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: October 28 , 1998
Giant Food Inc.
(exact name of registrant as specified in its charter)
Delaware 1-4434 53-0073545
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
6300 Sheriff Road, Landover, Maryland 20785
(address of principal executive offices)
Registrant's telephone number, including area code: (301) 341-4100
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Item 1. Changes in Control of Registrant.
(a) On October 28, 1998, Giant Acquisition Corporation, a Delaware
corporation ("Acquisition Corporation") and indirect, wholly-owned subsidiary of
Koninklijke Ahold N.V., a public company with limited liability organized under
the laws of the Netherlands with its corporate seat at Zaandam (Municipality
Zaandam) ("Royal Ahold"), acquired: (i) all 125,000 shares of the outstanding
voting Class AC Common Stock (the "Class AC Shares") of Giant Food Inc., a
Delaware corporation (the "Company"), from The 1224 Corporation, a Delaware
corporation ("1224"); and (ii) all 125,000 shares of the outstanding voting
Class AL Common Stock (the "Class AL Shares") of the Company from JS Mass.
Securities Corp. ("JS Mass."), a wholly-owned subsidiary of J Sainsbury, plc
("Sainsbury"). Royal Ahold acquired the Class AC Shares and the Class AL Shares
pursuant to, respectively, a Stock Purchase Agreement dated May 19, 1998 between
Royal Ahold and 1224 (the "1224 Agreement") and a Stock Purchase Agreement dated
May 27, 1998 among Royal Ahold, JS Mass. and Sainsbury (the "Sainsbury
Agreement").
Each of the Class AC Shares and the Class AL Shares had 50% of the
shareholder voting power in the Company. As a result of the acquisition of the
Class AC Shares and the Class AL Shares, Royal Ahold indirectly held 100% of the
voting power in the Company. Pursuant to the Certificate of Incorporation of the
Company, the Class AC Shares had the right to elect five, and the Class AL
Shares had the right to elect four, of the Company's nine directors. Effective
upon Royal Ahold's acquisition of the Class AC Shares and the Class AL Shares on
October 28, 1998 and as provided in the 1224 Agreement and the Sainsbury
Agreement, the directors of the Company elected by 1224 and Sainsbury,
respectively, resigned and were replaced by directors elected by Royal Ahold.
Simultaneously with its acquisition of the Class AC Shares and the Class AL
Shares, and pursuant to a tender offer to acquire all of the non-voting Class A
Common Stock ("Class A Shares") of the Company at a price of $43.50 per share,
net to the seller in cash, without interest thereon (the "Offer Price"), upon
the terms and conditions set forth in Royal Ahold's Offer to Purchase dated May
19, 1998 (the "Offer"), Royal Ahold acquired a total of 59,415,133 (or
approximately 99.2% of the outstanding) Class A Shares, including Class A Shares
tendered by 1224 and Sainsbury.
On October 30, 1998, Royal Ahold effected a merger of Acquisition Corp.
with and into the Company in accordance with the Delaware General Corporation
Law. As a result of the merger, the Company became a direct, wholly-owned
subsidiary of Ahold U.S.A., Inc., a Delaware corporation ("Ahold U.S.A."), and
an indirect wholly-owned subsidiary of Royal Ahold. Each outstanding Class A
Share (other than Class A Shares which are held directly or indirectly by the
Company or Royal Ahold or any direct or indirect subsidiary of the Company or
Royal Ahold, and Class A Shares with respect to which appraisal rights are
perfected under the Delaware General Corporation Law) were converted into the
right to receive $43.50 per share in cash, without interest, less any applicable
withholding taxes.
Pursuant to the 1224 Agreement, Royal Ahold acquired the Class AC Shares at
a per share price equal to the Offer Price. Under the provisions of the
Certificate of Incorporation of 1224, the Class AC Shares owned by 1224 could
only be sold as part of a transaction pursuant to which the holders of Class A
Shares were afforded the opportunity to participate in such sale on equal terms
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with 1224. Pursuant to the Sainsbury Agreement, Royal Ahold acquired the
Class AL Shares for $100 million.
In Amendment No. 13 to its Tender Offer Statement on Schedule 14D-1 filed
on May 19, 1998 relating to the Offer, Royal Ahold stated, with respect to Item
4 of Schedule 14D-1 ("Source and Amount of Funds or Other Consideration"), that
it expected the amount of funds required by Acquisition Corporation to purchase
all of the Class AC Shares from 1224, all of the Class AL Shares from Sainsbury
and all of the outstanding Class A Shares pursuant to the Offer (collectively,
the "Acquisition") and to pay related fees and expenses to be approximately $2.7
billion. Royal Ahold further stated in such Amendment No. 13:
Acquisition Corporation will obtain $2.2 billion of the funds
needed for the Acquisition from Royal Ahold. Royal Ahold will obtain
the $2.2 billion from the net proceeds of a global offering (the
"Global Offering") by Royal Ahold of Common Shares (which may be in the
form of American Depository Shares) and Guilder-denominated Convertible
Subordinated Notes (which may be in the form of American Depository
Notes).
Acquisition Corporation will obtain the remaining $500 million of
the funds needed for the Acquisition from a capital contribution by
Ahold U.S.A., which Ahold U.S.A. will fund by a borrowing made under an
Amended and Restated U.S. $1,000,000,000 Multicurrency Revolving
Facility Agreement (the "1996 Credit Facility"), dated December 18,
1996, and amended and restated September 7, 1998 between Royal Ahold,
Ahold U.S.A., ABN AMRO Bank N.V., Chase Investment Bank Limited and
J.P. Morgan Securities Ltd. as Arrangers, The Chase Manhattan Bank as
Facility, Swing-Line, Letter of Credit and Short Term Advances Agent,
Chase Manhattan International Limited as Multicurrency Facility Agent
and certain financial institutions named therein.
The 1996 Credit Facility provides for an unsecured loan facility
in an aggregate amount of up to U.S. $1.0 billion. The 1996 Credit
Facility expires on December 18, 2003. The 1996 Credit Facility may be
used by Royal Ahold for general corporate purposes including working
capital and the refinancing of certain other facilities. Revolving
credit advances under the 1996 Credit Facility will bear interest at a
rate per annum equal to LIBOR plus 10 basis points. The 1996 Credit
Facility contains certain restrictions on, among other things, the
creation of liens and certain financial covenants which require Royal
Ahold to maintain a specified ratio of operating earnings before income
taxes plus net interest expense to net interest expense. The 1996
Credit Facility also contains certain events of default, including (i)
the liquidation or bankruptcy of Royal Ahold or any of its material
subsidiaries, (ii) changes in the character of its business and (iii)
the lease, sale or disposition of all or any substantial part of its
assets. In addition, Royal Ahold has agreed to pay the Chase Manhattan
Bank certain fees to reimburse each of the agents and arrangers for
certain expenses and to provide certain indemnities, as is customary
for commitments of the type described therein.
Royal Ahold further stated that its foregoing summary of the source and
amount of funds was qualified in its entirety by reference to the text of the
1996 Credit Facility, a copy of which was filed as an exhibit to the Tender
Offer Statement on Schedule 14D-1.
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Item 7. Financial Statement and Exhibits.
(c) Exhibits
2.1 Stock Purchase Agreement, dated as of May 19, 1998, by and
between Koninklijke Ahold N.V. and The 1224 Corporation (incorporated
by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K
dated May 19, 1998).
2.2 Stock Purchase Agreement, dated as of May 27, 1998, by and
among Koninklijke Ahold N.V., J Sainsbury plc and JS Mass. Securities
Corp. (incorporated by reference to Exhibit 2 to the Company's
Solicitation/Recommendation Statement on Schedule 14D-9 dated May 29,
1998).
99.1 Amended and Restated U.S.$1,000,000,000 Multicurrency
Revolving Facility Agreement, dated December 18, 1996, and amended and
restated September 7, 1998, by and among Koninklijke Ahold N.V., Ahold
U.S.A., Inc., ABN AMRO Bank N.V., Chase Investment Bank Limited and
J.P. Morgan Securities Ltd. as Arrangers, The Chase Manhattan Bank as
Facility, Swing-Line, Letter of Credit and Short Term Advances Agent,
Chase Manhattan International Limited as Multicurrency Facility Agent
and certain financial institutions named therein (incorporated by
reference to Exhibit (a)(15) to the Tender Offer Statement on Schedule
14D-1 of Koninklijke Ahold N.V., filed May 19, 1998 (Amendment No.
13)).
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Signatures
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GIANT FOOD INC.
November 4, 1998 By: /s/ David W. Rutstein
David W. Rutstein
Senior Vice President and
General Counsel
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