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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
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(AMENDMENT NO. 7)
TALLEY INDUSTRIES, INC.
(Name of Subject Company)
SCORE ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
CARPENTER TECHNOLOGY CORPORATION
(Bidders)
Series A Convertible Preferred Stock
(Title of Class of Securities)
87468720
(CUSIP Number of Class of Securities)
Series B $1 Cumulative Convertible Preferred Stock
(Title of Class of Securities)
87468730
(CUSIP Number of Class of Securities)
Common Stock, $1.00 Par value per share
(Including the associated Preferred Stock Purchase Rights)
(Title of Class of Securities)
87468710
(CUSIP Number of Class of Securities)
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JOHN R. WELTY
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
CARPENTER TECHNOLOGY CORPORATION
101 WEST BERN STREET
READING, PENNSYLVANIA 19612-4662
Telephone: (610) 208-2000
(Name, Address and Telephone Number of Persons Authorized to
Receive Notices and Communications on Behalf of Bidders)
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with a copy to:
DECHERT PRICE & RHOADS
4000 BELL ATLANTIC TOWER
1717 ARCH STREET
PHILADELPHIA, PA 19103
(215) 994-4000
ATTENTION: HERBERT F. GOODRICH, JR.
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This Amendment No. 7 to the Schedule 14D-1 relates to a tender offer by
Score Acquisition Corp., a Delaware corporation (the "Purchaser") and a wholly
owned subsidiary of Carpenter Technology Corporation, a Delaware corporation
("Parent"), to purchase all outstanding shares of Series A Convertible Preferred
Stock ("Series A Preferred Shares"), Series B $1 Cumulative Convertible
Preferred Stock ("Series B Preferred Shares") and Common Stock, par value $1.00
per share ("Common Shares"), of Talley Industries, Inc., a Delaware corporation
(the "Company"), including the associated Preferred Stock Purchase Rights (the
"Rights") issued pursuant to the Rights Agreement between the Company and
ChaseMellon Shareholder Services L.L.C., as Rights Agent, as amended and
restated on February 2, 1996, (collectively, the "Shares"), at a purchase price
of $11.70 per Series A Preferred Share, $16.00 per Series B Preferred Share and
$12.00 per Common Share, net to the seller in cash, without interest thereon,
upon the terms and subject to the conditions set forth in the Offer to Purchase,
dated October 2, 1997 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which together constitute the "Offer"), copies of which are filed
as Exhibit (a)(1) and (a)(2), respectively, to the Schedule 14D-1 filed with the
Securities and Exchange Commission on October 2, 1997. The purpose of this
Amendment No. 7 is to amend and supplement Items 10 and 11 of the Schedule 14D-1
as described below.
ITEM 10. Additional Information
(f) Item 10(f) is hereby amended and supplemented by the following:
Parent announced on October 28, 1997, that it had extended the
Expiration Date of the Offer until 12:00 midnight (EST) on Thursday, December 4,
1997.
Reference is made to the press release issued by Parent on October 28,
1997, a copy of which is filed as Exhibit (a)(15) to the Schedule 14D-1 and is
incorporated herein by reference.
Exhibit (a)(14) to the Schedule 14D-1 is hereby amended and restated in
its entirety by Exhibit (a)(16) hereto.
ITEM 11. Material to be Filed as Exhibits.
(a)(15) Text of Press Release issued by Parent on October 28, 1997.
(a)(16) Text of questions and answers regarding the Offer which first
appeared on Parent's Internet web site on October 27, 1997.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Amendment No. 7 is true, complete and
correct.
CARPENTER TECHNOLOGY CORPORATION
By: /s/ John R. Welty
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Name: John R. Welty
Title: Vice President, General Counsel
and Secretary
SCORE ACQUISITION CORP.
By: /s/ John R. Welty
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Name: John R. Welty
Title: Secretary
Dated: October 29, 1997
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NEWS
CARPENTER
Carpenter Technology Corporation
P.O. Box 14662
Reading, Pennsylvania 19612-4662
Contact: Robert J. Dickson
Treasurer
(610) 208-2166
IMMEDIATE RELEASE
CARPENTER EXTENDS EXPIRATION DATE
OF OFFER FOR TALLEY
Reading, PA (October 28, 1997) - Carpenter Technology Corporation
(NYSE:CRS) announced today that it will extend the expiration date of its tender
offer for outstanding common and preferred shares of Talley Industries, Inc.
(NYSE:TAL). The offer will be extended from midnight (EST) Thursday, October 30
to midnight (EST) Thursday, December 4, 1997.
Carpenter announced October 20 that the U.S. Department of Justice had
requested additional information related to the pending acquisition, as part of
its review under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The
tender offer extension announced today reflects the time estimated to respond to
this request and the subsequent review period allowed the Justice Department
under the Act, according to John R. Welty, vice president, general counsel and
secretary at Carpenter.
Carpenter initiated a tender offer for Talley October 2 at a price of $12
per share of common stock, $11.70 per share of Series A convertible preferred
stock and $16 per share of Series B convertible preferred stock. The offer is
contingent upon shares representing a majority of the voting power of Talley
stock being tendered and upon other customary contingencies, including
expiration of the Hart-Scott-Rodino waiting period.
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Page2/Carpenter
As previously announced, Carpenter has completed the arrangements for
financing the transaction with four banks.
Carpenter, headquartered in Reading, Pa., manufactures and distributes
specialty materials, including stainless steel, titanium and other specialty
alloys, and various engineered products. In recent years, the company has
embarked on a growth strategy that entails expanding metals manufacturing
capacity, increasing international sales and diversifying into related specialty
materials technologies. Talley's stainless steel products group would provide
Carpenter with additional manufacturing capacity and distribution outlets.
For the first quarter of fiscal year 1998 (ended September 30, 1997),
Carpenter had sales of $249.5 million, net income of $17.1 million and earnings
per share on a primary basis of $.85. In fiscal year 1997 (ended June 30, 1997).
Carpenter had sales of $939 million.
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Questions and Answers about Carpenter's
Tender Offer for Talley Industries
Q: Why is Carpenter interested in Talley?
A: Carpenter began acquiring companies in 1993 as a way to achieve higher
growth. Since then, the company has completed 10 acquisitions, giving Carpenter
access to new materials technologies, a greater international presence, an
expanded product line and additional metals manufacturing capacity.
Talley has a stainless steel products group, which includes a modern mini-mill
that produces stainless steels and specialty alloys and a master distributor.
Carpenter needs additional specialty alloys manufacturing capacity to meet
customer demands. In addition, the company is seeking to acquire other
distribution companies, as a way to supplement its direct-to-customer selling
practices.
Talley also has a government products and services group and an industrial
products group. Carpenter expects to divest the companies in these groups
because they do not provide synergies to Carpenter's existing engineered
materials businesses.
Q: What is the value of this transaction?
A: Approximately $312 million, representing $185 million to acquire Talley's
15.4 million outstanding common and preferred shares and the assumption of debt.
Q: Does Carpenter have financing in place to acquire all of Talley?
A: Yes. Carpenter has increased its unsecured revolving credit agreement with
four banks to $400 million.
Q: What purchase price is Carpenter offering for Talley shares?
A: $12 per share of common stock, $11.70 per share of Series A convertible
preferred stock and $16 per share of Series B convertible preferred stock.
Q: Is Carpenter's offer valued fairly?
A: Carpenter believes so. Carpenter's $12 per common share offer for Talley was
based on internal assessment and the valuation of Carpenter's investment
advisor, Credit Suisse First Boston. This bid was supported by Talley's Board
and an analysis by J.P. Morgan, Talley's investment advisor, who valued Talley
at $9 to $10 per common share if business units of the company were sold
separately.
Q: Given the public offering, is it possible to receive Carpenter stock instead
of cash?
A: No. The Talley Board wanted a cash offer from Carpenter because of the
certainty of a cash offer.
Q: Is this a friendly acquisition?
A: Yes. A majority of the Talley Board supported Carpenter's offer to acquire
Talley.
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Q: When does the tender offer to acquire Talley shares end?
A: At midnight (Eastern Standard Time) on December 4.
Q: What will happen after the tender offer expires?
A: The offer is conditioned upon shares representing a majority of the voting
power of Talley stock being tendered and upon other customary contingencies,
including expiration of the Hart-Scott-Rodino waiting period. Carpenter
announced October 28 that the Justice Department had requested additional
information under the provisions of the Hart-Scott-Rodino Act, and was expecting
the review to be complete by December 4.
If the waiting period expires and 90 percent or more of the outstanding shares
are tendered, the acquisition of Talley by Carpenter could be completed in
December.
If the waiting period expires and fewer than 90 percent of Talley shares are
tendered, Carpenter could still proceed with an acquisition as long as more than
50 percent of the shares are tendered. Then, a shareholders' meeting would need
to be held to vote on the acquisition. Because Carpenter would control a
majority of Talley's stock, the acquisition would proceed. In this scenario, the
acquisition of Talley by Carpenter could be completed in early 1998.
If less than half of Talley's shares are tendered by December 4, Carpenter can
extend the deadline when shares can be tendered or decide not to proceed with
the acquisition.
Q: If I have Talley shares, how do I sell them to Carpenter?
A: Tender documents were sent in early October to all shareholders of record.
D.F. King & Co., Inc., a shareholder solicitation firm, is contacting Talley
shareholders as well. The procedure is to complete the letter of transmittal
sent to shareholders, sending it, delivering it or faxing it to the appropriate
ChaseMellon Shareholder Services address by midnight on December 4. Questions
about the procedure can be addressed to D.F. King, the information agent for
this transaction, at 1-800-347-4750.
Q: Are there any incidental administrative costs associated with my tender?
A: No.
