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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)
Citation Corporation
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(Name of Issuer)
Common Stock, $.01 par value
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(Title of Class of Securities)
172895104
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(CUSIP Number)
William B. Long
Drummond Company, Inc.
530 Beacon Parkway West
Birmingham, Alabama 35209
(205) 945-6525
With a copy to:
Gregory S. Curran
Maynard, Cooper & Gale, P.C.
1901 6th Avenue North
Suite 2400
Birmingham, Alabama 35203
(205) 254-1098
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
January 21, 1999
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1 (b) (3) or (4), check the following
box [_].
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SCHEDULE 13D
CUSIP NO. 172895104
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(1) Name of Reporting Person.
Drummond Company, Inc.
S.S. or I.R.S. Identification Nos. of Above Person.
63-0653224
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(2) Check the Appropriate Box if a Member of a Group
(a) [_]
(b) [X]
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(3) SEC Use Only
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(4) Source of Funds
NA
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(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [_]
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(6) Citizenship or Place of Organization
AL
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Number of Shares Beneficially (7) Sole Voting Power
Owned by Each Reporting 1,336,400
Person With
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(8) Shared Voting Power
-0-
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(9) Sole Dispositive Power
1,336,400
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(10) Shared Dispositive Power
-0-
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person
1,336,400
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(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares [X]
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(13) Percent of Class Represented by Amount in Row (11)
7.5%
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(14) Type of Reporting Person
CO
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Drummond hereby amends and supplements the statement on Schedule 13D,
filed November 16, 1998, and as amended by Amendment No. 1 thereto, filed
January 5, 1999 (as amended, the "Original Statement"), with respect to the
common stock, $.01 par value per share, of Citation Corporation, a Delaware
corporation ("Citation"), held by Drummond as set forth in this Amendment No. 1.
Item 3. Source and Amount of Funds or Other Consideration
The response set forth in Item 3 of the Original Statement is hereby
amended and supplemented by adding the following:
On January 21, 1999, Drummond Company, Inc. ("Drummond") notified T.
Morris Hackney ("Hackney") that it will not exercise its option to purchase the
4,000,000 shares of Citation Corporation ("Citation") common stock (the
"Shares") in accordance with the terms of that certain Call Option Agreement,
dated as of November 6, 1998, between Drummond and Hackney (the "Option
Agreement"), thereby terminating the Option Agreement.
Item 4. Purpose of Transaction
The response set forth in Item 4 of the Original Statement is hereby
amended and supplemented by the following:
On January 21, 1999, Drummond notified Hackney that it will not
exercise its option to purchase the Shares in accordance with the terms of the
Option Agreement, thereby terminating the Option Agreement. Following its
internal evaluation and considering the advice of its advisors, Drummond
determined that the $20 per share option price established in the Call Option
Agreement is not an attractive price to Drummond for Citation common stock.
Drummond currently holds 1,336,400 shares, or approximately 7.5%, of
the outstanding common stock of Citation. Drummond continues to believe that a
further investment in Citation or a business combination transaction involving
Citation at prices below the price represented by the Call Option Agreement may
be an attractive opportunity. Accordingly, Drummond will continue to evaluate
the possibility of additional purchases of Citation common stock, either in
privately negotiated purchases or in open market transactions, or the
possibility of a business combination transaction with, or acquisition of
control of, Citation. Such evaluation may involve discussions or negotiations
with Citation, through its Board of Directors or special committee, or with
individual stockholders of Citation.
Item 5. Interest in Securities of the Issuer
The response set forth in Item 5 of the Original Statement is hereby
amended and supplemented by the following:
Drummond is the beneficial owner of 1,336,400 shares of Citation common
stock, constituting approximately 7.5% of the issued and outstanding common
stock of Citation. On January 21, 1999, Drummond notified Hackney that it will
not exercise its option to purchase the Shares in accordance with the terms of
the Option Agreement, thereby terminating the Option Agreement.
Item 6. Contracts, Arrangements, Understanding or Relationships with Respect to
Securities of the Issuer.
The response set forth in Item 6 of the Original Statement is hereby
amended and supplemented by the following:
On January 21, 1999, Drummond notified Hackney that it will not
exercise its option to purchase the Shares in accordance with the terms of the
Option Agreement, thereby terminating the Option Agreement.
Item 7. Material to be Filed as Exhibits
Exhibit 99.3 - Letter, dated January 21, 1999, form Drummond Company,
Inc. to T. Morris Hackney.
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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.
DATE: January 21, 1999.
DRUMMOND COMPANY, INC.
By: /s/ Guy K. Mitchell, Jr.
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Guy K. Mitchell, Jr.
President
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EXHIBIT 99.3
[Letterhead of Drummond Company, Inc.]
January 21, 1999
VIA FACSIMILE: (205) 870-5146
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AND U.S. MAIL
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Mr. T. Morris Hackney
Citation Corporation
#2 Office Park Circle
Suite 204
Birmingham, Alabama 35223
Dear Morris:
The purpose of this letter is to inform you that Drummond Company, Inc.
will not exercise its option to acquire certain shares of Citation Corporation
common stock currently held by you in accordance with the terms of the Call
Option Agreement between Drummond and you, dated November 6, 1998. Accordingly,
the Call Option Agreement is hereby terminated.
Should you have any questions concerning the foregoing, please feel free to
call me at 945-6518.
Very truly yours,
Guy K. Mitchell, Jr.
Its President
