UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 12, 2007
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WHX CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 1-2394 13-3768097
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
555 Theodore Fremd Avenue, Rye, New York 10580
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (914) 925-4413
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N/A
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(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (SEE General Instruction A.2. below):
/_/ Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
/_/ Soliciting material pursuant to rule 15a-12 under the Exchange Act (17
CFR 240.15a-12)
/_/ Pre-commencement communications pursuant to Rule 15d-2(b) under the
Exchange Act (17 CFR 240.15d-2(b))
/_/ Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On April 12, 2007, Steel Partners II, L.P. ("Steel Partners"), a Delaware
limited partnership and affiliate of WHX Corporation (the "Company"), and the
Company entered into a Stock Purchase Agreement whereby the Company acquired
Steel Partners' entire interest in BZ Acquisition Corp. ("BZ Acquisition"), a
Delaware corporation and wholly owned subsidiary of Steel Partners (the "BZA
Transfer") for $10.00. In addition, the Company agreed to reimburse all
reasonable fees and expenses incurred by Steel Partners in connection with the
Offer and the Merger (each as defined below). BZ Acquisition is the acquisition
subsidiary in a tender offer to acquire up to all of the outstanding stock of
Bairnco Corporation, a Delaware corporation ("Bairnco") for $13.50 per share in
cash.
Steel Partners, BZ Acquisition, and Bairnco entered into an Agreement and
Plan of Merger dated as of February 23, 2007 (the "Merger Agreement"), pursuant
to which BZ Acquisition amended its tender offer to acquire all of the
outstanding common shares of Bairnco at a price of $13.50 per share in cash (the
"Offer"). In addition, all Bairnco shareholders of record on March 5, 2007
continued to be entitled to receive the declared first quarter dividend of $0.10
per share, for total cash proceeds of $13.60 per share. The BZA Transfer, which
was permitted under the terms of the Merger Agreement, did not and will not
change any of the conditions to the Offer or add a financing condition to the
Offer. The Offer is currently scheduled to expire at 5:00 P.M., New York City
time, on Friday, April 13, 2007 unless the Offer is extended.
Pursuant to the Merger Agreement, as promptly as practicable after the
completion of the Offer and the satisfaction or waiver of specified conditions,
BZ Acquisition will be merged with and into Bairnco with Bairnco continuing as
the surviving corporation as a wholly owned subsidiary of the Company (the
"Merger"). At the effective time of the Merger, each Bairnco common share then
outstanding (other than shares owned by BZ Acquisition or its direct parent
entity, shares owned by Bairnco as treasury stock and shares held by
stockholders who properly exercise their appraisal rights) will automatically be
converted into the right to receive $13.50 per share in cash, or any higher
price per share paid in the Offer, without interest and subject to applicable
withholding taxes. The proceeds required to fund the closing of the Offer and
the resulting Merger and to pay related fees and expenses are anticipated to be
approximately $101.5 million
In connection with the closing of the Offer, initial financing will be
provided by Steel Partners through two loans. Steel Partners will extend a
bridge loan in principal amount up to $90,000,000 pursuant to a Loan and
Security Agreement (the "Bridge Loan Agreement"), between BZ Acquisition and
Bairnco, as borrowers, and Steel Partners, as lender. In addition, Steel
Partners will extend a $15,000,000 subordinated loan to the Company pursuant to
a Subordinated Loan and Security Agreement (the "Subordinated Loan Agreement"
and, together with the Bridge Loan Agreement, the "Loan Agreements"), between
the Company, as borrower, and Steel Partners, as lender.
The Bridge Loan Agreement provides for a bridge term loan of up to $90
million from Steel Partners to BZ Acquisition, which will be assumed by Bairnco
as a result of the Merger. Borrowings under the Bridge Loan Agreement bear (i)
cash interest at a rate per annum equal to the prime rate of JP Morgan Chase
plus 1.75% and (ii) pay-in-kind interest at a rate per annum equal to the prime
rate of JP Morgan Chase plus 4.5% for the first 90 days the loan is outstanding
and plus 5% for the balance of the term, each as adjusted from time to time,
with a minimum aggregate interest rate of 14.5% per annum for the first 90 days
the loan is outstanding, and 15% per annum for the balance of the term, and a
maximum aggregate interest rate of 18% per annum. The cash interest rate and the
pay-in-kind interest rate may be adjusted from time to time, by agreement of
Steel Partners and Bairnco, so long as the aggregate interest rate remains the
same. Interest is payable monthly in arrears. Following the effective time of
the Merger, obligations under the Bridge Loan Agreement will be guaranteed by
certain of Bairnco's subsidiaries and secured by a junior lien on the assets of
Bairnco and certain of its subsidiaries and capital stock of certain of
Bairnco's subsidiaries. Obligations under the Bridge Loan Agreement will also be
guaranteed by the Company on an unsecured basis. The scheduled maturity date of
the indebtedness under the Bridge Loan Agreement is the earlier to occur of (i)
June 30, 2008 and (ii) such time as Bairnco obtains any replacement financing.
Indebtedness under the Bridge Loan Agreement may be prepaid without penalty or
premium.
The Subordinated Loan Agreement provides for a subordinated term loan of
$15 million from Steel Partners to the Company, which will be unsecured at the
Company level and the proceeds of which will be used by the Company to make a
capital contribution to BZ Acquisition. Borrowings under the Subordinated Loan
Agreement bear pay-in-kind interest at a rate per annum equal to the prime rate
of JP Morgan Chase plus 7.75%, adjusted from time to time, with a minimum
interest rate of 16% per annum and a maximum interest rate of 19% per annum.
Interest is payable monthly in arrears. Following the effective time of the
Merger, obligations under the Subordinated Loan Agreement will be guaranteed by
Bairnco and certain of its subsidiaries and secured by a junior lien on the
assets of Bairnco and certain of its subsidiaries and capital stock of certain
of Bairnco's subsidiaries. The indebtedness under the Subordinated Loan
Agreement will mature on the second anniversary of the issuance of the
subordinated loan and may be prepaid without penalty or premium.
The Loan Agreements contain customary representations, warranties,
covenants, events of default and indemnification provisions. The indebtedness
under the Bridge Loan Agreement and the related security interests will be
subordinated to the indebtedness and related security interests granted under
Bairnco's existing senior credit facility with Bank of America, N.A. The
guarantees of the indebtedness under the Subordinated Loan Agreement and the
related security interests will be subordinated to all indebtedness and security
interests described in the preceding sentence.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
As described in Item 1.01, in connection with the closing of the Offer,
initial financing will be provided by Steel Partners through two loans. Steel
Partners will extend a bridge loan in principal amount up to $90,000,000 to BZ
Acquisition pursuant to the Bridge Loan Agreement, which obligations will be
guaranteed by, among other entities, the Company on an unsecured basis. In
addition, Steel Partners will extend a $15,000,000 principal amount subordinated
loan to the Company pursuant to the Subordinated Loan Agreement. Please see Item
1.01 for additional information regarding the Loan Agreements, related
guaranties and their respective terms.
ITEM 8.01. OTHER EVENTS.
On April 12, 2007, the Company issued a press release, a copy of which is
attached hereto as EXHIBIT 99.5, announcing the aforementioned transactions.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
The exhibits listed in the following Exhibit Index are filed as part of
this Current Report on Form 8-K.
Exhibit no. Description
99.1 Agreement and Plan of Merger, dated as of February 23, 2007,
by and among Steel Partners II, L.P., BZ Acquisition Corp.
and Bairnco Corporation.
99.2 Stock Purchase Agreement, dated April 12, 2007, by and
between Steel Partners II, L.P. and WHX Corporation.
99.3 Loan and Security Agreement by and among BZ Acquisition
Corp., Bairnco Corporation and Steel Partners II, L.P.
99.4 Subordinated Loan and Security Agreement between WHX
Corporation and Steel Partners II, L.P.
99.5 Press release, dated April 12, 2007.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WHX CORPORATION
Dated: April 12, 2007 By: /s/ Robert Hynes
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Name: Robert Hynes
Title: Chief Financial Officer
