SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
AMENDMENT TO ITEM 12 OF
SCHEDULE 13E-3 FILED ONSEPTEMBER 20, 2001
RULE 13E-3 TRANSACTION STATEMENT
(PURSUANT TO SECTION 13(E) OF THE SECURITIES EXCHANGE ACT OF 1934)
THE QUIZNO'S CORPORATION
(NAME OF THE ISSUER)
THE QUIZNO'S CORPORATION
FIRENZE CORP.
RICHARD E. SCHADEN
RICHARD F. SCHADEN
(NAME OF THE PERSONS FILING STATEMENT)
COMMON STOCK, $.001 PAR VALUE PER SHARE
(TITLE OF CLASS OF SECURITIES)
749058 10 3
(CUSIP NUMBER OF CLASS OF SECURITIES)
----------------------
PATRICK E. MEYERS, ESQ.
VICE PRESIDENT AND GENERAL COUNSEL
THE QUIZNO'S CORPORATION
1415 LARIMER STREET
DENVER, COLORADO 80202
(720) 359-3300
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE
NOTICES AND COMMUNICATIONS ON BEHALF OF PERSONS FILING STATEMENT)
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COPIES TO:
DAVID C. ROOS, ESQ.
MOYE GILES O'KEEFE VERMIERE & GORRELL, LLP
1225 SEVENTEENTH STREET, SUITE 2900
DENVER, COLORADO 80202
(303) 292-2900
This statement is filed in connection with (check the appropriate box):
[X] (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) 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. [ ]
Check the following box if the filing is a final amendment reporting the results
of the transaction. [ ]
CALCULATION OF FILING FEE:
TRANSACTION VALUATION* $20,137,035
AMOUNT OF FILING FEE** $4,027.41
*For purposes of calculating the fee only. The amount assumes the conversion of
2,337,439 shares of Common Stock of The Quizno's Corporation, in the proposed
merger, at $8.50 per share, and options to purchase 155,378 shares of Common
Stock with an average net equity value of $ 1.73 per share.
**The amount of the filing fee calculated in accordance with Rule 0-11 of the
Securities Exchange Act of 1934 equals 1/50th of 1% of the value of the shares
to be converted in the merger.
[X] Check box if any part of the fee is offset as provided 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: $4,027.41 Filing Party: The Quizno's Corporation
Form or Registration No.: Schedule 14A, Preliminary proxy statement Date Filed:
July 5, 2001
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ITEM 12. THE SOLICITATION OR RECOMMENDATION
Attached hereto are copies of the correspondence between the Special
Committee of the Board of Directors and Fagan Capital, Inc. that has been
received and sent by the Special Committee between September 27, 2001 and
September 29, 2001.
Fagan Communication
DENVER, Colo. - November 29, 2001 - The Quizno's Corporation (Nasdaq: QUIZ)
reported today that the following letters have been exchanged between Fagan
Capital, Inc. (Fagan Capital) and the Company's Special Committee of the Board
of Directors (Quizno's Special Committee).
November 28, 2001 Letter from Quizno's Special Committee to Fagan Capital:
Special Committee
of
The Quizno's Corporation
1415 Larimer
Denver, Colorado 80202
November 28, 2001
William S. Fagan
President
Fagan Capital, Inc.
5201 N. O'Connor Blvd., Suite 440
Irving, Texas 75039
Dear Mr. Fagan:
Thank you for your letter of November 27, 2001 which was received yesterday
evening. As you will recall, we have been engaged in a lengthy, detailed process
attempting to determine whether FCI is prepared to make a bona fide binding
offer in a form that could be accepted for the benefit of Quiznos' minority
shareholders. After many months and on the eve of our shareholder vote, and
closing of our existing binding agreement, you have still failed to do so. We
are concerned that the timing of your letter is designed more to disrupt the
shareholder meeting and closing than it is a sincere expression of interest in
acquiring Quiznos' minority shares. In this respect we note that your letter
does not contain sufficient information to constitute a binding offer which the
Special Committee could recommend on behalf of the minority shareholders. We
have been requesting that type of detailed information at least since my letter
of September 7, 2001 to you.
Nonetheless, we are prepared to pursue immediately a transaction with FCI where
each of the Quiznos minority shareholders will be certain to receive $9.50 per
share in cash with no put option which would require third party consent. As you
know, time is of the essence, since we have a fully committed agreement
guaranteeing the minority shareholders $8.50 per share in cash scheduled to
close on Friday November 30. As expressed in our letter of October 22, 2001, and
as we did with Firenze, we request that your proposal be made immediately in the
form of a binding offer with definitive documentation. We are prepared to
negotiate a definitive document binding on FCI by the close of business on
Thursday, November 29, 2001.
In order to protect the minority shareholders, we ask you to confirm that the
$9.50 offer to the shareholders would be unconditional and that the funds
necessary would be placed immediately in escrow. We and our counsel are
available immediately and continuously to complete negotiations if FCI is
willing to make a binding commitment.
If you have any questions, please feel free to contact our counsel, Richard
Plumridge at (303) 410-2014 or Lexi Methvin at (303) 410-2022.
Best Regards,
Mark Bromberg
Chairman
cc: Richard R. Plumridge
Lexi Methvin
Holly Stein Sollod
Andre Weiss
November 29, 2001Letter from Fagan Capital to Quizno's Special Committee:
Fagan Capital, Inc. Reiterates Unconditional $9.50 per Share Offer
For Minority Shares in Quizno's
FAGAN CAPITAL, INC.
5201 N. O'CONNOR BLVD, SUITE 440
IRVING, TEXAS 75039
PHONE 972-869-4548
FAX 972-869-4066
November 29, 2001
The Special Committee of Quizno's Corporation
c/o The Quizno's Corporation
1415 Larimer Street
Denver, Colorado 80202
Attn: Mark Bromberg
Gentlemen:
FCI appreciates your November 28, 2001 response to our proposal of November
27, 2001. We trust that the Committee has properly reflected on our proposal and
the alternatives presented. Before addressing how to proceed with the
Committee's apparent acceptance of our UNCONDITIONAL $9.50 OFFER, we would like
to set the record straight in response to your inaccurate statement that we
don't have a sincere interest in acquiring Quizno's minority shares. In fact,
the record will show that we've bent over backwards to try to offer Quizno's
minority shareholders a substantially better deal than the offer you are
supporting, and we are still interested in doing so.
FCI made a very clear, fully financed and binding commitment to offer
$10.63 per share to the Quizno's minority shareholders over two months ago.
After several weeks, you reported to us that our $10.63 offer was blocked by
your mezzanine lender despite the fact that all FCI asked for was a put on the
same terms that such lender was granted last year. FCI made it clear that we
would defer exercise of such put until after the lender had been paid in full,
effectively subordinating our put to both the lender's loan and its put. Frankly
since our put poses no risk to the lender, we can't understand its objections to
our request.
It is especially troubling that less than one year ago and in full
anticipation of a subsequent going-private proposal by the Schadens, the
Directors (including the Special Committee members) sought a lender to provide
financing for such going-private proposal and then gave such lender sweeping
rights to block virtually any offer made by any other party who might wish to
compete with the Schadens! This lender can not only prevent any third party
(such as FCI) from obtaining the same benefits which were afforded the lender
(such as the put we requested), but you have informed us that the lender can
block virtually any debt or equity transaction involving Quizno's. You have
placed the Schadens in a position to take the Company private just as the cash
flows really started exploding, and at a price that the overwhelming majority of
non-Schaden shareholders find very objectionable.
Further, as you know, FCI spent substantial time and money meeting your
requests during the fall of 2001, trying to put together a transaction that
would benefit the Quizno's minority shareholders prior to the mailing of the
current proxy statement. Those efforts to reach a mutually agreed superior offer
were halted on November 5th, after my in-person meeting with Rick Schaden. As
you know, after many requests since February 2001 by me to meet with him, in
late October Rick Schaden finally called to invite me to meet with him in
Denver, ostensibly to see if we could reach an agreement that would be
beneficial to all parties. You, in fact, advised me that Mr. Schaden would
suggest constructive alternatives at such meeting. At the November 5th meeting,
and at the request of Schaden and John Moye, I outlined in good faith some
alternatives for resolving our differences and providing better alternatives to
shareholders. After my presentation of numerous approaches, I was then summarily
informed by Schaden, without any negotiation or the proffer of any ideas on his
part, that he would not propose or even consider any alternatives, since the
Schaden offer was "too far along" and he didn't want to disrupt the transaction
that he currently had on the table. Later that day, I learned that Quizno's had
actually been filing their final proxy with the SEC while our meeting was taking
place! Quizno's participation in the meeting was disingenuous.
Notwithstanding these matters, we are delighted that you are willing to
pursue immediately a definitive transaction at $9.50 per share with no put.
Given certain mischaracterizations of our offer, we wish to emphasize that OUR
$9.50 OFFER IS NOT A CONDITIONAL OFFER, and it appears that you agree that
neither the special committee nor the mezzanine lender has any basis to reject
such offer and must accept it as superior to the similarly unconditional but
inferior Schaden $8.50 offer.
In light of the events to date, it is understandable that we are leery of
wasting more time and money on wild goose chases. Therefore, please advise us
promptly as to which structure the Committee would like to pursue (tender offer
by FCI, or amended merger agreement by Quizno's along with a stock purchase
agreement between FCI and Quizno's). Please promptly furnish us with a draft
agreement with standard provisions incorporating such structure. To ensure that
this effort is not merely another useless exercise, we also require written
confirmation that the Board of Quizno's (not just the Special Committee)
supports the $9.50 offer. As you have previously advised us, the Special
Committee lacks the authority to bind Quizno's to approve an FCI proposal
without Schaden approval. Therefore, it is critical to know where the Schadens
stand now.
Again, we wish to reiterate that in addition to our UNCONDITIONAL $9.50
OFFER, we are still interested in offering much more than $9.50 per share if the
Schadens and your mezzanine lender would consent to giving us standard minority
shareholder protections including a put. Further, we would be keenly interested
in purchasing the entire Company for at least $15 per share, although since no
one knows better than the Schadens that the Company is probably worth at least
twice that much, we would be shocked (and delighted!) if they would seriously
enter into negotiations to sell us the Company at such price.
Finally, as you have already acknowledged in writing, FCI has proven its
financial wherewithal to complete a purchase of all minority shares. To
underscore that capability, I am willing to personally guarantee the
availability of such financing. It is disingenuous that your November 28 letter
adds a brand new condition to any prospective negotiations -- that you want an
escrow account to be funded to ensure that FCI can complete the purchase of such
shares. An escrow was never raised by you in the past and it is neither
necessary nor acceptable at this late date.
We look forward to completing a transaction promptly with you, as we view
Quizno's as an incredible cash-flow machine, and as we've said many times, we
think Rick and Dick Schaden and their team are among the most brilliant business
people in the United States and have executed superbly thus far. We are honored
to be their partners, and hope to continue to be their partners for a very long
time. We certainly understand why the Schadens want to take the Company private
at these prices; we share their views about the great future of the company and
hope to move forward on friendly terms. Thank you.
Very truly yours,
FAGAN CAPITAL, INC.
By: _____________________
William S. Fagan, President
cc: Andre Weiss (fax) 212-593-5955
John Moye (fax) 303-292-4510
Richard Plumridge (fax) 303-410-2199
Lexi Methvin (fax) 303-410-2199
November 29, 2001Letter from Quizno's Special Committee to Fagan Capital:
Special Committee
-----------------
Of
The Quizno's Corporation
November 29, 2001
William S. Fagan
President
Fagan Capital, Inc.
5201 N. O'Connor Blvd., Suite 440
- ---------------------------------
Irving, Texas 75039
Dear Bill,
We have received midday your response to our November 28, 2001 letter.
It is our goal to provide the greatest benefit possible to our minority
shareholders. We would like to believe that your primary goal is to complete a
transaction that would benefit the minority shareholders rather than to disrupt
the existing agreement. After careful review of your letter we continue to
believe that you have not been responsive to our requests, including our request
that you provide us with definitive documentation for execution. In addition, we
believe that you have inaccurately portrayed the actions of the Special
Committee. You should assume we disagree with the factual assertions in your
letter. Nevertheless, in the interest of maximizing value to our minority
shareholders we are willing to try once again to clearly state what is required
in order for us to effectively complete a transaction with you.
Our letter of November 29, 2001 clearly states that in order for us to pursue
your proposal you needed to provide us with definitive, executable
documentation. To date you have failed to provide us with any documentation
which if signed by Quizno's would be binding on FCI and provide value to the
minority shareholders. We do not wish to have any further miscommunication with
you on this point. In order for you to demonstrate you are serious in your
proposal, we require that you provide us with definitive documents executed by
you no later than midnight (Mountain time) tonight. Unless you comply with this
request, which we made numerous times including in our October 23, 2001 and
November 28, 2001 letters, we cannot and will not deprive the minority
shareholders of their right to receive $8.50 a share.
It is not the Special Committee's obligation to draft a definitive agreement for
you and we will not do so. I am sure you have at your disposal competent
attorneys who can advise you and guide you through this process. We remind you
once again that the agreement with Firenze, which the Special Committee has
approved, is publicly available.
Give the last minute nature of your proposal (the time of which is
extraordinary), our letter of November 28, 2001 informed you of our requirement
that you put sufficient funds into escrow in order to fund the transaction. Your
letter today indicates your unwillingness to do this. We will not continue
discussions with you at this late date unless this requirement is met. In the
alternative, we will accept a joint and several personal guaranty of the
performance of FCI's obligations from you and your wife to secure the funding
obligation.
If you have any questions, please feel free to contact our counsel, Richard
Plumridge at (303) 410-2014 or Lexi Methvin at (303) 881-6854.
Best regards,
Mark Bromberg
Chairman
Richard R. Plumridge
Lexi Methvin
Andre Weiss
For more information, contact:
Patrick E. Meyers, Vice President & General Counsel
The Quizno's Corporation, 720-359-3300
