SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE TO
Tender Offer Statement under Section 14(d)(1) or 13(e)(1)
of the Securities Exchange Act of 1934
(Amendment No. 1)
KLLM TRANSPORT SERVICES, INC.
(Name of Subject Company (issuer))
HIGH ROAD ACQUISITION CORP.
HIGH ROAD ACQUISITION SUBSIDIARY CORP.
WILLIAM J. LILES, III
BERNARD J. EBBERS
(Names of Filing Persons (offerors))
COMMON STOCK, PAR VALUE $1.00 PER SHARE
(Title of Class of Securities)
482498102
(CUSIP Number of Class of Securities)
Dionne M. Rousseau Charles P. Adams, Jr.
Jones, Walker, Waechter, Poitevent, Adams & Reese, L.L.P.
Carrere & Denegre, L.L.P. 111 E. Capitol Street
201 St. Charles Avenue, Floor 51 Suite 350
New Orleans, Louisiana 70170 Jackson, Mississippi 39201
(504) 582-8338 (601) 292-0720
(Name, address, and telephone numbers of persons authorized to receive
notices and communications on behalf of filing persons)
CALCULATION OF FILING FEE
- --------------------------------------------------------------------------
|Transaction valuation* | Amount of filing fee |
|$27,485,558 | $5,398 |
- --------------------------------------------------------------------------
*Estimated for purposes of calculating the amount of the filing fee only.
The filing fee calculation assumes the purchase of all the outstanding
shares of common stock, par value $1.00 per share, of KLLM Transport
Services, Inc. (the "Common Stock"), a Delaware corporation (the
"Company"), including the related preferred stock purchase rights (the
"Rights" and, together with the Common Stock, the "Shares"), except for
689,123 Shares beneficially owned by William J. Liles, III, at a per Share
price of $8.05 in cash, without interest. Based on the Company's
representation, as of May 25, 2000, there were 4,103,478 Shares issued and
outstanding. Based on the foregoing, the transaction value is equal to the
product of 3,414,355 Shares and $8.05 per Share. The amount of the filing
fee calculated in accordance with Rule 0-11 of the Securities Exchange Act
of 1934, as amended, equals 1/50th of one percent of the value of the
transaction.
[ ] Check the 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:___________________
Form or Registration No:___________________
Filing Party:_____________________________
Dated Filed:____________________________
[ ] 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.
[ ] amendment to Schedule 13D under Rule 13d-2.
Check the following box if a final amendment reporting the results of
the tender offer: [ ]
This Amendment No. 1 amends and supplements the Tender Offer
Statement on Schedule TO filed with the Securities and Exchange
Commission on June 2, 2000, by High Road Acquisition Corp., a
Delaware corporation ("Parent"), and High Road Acquisition Subsidiary
Corp., a Delaware corporation and wholly-owned subsidiary of Parent
("Purchaser"). The Schedule TO relates to a tender offer by
Purchaser to purchase all outstanding shares of common stock, par
value $1.00 per share (the "Common Stock") of KLLM Transport Services,
Inc., a Delaware corporation (the "Company"), and the associated preferred
stock purchase rights of the Company (the "Rights" and, together with the
Common Stock, the "Shares"), issued pursuant to the Stockholder Protection
Rights Agreement, dated as of February 13, 1997, by and between the Company
and Harris Trust and Savings Bank, as successor Rights Agent, at a price
of $8.05 per Share and subject to the conditions set forth in the Offer
to Purchase dated June 2, 2000 and the related Letter of Transmittal
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(which, together with any supplements or amendments, collectively
constitute the "Offer"), copies of which were attached as Exhibits (a)
(1)(A) and (a)(1)(B), respectively, to the Schedule TO.
The information set forth on the cover page of the Offer to Purchase
is hereby amended and supplemented by adding the following paragraph:
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved the transaction,
passed upon the merits or fairness of the transaction, or passed upon
the adequacy or accuracy of the disclosure in this document. Any
representation to the contrary is a criminal offense.
ITEM 1. SUMMARY TERM SHEET
Q. Who is offering to purchase my shares of common stock of the Company?
The information set forth in the Offer to Purchase in the Summary Term
Sheet in the fourth, fifth and sixth sentences under this question is
amended and restated as follows:
Parent and Purchaser have entered into a merger agreement with
the Company pursuant to which Parent, through Purchaser, is offering
to purchase all of the outstanding common stock of the Company. Of
the Company's outstanding shares of common stock, 689,123 shares (the
"Liles Shares") are owned by Mr. Liles, his wife and four trusts of
which Mr. Liles is the trustee, co-trustee and/or beneficiary (the
"Liles Family"). The Liles Family has entered into an agreement with
Parent providing that the Liles Shares will not be tendered in the
tender offer, but rather will be exchanged for shares of Parent's
common stock.
Q. What are you seeking to purchase, how much are you offering to pay and
what is the form of payment?
The information set forth in the Offer to Purchase in the Summary Term
Sheet in the first sentence under this question is hereby amended and
restated to read as follows:
We are offering to purchase all of the outstanding shares of
common stock of the Company at a price of $8.05 per shares, net to
you, in cash without interest.
Q. Why are you making the offer?
The information set forth in the Offer to Purchase in the Summary Term
Sheet under this question is hereby amended and supplemented by adding the
following paragraph at the end of the response to the question:
The reasons why we are making the offer include:
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* the inadequate and unfair price offered by Mr. Low to the
stockholders of the Company for the purchase of the shares;
* the Company's inability to find a third party buyer other
than Mr. Low;
* the expectation of keeping the Company's organization
intact and the Company's headquarters at its present
location; and
* the relatively low volume of trading in the shares and
that the offer and merger would result in immediate,
enhanced liquidity for the stockholders of the Company at a
premium to recent trading prices.
A fuller discussion of the reasons why we are making the
offer may be found in Section II.
Q. Will there be a subsequent offering period?
The information set forth in the Offer to Purchase in the Summary Term
Sheet is hereby amended by deleting the response corresponding to this
question and replacing it with the following:
If the initial offering period is consummated, we will provide a
subsequent offering period of at least three business days. The
subsequent offering period will be an additional opportunity for you
to tender your shares and receive the $8.05 per share cash
consideration following the expiration of the offer. However, we may
not purchase any shares unless during the initial offering period
there are validly tendered and not withdrawn a number of shares that,
together with the Liles Shares, will constitute at least a majority of
the shares outstanding on the date of our purchase, on a fully diluted
basis. Therefore, we urge you to tender your shares during the
initial offering period. See Sections 1 and 2.
Q. How will I be notified if the offer is extended?
The information set forth in the Offer to Purchase in the Summary
Term Sheet is hereby amended by deleting the response corresponding to this
question and replacing it with the following:
If we extend the offer, we will make a public announcement of the
extension no later than 9:00 a.m., New York City time, on the business
day after the day on which the offer was scheduled to expire. See
Section 1.
Q. What is your position on the fairness of the offer?
The information set forth in the Offer to Purchase in the Summary Term
Sheet is hereby amended by deleting the first sentence of the response
corresponding to this question and replacing it with the following:
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We believe that our offer of $8.05 per share is fair to all
unaffiliated stockholders of the Company based on our consideration of
the factors discussed in Section IV such as the current and historical
price of the shares and the fact that after a bidding process
conducted by a special committee of independent directors of the
Company, as of the time of our printing this amendment to our Schedule
TO, no one was willing to pay more.
Q. If I do not tender but the offer is successful, what will happen to my
shares?
The information set forth in the Offer to Purchase in the Summary Term
Sheet is hereby amended by deleting the second paragraph of the response
corresponding to this question and replacing it with the following:
The merger agreement requires us to cause the merger to occur,
subject to limited exceptions, if the tender offer closes. These
limited exceptions are described in Section 9, "Conditions to the
Merger." The primary conditions to the merger are that:
* no party or any of its subsidiaries shall be subject to
any order, decree or injunction by a court of competent
jurisdiction which (1) prevents the closing of the merger or
(2) would impose any material limitation on Parent's ability
to own the Company; and
* no governmental or regulatory authority shall have
enacted a statute, rule or regulation that makes the closing
of the merger illegal, and all material governmental
consents, orders and approvals legally required for the
closing of the merger shall have been obtained and be in
effect.
If the merger does not take place, the number of stockholders and
the number of shares of the Company that are still in the hands of the
public may be so small that there will no longer be an active public
trading market (or, possibly, any public trading market) for common
stock of the Company. Also, the Company may cease making filings with
the SEC or otherwise cease being required to comply with the SEC rules
relating to publicly held companies. Sec Sections 6 and 9.
ITEM 2. SUBJECT COMPANY INFORMATION
The information set forth in the Offer to Purchase in Section 7
("Information Concerning the Company") is hereby amended by adding the
following after the last paragraph:
CERTAIN PROJECTIONS PROVIDED TO MR. EBBERS. In the course
of discussing the proposed acquisition of the Company with
Mr. Ebbers, Mr. Liles, assisted by Mr. Dutro, the Company's
Chief Financial Officer, prepared models projecting the future
financial performance of the Company using various assumptions,
including assumptions about the Company's operating
performance and the financing of the transaction. The Company does
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not as a matter of course publicly disclose projections as to future
revenues or earnings, and the models were not prepared on behalf of
the Company, but were prepared by Messrs. Liles and Dutro and given
by them to Mr. Ebbers as a framework for discussing the proposed
acquisition of the Company. The models were not prepared with a view
to public disclosure and are included in this document only because
the information was provided to Mr. Ebbers for this limited purpose.
The models were not prepared with a view to compliance with the
published guidelines of the SEC regarding projections, were not
prepared in accordance with the guidelines established by the American
Institute of Certified Public Accountants for preparation and
presentation of financial projections, and were not reviewed by the
Company's auditors. The models are forward-looking statements
reflecting numerous assumptions about many factors that are
impossible to predict with any degree of accuracy, many of
which are beyond management's control, and as such are subject to
risks and uncertainties that could cause actual results to differ
materially from the results forecasted by the models. The inclusion
of the models should not be regarded as an indication that Messrs.
Liles or Ebbers, Parent or Purchaser considered or consider the models
to be a reliable prediction of future events. In addition, the models
were prepared over six weeks ago, and neither Messrs. Liles, Ebbers,
Parent or Purchaser intends to update or otherwise publicly revise the
models to reflect circumstances existing after the date they were
made, even if any or all of the assumptions underlying the models are
shown to be in error, or if experience or future changes make it clear
that results predicted by the models will not be realized. The models
were not prepared with a view to reliance by the Company's
shareholders in making a decision in connection with the Offer or the
Merger or in making any other investment decision. Therefore, the
Company's shareholders are cautioned not to rely upon the models.
Model A assumed revenue growth of 13.5% in 2000, and 7.5% each
year for 2001-2004, an operating ratio declining from 97.0% in 2000 to
94.9% in 2004, capital expenditures in 2000-2004 of $28.4 million,
$25.8 million, $30.3 million, $39.3 million and $42.1 million, an
equity price of $9.00 per share, post-transaction equity of $7.4
million, post-transaction debt of $81.5 million, transaction fees of
$4.0 million and an interest rate of 9%. The model produced equity of
$22.6 million and debt of $113.4 million at fiscal year end 2004.
Model B contained the same assumptions as Model A, except that
Model B assumed no revenue growth and capital expenditures in 2000-
2004 of $15.4 million, $14.2 million, $17.8 million, $21.4 million and
$21.5 million. The model produced equity of $18 million and debt of
$61.9 million at fiscal year end 2004.
Model C contained the same assumptions as Model A, except that
Model C assumed post-transaction equity of $17.4 million, post-
transaction debt of $69.5 million, transaction fees of $2.0 million
and an interest rate of 7%. The model produced equity of $41.1
million and debt of $94.9 million at fiscal year end 2004.
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Model D contained the same assumptions as Model C, except that
Model D assumed an operating ratio declining from 97.0% in 2000 to
91.0% in 2004. The model produced equity of $63.9 million and debt of
$72.1 million at fiscal year end 2004.
Model E contained the same assumptions as Model B, except that
Model E assumed post-transaction equity of $17.4 million, post-
transaction debt of $69.5 million, transaction fees of $2 million and
an interest rate of 7%. The model produced equity of $35.2 million
and debt of $44.7 million at fiscal year end 2004.
Model F contained the same assumptions as Model D, except that
Model F assumed no revenue growth and capital expenditures in 2000-
2004 of $15.4 million, $14.2 million, $17.8 million, $21.4 million and
$21.5 million. The model produced equity of $51.4 million and debt of
$28.4 million at fiscal year end 2004.
Model G assumed no revenue growth, an operating ratio declining
from 97% in 2000 to 91% in 2004, capital expenditures in 2000-2004 of
$15.4 million, $14.2 million, $17.8 million, $21.4 million and $21.5
million, an equity price of $9.00 per share, post-transaction equity
of $13.2 million, post-transaction debt of $73.7 million, transaction
fees of $2.0 million and an interest rate of 8.5%. The model produced
equity of $43.4 million and debt of $36.5 million at fiscal year end
2004.
Model H contained the same assumptions as Model G, except that
Model H assumed capital expenditures in 2000 of $17.9 million. The
model produced equity of $43.1 million and debt of $37.2 million at
fiscal year end 2004.
In making his decision to invest in Parent, Mr. Ebbers focused on
Models F, G and H.
ITEM 4. TERMS OF THE TRANSACTION
(a) The information set forth in the Offer to Purchase is hereby
amended by deleting the first sentence of Section 2 ("Acceptance for
Payment and Payment for Shares; Subsequent Offering Period") in its
entirety and replacing it with the following:
Upon the terms and subject to the conditions of the Offer
(including, if the Offer is extended or amended, the terms and
conditions of any such extension or amendment), Purchaser will accept
for payment and will pay for all Shares validly tendered and not
properly withdrawn on or prior to the Expiration Date promptly after
the expiration of the Offer.
The information set forth in the Offer to Purchase is hereby amended
by deleting the sixth paragraph of Section 2 ("Acceptance for Payment and
Payment for Shares; Subsequent Offering Period") in its entirety and
replacing it with the following:
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If the initial offering period is consummated, Purchaser will
provide a Subsequent Offering Period of at least three business days
pursuant to Rule 14d-11 under the Exchange Act. Rule 14d-11 under
the Exchange Act provides that a bidder may, subject to certain
conditions, elect to provide a subsequent offering period ("Subsequent
Offering Period") of three business days to 20 business days so long
as, among other things, (1) the Offer remains open for a minimum of 20
business days and has expired, (2) the Offer is for all outstanding
Shares, (3) the bidder accepts and promptly pays for all Shares
tendered during the Offer, (4) the bidder announces the results of the
Offer, including the approximate number and percentage of Shares
deposited no later than 9:00 a.m., New York City time on the next
business day after the Expiration Date and immediately begins the
Subsequent Offering Period, (5) the bidder immediately accepts and
promptly pays for the Shares as they are tendered during the
Subsequent Offering Period, and (6) the bidder pays the Per Share
Amount for all Shares tendered in the Subsequent Offering Period. A
Subsequent Offering Period is not an extension of the Offer but would
be an additional period of time, following the expiration of the
Offer, in which stockholders may tender Shares not tendered in the
Offer. Shares tendered during the initial offering period may not be
withdrawn during any Subsequent Offering Period, nor can shares
tendered during the Subsequent Offering Period be withdrawn.
The information set forth in the Offer to Purchase in Section 4
("Withdrawal Rights") is hereby amended and supplemented by adding the
following:
Shares tendered during the initial offering period may not be
withdrawn during any Subsequent Offering Period, nor can shares
tendered during the Subsequent Offering Period be withdrawn.
The information set forth in the Offer to Purchase is hereby amended
by deleting the first paragraph of Section 11 ("Conditions of the Offer")
in its entirety and replacing it with the following:
Notwithstanding any other provision of the Offer but subject to
the terms and conditions of the Merger Agreement, Purchaser shall not
be required to accept for payment and, subject to any applicable rules
and regulations of the SEC, including Rule 14e-1(c), Purchaser shall
not be required to pay for any Shares, may postpone the acceptance for
payment of or payment for, tendered Shares, and may, in its sole
discretion, extend, terminate or amend the Offer as to any Shares not
then accepted for payment, if the Minimum Tender Condition has not
been satisfied prior to the expiration of the Offer, or the Antitrust
Condition has not been satisfied before the acceptance of Shares for
payment or payment thereof, or, on or after the date of the Merger
Agreement and before the expiration of the Offer (or, in the case of
conditions related to regulatory matters, before the acceptance of
Shares for payment or the payment thereof), any of the following
events shall occur:
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ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS
(b) The information set forth in the Offer to Purchase in Section I
("Background of the Offer; Contacts with the Company") is hereby
amended and supplemented by adding the following at the end of the
third paragraph:
Robert E. Low is the owner and President of New Prime, Inc.,
one of the Company's principle competitors.
The information set forth in the Offer to Purchase in Section I
("Background of the Offer; Contacts with the Company") is hereby
amended and supplemented by adding the following at the end of the
fifth paragraph:
Mr. Liles made this comment in the context of negotiating
with Mr. Low in an effort to increase the price per Share
proposed by Mr. Low, and not as a statement of his belief of the
fair value of the Shares.
(b) and (c) The information set forth in the Offer to Purchase in
Section I ("Background of the Offer; Contacts with the Company")
is hereby amended and supplemented by adding the following:
On April 20, 2000, the Special Committee informed Mr.
Liles that it had rejected his and Mr. Ebbers' April 19th
proposal because it could not agree to the conditions in the
proposal.
The $8.80 proposal was withdrawn because Mr. Ebbers
determined that he did not wish to proceed with the
transaction at that time, at any price. Mr. Ebbers has
informed Parent that at the time he was considering funding
a substantial portion of his investment in Parent (which
will be used by Parent to pay the purchase price of the
Shares) by borrowings secured by publicly traded stock. At
the time the proposal was withdrawn, Mr. Ebbers was
concerned that stock market and financial market conditions
were deteriorating and that, if the deterioration continued,
he would be required to devote more of his available liquid
capital to his investment in Parent than he had planned or
desired. Mr. Ebbers has also informed Parent that, after
further consideration, he was concerned that $8.80 was not
an appropriate price for the Shares in light of Mr. Low's
then recent reduction of his offer from $9.25 to $8.75 and
also in light of rising interest rates that followed the
Federal Reserve Board's half-percentage point increase in
interest rates on May 16, 2000. Mr. Ebbers believed that
the increased costs of borrowed funds adversely affected the
Company's value.
9
On June 12, 2000, Mr. Low terminated his tender offer
for all of the outstanding shares of the Company's common stock.
On June 13, 2000, Mr. Low publicly disclosed the
following in Amendment No. 12 to his Schedule 13D:
". . . if the transaction between the Issuer and
the Liles Group is not completed, then Mr. Low may
wish to effect one or more of the actions or
transactions described in paragraphs (a) through
(j) of Item 4 of the instructions to this Schedule
without the support of the Board of Directors of
the Issuer, which action could include a change in
the present Board of Directors of the Issuer. In
that regard, Mr. Low has executed and delivered a
written consent of stockholder dated June 8, 2000
(the "Consent") which, if pursued by Mr. Low and
if a majority of the Issuer's stockholders file
similar consents pursuant to a consent
solicitation under Delaware law, would lead to the
removal of the current directors of the Company
and their replacement with a new slate of
directors."
On June 20, 2000, Parent was informed by the Federal
Trade Commission that early termination of the waiting
period under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976 had been granted. Accordingly, the Antitrust
Condition to the Offer has been satisfied.
ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
(d) The information set forth in Section 10 ("Source and Amount of
Funds") is hereby amended and supplemented by adding the following
after the first paragraph:
Mr. Ebbers has informed Parent that his current intention is
to fund his investment in Parent by borrowing $12 million on an
unsecured basis from a commercial bank, and to fund the remainder
of his investment from available cash. It is currently
anticipated that the loan would bear interest at a rate of one
percent plus the Eurodollar rate, adjusted monthly, and would be
due on September 12, 2000, at which time Mr. Ebbers would
refinance the loan. No arrangements to refinance the loan have
been made at this time.
ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3
Item 7. Purposes, Alternatives, Reasons and Effects.
10
(b) The information set forth in Section II ("Purpose of, Effects
of, Alternatives to, and Reasons for the Offer and Merger; Plans
for the Company") of the Offer to Purchase is hereby amended by
deleting the paragraph under "Alternatives Structures Considered"
in its entirety and replacing it with the following:
Neither Parent nor Purchaser considered any alternative
means of acquiring the Company other than by the Offer and
Merger.
(d) The information set forth in Section II ("Purpose of, Effects
of, Alternatives to, and Reasons for the Offer and Merger; Plans
for the Company") of the Offer to Purchase is hereby amended by
adding the following paragraph at the end of the disclosure under
the heading "Effects of the Offer and Merger":
The Liles Family's ownership of the Company prior to
the Offer and the Merger is approximately 16.8%. Upon
completion of the Offer and the Merger, the Liles Family
will own 35% of Parent's outstanding common stock.
Therefore, the Liles Family's interest in the Company's net
book value and net earnings will increase from approximately
16.8% to 35%. The Company's net book value as of March 31,
2000 was approximately $50.0 million and its net loss for
the twelve months ended March 31, 2000 was approximately
$1.6 million. Therefore, the Liles Family's interest in the
Company's net book value will increase from approximately
$8.4 million to $17.5 million, and its interest in the
Company's net loss will increase from approximately $268,000
to $560,000.
Item 8. Fairness of the Transaction.
(a), (b), (c), (d), (e) and (f) The information set forth in the
Offer to Purchase is hereby amended and supplemented by
deleting the first sentence of the second paragraph of
Section IV ("Position of the Parent and Purchaser as to the
Fairness of the Offer and Merger") and by adding the
following:
Parent's and Purchaser's Boards reasonably believe that
the Offer, the Merger and the Merger Agreement are fair to
the unaffiliated stockholders of the Company.
(a), (b), (c), (d), (e) and (f) The information set forth in the
Offer to Purchase in Section IV ("Position of the Parent
and Purchaser as to the Fairness of the Offer and Merger")
is amended and supplemented by adding the following at the
end of the third bullet point:
The Special Committee's determination that the
sale of the Company was inevitable supports the
fairness of the Offer and Merger because the
11
determination highlights the fact that Parent and Purchaser
did not initiate or control the timing of the sale of the
Company. Instead, the first indication of interest in
acquiring the Company was made by Mr. Low and the timing of
the sale was controlled by the Special Committee.
(a), (b), (c), (d), (e) and (f) The information set forth in the
Offer to Purchase in Section IV ("Position of the Parent
and Purchaser as to the Fairness of the Offer and Merger")
is amended and supplemented by amending the fourth paragraph
to read as follows:
In considering their proposal to acquire the Company,
Parent, Purchaser, Mr. Liles and Mr. Ebbers did not consider
the book value or liquidation value of the Company to be
relevant because they had and have no plan to liquidate the
Company. Mr. Ebbers and Mr. Liles did not discuss the
liquidation value of the Company, and Mr. Ebbers did not
analyze the Company's liquidation value. Mr. Liles
considered generally the issue of the liquidation value of
the Company, and, based on his knowledge of the Company and
the trucking industry, from his over 25 years of experience
with both, concluded that the Company's liquidation value,
in his opinion, was less than $8.05 per Share. He based his
conclusion primarily on his view of the market for used
trucks and trailers, which he believed to be poor and which
he believed would be further negatively affected by a
liquidation sale of the Company's trucks and trailers, on
his view that the Company's accounts receivable likely could
not be fully collected in the event of liquidation, and on
his view that the tax and transaction costs of the
liquidation would be high. He also considered the
uncertainty and time that would be associated with realizing
value in the liquidation process. In his consideration of
liquidation value, Mr. Liles was aware that the Bank of
America, N.A. had commissioned an appraisal of the Company's
trucks and trailers, which indicated an orderly liquidation
value as of March 30, 2000 of $85.2 million and a fair
market value as of March 30, 2000 of $103.9 million. The
Company had been in the process of discussing with the Bank
of America whether the Company should switch from its
current cash-flow based facility to an asset-based facility
at the time Mr. Low made his proposal to acquire the
Company, and Mr. Liles had determined to pursue an asset-
based facility for the refinancing of the revolving
credit facility, which contained a change of control
default, if Purchaser acquired the Company. It was
in this context that the Bank commissioned the
appraisal. Mr. Liles did not consider the appraisal material
to his analysis of liquidation value primarily because
the appraisal indicated that the trucks and trailers
could be liquidated for less than their book value of
$97.9 million as of March 31, 2000, which was consistent
with his view, and in light of what he believed to be the
substantial uncertainty regarding how much value could be
12
recovered by the Company in a liquidation sale of the
trucks and trailers, as described above. Mr. Ebbers did not
receive a copy of the appraisal.
(a), (b), (c), (d), (e) and (f) The information set forth in the
Offer to Purchase in Section IV ("Position of the Parent
and Purchaser as to the Fairness of the Offer and Merger")
is amended and supplemented by adding the following:
Parent and Purchaser did not consider the fact that
the Company's shares have traded higher than the offer price
within the last quarter as relevant in determining that the
offer price is fair. Parent and Purchaser believe that the
higher trading price during the quarter reflected
speculation on the part of traders as to the ultimate price
that would be paid for the Company.
(a), (b), (c), (d), (e) and (f) The information set forth in the
Offer to Purchase is hereby amended and supplemented by
deleting the last paragraph of Section IV ("Position of the
Parent and Purchaser as to the Fairness of the Offer and
Merger") in its entirety and by adding the following:
In determining that the Offer and the Merger were fair
to the stockholders of the Company, Parent's and Purchaser's
Boards considered the factors described as a whole and did
not assign specific or relative weights to them, although
Parent and Purchaser did conclude that the unfavorable
factors did not, individually or in the aggregate, outweigh
the advantages of the Offer and the Merger to the Company's
stockholders.
(a), (b), (c), (d), (e) and (f) The information set forth in the
Offer to Purchase in Section III ("Recommendation of the
Special Committee and the Board of Directors; Fairness of
the Offer and Merger") is amended and supplemented by adding
the following:
The Offer and the Merger have been approved by a
majority of the directors of the Company who are not
employees of the Company.
Parent and Purchaser believe that the Special Committee
acted solely on behalf of unaffiliated stockholders in
negotiating the terms of the Offer and the Merger.
Item 10. Source and Amount of Funds or Other Consideration
(c) The information set forth in the Offer to purchase in Section
13 ("Fees and Expenses") is hereby amended and supplemented by
adding the following to the itemized statement of expenses:
13
A closing fee of $937,500 to be incurred at the closing
of the loan agreement with the Bank of America, N.A. is to
be paid to the Bank of America, N.A.
The information set forth in the Offer to Purchase is hereby
amended and supplemented by deleting the last paragraph of
Section 13 ("Fees and Expenses") in its entirety and by adding
the following:
Except for the closing fee to be paid to the Bank of
America, N.A., the Company will not pay any of the fees and
expenses to be incurred by Purchaser in connection with the
Offer.
14
SIGNATURE
After due inquiry and to the best of their knowledge and belief, the
undersigned hereby certify as of June 22, 2000 that the information set
forth in this statement is true, complete and correct. William J. Liles,
III and Bernard J. Ebbers hereby adopt as their own disclosures the
disclosures made by Parent and Purchaser and Parent's and Purchaser's
Boards herein.
HIGH ROAD ACQUISITION SUBSIDIARY CORP.
By: /S/ WILLIAM J. LILES, III
----------------------------
Name: William J. Liles, III
Title: President
HIGH ROAD ACQUISITION CORP.
By: /S/ WILLIAM J. LILES, III
----------------------------
Name: William J. Liles, III
Title: President
/S/ WILLIAM J. LILES, III
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William J. Liles, III
/S/ BERNARD J. EBBERS
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Bernard J. Ebbers