-----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, AoZUEV+dw4H66mB6bSGCmnzyCvM4zjAN7VLj1jnBWoOuuh831i4SsVb5PGH4JYk4 6xX9Xq/g/BcvmXRMEmZJKQ== 0001047469-98-027640.txt : 19980720 0001047469-98-027640.hdr.sgml : 19980720 ACCESSION NUMBER: 0001047469-98-027640 CONFORMED SUBMISSION TYPE: SC 14D9/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19980717 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: HEI INC CENTRAL INDEX KEY: 0000351298 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 410944876 STATE OF INCORPORATION: MN FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: SC 14D9/A SEC ACT: SEC FILE NUMBER: 005-33908 FILM NUMBER: 98667974 BUSINESS ADDRESS: STREET 1: 1495 STEIGER LAKE LN STREET 2: P O BOX 5000 CITY: VICTORIA STATE: MN ZIP: 55386 BUSINESS PHONE: 6124432500 MAIL ADDRESS: STREET 1: P O BOX 5000 STREET 2: 1495 STEIGER LAKE LANE CITY: VICTORIA STATE: MN ZIP: 55386 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: HEI INC CENTRAL INDEX KEY: 0000351298 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 410944876 STATE OF INCORPORATION: MN FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: SC 14D9/A BUSINESS ADDRESS: STREET 1: 1495 STEIGER LAKE LN STREET 2: P O BOX 5000 CITY: VICTORIA STATE: MN ZIP: 55386 BUSINESS PHONE: 6124432500 MAIL ADDRESS: STREET 1: P O BOX 5000 STREET 2: 1495 STEIGER LAKE LANE CITY: VICTORIA STATE: MN ZIP: 55386 SC 14D9/A 1 SC 14D9/A - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ SCHEDULE 14D-9 SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO SECTION 14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 4) ------------------------ HEI, INC. (Name of Subject Company) ------------------------ HEI, INC. (Name of Person Filing Statement) ------------------------ COMMON STOCK, PAR VALUE $.05 PER SHARE (INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS) (Title of Class of Securities) ------------------------ 404160103 (CUSIP Number of Class of Securities) ------------------------ EUGENE W. COURTNEY CHIEF EXECUTIVE OFFICER HEI, INC. P.O. BOX 5000 1495 STEIGER LAKE LANE VICTORIA, MINNESOTA 55386 (612) 443-2500 (Name, Address and Telephone Number of Person Authorized to Receive Notice and Communications on Behalf of the Person Filing Statement) ------------------------ COPIES TO: DEANNE M. GRECO Moss & Barnett, A Professional Association 4800 Norwest Center 90 South Seventh Street Minneapolis, Minnesota 55402-4129 (612) 347-0287 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- HEI, Inc. hereby amends and supplements its Solicitation/Recommendation Statement on Schedule 14D-9 filed with the Securities and Exchange Commission on March 20, 1998, as amended (the "Schedule 14D-9"), in response to the Tender Offer Statement on Schedule 14D-1 filed by Fant Industries Inc., as set forth below. Capitalized terms used but not defined in this Amendment have the meanings given them in the Schedule 14D-9. ITEM 4. THE SOLICITATION OR RECOMMENDATION Item 4 is hereby amended to add the following: (a) On July 13, 1998, the Bidder amended its Offer by increasing the amount to be paid for Shares accepted for payment pursuant to the Offer from $8.00 per share to $9.00 per share (the "New Price"), as set forth in Amendment No. 24 to the Bidder's Schedule 14D-1. HEI's Board of Directors, along with its legal advisers, held a special meeting on July 16, 1998 to review the New Price and its impact on the Board's analysis of the Offer. At the meeting, the Board determined that the Offer, as amended, is not in the best interests of the Company and its shareholders and renewed its recommendation to the holders of the Shares that they not tender any of their Shares pursuant to the Offer. A copy of a letter to the Company's shareholders communicating the Board's recommendation and a form of press release announcing the recommendation are filed as Exhibits 8 and 9 hereto, respectively, and are incorporated by reference herein. (b) In reaching its conclusions, the Board determined that the Bidder's amendment of the Offer by announcing the New Price did not alter the Board's concerns regarding the Offer's coercive structure, highly conditional nature, the limited number of shares for which the Offer is made, and the possible risks for holders of Shares not purchased in the Offer. The following summarizes the Board's concerns, as more fully set forth in the Schedule 14D-9: (i) The Offer is for only 11.5% of the outstanding Shares, but is conditioned on both a change in control of the Board and redemption of the Rights issued under the Company's Rights Plan. (ii) The value of the remaining Shares (in excess of 70% of the outstanding Shares) that would not be owned by Mr. Fant after the consummation of the Offer would in large part be subject to the performance of Mr. Fant and his chosen directors. (iii) The future opportunity to sell to Mr. Fant Shares not purchased in the Offer will be limited, and future sales on the open market may be adversely affected if the Offer is completed. (iv) The Offer is highly conditional, and the Bidder has the absolute right to withdraw the Offer if any of its conditions are not met. (v) Even if the Offer is completed, Mr. Fant will have purchased Shares at different prices, enabling him to acquire control of the Company at an average price per share of $7.20 for less than 30% of the Shares. (vi) Shareholders may be entitled under federal securities laws to receive more information about the ownership or control of Shares by Steichen and its officers and directors before determining whether to tender their shares in the Offer. (vii) The timing of the Offer may adversely affect the plans and prospects of the Company. FOR ALL OF THE FOREGOING REASONS, THE BOARD DOES NOT BELIEVE THAT THE OFFER, AS AMENDED, IS IN THE BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS AND RECOMMENDS THAT THE HOLDERS OF THE SHARES REJECT THE OFFER AND NOT TENDER ANY OF THEIR SHARES PURSUANT THERETO. 2 ITEM 9. MATERIAL TO BE FILED AS EXHIBITS Item 9 is hereby amended to add the following: Exhibit 8 Letter to Shareholders dated July 17, 1998. Exhibit 9 Press Release dated July 17, 1998. SIGNATURE After reasonable 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. HEI, INC. By /s/ EUGENE W. COURTNEY ----------------------------------------- Eugene W. Courtney, CHIEF EXECUTIVE OFFICER
Dated: July 16, 1998 3 EX-8 2 EXHIBIT 8 Exhibit 8 Box 5000 1495 Steiger Lake Lane Victoria, MN 55386 (612) 443-2500 Fax (612) 443-2668 [LOGO] July 17, 1998 Dear Fellow Shareholder: There he goes again. Now Anthony J. Fant has raised the purchase price in his partial tender offer FOR ONLY 11.5% OF HEI'S SHARES from $8 to $9 per share. We believe this is simply another Fant tactic that draws attention away from the real issues. Your Board unanimously recommends that you not tender your shares to Fant. The enclosed amendment to Schedule 14D-9 sets forth our reasons for that recommendation. In short, the Board believes that you should focus on the following: - Fant's amended offer is still for only 11.5% of HEI's shares (not for all the shares that you might want to sell). What does that mean to you? Based on Fant's figures, if you tender 100 shares, 68 of those shares would be sent back to you without any payment (and even more shares would be returned if more shares are tendered by other shareholders). THE FUTURE VALUE OF THOSE RETURNED SHARES WOULD DEPEND ON THE RESULTS OF THE ON-THE-JOB TRAINING OF FANT AND HIS NOMINEES. - In Fant's July 14 newspaper advertisement, he states that "To take advantage of this offer, you must tender your shares and return the GREEN proxy card, if you have not done so already." THAT IS A BLATANTLY MISLEADING STATEMENT. YOU DON'T NEED TO RETURN THE GREEN CARD TO TENDER YOUR SHARES. If you tender your shares, you will be treated the same as all other tendering shareholders, NO MATTER HOW YOU VOTE. In his July 15 letter to shareholders, Fant himself, contrary to his misleading ad, admits that: "You are not required to vote your proxy card to tender your shares." We believe that Fant was required to make this admission. Unfortunately, not all of his misleading statements have been corrected. - The Company's performance has been very successful under current management, resulting in increases in net equity from $1.1 million in fiscal 1990 to $17.5 million at May 30, 1998, in annual revenues from $8.5 million in fiscal 1990 to $31 million in fiscal 1997 and in annual pre-tax earnings from $100,000 in fiscal 1991 to amounts ranging between $2 and $4 million in each of fiscal 1992 through 1997. Revenues for the first nine months of fiscal 1998 (ending May 30, 1998) were $14.7 million and pre-tax earnings for that period were $647,000 (negatively affected by $274,000 of expenses incurred in response to Fant's quest for control). Fant's repeated assertions that average annual earnings have declined dramatically during the past five years are astonishing in view of this performance. - When the motives for increasing the price of his already oversubscribed partial tender offer were questioned by a highly reputable local securities analyst, Fant responded with a personal attack on the analyst's motivation. This behavior, combined with Fant's repeated maligning of HEI's management and performance record, could damage HEI's ongoing reputation and its relationship with securities analysts and brokers, should Fant succeed in his takeover attempt. - THE ADDITIONAL COST TO FANT OF HIS "INCREASED" OFFER IS ACTUALLY LESS THAN HIS ANTICIPATED EXPENSES OF HIS CONTROL ATTEMPT--EXPENSES THAT HE WILL CAUSE HEI (AND THEREFORE YOU, INDIRECTLY AS AN HEI SHAREHOLDER) TO PAY IF HE TAKES CONTROL. Those expenses include the numerous expensive ads and repeated telephone calls that you have been badgered with. HE SAYS THESE COSTS, TOGETHER WITH ALL OF HIS PROXY SOLICITATION EXPENSES, ARE EXPECTED TO EXCEED $500,000. July 17,1998 Page 2 - Why is Fant persisting with his disturbing tactics? WE BELIEVE THAT HE IS FOCUSED ON HEI'S $13 MILLION CASH RESERVE, OVER WHICH HE HOPES TO ACQUIRE CONTROL BY PAYING LESS THAN $8.7 MILLION. If Fant is willing to use such tactics and spend so much money, he apparently believes the stock is worth much more than he is paying for it. If so, why would you sell any shares to him? Do you believe that he will run the Company better than existing management? What do you know about him? Consider his tactics. Consider his background and experience. After doing so, we are confident that you will support your current board of directors by voting AGAINST Fant's proposals (Proposals 1 and 3) by signing, dating and returning the enclosed WHITE proxy card in the postage-paid envelope provided. REMEMBER, NO TENDERED SHARES HAVE BEEN PURCHASED BY FANT AND YOU HAVE EVERY RIGHT TO VOTE ANY TENDERED SHARES FOR YOUR DIRECTORS AND AGAINST THE FANT PROPOSALS WITHOUT AFFECTING THE VALIDITY OF YOUR TENDER. Thank you for your support. HEI, Inc. Board of Directors Robert L. Brueck Eugene W. Courtney William R. Franta Frederick M. Zimmerman IF YOUR SHARES ARE HELD IN THE NAME OF A BANK OR BROKER, ONLY THAT ORGANIZATION CAN VOTE YOUR SHARES. PLEASE DIRECT THE PERSON RESPONSIBLE FOR YOUR ACCOUNT TO EXECUTE ON YOUR BEHALF A WHITE PROXY CARD WITH A VOTE AGAINST PROPOSALS 1 AND 3 AND FOR PROPOSAL 2. IF YOU HAVE ANY QUESTIONS OR REQUIRE ANY ASSISTANCE, PLEASE CONTACT OUR PROXY SOLICITOR: Innisfree M&A Incorporated Toll Free--1-888-750-5834 501 Madison Avenue 20th Floor New York, NY 10022 EX-9 3 EXHIBIT 9 Exhibit 9 NEWS RELEASE -------------------------------------- [LOGO] -------------------------------------- P. O. Box 5000 Victoria, Minnesota 55386 (612) 443-2500 www.heii.com - -------------------------------------------------------------------------------- CONTACT: Eugene W. Courtney, C.E.O. FOR IMMEDIATE RELEASE HEI SAYS THAT BIDDER'S INCREASED OFFER PRICE IS AN ATTEMPT TO BUY VOTES VICTORIA, MN (July 17, 1998) HEI, Inc. today filed an amended Schedule 14D-9 with the Securities and Exchange Commission containing its response to the announcement by Fant Industries Inc., wholly owned by Anthony J. Fant, that Fant is raising the purchase price in his offer to purchase 11.5% of HEI's outstanding shares from $8 to $9 per share. The HEI Board determined that Fant's offer, as modified, and quest for control of HEI are not in the best interests of HEI or its shareholders and renewed its recommendation that shareholders not tender into the partial offer. Eugene W. Courtney, HEI's Chief Executive Officer and a director, commented: "This latest tactic appears to the Board to be merely an attempt to buy the votes of shareholders who are not satisfied with Fant's sketchy disclosures about his past and vague promises for the future. Fant's amended offer really has nothing to do with acquiring more shares--based on Fant's recent figures, an HEI shareholder who tendered 100 shares would get 68 of those shares sent back without any payment whatsoever. The Board is deeply concerned that Fant continues to be unwilling to pay a control premium for all shares. "Despite the distraction caused by Fant's tactics and frivolous litigation, HEI's Board, management, and other employees are committed to the company's future growth and diversification. We continue to urge shareholders to vote against Fant's proposals at the Special Shareholders Meeting on August 4, 1998." HEI IS A MINNESOTA-BASED COMPANY SPECIALIZING IN THE DESIGN AND MANUFACTURE OF HIGH PERFORMANCE ULTRAMINIATURE MICROELECTRONIC DEVICES AND HIGH TECHNOLOGY PRODUCTS INCORPORATING THOSE DEVICES. THE COMPANY'S STOCK TRADES ON THE NASDAQ NATIONAL MARKET UNDER THE SYMBOL HEII. FORWARD LOOKING INFORMATION INFORMATION IN THIS NEWS RELEASE WHICH IS NOT HISTORICAL INCLUDES FORWARD-LOOKING STATEMENTS MADE PURSUANT TO THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. ALL OF SUCH FORWARD-LOOKING STATEMENTS INVOLVE RISKS AND UNCERTAINTIES INCLUDING, WITHOUT LIMITATION, ADVERSE BUSINESS OR MARKET CONDITIONS, THE ABILITY OF HEI TO SECURE AND SATISFY CUSTOMERS, THE AVAILABILITY AND COST OF MATERIALS FROM HEI'S SUPPLIERS, ADVERSE COMPETITIVE DEVELOPMENTS, CHANGE IN OR CANCELLATION OF CUSTOMER REQUIREMENTS, AND OTHER RISKS DETAILED FROM TIME TO TIME IN HEI'S SEC FILINGS. # # # -----END PRIVACY-ENHANCED MESSAGE-----