Mobley Environmental Services Inc – ‘SC 14D9/A’ on 7/23/99 re: Mobley Environmental Services Inc

On:  Friday, 7/23/99   ·   Accession #:  1047469-99-28346   ·   File #:  5-41780

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Amendment to Tender-Offer Solicitation/Recommendation Statement   —   Schedule 14D-9
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: SC 14D9/A   Amendment to Tender-Offer                              5     17K 
                          Solicitation/Recommendation Statement                  
 2: EX-7        Opinion re: Liquidation Preference                    30     60K 

SC 14D9/A   —   Amendment to Tender-Offer Solicitation/Recommendation Statement

SC 14D9/A
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      SECURITIES AND EXCHANGE COMMISSION
      Washington, D.C. 20549
     Supplement to the
      SCHEDULE 14D-9/A
     (Amendment No. 1)

Solicitation/Recommendation Statement Pursuant to Section 14(d)(4) of the   
Securities Exchange Act of 1934 

     Mobley Environmental Services, Inc.
      ------------------------------
     (Name of Subject Company)

     Mobley Environmental Services, Inc.
      ------------------------------
     (Name of Person Filing Statement)

      Class A Common Stock
      ------------------------------
      (Title of Class of Securities)

     607419-10-8
      ------------------------------
     (CUSIP Number of Class of Securities)

      Howard V. Rose
     111 Congress Avenue, Suite 1400
      Austin, Texas, 78701
      (512) 479-9701
      ------------------------------
     (Name, address and telephone number of person authorized to receive
     notice and communications on behalf of the person filing statement)

This Amendment No. 1 to the Solicitation/Recommendation Statement on  
Schedule 14D-9 (the "Statement") relates to the tender offer (the "Offer")      
disclosed in a Tender Offer Statement on Schedule 14D-1, dated June 11, 1999    
as amended by the Schedule 14D-1/A (Amendment No. 1) dated July 13, 1999, of    
GAP Capital, L.L.C. a Texas limited liability company (the "Purchaser") to      
purchase all outstanding shares of the Class A common stock, par value $.01     
per share (the "Class A Shares"), of Mobley Environmental Services, Inc., a     
Delaware corporation (the "Company").  The purpose of this Amendment No. 1      
is to amend and supplement Items 2, 4, 5 and 9 of the Schedule 14D-9 as         
described below.                                                                

SC 14D9/A
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Item 2.   Tender Offer of the Bidder                                            
Item 2 is hereby amended and supplemented as follows:       

      This Statement relates to the tender offer disclosed in the Tender
Offer Statement on Schedule 14D-1, dated June 11, 1999 and Amendment No. 1      
thereto dated July 13, 1999 (the "Supplement") (the "Schedule 14D-1") of GAP    
Capital, L.L.C., a Texas limited liability company (the "Purchaser"), for all   
outstanding Class A Shares, at a purchase price of $.25 per Class A Share,      
net to the seller in cash, without interest thereon (the "Offer Price"), upon   
the terms and subject to the conditions set forth in the Offer to Purchase      
dated June 11, 1999 and Supplement thereto dated July 13, 1999 (the "Offer to   
Purchase"), and in the related Letter of Transmittal (which together with the   
Offer to Purchase constitute the "Offer"). Pursuant to the Supplement, the      
Purchaser has extended the Expiration Date to 12:00 Midnight, New York City     
time on Tuesday, July 27, 1999, and has increased the Offer Price to $.25 per   
share.                                                                          

Item 4.   The Solicitation or Recommendation                                    
Item 4 is hereby amended and supplemented as follows:       

     (a)  This Statement relates to a cash tender offer being made for
the Class A Shares of the Company.  A solicitation in furtherance of the        
Offer is being made. The description of the background of the Offer set forth   
in Item 11 ("Contacts with the Company; Background of the Offer") of the        
Offer to Purchase is incorporated by reference herein.  In addition, the        
Board of Directors has re-recommended that the Company's stockholders accept    
the Offer as it has been increased and tender their Class A Shares.  In         
reaching its decision to recommend acceptance of the Offer, the Board           
determined the Offer Price is fair to the Company's stockholders and that the   
Offer is in the best interests of the Company and its stockholders and is       
fair to the stockholders of the Company.                                        

     (b)  In reaching its conclusions described above, the Board asked
for and received information, made certain judgments and considered a number    
of factors, including, without limitation, the following:                       

            (1)  The Offer Price is for $.25 per Class A Share.  The offer
was increased 25% from $.20 per share.                                          

    (2)  The current market price of the Class A Shares is
approximately $.20 per Class A Share presumably because of the Offer and few    
Class A Shares are being bought and sold.  Further, a seller in the market      
would ordinarily have to pay a brokerage commission out of the sales proceeds.  

            (3)  The Company may be subject to certain material contingent
liabilities arising from (i) pending lawsuits arising out of the operations     
of Gibraltar Chemical Resources, Inc. ("Gibraltar"), a former wholly-owned      
subsidiary of the Company, which the Company sold on                            

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SC 14D9/A
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December 31, 1994, alleging, among other things, that Gibraltar's operations    
caused bodily injury and personal property damage as a result of the release    
of toxic chemicals; (ii) potential claims from the purchaser of Gibraltar       
arising under indemnity provisions of the agreement between that purchaser      
and the Company; and (iii) possible claims by former customers of Gibraltar     
for damages incurred by those parties as a result of third party claims         
relating to Gibraltar's operations. The Company believes that it may continue   
to be subject to potential liabilities arising from these factors for an        
indefinite period of time in the future.                                        

          (4)  The Company is a defendant in several pending lawsuits,
one or more of which may continue for an indefinite period of time in the       
future. The Company currently expects to incur defense costs attributable to    
one of these lawsuits of approximately $900,000 for 1999.  The Company          
expects defense costs to continue at similar levels, or to increase, in         
future years.  Amounts that are not spent on defense costs may in turn be       
spent as part of settlements, in that settlement amounts are often a function   
of the litigants' perception of their alternative defense costs.  Although      
settlement discussions in several of these lawsuits occur periodically, the     
Company does not expect to be able to resolve all of the lawsuits to which it   
is a part in the foreseeable future.                                            

            (5)  Although certain of the Company's defense costs are being
borne by its insurance carrier under an existing pollution liability            
insurance policy, costs advanced by that carrier to date have exceeded the      
policy limits. In addition, an insurer of Gibraltar's purchaser is paying       
one-half of all defense costs relating to another lawsuit to which the          
Company is a party. There can be no assurance that the Company's insurer or     
the insurer of Gibraltar's purchaser will continue to bear defense costs as     
they have in the past.                                                          

       (6)  The Company has no ongoing business operations.  The
Company's assets consist, almost entirely, of cash and items that can be, or    
will be with the passage of time, readily converted into cash.  The Company     
invests its cash in readily marketable securities.  As a result, the            
Company's income is significantly less than the cost associated with managing   
its contingent liabilities, including bearing its share of defense costs.  To   
the extent that the Company should be required to participate in any            
settlement of lawsuits to which it is a party, or the extent that it should     
determine to settle any of its contingent liabilities, the Company may be       
required to utilize a significant portion of its available cash resources.      
The Company has liquid assets amounting to approximately $.81 per share         
(including both Class A Shares and Class B Shares), which assets include an     
earnout payment due to the Company from U.S. Filter Recovery Services           
(Southwest), Inc. that was estimated to be approximately $600,000 and has now   
been determined to be approximately $1,679,000 (each pre-tax and net of         
applicable commissions), which resulted in an increase in the Company's         
assets of $.12 per share (including both Class A Shares and Class B Shares).    
Defense costs have been estimated to be between $3.5 million to $7 million      
(which does not include potential liability to Gibraltar's purchaser and its    
former customers) over the next three and a half years, which would represent   
a cost of approximately $.40 to $.80 per share.                                 

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SC 14D9/A
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 (7)  The timing of the resolution of the contingent
liabilities is not known.  The Company has an agreement with the purchaser of   
Gibraltar not to pursue claims arising out of that purchase until July 31,      
2000.  One of the suits is set for trial in February of 2000 and under          
current pretrial orders another suit is expected to require several years to    
conclude.                                                                       

          (8)  The Company currently has no employees and no operating
businesses or investments in operating businesses.  The Board of Directors      
believe that the Company is currently without the personnel or expertise        
required to conduct business operations and does not expect to seek to engage   
in an active business in the foreseeable future.                                

         (9)  An independent investment banker has issued an opinion
that the Class A Shares may be valued at from zero to $.39 per share based      
primarily on the range of the contingent liabilities.  The opinion concludes    
that the Offer Price is fair to the holders of Class A Shares.  See Opinion     
of Harris, Webb & Garrison attached as an Exhibit 1 hereto.                     

Item 5.   Persons Retained, Employed or to be Compensated                       
Item 5 is hereby amended and supplement as follows:         

      No person or class of persons has been employed, retained or to be
compensated by the persons filing this statement to make solicitations or       
recommendations to security holders.  The Company has employed Harris, Webb &   
Garrison as a financial advisor as to this transaction for a fee of $52,500     
plus expenses.                                                                  

Item 9.   Material to Be Filed as Exhibits                                      
Item 9 is hereby amended and supplemented as follows:       

Exhibit 7 The opinion of subject Company's financial adviser dated July 16,     
1999.                                                                           

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SC 14D9/A
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  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.                                                 

                         Mobley Environmental Services, Inc.

7-21-99                        by: /s/ John Mobley                      
-------                            ---------------                      
Date                              John A. Mobley                      
       President

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Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘SC 14D9/A’ Filing		Date		First		Last			Other Filings
		7/31/00		4
		7/27/99		2					SC 13D,  SC 14D1/A
Filed on:		7/23/99
		7/16/99		4
		7/13/99		1		2			SC 14D1/A
		6/11/99		1		2			SC 14D1,  SC 14D9
		12/31/94		3
									List all Filings