-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O0E2gWXR3mNWFvyxglmHMV46ETVJG5YLLiApKpT2f0hSK3qJdtnH95lXaZ1xmKLn bESampIcwoKWPoYWlCnAhQ== 0000950157-98-000022.txt : 19980115 0000950157-98-000022.hdr.sgml : 19980115 ACCESSION NUMBER: 0000950157-98-000022 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19980112 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980114 SROS: CSE SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BETHLEHEM STEEL CORP /DE/ CENTRAL INDEX KEY: 0000011860 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 240526133 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-01941 FILM NUMBER: 98506572 BUSINESS ADDRESS: STREET 1: 1170 EIGHTH AVE CITY: BETHLEHEM STATE: PA ZIP: 18016-7699 BUSINESS PHONE: 6106843745 MAIL ADDRESS: STREET 1: 1170 EIGHTH AVE CITY: BETHLEHEM STATE: PA ZIP: 18016-7699 8-K 1 CURRENT REPORT - ------------------------------------------------------------------------------ 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 Date of Report (Date of earliest event reported): January 4, 1998 Bethlehem Steel Corporation (Exact name of registrant as specified in its charter) ----------------- Delaware 1-1941 24-0526133 (State or Other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification Number) 1170 Eighth Avenue Bethlehem, Pennsylvania 18016-7699 (Address of principal executive offices) Registrant's telephone number, including area code: (610) 694-2424 None (Former name or former address, if changed since last report) - ------------------------------------------------------------------------------ 2 Item 5. Other Events. Bethlehem Steel Corporation, a Delaware corporation ("Bethlehem"), Lukens Inc., a Delaware corporation ("Lukens"), and Lukens Acquisition Corporation, a Delaware corporation and wholly-owned subsidiary of Bethlehem ("Merger Sub"), have entered into an Amendment dated as of January 4, 1998 (the "Amendment") to the Agreement and Plan of Merger dated as of December 15, 1997 (as so amended, the "Amended Merger Agreement"). The Amendment increases the value of the consideration to be paid by Bethlehem from $25 to $30 per share of common stock, par value $.01 per share, of Lukens (a "Lukens Common Share"). Under the Amended Merger Agreement, Bethlehem will acquire Lukens for approximately $490 million in cash and stock. The Merger Agreement provides for the merger of Merger Sub with and into Lukens (the "Merger"). The Merger is expected to be completed early in the second quarter of 1998. Following the Merger, Bethlehem intends to cause Lukens to be merged with and into Bethlehem. In the Merger, each Lukens Common Share that is issued and outstanding immediately prior to the effective time of the Merger will be converted into the right to receive, subject to proration and certain other conditions and limitations, at the election of the holder either (i) cash from Bethlehem in an amount equal to $30 or (ii) a number of shares of common stock, par value $1.00 per share, of Bethlehem ("Bethlehem Shares") equal to the Conversion Number. The "Conversion Number" will be equal to $30 divided by the average of the daily closing prices per Bethlehem Share for the 15 consecutive full NYSE trading days immediately preceding the third full NYSE trading day prior to the effective time of the Merger (the "Average Bethlehem Market Price"), but will not be less than 2.878 or more than 4.317. Each issued and outstanding share of Lukens Series B Preferred Stock (a "Lukens Preferred Share") will be converted into the right to receive the consideration that a holder of the number of Lukens Common Shares into which such Lukens Preferred Share could have been converted would have the right to receive if such holder did not elect to receive cash. The Merger consideration will consist of approximately 68% cash and 32% Bethlehem Shares. If Lukens stockholders elect to receive cash in an aggregate amount in excess of 68% of the total Merger consideration, each Lukens share for which an election to receive cash is made will be converted into the right to receive a prorated amount of cash and Bethlehem Shares. An election to receive Bethlehem Shares will be deemed to have been made with respect to each Lukens share for which an election to receive cash is not made. If Lukens stockholders are deemed to have elected to receive Bethlehem Shares in an aggregate amount in excess of 32% of the total Merger consideration, each Lukens share for which a deemed election to receive Bethlehem Shares is made will be converted into the right to receive a prorated amount of Bethlehem Shares and cash. Consummation of the Merger is subject to termination or expiration of the waiting period under the Hart- Scott-Rodino Antitrust Improvement Act of 1976, approval by the Lukens stockholders and certain other conditions. Furthermore, Lukens will not be obligated to effect the Merger if the Average Bethlehem Market Price is less than a specified amount. The foregoing description of the Amended Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is incorporated herein by reference, and the Amendment, which is attached hereto as an exhibit. The equity value of the amended transaction between Bethlehem and Lukens represents an increase of about 7% over the offer previously made to Lukens by Allegheny Teledyne Incorporated to acquire Lukens in a merger transaction for $28 in cash per share. 3 Item 7. Financial Statements and Exhibits. (c) Exhibits. Exhibit Description - ------- ----------- 2.1* Agreement and Plan of Merger dated as of December 15, 1997, between Bethlehem Steel Corporation and Lukens Inc. 2.2 Amendment dated as of January 4, 1998 to the Agreement and Plan of Merger dated as of December 15, 1997 among Bethlehem Steel Corporation, Lukens Acquisition Corporation and Lukens Inc. 99.1* Press Release dated December 15, 1997, announcing the execution of the Merger Agreement between Bethlehem Steel Corporation and Lukens Inc. 99.2 Press Release dated January 5, 1998 announcing the execution of the Amendment to the Merger Agreement among Bethlehem Steel Corporation, Lukens Acquisition Corporation and Lukens Inc. 99.3 Press Release dated January 5, 1998 confirming the execution of the Amendment to the Merger Agreement among Bethlehem Steel Corporation, Lukens Acquisition Corporation and Lukens Inc. 99.4 Press Release dated January 5, 1998 responding to inquiries concerning the Amendment to the Merger Agreement among Bethlehem Steel Corporation, Lukens Acquisition Corporation and Lukens Inc. - -------------------- * Incorporated by reference to the Form 8-K of Bethlehem Steel Corporation dated December 15, 1997, File No. 1-1941. 4 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. Bethlehem Steel Corporation ---------------------------------------- (Registrant) Date: January 12, 1998 By: /s/ Lonnie A. Arnett ------------------------------------ Name: Lonnie A. Arnett Title: Vice President and Controller (principal accounting officer) 5 EXHIBIT INDEX Exhibit Description 2.1* Agreement and Plan of Merger dated as of December 15, 1997, between Bethlehem Steel Corporation and Lukens Inc. 2.2 Amendment dated as of January 4, 1998 to the Agreement and Plan of Merger dated as of December 15, 1997 among Bethlehem Steel Corporation, Lukens Acquisition Corporation and Lukens Inc. 99.1* Press Release dated December 15, 1997, announcing the execution of the Merger Agreement between Bethlehem Steel Corporation and Lukens Inc. 99.2 Press Release dated January 5, 1998 announcing the execution of the Amendment to the Merger Agreement among Bethlehem Steel Corporation, Lukens Acquisition Corporation and Lukens Inc. 99.3 Press Release dated January 5, 1998 confirming the execution of the Amendment to the Merger Agreement among Bethlehem Steel Corporation, Lukens Acquisition Corporation and Lukens Inc. 99.4 Press Release dated January 5, 1998 responding to inquiries concerning the Amendment to the Merger Agreement among Bethlehem Steel Corporation, Lukens Acquisition Corporation and Lukens Inc. - -------------------- * Incorporated by reference to the Form 8-K of Bethlehem Steel Corporation dated December 15, 1997, File No. 1-1941. EX-2.2 2 AMENDMENT DATED AS OF JANUARY 4, 1998 AMENDMENT dated as of January 4, 1998, to the Agreement and Plan of Merger dated as of December 15, 1997, among BETHLEHEM STEEL CORPORATION, a Delaware corporation ("Bethlehem"), LUKENS ACQUISITION CORPORATION, a Delaware corporation ("MERGER SUB") and LUKENS INC., a Delaware corporation (the "Company"). WHEREAS Bethlehem and the Company have entered into an Agreement and Plan of Merger dated as of December 15, 1997 (the "Merger Agreement"; all terms used herein that are defined in the Merger Agreement have the meanings set forth therein); WHEREAS Merger Sub has become a party to the Merger Agreement pursuant to Section 5.15 thereof; WHEREAS the parties wish to amend certain terms of the Merger Agreement as hereinafter provided. NOW, THEREFORE, the parties hereto agree as follows: Section 1. The dollar amount set forth in Section 2.01(c)(i) is hereby amended to be $30. Section 2. The reference to 3.62 in the proviso in Section 2.01(c)(ii) shall be amended to be 4.317 and the reference to 2.797 in such proviso shall be amended to be 2.878. Section 3. The reference to .62 in clause (z) of Section 2.03(a) and to .38 in clause (z) of Section 2.03(c) shall be amended to be .68 and .32, respectively. Section 4. The reference to $6.906 in Section 6.03(c) shall be amended to be $6.950. Section 5. Section 8.11 shall be amended by adding at the end thereof the following: "The parties agree to the exclusive jurisdiction of the Federal and state courts in the State of Delaware for any disputes arising under this Agreement or the transactions contemplated hereby." Section 6. Except as amended hereby, the Merger Agreement continues to be, and shall remain, in full force and effect in accordance with its terms. The General Provisions set forth in Article VIII of the Merger Agreement are incorporated herein by reference and deemed made a part hereof, mutatis mutandis. 2 IN WITNESS WHEREOF, the parties have executed this Amendment by their respective officers thereunto duly authorized as of the date first above written, BETHLEHEM STEEL CORPORATION, by /s/ C.H. Barnette -------------------------- C.H. Barnette LUKENS INC., by /s/ R.W. Van Sant -------------------------- Name: Title: LUKENS ACQUISITION CORPORATION, by /s/ C.H. Barnette -------------------------- C.H. Barnette EX-99.2 3 PRESS RELEASE DATED JANUARY 5, 1998 Bethlehem Steel Corporation Lukens Inc. Bette Kovach Rick Whitmyre (610) 694-3711 (610) 383-3393 LUKENS AND BETHLEHEM STEEL AMEND DEFINITIVE MERGER AGREEMENT Bethlehem Offer Increased To $30 Per Share For Lukens Common Stock COATESVILLE, PA., January 5, 1998 - Lukens Inc. (NYSE: LUC) and Bethlehem Steel Corporation (NYSE: BS) announced today the signing of an amendment to their definitive merger agreement of December 15, 1997. Under the terms of the amendment, Bethlehem would acquire Lukens in a transaction valued at about $740 million, including the assumption of about $250 million of debt. The equity value of about $490 million is based on Bethlehem paying $30 for each share of Lukens common stock outstanding on the date of closing, by issuing Bethlehem common stock for approximately 32 percent of the total equity value and paying cash for the remaining 68 percent. The amount of Bethlehem common stock per Lukens share will be based on the 15-day average closing price of Bethlehem common stock prior to transaction closing, but not less than 2.878 Bethlehem shares or more than 4.317 Bethlehem shares. The other material terms and conditions of the definitive merger agreement remain substantially unchanged. (MORE) The equity value of the amended transaction between Bethlehem and Lukens represents an increase of about 7 percent over the offer received from Allegheny Teledyne Incorporated to acquire Lukens in a merger transaction for $28 in cash for each share of Lukens common stock. Completion of the merger is subject to certain conditions, including approval by Lukens' stockholders and the receipt of regulatory approvals. Lukens Inc. is a leading North American specialty steel manufacturer whose operating units supply carbon, alloy and clad plate steels; and stainless steel sheet, strip and plate products. Bethlehem Steel, with current annual sales of about $4.7 billion, is the second largest steel producer in the United States. It produces plate at is Burns Harbor, Ind., and Sparrows Point, Md., facilities, and consumes plate at its Pennsylvania Steel Technologies' pipe mill in Steelton, Pa. # # # EX-99.3 4 PRESS RELEASE DATED JANUARY 5, 1998 BETHLEHEM STEEL CORPORATION Corporate Communication Division Public Affairs Department 1170 Eighth Avenue Bethlehem, PA 18016-799 (610) 694-3711 - Phone (610) 694-1509 - Fax FOR IMMEDIATE RELEASE BETHLEHEM, Pa., January 5, 1998 - In response to media inquiries concerning a joint announcement earlier today by Bethlehem Steel Corporation and Lukens, Inc., the following statement was issued by Bethlehem: Bethlehem Steel Corporation confirmed today that it has increased its offer to acquire Lukens Inc. to $30 per share by amending the definitive merger agreement it had signed with the Coatesville, Pa.-based steelmaker on December 15, 1997. Under the amended agreement signed by Bethlehem and Lukens, Bethlehem would acquire Lukens in a transaction valued at about $740 million, including the assumption of about $250 million of debt. The equity value of the transaction is about $490 million. Of the total consideration to be paid by Bethlehem, 68% will be in the form of cash, with the remaining 32% to be in the form of Bethlehem common stock. The amount of Bethlehem common stock to be issued for each Lukens' share exchanged for Bethlehem common stock will be based on the 15-day average closing price of Bethlehem common stock prior to the closing of the transaction, but will not be less than 2.878 Bethlehem shares or more than 4.317 Bethlehem shares. Under the (more) -2- agreement, Bethlehem will issue no more than 22.5 million shares, nor less than 15.1 million shares, of its common stock. Curtis H. Barnette, chairman and chief executive officer of Bethlehem, said, "We continue to believe that this transaction has significant strategic benefits to Bethlehem, and that the combination of the strengths of each company will establish the premier plate business in North America and, perhaps, the world. Moreover, we believe it will create a more globally competitive and customer-focused plate business, with the broadest range of plate products in the industry. It will also result in significant synergies, improved customer satisfaction, overall lower costs and, we believe, enhanced stockholder value." Bethlehem said there were a number of reasons why the company was able to improve the consideration from its previously signed definitive merger agreement with Lukens to a level superior to Allegheny Teledyne Incorporated's recent $28 per share offer to acquire Lukens. First, the combination will generate identifiable operating and administrative synergies at the high end of the range of synergies that Allegheny Teledyne said it could achieve from its combination with Lukens. In addition, Bethlehem will be able to utilize its significant tax net operating carryforwards to shield Lukens' pre-tax earnings and the pre-tax synergies from its combination with Lukens. Bethlehem said that it is continuing to actively study options for maximizing the value of Lukens' stainless businesses and its Washington Specialty Metals business, a leading distributor of stainless steel products. Bethlehem said that these operations (more) -3- are not part of its core business strategy and, therefore, it would divest these assets. Bethlehem said that it believed these businesses had very good potential for significant value. Bethlehem said that it continues to believe that the combination would increase its earnings per share after an initial transition period required to integrate the operations of the two companies and to sell the stainless assets. The transaction is expected to close by early Second Quarter 1998, subject to approval by Lukens' shareholders and regulatory authorities. In announcing the amended agreement, Bethlehem said it would act promptly after closing to combine the plate businesses of both companies and to take full and immediate advantage of the merged facilities' capabilities. As previously announced, Bethlehem said it would have the Bethlehem and Lukens' plate operations function as a separate Division of Bethlehem, headquartered in Coatesville, with consolidated operations and marketing responsibilities. Mr. Barnette said, "This will allow the newly created Business Division, which is to be called the "Bethlehem-Lukens Plate Division", to concentrate solely on the plate business and to provide its customers a greater level of quality and service." Mr. Barnette also said, "The Division's name would allow for continued recognition of the Lukens name, which has a rich history and importance in the marketplace, with Lukens' employees and others." Bethlehem's three plate mills -- Burns Harbor's 160" and 110" sheared plate mills and Sparrows Point's 160" sheared plate mill -- have annual shipments of about 1.5 million tons. Lukens ships approximately 750,000 tons of carbon and alloy plate (more) -4- and 260,000 tons of stainless steel products from its Coatesville 140" and 206" plate mills, its Conshohocken 110" combination Steckel/sheared mill and its stainless facilities in Pennsylvania and Ohio. After an appropriate period of transition, the new Division will operate four of the six carbon and alloy plate mills now operated by both companies. Bethlehem said that the business of the Coatesville 206" plate mill and Sparrows Point's 160" plate mill will be consolidated with the other four plate mills. These two mills will be closed at a future time to be determined, consistent with customer requirements and other factors. The combined business will produce the widest range of plate gauges and grades in North America, including carbon, alloy, resulphurized, high strength-low alloy, normalized, quenched and tempered, and clad. Bethlehem said that the rationalization of its Sparrows Point 160" plate mill was appropriate even though this mill is a competitive and profitable mill that benefits from Sparrows Point having among the lowest cost slabs in the domestic steel industry for rolling into plate products. The Lukens' 110" Conshohocken Steckel mill is currently underutilized and would receive slabs from Sparrows Point, and has the capability, along with Burns Harbor's plate capability, to handle all of Sparrows Point's 160" plate mill business without any loss of shipments. However, there is expected to be significantly improved operating efficiencies as a result of the higher volumes. Discontinuing the Sparrows Point plate mill will result in a restructuring charge at the time the transaction closes of no more than $50 million. (more) -5- The Bethlehem-Lukens combination should significantly reduce costs by improving utilization of the remaining mills. Lukens has just completed a major modernization program to enhance melting, rolling and certain finishing capabilities, which will enhance the new Division's strengths. Bethlehem said that the combined plate businesses would cause it to be one of the lowest-cost carbon and alloy plate producers, to improve the utilization of its raw steelmaking capabilities, and to reduce administrative and associated costs. The principal consuming industries for plate products are construction, farm equipment, industrial machinery, oil and gas pipeline, pipe and tube, railroad cars, service centers, shipbuilding and transportation. The total domestic sales for both cut and coil plate were about twelve million tons in 1997, including about 25 percent imports. Bethlehem Steel, with current annual sales of about $4.7 billion, is the second largest steel company in the United States. Bethlehem produces plate at its Burns Harbor, Ind. and Sparrows Point, Md. facilities, and consumes plate at its Pennsylvania Steel Technologies' pipe mill in Steelton, Pa. Lukens, which currently has sales of about $1.0 billion per year, is the only steelmaker in North America that produces carbon, alloy and stainless steels on a flexible, fully integrated manufacturing system. Lukens presently has major steelmaking and finishing facilities in Coatesville, Conshohocken, Houston and Washington, Pa., and Massillon, Ohio. After the combination of the two companies, Bethlehem's annual sales will be about $5.5 billion per year, with annual shipments of about ten million tons. (more) -6- Bethlehem currently has about 15,500 employees and Lukens has about 3,400 employees. Following the combination, Mr. Barnette will continue as Chairman and Chief Executive Officer of Bethlehem Steel Corporation. Mr. R.W. Van Sant, currently Chairman and Chief Executive Officer of Lukens Inc., will serve as the President of the Bethlehem-Lukens Plate Division. J.P. Morgan acted as financial advisor to Bethlehem on the transaction. # EX-99.4 5 PRESS RELEASE DATED JANUARY 5, 1998 BETHLEHEM STEEL CORPORATION Corporate Communication Division Public Affairs Department 1170 Eighth Avenue Bethlehem, PA 18016-799 (610) 694-3711 - Phone (610) 694-1509 - Fax FOR IMMEDIATE RELEASE BETHLEHEM, Pa., January 5, 1998 -- In response to media inquiries, the following additional information was released concerning Bethlehem Steel's offer to merge with Lukens Inc.: 1. The analysts are saying that the benefits to Bethlehem could be realized as early as three to nine months. Answer: Yes, Bethlehem expects the combination clearly to be accretive to earnings, but realistically a transition period will be recognized in the near term, perhaps three to nine months to integrate our respective operations. 2. This shortened time frame to realize benefits indicates that Bethlehem has done additional due diligence. Answer: Yes, Bethlehem performed additional due diligence. 3. Is the anticipated $50 million charge only to close the Sparrows Point plate mill? Answer: Yes. (more) 4. Does Bethlehem expect a counter offer from Allegheny Teledyne? Answer: We do not speculate on the possible actions of other companies. 5. A debt analyst said that Bethlehem has casually discussed selling the Burns Harbor coke ovens to an outside party to create tax benefits that could be used in connection with the Lukens merger. Bethlehem would buy coke from the new owner. Answer: Bethlehem is discussing the possible sale of its No. 1 coke oven battery at Burns Harbor to an independent party. The possible sale of this battery has been under discussion for the past several months and is unrelated to the merger agreement with Lukens Inc. If successful, the new owner would be able to access Section 29 energy credits under the IRS tax regulations. 6. How can Bethlehem not afford to keep the Bethlehem Coke Oven Division operating but can afford another $90 million to bid for Lukens? Answer: As we have said previously, the coke ovens in Bethlehem cannot achieve satisfactory levels of profitability. The merger with Lukens allows Bethlehem Steel to achieve its financial objective of creating satisfactory return on net investment. 7. Explain the tax benefits to Bethlehem through the proposed merger with Lukens. Answer: Bethlehem has net operating loss carryforwards as a result of losses sustained in previous years. We can use those NOLs to shield Lukens' pre-tax earnings and the pre-tax synergies that would arise from a Bethlehem-Lukens combination. (more) 8. Is Bethlehem's offer, which includes stock, really better than Allegheny Teledyne's? Answer: In our news release, we state that Bethlehem "was able to improve the consideration from its previously signed definitive merger agreement with Lukens to a level superior to Allegheny Teledyne Incorporated's recent $28 per share offer to acquire Lukens." Lukens' board has signed the amended merger agreement with Bethlehem. # -----END PRIVACY-ENHANCED MESSAGE-----