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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-9
Solicitation/Recommendation Statement under Section 14(d)(4) of the
Securities Exchange Act of 1934.
CHASE INDUSTRIES INC.
(Name of Subject Company)
CHASE INDUSTRIES INC.
(Name of Persons Filing Statement)
Common Stock, par value $0.01 per share
(Title of Class of Securities)
161568-10-0
(CUSIP Number of Class of Securities)
Martin V. Alonzo Copies to:
President and Chief Executive Officer Rodney L. Moore
Chase Industries Inc. Vinson & Elkins L.L.P.
14212 County Road M-50 2001 Ross Avenue, Suite 3700
Montpelier, Ohio 43543 Dallas, Texas 75201
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Persons Filing Statement)
[X] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
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[CHASE INDUSTRIES INC. LETTERHEAD]
FOR IMMEDIATE RELEASE
CHASE INDUSTRIES INC. ADOPTS
STOCKHOLDER RIGHTS PLAN AND BYLAW AMENDMENTS
MONTPELIER, OHIO, DECEMBER 27, 2000, Chase Industries Inc. (NYSE: CSI)
today announced that its Board of Directors has authorized the adoption of a
stockholder rights plan. This plan is designed to protect against abusive
takeover tactics and ensure that all stockholders receive fair and equal
treatment in the event of an unsolicited attempt to acquire Chase Industries. It
includes safeguards against partial or two-tiered tender offers, squeeze-out
mergers and other abusive takeover tactics. Chase Industries' Board of Directors
concluded that the adoption of the stockholder rights plan was in the best
interest of Chase Industries and all of its stockholders. Because the rights may
be redeemed by the Board under certain circumstances, they should not interfere
with any merger or other business combination approved by the Board. The rights
will be distributed to all record holders of Chase Industries common stock on
January 5, 2001.
As previously announced by Chase Industries, on December 18, 2000, an
investor group that includes Citicorp Venture Capital, Chase Industries' largest
stockholder (holding approximately 47.7% of Chase Industries' common stock),
issued a press release stating that it intends to commence an unsolicited tender
offer for up to 2,300,000 shares (or 15%) of Chase Industries' outstanding
common stock. The Citicorp offer has not yet commenced.
The Board of Directors of Chase Industries has engaged Credit Suisse
First Boston Corporation to advise it in connection with its evaluation of the
proposed tender offer, and intends to formally respond to the proposed tender
offer within 10 business days after the offer is commenced. The Board requests
that holders of Chase Industries' common stock defer making a determination
whether to accept or reject the proposed tender offer until the Board makes its
formal recommendation.
The rights plan provides for the issuance of one right for each
outstanding share of Chase Industries' common stock. The rights will become
exercisable only after a person or group acquires, or announces a tender or
exchange offer that would result in, beneficial ownership of 20% or more of
Chase Industries' voting stock (or the acquisition of any additional shares of
stock in the case of any person who currently owns in excess of 20%). Although
the rights plan excepts the Citicorp announcement from causing the rights to
become exercisable, any subsequent commencement of such tender offer could cause
the rights to become exercisable.
If the rights become exercisable as a result of the announcement or
commencement of a tender or exchange offer, each right initially will entitle
the holder to buy one one-thousandth (1/1000) of a share of a new series of
junior participating preferred stock at an exercise price of $30 per right,
subject to antidilution adjustments. Each one one-thousandth of a share of this
new preferred stock has the dividend and voting rights of, and is designed to be
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CHASE INDUSTRIES, INC.
ADD-1-
substantially equivalent to, one share of voting common stock. Chase Industries'
Board of Directors may, at its option, redeem all rights for $.0001 per right at
any time prior to the acquisition of 20% or more of Chase Industries' voting
stock by a person or group or the acquisition of any additional shares of stock
in the case of any person or group who currently owns in excess of 20%.
In general, if a person or group acquires beneficial ownership of 20%
or more of Chase Industries' voting stock, or any additional shares of stock in
the case of any person or group who currently owns in excess of 20%, each right
will entitle holders, other than the acquiring party, to purchase common stock
of Chase Industries having a market value of $60 for a purchase price of $30. In
addition, the Board of Directors may at its option, at any time prior to the
time such person acquires in excess of 50% of the outstanding voting stock,
exchange the rights in whole or in part for shares of Chase Industries' stock.
Under this option, Chase Industries generally would issue one share of common
stock, or one one-thousandth of a share of the new preferred stock, for each
right then outstanding. This exchange would not apply to shares held by the
person or group holding 20% or more of Chase Industries' voting stock (or any
person or group that has increased its ownership of Chase Industries' stock if
such person or group currently owns in excess of 20%).
If, after the rights have become exercisable, Chase Industries merges
or otherwise combines with another entity, or sells assets constituting more
than 50% of its assets or producing more than 50% of its earning power or cash
flow, each right then outstanding will entitle its holder to purchase for $30,
subject to antidilution adjustments, a number of the acquiring party's common
shares having a market value of twice that amount.
Chase Industries also announced that its Board of Directors approved a
number of amendments to Chase Industries' bylaws. The amendments provide for,
among other things, advance notice to Chase Industries of plans by stockholders
to nominate directors for election or to propose other action at any annual or
special meeting of Chase Industries' stockholders, the right of the board of
directors to set the date for any special meeting of stockholders, and prior
notice to the board of directors of any proposed action to be taken by written
consent in order to allow the board to set a record date for such consent. Under
the amended bylaws, March 2, 2001, will be the deadline for stockholders to
inform Chase Industries in writing of any intention to nominate directors for
election or propose other action for consideration at Chase Industries' 2001
annual stockholders meeting. The date of the 2001 meeting has not yet been set.
Chase Industries, through its wholly owned subsidiaries Chase Brass &
Copper Company and Leavitt Tube Company, is a leading manufacturer of
free-machining and forging brass rod and structural and mechanical steel tubing
and structural pipe.
HOLDERS OF CHASE INDUSTRIES' COMMON STOCK SHOULD READ CHASE INDUSTRIES'
RECOMMENDATION STATEMENT REGARDING THE PROPOSED TENDER OFFER WHEN IT BECOMES
AVAILABLE. THIS RECOMMENDATION STATEMENT WILL CONTAIN IMPORTANT INFORMATION
REGARDING THE TENDER OFFER. HOLDERS OF CHASE INDUSTRIES' COMMON STOCK CAN OBTAIN
THE RECOMMENDATION AND OTHER FILED DOCUMENTS FOR FREE AT THE WEBSITE OF THE
SECURITIES AND EXCHANGE COMMISSION AT HTTP://WWW.SEC.GOV, OR FOR FREE FROM CHASE
INDUSTRIES.
The description of the rights and bylaw amendments in this press
release is a summary of the material terms of the rights and the bylaw
amendments. The rights are subject to the terms and conditions set forth in a
Rights Agreement which will be filed by Chase Industries with the Securities and
Exchange Commission on Form 8-K. A copy of Chase Industries' bylaws
incorporating the bylaw amendments also will be filed by Chase Industries with
the Securities and Exchange Commission on Form 8-K.
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CHASE INDUSTRIES, INC.
ADD-2-
This press release contains forward looking statements regarding the
proposed tender offer for Chase Industries' common stock described herein. These
statements are identified by words such as "will," "intends," and other words
referring to events to occur in the future. The statements are based on
information currently available to Chase Industries and are subject to a variety
of risks and uncertainties, including the actual commencement of the proposed
tender offer, Chase Industries' evaluation and recommendation with respect to
the proposed tender offer, alternatives that may be pursued or other actions
that may be undertaken by Chase Industries in response to or independent of the
proposed tender offer, the number of shares tendered in response to the proposed
tender offer and consummation of the proposed tender offer. Actual events,
actions and effects of the proposed tender offer may depend on one or more of
these risks and uncertainties and may vary materially from the future events,
actions and effects described in this press release. Chase Industries undertakes
no obligation to update any forward looking statements made in this press
release.
# # #
For Further Information Contact: Matt Sherman / Dan Katcher
Joele Frank, Wilkinson Brimmer Katcher
(212) 355-4449
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