SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
SCHEDULE TO
(Amendment No. 1)
(Rule 14d-100)
Tender Offer Statement Under Section 14(d)(1) or 13(e)(1)
of the Securities Exchange Act of 1934
KENETECH CORPORATION
(Name of Subject Company (Issuer))
KC MERGER CORP.
KC HOLDING CORPORATION
VALUEACT CAPITAL PARTNERS, L.P.
(Names of Filing Persons (Offerors))
Common Stock, Par Value $.0001 Per Share,
Together With The Associated Rights Attached Thereto
(Title of Class of Securities)
488878109
(CUSIP Number of Class of Securities)
Jeffrey W. Ubben
Secretary and Treasurer
KC Merger Corp.
KC Holding Corporation
c/o ValueAct Capital Partners, L.P.
One Maritime Plaza
Suite 1400
San Francisco, CA 94111
(415) 362-3700
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of Filing Persons)
Copies to:
Dennis M. Myers, Esq.
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
(312) 861-2000
CALCULATION OF FILING FEE
------------------------------------------------------------
Transaction Valuation* Amount of Filing Fee**
------------------------------------------------------------
$34,548,971 $6,910
------------------------------------------------------------
* Estimated for purposes of calculating the amount of the filing fee only.
Calculated by multiplying $1.04, the per share tender offer price, by
33,220,164, the sum of (i) 31,970,164 currently outstanding shares of
Common Stock sought in the Offer, (ii) outstanding options with respect to
750,000 shares of Common Stock and (iii) outstanding warrants with respect
to 500,000 shares of Common Stock, in each case as of October 20, 2000.
** Calculated as 1/50 of 1% of the transaction value.
[X] 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: $6,910 Filing Party: KC Merger Corp.
Form or Registration No.: Schedule TO Date Filed: November 7, 2000
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes 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: [ ]
- ------------------------------------------------------------------------------
NAMES OF REPORTING PERSONS
1
KC Holding Corporation
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [x]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) or 2(E) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 11,365,458
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
0
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
11,365,458
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
Approximately 36%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
NAMES OF REPORTING PERSONS
1
KC Merger Corp.
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [x]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) or 2(E) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
11,365,458
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
11,365,458
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
Approximately 36%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1
ValueAct Capital Partners, L.P.
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [x]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) or 2(E) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
11,365,458
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
11,365,458
- ------------------------------------------------------------------------------
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
Approximately 36%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
PN
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
NAMES OF REPORTING PERSON
1
VA Partners, L.L.C.
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [x]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) or 2(E)
5 [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 11,365,458
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
11,365,458
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[ ]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
Approximately 36%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
OO
- ------------------------------------------------------------------------------
This Amendment No. 1 (the "Amendment") amends and supplements the Tender
Offer Statement on Schedule TO filed by KC Merger Corp., a Delaware corporation
("Purchaser"), KC Holding Corporation, a Delaware corporation ("Parent"), and
ValueAct Capital Partners, L.P., a Delaware limited partnership ("VAC") on
November 7, 2000 (the "Schedule TO") relating to the offer by Purchaser to
purchase all outstanding shares of common stock, par value $.0001 per share, and
the associated rights attached thereto (together, the "Shares"), of KENETECH
Corporation, a Delaware corporation (the "Company"), at a purchase price of
$1.04 per Share, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated November 6, 2000 (the "Offer
to Purchase"), and in the related Letter of Transmittal, copies of which are
attached as Exhibits (a)(1)(i) and (a)(1)(ii) to the Schedule TO (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer"). Capitalized terms used but not defined in this Amendment shall have
the meaning assigned to them in the Offer to Purchase.
Items 1 through 9, 11, and 13.
Items 1 through 9, 11, and 13 of the Schedule TO, which incorporate by
reference the information contained in the Offer to Purchase, are hereby amended
and supplemented by adding thereto the following:
The information set forth under the caption "The Tender Offer - Certain
Legal Matters and Regulatory Approvals" of the Offer to Purchase is hereby
amended by adding as the final paragraphs the following:
"Litigation. On November 9, 2000, Robert L. Kohls and Louise A. Kohls (the
"Plaintiffs") moved to file a second amended and supplemental complaint (the
"Second Amended Complaint") in an action pending in the Court of Chancery of the
State of Delaware in and for New Castle County (the "Chancery Court") styled
Kohls v. Duthie, et al. (the "Action"). The Second Amended Complaint names
Gerald R. Morgan, Jr., Michael D. Winn, and KENETECH as additional defendants.
KENETECH previously was a nominal defendant. The first cause of action of the
Second Amended Complaint sets forth all of the allegations and seeks all of the
relief set forth in the Plaintiffs' first amended complaint. The first cause of
action of the Second Amended Complaint is purportedly brought as a derivative
action on behalf of KENETECH. The second cause of action of the Second Amended
Complaint seeks to enjoin preliminary and permanently the consummation of the
Merger Agreement.
As it pertains to the Merger Agreement, the Second Amended Complaint
alleges in substance the following:
. that the Offer and the Merger are the result of an unfair process, and
will constitute an unfair transaction to the KENETECH stockholders;
. that Charles Christenson, one of the members of the Special Committee,
has, as a defendant in the Action, a personal interest in approving
the Merger Agreement because the closing of the Merger would eliminate
the standing of the Plaintiffs to bring the Action, and therefore the
transactions contemplated by the Merger
Agreement were not the product of arms-length negotiations, but
instead constituted self-dealing;
. that because Gerald R. Morgan, Jr., one of the members of the Special
Committee, has, as the Chief Operating Officer of an entity in which
KENETECH invests, an interest in pleasing Mr. Lerdal, and because the
Offer and the Merger provide a unique benefit to Mr. Lerdal in the
form of a "roll over" of his investment in KENETECH, the process
whereby the Offer and the Merger were agreed to by KENETECH was
unfair;
. that the Per Share Amount of $1.04 was the product of an analysis of
Houlihan Lokey that failed to consider the value of the Action, failed
to investigate the Action by contacting the Plaintiffs, failed to
consider that the Action is scheduled to go to trial in April 2001,
and failed to evaluate independently the deferred benefit for
deconsolidated losses, as a result of which the process whereby the
Offer and the Merger were agreed to by KENETECH was unfair;
. that the Per Share Amount of $1.04 fails to properly account for
issues relating to the deferred benefit for deconsolidated losses and
overhead costs, as a result of which the Per Share Amount is unfair;
. that the Per Share Amount of $1.04 is based on Mr. Lerdal owning the
Shares that are the subject of the Action, title to which is contested
by the Action, as a result of which both the process whereby the Offer
and the Merger were agreed to by KENETECH and the Per Share Amount are
unfair; and
. that the disclosures surrounding the Offer and the Merger contain
material misstatements and fail to include information necessary to
make the statements not misleading.
The Plaintiffs allege that the second cause of action of the Second Amended
Complaint, including the above allegations, is maintainable as a class action,
and that there are questions of law and fact which are common to the KENETECH
stockholders who comprise the class, including: (i) whether the transactions
contemplated by the Merger Agreement are the product of a fair process and
provide a fair price to the stockholders of KENETECH; and (ii) whether the
materials that describe the Offer and the Merger contain any misrepresentations
or fail to disclose material facts which are necessary for the disclosures that
have been made to not be misleading.
The Plaintiffs request that the Chancery Court: (i) issue a preliminary
injunction enjoining the consummation of the Merger Agreement; (ii) enter a
permanent injunction prohibiting the consummation of the Merger Agreement; and
(iii) award Plaintiffs their attorneys' fees, costs, and other expenses.
Also on November 9, 2000, the Plaintiffs asked the Chancery Court to hold a
scheduling conference to determine whether to schedule an expedited hearing on
the Plaintiffs' application for a preliminary injunction enjoining the
consummation of the Merger Agreement. On November 13, 2000, the Chancery Court
held a conference and scheduled a hearing on the Plaintiffs' application for a
preliminary injunction for December 5, 2000, at 3:00 p.m.
The above summary is qualified in its entirety by reference to the complete
terms of the Notice of Motion and Motion for Leave to File Second Amended and
Supplemental Complaint, copies of which are attached as Exhibit (a)(5)(v) to the
Schedule TO and incorporated by this reference."
Item 12. Exhibits.
Item 12 of the Schedule TO is hereby amended and supplemented by adding
thereto the following:
Exhibit No. Description
----------- -----------
(a)(5)(v) Notice of Motion and Motion for Leave to File Second Amended
and Supplemental Complaint in the action styled Kohls v.
Duthie, et al.
After due inquiry and to the best of its knowledge and belief, each of
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
Dated: November 14, 2000 Schedule TO, Schedule 13E-3 and Schedule 13D
KC MERGER CORP.
By: /s/ Jeffrey W. Ubben
___________________________________
Name: Jeffrey W. Ubben
Title: Secretary/Treasurer
KC HOLDING CORPORATION
By: /s/ Jeffrey W. Ubben
___________________________________
Name: Jeffrey W. Ubben
Title: Secretary/Treasurer
VALUEACT CAPITAL PARTNERS, L.P.
By: VA Partners, L.L.C.
Its: General Partner
By: /s/ Jeffrey W. Ubben
_____________________________________
Name: Jeffrey W. Ubben
Title: Managing Member
After due inquiry and to the best of his or its knowledge and belief, each
of the undersigned certifies that the information set forth in this statement to
the extent it constitutes a filing under Rule 13e-3 is true, complete and
correct.
Dated: November 14, 2000 Schedule 13E-3
KENETECH CORPORATION
By: /s/ Dianne P. Urhausen
_____________________________________
Name: Dianne P. Urhausen
Title: Vice President and Secretary
/s/ Mark D. Lerdal
________________________________________
Mark D. Lerdal