Tender-Offer Solicitation/Recommendation Statement — Schedule 14D-9
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SC 14D9 Tender-Offer Solicitation/Recommendation Statement 42 195K
2: EX-2 Letter to Stockholders 2± 8K
3: EX-3 Press Release 5 20K
4: EX-9 Confidentiality Agreement 4 15K
5: EX-10 First Amendment to Rights Agreement 4 13K
EX-3 — Press Release
| EX-3 | 1st Page of 5 | TOC | ↑Top | Previous | Next | ↓Bottom | Just 1st |
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Exhibit 3
[LOGO]EARTHGRAINS
The Earthgrains Company
8400 Maryland Avenue St. Louis, MO 63105-3668
T 314 259 7000
For more information,
Investor contact - Molly Salky 314/259-7018
Media contact - Matt Hall 314/259-7223
FOR IMMEDIATE RELEASE
EARTHGRAINS COMPANY ANNOUNCES AGREEMENT TO BE PURCHASED BY SARA LEE CORPORATION
ST. LOUIS, July 2, 2001 - The Earthgrains Company (NYSE: EGR) today
announced that it has entered into a merger agreement under which Sara Lee
Corporation would buy Earthgrains for $40.25 per share of common stock and would
assume the company's debt.
Under terms of the $2.8 billion acquisition, Earthgrains would merge with
Sara Lee's baking operations in an organization that would be headed by
Earthgrains Chairman and CEO Barry H. Beracha. The new organization, to be
called the Sara Lee Bakery Group, would have annual revenue of approximately
$3.4 billion and would have headquarters in St. Louis. Beracha would report to
Sara Lee Corporation President and Chief Executive Officer C. Steven McMillan.
Earthgrains, the second-largest packaged bread and bakery manufacturer in
the United States, had revenue of $2.6 billion in fiscal 2001 and is projecting
revenue of $2.7 billion in fiscal 2002. The baking operations from Sara Lee
would add approximately $700 million in annual revenue.
"The purchase by Sara Lee and the combination of our baking businesses
represents an outstanding value to the shareholders of both companies," Beracha
said. "This is a strategic combination that brings the power of strong brands
in the fresh, refrigerated and frozen baking segments. We will create a premier
bakery company through our new-product potential, extensive direct-store and
warehouse delivery systems, superior information technology systems, and ability
to continue making acquisitions. This is overwhelmingly positive for
shareholders, employees, customers and consumers."
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Sara Lee will make a cash tender offer for all Earthgrains shares at $40.25
per share, to be followed by a merger in which remaining Earthgrains shares will
receive the same cash price per share. The acquisition is subject to receipt of
a majority of the Earthgrains shares in the tender offer and subject to approval
of antitrust authorities. The transaction is expected to be completed in 30 to
60 days.
"Earthgrains and its Board of Directors gave careful consideration to this
proposal," Beracha said. "We are confident that this acquisition generates
significant shareholder value for Earthgrains and Sara Lee."
UBS Warburg LLC was retained as financial adviser to Earthgrains in the
transaction and provided a fairness opinion to the Earthgrains Board of
Directors.
"As a leading player in the fresh bread and refrigerated dough categories,
Earthgrains is a highly strategic acquisition for our company," Sara Lee's
McMillan said. "Earthgrains is a key element in the investment phase of Sara
Lee's reshaping program as it creates a strong growth platform for one of our
core businesses. With the earnings guidance Earthgrains announced this morning,
we are even more excited about adding this strong performer to our business
portfolio."
Earlier today, Earthgrains announced in a separate press release that it
expects to report first-quarter earnings results above the consensus of analyst
expectations. Earthgrains, which will report earnings on July 10, 2001, expects
to report earnings per diluted share of approximately $0.34, compared with the
analyst consensus of $0.28 per diluted share and year-ago earnings of $0.27 per
diluted share.
The maker of Earth Grains superpremium breads and bagels and IronKids
Special-Recipe Bread for children, Earthgrains has strong brand franchises in
the popular, premium and superpremium fresh product segments and has leading
brands in the fast-growing artisan bread segment in California. Earthgrains is
the branded market-share leader in its marketing territory, which serves more
than 50 percent of the U.S. population in the South, Midwest, Southwest and
West. Earthgrains serves grocery customers primarily through its direct-store
delivery system that puts route service representatives in the bread aisle at
least five times a week. Earthgrains also is the only store-brand producer of
refrigerated dough in the United States and serves customers nationwide through
one of the best warehouse distribution systems in the food industry. The
company also has leading bakery and refrigerated dough businesses in Europe.
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Sara Lee markets fresh breads and bagels, frozen bakery products and frozen
foods in the United States under the Sara Lee, A la francaise, Alfaro's, Chef
Pierre, International, and Mr. Pita brands. The A la francaise and Alfaro's
brands compete in the artisan market in California and the West Coast.
Earthgrains has 61 bakeries and two refrigerated dough plants in the United
States, and has 12 bakeries and four refrigerated dough plants in Western
Europe, primarily in Spain and France.
Sara Lee has six bakery and frozen food plants in the United States.
Strategic benefits of the combination include:
. Enhancing top-line growth potential, particularly in the superpremium
fresh bakery segment. Sara Lee Bakery Group would serve 61 percent of
the U.S. population with fresh bread and bakery products, with the
potential to penetrate markets more effectively.
. Leveraging the strength and equity of the Sara Lee brand name with
consumers, adding significantly to the existing Earth Grains and
IronKids franchises.
. Positioning Sara Lee Bakery Group to continue making strategic
acquisitions to take advantage of industry consolidation activity and
Earthgrains' expertise at acquisition integration. Earthgrains has
made 12 acquisitions in the past five years, including eight in the
U.S. baking industry.
. Leveraging Earthgrains' industry-leading information technology
capabilities. Earthgrains is a leader in the use of scan-based
trading and category management with grocery retailers for bread and
bakery sales and vendor managed inventory with customers for
refrigerated dough products.
. Leveraging Earthgrains' leadership in baking and refrigerated dough
in Europe and enabling additional growth.
Conference Call Webcast
-----------------------
Earthgrains Chairman and Chief Executive Officer Barry Beracha will join
Sara Lee Corporation President and Chief Executive Officer Steve McMillan
today in a conference call for securities analysts hosted by Sara Lee. The
webcast will air live at 9:30 a.m. EDT and may be accessed at Sara Lee's
corporate Web site, www.saralee.com, or at Earthgrains' corporate Web site,
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www.earthgrains.com. The call is expected to last 45 minutes.
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Replays of the conference call webcast will be available beginning two
hours after the call and will be archived for 10 business days.
Important Information for Shareholders
--------------------------------------
Earthgrains shareholders are advised to read the tender offer
statement regarding the acquisition referenced in this press release. The
tender offer statement will be filed by Sara Lee Corporation with the U.S.
Securities and Exchange Commission (SEC) and will be mailed to shareholders.
Earthgrains will file a related solicitation recommendation statement with the
SEC and will mail the statement to shareholders.
Sara Lee's tender offer statement, including an offer to purchase, a
letter of transmittal, and related tender offer documents, and Earthgrains'
solicitation recommendation statement will contain important information that
should be read carefully before any decision is made regarding the offer. These
documents will be available at no charge at the SEC's Web site at www.sec.gov
-----------
and may also be obtained from Sara Lee by directing a request through the
investor relations section of the Sara Lee corporate Web site at www.saralee.com
---------------
or by mail to Sara Lee Corporation, 70 W. Madison Street, Chicago, IL, 60602,
Attn: Investor Relations. The telephone number is (312) 558-4966.
About Earthgrains
-----------------
Earthgrains, which had sales of nearly $2.6 billion in fiscal 2001,
operates fresh-bakery and refrigerated-dough businesses in the United States and
Europe.
Earthgrains is the second-largest producer of fresh packaged bread and
baked goods in the United States, operating 61 bakeries. Major company-owned
brands include Earth Grains, IronKids, Grant's Farm, Colonial, Rainbo, San Luis
Sourdough, Heiner's, Master, Mother's, Old Home, and Break Cake. Major
franchise brands include Sunbeam, Country Hearth, Roman Meal, D'Italiano,
Taystee, Holsum, Healthy Choice, Pillsbury, Mickey, and Sun*Maid.
In Europe, Earthgrains is the market-share leader for fresh packaged sliced
bread, buns and packaged sweet goods in Spain and is one of the largest
producers of bread and buns in Portugal. Earthgrains has 12 bakeries in Spain
(including the Canary Islands) and Portugal. Major brands include Bimbo,
Silueta, Semilla de Oro, Martinez, and Ortiz.
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In the refrigerated-dough segment, Earthgrains is the only manufacturer of
store-brand canned refrigerated-dough products in the United States and is one
of the largest producers of store-brand toaster pastries. The company has two
domestic refrigerated-dough plants and also markets products under its Merico
brand. In Europe, Earthgrains is the largest refrigerated-dough producer in
France and the only producer of canned dough in Europe. The company operates
four plants in France and markets canned and rolled refrigerated-dough products
under the CroustiPate brand in France and via customer brands throughout Western
Europe.
More information about Earthgrains may be found on the company's corporate
Internet web site at www.earthgrains.com.
# # #
CAUTIONARY NOTE: To provide the clearest possible description of
Earthgrains' business and outlook, this report contains forward-looking
statements based on Earthgrains' best current information and reasonable
assumptions about anticipated developments. However, because of the risks and
uncertainties that always exist in any operating environment or business,
Earthgrains cannot make any assurances that these expectations will prove
correct. Actual results and developments may differ materially, depending upon
prices of raw materials, fuel, commodities and other goods purchased; the
ability of the Company to realize projected savings from productivity and
product-quality improvements; the ability of the Company to continue to
participate in industry consolidation and to successfully integrate acquired
businesses; labor costs and labor relations; legal proceedings to which the
Company may become a party; competitive pricing; economic conditions in the
Company's countries of operations, including currency values and interest rates;
and other factors.
Further information on factors that could affect Earthgrains' financial and
other results is included in the Company's filings with the Securities and
Exchange Commission.
Dates Referenced Herein and Documents Incorporated by Reference
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