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Exhibit 99(a)(1)(C)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
(Rule 14d-101)
Solicitation/Recommendation Statement
Under Section 14(d)(4) of the Securities Exchange Act of 1934
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WESTFIELD AMERICA, INC.
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(Name of Subject Company)
WESTFIELD AMERICA, INC.
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(Name of Person(s) Filing Statement)
COMMON STOCK, PAR VALUE $.01 PER SHARE
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(Title of Class of Securities)
959910 10 0
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(CUSIP Number of Class of Securities)
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
CHIEF FINANCIAL OFFICER
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
TELEPHONE: (▇▇▇) ▇▇▇-▇▇▇▇
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(Name, address and telephone number of person authorized to receive
notice and communications on behalf of the person filing statement)
WITH A COPY TO:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇, ESQUIRE
WOLF, BLOCK, ▇▇▇▇▇▇ AND ▇▇▇▇▇-▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
TELEPHONE: ▇▇▇-▇▇▇-▇▇▇▇
FACSIMILE: ▇▇▇-▇▇▇-▇▇▇▇
/ / Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
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ITEM 1. SUBJECT COMPANY INFORMATION.
NAME AND ADDRESS.
The name of the subject company is Westfield America, Inc., a Missouri
corporation (the "Company"), and the address and telephone number of its
principal executive offices are ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (▇▇▇) ▇▇▇-▇▇▇▇.
SECURITIES.
This Schedule 14D-9 relates to the Company's Common Stock, par value $.01
per share (the "Shares"). As of February 14, 2001, 73,354,863 Shares were issued
and outstanding.
ITEM 2. IDENTITY AND BACKGROUND OF FILING PERSON.
NAME AND ADDRESS.
The name, business address and business telephone number of the Company,
which is the person filing this statement, are set forth in Item 1 above.
TENDER OFFER.
This Schedule 14D-9 relates to a tender offer by Westfield America
Management Limited, an Australian public company ("Purchaser"), in its capacity
as responsible entity and trustee of Westfield America Trust, an Australian
public unit trust, disclosed in a Tender Offer Statement on Schedule TO, dated
March 5, 2001 (the "Schedule TO"), to purchase all the outstanding Shares not
already owned by Purchaser or its affiliates, Westfield American Investments
Pty. Limited and Westfield Corporation, Inc. ("Westfield Affiliates"), at a
price of $16.25 per Share, to the seller in cash, less any amounts required by
law to be withheld and paid to governmental entities, without interest (the
"Offer Price"), upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated March 5, 2001 (the "Offer to Purchase"), and the
related Letter of Transmittal (which Letter of Transmittal, together with the
Offer to Purchase, as they may be amended or supplemented, from time to time,
constitute the "Offer"), copies of which are filed as Exhibits (a)(1) and (a)(2)
hereto, respectively, and are incorporated herein by reference in their
entirety.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of February 14, 2001 (the "Merger Agreement"), by and among Purchaser, Mall
Acquisition Corp., a Delaware corporation to be formed prior to the Effective
Time (as defined below) ("Merger Sub"), and the Company, which, among other
things, provides for: (i) the making of the Offer by Purchaser, subject to the
conditions set forth in the Offer to Purchase and the conditions and terms of
the Merger Agreement; and (ii) the subsequent merger of Merger Sub with and into
the Company (the "Merger"). A copy of the Merger Agreement is filed as
Exhibit (e)(1) hereto and is incorporated herein by reference in its entirety.
Pursuant to the Merger, at the effective time of the Merger (the "Effective
Time"), each Share outstanding (other than Shares owned by Purchaser, Merger Sub
or the Westfield Affiliates, or Shares held in the treasury of the Company, or
Shares held by shareholders validly exercising appraisal rights pursuant to
Section 351.455 of the General and Business Corporation Law of the State of
Missouri (the "MGBCL")) will, by virtue of the Merger and without any action by
the holder thereof, be converted into the right to receive, without interest, an
amount in cash equal to the Offer Price.
The Schedule TO states that the address of the principal executive offices
of Purchaser is ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇ Towers, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇ and the telephone number is ▇▇▇-▇▇▇-▇▇▇▇-▇▇▇▇.
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ITEM 3. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
For a description of certain contracts, agreements, arrangements or
understandings and any actual or potential conflicts of interest between the
Company or its affiliates and (1) the Company's executive officers, directors or
affiliates or (2) Purchaser or its affiliates, see "SPECIAL FACTORS--Interests
of Certain Persons in the Offer and the Merger," "SPECIAL FACTORS--Related Party
Transactions" and "SPECIAL FACTORS--Plans for the Company After the Offer and
the Merger; Certain Effects of the Offer" in the Offer to Purchase, which is
incorporated by reference herein.
A summary of the material provisions of the Merger Agreement is included in
"SPECIAL FACTORS--The Merger Agreement" in the Offer to Purchase, which is
incorporated by reference herein. The summary of the Merger Agreement contained
in the Offer to Purchase is qualified in its entirety by reference to the Merger
Agreement, a copy of which is attached as Exhibit (e)(1) hereto and which is
incorporated by reference herein.
Except as set forth in this Item 3, to the knowledge of the Company, as of
the date hereof, there are no material contracts, agreements, arrangements or
understandings and no actual or potential conflicts of interest between the
Company or its affiliates and (1) the Company's executive officers, directors or
affiliates or (2) Purchaser or its executive officers, directors or affiliates.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
RECOMMENDATION OF THE BOARD OF DIRECTORS.
At a meeting held on February 14, 2001, the special committee of the Board
of Directors (the "Special Committee") unanimously determined that the Merger
Agreement and the other transactions contemplated thereby, including the Offer
and the Merger, are advisable, fair to, and in the best interests of the Company
and the holders of Shares (other than Purchaser, Merger Sub and the Westfield
Affiliates), and unanimously determined to recommend that the Board
(i) approved, adopted and declared advisable the Merger Agreement and the other
transactions contemplated thereby, (ii) determined that the Offer, the Merger
and the other transactions contemplated by the Merger Agreement are fair to, and
in the best interests of, holders of Shares (other than Purchaser, Merger Sub
and the Westfield Affiliates) and (iii) recommended that holders of Shares
accept the Offer and tender their Shares pursuant to the Offer.
At a meeting held on February 14, 2001, the Board of Directors of the
Company unanimously determined to accept the Special Committee's recommendation
and determined that the terms of the Merger Agreement and the transactions
contemplated thereby, including the Offer and the Merger, are fair to, and in
the best interests of, holders of Shares (other than Purchaser, Merger Sub and
the Westfield Affiliates), approved, adopted and declared advisable the Merger
Agreement and resolved to recommend that holders of Shares accept the Offer and
tender their Shares pursuant to the Offer and, if applicable, approve and adopt
the Merger Agreement. Accordingly, the Board unanimously recommends that the
shareholders of the Company tender their Shares pursuant to the Offer. Copies of
a letter to the shareholders of the Company communicating the Board's
recommendation and the Company's press release announcing the Merger Agreement
and the transactions contemplated thereby are filed as Exhibits (a)(3) and
(a)(4) hereto, respectively, and are incorporated herein by reference.
REASONS FOR THE RECOMMENDATION.
SPECIAL COMMITTEE. In evaluating the Merger Agreement, the Offer and the
Merger, the Special Committee relied upon its knowledge of the business,
financial condition and prospects of the Company as well as the advice of its
financial and legal advisors. In determining that the Special Committee would
recommend the Merger Agreement and the transactions contemplated thereby,
including the Offer and the Merger, to the Board, the Special Committee
considered the following
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factors, each of which, except as set forth in items (10) and (13) below, in the
view of the Special Committee, supported such determination:
(1) FINANCIAL AND BUSINESS PROSPECTS. The Special Committee considered the
information with regard to the financial condition, results of operations,
competitive position, business and prospects of the Company, current economic
and market conditions (including current conditions in the industry in which the
Company is engaged) and the estimated net asset value of the Company's assets.
(2) MARKET PRICE AND PREMIUM. The Special Committee considered the historic
market prices and recent trading activity of the Shares with a particular
emphasis on the relationship between the $16.25 per Share amount and the trading
history of the Shares. In particular, the Special Committee noted that the
$16.25 per Share amount represents a premium of approximately 14.7% over the
$14.17 per Share closing price on the New York Stock Exchange ("NYSE") on
February 13, 2001, the trading day before the Merger Agreement was executed,
approximately 12.6% over the $14.43 per Share average closing price on the NYSE
over the previous month, and approximately 15.7% over the $14.05 per Share
average closing price on the NYSE over the past year.
(3) ALTERNATIVES TO THE MERGER. The Special Committee considered the
possible alternatives to the Offer and the Merger, including continuing to
operate the Company as a publicly held entity and the risks and benefits
associated therewith. The Special Committee discussed the significant
uncertainties regarding the financial condition of anchor mall tenants such as
JC Penney Company, Inc., Sears ▇▇▇▇▇▇▇ and Co. and ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & Co., Inc.
The Special Committee also concluded that the beneficial ownership by Purchaser
and the Westfield Affiliates of approximately 77.5% of the Shares effectively
precluded the possibility of a third party bid that might offer the Company's
shareholders a control premium for their Shares. In addition, based upon
discussions between the Special Committee's financial advisor and Purchaser's
financial advisor, the Special Committee concluded that Purchaser would not
consider a liquidation of the Company or a sale of its Shares at this time.
(4) ARM'S-LENGTH NEGOTIATIONS. The Special Committee considered the fact
that the Merger Agreement and the transactions contemplated thereby were the
product of arm's-length negotiations between Purchaser and the Special Committee
(through their respective advisors), none of whose members were employed by or
affiliated with the Company (except in their capacities as directors) or would
have any equity interest in the Company following the Merger, other than as a
public holder of ordinary units of Westfield America Trust.
(5) OFFER PRICE AND MERGER CONSIDERATION. The Special Committee concluded
that the Offer Price represented the highest price that Purchaser would be
willing to pay to acquire the Shares. This determination was based on all
information available to the Special Committee as a result of the Special
Committee's participation, through its advisors, in the negotiations with
Purchaser, as well as the advice of its advisors, in an attempt to obtain the
highest price reasonably available.
(6) FAIRNESS OPINION. The Special Committee considered the financial
presentation of ▇▇▇▇▇▇ Brothers Inc. ("▇▇▇▇▇▇") and Lehman's oral opinion
delivered at the February 14, 2001 meeting of the Special Committee
(subsequently confirmed by delivery of a written opinion dated February 14,
2001, the date that the Merger Agreement was signed) that, as of the date of
such opinion and based upon and subject to the assumptions, factors and
limitations set forth therein, the per Share amount was fair, from a financial
point of view, to the Company's shareholders, other than Purchaser, Merger Sub
and the Westfield Affiliates. ▇▇▇▇▇▇'▇ opinion is limited to the fairness, from
a financial point of view, of the cash consideration to be received in the Offer
and the Merger, taken together as a whole and not separately, by the holders of
Shares (other than Purchaser, Merger Sub and the Westfield Affiliates) and does
not constitute a recommendation as to whether any shareholder should tender
Shares pursuant to the Offer or how such shareholder should vote with respect to
the Merger. Holders of Shares are urged to read such opinion carefully in its
entirety. A COPY OF ▇▇▇▇▇▇'▇ WRITTEN OPINION SETTING FORTH THE ASSUMPTIONS MADE,
MATTERS CONSIDERED AND
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LIMITATIONS ON THE REVIEW UNDERTAKEN BY ▇▇▇▇▇▇ IS ATTACHED AS ANNEX A TO THIS
SCHEDULE 14D-9 AND IS INCORPORATED BY REFERENCE HEREIN. SHAREHOLDERS ARE URGED
TO, AND SHOULD, READ THE OPINION OF LEHMAN CAREFULLY AND IN ITS ENTIRETY (SEE
"ANNEX A--OPINION OF ▇▇▇▇▇▇ BROTHERS").
(7) TRANSACTION STRUCTURE. The Special Committee evaluated the benefits of
the transaction being structured as an immediate cash tender offer for all of
the Shares, without any financing contingency, thereby enabling the public
shareholders of the Company the opportunity to obtain cash for all of their
Shares at the earliest possible time and the fact that the per Share
consideration to be paid in the Offer and the Merger is the same.
(8) QUARTERLY DIVIDENDS. The Special Committee considered the provisions of
the Merger Agreement which ensured that the Company's shareholders would
continue to receive regular quarterly cash dividends, or a PRO RATA portion
thereof, with respect to the Shares until the conclusion of the Offer.
(9) ABILITY TO CONSIDER ALTERNATIVE TRANSACTIONS. The Special Committee
considered the terms of the Merger Agreement, including (a) the ability of the
Board, in the exercise of its fiduciary duties, to terminate the Merger
Agreement in order to permit the Company to enter into an alternative
transaction with a third party and (b) a cost reimbursement arrangement of no
more than $5 million in lieu of a typical break-up fee.
(10) POSSIBLE DECLINE IN MARKET PRICE OF SHARES. The Special Committee
considered that if a merger transaction with Purchaser were not negotiated and
the Company remained a publicly held corporation, it is possible that, because
of a decline in the market price of the Shares or the stock market in general,
the price that might be received by the holders of the Shares in the open market
or in a future transaction might be less than the $16.25 per Share price to be
received by the Company's shareholders in connection with the Offer and the
Merger. The Special Committee considered the fact that after the Effective Time,
the public holders of the Shares will not participate in the future growth of
the Company. Because of the risks and uncertainties associated with the
Company's future prospects, the Special Committee concluded that this detriment
was not quantifiable. The Special Committee also concluded that obtaining a cash
premium for the Shares in the Offer was preferable to the alternative of a
speculative potential future return for public holders of the shares.
(11) MERGER AGREEMENT TERMS. The Special Committee considered the terms
of the Merger Agreement, including the parties' representations, warranties and
covenants and the conditions to their respective obligations.
(12) HIGH LIKELIHOOD OF CONSUMMATION. The Special Committee considered
the high likelihood that the proposed acquisition would be consummated, in light
of the fact that there are no unusual requirements or conditions to the Offer,
the Offer and the Merger are not subject to any regulatory approval requirements
or financing contingencies and Purchaser has the financial resources to
consummate the Offer and the Merger expeditiously.
(13) CONFLICTS OF INTEREST. The Special Committee considered the
conflicts of interest of certain directors and officers of the Company as set
forth in "SPECIAL FACTORS--Interests of Certain Persons in the Offer and the
Merger" in the Offer to Purchase.
(14) AVAILABILITY OF DISSENTERS' RIGHTS. The Special Committee also
considered the fact that dissenters' rights of appraisal will be available to
the holders of Shares under Missouri law in connection with the Merger.
(15) SECURITY CAPITAL PREFERRED SHARES. The Special Committee considered
the financial terms of the understanding between Purchaser and Security Capital
Preferred Growth Incorporated ("Security
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Capital") as set forth in "SPECIAL FACTORS--Plans for the Company after the
Offer and the Merger; Certain Effects of the Offer" in the Offer to Purchase,
relating to a modification of the rights and privileges of the Series C
Preferred Shares, Series C-1 Preferred Shares and Series C-2 Preferred Shares of
the Company which are owned by Security Capital and the proposed agreement among
Security Capital, the Company, Purchaser and the Westfield Affiliates which
provides that Security Capital will waive any rights it may have with respect to
certain provisions of the Preferred Shares and will not convert such Preferred
Shares into Shares prior to the Effective Time.
(16) OPERATING PARTNERSHIP REDEMPTIONS. The Special Committee considered
the obligation of the Company as set forth in the Merger Agreement, for a period
of one year following the Effective Time, to value the Shares at no less than
the Offer Price for purposes of determining the cash amount payable to holders
of Partnership Common Units or Investor Unit Rights of the Company's Operating
Partnership, Westfield America Limited Partnership, upon redemption of those
units, and the agreement of the Company that no such redemption shall be
satisfied using Shares if the Shares are not publicly traded at the time of the
redemption.
BOARD OF DIRECTORS.
The full Board of Directors of the Company considered and relied upon the
conclusions and unanimous recommendation of the Special Committee that the full
Board approve the Merger Agreement and the transactions contemplated thereby,
including the Offer and the Merger, and the considerations referred to above as
having been taken into account by the Special Committee, as well as the Board's
own familiarity with the Company's business, financial condition, results of
operations and prospects and the nature of the industry in which the Company
operates.
In light of the number and variety of factors that the Special Committee and
the Board considered in connection with their evaluation of the Offer and the
Merger, neither the Special Committee nor the Board found it practicable to
quantify or otherwise assign relative weights to the foregoing factors, and,
accordingly, neither the Special Committee nor the Board did so. In addition,
individual members of the Special Committee and the Board may have given
different weights to different factors. Rather, the Special Committee and the
Board viewed their positions and recommendations as being based on the totality
of the information presented to and considered by them.
The Board believes that consideration of the Offer and the Merger was
procedurally fair because, among other things:
- the Special Committee consisted of independent directors appointed by the
Board to represent solely the interests of the Company's shareholders,
other than Purchaser, Merger Sub and the Westfield Affiliates;
- the Special Committee retained and was advised by a nationally recognized
financial advisor, ▇▇▇▇▇▇ Brothers Inc., in evaluating the proposed
transaction;
- of the deliberations pursuant to which the Special Committee evaluated the
Offer and the Merger; and
- the $16.25 per Share cash purchase price, together with the continued
payment of regular quarterly dividends (or PRO RATA portions thereof)
until the conclusion of the Offer, and the other terms and conditions of
the Merger Agreement resulted from active arms'-length bargaining between
the respective advisors of the Special Committee and Purchaser.
The Board believes that sufficient procedural safeguards to ensure the
fairness of the transaction and to permit the Special Committee to effectively
represent the interests of the public holders of the Shares were present, and
therefore, there was no need to retain any additional unaffiliated
representative to act on behalf of the holders of the Shares in view of:
(i) the unaffiliated status and the experience of the members of the Special
Committee whose sole purpose was to represent the
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interests of the holders of the Shares (other than Purchaser and the Westfield
Affiliates) and retention by the Special Committee of ▇▇▇▇▇▇ and independent
legal advisors, and (ii) the fact that the Special Committee, even though
consisting of directors of the Company and therefore not completely unaffiliated
with the Company, is a mechanism well recognized under law to ensure fairness in
transactions of this type.
Neither the Special Committee nor the Board considered the book value or the
liquidation of the Company's assets as meaningful measures of the fair value of
the Shares and neither considered liquidation to be a viable course of action.
Therefore, no appraisal of liquidation values was sought for purposes of
evaluating the Offer and the Merger.
The Board and the Special Committee recognized that even if no Shares are
purchased in the Offer, Purchaser and its affiliates will have sufficient voting
power to approve the Merger without the affirmative vote of any other
shareholders of the Company. In negotiating the Merger Agreement, the Special
Committee sought to condition consummation of the Offer upon, among other
things, the acceptance of the Offer by at least two-thirds of the outstanding
Shares not owned by Purchaser and its affiliates (the "minimum condition"). The
Special Committee was advised by Purchaser's representatives that such a
condition would materially and adversely affect Purchaser's ability to obtain
the funds necessary to consummate the Offer and the Merger in the manner
contemplated by Purchaser. In view of that effect on Purchaser's ability to
obtain financing for the Offer and the Merger, Purchaser's representatives
advised representatives of the Special Committee that if the Offer were to be
conditioned upon the acceptance of the Offer by two-thirds (or a majority) of
public shareholders, then Purchaser would also require that the Offer be
conditioned upon obtaining the necessary financing to complete the Offer and the
Merger. In its deliberations, the Special Committee concluded that the "minimum
condition" was less important than the high likelihood of consummation that
could be jeopardized if the Offer were conditioned upon financing. Accordingly,
the Special Committee agreed that consummation of the Offer would not be
conditioned upon acceptance of the Offer by any threshold percentage of the
Shares held by unaffiliated shareholders.
The foregoing discussion of the information and factors considered and given
weight by the Special Committee and the Board is not intended to be exhaustive
but is believed to include all material factors considered by the Special
Committee and the Board.
THE BOARD, AFTER RECEIVING THE UNANIMOUS RECOMMENDATION OF THE SPECIAL
COMMITTEE, (1) HAS UNANIMOUSLY DETERMINED THAT THE MERGER IS ADVISABLE, FAIR TO
AND IN THE BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS (OTHER THAN
PURCHASER, MERGER SUB AND THE WESTFIELD AFFILIATES), (2) HAS UNANIMOUSLY
APPROVED THE MERGER, THE OFFER AND THE MERGER AGREEMENT AND (3) UNANIMOUSLY
RECOMMEND THAT THE COMPANY'S SHAREHOLDERS ACCEPT THE OFFER AND TENDER THEIR
SHARES PURSUANT TO THE OFFER.
OPINION OF ▇▇▇▇▇▇ BROTHERS.
The Special Committee engaged Lehman to act as its financial advisor in
connection with the proposed Offer and Merger. On February 14, 2001, at a
meeting of the Special Committee held to evaluate the Offer and the Merger,
▇▇▇▇▇▇ rendered to the Special Committee an oral opinion, confirmed by delivery
of a written opinion dated February 14, 2001, that as of such date, from a
financial point of view, the cash consideration of $16.25 per Share to be
offered to the Company's shareholders (other than Purchaser, the Westfield
Affiliates and Merger Sub) in connection with the proposed transaction was fair
to such shareholders.
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THE FULL TEXT OF ▇▇▇▇▇▇'▇ OPINION DATED FEBRUARY 14, 2001 IS INCLUDED AS
ANNEX A TO THIS SCHEDULE 14D-9 AND IS INCORPORATED HEREIN BY REFERENCE. HOLDERS
OF THE COMPANY'S COMMON STOCK MAY READ ▇▇▇▇▇▇'▇ OPINION FOR A DISCUSSION OF THE
PROCEDURES FOLLOWED, FACTORS CONSIDERED, ASSUMPTIONS MADE AND QUALIFICATIONS AND
LIMITATIONS OF THE REVIEW UNDERTAKEN BY ▇▇▇▇▇▇ IN RENDERING ITS OPINION.
▇▇▇▇▇▇'▇ OPINION WAS PROVIDED FOR THE INFORMATION AND ASSISTANCE OF THE
SPECIAL COMMITTEE AND THE BOARD IN CONNECTION WITH THEIR CONSIDERATION OF THE
PROPOSED TRANSACTION. ▇▇▇▇▇▇'▇ OPINION IS NOT A RECOMMENDATION TO THE COMPANY'S
SHAREHOLDERS AS TO HOW SUCH SHAREHOLDERS SHOULD RESPOND TO THE OFFER OR VOTE ON
THE APPROVAL AND ADOPTION OF THE MERGER AGREEMENT OR ANY MATTER RELATED THERETO.
▇▇▇▇▇▇ WAS NOT REQUESTED TO OPINE AS TO, AND ITS OPINION DOES NOT ADDRESS, THE
COMPANY'S UNDERLYING BUSINESS DECISION TO PROCEED WITH OR EFFECT THE OFFER AND
THE MERGER.
In arriving at its opinion, ▇▇▇▇▇▇ reviewed and examined, among other
things:
- the Merger Agreement and the specific terms of the Offer and the Merger;
- publicly available information concerning the Company that ▇▇▇▇▇▇ believed
to be relevant to its analysis, including the Company's Annual Report on
Form 10-K for the year ended December 31, 1999, and the Company's
Quarterly Reports on Form 10-Q for the periods ended March 31, 2000,
June 30, 2000 and September 30, 2000, and the Company's earnings release
for the quarter ended December 31, 2000;
- financial and operating information with respect to the business,
operations and prospects of the Company furnished to Lehman by the
Company;
- a trading history of the Company's Common Stock from May 16, 1997 to
February 13, 2001, and a comparison of that trading history with those of
other companies that Lehman deemed relevant;
- a comparison of the historical financial results and present financial
condition of the Company with those of other companies that Lehman deemed
relevant;
- a comparison of the financial terms of the proposed transaction with the
financial terms of certain other transactions that Lehman deemed relevant;
- a summary of the terms relating to proposed amendments to the certificates
of designation of the Series C, C-1 and C-2 Preferred Shares of the
Company held by Security Capital; and
- publicly available reports prepared by third party research analysts
regarding the future financial performance of the Company.
In addition, Lehman had discussions with the management of the Company
concerning the Company's business, operations, assets, financial condition and
prospects, and undertook such other studies, analyses and investigations that
Lehman deemed appropriate.
In arriving at its opinion, Lehman assumed and relied upon the accuracy and
completeness of the financial and other information used by Lehman without
assuming any responsibility for independent verification of such information and
further relied upon the assurances of management of the Company that they are
not aware of any facts or circumstances that would make such information
inaccurate or misleading. With respect to the financial projections of the
Company provided to Lehman, upon advice of the Company, Lehman assumed that such
projections were reasonably prepared on a basis reflecting the best currently
available estimates and judgments of the Company's management as to the future
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performance of the Company. In arriving at its opinion, ▇▇▇▇▇▇ conducted only a
limited physical inspection of the properties owned by the Company and did not
make or obtain any evaluations or appraisals of the assets or liabilities of the
Company. In addition, neither the Special Committee nor the Board authorized
▇▇▇▇▇▇ to solicit, and ▇▇▇▇▇▇ did not solicit, any indications of interest from
any third parties with respect to the purchase of all or a part of the Company's
business. ▇▇▇▇▇▇'▇ opinion necessarily was based upon market, economic and other
conditions as they existed on, and could be evaluated as of, February 14, 2001.
No limitations were imposed by the Company or the Special Committee on the
scope of ▇▇▇▇▇▇'▇ investigation or the procedures to be followed by ▇▇▇▇▇▇ in
rendering its opinion. In arriving at its opinion, ▇▇▇▇▇▇ did not ascribe a
specific range of value to the Company, but rather made its determination as to
the fairness, from a financial point of view, of the cash consideration of
$16.25 per Share to be offered to the Company's shareholders (other than
Purchaser, the Westfield Affiliates and Merger Sub) in the proposed transaction
on the basis of the analyses described below. The preparation of a fairness
opinion involves various determinations as to the most appropriate and relevant
methods of financial and comparative analysis and the application of those
methods to the particular circumstances, and, therefore, such an opinion is not
readily susceptible to summary description. Furthermore, in arriving at its
fairness opinion, ▇▇▇▇▇▇ did not attribute any particular weight to any analysis
or factor considered by it, but rather made qualitative judgments as to the
significance and relevance of each analysis and factor. Accordingly, ▇▇▇▇▇▇
believes that its analyses must be considered as a whole and that considering
any portion of such analyses and the factors considered, without considering all
analyses and factors, could create a misleading or incomplete view of the
process underlying the opinion. In its analyses, ▇▇▇▇▇▇ made numerous
assumptions with respect to industry performance, general business and economic
conditions and other matters, many of which are beyond the control of the
Company and Purchaser. None of Lehman, the Company or any other person assumes
responsibility if future results are materially different from those discussed.
Any estimates contained in the analyses are not necessarily indicative of actual
values or predictive of future results or values, which may be significantly
more or less favorable than as set forth in the analyses. In addition, analyses
relating to the value of businesses do not purport to be appraisals or to
reflect the prices at which businesses could actually be sold.
FINANCIAL ANALYSES
Certain of the summaries of financial analyses include information presented
in tabular format. In order to fully understand the financial analyses used by
Lehman, the tables must be read together with the text of each summary.
Considering any portion of such analyses and of the factors considered, without
considering all analyses and factors, could create a misleading or incomplete
view of the process underlying ▇▇▇▇▇▇'▇ opinion.
The following is a summary of the material financial analyses used by Lehman
in connection with providing its opinion to the Board and the Special Committee.
Lehman performed a valuation of the Company using the following methodologies:
stock trading analysis, comparable companies analysis, comparable transactions
analysis, net asset value analysis, dividend discount analysis and analysis of
third party research reports. Each of these methodologies, other than the
comparable companies analysis and the comparable transactions analysis, was used
to generate a range of reference values per share for the Company. The per share
value ranges were then compared to the $16.25 per Share cash consideration to be
offered to the Company's shareholders in the proposed transaction. The implied
per share value ranges derived using the various valuation methodologies
described above, as well as the comparable companies analysis and comparable
transactions analysis, supported the conclusion that the consideration to be
offered to the Company's shareholders (other than Purchaser, the Westfield
Affiliates and Merger Sub) was fair, from a financial point of view, to such
shareholders.
- 9 -
The various financial analyses noted above and the implied per share value
ranges derived therefrom are included in the following table. This table should
be read together with the more detailed descriptions set forth below. In
particular, you should note that in applying the various valuation methods to
the particular circumstances of the Company, and the proposed transaction,
Lehman made qualitative judgments as to the significance and relevance of each
analysis and factor. In addition, Lehman made numerous assumptions with respect
to industry performance, general business and economic conditions and other
matters, many of which are beyond the control of the Company and Purchaser.
Accordingly, the analyses listed in the table and described below must be
considered as a whole. The table alone does not constitute a complete
description of the financial and comparative analyses. Considering the implied
per share value ranges without considering the narrative description of the
financial analyses, including the assumptions underlying these analyses, could
create a misleading or incomplete view of the process underlying, and
conclusions represented by, ▇▇▇▇▇▇'▇ opinion.
VALUATION SUMMARY DESCRIPTION IMPLIED VALUE
METHODOLOGY OF VALUATION METHODOLOGY PER SHARE
------------------- ------------------------------------- ---------------
Stock Trading Analysis of historical trading of $12.31-$18.56
Analysis the Company's Common Stock
since initial public offering
Net Asset Net present valuation based $15.34-$18.63
Valuation Analysis upon market valuation of
properties individually and
settlement of liabilities
Dividend Discount Valuation based on net present $13.86-$19.33
Model Analysis valuation of dividends on
Company's Common Stock and
assumed terminal value of
Common Stock
Analysis of Third Review of target prices and net $13.82-$17.00
Party Research asset value estimates for the
Reports Company by selected analysts
Consideration To $16.25
Be Received by the
Company's Public
Shareholders in the
Offer and Merger
STOCK TRADING ANALYSIS. Lehman reviewed and analyzed the current and
historical market prices and values of the Common Stock during the period from
May 16, 1997 (the date of the Company's initial public offering) through
February 13, 2001. The $16.25 per Share price to be paid in the Offer and the
Merger represented a premium of approximately 14.7% over the closing price of
the Shares, as reported on the NYSE, of $14.17 per Share as of the close of
business on February 13, 2001, a premium of approximately 15.7% over the most
recent one year trading average of $14.05 per Share and a premium of
approximately 3.4% over the average price of the Shares of $15.72 per Share from
May 16, 1997 until February 13, 2001.
COMPARABLE COMPANIES ANALYSIS. The comparable company trading analysis
provides a market valuation benchmark based on the common stock trading
multiples of selected comparable companies. For this analysis, Lehman reviewed
the public stock market trading multiples for selected regional mall real estate
investment trusts ("REIT") with financial and operating characteristics that
Lehman deemed
- 10 -
to be comparable to the Company, including (i) CBL & Associates Properties,
Inc., (ii) General Growth Properties, Inc., (iii) JP Realty Inc., (iv) The
Macerich Company, (v) The ▇▇▇▇▇ Company, (vi) Simon Property Group Inc. and
(v) Taubman Centers Inc.
Using publicly available information, Lehman calculated and analyzed each
company's Net Debt to Firm Value Ratio, EBITDA to Firm Value Ratio, 2001 and
2002 FFO Multiples and Current Dividend Yield. Net Debt To Firm Value Ratio is
derived by dividing a company's Net Debt (long-term debt minus cash on hand) by
its Firm Value (sum of the market value of the common equity and the value of
the preferred stock). EBITDA to Firm Value Ratio is derived by dividing a
company's EBITDA (earnings before interest, taxes, depreciation and amortization
expenses) by its Firm Value. The 2001 and 2002 FFO Multiples are derived by
dividing a company's 2001 or 2002 FFO estimates (defined by The National
Association of Real Estate Investment Trusts as "net income" computed in
accordance with generally accepted accounting principles, excluding gains or
losses from debt restructuring and sales of property, plus depreciation of real
property, and after adjustments for unconsolidated entities in which the subject
REIT holds an interest) by its current share price. The 2001 and 2002 FFO
estimates are based on those published by First Call Corporation. Current
Dividend Yield is derived by dividing a company's current annualized dividend by
its current share price. This analysis indicated that current ranges of
multiples derived from the comparable companies were: (i) Net Debt to Firm
Value: 47.9% to 65.4%; (ii) EBITDA to Firm Value: 7.4% to 9.9%; (iii) projected
2001 and 2002 FFO Multiples of: 6.7x to 8.2x, and 6.1x to 7.2x; respectively;
and (iv) dividend yield: 5.1% to 10.7%. ▇▇▇▇▇▇'▇ analysis indicated that at the
offer price of $16.25 per Share, the Company's Net Debt to Firm Value was 60.4%,
EBITDA to Firm Value was 8.0%, projected 2001 and 2002 FFO was 8.5x and 8.1x,
respectively and dividend yield was 9.1%. Accordingly, each of the valuation
measures put the Company in the middle or at the top of its comparable universe
with only one of the comparable companies having a lower ratio of EBITDA to Firm
Value and no comparable company having a higher 2001 or 2002 FFO multiple.
Because of the inherent differences between the corporate structure,
businesses, operations and prospects of the Company and the corporate structure,
businesses, operations and prospects of the companies included in the comparable
company groups, Lehman believed that it was inappropriate to, and therefore did
not, rely solely on the quantitative results of the analysis and, accordingly,
also made qualitative judgments concerning differences between the financial and
operating characteristics of the Company and the companies in the comparable
companies analysis that would affect the public trading values of the Company
and such comparable companies.
COMPARABLE TRANSACTIONS ANALYSIS. The comparable transaction analysis
provides a market benchmark based on the consideration paid in selected
comparable transactions. For this analysis, Lehman reviewed certain publicly
available information on two regional mall portfolio transactions which it
determined to be the only recent transactions comparable to the proposed
transaction. ▇▇▇▇▇▇'▇ universe of comparable transactions included all
transactions that were announced in the previous year in which a portfolio of
regional malls was sold for aggregate consideration of over $1.0 billion. The
transactions were the September 2000 purchase by Rodamco North America N.V. of
Urban Shopping Centers, Inc. for a total consideration of $3.4 billion and the
$1.225 billion acquisition by CBL & Associates Properties, Inc. of 21 regional
malls and two associated centers owned by the ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Group, Inc.
announced in September 2000.
For each transaction, Lehman compared the EBITDA Capitalization Rate,
defined as the ratio of EBITDA to Firm Value, against the corresponding value
for the proposed Company transaction. The Rodamco transaction had an EBITDA
Capitalization Rate of approximately 7.6%, the CBL & Associates Properties, Inc.
transaction had an EBITDA Capitalization Rate of approximately 10.7% and the
proposed transaction has an EBITDA Capitalization Rate of 8.0%.
- 11 -
Lehman also compared the premium paid for Urban Shopping Centers shares one
day prior to the announcement of such transaction, 39%, to the 14.7% premium
offered in the proposed Company transaction (one day prior to announcement). As
the ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Group, Inc. was a private company, an equivalent measure
of market price was not available for that transaction.
Lehman explained the large variances in the parameters by noting that the
quality of the assets of the target companies differed significantly. In
particular the Urban Shopping Centers had a 93.1% occupancy rate, the ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ Group, Inc. an 87% occupancy rate and the Company a 94% occupancy rate.
Sales per square foot for the Urban Shopping Centers, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Group,
Inc. and the Company were $429, $303 and $354, respectively. Both sales per
square foot and occupancy rate are used in the industry as indications of the
performance and quality of a regional mall. These data points for the Company,
taken together and in conjunction with those of the comparable transactions
listed above, indicate that it is reasonable that the EBITDA Capitalization Rate
for the Company is within the range of those for the comparable transactions.
Therefore, Lehman concluded that the premium and the EBITDA Capitalization Rate
on the proposed transaction are consistent with the comparable transactions when
considered in the context of the different quality of each of the portfolios.
Because the market conditions, rationale and circumstances surrounding each
of the transactions analyzed were specific to each transaction and because of
the inherent differences between the businesses, operations and prospects of the
Company and the acquired businesses analyzed, Lehman believed that it was
inappropriate to, and therefore did not, rely solely on the quantitative results
of the analysis and, accordingly, also made qualitative judgments concerning
differences between the characteristics of each of these transactions and the
transactions contemplated by the Merger Agreement involving the Company.
NET ASSET VALUE ANALYSIS. Lehman analyzed a scenario in which the Company
would sell each of its properties individually and then settle its liabilities,
including the repayment of certain of its preferred stock at liquidation value.
For stabilized properties, the standard method of determining market value
is to apply an NOI Capitalization Rate to each property's forward 12 months
projected net operating income ("NOI"). "NOI" means the revenues from a property
less expenses incurred in the operation of that property. The NOI Capitalization
Rate describes a purchaser's theoretical yield in the first year of operation
after purchasing a property. More specifically, as properties are generally
valued on the future NOI that they may produce, the property's future NOI
divided by its NOI Capitalization Rate will determine the property's value.
Lehman determined the NOI Capitalization Rate for each property based on several
factors, including;
- age of asset and physical condition;
- tenant quality;
- demographic statistics of the property's trade area;
- mix and quality of anchor/department stores;
- productivity of mall stores (sales per square foot); and
- future growth and expansion potential of the property.
For each property Lehman applied a midpoint NOI Capitalization Rate to
determine the base case and then increased and decreased the capitalization rate
by 25 basis points to come up with downside and upside valuations. Estimates of
forward 12 months projected NOI for each property was provided to Lehman by the
Company. For those properties under development, Lehman used a range of values
- 12 -
that represented the land or "as is" appraised values of the properties and
varied that value by plus or minus five percent for the downside and upside
valuation.
The analysis produced an aggregate net asset value for all of the Company's
properties of $15.34-$18.63 per share. This represented an NOI Capitalization
Rate of 9.1% and 8.6%, respectively, on the portfolio. The midpoint NOI
Capitalization Rates on the individual centers ranged from a low of 7.5% to a
high of 12.5%.
While the consideration of $16.25 per Share offered in the proposed
transaction is 4.1% lower than the base case net asset value of $16.94 per
Share, Lehman believed that a discount to the midpoint net asset value is
reasonable for the following reasons, among others:
- The consideration that shareholders will receive in the proposed Company
transaction is cash and therefore requires no valuation discount or time
value discount whereas an orderly liquidation of the Company could take
from six months to two years to complete; and
- The Company's external advisory structure means that the Company's
shareholders do not get all of the benefits of increased property
performance and improvements in operating margins or economics of scale.
Specifically, the Company pays incentive fees to third parties to manage,
lease, develop and redevelop its properties. Therefore, as NOI at a
property increases, a portion of this increase is paid to these third
parties as incentive fees.
DIVIDEND DISCOUNT MODEL. Lehman performed a dividend discount analysis
pursuant to which the value of the Company was established by adding (i) the net
present value of the Company's future stream of dividend payments to the
Company's shareholders for the years 2001 through 2003 plus (ii) the estimated
net present value of the terminal value of the Company at the end of 2003.
Lehman assumed a terminal value of the Shares at the end of 2003 by applying an
assumed terminal multiple of 7.4x (based on the Company's estimate of FFO in
2001 of $1.92 per Share and a closing price per Share on February 13, 2001 of
$14.17). The assumed terminal multiple was then applied to the Company's
projected 2004 FFO.
To determine net present value, Lehman used a discount rate of 13% per annum
based on its estimate of the Company's cost of equity.
Lehman also performed a sensitivity analysis on the dividend discount model
by varying its assumptions of the cost of equity from 12% to 14%and the terminal
FFO multiple from 5.9x to 8.8x (10% above and below the Company's 2001 FFO
multiple of 7.4x). The dividend discount analysis suggested a value per Share
range of $13.86 to $19.33. The consideration offered in the proposed transaction
($16.25) is within this range.
THIRD PARTY RESEARCH. Lehman reviewed the target prices and/or net asset
value estimates for the Company as reported by the equity research analysts at
▇▇▇▇▇▇, Prudential Securities Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ & Company. The 12 month target prices and net asset values set by
such firms were in a range of $14.78 to $17.71 per Share. The consideration
offered in the proposed transaction ($16.25) is within this range.
▇▇▇▇▇▇ is an internationally recognized investment banking firm and, as part
of its investment banking activities, is regularly engaged in the evaluation of
businesses and their securities in connection with mergers and acquisitions,
negotiated underwritings, competitive bids, secondary distributions of listed
and unlisted securities, private placements and valuations for corporate and
other purposes. The Special Committee selected Lehman because of its expertise,
reputation and familiarity with the Company and the real estate industry in
general and because its investment banking professionals have substantial
experience in transactions similar to the proposed transaction.
INTENT TO TENDER.
To the best of the Company's knowledge after reasonable inquiry, to the
extent permitted by applicable securities laws, rules or regulations, all
executive officers, directors and affiliates of the Company, other than
Purchaser, Merger Sub and the Westfield Affiliates, and other than those
individuals who intend to make charitable contributions of the Shares, currently
intend to tender all Shares held of record or beneficially owned by them
pursuant to the Offer.
- 13 -
ITEM 5. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED.
The Company has retained Lehman to render to the Special Committee an
opinion with respect to the fairness, from a financial point of view, to the
Company's public shareholders of the consideration offered for the purchase of
Shares pursuant to the Offer and the Merger (the "Opinion"). Pursuant to the
terms of ▇▇▇▇▇▇'▇ engagement, the Company has agreed to pay Lehman an opinion
fee equal to $1,000,000 which was payable upon delivery of the Opinion. The
engagement agreement further provided that the Company pay Lehman an additional
fee of $500,000 upon the delivery of any subsequent opinion or if ▇▇▇▇▇▇
provides any additional services related to any opinion consisting of services
in connection with any lawsuits, investigations, claims or other proceedings
arising out of the Offer and the Merger. As a result of additional services
rendered by Lehman at the request of the Special Committee relating to the
transaction with Security Capital, the Company has agreed to pay the additional
fee. The Company has also agreed to reimburse Lehman upon request for its
reasonable expenses incurred in connection with its engagement, but not
exceeding $50,000 without the Company's prior written consent. The Company has
also agreed to indemnify Lehman against certain liabilities arising out of
▇▇▇▇▇▇'▇ engagement.
Lehman and its affiliates have, in the ordinary course of business, in the
past provided, and in the future may continue to provide, commercial and
investment banking services to the Company, and its affiliates unrelated to the
Offer and the Merger, for which services ▇▇▇▇▇▇ and its affiliates have received
customary compensation. In the ordinary course of business, Lehman or its
affiliates may actively trade or hold the debt and equity securities of the
Company, Westfield America Trust and their respective affiliates for their own
accounts and those of their customers and, accordingly, may at any time hold a
long or short position in such securities.
Neither the Company nor anyone acting on its behalf has employed, retained
or compensated, or currently intends to employ, retain or compensate, any person
to make solicitations or recommendations to the shareholders of the Company on
its behalf with respect to the Offer or the Merger.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
No transactions in Shares have been effected during the past 60 days by the
Company or, to the knowledge of the Company, by any executive officer, director,
affiliate or subsidiary of the Company.
ITEM 7. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
Except as set forth in this Schedule 14D-9 and as set forth in "SPECIAL
FACTORS--Plans for the Company After the Offer and the Merger; Certain Effects
of the Offer" in the Offer to Purchase, the Company is not engaged in any
negotiation in response to the Offer which relates to or would result in (i) a
tender offer or other acquisition of the Company's securities; (ii) an
extraordinary transaction, such as a merger, reorganization or liquidation,
involving the Company or any subsidiary of the Company; (iii) a purchase, sale
or transfer of a material amount of assets of the Company or any subsidiary of
the Company; or (iv) any material change in the present dividend rate or policy,
or indebtedness or capitalization of the Company.
Except as set forth in this Schedule 14D-9 and as set forth in "SPECIAL
FACTORS--Plans for the Company After the Offer and the Merger; Certain Effects
of the Offer" in the Offer to Purchase, there are no transactions, Board
resolutions, agreements in principle or signed contracts in response to the
Offer that relate to or would result in one or more of the events referred to
above in this Item 7.
- 14 -
ITEM 8. ADDITIONAL INFORMATION.
OFFER TO PURCHASE, LETTER OF TRANSMITTAL AND RELATED DOCUMENTS
Reference is hereby made to the Offer to Purchase and the related Letter of
Transmittal, form of letter to brokers, dealers, commercial banks, trust
companies and other nominees and form of letter to clients which are filed as
Exhibits (a)(1), (a)(2), (a)(6) and (a)(7) hereto, respectively, and are
incorporated herein by reference in their entirety.
SECTION 351.459 OF THE MGBCL
Section 351.459 of the MGBCL ("Section 351.459"), the Missouri Business
Combination Statute, generally prevents an "interested shareholder" (generally a
person who owns or has the right to acquire 20% or more of a corporation's
outstanding voting stock, or an affiliate or associate thereof) from engaging in
a "business combination" (defined to include mergers and certain other actions)
with a "resident domestic corporation" for a period of five years following the
date such person first became an interested shareholder, and imposes certain
requirements on such business combinations undertaken after the five-year
period. The provisions of Section 351.459 are not applicable to the Merger for
one or more reasons specified in the statute, including the fact that Purchaser
and the Westfield Affiliates acquired their respective Shares prior to the date
that the Company had a class of voting stock registered with the Securities and
Exchange Commission pursuant to Section 12 of the Securities Exchange Act of
1934, as amended, and at a time when the Company was not a "resident domestic
corporation."
SECTION 351.407 OF THE MGBCL
Section 351.407 of the MGBCL ("Section 351.407"), the Missouri Control Share
Acquisition Statute, generally provides that "control shares" of an "issuing
public corporation" acquired in a "control share acquisition" retain voting
rights only to the extent granted by a majority vote of all shares entitled to
vote and a majority of all voting shares excluding shares held by the acquirer
and officers and employee directors of the issuing public corporation. The
provisions of Section 351.407 are not applicable to Shares acquired by Purchaser
in the Offer or the Merger as a consequence of the fact that Purchaser may
exercise or direct the exercise of voting power over a majority or more of all
voting power of the Shares prior to the completion of the Offer or the Merger.
Accordingly, Shares purchased by Purchaser in the Offer or the Merger are not
"control shares" for purposes of Section 351.407. Furthermore, the acquisition
of Shares in the Merger are exempt from Section 351.407 because of a provision
of the Control Share Acquisition Statute which provides that an acquisition of
shares pursuant to a merger, when the "issuing public corporation" is a party to
the merger agreement, does not constitute a "control share acquisition."
SECTION 409.500 ET SEQ. OF THE MGBCL
Section 409.500 ET SEQ. (the "Missouri Takeover Bid Disclosure Act")
regulates certain "takeover bids," including tender offers, aimed at acquiring
any "equity security" of a "target company" (defined as a "resident domestic
corporation" within the meaning of the MGBCL) if, after the acquisition, the
offeror would own more than 5% of any class of the target company's equity
securities. The Missouri Takeover Bid Disclosure Act prohibits takeover bids and
solicitations or recommendations regarding a takeover bid unless certain filings
and disclosures are made. The Offer and the Merger are not subject to the
Missouri Takeover Bid Disclosure Act because, among other things, the definition
of "takeover bid" excludes any offer where, prior to making the offer, the
offeror beneficially owns, directly or indirectly, a majority of the voting
equity securities of the target company.
- 15 -
The Company does not believe that the antitakeover laws and regulations of
any state, including Missouri, will by their terms apply to the Offer and the
Merger, and Purchaser has not attempted to comply with any state antitakeover
statute or regulation. Purchaser has reserved the right to challenge the
applicability or validity of any state law purportedly applicable to the Offer
or the Merger on any grounds, including those discussed above. If it is asserted
that any state antitakeover statute is applicable to the Offer and an
appropriate court does not determine that it is inapplicable or invalid as
applied to the Offer, Purchaser might be required to file certain information
with, or to receive approvals from, the relevant state authorities, and
Purchaser might be unable to accept for payment or pay for Shares tendered
pursuant to the Offer or may be delayed in consummating the Offer. In such case,
Purchaser may not be obligated to accept for payment, or pay for, any Shares
tendered pursuant to the Offer. See "THE TENDER OFFER--Section 11. Certain
Conditions of the Offer," of the Offer to Purchase, which is filed as
Exhibit (a)(1) hereto.
SECTION 351.447 OF THE MGBCL.
Section 351.447 of the MGBCL provides that, if a corporation owns at least
90% of the outstanding shares of each class of another corporation, and one of
the corporations is a Missouri corporation and the other is either a Missouri
corporation or a foreign corporation if the laws of the jurisdiction of
incorporation of the foreign corporation permit a corporation of that
jurisdiction to merge with a corporation of another jurisdiction, the
corporation having such ownership may merge the other corporation into itself or
itself into such other corporation, without any action or vote on the part of
the shareholders of any Missouri corporation (a "short-form merger"). In the
event that Purchaser acquires in the aggregate at least 90% of the outstanding
Shares, pursuant to the Offer or otherwise, and Purchaser also acquires 90% of
the outstanding shares of the Company's preferred stock, then, at the election
of Purchaser, a short-form merger could be effected without approval of the
shareholders of the Company, subject to compliance with the provisions of
Section 351.447 of the MGBCL. Even if Purchaser does not own 90% of the
outstanding Shares following consummation of the Offer, Purchaser could seek to
purchase additional Shares in the open market or otherwise in order to reach the
90% threshold and employ a short-form merger. The per Share consideration paid
for any Shares so acquired may be greater or less than the Offer Price.
SECTION 351.455 OF THE MGBCL.
Holders of the Shares do not have appraisal rights in connection with the
Offer. However, if the Merger is consummated, holders of the Shares at the
Effective Time will have certain rights pursuant to the provisions of
Section 351.447(3) or Section 351.455 of the MGBCL. These statutes generally
allow shareholders who comply with the applicable statutory procedures to
receive a judicial determination of the value or fair value of their Shares
(exclusive of any element of value arising from the expectation or
accomplishment of the Merger) and to receive payment of such value or fair value
in cash, together with interest thereon. Any such judicial determination of the
value or fair value of the Shares could be based upon factors other than, or in
addition to, the price per Share to be paid in the Merger or the market value of
the Shares. The value so determined could be more or less than the price per
Share to be paid in the Merger.
LITIGATION
On February 15, 2001, a complaint was filed in state court in Los Angeles
County, California, naming the Company, ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇, together with Westfield America
Trust and Westfield Holdings Limited, as defendants. The complaint is brought on
behalf of a purported class of public shareholders of the Company and alleges,
among other things, that the consideration being offered to the public
shareholders of the Company in connection with the
- 16 -
proposed acquisition by Westfield America Trust of the Shares not held by
Westfield America Trust and the Westfield Affiliates is unfair and inadequate
and that the directors of the Company breached their fiduciary duties by
approving a transaction which will benefit fiduciaries at the expense of the
public shareholders of the Company. As relief, the complaint seeks, among other
things, an injunction against completion of the proposed transaction, and
damages in an unspecified amount. This case is titled ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ V. ▇▇▇▇▇
▇. ▇▇▇▇, ET. AL., Case No. BC245070 (Cal. Super. Ct., Cty of Los Angeles). A
copy of the complaint is filed as Exhibit (a)(9) hereto and is incorporated
herein by reference in its entirety. On March 1, 2001, the plaintiff re-filed a
substantially similar complaint in the United States District Court for the
Central District of California. This case is titled ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ V. ▇▇▇▇▇
▇. ▇▇▇▇, ET. AL., Case No. 01-1963 CAS (RNBX) (C.D. Cal. March 1, 2001). A copy
of the complaint is filed as Exhibit (a)(15) hereto and is incorporated herein
by reference in its entirety.
On February 15, 2001, an additional complaint titled ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ V.
WESTFIELD AMERICA, INC. ET. AL., ▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇ (▇▇▇. Super. Ct., Cty of Los
Angeles), was filed in state court in Los Angeles County, California, naming the
Company, its directors and Westfield America Trust, as defendants. The complaint
is brought on behalf of a purported class of public shareholders of the Company
and alleges, among other things, that the consideration being offered to the
public shareholders of the Company in connection with the proposed acquisition
by Westfield America Trust of the Shares not held by Westfield America Trust and
the Westfield Affiliates is unfair and does not reflect the value of the
Company's assets and that the directors of the Company are engaging in
self-dealing, are not acting in good faith and have breached their fiduciary
duties at the expense of the public shareholders of the Company. As relief, the
complaint seeks, among other things, an injunction against completion of the
proposed transaction, and damages in an unspecified amount. A copy of the
complaint is filed as Exhibit (a)(10) hereto and is incorporated herein by
reference in its entirety. On March 1, 2001, the plaintiff re-filed a
substantially similar complaint in the United States District Court for the
Central District of California. The case is titled ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ V. WESTFIELD
AMERICA, INC. ET. AL., Case No. 01-1962 MMM (▇▇▇) (C.D. Cal. March 1, 2001). A
copy of the complaint is filed as Exhibit (a)(16) hereto and is incorporated
herein by reference in its entirety.
On February 15, 2001 and February 16, 2001, two complaints were filed in the
United States District Court for the Western District of Missouri, naming the
Company, its directors and Westfield America Trust, as defendants. The
complaints are brought on behalf of a purported class of public shareholders of
the Company and allege, among other things, that the consideration being offered
to the public shareholders of the Company in connection with the proposed
acquisition by Westfield America Trust of the Shares not held by Westfield
America Trust and Westfield Affiliates is unfair and inadequate and that the
directors of the Company are engaging in self-dealing, are not acting in good
faith and have breached their fiduciary duties to the public shareholders of the
Company. As relief, the complaints seek, among other things, an injunction
against completion of the proposed transaction, and damages in an unspecified
amount. The cases titled ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ V. WESTFIELD AMERICA, INC. ET. AL.,
Civil Action No. 01-0165-CV-W-3 (W.D. Mo.) and ▇▇▇▇▇ ▇▇▇▇▇ V. WESTFIELD
AMERICA, INC. ET. AL., Civil Action No. 01-0168-CV-W-4 (W.D. Mo.) have been
consolidated into one proceeding. Copies of the complaints are filed as Exhibits
(a)(11) and (a)(12) hereto and are incorporated herein by reference in their
entirety.
On February 23, 2001, an additional complaint was filed in state court in
Los Angeles County, California, naming the Company, its directors and Westfield
America Trust, as defendants. The complaint is brought on behalf of a purported
class of public shareholders of the Company and alleges, among other things,
that the consideration being offered to the public shareholders of the Company
in connection with the proposed acquisition by Westfield America Trust of the
Shares not held by Westfield America Trust and the Westfield Affiliates is
unfair and does not reflect the value of the Company's assets and that the
directors of the Company are engaging in self-dealing, are not acting in good
faith and have breached their fiduciary duties at the expense of the public
shareholders of the
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Company. As relief, the complaint seeks, among other things, an injunction
against completion of the proposed transaction, and damages in an unspecified
amount. The case is titled ▇▇▇▇▇▇▇▇▇ BOWLINDER V. WESTFIELD AMERICA, INC. ET.
AL., Case No. BC245629 (Cal Super. Ct., Cty of Los Angeles). A copy of the
complaint is filed as Exhibit (a)(13) hereto and is incorporated herein by
reference in its entirety.
An additional complaint titled WASHINGTON SAVINGS BANK V. WESTFIELD AMERICA,
INC. ET. AL., Case No. 01-0213-CV-W-5 (W.D. Mo.), was filed in the United States
District Court for the Western District of Missouri, naming the Company,
Westfield America Trust, ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., as defendants. The complaint is brought
on behalf of a purported class of public shareholders of the Company and
alleges, among other things, that the consideration being offered to the public
shareholders of the Company in connection with the proposed acquisition by
Westfield America Trust of the Shares not held by Westfield America Trust and
the Westfield Affiliates is unfair and does not reflect the value of the
Company's assets and that the individual defendants have breached their
fiduciary duties to the public shareholders of the Company. As relief, the
complaint seeks, among other things, an injunction against completion of the
proposed transaction, and damages in an unspecified amount. A copy of the
complaint is filed as Exhibit (a)(14) hereto and is incorporated herein by
reference in its entirety.
ITEM 9. EXHIBITS.
The following exhibits are filed herewith:
EXHIBIT NO. DESCRIPTION
----------- -----------
(a)(1) Offer to Purchase dated March 5, 2001 (incorporated by
reference to Exhibit (a)(1)(A) to the Schedule TO filed by
Purchaser on March 5, 2001 and included in copies mailed to
the Company's shareholders).
(a)(2) Letter of Transmittal (incorporated by reference to
Exhibit (a)(1)(B) to the Schedule TO filed by Purchaser on
March 5, 2001 and included in copies mailed to the Company's
shareholders).
(a)(3) Letter from the Board of Directors of the Company to the
Company's shareholders dated March 5, 2001 (incorporated by
reference to Exhibit (a)(1)(L) to the Schedule TO filed by
Purchaser on March 5, 2001 and included in copies mailed to
the Company's shareholders).
(a)(4) Press Release issued by the Company on February 15, 2001
(incorporated by reference to Exhibit (a)(1)(K) to the
Schedule TO filed by the Purchaser on March 5, 2001).
(a)(5) Joint Press Release issued by Purchaser and the Company on
March 5, 2001, announcing the commencement of the Offer
(incorporated by reference to Exhibit (a)(1)(I) to the
Schedule TO filed by Purchaser on March 5, 2001 and included
in copies mailed to the Company's shareholders).
(a)(6) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and other Nominees (incorporated by reference to
Exhibit (a)(1)(E) to the Schedule TO filed by Purchaser on
March 5, 2001).
(a)(7) Form of Letter to clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and other Nominees
(incorporated by reference to Exhibit (a)(1)(F) to the
Schedule TO filed by Purchaser on March 5, 2001).
(a)(8) Opinion of ▇▇▇▇▇▇ Brothers Inc. dated February 14, 2001
(included as Annex A to this Schedule 14D-9).
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EXHIBIT NO. DESCRIPTION
----------- -----------
(a)(9) Copy of complaint titled ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ v. ▇▇▇▇▇ ▇. ▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇, Westfield America, Inc., Westfield America Trust and
Westfield Holdings Limited, filed on February 15, 2001 in
the Superior Court of the State of California, County of Los
Angeles (incorporated by reference to Exhibit 99.1 to the
Form 8-K filed by the Company on February 20, 2001).
(a)(10) Copy of complaint titled ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ v. Westfield
America, Inc., Westfield America Trust, ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇
▇. ▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., filed on February 15, 2001 in the
Superior Court of the State of California, County of Los
Angeles (incorporated by reference to Exhibit 99.2 to the
Form 8-K filed by the Company on February 20, 2001).
(a)(11) Copy of complaint titled ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ v. Westfield
America, Inc., Westfield America Trust, ▇▇▇▇▇▇ ▇. ▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ filed on February 15, 2001 in the
United States District Court for the Western District of
Missouri, Western Division (incorporated by reference to
Exhibit 99.3 to the Form 8-K filed by the Company on
February 22, 2001).
(a)(12) Copy of complaint titled ▇▇▇▇▇ ▇▇▇▇▇ v. Westfield
America, Inc., Westfield America Trust, ▇▇▇▇▇▇ ▇. ▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ filed on February 16, 2001 in the
United States District Court for the Western District of
Missouri, Western Division (incorporated by reference to
Exhibit 99.4 to the Form 8-K filed by the Company on
February 22, 2001).
(a)(13) Copy of complaint titled ▇▇▇▇▇▇▇▇▇ Bowlinder v. Westfield
America, Inc., Westfield America Trust, ▇▇▇▇▇▇ ▇. ▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ filed on February 23, 2001 in the Superior
Court of the State of California, County of Los Angeles
(incorporated by reference to Exhibit (a)(5)(E) to the
Schedule TO filed by Purchaser on March 5, 2001).
(a)(14) Copy of complaint titled Washington Savings Bank v.
Westfield America, Inc., Westfield America Trust, ▇▇▇▇▇ ▇.
▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. filed in the United
States District Court for the Western District of Missouri,
Western Division (incorporated by reference to
Exhibit (a)(5)(F) to the Schedule TO filed by Purchaser on
March 5, 2001).
(a)(15) Copy of complaint titled ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ v. ▇▇▇▇▇ ▇. ▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇, Westfield America, Inc., Westfield America Trust and
Westfield Holdings Limited, filed on March 1, 2001 in the
United States District Court for the Central District of
California (incorporated by reference to Exhibit (a)(5)(G)
to Schedule TO filed by Purchaser on March 5, 2001).
- 19 -
EXHIBIT NO. DESCRIPTION
----------- -----------
(a)(16) Copy of complaint titled ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ v. Westfield
America, Inc., Westfield America Trust, ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇
▇. ▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., filed on March 1, 2001 in the
United States District Court for the Central District of
California (incorporated by reference to Exhibit (a)(5)(H)
to Schedule TO filed by Purchaser on March 5, 2001).
(e)(1) Agreement and Plan of Merger, dated as of February 14, 2001,
by and among Purchaser, Merger Sub and the Company
(incorporated by reference to Exhibit (d)(1) to the Schedule
TO filed by Purchaser on March 5, 2001).
- 20 -
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.
WESTFIELD AMERICA, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
CHIEF FINANCIAL OFFICER
Dated: March 5, 2001
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