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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE TO
(AMENDMENT NO. 1)
(Rule 14d-100)
TENDER OFFER STATEMENT UNDER SECTION 14(D)(1) OR 13(E)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
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CHASE INDUSTRIES INC.
(Name of Subject Company (Issuer))
CHASE ACQUISITION CORPORATION
COURT SQUARE CAPITAL LIMITED
(Names of Filing Persons (Offerors))
COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of Class of Securities)
161568-10-0
(CUSIP Number of Class of Securities)
ROBERT F. B. LOGAN
PRESIDENT
CHASE ACQUISITION CORPORATION
1209 ORANGE STREET
WILMINGTON, DE 19801
(561) 231-7490
(Name, address, and telephone numbers of person authorized to receive
notices and communications on behalf of filing persons)
With a copy to:
CRAIG L. GODSHALL
DECHERT
4000 BELL ATLANTIC TOWER
1717 ARCH STREET
PHILADELPHIA, PA 19103
(215) 994-4000
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Check the appropriate boxes below to designate any transactions to which the
statement relates:
|X| third-party tender offer subject to Rule 14d-1.
| | issuer tender offer subject to Rule 13e-4.
|X| going-private transaction subject to Rule 13e-3.
|X| amendment to Schedule 13D under Rule 13d-2
Check the following box if the filing is a final amendment reporting the results
of the tender offer:
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This Amendment No. 1 amends and supplements the Tender Offer Statement on
Schedule TO filed with the Securities and Exchange Commission on January 2, 2001
(the "Schedule TO") , relating to the offer by Chase Acquisition Corporation, a
Delaware corporation (the "Purchaser") and a majority-owned subsidiary of Court
Square Capital Limited, a Delaware corporation ("Court Square"), to purchase (1)
up to an aggregate of 2,300,000 shares of common stock, par value $0.01 per
share (all issued and outstanding shares of such common stock, being referenced
to herein as, the "Shares"), of Chase Industries Inc., a Delaware corporation
(the "Company"), and (2) unless and until validly redeemed by the Board of
Directors of the Company, the related rights to purchase shares of Junior
Participating Preferred Stock of the Company (the "Rights") issued pursuant to
the Rights Agreement for such Rights (as amended from time to time, the "Rights
Agreement"), by and between the Company and Mellon Investor Services LLC, as
Rights Agent, at a price of $10.50 per Share, net to the seller in cash, without
interest, upon the terms and subject to the conditions set forth in the Offer to
Purchase (the "Offer to Purchase") dated January 2, 2001, and in the related
Letter of Transmittal (the "Letter of Transmittal" which, together with the
Offer to Purchase, as each may be amended or supplemented from time to time,
constitute the "Offer"). Unless the context otherwise requires, all references
to the Shares shall be deemed to include the associated Rights, and all
references to the Rights shall be deemed to include the benefits that may inure
to holders of Rights pursuant to the Rights Agreement.
Capitalized terms used herein and not defined herein have the respective
meanings assigned such terms in the Offer to Purchase and the Schedule TO.
ITEMS 5 AND 13.
Items 5 and 13 of the Schedule TO, which incorporate by reference the
information contained in the Offer to Purchase, are hereby amended and
supplemented as follows:
1. The section of the Offer to Purchase entitled "SPECIAL
FACTORS--Background of the Offer and the Proposed Merger; Contacts with the
Company" is hereby amended and supplemented by adding the following at the end
thereof:
2
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"On January 8, 2001, Mr. McWilliams received the following letter
from the Company:
January 8, 2001
Mr. Thomas F. McWilliams
Citicorp Venture Capital Ltd.
399 Park Avenue
14th Floor, Zone 4
New York, New York 10043
Dear Tom:
I am writing this letter on behalf of myself and each
of Gene Cartledge, Jack Kennedy, Bob Kennedy and Bill Toller, in
our capacity as directors of Chase Industries Inc., in response
to your letter of December 29, 2000. We were surprised by your
positions as stated in your letter. We had requested on several
occasions during the week prior to the December 18, 2000, Board
meeting that Citicorp defer publicly announcing its intent to
commence the tender offer until the other members of the Board
had an opportunity to meet with you and discuss Citicorp's
proposal, and again made that request at the start of the
December 18, 2000, meeting. You repeatedly declined our requests,
and at the December 18, 2000, meeting we clearly stated to you
that if Citicorp proceeded with publicly announcing the tender
offer the Board would view the offer as unsolicited, the Citicorp
representatives would be on an opposing side from the remainder
of the Board, and proceedings regarding this matter would be
conducted accordingly.
At the start of the December 26, 2000, Board meeting,
you were told that the matters to be discussed were Citicorp's
unsolicited offer and actions to be taken in response thereto. We
believe that our conduct with respect to Citicorp's offer and
adoption of the stockholders rights plan and bylaw amendments in
response thereto have been not only appropriate but also
necessary to fulfill our fiduciary duties as directors of Chase
Industries.
Furthermore, we do not understand or agree with your
assertions that we have not been sufficiently attentive to the
creation of value for all stockholders. As you know, as recently
as the March 28, 2000, Board meeting we had DLJ provide an
analysis of certain recapitalization alternatives and considered
these alternatives, as well as a sale of the Company. At that
meeting, you concurred with the conclusion that it was not then
an opportune time to attempt a sale of Chase and that the Board
should deter further discussions of a recapitalization
transaction subject to reconsideration in the future.
Since the March 28, 2000, meeting (as well as at all
times prior thereto), we have acted in accordance with our
fiduciary duties to Chase's stockholders, including our actions
taken in response to Citicorp's offer. Accordingly, we take
exception to your comments and find them self-serving at best.
Very truly yours,
/s/ MARTIN V. ALONZO
MVA/nfm
cc: William Comfort
Charles Corpening
Raymond E. Cartledge
John R. Kennedy
Robert D. Kennedy
William Toller
3
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On January 9, 2001, Mr. McWilliams and Mr. Corpening
attended a meeting of the Company Board. At this meeting, the Company
Board considered, among other matters, the formation and composition
of a subcommittee of the Company Board (the "Subcommittee") to
evaluate the Offer and other alternatives and to provide a
recommendation to the Company's stockholders regarding the Offer. The
Subcommittee is comprised of four outside independent directors who
also constitute a majority of the whole Company Board. Mr. McWilliams
and Mr. Corpening voted in favor of the establishment of the
Subcommittee. After the vote to establish the Subcommittee, Mr.
McWilliams and Mr. Corpening recused themselves from the balance of
the meeting.
On January 10, 2001, investment bankers representing the
Company and the Subcommittee met with Mr. McWilliams, Mr. Corpening
and Darren Fogel, an employee of Court Square, to discuss the Offer.
The investment bankers asked for and received clarification on the
terms of the Offer and Proposed Merger, particularly that it was the
current intention of Court Square and the Purchaser to pay the same
consideration in the Proposed Merger, $10.50 in cash per share, as is
payable in the Offer. The investment bankers then discussed the
financing for the Offer and Proposed Merger in light of some of the
Company's existing financing arrangements. Mr. McWilliams noted that
he would confer with the lender to the Purchaser to clarify the
concerns raised by the investment bankers.
On Friday, January 12, 2001, and over the ensuing holiday
weekend, the investment bankers delivered materials to Mr. McWilliams,
Mr. Corpening, Mr. Logan and the lender to the Purchaser regarding the
Company's existing financing arrangements and the Company's capital
expenditure plans for 2001. The investment bankers and these
individuals had a series of phone calls over the holiday weekend to
review these materials, and to review the terms of the commitment
letter provided to the Purchaser by its lender.
On Tuesday, January 16, 2001, the investment bankers for the
Company and Subcommittee requested a further meeting. Mr. McWilliams
and Mr. Fogel were able to meet with them that afternoon. At the
meeting, the investment bankers briefly described the substance of the
disclosures in the Schedule 14D-9 that the Company was in the process
of filing with the Commission that day, including the disclosure that
at the direction of the Subcommittee, representatives of the Company
had contacted other parties who may be interested in a business
combination with the Company. The investment bankers then indicated
that an unidentified third party was interested in exploring a
business combination with a complicated structure and the investment
banker wanted to explore the attractiveness of participating in such a
structure with Court Square and the Purchaser. Mr. McWilliams stated
that he could not respond until he received the financial and tax
information that the third party had obviously received and until he
received detailed information regarding the proposed business
combination. The investment banker stated that he would review these
requests with his client and would discuss with the unidentified third
party whether the investment banker could provide more details
regarding the proposed business combination to Court Square and the
Purchaser.
As a result of these discussions, Court Square and Purchaser
have assumed that an additional $10.5 million of Company obligations
under a synthetic lease may need to be refinanced in connection with
the Proposed Merger, that some part of the Company's credit lines
after the Proposed Merger will be used for letters of credit issued to
support a subsidiary's purchasing obligations, and that the Company's
capital expenditures for 2001 may be as much as $15 million higher
than previously anticipated. In addition, Court Square and the
Purchaser were told that the Company's management believe that the
Company's income before interest, taxes, depreciation and amortization
for 2001 may be as much as ten percent (10%) lower than what Court
Square and the Purchaser believed at the time of announcing the
proposed transaction and commencing the Offer. Court Square and the
Purchaser are revising their projections based on this information and
are awaiting further information from the Company to finalize their
new projections. The investment banker noted that the Company would
require Court Square to sign a confidentiality agreement prior to
providing Court Square additional information.
The Company's counsel forwarded a draft confidentiality
agreement to Court Square and the Purchaser on January 17, 2001. The
draft provided, among other things, that Court Square and the
Purchaser could not disclose any information received under the
confidentiality agreement prior to February 7, 2001, and would be
required to extend the Offer past February 7, 2001, to the extent
required under the securities laws.
4
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After reviewing the draft confidentiality agreement, Mr.
McWilliams sent the following letter to the Company Board:
January 18, 2001
Chase Industries, Inc.
14212 County Road M-50
Montpelier, OH 43543
Attention: Board of Directors
c/o Michael T. Segraves, Secretary
Gentlemen:
I have had a series of discussions with representatives
of the Company over the last week regarding the offer we have
made to the shareholders. It became obvious from those
discussions that the Company has provided information to other
parties that it has not provided to us. We have been told that if
we sign a confidentiality agreement that prevents us from any
public disclosure of these materials until February 8th we can
have access to this information. As our respective counsel have
discussed with each other, assuming that we could agree to this
and still fulfill our obligations under the securities laws and
assuming we filed these materials with the Securities and
Exchange Commission on February 8th, this would likely require us
to extend the Offer until February 22nd.
When I first started calling directors on December
14th, I noted that the Company had 47 days to respond prior to
the proposed closing date of our Offer. We believe we have been
more than fair. We informed the members of the Board prior to
making any public announcement; we delayed the commencement of
our Offer to allow the Board a full opportunity to respond; we
kept our Offer open longer than any required time period and we
have stated that we would make ourselves available at any time to
discuss the Offer. We have also requested the information that
the Company provided to third parties who have not made any offer
or commitment to the shareholders. The Board's response has been
to adopt a poison pill to prevent shareholders from selling their
shares, to adopt bylaw amendments to frustrate our ability to
vote our shares and to offer to provide information if we keep
our Offer open for 69 days.
We are not going to extend our Offer. It will expire on
January 31. It is up to the Board to decide whether to let
shareholders accept our offer or not. Obviously, if the Board
does not redeem or otherwise amend the poison pill, we will not
be able to purchase any shares in the Offer and the Offer will
expire without the conditions being satisfied. If the Board
decides it will not let shareholders sell their shares at the
attractive price we have offered, we will not entertain any other
offers for the shares that Court Square owns. The Board will have
to live with the consequences. We obviously will reserve all
rights that we may have in the future to improve shareholder
value and allow shareholders to profit from their investments in
the Company.
I sincerely hope the Board will make the right
decision.
Sincerely,
/s/ THOMAS F. McWILLIAMS"
5
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ITEM 11. ADDITIONAL INFORMATION.
On January 16, 2001, Citigroup filed a Notification and Report Form with
the FTC and the Antitrust Division with respect to the Offer and the Proposed
Merger and the conversion of the Non-Voting Shares to Voting Shares. The
required waiting period with respect to the Offer and the Proposed Merger will
expire at 11:59 p.m., New York City time, on January 31, 2001, unless early
termination is granted or Citigroup receives a request for additional
information and documentary material prior thereto, in which case the waiting
period will expire at 11:59 p.m., New York City time, on the 10th calendar day
after Citigroup has substantially complied with such request. The required
waiting period with respect to the conversion of the Non-Voting Shares to Voting
Shares will expire at 11:59 p.m., New York City time, on February 15, 2001,
unless early termination is granted or Citigroup receives a request for
additional information and documentary material prior thereto, in which case the
waiting period will expire at 11:59 p.m., New York City time, on the 10th
calendar day after Citigroup has substantially complied with such request.
6
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SIGNATURE
After due inquiry and to the best of their knowledge and belief, the
undersigned hereby certify as of January 19, 2001 that the information set forth
in this statement is true, complete and correct.
SCHEDULE TO, SCHEDULE 13E-3 AND SCHEDULE 13D
CHASE ACQUISITION CORPORATION
By: /s/ Robert F.B. Logan
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Name: Robert F.B. Logan
Title: President
COURT SQUARE CAPITAL LIMITED
By: /s/ Charles E. Corpening
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Name: Charles E. Corpening
Title: Vice President
SCHEDULE 13D
CITICORP BANKING CORPORATION
By: /s/ William Wolf
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Name: William Wolf
Title: Senior Vice President
CITICORP
By: /s/ Joseph B. Wollard
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Name: Joseph B. Wollard
Title: Assistant Secretary
CITIGROUP HOLDINGS COMPANY
By: /s/ Joseph B. Wollard
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Name: Joseph B. Wollard
Title: Assistant Secretary
CITIGROUP INC.
By: /s/ Joseph B. Wollard
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Name: Joseph B. Wollard
Title: Assistant Secretary
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
(a)(1)(A)+ Offer to Purchase, dated January 2, 2001.
(a)(1)(B)+ Letter of Transmittal.
(a)(1)(C)+ Notice of Guaranteed Delivery.
(a)(1)(D)+ Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
other Nominees.
(a)(1)(E)+ Form of Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and other Nominees.
(a)(1)(F)+ Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(1)(G)+ Press release issued by the Purchaser, dated January 2, 2001,
announcing the commencement of the Offer.
(a)(1)(H)+ Summary Advertisement published January 2, 2001.
(b)(1) Commitment Letter dated December 14, 2000, by and among PNC, PNC
Capital, CVC and the Purchaser (incorporated by reference to
Exhibit 4 on Schedule 13D filed December 29, 2000 by the
Purchaser, Court Square, CBC, Citicorp, Citigroup Holdings and
Citigroup).
(b)(2) Commitment Letter dated December 14, 2000, by and among PNC, PNC
Capital, CVC and the Purchaser (incorporated by reference to
Exhibit 5 on Schedule 13D filed December 29, 2000 by the
Purchaser, Court Square, CBC, Citicorp, Citigroup Holdings and
Citigroup).
(c) Not applicable.
(d)(1) Exchange Agreement dated November 4, 1994, by and between the
Company and CVC (incorporated by reference to Exhibit 8 on
Schedule 13D filed December 29, 2000 by the Purchaser, Court
Square, CBC, Citicorp, Citigroup Holdings and Citigroup).
(d)(2) Voting Agreement dated November 4, 1994, by and among the
Company, CVC and Martin V. Alonzo (incorporated by reference to
Exhibit 6 on Schedule 13D filed December 29, 2000 by the
Purchaser, Court Square, CBC, Citicorp, Citigroup Holdings and
Citigroup).
(d)(3) Registration Rights Agreement dated November 10, 1994, by and
among the Company, CVC and Martin V. Alonzo (incorporated by
reference to Exhibit 7 on Schedule 13D filed December 29, 2000 by
the Purchaser, Court Square, CBC, Citicorp, Citigroup Holdings
and Citigroup).
(d)(4) Contribution Agreement dated as of December 18, 2000, by and
between Court Square and the Purchaser (incorporated by reference
to Exhibit 3 on Schedule 13D filed December 29, 2000 by the
Purchaser, Court Square, CBC, Citicorp, Citigroup Holdings and
Citigroup).
(e) Not applicable.
(f)+ Section 262 of the Delaware General Corporation Law (included as
Schedule II to the Offer to Purchase filed herewith as Exhibit
(a)(1)(i)).
(g) Not applicable.
(h) Not applicable.
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+ Previously filed.
