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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 Act of 1934
Date of Report (Date of earliest event reported):
July 5, 1998
DAVEL COMMUNICATIONS GROUP, INC..
(Exact name of registrant as specified in its charter)
Illinois 0-22610 37-1064777
(State or other jurisdiction (Commission file number) (I.R.S. Employer
of incorporation) Identification Number)
1429 Massaro Boulevard, Tampa, Florida 33619
(Address of Principal Executive Offices)(Zip Code)
(813) 623-3545
(Registrant's telephone number, including area code)
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Item 5. Other Events
Execution of Agreement and Plan of Merger and Reorganization
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On July 5, 1998, Davel Communications Group, Inc., an Illinois corporation
(the "Company"), Davel Holdings, Inc., a Delaware corporation and a wholly owned
subsidiary of the Company ("New Davel"), and Peoples Telephone Company, Inc., a
New York corporation ("Peoples"), entered into an Agreement and Plan of Merger
and Reorganization (the "Merger Agreement"). Pursuant to the Merger Agreement,
Peoples will become a subsidiary of the Company, or, in the event that the
Company's previously announced merger with PhoneTel Technologies, Inc. (the
"PhoneTel Transaction") is completed, of New Davel. Holders of issued and
outstanding shares of the common stock, $.01 par value per share, of Peoples
(the "Peoples Common Stock") will receive in exchange therefor .235 share of the
common stock of the Company or, if the PhoneTel Transaction is completed, of New
Davel. The exchange ratio is fixed and is not subject to adjustment. Based on
the Company's closing stock price of $24.9375 on July 2, 1998, the last trading
day prior to the execution of the Merger Agreement, the Peoples Common Stock
would be valued at $5.86 per share. The transaction is conditioned on its being
accounted for as a pooling of interests and is expected to be tax free to
shareholders of Peoples and the Company. A representative of UBS Capital II LLC
("UBS"), a significant shareholder of Peoples, will serve on the Company's Board
of Directors for a one-year period.
In connection with the execution of the Merger Agreement, the Company and
Peoples also entered into a Termination Option Agreement, dated as of July 5,
1998, pursuant to which Peoples granted the Company an option to purchase up to
3,226,274 shares of newly issued Peoples Common Stock, at a price of $5.86 per
share, subject to certain adjustments (the "Option"). The Option becomes
exercisable in the event that the Merger Agreement is terminated under certain
conditions.
The transaction, which is expected to close in the fall of 1998, is subject
to the approval of the shareholders of both companies and receipt of regulatory
approvals. UBS entered into a voting agreement with the Company pursuant to
which UBS has agreed to vote all of the shares of Peoples Common Stock owned by
it in favor of the transaction. In addition, David R. Hill, Chairman of the
Company, and Samstock, L.L.C., a significant shareholder of the Company, have
entered into voting agreements with Peoples to vote all of the shares of Company
common stock owned by them in favor of the transaction. The transaction is
subject to certain other conditions, including the conversion by UBS of the
Peoples Series C Cumulative Preferred Stock held by it into Peoples Common Stock
and completion of a cash tender offer for Peoples' 12 1/4% Senior Notes due
2002, pursuant to which a minimum of 80% of the $100 million principal amount
outstanding shall have been tendered. Satisfaction of these conditions is
dependent upon receipt by the Company of financing, which is expected to be
obtained through a combination of high yield debt and a senior credit facility.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
2.1 Agreement and Plan of Merger and Reorganization, dated as of July
5, 1998, by and among Davel Communications Group, Inc., Davel
Holdings, Inc. and Peoples Telephone Company, Inc.
10.1 Corporate Governance, Liquidity and Voting Agreement, dated as of
July 5, 1998, by and among UBS Capital II LLC, Davel
Communications Group, Inc., Davel Holdings, Inc. and Peoples
Telephone Company, Inc.
10.2 Termination Option Agreement, dated as of July 5, 1998, by and
among Davel Communications Group, Inc. and Peoples Telephone
Company, Inc.
99.1 Joint Press Release of Davel Communications Group, Inc. and
Peoples Telephone Company, Inc., dated July 6, 1998.
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SIGNATURES
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.
DAVEL COMMUNICATIONS GROUP, INC.
Date: July 22, 1998 By: /s/ Michael E. Hayes
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Michael E. Hayes
Senior Vice President and
Chief Financial Officer
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Exhibit Index
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Exhibit Number Description of Exhibit
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2.1 Agreement and Plan of Merger and Reorganization, dated as
of July 5, 1998, by and among Davel Communications Group,
Inc., Davel Holdings, Inc. and Peoples Telephone Company,
Inc.
10.1 Corporate Governance, Liquidity and Voting Agreement, dated
as of July 5, 1998, by and among UBS Capital II LLC, Davel
Communications Group, Inc., Davel Holdings, Inc. and Peoples
Telephone Company, Inc.
10.2 Termination Option Agreement, dated as of July 5, 1998, by
and among Davel Communications Group, Inc. and Peoples
Telephone Company, Inc.
99.1 Joint Press Release of Davel Communications Group, Inc. and
Peoples Telephone Company, Inc., dated July 6, 1998.
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