1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13E-3
RULE 13e-3 TRANSACTION STATEMENT
(PURSUANT TO SECTION 13(e) OF THE SECURITIES EXCHANGE ACT OF 1934)
ALFA LEISURE, INC.
- --------------------------------------------------------------------------------
(Name of Issuer)
JOHNNIE R. CREAN
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Statement)
Common Stock, no par value
- --------------------------------------------------------------------------------
(Title of Class of Securities)
015394109
- --------------------------------------------------------------------------------
(CUSIP Number of Class of Securities)
Karen Nicolai Winnett, Esq.
Bruck & Perry
500 Newport Center Drive, Suite 700, Newport Beach, California 92660;
714/719-6000
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of Person(s) Filing Statement)
This statement is filed in connection with (check the appropriate box):
a. [ ] The filing of solicitation materials or an information statement
subject to Regulation 14A [17 CFR 240.14a-1 to 240.14b-1], Regulation
14C [17 CFR 240.14c-1 to 240.14c-101] or Rule 13e-3(c)
[Section 240.13e-3(c)] under the Securities Exchange Act of 1934.
b. [ ] The filing of a registration statement under the Securities Act
of 1933.
c. [X] 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: [ ]
CALCULATION OF FILING FEE
Transaction Amount of filing fee
valuation * $357,132 $105.35
* Transaction valuation calculated by multiplying the number of shares
proposed to be acquired (714,264 shares) times the amount of cash to
be paid for the shares ($.50 per share).
[X] Check box if any part of the filing 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: $105.35
Form or Registration Number: Schedule 14D-1
Filing Party: Johnnie R. Crean
Date Filed: April 30, 1998
2
Cross Reference Sheet
The rule 13e-3 transaction covered by this filing involves a tender offer
subject to Regulation 14D. Certain information contained in the Schedule 14D-1
has been incorporated by reference in answer to certain Items of this Schedule
13E-3.
Schedule 13E-3 Item
Item 2. Identity and Background
Item 3. Past Contacts, Transactions or Negotiations
Item 5. Plans or Proposals of the User or Affiliate
Item 10. Interest in Securities of the Issuer
Item 11. Contracts, Arrangements or Understandings with Respect to the
Issuer's Securities
Location in Schedule 14D-1
Item 2. Identity and Background
Item 3.(a) Past Contacts, Transactions or Negotiations with the Subject
Company
Item 5. Purpose of the Tender Offer and Plans or Proposals of the Bidder
Item 6. Interest in Securities of the Subject Company
Item 7. Contracts, Arrangements or Understandings or Relationships with
Respect to the Subject Company's Securities
2
3
Item 1. Issuer and Class of Security Subject to the Transaction.
(a) Alfa Leisure, Inc. ("Company")
13501 5th Street
Chino, California 91710.
(b) The class of equity securities which is the subject of the Rule
13e-3 transaction is common stock, no par value ("Common Stock"). On April 28,
1998, the total number of outstanding shares of Common Stock was 3,039,872 and
the number of holders of record was approximately 400.
(c) The Common Stock is traded in the over-the-counter market, however,
there is currently no established public trading market for the shares and the
Common Stock has not been quoted in the National Quotation Bureau's "pink
sheets" during the past eight fiscal quarters.
(d) The Company has never declared or paid any dividends on its Common
Stock. Management does not expect that the Company will declare or pay any
dividends in the foreseeable future.
(e) Not applicable.
(f) No purchases of common stock of the Company have been made by the
Company or its affiliates since the commencement of the Company's second full
fiscal year preceding the date of this Schedule.
Item 2. Identity and Background.
Incorporated by reference to Item 2 (Identity and Background) of
Schedule 14D-1 dated April 30, 1998.
Item 3. Past Contacts, Transactions or Negotiations with the Subject Company.
(a) Incorporated by reference to Item 3(a) (Past Contacts, Transactions
or Negotiations with the Subject Company) of Schedule 14D-1 dated April 30,
1998.
(b) Incorporated by reference to Item 3(b) (Past Contacts, Transactions
or Negotiations with the Subject Company) of Schedule 14D-1 dated April 30,
1998.
Item 4. Terms of the Transaction.
(a) The purchaser is offering to purchase up to 714,264 shares of
common stock of the Company at $.50 per share, net to the Seller in cash, upon
the terms and conditions set forth in the Offer to Purchase and related Letter
of Transmittal attached to this Schedule as exhibits.
(b) There is no term or arrangement concerning the Rule 13e-3
transaction relating to any shareholder of the Company which is not identical to
that relating to the other holders of the common stock of the Company.
3
4
Item 5. Plans or Proposals of the Issuer or Affiliate.
Incorporated by reference to Item 5 (Purpose of the Tender Offer and
Plans or Proposals of the Bidder) of Schedule 14D-1 dated April 30, 1998.
Item 6. Source and Amounts of Funds or Other Consideration.
(a) Incorporated by reference to Item 4(a) (Source and Amount of Funds
or Other Consideration) of Schedule 14D-1 dated April 30, 1998.
(b) Expenses estimated to be incurred in connection with the Rule 13e-3
transaction are itemized as follows:
Filing fees $ 105
Legal fees 2,000
Appraisal fees 5,000
Printing and mailing 3,000
Depositary fees 5,000
Miscellaneous 395
-------
$15,500
All expenses will be paid by the Purchaser. The Company will not be responsible
for paying any of such expenses.
(c) Incorporated by reference to Item 4(b) (Source and Amount of Funds
or Other Consideration) of Schedule 14D-1 dated April 30, 1998.
(d) Not applicable.
Item 7. Purposes, Alternatives, Reasons and Effects.
(a) The principal purpose of the Rule 13e-3 transaction is enable the
Purchaser to obtain a greater percentage of the ownership of the Company. The
Purchaser intends to continue the operations of the Company without significant
change. The tender offer is not expected to result in any change in the present
Board of Directors or management of the Company, as Purchaser is currently the
Company's principal shareholder and controls approximately 78.2% of the
outstanding shares of Common Stock.
(b) Not applicable.
(c) The Rule 13e-3 transaction was structured as a tender offer to give
each shareholder an independent opportunity to sell his or her shares for cash
or to continue as a minority shareholder of the Company. The Rule 13e-3
transaction is being undertaken at this time because of a lack of trading in the
Company's Common Stock and because the Company's financial performance during
the past few years makes the purchase of shares an attractive opportunity for
the Purchaser.
4
5
(d) If all Shares being sought are tendered, the Purchaser will become
the sole shareholder of the Company. The Purchaser believes that he will be
benefitted by the tender offer because he will have the opportunity to increase
his percentage ownership in the Company.
The effects of the Rule 13e-3 transaction on an unaffiliated security
holder will be to force him or her to make a choice between selling his or her
shares now or continuing to hold his or her shares as a company with no trading
market for its shares. The transaction will have little effect on the liquidity
of shares of an unaffiliated security holder since there has been no reported
trading activity in the Company's Common Stock during the prior two years.
Item 8. Fairness of the Transaction.
(a) The Purchaser believes that the Rule 13e-3 transaction is fair to
unaffiliated security holders.
(b) In considering whether the Rule 13e-3 transaction is fair to
unaffiliated security holders, the Purchaser considered the lack of trading
market for the securities, historical market prices, and the report of William
R. Black who was engaged by the Purchaser to provide the Purchaser with an
opinion with respect to the fairness of the proposed offer price in the
transaction. In addition, the Purchaser has recently purchased 35,000 shares
from two shareholders who requested that Purchaser buy their shares. The
Purchaser paid a price of $.50 per share.
The price offered is less than the Company's net book value per share
and the Company's likely liquidation value. The Company's book value at January
31, 1998 was 2,061,732 or $.68 per share.
There is no trading market for the Company's shares. There has been no
published bid for the Company's shares since 1987. During 1986 to 1987
historical market prices ranged from $.0625 to $.125. At that time, the
Company's operations were profitable. Annual sales reached $18,503,398 for
fiscal year 1988. For fiscal year 1997, the Company's sales were $28,590,285 and
the Company reported net income of $329,544 or $.11 per share. For the first
nine months of fiscal year 1998, the Company's sales were $24,882,486 and the
Company reported net income of $430,187 or $.14 per share.
(c) The structure of the transaction does not require the approval of a
majority of the unaffiliated security holders. Each individual security holder
will make the decision whether or not to tender shares. There are approximately
400 shareholders of record.
(d) No unaffiliated representative has been retained by the directors
who are not employees of the Company to act on behalf of the unaffiliated
security holders for purposes of negotiating the terms of the tender offer or
preparing a report concerning the fairness of the transaction.
(e) No approval of the directors who are not employees of the Company
was sought with respect to the transaction.
(f) No offer of the type described in Instruction (viii) to Item 8(v)
has been received.
Item 9. Reports, Opinions, Appraisals and Certain Negotiations.
(a) The Purchaser has received an opinion from an outside party
relating to the fairness of the consideration to be offered to security holders
of the class of securities which is the subject of the Rule 13e-3 transaction.
5
6
(b) The Purchaser retained William R. Black to provide an opinion with
respect to the fairness of the tender offer price from a financial point of view
to the unaffiliated shareholders. Mr. Black provides business valuation,
economic analysis, business forecasting and expert testimony services. Mr. Black
has been engaged in business valuations since 1984. Mr. Black was a partner in
Analytical Services which had previously rendered fairness opinions for the
Purchaser. Mr. Black was selected based on his familiarity with the Company, his
experience and the cost to obtain a fairness opinion.
No material relationship exists or is contemplated between (i) Mr.
Black and (ii) the Company or the Purchaser. The Purchaser has paid Mr. Black a
fee of $5,000 for his services in valuing the Company and providing his fairness
opinion. Purchaser determined the tender offer price of $.50 per share. Mr.
Black concluded that this price was in excess of the minimum price which Mr.
Black would have recommended.
In connection with rendering his opinion, Mr. Black reviewed and
analyzed the Company's audited financial statements for the periods ended April
30, 1992 through April 30, 1997; interim financial statements for the nine
months ended January 31, 1998; Securities and Exchange Commission Forms 10- K
filed by the Company for the fiscal years ended April 30, 1992 through 1997;
Securities and Exchange Commission Form 10-Q filed by the Company for the nine
months ended January 31, 1998; Articles of Incorporation and Bylaws; Riverside
County property tax assessment records and County Recorder's records. Mr. Black
also analyzed financial statements and other material regarding comparative
public companies, acquisition data for the recreational vehicle industry,
required rates of return on common stocks in general, material discussing the
economic outlook of the recreational vehicle industry and other material he
deemed appropriate. Mr. Black had previously toured the Company's facility and
interviewed the Company's management.
Based on his analysis, Mr. Black rendered his opinion that the proposed
cash offer for the outstanding common stock of Alfa Leisure, Inc. not held by
Purchaser, at a price of fifty cents ($.50) per share is fair from a financial
point of view to the shareholders of the Company.
(c) A copy of the opinion of Mr. Black is included in the Offer to
Purchase which will be provided to each Shareholder of the Company.
Item 10. Interest in Securities of the Issuer.
Incorporated by reference to Item 6 (Interest in Securities of the
Subject Company) of Schedule 14D-1 dated April 30, 1998.
Item 11. Contracts, Arrangements or Understandings with Respect to the Issuer's
Securities.
Incorporated by reference to Item 7 (Contracts, Arrangements,
Understandings or Relationships with Respect to the Subject Company's
Securities) of Schedule 14D-1 dated April 30, 1998.
Item 12. Present Intention and Recommendation of Certain Persons with Regard to
the Transaction.
(a) No executive officer, director or affiliate of the Company or any
person enumerated in instruction C of this statement will tender or sell
securities of the Company owned or held by such person.
6
7
(b) None of the persons named in paragraph (a) of this item has made a
recommendation in support of or opposed to the Rule 13e-3 transaction.
Item 13. Other Provisions of the Transaction.
(a) No appraisal rights are provided under applicable state law or
under the Company's articles of incorporation in connection with the tender
offer. The Purchaser is not voluntarily offering appraisal rights to security
holders in connection with the Rule 13e-3 transaction.
(b) Unaffiliated security holders may obtain access to the corporate
files of the Company or the Purchaser (at the expense of the Purchaser) by
contacting the Purchaser.
(c) Not applicable.
Item 14. Financial Information.
(a) (1) Audited financial statements of the Company for the fiscal
years ended April 30, 1997 and 1996 required to be filed with the Company's most
recent annual report are attached hereto as Exhibit 14(a)(1).
(2) Unaudited balance sheets and comparative year-to-date income
statements and statements of cash flows required to be included in the Company's
most recent quarterly report are attached hereto as Exhibit 14(a)(2).
(3) Not applicable.
(4) The Company's book value per share as of April 30, 1997 and
January 31, 1998 was $.55 and $.68, respectively.
(b) Not applicable.
Item 15. Persons and Assets Employed, Retained or Utilized.
(a) It is anticipated that the Purchaser may utilize the Company's
facilities and administrative personnel to mail written materials and to respond
to Shareholder inquiries. The Purchaser intends to reimburse the Company for the
cost of any facilities or personnel utilized by the Purchaser.
(b) The Purchaser may retain agents who may contact holders of Shares
by mail, telephone, telex, telegraph and personal interview and may request
brokers, dealers and other nominee shareholders to forward the tender offer
materials to beneficial owners. If retained, these agents will be compensated
for services relating to the tender offer on an hourly basis and will be
reimbursed for certain out-of-pocket expenses.
The Purchaser will not pay any fees or commissions to any broker or
dealer or any other person for soliciting tenders of Shares pursuant to the
tender offer. Brokers, dealers, commercial banks and trust companies will be
reimbursed by the Purchaser for customary mailing and handling expenses incurred
by them in forwarding offering materials to their customers.
7
8
Item 16. Additional Information.
Not applicable.
Item 17. Material to be Filed as Exhibits.
(a) Form Promissory Note incorporated by reference to Item 11(b)
(Material to be Filed as Exhibits) of Schedule 14D-1 dated April 30, 1998.
(b) Fairness opinion rendered by William R. Black is attached hereto as
Exhibit 17(b).
(c) Loan Agreement, Promissory Note, Security Agreement, UCC-1,
Assignment of Sublease, Certificate of Borrower, Guaranty, Pledge Agreement,
Escrow Letter, Lease Assignment and Stock Assignment Separate From Certificate
are incorporated by reference to Schedule 14D-1, Item 11(c) filed by Purchaser
on May 12, 1994.
(d) Offer to Purchase, Letter of Transmittal and Letter to Shareholders
from Purchaser are incorporated by reference to Schedule 14D-1, Item 11(a) dated
April 30, 1998.
(e) Not applicable.
(f) None.
8
9
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Date: April 28, 1998
/s/ Johnnie R. Crean
------------------------------
JOHNNIE R. CREAN
9
10
EXHIBIT INDEX
-------------
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
14(a)(1) Audited financial statements of the Company for the fiscal
years ended April 30, 1997 and 1996 required to be filed
with the Company's most recent annual report.
14(a)(2) Unaudited balance sheets and comparative year-to-date income
statements and statements of cash flows required to be
included in the Company's most recent quarterly report.
17(a) Form Promissory Note incorporated by reference to Item 11(b)
(Material to be Filed as Exhibits) of Schedule 14D-1 dated
April 30, 1998.
17(b) Fairness opinion rendered by William R. Black.
17(c) Loan Agreement, Promissory Note, Security Agreement, UCC-1,
Assignment of Sublease, Certificate of Borrower, Guaranty,
Pledge Agreement, Escrow Letter, Lease Assignment and Stock
Assignment Separate From Certificate are incorporated by
reference to Schedule 14D-1, Item 11(c) filed by Purchaser
on May 12, 1994.
17(d) Offer to Purchase, Letter of Transmittal and Letter to
Shareholders from Purchaser are incorporated by reference to
Schedule 14D-1, Item 11(a) dated April 30, 1998.