sec document
UNITED STATES
SECURTIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN CONSENT STATEMENT
SCHEDULE 14A INFORMATION
CONSENT STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant | |
Filed by a Party other than the Registrant|X|
Check the appropriate box:
| | Preliminary Consent Statement
| | Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
| | Definitive Consent Statement
|X| Definitive Additional Materials
| | Soliciting Material Under Rule 14a-12
BAIRNCO CORPORATION
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
STEEL PARTNERS II, L.P.
STEEL PARTNERS, L.L.C.
BZ ACQUISITION CORP.
WARREN G. LICHTENSTEIN
HUGH F. CULVERHOUSE
JOHN J. QUICKE
ANTHONY BERGAMO
HOWARD M. LEITNER
--------------------------------------------------------------------------------
(Name of Persons(s) Filing Consent Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
| | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
--------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------------------
(5) Total fee paid:
--------------------------------------------------------------------------------
| | Fee paid previously with preliminary materials:
--------------------------------------------------------------------------------
| | Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid
--------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No:
--------------------------------------------------------------------------------
(3) Filing Party:
--------------------------------------------------------------------------------
(4) Date Filed:
--------------------------------------------------------------------------------
Steel Partners II, L.P., together with the other Participants (as defined
below), is filing materials contained in this Schedule 14A with the Securities
and Exchange Commission in connection with the solicitation of written consents
from stockholders of Bairnco Corporation.
On January 24, 2007, Steel Partners II, L.P. issued the following press
release:
FOR IMMEDIATE RELEASE
STEEL PARTNERS II SENDS LETTER TO BAIRNCO STOCKHOLDERS QUESTIONING
BOARD OF DIRECTORS' PAST RECORD
NEW YORK, NY - JANUARY 24, 2007 -- Steel Partners II, L.P. ("Steel
Partners II"), which has commenced a $12.00 per share cash tender offer for
Bairnco Corporation (NYSE:BZ; "Bairnco"), announced today that it has sent the
following letter to stockholders of Bairnco questioning the board of directors'
past record and calling on stockholders to support Steel Partners II's consent
solicitation to remove the current board members and replace them with Steel
Partners II's nominees in order to allow the stockholders to decide their
company's future for themselves:
STEEL PARTNERS II, L.P.
590 MADISON AVENUE, 32ND FLOOR
NEW YORK, NEW YORK 10022
January 24, 2007
Dear Fellow Stockholder:
As you are aware, BZ Acquisition Corp., a wholly owned subsidiary of Steel
Partners II, L.P., has commenced a tender offer to purchase all the issued and
outstanding shares of common stock of Bairnco Corporation for $12.00 net per
share in cash (the "Offer"). THE BOARD OF DIRECTORS OF BAIRNCO HAS REFUSED TO
TAKE THE STEPS NECESSARY TO ALLOW US TO CONSUMMATE THE OFFER AND TO ALLOW YOU TO
DETERMINE FOR YOURSELF WHETHER YOU WANT TO RECEIVE THE CONSIDERATION TO BE PAID
PURSUANT TO THE OFFER. Because we believe that the current directors of Bairnco
are not acting, and will not act, in your best interests with respect to the
Offer, we are soliciting written consents from Bairnco stockholders to remove
each current member of Bairnco's board of directors and replace them with five
highly qualified individuals who, as dictated by their fiduciary duties, will
take action to allow the stockholders, the true owners of Bairnco, to decide the
Company's future for themselves.
SHOULD YOU TRUST THE CURRENT BOARD OF DIRECTORS WITH YOUR
COMPANY'S FUTURE?
WE THINK THE ANSWER IS CLEARLY NO
Bairnco's management has made some bold predictions regarding the future
financial results of the Company for 2007. Do you believe that Bairnco, led by
its current board of directors, will achieve these projections? If you look at
the record, Bairnco's management is no stranger to making predictions of future
success that come up woefully short. To find unfulfilled expectations of greener
earnings pastures, you need look no further than the two most recent annual
reports that Bairnco sent to its stockholders. Consider the following statements
made by Luke E. Fichthorn, III, Bairnco's Chairman of the Board and CEO:
FICTION: "We expect 2005 to be a year of improved results as compared to
2004." (2004 annual report)
FACT: In 2005, operating profit and diluted earnings per share from
continuing operations were each DOWN OVER 30%, as compared to
2004.
THE EXCUSE: "[E]xternal events, COMBINED WITH OUR DECISIONS - SOME OF WHICH
WERE GOOD, SOME BAD, AND SOME LATE - LED TO FINANCIAL RESULTS
WELL BELOW OUR EXPECTATIONS." (2005 annual report, EMPHASIS
ADDED)
WHY WOULD YOU BELIEVE THE BOARD OF DIRECTORS NOW?
In addition to making public statements about the Company's future
financial performance that have not borne fruit, Mr. Fichthorn also conveniently
neglects to tell the whole story about the Company's financial health. In the
Company's press release announcing its 2006 results, Mr. Fichthorn fails to
remind you of his statement from Bairnco's 2005 annual report that the level of
growth represented by the Company's 2006 earnings "will still leave us below our
long term financial objectives." He also doesn't tell you that, even with the
repurchase of a significant number of shares during the past two years, the
Company's diluted earnings per share for 2006 is STILL BELOW THE COMPANY'S 2004
DILUTED EARNINGS PER SHARE OF $0.68. Now, Mr. Fichthorn is predicting earnings
per share growth in the range of approximately 69% to 85% in 2007 even though,
in 2006, the Company did not return to 2004 levels and Arlon Coated Materials
operating profit DECREASED 48.4% IN 2006, including an OPERATING LOSS IN THE
FOURTH QUARTER OF 2006. Based on its track record, do you believe that Bairnco,
led by its current board of directors, will achieve these lofty projections?
THE NUMBERS DON'T LIE - Bairnco, led by its current board of directors,
earned less and is in a worse financial position - with substantially higher
debt - today than in 2004.
HAS BAIRNCO BEEN ABLE TO DELIVER ON THE OPERATIONAL CHANGES IT PROMISED?
AGAIN, WE THINK THE ANSWER IS CLEARLY NO
FICTION: "[P]lans have been approved to open a China manufacturing plant
which is expected to be in production by the end of 2005. . . . The
plant is expected to be profitable in 2006." (2004 annual report)
FACT: The new China plant "will not be operational until the third
quarter 2006." (2005 annual report). In fact, the China facility
began only LIMITED OPERATIONS in October 2006, and a significant
increase in sales and production is needed to ramp-up this plant
from its 2006 fourth quarter operating loss to the level of
profitability projected by the Company for 2007.
FICTION: "The start up inefficiencies and scrap at the San Antonio plant
[into which Bairnco consolidated its Arlon industrial engineered
coated products businesses] should be materially reduced."
(2004 annual report)
FACT: "Arlon Coated Materials' San Antonio facility remained
substantially below expected performance levels during 2005 due to
POOR PRODUCTION SCHEDULING, INCREASED SCRAP, INEFFICIENT LABOR AND
INCREASED RAW MATERIAL COSTS." (2005 annual report, EMPHASIS ADDED)
FICTION: Bairnco's goal was "to move the remaining manufacturing operations
in St. Louis to Kasco's Mexican plant over the first six months of
2005." (2004 annual report)
FACT: "The St. Louis plant move to Mexico was DELAYED [it was not in full
operation until the end of the third quarter of 2005] and OVER
BUDGET [by nearly double the expected cost]." (2005 annual report,
EMPHASIS ADDED)
WHEN IT COMES TO ITS OPERATIONAL OBJECTIVES, BAIRNCO HAS CLEARLY
OVER-PROMISED AND UNDER-DELIVERED.
WHY WOULD YOU BELIEVE THE BOARD OF DIRECTORS NOW?
Other sophisticated, potential purchasers of Bairnco don't appear to
believe the board of directors. Although Bairnco, with the assistance of its
financial advisor, conducted a nearly three-month process to explore a variety
of possible strategic alternatives, including the possible sale of the Company,
IT DID NOT RECEIVE A SINGLE OFFER FOR THE ACQUISITION OF THE ENTIRE COMPANY.
It also seems as though Bairnco's management doesn't have the confidence
to stand behind its own financial projections. When we put forth a proposal
providing that a portion of the total transaction consideration would depend on
Bairnco's future financial performance, it was summarily rejected.
In a January 16, 2007 letter to stockholders, Mr. Fichthorn claimed that
the board of directors has successfully enhanced shareholder value "over the
last six months." For a board with over 50 years of combined experience serving
as directors of the Company, we find it curious that Mr. Fichthorn focused only
on the board's questionable accomplishments during the past six months, which
happens to coincide with the period of time during which our Offer has remained
open and the directors' continued service with Bairnco has been threatened,
while completely overlooking the past missteps we have recounted above. ASK
YOURSELF WHETHER THE PRICE IMPACT ON BAIRNCO'S STOCK IS THE RESULT OF THE
COMPANY'S PERFORMANCE OR THE PUBLICLY ANNOUNCED INTEREST OF STEEL PARTNERS II IN
PURCHASING THE COMPANY.
YOU SHOULD BE ABLE TO DECIDE THE FUTURE OF YOUR COMPANY
We believe that our Offer is fair to all stockholders and affords
stockholders an attractive and certain means of monetizing their investment, as
opposed to the uncertainty offered by the current board of directors, with its
financial crystal ball and selective memory. The $12.00 per share cash price
proposed to be paid in the Offer represents a premium of 21% to the last
reported sales price per share on June 15, 2006, the day we informed Bairnco of
our Offer. Unfortunately, the current board of directors has decided to reject
and impose roadblocks on our Offer. As a result, we have been forced to
undertake our consent solicitation as a last resort. WE URGE ALL STOCKHOLDERS TO
CONSENT TO ALL FOUR OF OUR PROPOSALS, WHICH WILL RESULT IN THE REMOVAL OF THE
CURRENT MEMBERS OF BAIRNCO'S BOARD OF DIRECTORS AND THEIR REPLACEMENT WITH FIVE
HIGHLY QUALIFIED INDIVIDUALS WHO WILL ACT TO ENSURE THAT YOU, THE TRUE OWNERS OF
THE COMPANY, WILL HAVE A VOICE IN THE FUTURE OF YOUR INVESTMENT.
DEMAND VALUE FOR YOUR INVESTMENT - VOTE THE GOLD CONSENT CARD TODAY!
As a significant and long-term stockholder of the Company, we are counting
on your support to maximize value for all stockholders. We encourage all
stockholders to vote promptly and to discard any consent revocation materials
you may receive from management. If you return management's white consent card,
you can change your vote by executing the enclosed GOLD consent card. If you
have any questions, or need assistance in voting your GOLD consent card, please
call our consent solicitor, MacKenzie Partners, Inc., toll-free at (800)
322-2885 or (212) 929-5500 (call collect).
Thank you in advance for your support.
Sincerely,
/s/ Warren G. Lichtenstein
Warren G. Lichtenstein
Steel Partners II, L.P.
--------------------------------------------------------------------------------
IF YOU HAVE ANY QUESTIONS, REQUIRE ASSISTANCE IN VOTING YOUR GOLD CONSENT
CARD, OR NEED ADDITIONAL COPIES OF STEEL PARTNERS II'S CONSENT MATERIALS,
PLEASE CALL MACKENZIE PARTNERS, INC. AT THE PHONE NUMBERS LISTED BELOW.
MACKENZIE
PARTNERS, INC.
105 Madison Avenue
New York, NY 10016
bairnco@mackenziepartners.com
(212) 929-5500 (Call Collect)
or
TOLL-FREE (800) 322-2885
--------------------------------------------------------------------------------
IMPORTANT INFORMATION REGARDING THE TENDER OFFER
BZ Acquisition Corp., a wholly-owned subsidiary of Steel Partners II, has
commenced a tender offer to purchase all of the outstanding shares of common
stock (and associated preferred stock purchase rights) of Bairnco at $12.00 per
share, net to the seller in cash, without interest. The offer is currently
scheduled to expire at 5:00 P.M., New York City time, on Monday, January 29,
2007, unless the offer is extended.
MacKenzie Partners, Inc. is the Information Agent for the tender offer and any
questions or requests for the Offer to Purchase and related materials with
respect to the tender offer may be directed to MacKenzie Partners, Inc.
THIS PRESS RELEASE IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT AN OFFER TO BUY
OR THE SOLICITATION OF AN OFFER TO SELL ANY SHARES. THE SOLICITATION AND THE
OFFER TO BUY BAIRNCO'S COMMON STOCK IS ONLY BEING MADE PURSUANT TO AN OFFER TO
PURCHASE AND RELATED MATERIALS THAT STEEL PARTNERS II HAS FILED (AND WILL FILE)
WITH THE SECURITIES AND EXCHANGE COMMISSION. STOCKHOLDERS SHOULD READ THESE
MATERIALS CAREFULLY BECAUSE THEY CONTAIN IMPORTANT INFORMATION, INCLUDING THE
TERMS AND CONDITIONS OF THE OFFER. STOCKHOLDERS MAY OBTAIN THE OFFER TO PURCHASE
AND RELATED MATERIALS WITH RESPECT TO THE TENDER OFFER FREE AT THE SEC'S WEBSITE
AT HTTP://WWW.SEC.GOV OR FROM STEEL PARTNERS II BY CONTACTING MACKENZIE
PARTNERS, INC. TOLL-FREE AT (800) 322-2885 OR COLLECT AT (212) 929-5500 OR VIA
EMAIL AT BAIRNCO@MACKENZIEPARTNERS.COM.
IMPORTANT INFORMATION REGARDING THE CONSENT SOLICITATION
Steel Partners II, together with the other Participants (as defined below), has
filed a definitive consent solicitation statement (as it may be amended or
supplemented, the "Consent Solicitation Statement") with the Securities and
Exchange Commission (the "SEC") relating to the solicitation of written consents
from Bairnco stockholders.
STEEL PARTNERS II STRONGLY ADVISES ALL STOCKHOLDERS OF BAIRNCO TO READ THE
CONSENT SOLICITATION STATEMENT BECAUSE IT CONTAINS IMPORTANT INFORMATION. SUCH
CONSENT SOLICITATION STATEMENT IS AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE
AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN THE SOLICITATION WILL
PROVIDE COPIES OF THE CONSENT SOLICITATION STATEMENT WITHOUT CHARGE UPON
REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE PARTICIPANTS' CONSENT
SOLICITOR, MACKENZIE PARTNERS, INC., TOLL-FREE AT (800) 322-2885 OR COLLECT AT
(212) 929-5500 OR VIA EMAIL AT BAIRNCO@MACKENZIEPARTNERS.COM.
THE PARTICIPANTS IN THE CONSENT SOLICITATION ARE STEEL PARTNERS II, STEEL
PARTNERS, L.L.C., BZ ACQUISITION CORP., WARREN G. LICHTENSTEIN, HUGH F.
CULVERHOUSE, JOHN J. QUICKE, ANTHONY BERGAMO AND HOWARD M. LEITNER
(COLLECTIVELY, THE "PARTICIPANTS"). STOCKHOLDERS OF BAIRNCO MAY OBTAIN
INFORMATION REGARDING THE PARTICIPANTS' DIRECT OR INDIRECT INTERESTS, BY
SECURITY HOLDINGS OR OTHERWISE, IN BAIRNCO BY REFERRING TO THE CONSENT
SOLICITATION STATEMENT.
Any forward-looking statements contained in this release are made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Forward-looking statements are inherently subject to a variety of risks
and uncertainties that could cause actual results to differ materially from
those projected. These risks and uncertainties include, among others: the
willingness of Bairnco stockholders to tender their shares in the tender offer
and the number and timing of shares tendered; the willingness of Bairnco
stockholders to deliver written consents in connection with the consent
solicitation; the receipt of third party consents to the extent required for the
acquisition; and satisfaction of the various closing conditions. Other important
factors that could cause actual results to differ materially are included but
are not limited to those listed in Bairnco's periodic reports and registration
statements filed with the Securities and Exchange Commission. Steel Partners II
undertakes no obligation to update information contained in this release.
For additional information:
Media
Jason Booth and Terry Fahn
Sitrick And Company, Inc.
(310) 788-2850
Investors and Analysts
Daniel Sullivan and Bob Sandhu
Mackenzie Partners, Inc.
(212) 929-5500