SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE TO
(Rules 13e-3 and 13e-4)
TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
CURTIS INTERNATIONAL LTD.
(Name of Subject Company (Issuer))
CURTIS INTERNATIONAL LTD.
(Name of Filing Person)
Common Stock, No Par Value
(Title of Class of Securities)
231461 10 4
(CUSIP Number of Class of Securities)
Aaron Herzog
Chief Executive Officer
315 Attwell Drive
Etobicoke, Ontario M9W 5C1
(416) 674-2123
(Name, address and telephone number of person
authorized to receive notices and communications on
behalf of filing person)
Copy to:
Arthus S. Marcus, Esq.
Gersten, Savage & Kaplowitz, LLP
101 East 52nd Street
New York, New York 10022
(212)752-9700
CALCULATION OF FILING FEE
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Transaction valuation* Amount of filing fee**
$1,460,116 $292.02
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* For purposes of calculating amount of filing fee only. This calculation
assumes the purchase of all outstanding shares of common stock, no par value, of
Curtis International Ltd. not currently owned by the principal shareholders and
primary officers of Curtis International Ltd. at a purchase price of $0.80 per
share, net to the seller in cash, without interest. This calculation also
assumes that the holders of the 1,825,145 shares of common stock tendered for
hereby will agree to sell such shares.
** The amount of the filing fee calculated in accordance with Regulation
2400.0-11 of the Securities Exchange Act of 1934, as amended, equals 1/50th of
one percent of the value of the transaction.
[_] Check 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
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and the date of its filing.
Amount Previously Paid: Not Applicable Filing party: Not Applicable
Form or Registration No.: Not Applicable Date filed: Not Applicable
[_] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[_] third party tender offer subject to Rule 14d-1.
[X] issuer tender offer subject to Rule 13e-4.
[X] going-private transaction subject to Rule 13e-3.
[_] 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. [_]
INTRODUCTORY STATEMENT
This Tender Offer Statement on Schedule TO (this "Statement") relates
to a tender offer by Curtis International Ltd., an Ontario corporation (the
"Company" or the "Issuer," as appropriate), to purchase all its outstanding
shares of common stock, no par value per share (the "Common Shares") not
currently held by Aaron and Jacob Herzog, the principal shareholders and primary
officers of the Company, the A&E Herzog Family Trust and the Herzog Family Trust
(collectively, the "Herzog Group"). The Herzog Group owns approximately
sixty-six percent (66%) of the issued and outstanding Common Shares. The Common
Shares are tendered for pursuant to the tender offer (the "Tender Offer") at a
purchase price of $0.80 per Common Share, net to the seller in cash, without
interest, upon the terms and subject to the conditions set forth in the Offer to
Purchase dated May 1, 2001 (the "Offer to Purchase") and in the related Letter
of Transmittal, copies of which are attached hereto as Exhibits (A)(1) and
(A)(4) (which together with any amendments or supplements thereto, collectively
constitute the "Offer"). Unless otherwise specifically stated, all monetary
figures refer to US Dollars.
The information in the Offer to Purchase, including all schedules and annexes
thereto, is hereby expressly incorporated herein by reference in response to all
the Items of this Statement, except as otherwise set forth below.
ITEM 1. SUMMARY TERM SHEET.
The information set forth in the Offer to Purchase under the caption "Summary
Term Sheet" is incorporated herein by reference.
ITEM 2. SUBJECT COMPANY INFORMATION.
(a) Name and Address. The name of the Company is Curtis International Ltd.,
which is the issuer of the Common Shares subject to the Tender Offer. The
Company's principal executive offices are located at 315 Attwell Drive,
Etobicoke, Ontario, M9W 5C1. The telephone number for the Company is (416)
674-2123. Reference is made to the information set forth in the Offer to
Purchase under the caption "THE OFFER--7. Certain Information Concerning Curtis
International Ltd.," which information is incorporated herein by reference.
(b) Securities. The securities which are the subject of the Tender Offer consist
of the Company's common stock, no par value (the "Common Shares"). As of April
30, 2001, there were 5,373,145 Common Shares outstanding, of which
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the Herzog Group owns 3,548,000. Reference is made to the information set forth
on the cover page of the Offer to Purchase and in the Offer to Purchase under
the caption "INTRODUCTION," which information is incorporated herein by
reference.
(c) Trading Market and Price. The Common Shares are traded in the Nasdaq Small
Cap Market under the symbol "CURT." Trading in the Common Shares has been
limited and sporadic. The Common Shares are not listed for trading on any
exchange. Reference is made to the information set forth in the Offer to
Purchase under the captions "SPECIAL FACTORS--2. Purpose and Fairness of the
Offer" and "THE OFFER--5. Price Range of the Common Shares; Dividends," which
information is incorporated herein by reference.
ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON.
(a) Name and Address. This is an offer tendered by the Company. The address of
the Company is 315 Attwell Drive, Etobicoke, Ontario, M9W 5C1. The information
set forth in the Offer to Purchase under the caption "THE OFFER--7. Certain
Information Concerning Curtis International Ltd." is incorporated herein by
reference.
ITEM 4. TERMS OF THE TRANSACTION.
The information set forth in the Offer to Purchase under the captions
"INTRODUCTION", "SPECIAL FACTORS-- 3. Interests of Certain Persons in the
Offer", "SPECIAL FACTORS-4. Material Federal Income Tax Consequences", "THE
OFFER--1. Terms of the Offer", "THE OFFER--2. Acceptance for Payment and
Payment", "THE OFFER--3. Procedures for Accepting the Offer and Tendering the
Common Shares", "THE OFFER--4. Withdrawal Rights", "THE OFFER--8. Conditions to
the Offer", and "THE OFFER--9. Legal Matters" is incorporated herein by
reference.
ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
(e) Agreements involving the subject company's securities. Aaron Herzog, the
President and Chief Executive Officer of the Company, Jacob Herzog, its
Principal Accounting Officer, Treasurer and Secretary, the A&E Herzog Family
Trust and the Herzog Family Trust collectively own approximately sixty-six
percent (66%) of the Common Shares. While the members of the Herzog Group have
executed no formal agreement with respect to the Tender Offer in particular, the
members of the Herzog Group are parties to a voting agreement specifying that
they will vote their shares together.
ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
(a) Purposes. The information set forth in the Offer to Purchase under the
caption "INTRODUCTION" and "SPECIAL FACTORS--2. Purpose and Fairness of the
Offer" is incorporated herein by reference.
(b) Use of Securities. The information set forth in the Offer to Purchase under
the caption "SPECIAL FACTORS-8. Certain Effects of the Offer" is incorporated
herein by reference.
(c) Plans. The information set forth in the Offer to Purchase under the captions
"SPECIAL FACTORS--1. Operating History; Payment of Dividends and Redemption of
Common Shares Uncertain", "SPECIAL FACTORS--2. Purpose and Fairness of the
Offer" and "SPECIAL FACTORS-8. Certain Effects of the Offer" is incorporated
herein by reference.
ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) Source of Funds. The information set forth in the Offer to Purchase under
the caption "SPECIAL FACTORS-5. Financing of the Offer" is incorporated herein
by reference.
(b) Conditions. Not applicable.
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(d) Borrowed Funds. Not applicable.
ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) Securities Ownership. See Item 8 (b) below.
(b) Securities Transactions. The information set forth in the Offer to Purchase
under the caption "SPECIAL FACTORS-3. Interests of Certain Persons in the
Offer", "SPECIAL FACTORS--7. Beneficial Ownership of the Common Shares",
"SPECIAL FACTORS-7. Transactions and Arrangements Concerning the Common Shares"
and "THE OFFER--7. Certain Information Concerning Curtis International Ltd." is
incorporated herein by reference.
ITEM 9. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED.
(a) Solicitations or Recommendations. The information set forth in the Offer to
Purchase under the captions "THE OFFER--10. Fees and Expenses" is incorporated
herein by reference.
ITEM 10. FINANCIAL STATEMENTS.
The financial statements contained in the Company's Annual Report on Form 10-K
filed with the Securities and Exchange Commission (the "Commission") on March
27, 2000, the Form 10 K/A filed with the Commission on October 20, 2000 and the
Company's Quarterly Reports on Form 10-Q filed with the Commission on January
16, 2001 and April 16, 2001 are incorporated herein by reference.
ITEM 11. ADDITIONAL INFORMATION.
(a) Agreements, Regulatory Requirements and Legal Proceedings.
(1) None other than previously disclosed.
(2) See (3) below.
(3) The information set forth in the Offer to Purchase under the
caption "THE OFFER--9. Legal Matters" is incorporated herein by reference.
(4) Not applicable.
(5) Not applicable.
(b) Other Material Information. The information set forth in the Offer to
Purchase and the Letter of Transmittal, copies of which are attached hereto as
Exhibits (A)(1) and (A)(4), is incorporated herein by reference.
ITEM 12. EXHIBITS.
(A)(1) Offer to Purchase dated May 1, 2001.
(A)(4) Form of Letter of Transmittal for Common Shares.
(A)(5) Form of Notice of Guaranteed Delivery.
(A)(6) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(A)(7) Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
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ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3.
Due partly to the fact that it is a condition to the tender offer for the Common
Shares that the Common Shares be held of record by fewer than 300 persons after
the closing of the offer, this transaction constitutes a "going-private"
transaction. As such, the following sets forth that information required by
Schedule 13E-3 that has not already been set forth in Items 1-12 above. The
information set forth in the Offer to Purchase is incorporated herein by
reference to the items required by Schedule 13E-3.
ITEM 2 OF SCHEDULE 13E-3. SUBJECT COMPANY INFORMATION
(d) Dividends. The information is set forth in the Offer to Purchase under the
Caption "THE OFFER--5. Price Range of the Common Shares; Dividends" is
incorporated herein by reference.
(e) Prior Public Offerings. The Company completed its initial public offering
pursuant to a registration statement on Form SB-2 that the Commission declared
effective on November 12, 1998. The Company sold 1,673,145 Common Shares for the
price of Five US Dollars per share ($5.00) for aggregate proceeds of $8,365,145
(f) Prior Stock Purchases. The information set forth in "SPECIAL FACTORS--7.
Transactions and Arrangements Concerning the Common Shares" is hereby
incorporated by reference.
ITEM 3 OF SCHEDULE 13E-3 IDENTITY AND BACKGROUND OF FILING PERSON
(b) Business and Background of Entities. Not applicable.
(c) Business and Background of Natural Persons. Not applicable.
ITEM 4 OF SCHEDULE 13E-3 TERMS OF THE TRANSACTION
(c) Different Terms. None.
(d) Appraisal Rights. Shareholders who do not accept the Company's Offer will be
granted appraisal rights as provided for under Ontario law. See "SPECIAL
FACTORS--8. Certain Effects of the Offer."
(e) Provisions for Unaffiliated Security Holders. Unaffiliated security holders
have access to the Company's public filings on the Commission's Web site at
http://www.sec.gov/edgar/searchedgar/formpick.htm. No other information or
services are provided to the unaffiliated security holders. Unaffiliated
security holders are asked to contact MacKenzie Partners, Inc., the Company's
Information Agent, collect at (212) 929-5500 or Toll-Free at (800) 322-2885.
(f) Eligibility for Listing or Trading. Not applicable.
ITEM 5 OF SCHEDULE 13E-3 PAST CONTRACTS, TRANSACTIONS, NEGOTIATIONS, AND
AGREEMENTS
(a) Transactions. See (c) below.
(b) Significant Corporate Events. See (c) below.
(c) Negotiations or Contracts. The information set forth in the Offer to
Purchase under the caption "SPECIAL
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FACTORS--2. Purpose and Fairness of the Offer" and "SPECIAL FACTORS-3. Interests
of Certain Persons in the Offer" is incorporated herein by reference.
ITEM 7 OF SCHEDULE 13E-3. PURPOSES, ALTERNATIVES, REASONS AND EFFECTS.
(a) Purposes. The information set forth in the Offer to Purchase under the
captions "INTRODUCTION" and "SPECIAL FACTORS--2. Purpose and Fairness of the
Offer" is incorporated herein by reference.
(b) Alternatives. Not applicable.
(c) Reasons. The information set forth in the Offer to Purchase under the
caption "SPECIAL FACTORS--2. Purpose and Fairness of the Offer" is incorporated
herein by reference.
(d) Effects. The information set forth in the Offer to Purchase under the
captions "SPECIAL FACTORS-4. Material Federal Income Tax Consequences" and
"SPECIAL FACTORS-8. Certain Effects of the Offer" is incorporated herein by
reference.
ITEM 8 OF SCHEDULE 13E-3. FAIRNESS OF THE GOING-PRIVATE TRANSACTION
(a) Fairness. See (b) below.
(b) Factors Considered in Determining Fairness. The information set forth in the
Offer to Purchase under the captions "SPECIAL FACTORS--2. Purpose and Fairness
of the Offer" is incorporated herein by reference.
(c) Approval of Security Holders. Not applicable.
(d) Unaffiliated Representative. At the request of David Ben-David, the
Company's independent Director, the Board of Directors has retained Rodman &
Renshaw, Inc. ("Rodman") to produce a Fairness Opinion to be delivered to all
shareholders, which is attached hereto as Exhibit (A)(2).
(e) Approval of Directors. The rule 13e-3 transaction has been approved by a
majority of the Company's non-employee directors.
(f) Other Offers. Not applicable.
ITEM 9 OF SCHEDULE 13E-3. REPORTS, OPINIONS, APPRAISALS AND NEGOTIATIONS
(a) Report, Opinion or Appraisal. The Company has received a Fairness Opinion
from Rodman & Renshaw on the fairness of the transaction, which Fairness Opinion
is attached hereto as Exhibit (A)(2). In addition, the information set forth in
the Offer to Purchase under the caption "SPECIAL FACTORS" is incorporated herein
by reference.
(b) Preparer and Summary of the Report, Opinion or Appraisal.
(1) The identity of the preparer of the Fairness Opinion is Rodman
& Renshaw, Inc. ("Rodman").
(2) Rodman & Renshaw, an investment bank, is regularly engaged in
the valuation of businesses and their securities in connection
with mergers and acquisitions, negotiated underwritings,
secondary distributions of listed and unlisted securities,
private placements and valuations for estate, corporate and
other purposes.
(3) The method the Company used to select Rodman & Renshaw was a
resolution adopted by the Company's board of directors after
discussions with several investment banks.
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(4) Not applicable.
(5) The price at which the Company is offering to purchase its
outstanding Common Shares (the "Common Share Offer Price") was
determined by the Company.
(6) Summary of the Fairness Opinion:
(i) The Company did not place any limitations on Rodman on the
scope of the investigation.
(ii) The instructions given Rodman by the Company consisted of
informing the Company's Board of Directors whether, in
Rodman's opinion, $0.80 per Common Share is a fair price for
the Company to offer its shareholders.
(iii) The procedures followed by Rodman were to examine any
information in the public domain that Rodman deemed relevant
to its task. In addition, where information on the Company is
concerned, Rodman accepted as true and correct the information
made available to it by the Company or derived from other
sources, and relied on the representations made to Rodman by
the Company's senior management that, to the best knowledge of
management, nothing has occurred that would render the
information provided to Rodman incomplete, false or
misleading.
(iv) Rodman's bases for and methods of arriving at the
conclusion were to review any financial information deemed
relevant to the discharge of its responsibilities, including
the Offer to Purchase, the market price of the Company's
Common Shares in comparison with that of similar companies,
the listing status of the Company's Common Shares and the
impact of a potential delisting from Nasdaq, the performance
of the Company and the terms of recent acquisitions of a
similar nature. In addition, Rodman, discussed anything it
deemed pertinent with management of the Company, assessed
general market and economic conditions and, finally, reviewed
any other information it deemed appropriate.
(v) Based on the foregoing, Rodman found that $0.80 is a fair
price for the Company to offer its shareholders, but made no
recommendations in this or any other regard.
(c) Availability of Documents. The Fairness Opinion is provided herewith,
attached as Exhibit (A)(2).
ITEM 10 OF SCHEDULE 13E-3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
(c) Expenses. The Information contained in the Offer to Purchase under the
caption "THE OFFER--10. Fees and Expenses" is incorporated herein by reference.
ITEM 12 OF SCHEDULE 13E-3. THE SOLICITATION OR RECOMMENDATION
(d) Intent to Tender or Vote in a Going-Private Transaction. The information set
forth in the Offer to Purchase under the caption "SPECIAL FACTORS-3. Interest of
Certain Persons in the Offer" is incorporated herein by reference.
(e) Recommendations of Others. No member of the Herzog Group has made a
recommendation with respect to the Offer.
ITEM 14 OF SCHEDULE 13E-3. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR
USED
(b) Employees and Corporate Assets. Aaron and Jacob Herzog, the members of the
Herzog Group, are the Company's principal officers. They will be responsible for
the Company's role in the Offer. The Company will be responsible for the
expenses incurred in connection with the Tender Offer.
ITEM 16 OF SCHEDULE 13E-3 EXHIBITS
(c) (A)(2) Form of Fairness Opinion
(f) (A)(3) Rights of Dissenting Shareholders under the Ontario Business
Corporation Act
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that the
information set forth in this Schedule TO is true, complete and correct.
Curtis International Ltd.
/s/ Aaron Herzog
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Aaron Herzog
Chief Executive Officer
Date: May 1, 2001
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