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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
FEBRUARY 27, 1996
Date of Report (Date of earliest event reported)
HUDSON GENERAL CORPORATION
(Exact Name of Registrant as Specified in Charter)
DELAWARE 1-5896 13-1947395
(State or other jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
111 GREAT NECK ROAD, GREAT NECK, NEW YORK 11021
(Address of Principal Executive Offices) (Zip Code)
(516) 487-8610
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
On February 27, 1996, Hudson General Corporation, a Delaware
corporation (the "Company"), and Lufthansa Airport and Ground Services GmbH, a
German corporation ("LAGS"), executed a Unit Purchase and Option Agreement (the
"Purchase Agreement") pursuant to which LAGS will acquire a 26% interest in the
Company's aviation services business (the "Aviation Services Business"). LAGS is
a wholly owned subsidiary of Deutsche Lufthansa AG ("Lufthansa"). The
transaction, which is expected to close on or about July 1, 1996, is subject to
certain conditions, including, without limitation, the prior approval of the
holders of a majority of the Company's outstanding stock.
The Purchase Agreement and the press release issued by the
Company in connection therewith are filed as exhibits to this report and are
incorporated herein by reference. The description herein of the Purchase
Agreement does not purport to be complete and is qualified in its entirety by
the provisions of the Purchase Agreement.
The Purchase Agreement provides, among other things, for the
transfer by the Company to a new subsidiary, Hudson General LLC, a limited
liability company to be formed in the state of Delaware ("Hudson LLC"), of
substantially all the assets of the Company's Aviation Services Business and the
assumption by Hudson LLC, as a co-obligor with the Company, of the obligations
of the Company under its 7% Convertible Subordinated Debentures due 2011. Hudson
LLC also will assume other obligations relating to the Aviation Services
Business.
The Purchase Agreement provides that LAGS will acquire its 26%
interest in Hudson LLC, which will conduct the Aviation Services Business
effective as of the closing, for a purchase price of approximately $23.8 million
in cash. Approximately $16 million of the purchase price will be paid at the
closing. The balance of the purchase price of approximately $7.8 million, which
is subject to downward adjustment based on future earnings of the Aviation
Services Business, is payable in three annual installments in September 1996,
1997 and 1998.
The Purchase Agreement also provides that LAGS will have an
option, exercisable on October 1 of each year from 1996 through 2000, effective
as of the preceding July 1, to increase its interest in Hudson LLC from 26% to a
maximum of 49%. The option may be exercised on no more than two occasions, and
the first exercise must be for at least an additional 12% interest in Hudson
LLC. The option price is based on a formula related to the average earnings of
the Aviation Services Business over the preceding four fiscal years, subject to
certain minimum and maximum amounts.
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Following the closing, the Company will own a 74% interest in
Hudson LLC, which interest may be reduced to 51% if LAGS exercises its option in
full to increase its interest in Hudson LLC to 49%. Neither LAGS nor Lufthansa
is acquiring any securities of the Company, and the Purchase Agreement contains
certain standstill provisions pursuant to which, among other things, LAGS,
Lufthansa and their affiliates will not acquire any of the Company's voting
securities, seek to acquire control of, or engage in a business combination
with, the Company, until the later of (i) the third anniversary of the date of
the Purchase Agreement or (ii) the first anniversary of the date on which LAGS
and its affiliates or the Company and its affiliates cease to beneficially own
an interest in Hudson LLC.
At the closing, the Company, LAGS and Hudson LLC will enter
into a Limited Liability Company Agreement. The Company will continue to manage
the Aviation Services Business conducted by Hudson LLC.
The Aviation Services Business constitutes approximately 70%
of the Company's assets and virtually all of its revenues. The Company is not
transferring to Hudson LLC its interest in the Kohala Joint Venture, a joint
venture in which Hudson Kohala, Inc., a wholly-owned subsidiary of the Company,
is a 50% participant.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
99.1 Unit Purchase and Option Agreement, dated Febru-
ary 27, 1996, between Hudson General Corporation
and Lufthansa Airport and Ground Services GmbH.
99.2 Press Release dated February 28, 1996.
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SIGNATURE
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.
Dated: March 6, 1996
HUDSON GENERAL CORPORATION
By: /s/ Michael Rubin
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Michael Rubin
Executive Vice President and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description
99.1 Unit Purchase and Option Agreement, dated February
27, 1996, between Hudson General Corporation and
Lufthansa Airport and Ground Services GmbH.
99.2 Press Release dated February 28, 1996.
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