SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): January 8, 1999
FOAMEX INTERNATIONAL INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-22624 05-0473908
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(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification No.)
1000 Columbia Avenue, Linwood, PA 19061
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(Address of principal executive offices) (zip code)
(610) 859-3000
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events
On January 8, 1999, Foamex International Inc. (the "Company") and Trace
International Holdings, Inc. ("Trace") announced that the Agreement and Plan of
Merger, dated November 5, 1998 (the "Merger Agreement"), among the Company,
Trace and a wholly owned subsidiary of Trace, had been terminated. On such date,
Trace delivered to the Company's Board of Directors, and the Company's Board of
Directors accepted, a notice terminating the Merger Agreement. The Merger
Agreement had provided a price of $12.00 per share in cash upon consummation of
the merger for approximately 54% of the Company's common stock not owned by
Trace and its subsidiaries.
Trace stated that it had been informed by one of its proposed financing
sources that it would be unable to provide the bank financing necessary to
consummate the Merger Agreement, and that despite Trace's best efforts, it had
been unable to obtain alternate financing on terms acceptable to Trace. Trace
also advised the Company that it had either paid or restructured its debt
obligations that were due at the end of December 1998.
The Company will continue to explore its strategic alternatives with
its advisors.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of businesses acquired:
None.
(b) Pro Forma financial information:
None.
(c) Exhibits:
99.1 Termination Letter of Trace International
Holdings, Inc., dated January 8, 1999.
99.2 Press Release of Foamex International Inc., dated
January 8, 1999.
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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.
Date: February 2, 1999 By: /s/ Philip N. Smith
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Name: Philip N. Smith
Title: Vice President
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EXHIBIT INDEX
Exhibit Description of Exhibit
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99.1 Termination Letter of Trace International Holdings, Inc., dated
January 8, 1999.
99.2 Press Release of Foamex International Inc., dated January 8, 1999.
Trace International Holdings, Inc.
375 Park Avenue, 11th Floor
New York, New York 10152
February 2, 1999
Foamex International Inc.
1000 Columbia Avenue
Linwood, PA 19061
Attention: Chief Executive Officer
Board of Directors
of Foamex International Inc.
1000 Columbia Avenue
Linwood, PA 19061
Attention: Chairman
Re: Termination of Agreement and Plan of Merger
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Dear Ladies and Gentlemen:
This notice is being provided to you pursuant to the terms of the
Agreement and Plan of Merger, dated as of November 5, 1998, by and among Trace
International Holdings, Inc. ("Trace"), Trace Merger Sub, Inc. ("Sub") and
Foamex International Inc. ("Foamex"), (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 by its financing sources that the Financing
contemplated by the Financing Letters is not available. In light of discussions
with investment and commercial banks, all of whom have indicated that they would
not be able to provide Financing for a transaction at $12.00 per share, Trace is
incapable of obtaining Financing on terms, conditions and in amounts that would
not be materially worse for Trace than as set forth in the Financing Letters on
or prior to January 29, 1999. Therefore, the condition set forth in Section
6.3(c) of the Merger Agreement is incapable of being satisfied.
<PAGE>
Board of Directors of
Foamex International Inc. 2
In light of the fact that the condition set forth in Section 6.3(c) is
incapable of occurring, pursuant to the terms of Section 7.1(f) of the Merger
Agreement, Trace hereby terminates the Merger Agreement. The Merger Agreement
shall forthwith become void and there shall be no liability or obligation on the
part of Trace, Sub or Foamex or their respective officers or directors, except
as provided in Section 7.2 of the Merger Agreement.
Sincerely yours,
Marshall S. Cogan
cc: Judith R. Thoyer, Esq.
Paul, Weiss, Rifkind, Wharton & Garrison
Foamex International Inc. Trace International Holdings, Inc.
David Bright Warren Cavior
Foamex International 212-687-6070
212-230-0488
Kate McDonough
Emma Murphy
Gavin Anderson & Company
212-373-0200
FOR IMMEDIATE RELEASE
FOAMEX INTERNATIONAL AND TRACE INTERNATIONAL
TERMINATE MERGER PLANS
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LINWOOD, PENNSYLVANIA, January 8, 1999 -- Foamex International Inc.
(Nasdaq: FMXI) and Trace International Holdings, Inc., a New York-based private
holding company, today announced that the agreement and plan to merge Foamex
with a wholly owned subsidiary of Trace has been terminated. Foamex and Trace
confirmed that Trace has today delivered to the Foamex Board and the Foamex
Board has accepted a notice terminating the Merger Agreement entered into on
November 5, 1998.
Trace stated that it has been informed by one of its proposed financing
sources that it would be unable to provide the bank financing necessary for the
merger, and that despite Trace's best efforts, it had been unable to obtain
alternate financing on terms acceptable to Trace. Trace added that it has either
paid or restructured its debt obligations that were due at the end of December
1998.
The agreement had provided a price of $12.00 per share in cash for
approximately 54% of the Foamex common stock not owned by Trace and its
subsidiaries upon consummation of the merger. To assure objective, arms-length
shareholder review of the merger, Trace had agreed to have the merger subject to
the approval of a majority of the non-Trace shares voting on the merger.
Andrea Farace, Chairman, Foamex International, stated that the Foamex
Board will continue to explore the Company's strategic alternatives with its
advisors.
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2
Marshall S. Cogan, Chairman and Chief Executive Officer of Trace, who
serves as Vice Chairman of the Foamex Board of Directors, stated, "There has
been considerable debate in recent months about what is in the best interest of
all of Foamex's shareholders, including Trace, as well as what is best to
maximize Foamex's future. The process of considering recent proposals made to
Foamex by Trace has led the Board of Directors to conclude that a fresh review
of all our strategic options is the best next step for Foamex. We are hopeful
that this process will maximize Foamex shareholder value in 1999."
Trace and its subsidiaries beneficially own approximately 11,525,000
shares of Foamex common stock, or approximately 46% of the outstanding common
stock. Foamex has 25,014,323 shares of common stock outstanding.
Foamex manufacturers and markets flexible polyurethane and advanced
polymer foam products in North America. Foamex operates under four business
units: Foam Products, which includes consumer, cushioning, furniture and bedding
products; Carpet Cushion Products; Automotive Products; and Technical Products.
Trace, a New York-based private holding company, is the principal
shareholder of Foamex International Inc. and a principal shareholder of
UnitedAuto Group, Inc. Trace also owns CHF Industries Inc., a leading
manufacturer of home textiles, and is a founder of Trace Capital Management
L.L.C.
This press release contains forward-looking information, and actual
results may materially vary from those expressed or implied herein. Factors that
could affect these results include those mentioned in the Company's Form
10-K/A-2 filed with the Securities and Exchange Commission.
