to Rule 14d-9(b) and
Rule 101(a) of Regulation S-T, under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), Amendment No. 1 to the Company's Tender Offer
Solicitation/Recommendation Statement on Schedule 14D-9.
Please note that the Company is hand delivering today a copy of
Amendment No. 1 to the Schedule 14D-9 to the bidders, Horizon PRSM
Corporation and Horizon/CMS Healthcare Corporation, at the address of the
person authorized to receive notices and communications on behalf of the
bidders as set forth on the cover sheet of the bidder's Schedule 14D-1 filed
with the Commission. The Company has given telephonic notice of the
information required by Items 2 and 4(a) of Schedule 14D-9 and will mail
copies of the Schedule 14D-9 to the Nasdaq National Market, on which the
Company's Common Stock is quoted.
Please contact the undersigned at (212) 259-6608 or Morton A.
Pierce of this office at (212) 259-6640 if you have any questions concerning
the attached materials.
Very truly yours,
Denise A. Cerasani
cc: James H. Wilson, Esq.
Horizon PRSM Corporation
and Horizon/CMS Healthcare Corporation
Nasdaq National Market
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934
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PACIFIC REHABILITATION & SPORTS MEDICINE, INC.
(NAME OF SUBJECT COMPANY)
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PACIFIC REHABILITATION & SPORTS MEDICINE, INC.
(NAME OF PERSON(S) FILING STATEMENT)
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COMMON STOCK, PAR VALUE $0.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
694926 10 6
(CUSIP NUMBER OF CLASS OF SECURITIES)
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MICHAEL MCARTHUR-PHILLIPS
SENIOR VICE PRESIDENT--GENERAL COUNSEL AND SECRETARY
PACIFIC REHABILITATION & SPORTS MEDICINE, INC.
ONE S.W. COLUMBIA STREET, SUITE 900
PORTLAND, OREGON 97258
(503) 222-4191
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE
NOTICES AND COMMUNICATIONS ON BEHALF OF THE PERSON(S) FILING STATEMENT)
WITH A COPY TO:
MORTON A. PIERCE, ESQ.
DENISE A. CERASANI, ESQ.
DEWEY BALLANTINE
1301 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019-6092
(212) 259-8000
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This Amendment No. 1 amends and supplements the
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule
14D-9") of Pacific Rehabilitation & Sports Medicine, Inc., a Delaware
corporation (the "Company"), with respect to the tender offer disclosed in a
Tender Offer Statement on Schedule 14D-1 dated November 22, 1996 by Horizon
PRSM Corporation, a Delaware corporation (the "Purchaser") and an indirect
wholly owned subsidiary of Horizon/CMS Healthcare Corporation, a Delaware
corporation (the "Parent"), to purchase all of the Company's outstanding
shares of common stock, par value $0.01 per share (the "Shares").
Capitalized terms used herein shall have the definitions set forth in the
Schedule 14D-9 unless otherwise provided herein.
ITEM 2. TENDER OFFER OF THE BIDDER.
Item 2 of the Schedule 14D-9 is hereby amended and supplemented to
include Parent as a bidder.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
Item 4(a) of the Schedule 14D-9, under the caption "Recommendation
of the Company's Board of Directors," is hereby amended and supplemented by
adding to the end of the first paragraph thereof the following:
"Mr. Barancik advised the Company that he dissented from the
merger proposal because he believed that the Shares were currently
undervalued in the market, that considerably higher values could
be achieved once certain actions recently undertaken by the
Company to improve profitability (including the closing of
unprofitable clinics and reduction of costs) were realized, and
that a higher offer price could have been obtained had a firmer
negotiation position been taken. Mr. Barancik also informed the
Company that he believed that the Company should continue its
efforts to replace its existing line of credit, which had only
been extended to December 31, 1996, and secure additional funds
for working capital and acquisitions. Mr. Barancik stated his
concern that, if the Offer and the Merger were not consummated,
the Company's line of credit would be terminated and its
continuing operations would be materially adversely affected."
Item 4(b) of the Schedule 14D-9, under the caption "Background of
the Offer," is hereby amended and supplemented by adding to the end of the
seventh paragraph thereof the following:
"With respect to the two entities, other than Parent, that had
indicated interest in a possible acquisition of the Company, one
entity, after executing a confidentiality agreement and receiving
certain non-public information concerning the Company, had no
further discussions with, and did not submit a proposal to, the
Company regarding a possible transaction. The other entity
submitted a preliminary proposal, which was subsequently
withdrawn, and no further material discussions occurred with
such entity."
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete
and correct.
PACIFIC REHABILITATION & SPORTS MEDICINE, INC.
By: /s/ Michael McArthur-Phillips
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Michael McArthur-Phillips
Senior Vice President--General Counsel and
Secretary
Dated: December 10, 1996
