SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
Amendment No. 1
Solicitation/Recommendation Statement
Pursuant to Section 14(d)(4)
of the Securities Exchange Act of 1934
Brenco, Incorporated
(Name of Subject Company)
Brenco, Incorporated
(Name of Person(s) Filing Statement)
COMMON STOCK, par value $1.00 per share,
(Title of Class of Securities)
107061 10 3
(CUSIP Number of Class of Securities)
Needham B. Whitfield
Chairman of the Board and Chief Executive Officer
Brenco, Incorporated
One Park West Circle
Midlothian, Virginia 23113
(804) 378-2900
(Name, address and telephone number of persons authorized
to receive notice and
communications on behalf of the person(s) filing
statement)
Copy to:
F. Claiborne Johnston, Jr.
Mays & Valentine
NationsBank Center
1111 East Main Street
Richmond, Virginia 23219
(804) 697-1214
This Amendment No. 1 amends and supplements the
Solicitation/Recommendation Statement on Schedule 14D-9 dated June 20,
1996 (the "Schedule 14D-9"), of Brenco, Incorporated (the "Company"),
with respect to the tender offer by BAS, Inc., a Virginia corporation
and a wholly-owned subsidiary of Varlen Corporation, a Delaware
corporation, to purchase all of the outstanding shares of Common
Stock, $1.00 par value per share, of the Company. Capitalized terms
used and not defined herein shall have the meanings ascribed to them
in the Schedule 14D-9.
Item 9. Material to be Filed as Exhibits
Item 9 is hereby amended and supplemented as follows:
The following Exhibit is filed herewith:
Exhibit Description
Exhibit J Revised Fairness Opinion of Wheat dated June 15, 1996.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this Amendment
No. 1 is true, complete and correct.
BRENCO, INCORPORATED
By /s/ Jacob M. Feichtner
Jacob M. Feichtner
Executive Vice President
and Secretary
Dated: July 22, 1996
EXHIBIT J
June 15, 1996
CONFIDENTIAL
The Board of Directors
Brenco, Incorporated
One Park West Circle
Midlothian, VA 23113
Members of the Board:
You have requested our opinion as to the fairness, from a financial
point of view, to the holders of the outstanding shares of Common
Stock, par value $1.00 per share (the "Shares"), of Brenco,
Incorporated (the "Company") of the cash consideration of $16.125 per
Share to be received by such holders pursuant to the Acquisition
Agreement dated as of June 15, 1996, among Varlen Corporation (the
"Acquiror"), BAS, Inc. and the Company (the "Agreement").
Wheat, First Securities, Inc. ("Wheat"), as part of its investment
banking business, is regularly engaged in the valuation of businesses
and their securities in connection with mergers and acquisitions,
negotiated underwritings, competitive biddings, secondary
distributions of listed and unlisted securities, private placements
and valuations for estate, corporate and other purposes. Wheat has
provided investment banking services for the Company in the past for
which it has received customary compensation. In the ordinary course
of our business as a broker-dealer, we may, from time to time, have a
long or short position in, and buy or sell, debt or equity securities
of the Company or the Acquiror for our own account or for the accounts
of our customers. Wheat will receive a fee from the Company for
rendering this opinion.
In arriving at our opinion, we have, among other things:
(1) reviewed the financial and other information contained in the
Company's Annual Reports to Shareholders and Annual Reports on
Form 10-K for the fiscal years ended December 31, 1995, December
31, 1994 and December 31, 1993, and certain interim reports to
Shareholders and Quarterly Reports on Form 10-Q;
(2) conducted discussions with members of senior management of the
Company concerning the Company's business and prospects;
(3) reviewed certain publicly available information with respect to
historical market prices and trading activity for the Company's
Common Stock and for certain publicly traded companies which we
deemed relevant;
(4) compared the results of operations of the Company with those of
certain publicly traded companies which we deemed relevant;
(5) compared the proposed financial terms of the transaction with the
financial terms of certain other mergers and acquisitions which
we deemed to be relevant;
(6) performed a discounted cash flow analysis of the Company based
upon estimates of projected financial performance prepared by the
management of the Company;
(7) reviewed the Agreement (including the Exhibits thereto) dated
June 15, 1996; and
(8) reviewed such other financial studies and analyses and performed
such other investigations and took into account such other
matters as we deemed necessary.
In rendering our opinion, we have assumed and relied upon the accuracy
and completeness of all information supplied or otherwise made
available to us by the Acquiror and the Company, and we have not
assumed any responsibility for independent verification of such
information or any independent valuation or appraisal of any of the
assets of the Acquiror and the Company. We have relied upon the
management of the Acquiror and the Company as to the reasonableness
and achievability of their financial and operational forecasts and
projections, and the assumptions and bases therefor, provided to us,
and we have assumed that such forecasts and projections reflect the
best currently available estimates and judgments of such management
and that such forecasts and projections will be realized in the
amounts and in the time periods currently estimated by such
management. Our opinion is necessarily based upon market, economic
and other conditions as they exist and can be evaluated on the date
hereof and the information made available to us through the date
hereof. Our opinion does not address the relative merits of the
transaction contemplated by the Agreement as compared to any
alternative business strategies that might exist for the Company, nor
does it address the effect of any other business combination in which
the Company might engage.
Our advisory services and the opinion expressed herein are provided to
the Company's Board of Directors for use in evaluating the transaction
contemplated by the Agreement and do not constitute a recommendation
to any holder of the Shares as to whether such holder should tender
his or her shares pursuant to the Acquiror's offer, or approve the
merger. This opinion may not be summarized, excerpted from or
otherwise publicly referred to without our prior written consent.
On the basis of, and subject to the foregoing, we are of the opinion
that as of the date hereof the cash consideration of $16.125 per Share
to be received by the holders of the Shares is fair, from a financial
point of view, to such holders.
Very truly yours,
WHEAT, FIRST SECURITIES, INC.
By: _________________________________
Managing Director