<PAGE>
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 (Date of earliest event reported): October 16, 1998
FOAMEX INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
Delaware 0-22624 05-0473908
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
1000 Columbia Avenue, Linwood, PA 19061
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (610) 859-3000
Not Applicable
(Former name or former address, if changed from last report)
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Item 5. Other Events
Foamex International Inc. has been notified by Trace International
Holdings, Inc. ("Trace") that due to changes in market conditions, the financing
originally contemplated for the proposed acquisition of all of the outstanding
shares of common stock of Foamex International Inc. ("Foamex International"),
not currently owned by Trace or its subsidiaries, for a purchase price of $18.75
per share will not be available. In addition, Trace informed the Board of
Directors of Foamex International that although it has attempted to obtain
substitute financing, to date, it has not been successful in obtaining
such substitute financing for a transaction at $18.75 per share.
Trace has submitted a revised proposal to the Board of Directors of
Foamex International to acquire all of the outstanding shares of common stock of
Foamex International not currently owned by Trace or its subsidiaries (the
"Offer Shares") at a cash price of $12.00 per share. Trace has also indicated
that it will arrange the $800 million necessary for the financing of the revised
proposal through The Bank of Nova Scotia. The letter setting forth Trace's
revised proposal is attached hereto as Exhibit 99.1 and is incorporated herein
by reference.
The proposed acquisition of the Offer Shares is subject to a number of
conditions, and there can be no assurance that such transaction will be
consummated. The press release announcing Foamex International's receipt of the
offer letter is attached hereto as Exhibit 99.2 and is incorporated herein by
reference.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of businesses acquired:
None.
(b) Pro Forma financial information:
None.
(c) Exhibits:
99.1 Proposal Letter of Trace International Holdings, Inc.,
dated October 16, 1998.
99.2 Press Release of Foamex International Inc., dated
October 16, 1998.
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SIGNATURES
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.
FOAMEX INTERNATIONAL INC.
/s/ John A. Feenan
-----------------------------------
Name: John A. Feenan
Title: Executive Vice President and
Chief Financial Officer
October 19, 1998
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<PAGE>
EXHIBIT INDEX
Exhibit
99.1 Proposal Letter of Trace International Holdings, Inc.,
dated October 16, 1998.
99.2 Press Release of Foamex International Inc., dated October 16, 1998.
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Exhibit 99.1
------------
TRACE INTERNATIONAL HOLDINGS, INC.
375 Park Avenue
New York, N.Y. 10152
October 16, 1998
Foamex International Inc.
1000 Columbia Avenue
Linwood, PA 19061
Attention: Chief Executive Officer
Special Committee of Board of Directors of
Foamex International Inc.
c/o Gutfreund & Co., Inc.
712 Fifth Avenue
New York, NY 10019
Attention: Mr. John Gutfreund
Re: Debt Financing
New Acquisition Proposal
------------------------
Ladies & Gentlemen:
This notice is being provided to you pursuant to the terms of the
Agreement and Plan of Merger, dated as of June 25, 1998, by and among Trace
International Holdings, Inc. ("Trace"), Trace Merger Sub, Inc. and Foamex
International Inc. ("Foamex"), as amended on July 6, 1998 (the "Merger
Agreement"). Capitalized terms used herein but not otherwise defined shall have
the meaning ascribed to them in the Merger Agreement.
Trace has been informed that due to changes in market conditions the
financing contemplated by the Merger Agreement will not be available. In
addition, the commitment letter for the bank debt portion of the financing
expired on October 15, 1998. Pursuant to Section 5.10 of the Merger Agreement,
Trace has been using its reasonable best efforts to obtain financing on terms
and conditions not materially less favorable to Trace than those set forth in
the Financing Letters. However, based on current market conditions and
discussions with investment and commercial banks,
<PAGE>
Foamex International Inc.
Special Committee of
Board of Directors of Foamex
October 16, 1998
Page 2
all of whom have indicated that they would not be able to finance a transaction
at a price of $18.75 per share, Trace believes that it will not be able to
obtain such alternate financing.
In light of expectation that Trace will be unable to obtain alternate
financing, Trace hereby submits a revised proposal to acquire all of the
outstanding shares of Common Stock of Foamex not currently owned by Trace or any
of its subsidiaries for a cash price of $12.00 per share. In connection with the
financing of this proposal, Trace will arrange the $800 million necessary for
the financing of the new proposal through The Bank of Nova Scotia.
This new proposal is subject to a number of conditions, including (1)
the approval of the board of directors of Foamex, (2) the approval of the
stockholders other than Trace and its subsidiaries, (3) the receipt of necessary
financing, (4) the termination of the existing Merger Agreement, (5) the
execution of a new definitive merger agreement prior to November 5, 1998, at
which time the financing arrangement will expire if no agreement is executed and
(6) other conditions currently contained in the Merger Agreement or as may be
typical for transactions of this type.
Trace believes that this new proposal is a fair one that will
benefit the public stockholders of Foamex. The price represents a 14.3% premium
over the closing market price on October 15, 1998 of $10.50 and enables
the public stockholders to receive cash for their shares.
Trace anticipates that upon the completion of the acquisition, the
Common Stock of Foamex will cease to be quoted on the Nasdaq National Market
System and that the Common Stock will be deregistered under the Securities
Exchange Act of 1934, as amended.
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Foamex International Inc.
Special Committee of
Board of Directors of Foamex
October 16, 1998
Page 3
Thank you for your consideration of this new proposal. Please respond
as soon as practicable so that both parties may proceed with this new proposal.
Sincerely yours,
/s/ Karl H. Winters
----------------------
Name: Karl H. Winters
Title: Vice President Finance
and Controller
cc: Victor I. Lewkow, Esq. (Cleary, Gottlieb, Steen & Hamilton)
<PAGE>
Exhibit 99.2
------------
FOR IMMEDIATE RELEASE
FOAMEX INTERNATIONAL INFORMED THAT
TRACE INTERNATIONAL HOLDINGS, INC. UNABLE TO OBTAIN
FINANCING FOR $18.75 PER SHARE TRANSACTION
_________________________
COMPANY RECEIVES REVISED BUYOUT PROPOSAL OF
$12.00 PER SHARE
_________________________
LINWOOD, PENNSYLVANIA, October 16, 1998 - Foamex International Inc. (NASDAQ:
FMXI) announced today that Trace International Holdings, Inc. had notified the
Foamex Board of Directors that due to a deterioration in conditions in worldwide
capital markets that Trace has been informed that it will be unable to obtain
the debt financing originally contemplated for the proposed acquisition of all
of the outstanding shares of common stock of Foamex International Inc., not
currently owned by Trace or its subsidiaries, for a purchase price of $18.75 per
share.
In addition, Trace International Holdings, Inc. informed the Board of
Directors of Foamex International that it has attempted to obtain but has not
been successful in securing substitute financing for a transaction at $18.75 per
share.
Trace has submitted a revised proposal to the Board of Directors of
Foamex International to acquire all of the outstanding shares of common stock of
Foamex International, not currently owned by Trace or its subsidiaries, at a
cash price of $12.00 per share. The revised proposal represents a premium of
14.3% over the closing stock price of $10.50, on October 15, 1998. Trace has
also indicated that it will arrange for the $800 million necessary for the
financing of the new proposal through The Bank of Nova Scotia. Trace has
indicated that it is willing to have its proposal subject to the approval of the
majority of the other shareholders of Foamex.
The Board of Directors of Foamex International Inc. has scheduled a
meeting for Monday, October 19, 1998 to consider the revised proposal.
The proposed acquisition of the common stock is subject to a
number of conditions, including (1) the approval of the Board of Directors
of Foamex International, (2) the approval of the majority of the stockholders
of Foamex International other than Trace and its subsidiaries, (3) the receipt
<PAGE>
of necessary financing, (4) the termination of the existing merger agreement,
(5) the execution of a new definitive agreement by November 5, 1998, at which
date Trace has indicated that the financing arrangement will expire if no
agreement is executed and (6) other customary conditions.
Trace and its subsidiaries beneficially own approximately 11,525,000
shares of Foamex common stock, or approximately 46% of the outstanding common
stock. The Company has 25,014,823 shares of common stock outstanding.
Foamex manufactures and markets flexible polyurethane and advanced
polymer products in North America. Foamex operates under four business units:
Foam Products, Carpet Cushion Products, Automotive Products, and Technical
Products.
For more information about Foamex International, visit its web site at
http://foamex.com.
Editors note: Foamex's company logo and executive photos can be
retrieved in digital form by media without any charge from Wieck Photo DataBase
(972) 392-0888.
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