sc14d9za
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
(Rule 14d-101)
(Amendment No. 2)
Solicitation/Recommendation Statement
Under Section 14(d)(4) of the Securities Exchange Act of 1934
BLUELINX HOLDINGS INC.
(Name of Subject Company)
BLUELINX HOLDINGS INC.
(Name of Person Filing Statement)
Common stock, par value $0.01 per share
(Title of Class of Securities)
09624H109
(CUSIP Number of Class of Securities)
Dean A. Adelman
Chief Administrative Officer
4300 Wildwood Parkway
Atlanta, Georgia 30339
(770) 953-7000
(Name, address and telephone number of person authorized to receive
notices and communications on behalf of the persons filing statement)
With copies to:
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Sara Epstein, Esq.
BlueLinx Corporation
4300 Wildwood Parkway
Atlanta, Georgia 30339
(770) 953-7000
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Mark L. Hanson, Esq.
Jones Day
1420 Peachtree St., N.E.
Atlanta, GA 30309
(404) 521-3939 |
o Check the box if the filing relates solely to preliminary communications made before the
commencement of a tender offer.
TABLE OF CONTENTS
Purpose of the Amendment
This Amendment No. 2 (this Amendment) amends and supplements the Solicitation/Recommendation
Statement on Schedule 14D-9 (together with the exhibits and annexes thereto and as amended and
supplemented from time to time, the Schedule 14D-9), originally filed with the Securities and
Exchange Commission (the Commission) on August 13, 2010 by BlueLinx Holdings Inc., a Delaware
corporation (the Company or BlueLinx) and subsequently amended and restated on September 27,
2010, relating to the tender offer by Cerberus ABP Investor LLC, a Delaware limited liability
company (CAI), and a wholly-owned subsidiary of Cerberus Capital Management, L.P. (Cerberus
Capital), pursuant to which CAI has offered to purchase all outstanding shares of common stock,
par value $0.01 per share of the Company (the Shares) not otherwise owned by CAI for $4.00 net
per Share in cash, without interest and less any applicable withholding taxes (the Offer Price),
upon the terms and subject to the conditions set forth in the Offer to Purchase, dated August 2,
2010, as supplemented by the Second Supplement to Offer to Purchase dated September 22, 2010, and
the related Letter of Transmittal (which, together with any amendments or supplements thereto,
collectively, constitute the Offer). The Offer is described in a Tender Offer Statement on
Schedule TO, filed by CAI and Cerberus Capital with the Commission on August 2, 2010 (as amended
and/or supplemented from time to time, and together with the Exhibits thereto, the Schedule TO).
All information in the Schedule 14D-9 is incorporated into this Amendment by reference, except
that such information is hereby amended to the extent specifically provided herein.
This Amendment is being filed to reflect certain updates as reflected below.
All references to (other than CAI and Cerberus Capital) in the Schedule 14D-9 are deleted in
their entirety and replaced with (other than CAI, Cerberus Capital, the Companys directors and
executive officers and other affiliates).
Item 2. Identity and Background of Filing Person.
The
last sentence of the first paragraph under the subheading
Tender Offer is deleted and replaced in its
entirety with the following:
According
to the Schedule TO, the Offer is scheduled to remain open from
August 2, 2010 until 12:00 midnight, New York City time on
October 18, 2010 (the Offer Period), unless
extended by CAI.
Item 4. The Solicitation or Recommendation.
Background of the Offer.
The following sentences are inserted at the end of the 20th paragraph of this
section:
In light of CAIs statement in its Letter to the Board, dated July 21, 2010, that in its
capacity as a stockholder CAI was only interested in acquiring Shares it did not already own, and
that it neither had any current interest in selling its Shares nor in voting in favor of any
alternative sale, merger or other such transaction, the Special Committee did not believe there was
any viable alternative transaction involving the sale of the Company as a whole that could be
explored or pursued without CAIs support. Consequently, the Special Committee determined that
exploring the potential acquisition of the entire minority interest by a third party was the only
alternative transaction that could reasonably be explored at this time.
The 33rd paragraph of this section is deleted and replaced in its entirety with
the following paragraph:
On August 11 and 12, 2010, the Special Committee held telephonic meetings to discuss the
Schedule 14D-9 and the Offer. At the meeting on August 12, the representatives of Citadel
Securities informed the Special Committee that the remaining third party that had expressed an
interest in exploring a potential acquisition of the Companys Shares not currently owned by CAI no
longer was interested in pursuing such an acquisition. In light of CAIs stated position that it
had no current interest in selling its Shares, the Special Committee determined that there were no
other currently available alternative transactions, and that it should continue to evaluate the
Offer and engage in discussions with CAI. At the conclusion of the meetings, the Special Committee
determined that it was unable to take a position with respect to the Offer at that time and
authorized the Company to finalize and file a Schedule 14D-9. The Special Committee determined to
request that stockholders of the Company take no action and not tender their Shares with respect to
the Offer at that time, and instead defer making a determination of whether to accept or reject the
Offer until the Special Committee has advised stockholders of its position or recommendation, if
any, with respect to the Offer.
The last two paragraphs of this section are deleted and replaced in their entirety with
the following paragraphs:
Following the discussion, the Special Committee unanimously determined, by all members
participating in the deliberations, that the Offer is fair, from a financial point of view, to the
Companys stockholders (other than CAI, Cerberus Capital, the Companys directors and executive
officers and other affiliates) and to recommend on behalf of the Company and the Board, that such
stockholders accept the Offer and tender their Shares pursuant to the Offer. The Company, through
the Special Committee as authorized by the Board, also determined that the Offer is fair, from a
financial point of view, to the Companys stockholders (other than CAI, Cerberus Capital, the
Companys directors and executive officers and other affiliates).
Effective on September 27, 2010, after the Special Committee informed CAI and Cerberus Capital
that it, on behalf of the Company, had determined to issue a favorable recommendation with respect
to the amended Offer, the Company, CAI and Cerberus Capital entered into the Stockholder Agreement
in the form that had been agreed upon between the parties on September 22, 2010.
On September 27, 2010, the Company issued a press release announcing that the Special
Committee, on behalf of the Company, was recommending that stockholders accept the Offer at the increased Offer Price of $4.00
per Share and tender their Shares pursuant to the Offer.
On September 28, 2010, the Special Committee received a letter from Stadium Capital Management
LLC, (Stadium Capital), which holds approximately 5% of the outstanding Shares. In the letter,
which Stadium Capital also filed with the Commission, Stadium Capital expressed its continuing
opposition to the Offer and to the increased Offer Price, and requested that the Special Committee
reconsider its recommendation.
On October 1, 2010, the Special Committee held a telephonic
meeting, which included representatives of Citadel Securities and Jones Day, to review the
communication from Stadium Capital. Following a discussion of the points raised by Stadium Capital
in its letter, the Special Committee determined to stand by its recommendation of the Offer, and
the reasons therefor, all as previously announced on September 27, 2010.
On
October 4, 2010, prior to the opening of trading on the NYSE,
CAI announced a further extension of the expiration time of the Offer
to midnight, New York City time, on Monday, October 18, 2010. In
the announcement, CAI stated that the purpose of the extension was to
allow stockholders of the Company additional time to review the terms
of the amended Offer and the Companys amended
Solicitation/Recommendation Statement on Schedule 14D-9, which
was filed on September 27, 2010.
Reasons for the Special Committees Position.
The first paragraph of this section is deleted and replaced in its entirety with the following
paragraph:
In reaching its recommendation that the Offer Price is fair, from a financial point of view,
to the Companys stockholders (other than CAI, Cerberus Capital, the Companys directors and
executive officers and other affiliates), the Special Committee, on its behalf and on behalf of the
Company and the Board, considered a number of factors, including the following:
The following paragraph is inserted immediately following the second paragraph of this
section:
Trading Market and Liquidity. The Special Committee considered the historical market prices
and trading activity of the Shares on the NYSE, including the generally low trading volume and
resulting lack of liquidity for stockholders, and the risk of further erosion of the market price
for the Shares as a result of current conditions in the financial and housing markets generally.
The Special Committee also considered the fundamental dislocations that have occurred in the
financial and housing markets over the past few years, which has had a number of consequences,
including creating a larger disparity between current trading prices of equity securities and
historical trading prices, and which, in the Special Committees view, make financial metrics,
including historical trading prices, from prior periods less relevant
to a current analysis of the value of the Shares.
The following paragraphs are inserted immediately preceding the last paragraph of this
section:
In reaching its conclusion as to fairness, the Special Committee concluded, consistent with
the view of its financial advisor, that a valuation of the Company as a going concern was the most
appropriate valuation approach to apply. The Special Committees conclusion was based primarily on
the fact that CAI had explicitly stated that it had no interest in selling its Shares nor in voting
in favor of any alternative sale, merger or other such transaction,
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together with the view that a going concern valuation approach was most appropriate in light
of the nature of the Companys business and its ongoing viability as a going concern, all as
described in more detail in Opinion of the Special Committees Financial Advisor, Citadel
Securities LLC. As such, the Special Committee did not consider the liquidation value of the
Companys assets. Therefore, no appraisal of liquidation value was sought for purposes of valuing
the Companys Shares, and the Special Committee believed that the liquidation value of the Company
was not a meaningful indicator of value for a distribution business such as the Companys and was
therefore not relevant to a determination as to whether the Offer is fair to the unaffiliated
stockholders. Further, the Special Committee did not consider net book value as a factor because it
believed that net book value is an accounting concept that is not a material indicator of the value
of the Company as a going concern, particularly for companies in the building products distribution
sector.
Opinion of the Special Committees Financial Advisor, Citadel Securities LLC.
The second paragraph of this section under the subheading Miscellaneous is replaced in
its entirety with the following paragraph:
Pursuant to an engagement letter dated July 27, 2010, the Company is obligated to pay Citadel
Securities a fee in an amount of $1,500,000 in connection with the services rendered to the Special
Committee. In addition, the Company has also agreed to reimburse Citadel Securities for its
reasonable expenses, including attorneys fees and disbursements, and to indemnify Citadel
Securities and related persons against certain liabilities relating to or arising out of its
engagement.
Item 8. Additional Information.
Litigation.
The following paragraph is inserted after the last paragraph of this subsection:
On September 30, 2010 an individual stockholder of the Company filed a
complaint in the U.S. District Court for the Northern District of Georgia commencing a putative
class action lawsuit against CAI, Cerberus Capital, the Company and each of the individual members
of the Board. This complaint, styled as Ajay Kajaria v. Howard S. Cohen, et al. (Case No.
1:10-CV-03141-JOF), seeks, among other remedies, to preliminarily and permanently enjoin the Offer
and Merger, to rescind the proposed transaction, to the extent already implemented, and the award
of damages and attorneys fees. In general, the complaint alleges, among other things, that the
members of the Board breached their fiduciary duty and CAI and Cerberus Capital aided and abetted
such breach of fiduciary duty by, among other things, allegedly failing to disclose material facts
regarding the Offer and the Merger. The Company believes this case has no merit.
The following is inserted at the end of this section:
Financial Information.
The following table sets forth summary historical financial data for the Company as of and for
each of the fiscal year ended January 2, 2010 and the fiscal year ended January 3, 2009 and the six
months ended July 3, 2010. The selected financial information set forth below is derived from, and
should be read in conjunction with, the audited financial statements and other financial
information contained in the Companys Annual Report on Form 10-K filed with the Commission on
March 2, 2010 for the year ended January 2, 2010 (the 2009 10-K) and the unaudited financial
statements and other financial information contained in the Companys Quarterly Report on Form 10-Q
filed with the Commission on August 6, 2010 for the quarter ended July 3, 2010 (the Second Quarter
2010 10-Q), including the notes thereto, which contain more comprehensive financial information
(including managements discussion and analysis of financial condition and results of operation).
The following summary is qualified in its entirety by reference to the information contained in the
2009 10-K and the Second Quarter 2010 10-Q and the financial statements included as Item 8 in the
2009 10-K and Item 1 of the Second Quarter 2010 10-Q are incorporated by reference herein. Copies
of reports and documents filed by the Company with the Commission can be inspected and copied at
the Commissions Public Reference Room at 100 F Street, N.E., Washington, D.C.
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20549. Please call 1-800-SEC-0330 for further information on the operation of the Public
Reference Room. The Commission also maintains a website on the Internet (http://www.sec.gov) that
contains such reports and documents.
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Six Months |
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Ended |
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Year Ended |
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Year Ended |
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July 3, 2010 |
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January 2, |
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January 3, |
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(unaudited) |
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2010 |
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2009 |
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(In thousands, except per share data) |
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Statement of Operations Data: |
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Net sales |
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$ |
971,831 |
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$ |
1,646,108 |
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$ |
2,779,699 |
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Cost of sales |
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855,434 |
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1,452,947 |
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2,464,766 |
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Gross profit |
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116,397 |
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193,161 |
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314,933 |
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Net loss |
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$ |
(18,146 |
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$ |
(61,463 |
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$ |
(31,703 |
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Comparative per Share Data: |
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Basic net loss per share applicable to common stock |
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$ |
(0.59 |
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$ |
(1.98 |
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$ |
(1.02 |
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Diluted net loss per share applicable to common stock |
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$ |
(0.59 |
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$ |
(1.98 |
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$ |
(1.02 |
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Dividends
declared per share of common stock(1) |
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Book value
per share(2) |
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1.05 |
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1.58 |
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3.18 |
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Balance Sheet Data (at end of period): |
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Cash and cash equivalents |
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$ |
18,821 |
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$ |
29,457 |
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$ |
150,353 |
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Working capital |
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265,524 |
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247,722 |
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320,527 |
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Total assets |
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644,047 |
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546,846 |
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729,178 |
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Total debt(3) |
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410,356 |
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341,669 |
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444,870 |
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Shareholders equity |
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$ |
34,368 |
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$ |
50,820 |
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$ |
102,852 |
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Ratio of
Earnings to Fixed Charges(4) |
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(0.22)x |
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(0.31)x |
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(0.12)x |
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(1) |
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The last dividend paid by the Company was on
December 28, 2007 for the third quarter ended September 29, 2007.
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(2) |
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Book value per share is calculated by dividing total stockholders equity by the number of
shares of common stock outstanding. |
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Total debt represents long-term debt, including current maturities. |
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Earnings for the six months ended July 3, 2010 and the years ended January 2, 2010 and
January 3, 2009 were inadequate to cover fixed charges by $18.1 million, $56.9 million and
$48.1 million, respectively. |
Prior Stock Purchases.
On December 22, 2008, the Board approved a stock repurchase program authorizing the Company to
repurchase up to $10,000,000 of outstanding common stock. Below is a listing of the shares
repurchased since 2009 (by quarter) and information relating to the repurchase price of those
shares. No shares were repurchased by the Company in 2008.
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Average |
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Total Number of |
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Purchase |
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Period |
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Shares Purchased |
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Range of Prices |
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Price |
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2010 |
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First Quarter |
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199,328 |
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$ |
2.68-$3.03 |
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$ |
2.93 |
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Second Quarter |
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2009 |
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First Quarter |
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363,018 |
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$ |
1.37-$2.90 |
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$ |
2.18 |
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Second Quarter |
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273,287 |
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$ |
2.78-$3.27 |
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$ |
3.05 |
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Third Quarter |
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75,547 |
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$ |
3.10-$3.27 |
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$ |
3.16 |
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Fourth Quarter |
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60,196 |
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$ |
2.69-$3.03 |
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$ |
2.90 |
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Trading Market and Price.
The Shares currently are traded on the NYSE under the symbol BXC. The table below sets forth
the quarterly range of high and low sales prices for Shares as reported on the NYSE with respect to
the periods occurring in fiscal year 2008 and 2009 for each quarter during 2010.
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High |
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Low |
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Fiscal Year 2010 |
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Third Quarter (through September 30, 2010) |
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$ |
4.10 |
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$ |
2.24 |
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Second Quarter |
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6.32 |
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2.30 |
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First Quarter |
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4.11 |
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2.51 |
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Fiscal Year 2009 (ended January 2, 2010) |
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Fourth Quarter |
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$ |
4.12 |
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$ |
2.60 |
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Third Quarter |
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5.93 |
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2.96 |
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Second Quarter |
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4.60 |
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2.25 |
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First Quarter |
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3.30 |
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1.20 |
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Fiscal Year 2008 (ended January 3, 2009) |
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Fourth Quarter |
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$ |
5.60 |
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$ |
1.02 |
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Third Quarter |
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7.54 |
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2.91 |
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Second Quarter |
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6.00 |
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3.57 |
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First Quarter |
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5.97 |
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2.96 |
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Item 9. Exhibits.
Item 9 is hereby amended to add the following exhibit:
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Exhibit No. |
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Description |
(e)(15)
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Complaint entitled Ajay Kajaria v. Howard S. Cohen, et al.
filed on September 30, 2010 in the United States District
Court for the Northern District of Georgia. |
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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 Statement is true, complete and correct.
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BLUELINX HOLDINGS INC. |
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By: |
/s/ H. Douglas Goforth
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Name: |
H. Douglas Goforth |
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Title: |
Chief Financial Officer and Treasurer |
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Dated: October 4, 2010
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