SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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): June 19, 1997
VARSITY SPIRIT CORPORATION
(Exact name of registrant as specified in its charter)
Tennessee 62-1169661
(State or other jurisdiction of (I.R.S. Employer
incorporation) Identification No.)
Commission file number 0-19790
2525 Horizon Lake Drive
Memphis, Tennessee 38133
(Address of principal executive offices) (Zip Code)
(901) 387-4300
(Registrant's telephone number, including area code)
Item 1. Changes in Control of Registrant
On May 5, 1997, Varsity Spirit Corporation, a Tennessee corporation
("Varsity Spirit"), Riddell Sports Inc., a Delaware corporation ("Riddell"), and
Cheer Acquisition Corporation, a Tennessee corporation and a wholly owned
subsidiary of Riddell (the "Merger Sub"), entered into an Agreement and Plan of
Merger (the "Merger Agreement"), pursuant to which the Merger Sub offered to
purchase all outstanding shares of common stock, par value $0.01 per share, of
Varsity Spirit (the "Shares"), at $18.90 per share, net to the seller in cash
(the "Offer Price"), upon the terms and subject to the conditions set forth in
the Offer to Purchase and in the related Letter of Transmittal (which, together
with any amendments or supplements thereto, collectively constitute the
"Offer"), sent to Varsity Spirit shareholders on May 12, 1997. All capitalized
terms used herein, but not defined shall have the meanings ascribed to such
terms in the Offer to Purchase.
The Offer expired at 11:00 a.m., New York City time, on Thursday, June
19, 1997 (the "Expiration Time") and Merger Sub accepted for purchase 4,511,415
Shares (including 500 Shares tendered pursuant to guarantees of delivery) that
had been validly tendered and not withdrawn prior to the Expiration Time. The
Shares accepted pursuant to the Offer constitute approximately 98.6% of Varsity
Spirit's issued and outstanding Shares. The remaining Varsity Shares will be
acquired in a subsequent second-step merger transaction expected to occur on or
about July 25, 1997.
The Merger Agreement provides that, upon the purchase and payment by
Riddell or the Merger Sub of Shares representing at least a majority of the
outstanding Shares on a fully diluted basis, Riddell is entitled to designate
such number of directors on the Board of Directors of Varsity Spirit which
represents a percentage of the Board of Directors of Varsity Spirit equaling the
percentage of Shares purchased pursuant to the Offer, provided that regardless
of the percentage of Shares purchased pursuant to the Offer, at least two
directors shall remain on the Varsity Spirit Board of Directors that were
directors prior to the Expiration Time. Furthermore, if requested by Riddell,
Varsity Spirit is required to cause such persons designated by Riddell to
constitute at least the same percentage of each committee of the Board of
Directors of Varsity Spirit and each board of directors of each subsidiary of
Varsity Spirit.
At the Expiration Time, Riddell exercised its rights under the Merger
Agreement to designate persons to be elected to Varsity Spirit's Board of
Directors so that its designees constituted approximately 70% of Varsity
Spirit's Board of Directors.
The total funds required by Riddell and the Merger Sub (i) to
purchase all Shares validly tendered pursuant to the Offer, (ii) to consummate
the Merger, (iii) to refinance Riddell's and Varsity Spirit's indebtedness that
was required to be repaid in connection with the Merger, and (iv) to pay all
related fees and expenses, will be or were obtained by (a) the Stock Purchase
Agreements entered into by and among certain executives of Varsity Spirit and
Riddell, and (b) proceeds obtained from the issuance of $115 million principal
amount of 10 1/2% senior notes due July 15, 2007, of Riddell (the "Senior
Notes") through a private placement exempt from registration under the
Securities Act of 1933, as amended.
The Merger Agreement, Offer to Purchase and the related Letter of
Transmittal and the Stock Purchase Agreements are attached hereto as exhibits,
and each is incorporated herein by reference in its entirety. The foregoing
discussion does not purport to be complete and is qualified in its entirety by
reference to such exhibits.
To the knowledge of Varsity Spirit, there are no arrangements,
including any pledge by any person of securities of Varsity Spirit, the
operation of which may at a subsequent date result in a further change in
control of Varsity Spirit.
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Item 7. Exhibits
99.1 Agreement and Plan of Merger, dated as of May 5, 1997, by and among
Varsity Spirit Corporation, Riddell Sports Inc. and Cheer Acquisition
Corporation, filed with the Securities and Exchange Commission as
Exhibit 99.1 to Varsity Spirit Corporation's Current Report on
Form 8-K, dated May 12, 1997, is incorporated herein by reference.
99.2 Offer to Purchase and the related Letter of Transmittal, dated as of
May 12, 1997, by Cheer Acquisition Corporation, a wholly-owned
subsidiary of Riddell Sports, Inc., filed with the Securities and
Exchange Commission as Exhibits (a)(1) and (a)(2), respectively,
to Cheer Acquisition Corporation's Schedule 14D-1 on May 12, 1997, is
incorporated herein by reference.
99.3 Stock Purchase Agreement, dated as of May 5, 1997, between Riddell
Sports, Inc. and Jeffrey G. Webb, filed with the Securities and
Exchange Commission as Exhibit (c)(3) of Cheer Acquisition
Corporation's Schedule 14D-1 on May 12, 1997, is incorporated herein
by reference.
99.4 Stock Purchase Agreement, dated as of May 5, 1997, between Riddell
Sports, Inc. and Gregory C. Webb filed with the Securities and
Exchange Commission as Exhibit (c)(4) of Cheer Acquisition
Corporation's Schedule 14D-1 on May 12, 1997, is incorporated herein
by reference.
99.5 Stock Purchase Agreement, dated as of May 5, 1997, between Riddell
Sports, Inc. and W. Kline Boyd filed with the Securities and
Exchange Commission as Exhibit (c)(5) of Cheer Acquisition
Corporation's Schedule 14D-1 on May 12, 1997, is incorporated herein
by reference.
99.6 Stock Purchase Agreement, dated as of May 5, 1997, between Riddell
Sports, Inc. and J. Kristyn Shepherd, filed with the Securities and
Exchange Commission as Exhibit (c)(6) of Cheer Acquisition
Corporation's Schedule 14D-1 on May 12, 1997, is incorporated herein
by reference.
SIGNATURE
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 thereunto duly authorized.
VARSITY SPIRIT CORPORATION
(Registrant)
By:
/s/ Jeffrey G. Webb
---------------------------
Jeffrey G. Webb
President
June 24, 1997
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