SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13e-3
(Rule 13e-100)
(Transaction Statement under Section 13(e) of the Securities Exchange
Act of 1934 and Rule 13e-3 thereunder)
(Amendment No. 1)
National Discount Brokers Group, Inc.
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(Name of Subject Company)
Deutsche Bank AG
Deutsche Acquisition Corp.
and
National Discount Brokers Group, Inc.
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(Name of Filing Persons)
Common Stock, par value $.01 per share
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(Title of Class of Securities)
635646 102
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(CUSIP Number of Class of Securities)
Please send all notices and communications to: with copies to:
Deutsche Acquisition Corp. Daniel S. Sternberg, Esq.
c/o Deutsche Bank AG New York Branch William A. Groll, Esq.
31 West 52nd Street Cleary, Gottlieb, Steen & Hamilton
New York, NY 10019 One Liberty Plaza
Attention: General Counsel New York, New York 10006
212-469-5000 212-225-2000
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(Name, Address and Telephone Number of Persons Authorized to Receive
Notices and Communications on Behalf of Filing Persons)
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Calculation of Filing Fee
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Transaction Valuation* Amount of Filing Fee**
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$950,604,214 $190,120.84
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* Estimated for purposes of calculating the amount of filing fee only. The
amount assumes the purchase of 19,400,086 shares of common stock, par value
$.01 per share ("Shares"), at a price per Share of $49.00 in cash. Such
number of Shares represents the number of Shares outstanding as of October
20, 2000 on a fully-diluted basis, assuming the exercise of all options to
purchase Shares outstanding as of such date, less the number of Shares
already beneficially owned by Deutsche Bank AG.
** The filing fee, calculated in accordance with Rule 0-11 of the Securities
Exchange Act of 1934, is 1/50th of one percent of the aggregate Transaction
Valuation.
[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: $171,581.15.
Form or Registration No.: Schedule TO.
Filing Party: Deutsche Bank AG
Date Filed: October 24, 2000.
[ ] Check the box if the filing relates solely to preliminary
communications made before the commencement of a tender offer. Check
the appropriate boxes below to designate any transactions to which the
statement relates:
[X] third-party tender offer subject to Rule 14d-1.
[ ] issuer tender offer subject to Rule 13e-4.
[X] going-private transaction subject to Rule 13e-3.
[X] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting
the results of the tender offer: [ ]
This Amendment No. 1 (this "Amendment") amends and supplements the
joint Schedule 13E-3 Transaction Statement (the "Schedule 13E-3") filed with the
Securities and Exchange Commission on October 24, 2000 by Deutsche Bank AG, a
banking company with limited liability organized under the laws of the Federal
Republic of Germany ("Deutsche Bank"), Deutsche Acquisition Corp., a Delaware
corporation and an indirect wholly owned subsidiary of Parent ("Purchaser"), and
National Discount Brokers Group, Inc., a Delaware corporation ("NDB"), filed in
connection with Deutsche Bank's and Purchaser's offer to purchase all
outstanding shares of common stock, par value $.01 per share ("Shares"), of NDB,
at $49.00 per Share, net to the seller in cash (less any required withholding
taxes), without interest thereon, upon the terms and subject to the conditions
set forth in the offer to purchase, dated October 24, 2000 (the "Offer to
Purchase"), and in the related letter of transmittal (the "Letter of
Transmittal," which together with the Offer to Purchase, as amended or
supplemented from time to time, collectively constitute the "Offer"). This
Amendment is being filed on behalf of Deutsche Bank, Purchaser and NDB.
Capitalized terms used and not defined herein shall have the meanings
assigned to such terms in the Offer to Purchase and the Schedule TO.
ITEMS 1 THROUGH 9 AND 11 THROUGH 13
Items 1 through 9 and 11 through 13 of the Schedule TO, which
incorporate by reference the information contained in the Offer to Purchase, are
hereby amended and supplemented as follows:
(1) The second to last paragraph on page 10 of the Offer to Purchase is
hereby deleted and replaced with the following:
"Representatives of U.S. Bancorp Piper Jaffray presented to the NDB
board of directors selected financial and market trading information
concerning NDB, and preliminary analyses of acquisition transactions
involving companies deemed similar to NDB, premiums paid in these
transactions, and publicly traded companies deemed similar to NDB. This
information and analyses concerning NDB were substantially similar to
those presented to the NDB board of directors by U.S. Bancorp Piper
Jaffray in connection with the delivery of its fairness opinion on
October 11, 2000, as discussed under "Special Factors--Opinion of U.S.
Bancorp Piper Jaffray," except for the absence of a specific
transaction price and timing differences in available stock market and
financial data. In addition, U.S. Bancorp Piper Jaffray presented
selected financial, market trading and research analyst information
regarding Deutsche Bank and Citigroup and a comparison of selected
operating and valuation data of these companies to a group of companies
deemed comparable to provide the NDB board of directors background
operating and financial information regarding these companies.
Set forth below is the information U.S. Bancorp Piper Jaffray
presented to the NDB board of directors that compared financial
information and valuation ratios relating to Deutsche Bank and
Citigroup to corresponding data and ratios from a group of publicly
traded companies that operate in the traditional brokerage industry
which U.S. Bancorp Piper Jaffray deemed comparable to Deutsche Bank
and Citigroup. These companies included American Express Company,
Donaldson Lufkin & Jenrette, Inc., FleetBoston Financial Corp.,
Goldman Sachs Group, Inc., Lehman Brothers Holdings Inc., Merrill
Lynch & Co., Inc., Morgan Stanley Dean Witter & Co., and Wells Fargo &
Company.
Brokerage Companies
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Citigroup Deutsche Bank Mean Median
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Share price to latest 12 months net income per share .. 20.9x 11.4x 17.7x 17.0x
Share price to estimated calendar 2000 net income per
share ............................................... 19.2x 19.7x 17.3x 17.0x
Share price to estimated calendar 2001 net income per
share ............................................... 17.2x 17.8x 16.1x 16.0x
Market capitalization to book value ................... 4.7x 2.3x 4.1x 3.5x
A copy of U.S. Bancorp Piper Jaffray's September 29, 2000, written
presentation to the NDB board of directors has been filed with the SEC
as Exhibit (c)(3) to the Schedule TO and Schedule 13E-3 and will be
available for inspection and copying at the principal executive offices
of NDB during regular business hours by any interested stockholder of
NDB or any representative of such stockholder who has been so
designated in writing and also may be inspected and copied at the
office of, and obtained by mail from, the SEC. See "THE OFFER, Section
8--Information concerning National Discount Brokers Group."
(2) The seventh bullet point under the heading "SPECIAL
FACTORS--Recommendation of the NDB Board of Directors; Fairness of the Offer and
the Merger" on page 15 of the Offer to Purchase is hereby deleted and replaced
with the following:
o "Presentation of the NDB Board of Directors' Financial Advisor.
The NDB board of directors has relied upon, and adopted, the
conclusions, analyses and reasoning of U.S. Bancorp Piper Jaffray
set forth in the written presentation and fairness opinion of U.S.
Bancorp Piper Jaffray, each of which was delivered to the NDB
board of directors on October 11, 2000 and filed with the SEC as
an exhibit to the Schedule TO and Schedule 13E-3, including,
without limitation, the various valuation analyses of U.S. Bancorp
Piper Jaffray described in "SPECIAL FACTORS--Opinion of U.S.
Bancorp Piper Jaffray."
(3) The following two sentences are hereby added to the end of the last
paragraph of "SPECIAL FACTORS--Recommendation of the NDB Board of Directors;
Fairness of the Offer and the Merger" on page 16 of the Offer to Purchase:
"The NDB board of directors did not believe that the liquidation value
of the Company would be relevant to determining the fair value of NDB
because, due to the nature of NDB's business, such a valuation would be
well below NDB's going-concern value, which was considered by U.S.
Bancorp Piper Jaffray as part of its discounted cash flow analysis, and
substantially below the price per Share proposed in the offer. For this
reason, the NDB board of directors did not consider this factor
relevant or material and therefore did not accord such factor any
weight. For all of the reasons stated above, the NDB board of directors
concluded that the proposed transaction is substantively and
procedurally fair to the unaffiliated security holders of NDB."
(4) The last paragraph of "SPECIAL FACTORS--Opinion of U.S. Bancorp
Piper Jaffray" on page 22 of the Offer to Purchase is hereby deleted and
replaced with the following paragraph:
"Under the terms of an engagement letter dated September 25, 2000, NDB
has agreed to pay U.S. Bancorp Piper Jaffray a fee equal to $3,000,000
upon consummation of an acquisition of NDB, for U.S. Bancorp Piper
Jaffray's financial advisory services. NDB also agreed to pay U.S.
Bancorp Piper Jaffray $1,000,000 for rendering its opinion which will
be credited against payment of the fee for financial advisory
services. The contingent nature of the financial advisory fee may have
created a potential conflict of interest in that NDB would be unlikely
to consummate the transaction unless it had received the opinion of
U.S. Bancorp Piper Jaffray. Whether or not the transaction is
consummated, NDB has agreed to pay the reasonable out-of-pocket
expenses of U.S. Bancorp Piper Jaffray, and to indemnify U.S. Bancorp
Piper Jaffray, to the full extent lawful, against liabilities
incurred. These liabilities include liabilities under the Federal
securities laws in connection with the engagement of U.S. Bancorp
Piper Jaffray by the NDB board of directors. The NDB board of
directors selected U.S. Bancorp Piper Jaffray to serve as its
financial advisor because of U.S. Bancorp Piper Jaffray's mergers and
acquisitions expertise, reputation and familiarity with the
industry in which NDB operates."
(5) The section on page 23 of the Offer to Purchase entitled "Position
of Deutsche Bank and Purchaser Regarding Fairness of the Offer and the Merger"
is hereby amended to include the following paragraphs, inserted immediately
before the last paragraph in the section:
"In making their determination that the offer and merger are
substantively and procedurally fair to NDB's unaffiliated stockholders,
Deutsche Bank and Purchaser were aware that the transaction is not
structured specifically to require the approval of a majority of the
unaffiliated stockholders and that NDB's board had not established a
special committee comprised of directors not employed by NDB or
Deutsche Bank. However, Deutsche Bank and Purchaser did not believe
that either of those procedural safeguards was necessary in order for
the offer and merger to be substantively and procedurally fair.
Deutsche Bank and Parent based this belief on the factors described
above as well as those set forth in this paragraph. NDB has, at all
times since Deutsche Bank's initial investment earlier this year,
operated as an independent company. The majority of NDB's board of
directors are independent: of the nine members on the board, only one
is an employee of Deutsche Bank, and only three are employees of NDB.
In reviewing the discussions with, and negotiating the proposals from,
Deutsche Bank and the potential acquirors described under "Background
of the Offer and the Merger," NDB and its board of directors acted
independently and with the advice and assistance of independent
financial and legal advisors. Deutsche Bank's sole representative on
the NDB board did not participate in any of the discussions or relevant
meetings. The five members of the NDB board who are not employees of
NDB (or associated with Deutsche Bank) unanimously approved the
transaction. Similarly, the successful completion of the transaction is
conditioned upon the effective approval of a substantial percentage of
the unaffiliated stockholders. As a result of the Minimum Tender
Condition and the fact that Deutsche Bank may not waive that condition
without the prior written consent of NDB, the transaction is structured
to require the approval (as evidenced by the tender of Shares) of the
holders of approximately 45.4% of the currently outstanding Shares not
held by Deutsche Bank and its wholly owned subsidiaries (approximately
41.0% in the unlikely event that all outstanding options to purchase
Shares are exercised and Shares issued in respect thereof). Deutsche
Bank also considered the fact that the price to be paid in the offer
and the merger is higher than the price it had paid for any Shares it
acquired in establishing its current investment in NDB, and represented
a substantial premium to then current and recent market prices.
Finally, although Deutsche Bank and Purchaser were not aware of the
specifics of any proposals made by the other potential acquirors, they
understood at the time of the negotiations that the terms of Deutsche
Bank's proposal, after being negotiated up by NDB, compared favorably
to the terms of any such proposal received by NDB from any potential
acquiror unaffiliated with NDB or Deutsche Bank."
(6) The last sentence of the last paragraph on page 23 of the section
of the Offer to Purchase entitled "Position of Deutsche Bank and Purchaser
Regarding Fairness of the Offer and the Merger" is hereby amended by inserting
the following before the period:
"because they understood that net book value and liquidation value, for
a business like NDB, would not accurately reflect a fair value of the
business and would be significantly lower than the actual price they or
any unaffiliated acquiror might be willing to pay, and because they
assumed that going concern value, which they did not specifically
calculate or estimate, would have been considered by the NDB board and
its financial advisor in reaching the conclusions they had reached with
respect to the fairness of the offer and the merger to NDB's
unaffiliated stockholders."
(7) The disclosure in the last paragraph on page 23, entitled
"Purpose," in the section of the Offer to Purchase entitled "Purpose and Effects
of the Offer and the Merger" is hereby amended by deleting the first sentence
and, in its place, including the following text at the beginning of the
paragraph:
"As more specifically described under "Background of the Offer and the
Merger" above, in mid-June 2000, Deutsche Bank made its initial
significant investment in NDB and established a business relationship
with NDB involving the cooperation of Deutsche Bank and NDB in the
provision of various brokerage and financial services. On September 19,
2000, Mr. Kontos disclosed to Mr. Kevin Parker, Deutsche Bank's
representative on NDB's board of directors, the existence of
discussions between NDB and the First Potential Acquiror, and the
interest of the First Potential Acquiror in acquiring NDB. Faced with
the risk of losing its newly established business relationship with NDB
and with selling its entire equity interest in NDB, Deutsche Bank
determined to propose to acquire the remainder of NDB rather than to
sell its interest in a transaction between NDB and the First Potential
Acquiror. In this way, Deutsche Bank intends to take an important step
toward enhancing its global equities capabilities. Following the
transaction, Deutsche Bank expects to be by volume one of the five
largest NASDAQ market makers and to benefit from NDB's trading
technology platform. The offer and the merger are intended to
facilitate this acquisition of the remainder of NDB and to enable
Deutsche Bank to achieve those enhanced capabilities."
(8) The disclosure on page 24 of the Offer to Purchase, in the second
paragraph of the subsection entitled "Effects," in the section of the Offer to
Purchase entitled "Purpose and Effects of the Offer and the Merger" is hereby
amended by deleting the first sentence and, in its place, including the
following text at the beginning of the paragraph:
"Deutsche Bank currently beneficially owns approximately 16.7% of the
outstanding Shares. As a stockholder, Deutsche Bank does not have any
direct interest in, or ability to access, NDB's net book value or net
earnings. Upon a successful completion of the offer and the merger,
Deutsche Bank will own 100% of the then outstanding stock of NDB, will
be able to consolidate 100% of NDB's net book value and net earnings in
its own financial statements, and will be able, as the sole
stockholder, to access 100% of NDB's net book value and net earnings.
According to NDB's Form 10-Q for the fiscal quarter ended August 31,
2000, NDB's net book value as of August 31, 2000, was approximately
$450.8 million and, according to NDB's Form 10-K, NDB's net income for
the fiscal year ended May 31, 2000, was approximately $53.5 million.
The net book value and net earnings of NDB will necessarily fluctuate
from these amounts with the ongoing operation of NDB's business, both
before and after completion of the offer and the merger."
(9) The disclosure on page 25 of the Offer to Purchase, in the last
paragraph of the subsection entitled "Employee Retention Plan and Benefit
Continuation," in the section of the Offer to Purchase entitled "Interests of
Certain Persons" is hereby amended by adding the following sentence at the end
of such paragraph:
"Grants under Deutsche Bank's share scheme, including the retention
stock bonuses and equity awards described above in this subsection, are
of phantom stock interests, designed to track the performance of
Deutsche Bank's ordinary shares on the Frankfurt Stock Exchange, but do
not represent an actual equity interest in Deutsche Bank."
(10) The disclosure in section 5 of the Offer to Purchase, entitled
"Certain United States Federal Income Tax Consequences of the Offer," is hereby
amended by adding the following paragraph immediately before the final paragraph
of this section on page 36:
"The offer and the merger generally will not be taxable events to NDB
for U.S. federal income tax purposes. To the extent that NDB has net
operating losses, capital loss carry-forwards or built-in-losses,
however, the use of such losses in the future may be restricted due to
the change of ownership in NDB. The offer and the merger generally will
not be taxable events for U.S. federal income tax purposes to Deutsche
Bank or Purchaser."
(11) The disclosure on the fully diluted book value per share for the
three months ended August 31, 2000, appearing in the last line of the table
entitled "National Discount Brokers Group Inc. - Selected Consolidated Financial
Information" on page 39 of the Offer to Purchase, is hereby amended by deleting
the number "21.94" and replacing it with the number "21.43."
(12) The disclosure in section 11 of the Offer to Purchase, entitled
"Source and Amount of Funds," is hereby amended by adding the following at the
end of this section on page 52:
"Neither Deutsche Bank nor Purchaser has any alternate financing plan
at this time. Similarly, Deutsche Bank and Purchaser have no current
plans with respect to the repayment or refinancing of borrowings, if
any, made under Deutsche Bank's existing credit facilities. At the
current time, Deutsche Bank anticipates obtaining all the funds
necessary to make the payments required by the offer and the merger
from existing working capital. If Deutsche Bank does not use only
existing working capital but instead does borrow funds under its
existing credit facilities, it is anticipated that those borrowings
would be repaid in the ordinary course of Deutsche Bank's business out
of the proceeds of its consolidated operations, including, if
applicable, the operations of NDB's business."
(13) The first paragraph of section 12 of the Offer to Purchase,
entitled "Certain Conditions of the Offer," is hereby amended to read in its
entirety as follows:
"Notwithstanding any other provision of the offer, Purchaser shall not
be required to accept for payment or (subject to any applicable rules
and regulations of the SEC, including Rule 14e-1(c) under the Exchange
Act, which relates to Purchaser's obligation to pay for or return
tendered Shares promptly after termination or withdrawal of the offer)
to pay for any Shares tendered in the offer and may terminate or,
subject to the terms of the Merger Agreement, amend the offer, if (i)
as of the Expiration Date, there shall not have been validly tendered
and not properly withdrawn that number of Shares which, together with
any Shares beneficially owned by Purchaser or Deutsche Bank, represents
at least a majority of the total number of outstanding Shares on a
fully diluted basis (which shall mean, as of the Expiration Date, the
number of Shares that are actually issued and outstanding plus the
number of Shares that NDB is required to issue pursuant to obligations
outstanding under convertible securities, options and otherwise as of
the Expiration Date) (the "Minimum Tender Condition"), (ii) as of the
Expiration Date, any applicable waiting period under the HSR Act shall
not have expired or been terminated, and any applicable approvals or
consents have not been obtained under any applicable foreign laws (or
any applicable waiting periods thereunder have not expired or been
terminated) or (iii) at any time on or after the date of the Merger
Agreement and prior to the acceptance for payment of any Shares, any of
the following conditions exist:"
(14) The continuing clause on page 53 of the Offer to Purchase
following clause (g) of section 12 of the Offer to Purchase, entitled "Certain
Conditions of the Offer," is hereby amended by deleting the reference to "good
faith" on the first line thereof and replacing it with the word "reasonable."
(15) The first sentence of the last paragraph of section 12 of the
Offer to Purchase, entitled "Certain Conditions of the Offer," on page 53 of the
Offer to Purchase is hereby amended to read in its entirety as follows:
"The foregoing conditions are for the sole benefit of Deutsche Bank and
Purchaser and may be asserted regardless of the circumstances by
Deutsche Bank or Purchaser in its discretion in whole or in part at any
applicable time or from time to time prior to the acceptance for
payment of Shares, or may (except for the Minimum Tender Condition) be
waived by Deutsche Bank or Purchaser in its discretion in whole or in
part at any applicable time or from time to time prior to the
Expiration Date, in each case subject to the terms and conditions of
the Merger Agreement and the applicable rules and regulations of the
SEC."
(16) Item 12 and the Exhibit Index are each hereby amended by adding
reference to Exhibit "(c)(3) Report of U.S. Bancorp Piper Jaffray dated
September 29, 2000." A copy of the new exhibit is attached hereto.
SIGNATURE
After due inquiry and to the best of our knowledge and belief, we
certify that the information set forth in this statement is true, complete and
correct.
DEUTSCHE BANK AG
By /s/ Thomas A. Curtis
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Name: Thomas A. Curtis
Title: Attorney-in-Fact
DEUTSCHE ACQUISITION CORP.
By /s/ Kevin E. Parker
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Name: Kevin E. Parker
Title: President
By /s/ Thomas A. Curtis
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Name: Thomas A. Curtis
Title: Vice President
NATIONAL DISCOUNT BROKERS GROUP, INC.
By /s/ Frank E. Lawatsch, Jr.
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Name: Frank E. Lawatsch, Jr.
Title: Executive Vice President,
Secretary and General Counsel
Dated: November 9, 2000