April 5, 2005
Via facsimile 414.277.0656 and U.S. Mail
Thomas J. Bare, President
First Manitowoc Bancorp, Inc.
402 North Eighth Street
Manitowoc, Wisconsin 53221-0010
Re: First Manitowoc Bancorp, Inc.
Schedule 13E-3/A filed on March 25, 2005
File No. 005-80577
Dear Mr. Bare:
We have the following comments on your filing. Where
appropriate, please file a revised Schedule 13E-3 and accompanying
information statement to give effect to these comments. If you
disagree with a comment, we will consider your explanation as to
why a comment is inapplicable or a revision is unnecessary. Please
be as detailed as necessary in your explanation. In some of our
comments, we may ask you to provide us with supplemental information
so we may better understand your disclosure. After reviewing this
information, we may or may not raise additional comments.
Please understand that the purpose of our review process is
to assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect of our review. Feel free to call us at the telephone numbers
listed at the end of this letter.
Schedule 13E-3
General
1. In response to prior comment 1, we note that you cite to
Release 33-5316 and In re Natomas Company as support for your belief
that this transaction does not involve an "offer", "offer for sale",
"offer to sell" or a "sale" within the meaning of 2(a)(3) of the
Act. Please advise of the basis for your belief, in light of the fact
that you will be redeeming approximately 3% of your previously
outstanding common stock. In this regard, explain how security holders
of the "surviving corporation will be in an identical economic position
to that occupied prior to the transaction" and reconcile your
transaction with the transaction described in In re Natomas, in
which the security holders of the surviving company received the same
proportional interest that they had prior to the transaction. In
addition, please explain the basis for your belief that this
transaction is consistent with the Commission`s position set forth
in Release 33-5316 that securities issued pursuant to short-form
mergers involve an "offer", "offer to sell", "offer for sale" or "sale"
within the meaning of 2(a)(3) of the act and are subject to the
registration provisions of the Act unless there is an available
exemption.
2. We reissue comment 4 of our letter of March 9, 2005. Although
schedule 13E-3 does not require an issuer to provide security
holders with summary financial information in all circumstances, in light
of the fact that you are incorporating your financial statements by
reference, please revise to include the complete summarized
financial information required by Item 1010(c) of Regulation M-A.
Pursuant to Instruction 1 to Item 13 of Schedule 13E-3, all of the
Summarized financial information required by Item 1010(c) must be
disclosed in the Schedule 13E-3 when the information required by
Item 1010(a) and (b) is incorporated by reference.
Item 3. Identity and Background of Filing Persons, page 4
3. We note your response to prior comment 6. Please advise
whether each of your executive officers and directors will be "a
continuing shareholder." Also, advise whether your executive officers
and directors held 1,000 or more shares of First Manitowoc common
stock prior to the contemplation of this transaction. If not, tell us
whether any of your executive officers and/or directors received
shares since the contemplation of this transaction to meet the
threshold amount of "a continuing shareholder."
Information Statement
Special Factors, page 7
Background of the Merger Proposal, page 7
4. We refer you to prior comment 7. You disclose on page 9 that
the directors chose a price in excess of the fair value of First
Manitowoc`s shares of common stock and the current trading price.
Although you provide additional disclosure in response to prior
comment 7, it remains unclear what criteria was used to determine
the premium over the fair value price per share and the current
trading price. Please revise.
Position of FMB as to the Fairness of the Merger to
Unaffiliated Shareholders, page 14
5. We reissue prior comment 11 of our letter of March 9, 2005. We
note that the board of directors did not consider net book value,
liquidation value or pre-merger going concern value. Although we
understand that you believe that the company`s net book value is
indicative of historical costs and the liquidation value is not a
relevant valuation method, it is unclear why these valuations
cannot be indicative of the value of the company. For example, the
absence of an intention to liquidate is not determinative of whether
your information statement should address liquidation values. Do you
believe that these valuation methods would substantially
overestimate or underestimate the value of the company? If you believe
that these valuations will overestimate the value the company, expand
your disclosure to explain why these valuation methods are not
indicative of the value of the company and further discuss the basis
for your belief that the transaction is substantively fair to the
unaffiliated security holders.
6. We refer you to your response to prior comment 12. Please
revise your information statement to include your response. The
information statement should include a discussion as to why the board
did not exclusively consider going concern value and why you believe that
a "blended valuation methodology" provides a more accurate
reflection of First Manitowoc`s going concern value. Also, the
information statement should include disclosure that is substantially
similar to the second paragraph in your response to comment 12.
7. We reissue prior comment 13. Please expand each filing
person`s Item 1014(b) analysis, including a discussion as to why the
transaction is fair despite the fact that the safeguards provided
in Item 1014(c), (d) and (e) have not been provided. In this regard,
although your response to comment 13 states that the information
statement was revised to include a discussion of why the filing
parties believe that the transaction is fair despite the absence
of safeguards referenced in Item 1014(c), (d) and (e), we are unable
to locate this revised disclosure.
Report of Financial Advisor, page 18
8. We refer you to your response to prior comment 16. Although
you advise that the information statement was revised to include an
affirmative statement that no material relationship existed
between American Appraisal and First Manitowoc during the past two
years, we were unable to locate this disclosure. Please revise your
information statement or supplementally advise.
9. We refer you to your response to prior comment 17. Although
your response notes that First Manitowoc revised the information
statement to remove the qualification language regarding the summary of
the American Appraisal Report, it does not appear that the language
has been removed. We continue to believe that a qualification of this
type is inconsistent with the requirement that all material
information be provided in the information statement. Please
revise.
Summary of Report of Financial Advisor, page 18
10. We note your response to prior comment 21. Please revise your
information statement to include the information presented to the
staff to provide a materially complete discussion of the basis for
utilizing a 5% control premium as opposed to the average control
premium of 38.1%.
11. We reissue comment 22 of our letter of March 9, 2005. Please
disclose how American Appraisal determined the weight that was
applied to the multiples in the guideline company method and the
guideline transaction method. Similarly, disclose how American
Appraisal determined the weight that was applied to each valuation
method to derive the ultimate fair value of First Manitowoc.
Although we note your response in your letter of March 25, 2005,
your response appears to restate the information contained in your
information statement. Your information statement should be
revised to specifically address the matters above and also disclose
why American Appraisal decided to give equal consideration to First
Manitowoc`s balance sheet and income statement. Further, disclose
why American Appraisal assigned greater weight to the market
approach over the income approach, including the significance of
having only one year of projected financials of First Manitowoc
available for the income approach.
12. We reissue comment 23 of our letter of March 9, 2005. Advise
us whether you have disclosed all of the projections provided to
America Appraisal for use in their "opinion on value," which was
utilized by your board. In this regard, ensure that your disclosure
summarizes all of the material projections that were presented to
American Appraisal.
Closing Comments
As appropriate, please amend your filing and respond to
these comments within 10 business days or tell us when you will provide
us with a response. You may wish to provide us with marked copies of
the amendment to expedite our review. Please furnish a cover
letter with your amendment that keys your responses to our comments and
provides any requested supplemental information. Detailed cover
letters greatly facilitate our review. Please understand that we
may have additional comments after reviewing your amendment and
responses to our comments.
Please direct any questions to me at (202) 942-1957. You
may also contact me via facsimile at (202) 942-9638. Please send all
correspondence to us at the following ZIP code: 20549-0303.
Sincerely,
Jeffrey B. Werbitt
Attorney-Advisor
Office of Mergers and Acquisitions
cc: K. Thor Lundgren, Esquire
W. Charles Jackson, Esquire
Michael Best & Friedrich LLP
100 East Wisconsin Avenue
Milwaukee, Wisconsin53202