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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13E-3
RULE 13E-3 TRANSACTION STATEMENT
(Pursuant to Section 13(e) of the
Securities Exchange Act of 1934
and Rule 13e-3 (Section 240.13e-3) Thereunder)
_______________
American Paging, Inc.
(Name of the Issuer)
American Paging, Inc.
API Merger Corp.
Telephone and Data Systems, Inc.
(Name of Person(s) Filing Statement)
COMMON SHARES, PAR VALUE $1.00 PER SHARE
(Title of Class of Securities)
02882K10
(CUSIP Number of Class of Securities)
__________________
LeRoy T. Carlson, Jr. (312) 630-1900
President and Chief Executive Officer
Telephone and Data Systems, Inc.
30 N. LaSalle Street, Suite 4000, Chicago, Illinois 60602
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Person(s) Filing Statement)
__________________
WITH COPY TO:
James G. Archer (212) 906-2000
Sidley & Austin
875 Third Avenue, New York, New York 10022
______________
This statement is filed in connection with (check the appropriate box):
a. / / The filing of solicitation materials or an information statement
subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the Securities
Exchange Act of 1934.
b. / / The filing of a registration statement under the Securities Act of
1933.
c. /x / A tender offer.
d. / / None of the above.
Check the following box if the soliciting materials or information statement
referred to in checking box (a) are preliminary copies:
CALCULATION OF FILING FEE
TRANSACTION VALUATION AMOUNT OF FILING FEE
$9,122,120* $1,824
____________________
* Note: The Transaction Valuation is calculated by multiplying (i) $2.50, the
per share tender offer price, by (ii) 3,658,946 (the total of 7,645,446 (the
number of Common Shares outstanding) minus 4,000,000 (the number of Common
Shares owned by API Merger Corp.) plus 13,500 (the number of Common Shares
subject to options with an exercise price less than $2.50)) and subtracting
from such product the aggregate exercise price of the options.
/X/ Check box if any part of the fee is offset by Rule 0-11(a)(2) and identify
the filing with which the offsetting fee was previously paid. Identify the
previous filing by registration statement number, or the Form or Schedule and
the date of its filing.
Amount Previously Paid: $1,824
Form of Registration No.: Schedule 14D-1 (13D (Amendment No. 2))
Filing Party: API Merger Corp. and Telephone and Data Systems, Inc.
Date Filed: February 18, 1998
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INTRODUCTION
This Rule 13e-3 Transaction Statement on Schedule 13E-3 (the "Schedule
13E-3") is being filed by (i) API Merger Corp., a Delaware corporation
("Purchaser") and a direct wholly owned subsidiary of Telephone and Data
Systems, Inc., a corporation organized under the laws of Iowa ("TDS"), (ii)
TDS and (iii) American Paging, Inc., a Delaware corporation (the
"Company"), pursuant to Section 13(e) of the Securities Exchange Act of 1934,
as amended, and Rule 13e-3 thereunder in connection with the tender offer by
Purchaser for all the outstanding common shares, par value $1.00 per share
(the "Common Shares"), of the Company not already beneficially owned by
Purchaser or any of its affiliates, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated February 18, 1998 (the
"Offer to Purchase") and the related Letter of Transmittal (which, together
with the Offer to Purchase, constitute the "Offer"), copies of which are
filed as Exhibits (d)(1) and (d)(2) hereto, respectively.
The following Cross Reference Sheet, prepared pursuant to General Instruction
F to Schedule 13E-3, shows the location in the Tender Offer Statement on
Schedule 14D-1 filed by TDS and Purchaser (the "Schedule 14D-1) with the
Securities and Exchange Commission on the date hereof of the information
required to be included in this Schedule 13E-3. The information set forth in
the Schedule 14D-1, including all exhibits thereto, is hereby expressly
incorporated herein by reference as set forth in the Cross Reference Sheet
and the responses in this Schedule 13E-3, and such responses are qualified in
their entirety by reference to the information contained in the Offer to
Purchase and the schedules thereto.
The information contained in this Schedule 13E-3 concerning the Company,
including, without limitation, information concerning the background of the
transaction, the deliberations of the Company's Board of Directors in
connection with the transaction, the opinion of the Company's financial
advisor, and the Company's capital structure and historical financial
statements, was supplied by the Company. TDS and Purchaser take no
responsibility for the accuracy of such information. The information
contained in this Schedule 13E-3 concerning TDS and Purchaser was supplied by
TDS and Purchaser. The Company takes no responsibility for the accuracy of
such information.
CROSS REFERENCE SHEET
ITEM IN WHERE LOCATED IN
SCHEDULE 13E-3 SCHEDULE 14D-1
Item 1(a) Item 1(a)
Item 1(b) Item 1(b)
Item 1(c) Item 1(c)
Item 1(d) *
Item 1(e) *
Item 1(f) *
Item 2(a) Item 2(a)
Item 2(b) Item 2(b)
Item 2(c) Item 2(c)
Item 2(d) Item 2(d)
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ITEM IN WHERE LOCATED IN
SCHEDULE 13E-3 SCHEDULE 14D-1
Item 2(e) Item 2(e)
Item 2(f) Item 2(f)
Item 2(g) Item 2(g)
Item 3(a) Item 3(a) and Item 3(b)
Item 3(b) Item 3(b)
Item 4 *
Item 5 Item 5
Item 6(a) Item 4(a)
Item 6(b) *
Item 6(c) Item 4(b)
Item 6(d) Item 4(c)
Item 7(a) Item 5
Item 7(b) *
Item 7(c) *
Item 7(d) *
Item 8 *
Item 9 *
Item 10(a) Item 6(a)
Item 10(b) *
Item 11 Item 7
Item 12(a) *
Item 12(b) *
Item 13 *
Item 14 *
Item 15(a) *
Item 15(b) Item 8
Item 16 Item 10(f)
Item 17 Item 11
* The Item is located in the Schedule 13E-3 only.
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ITEM 1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION.
(a)-(c) The response to Item l (a)-(c) of the Schedule 14D-1 is incorporated
herein by reference.
(d) The information set forth in the Offer to Purchase under "THE TENDER OFFER
- -- 6. Price Range of Shares; Dividends" is incorporated herein by reference.
(e) Not applicable.
(f) The information set forth in the Offer to Purchase under "SPECIAL FACTORS
- --Background of the Offer and the Merger" and "THE TENDER OFFER -- 8. Certain
Information Concerning Purchaser, TDS and The Voting Trust" is incorporated
herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) This Statement is being filed by Purchaser, TDS and the Company.
The response to Item 2 of the Schedule 14D-1 is incorporated herein by
reference. The information concerning the Company name, state or other place
of organization, principal business and address of the principal office of
each of the Company and the information concerning the name, business
address, present principal occupation or employment and the name, principal
business and address of any corporation or other organization in which such
employment or occupation is conducted, material occupations, positions,
offices or employments during the last five years and citizenship of each of
the executive officers and directors of Purchaser and TDS are set forth under
"INTRODUCTION", "THE TENDER OFFER - 7". Certain Information Concerning the
Company and Schedule II of the Offer to Purchase and are incorporated herein
by reference.
(e)-(f) The response to Item 2 of the Schedule 14D-1 is incorporated herein
by reference with respect to TDS and Purchaser. During the last five years,
neither the Company nor, to the best knowledge of the Company, none of the
persons listed in Schedule II of the Offer to Purchase (i) has been convicted
in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) was party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
further violations of, or prohibiting activities subject to, federal or state
securities laws or finding any violation of such laws.
(g) The response to Item 2 of the Schedule 14D-1 is incorporated herein by
reference with respect to TDS and Purchaser. The citizenship of the
directors and executive officers of the Company are set forth in Schedule II
to the Offer to Purchase and are incorporated herein by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS.
(a)-(b) The response to Item 3 of the Schedule 14D-1 is incorporated herein by
reference.
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ITEM 4. TERMS OF THE TRANSACTION.
(a) The information set forth in the Offer to Purchase on the cover page
thereof and under "INTRODUCTION", "SPECIAL FACTORS -- Background of the Offer
and the Merger", "SPECIAL FACTORS -- The Merger Agreement", "THE TENDER OFFER
- -- 1. Terms of the Offer; Expiration Date", "THE TENDER OFFER -- 2.
Acceptance for Payment and Payment for Common Shares", "THE TENDER OFFER --
3. Procedures for Accepting the Offer and Tendering Common Shares", "THE
TENDER OFFER -- 4. Withdrawal Rights", "THE TENDER OFFER -- 10. Dividends
and Distributions", "THE TENDER OFFER -- 12. Certain Conditions of the
Offer", "THE TENDER OFFER -- 13. Certain Legal Matters and Regulatory
Approvals" and "THE TENDER OFFER -- 15. Miscellaneous" is incorporated
herein by reference.
(b) Not applicable.
ITEM 5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE.
(a)-(e) The response to Item 5(a)-(e) of the Schedule 14D-1 is incorporated
herein by reference. The information set forth under "SPECIAL FACTORS
- --Interests of Certain Persons in the Offer and the Merger" of the Offer to
Purchase is incorporated herein by reference.
(f)-(g) The response to Item 5(f)-(g) of the Schedule 14D-1 is incorporated
herein by reference.
ITEM 6. SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION.
(a) The response to Item 4(a) of the Schedule 14D-1 is incorporated herein
by reference.
(b) The information set forth in the Offer to Purchase in "SPECIAL FACTORS
- --Fees and Expenses" and "THE TENDER OFFER -- 14. Fees and Expenses" is
incorporated herein by reference.
(c) The response to Item 4(a) of the Schedule 14D-1 is incorporated herein
by reference.
(d) The response to Item 4(a) of the Schedule 14D-1 is incorporated herein
by reference.
ITEM 7. PURPOSE(s), ALTERNATIVES, REASONS AND EFFECTS.
(a) The response to Item 5 of the Schedule 14D-1 is incorporated herein by
reference.
(b) The information set forth in the Offer to Purchase under "SPECIAL
FACTORS -- Background of the Offer and Merger", "SPECIAL FACTORS --
Recommendation of the Special Committee and the Company's Board; Fairness of
the Offer and the Merger" and "SPECIAL FACTORS -- Purpose and Structure of
the Offer and the Merger; Reasons of TDS and Purchaser for the Offer and the
Merger" is incorporated herein by reference.
(c)-(d) The information set forth in the Offer to Purchase under
"INTRODUCTION", "SPECIAL FACTORS -- Background of the Offer and the Merger",
"SPECIAL FACTORS --Recommendation of the Special Committee and the Company's
Board; Fairness of the Offer and the Merger", "SPECIAL FACTORS -- Purpose and
Structure of the Offer and the Merger; Reasons of TDS and Purchaser for the
Offer and the Merger", "SPECIAL FACTORS -- Plans for the Company After the
Offer and the Merger; Certain Effects of the Offer", "THE TENDER
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OFFER -- 5. Certain Federal Income Tax Consequences" and "THE TENDER OFFER
- -- 11. Effect of the Offer on the Market for the Common Shares, American
Stock Exchange, Inc. and Exchange Act Registration" is incorporated herein by
reference.
ITEM 8. FAIRNESS OF THE TRANSACTION.
(a)-(f) The information set forth in the Offer to Purchase under
"INTRODUCTION", "SPECIAL FACTORS -- Background of the Offer and the Merger",
"SPECIAL FACTORS --Recommendation of the Special Committee and the Company's
Board; Fairness of the Offer and the Merger", "SPECIAL FACTORS -- Position of
TDS and Purchaser Regarding Fairness of the Offer and the Merger", "SPECIAL
FACTORS --Purpose and Structure of the Offer and the Merger; Reasons of TDS
and Purchaser for the Offer and the Merger" is incorporated herein by
reference.
ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS.
(a)-(c) The information set forth in the Offer to Purchase under "SPECIAL
FACTORS -- Background of the Offer and the Merger", "SPECIAL FACTORS
- --Recommendation of the Special Committee and the Company's Board; Fairness
of the Offer and the Merger", "SPECIAL FACTORS -- Opinion of Financial
Advisor to the Special Committee", "SPECIAL FACTORS -- Position of TDS and
Purchaser Regarding Fairness of the Offer and the Merger", "SPECIAL FACTORS
- -- Presentation of Financial Advisor to TDS" and in Schedule III is
incorporated herein by reference.
ITEM 10. INTEREST IN SECURITIES OF THE ISSUER.
(a)-(b) The response to Item 6(a) of the Schedule 14D-1 is incorporated
herein by reference.
ITEM 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO THE
ISSUER'S SECURITIES.
The response to Item 7 of the Schedule 14D-1 and the information set forth in
the Offer to Purchase under "SPECIAL FACTORS -- Beneficial Ownership of Common
Stock" and "SPECIAL FACTORS -- Related Party Transactions" are incorporated
herein by reference.
ITEM 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS WITH REGARD
TO THE OFFER AND THE MERGER.
(a)-(b) The information set forth in the Offer to Purchase under
"INTRODUCTION", "SPECIAL FACTORS -- Background of the Offer and the Merger",
"SPECIAL FACTORS --Recommendation of the Special Committee and the Company's
Board; Fairness of the Offer and the Merger", "SPECIAL FACTORS -- Interests
of Certain Persons in the Offer and the Merger" and "SPECIAL FACTORS
- --Beneficial Ownership of Common Stock" is incorporated herein by reference.
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ITEM 13. OTHER PROVISIONS OF THE OFFER AND THE MERGER.
(a) The information set forth in the Offer to Purchase under "SPECIAL
FACTORS --Rights of Shareholders in the Merger", "SPECIAL FACTORS --The
Merger Agreement" and in Schedule IV is incorporated herein by reference.
(b) Not applicable.
(c) Not applicable.
ITEM 14. FINANCIAL INFORMATION.
(a) The information set forth in the Offer to Purchase under "THE
TENDER OFFER -- 7. Certain Information Concerning the Company" is
incorporated herein by reference. In addition, the Company's audited
financial statements for the fiscal years ended 1997 and 1996 are attached to
the Offer to Purchase as Schedule V.
(b) Not applicable.
ITEM 15. PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED.
(a) The information set forth in the Offer to Purchase under "SPECIAL
FACTORS --Background of the Offer and the Merger", "SPECIAL FACTORS
- --Recommendation of the Company's Board; Fairness of the Offer and the
Merger", "SPECIAL FACTORS --Plans for the Company after the Offer and the
Merger; Certain Effects of the Merger", "SPECIAL FACTORS -- Interests of
Certain Persons in the Offer and the Merger" and "THE TENDER OFFER -- 11.
Effect of the Offer on the Market for the Shares, American Stock Exchange,
Inc. and Exchange Act Registration" is incorporated herein by reference.
(b) The response to Item 8 of the Schedule 14D-1 is incorporated herein
by reference.
ITEM 16. ADDITIONAL INFORMATION.
The response to Item 10(f) of the Schedule 14D-1 is incorporated herein by
reference.
ITEM 17. MATERIAL TO BE FILED AS EXHIBITS.
(a) Not applicable.
(b)(1) Opinion of PaineWebber Incorporated, dated February 10, 1998
(attached as Schedule III to Exhibit(d)(1)).*
(b)(2) Presentation of Credit Suisse First Boston Corporation, dated
February 10, 1998.
(c)(1) Agreement and Plan of Merger, dated as of February 11, among TDS,
Purchaser and the Company.*
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(c) (2) Asset Contribution Agreement, dated as of December 22, 1997, among
TDS, TSR Paging Inc. and TSR Wireless LLC, is hereby incorporated herein by
reference to Exhibit 2.1 of the Schedule 13-D relating to the Company filed
by TDS on December 23, 1998.
(c)(3) Option Agreement, dated as of December 22, 1997, between TDS and TSR
Paging Inc., is hereby incorporated herein by reference to Exhibit 2.2 of
the Schedule 13-D relating to the Company filed by TDS on December 23, 1998.
(c)(4) Restated Certificate of Incorporation, as amended, is hereby
incorporated by reference to Exhibit 3.1 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1994.
(c)(5) Voting Trust Agreement, dated as of June 30, 1989, with respect to
Common Shares of TDS, is hereby incorporated by reference to Exhibit 9.1(a),
Exhibit 9.1(b) and Exhibit 9.1(c) to the Company's Annual Report on Form 10-K
for the year ended December 31, 1994.
(c)(6) Exchange Agreement, between the Company and TDS, is hereby
incorporated by reference to Exhibit 10.1 to the Company's Registration
Statement on Form S-1 (Registration No. 33-72707).
(c)(7) Revolving Credit Agreement, between the Company and TDS, is hereby
incorporated by reference to Exhibit 10.2 to the Company's Registration
Statement on Form S-1 (Registration No. 33-72707).
(c)(8) Amendment to Revolving Credit Agreement, between the Company and
TDS, dated March 5, 1997 and effective January 1, 1997, is hereby
incorporated by reference to Exhibit 10.2(b) to the Company's Annual Report
on Form 10-K for the year ended December 31, 1996.
(c)(9) Amendment to Revolving Credit Agreement, between the Company and TDS,
dated January 13, 1998.*
(c)(10) Intercompany Agreement, between the Company and TDS, is hereby
incorporated by reference to Exhibit 10.5 to the Company's Registration
Statement on Form S-1 (Registration No. 33-72707).
(c)(11) Registration Rights Agreement, between the Company and TDS, as
amended, is hereby incorporated by reference to Exhibit 10.6 to the Company's
Registration Statement on Form S-1 (Registration No. 33-72707).
(c)(12) Employee Benefit Plans Agreement, between the Company and TDS, is
hereby incorporated by reference to Exhibit 10.8 to the Company's
Registration Statement on Form S-1 (Registration No. 33-72707).
(d)(1) Form of Offer to Purchase, dated February 18, 1998.*
(d)(2) Form of Letter of Transmittal.*
(d)(3) Form of Letter from Credit Suisse First Boston Corporation to Brokers,
Dealers, Commercial Banks, Trust Companies and Other Nominees.*
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(d)(4) Form of Letter from Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees to Clients.*
(d)(5) Form of Notice of Guaranteed Delivery.*
(d)(6) Form of Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.*
(d)(7) Summary Advertisement as published in the Wall Street Journal on
February 18, 1998.*
(d)(8) Form of Joint Press Release dated February 18, 1998 issued by the
Company and TDS.*
(d)(9) Letter to Company Shareholders, dated February 18, 1998.*
(e) Summary of Stockholder Appraisal Rights and Section 262 of the
Delaware General Corporation Law (attached as Schedule IV to Exhibit (d)(1)).*
(f) Not applicable.
________________________
* Incorporated by reference to the Statement in Schedule 14D-1 filed by
Purchaser and TDS on February 18, 1998.
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SIGNATURES
After due inquiry and to the best of its knowledge and belief, each of the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: February 18, 1998 API MERGER CORP.
By: /s/ LeRoy T. Carlson, Jr.
-------------------------
Name: LeRoy T. Carlson, Jr.
Title: President
TELEPHONE AND DATA SYSTEMS, INC.
By: /s/ LeRoy T. Carlson, Jr.
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Name: LeRoy T. Carlson, Jr.
Title: President
Signature Page to Schedule 13E-3
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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 statement is true, complete and
correct.
Dated: February 18, 1998 AMERICAN PAGING, INC.
By: /s/ Terrence T. Sullivan
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Name: Terrence T. Sullivan
Title: President
Signature Page for Schedule 13E-3
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EXHIBIT INDEX
Exhibit No. Exhibit Description
(b)(2) Presentation of Credit Suisse First Boston
Corporation, dated February 10, 1998.
12
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FEBRUARY 10, 1998
MATERIALS PREPARED FOR DISCUSSION
TELEPHONE AND DATA SYSTEMS, INC.
BOARD OF DIRECTORS
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TELEPHONE AND DATA SYSTEMS, INC.
AMERICAN PAGING, INC.: STAND ALONE VALUATION
- Paging Industry Generally:
- Increased competition
- High capital requirements
- Depressed earnings, cash flow and market valuations
- APP:
- Weak financial performance
- Failed restructuring efforts
- Growth in subscribers declining
- Cash flow requirements of $3.0 million per month
- No business plan
Given, among other things, the above issues, APP's value on a stand-alone
basis is likely to be defined by the value of its assets on a liquidation
basis -- a figure that would likely be below that placed on APP by a
potential acquiror assessing the Company not only for its assets but also for
its future potential under the acquiror's own management team, philosophy and
business capabilities.
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TELEPHONE AND DATA SYSTEMS, INC.
OVERVIEW OF SALE PROCESS
- - Sale process initiated in summer of 1996.
- - Approximately 50 potential acquirors were contacted regarding a possible
transaction with APP.
- - A Confidential Memorandum was requested by and furnished to approximately
ten potential acquirors, both strategic and financial, together with a bid
procedure letter requesting that non-binding indications of interest be
submitted by the end of January 1997.
- - Written indications of interest were not received until the spring of 1997;
only two bidders, TSR and one other strategic acquiror ("Otherbidco"),
initially submitted indications of interest.
- - From May through December 1997, APP worked with both TSR and Otherbidco to
facilitate due diligence and assist them in developing firm and binding
proposals.
- TSR's final proposal yields an estimated present value for TDS's
30% equity stake in the combined TSR/APP, based on a discounted
cash flow analysis, of approximately $143 million - $180 million.
- Otherbidco's final proposal had an estimated present value of
approximately $105 million - $110 million.
- - In early December, an acquisition proposal also was received from one
financial buyer consisting of $95 million in cash and a contingent note of
$25 million, subject to due diligence and financing.
- - Definitive agreement executed with TSR.
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