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): December 1, 1997
(November 14, 1997)
FRED'S, INC.
(Exact name of registrant as specified in its charter)
Tennessee 00-19288 62-0634010
(State or other jurisdiction (Commission file number) (IRS employer
of incorporation) identification No.)
4300 New Getwell Road, Memphis, Tennessee 38118
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (901) 365-8880
Item 5. Other Events.
1. On November 14, 1997, Fred's, Inc. ("Fred's"), through its wholly-owned
subsidiary Fred's Stores of Tennessee, Inc. (the "Buyer"), purchased 17 stores
from CVS Revco D.S., Inc., a Delaware corporation ("Seller"). The transaction
was effected pursuant to an Asset Purchase Agreement (the "Asset Purchase
Agreement") between the Buyer, Fred's, Seller and CVS Corporation, a Delaware
corporation ("CVS"). Prior to this transaction, Fred's and the Buyer were not
affiliated with the Seller or CVS and the Asset Purchase Agreement was
negotiated at arms' length. The transaction was funded through operating cash
and borrowings under Fred's existing line of credit.
A copy of Fred's October 14, 1997 and November 24, 1997 Press Releases
regarding the acquisition are attached as Exhibits to this Report on Form 8-K.
2. On November 24, 1997, Fred's announced that its Board of Directors approved a
five-for-four stock split, to be effected as a 25% stock dividend, of its Common
Stock, Class A voting, no par value. The new shares, one additional share for
every four shares currently held by stockholders, will be distributed on
December 19, 1997, to stockholders of record on December 5, 1997. Fred's
currently has 9.4 million shares of Common Stock outstanding. Cash will be paid
in lieu of fractional shares.
Fred's Board of Directors also declared a quarterly cash dividend of
$.05 per share on both old and new shares, using the same record date and
payment date as the stock split. This represents an effective increase of 25%
from the previous rate (which was $.04 per share per quarter, as adjusted for
the stock split). The higher dividend will be paid on December 19, 1997,
together with the stock dividend.
Fred's, Inc. operates 258 discount general merchandise stores in the
southeastern United States. The Company also markets goods and services to 31
franchised Fred's stores.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
Exhibit No. Description
2.1 Asset Purchase Agreement between CVS Revco D.S., Inc., Fred's
Stores of Tennessee, Inc., CVS Corporation and Fred's, Inc., dated
as of October 10, 1997*
2.2 Letter Agreement between CVS Revco D.S., Inc., Fred's Stores of
Tennessee, Inc., CVS Corporation and Fred's, Inc. dated as of
November 1, 1997
99.1 Press Release dated October 14, 1997 announcing the asset
purchase
99.2 Press Release dated November 24, 1997, announcing the
completion of the asset purchase and the Fred's stock split and
dividend
*The following exhibits and schedules to the Asset Purchase Agreement
have been omitted, and Fred's will file supplementally any such exhibits or
schedules to the Commission upon request:
Exhibits and Schedules to Asset Purchase Agreement
Exhibit A List of Acquired Stores
Exhibit B Assignment and Assumption Agreement
Exhibit C Lease Assignment
Exhibit 10.02(c) Form of Opinion of Davis Polk & Wardwell
Exhibit 10.03(b) Form of Opinion of Waring Cox, PLC
Schedule 2.01(c) Fixed Assets
Schedule 2.06 Inventory Cost Schedule
Schedule 3.08(a) Lease Abstracts
Schedule 3.15 Sales Data
Schedule 9.02(a) Material Employee Plans
Schedule 9.02(b) Material Benefit Arrangements
SIGNATURE PAGE
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 hereunto duly authorized.
FRED'S, INC.
/s/ Richard B. Witaszak
Date: December 1, 1997
Richard B. Witaszak
Executive Vice President and
Chief Financial Officer
(Duly Authorized Officer)