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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)
Esprit Telecom Group plc
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(Name of Issuer)
Ordinary Shares, nominal value (pound)0.01 each
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(Title of Class of Securities)
29665W104
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(CUSIP Number of Class of Securities)
Stephen Distler
E.M. Warburg, Pincus & Co., LLC
466 Lexington Avenue
New York, New York 10017
(212) 878-0600
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
Copies to:
William N. Dye
Willkie Farr & Gallagher
35 Wilson Street
London EC2M 2SJ
England
(011) 44-171-696-9060
November 11, 1998
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(Date of Event which Requires Filing of this Schedule)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following: [ ]
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SCHEDULE 13D
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CUSIP No. 29665W104 Page 2 of 8 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Warburg, Pincus Ventures, L.P. I.D. #13-3784037
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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 * OO
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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 Delaware
- -------------- --------- -------------------------------------------------------
7 SOLE VOTING POWER
0 Ordinary Shares
--------- -------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 15,442,150 Ordinary Shares
OWNED BY --------- -------------------------------------------------------
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH
0 Ordinary Shares
--------- -------------------------------------------------------
10 SHARED DISPOSITIVE POWER
15,442,150 Ordinary Shares
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
15,442,150 Ordinary Shares
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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) 12.3%
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14 TYPE OF REPORTING PERSON * PN
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* SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
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SCHEDULE 13D
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CUSIP No. 29665W104 Page 3 of 8 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Warburg, Pincus & Co. I.D. #13-6358475
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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 * N/A
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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 New York
- -------------- --------- -------------------------------------------------------
7 SOLE VOTING POWER
0 Ordinary Shares
--------- -------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 15,442,150 Ordinary Shares
OWNED BY --------- -------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 0 Ordinary Shares
--------- -------------------------------------------------------
10 SHARED DISPOSITIVE POWER
15,442,150 Ordinary Shares
- ---- ---------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
15,442,150 Ordinary Shares
- ---- ---------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES * [X]
- ---- ---------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 12.3%
- ---- ---------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON * PN
- ---- ---------------------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
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SCHEDULE 13D
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CUSIP No. 29665W104 Page 4 of 8 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
E.M. Warburg, Pincus & Co., LLC I.D. #13-3536050
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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 * N/A
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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 New York
- -------------- --------- -------------------------------------------------------
7 SOLE VOTING POWER
0 Ordinary Shares
--------- -------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 15,442,150 Ordinary Shares
OWNED BY --------- -------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 0 Ordinary Shares
--------- -------------------------------------------------------
10 SHARED DISPOSITIVE POWER
15,442,150 Ordinary Shares
- ---- ---------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
15,442,150 Ordinary Shares
- ---- ---------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES * [X]
- ---- ---------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 12.3%
- ---- ---------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON * OO
- ---- ---------------------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
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This Amendment No. 2 amends the statement on Schedule 13D filed with the
Securities and Exchange Commission on October 22, 1998 (the "Initial Filing"),
as amended by Amendment No. 1 to the Schedule 13D filed with the Securities and
Exchange Commission on November 2, 1998 (together with the Initial Filing, the
"Schedule 13D") on behalf of Warburg, Pincus Ventures, L.P., a Delaware limited
partnership ("Ventures"), Warburg, Pincus & Co., a New York general partnership
("WP"), and E.M. Warburg, Pincus & Co., LLC, a New York limited liability
company ("EMW"), relating to the Ordinary Shares, nominal value (pound)0.01 each
(the "Ordinary Shares"), of Esprit Telecom Group plc, a public limited company
organized under the laws of England and Wales, whose principal executive office
is located at Minerva House, Valpy Street, Reading, RG1 1AR, United Kingdom.
This statement is being filed by the Reporting Entities (as defined in the
Initial Filing). There has been no change in the number of Ordinary Shares held
by the Reporting Entities since the date of the Initial Filing and, other than
as set forth herein, there has been no material change in the information set
forth in the Schedule 13D. The Schedule 13D is supplementally amended as set
forth herein.
Item 4. Purpose of Transaction.
Item 4 of the Schedule 13D is hereby amended to add the following:
Extraordinary General Meeting
-----------------------------
In connection with the extraordinary general meeting of the Company's
shareholders to be held on November 23, 1998, Ventures and Apax (as defined in
the Initial Filing) have retained MacKenzie Partners, Inc., a proxy solicitation
firm.
On November 11, 1998, Ventures and Apax Funds Nominees Limited sent
shareholders of the Company a letter asking them to vote in favor of the
resolution proposed by Ventures and Apax Funds Nominees Limited to remove Mr.
Walter Anderson as a Director of the Company and against the resolutions
proposed by Mr. Anderson and Gold & Appel Transfer, S.A. The text of this letter
is set forth as Exhibit 99.8 and is incorporated herein by reference.
Page 5 of 8 Pages
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As a result of the foregoing actions by Ventures, Apax Funds Nominees
Limited and Apax, the Reporting Entities and Apax may be deemed to have formed a
"group" within the meaning of Section 13(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). Apax has informed the Reporting Entities
that it intends to file a separate Schedule 13D. The filing of this Amendment
No. 2 to the Schedule 13D shall not be construed as an admission that any
Reporting Entity is, for the purposes of Section 13(d) or 13(g) of the Exchange
Act, the beneficial owner of any securities covered by this Amendment No. 2 to
the Schedule 13D other than the securities stated herein to be beneficially
owned by such Reporting Entity. The Reporting Entities expressly disclaim
beneficial ownership of any Ordinary Shares beneficially owned by Apax.
The Reporting Entities may from time to time acquire additional
Ordinary Shares or dispose of Ordinary Shares through open market or privately
negotiated transactions or otherwise, depending on existing market conditions
and other considerations discussed below. The Reporting Entities intend to
review their investment in the Company on a continuing basis and, depending upon
the price and availability of Ordinary Shares, subsequent developments affecting
the Company, the Company's business and prospects, other investment and business
opportunities available to the Reporting Entities, general stock market and
economic conditions, tax considerations and other factors considered relevant,
may decide at any time not to increase, or to decrease, the size of their
investment in the Company.
Except as set forth herein or in Item 6, none of the Reporting Entities
nor, to the best of their knowledge, any person listed in Schedule I to the
Initial Filing, has any plans or proposals which relate to or would result in:
(a) the acquisition by any person of additional securities of the Company, or
the disposition of securities of the Company; (b) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving the
Company or any of its subsidiaries; (c) a sale or transfer of a material amount
of assets of the Company or any of its subsidiaries; (d) any change
Page 6 of 8 Pages
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in the present Board of Directors or management of the Company, including any
plans or proposals to change the number or term of directors or to fill any
existing vacancies on the board; (e) any material change in the present
capitalization or dividend policy of the Company; (f) any other material change
in the Company's business or corporate structure; (g) changes in the Company's
Memorandum and Articles of Association or instruments corresponding thereto or
other actions which may impede the acquisition of control of the Company by any
person; (h) causing a class of securities of the Company to be delisted from a
national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
(i) a class of equity securities of the Company becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Exchange Act; or
(j) any action similar to any of those enumerated above.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the
Issuer.
Item 6 of the Schedule 13D is hereby amended to add the following:
The information set forth in Item 4 above is incorporated herein by
reference.
Item 7. Material to be Filed as Exhibits.
Item 7 of the Schedule 13D is hereby amended to add the following:
99.8 Letter to Shareholders, dated November 11, 1998, from Ventures and
Apax Funds Nominees Limited.
Page 7 of 8 Pages
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SIGNATURES
After reasonable inquiry and to the best of our knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.
Dated: November 12, 1998 WARBURG, PINCUS VENTURES, L.P.
By: Warburg, Pincus & Co.,
General Partner
By:/s/Stephen Distler
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Stephen Distler
Partner
Dated: November 12, 1998 WARBURG, PINCUS & CO.
By:/s/ Stephen Distler
----------------------
Stephen Distler
Partner
Dated: November 12, 1998 E.M. WARBURG, PINCUS & CO., LLC
By:/s/ Stephen Distler
----------------------
Stephen Distler
Member
Page 8 of 8 Pages
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EXHIBIT INDEX
EXHIBIT NO. TITLE
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99.8 Letter to Shareholders, dated November 11, 1998, from
Warburg, Pincus Ventures, L.P. and Apax Funds Nominees
Limited.
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EXHIBIT 99.8
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APAX FUNDS NOMINEES LIMITED WARBURG, PINCUS VENTURES, L.P.
Registered in England no. 2140054 Registered in Delaware no. 133784037
Registered Office 466 Lexington Avenue
62 Green Street New York
London W1Y 4BA ENGLAND New York 10017 USA
November 11, 1998
Dear Fellow Shareholder:
We are writing to you as concerned shareholders of Esprit Telecom Group plc
("Esprit"). We currently together beneficially own approximately 39% of Esprit.
As you may know, an extraordinary general shareholders meeting of Esprit
has been called for November 23, 1998 in London, England.
At the meeting, shareholders will consider:
1) the proposals of Walter Anderson, co-founder
and former Chairman of the Board of Esprit,
and Gold & Appel Transfer, S.A., an entity
for which Mr. Anderson acts as
attorney-in-fact, to remove from the Board of
Esprit David Oertle, Esprit's Chief Executive
Officer, Sir Robin Biggam, Esprit's newly
appointed Chairman, John McMonigall and
Dominic Shorthouse, Esprit's non-executive
directors; and
2) our proposal to remove Mr. Anderson from the
Board of Esprit.
WE OPPOSE MR. ANDERSON'S PROPOSALS AND URGE YOU TO VOTE AGAINST EACH OF HIS
PROPOSALS.
WE ASK YOU TO VOTE IN FAVOR OF OUR PROPOSAL TO REMOVE MR. ANDERSON FROM THE
BOARD OF THE COMPANY.
In March 1997, Mr. Oertle was appointed unanimously by the Board of
Esprit as its Chief Executive Officer, following an extensive search that
continued for about eight months. The entire Board then agreed that Mr. Oertle
was the executive who could most effectively accomplish Esprit's goal of
becoming a leading European telecommunications company.
We believe that shareholders would agree with our assessment that Esprit's
success as a leading player in the European telecommunications industry is the
direct result of the intense work of Mr. Oertle and his team.
Our confidence in Mr. Oertle and his team's performance at Esprit to date
is underpinned by the following key factors:
* Esprit has exhibited very strong growth throughout European
markets and has established itself as a significant competitor in
each local market;
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* Esprit's long-term infrastructure strategy is now rapidly
delivering a state-of-the-art fibre network that, by connecting
the most important traffic routes in Europe, is intended to
support Esprit's growth and competitive position across the
expanding spectrum of telecommunication services;
* Esprit's information systems have been radically redesigned to
enable it to compete successfully in the telecommunications
market of the next century;
* Esprit's share price has increased substantially since Mr.
Oertle, in late 1997, had the opportunity to present to the
market his management team's plans for the Esprit of the future;
and
* Esprit is well capitalized to take advantage of opportunities in
the European markets.
For these reasons, among others, we, as substantial shareholders, firmly
believe that Mr. Oertle and his management team represent the future of Esprit.
We remain grateful to Mr. Anderson as one of Esprit's founders. His vision
was instrumental in setting Esprit in the right direction. However, we believe
that Mr. Oertle, succeeding Mr. Anderson as Chief Executive Officer, has
successfully managed to improve the value of the Company and position it for the
future.
The rapidly changing challenges in the telecommunications industry
converging toward broadcasting and information technology, together with the
growing complexities shaping the European communications domain of the future,
limit the number of candidates who could be regarded as ideal to fulfill the
role of independent Chairman of Esprit. We believe that Sir Robin Biggam, who
was appointed as non-executive director and Chairman of the Board on October 5,
1998, is such a candidate. Sir Robin Biggam is currently chairman of the
Independent Television Commission in the United Kingdom. He is also chairman of
Fairey Group and Electrium Limited and is a non-executive director of British
Aerospace plc and British Energy plc. He was formerly chairman and chief
executive of BICC plc and finance director at ICL and Dunlop Holdings.
The appointment of Sir Robin Biggam as independent non-executive Chairman
of Esprit represents a significant step forward for Esprit and its ability to
compete successfully in the next century.
We are very confident in Esprit's future as a premier, independent
telecommunications operator in the fast-growing European telecommunications
market.
We believe that any disruption to Mr. Oertle's vision and Esprit's
management team would be against the best interests of the Company in the
pursuit of its ambitious mission.
2
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WE THEREFORE ASK YOU TO VOTE FOR THE REMOVAL OF MR. ANDERSON AND AGAINST
THE PROPOSALS CONCERNING THE REMOVAL OF DAVID OERTLE, SIR ROBIN BIGGAM, JOHN
MCMONIGALL AND DOMINIC SHORTHOUSE.
Yours faithfully Yours faithfully
/s/ Apax Funds Nominees Limited /s/ Warburg, Pincus Ventures, L.P.
for and on behalf of for and on behalf of
APAX FUNDS NOMINEES LIMITED WARBURG, PINCUS VENTURES, L.P.
3
