UNITED STATES
SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 10)*
Spartan Stores, Inc.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
846822104
(CUSIP Number)
Michael Emanuel, Esq.
c/o Loeb Partners Corporation
61 Broadway, N.Y., N.Y., 10006 (212) 483-7047
(Name, address and Telephone Number of Person Authorized to Receive Notices
and Communications)
October 3, 2005
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. Check
the following box if a fee is being paid with statement [ ]. (A fee is not
required only if the following reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described is Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.) Note: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other parties to whom
copies are to be sent. *The remainder of this cover page shall be filled out for
a reporting person's initial filing on this form with respect to the subject
class of securities, and for any subsequent amendment containing information
which would alter disclosures provided in a prior cover page. The information
required on the remained of this cover page shall not be deemed to be "filed"
for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or
otherwise subject to the liabilities of that section of the Act but shall be
subject to all other provisions of the Act (however, see the Notes).
SCHEDULE 13D
CUSIP NO. 846822104
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Loeb Partners Corporation
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC, O
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 44,760 Shares of Common stock
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 33,695 Shares of Common stock
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 44,760 Shares of Common stock
PERSON WITH 10 SHARED DISPOSITIVE POWER
33,695 Shares of Common stock
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
78,455 Shares of Common stock
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.38%
14 TYPE OF REPORTING PERSON*
CO, BD, IA
SCHEDULE 13D
CUSIP NO. 846822104
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Loeb Arbitrage Fund
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC, O
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED [ ]
PURSUANT TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
NUMBER OF 7 SOLE VOTING POWER
SHARES 947,433 Shares of Common stock
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -----
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 947,433 Shares of Common stock
PERSON WITH 10 SHARED DISPOSITIVE POWER
-----
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
947,433 Shares of Common stock
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.62%
14 TYPE OF REPORTING PERSON*
PN, BD
SCHEDULE 13D
CUSIP NO. 846822104
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Loeb Offshore Fund Ltd.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC, O
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
NUMBER OF 7 SOLE VOTING POWER
SHARES 88,419 Shares of Common stock
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY --------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 88,419 Shares of Common stock
PERSON WITH 10 SHARED DISPOSITIVE POWER
-------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
88,419 Shares of Common stock
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.43%
14 TYPE OF REPORTING PERSON*
CO
SCHEDULE 13D
CUSIP NO. 846822104
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Loeb Marathon Fund LP
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC, O
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 124,264 Shares of Common stock
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -----
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 124,264 Shares of Common stock
PERSON WITH 10 SHARED DISPOSITIVE POWER
-----
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
124,264 Shares of Common stock
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.60%
14 TYPE OF REPORTING PERSON*
PN
SCHEDULE 13D
CUSIP NO. 846822104
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Loeb Marathon Offshore Fund, Ltd.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC, O
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
NUMBER OF 7 SOLE VOTING POWER
SHARES 82,430 Shares of Common stock
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -----
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 82,430 Shares of Common stock
PERSON WITH 10 SHARED DISPOSITIVE POWER
-----
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
82,430 Shares of Common stock
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.40%
14 TYPE OF REPORTING PERSON*
CO
Item 1. Security and Issuer.
------ -------------------
This statement refers to the Common Stock of Spartan Stores, Inc., 850 76th
Street Southwest, Grand Rapids, MI. 49518.
Item 2. Identity and Background.
------ -----------------------
Loeb Arbitrage Fund ("LAF") is a New York limited partnership. It is a
registered broker/dealer. Its general partner is Loeb Arbitrage Management,
Inc., ("LAM"), a Delaware corporation. Its President is Gideon J. King. The
other officers of LAM are Thomas L. Kempner, Chairman of the Board, President,
Peter A. Tcherepnine, Vice President, Edward J. Campbell, Vice President. Loeb
Partners Corporation ("LPC") is a Delaware corporation. It is a registered
broker/dealer and a registered investment adviser. Thomas L. Kempner is its
President and a director and its Chief Executive Officer. Norman N. Mintz is a
Vice President and also a director. Gideon J. King is Executive Vice President.
Loeb Holding Corporation ("LHC"), a Maryland corporation, is the sole
stockholder of LAM and LPC. Thomas L. Kempner is its President and a director as
well as its Chief Executive Officer and majority stockholder. Norman N. Mintz
and Peter A. Tcherepnine are also directors. Loeb Offshore Fund, Ltd., ("LOF")
is a Cayman Islands exempted company. Loeb Offshore Management, LLC ("LOM") is a
Delaware limited liability company, a registered investment adviser and is
wholly owned by Loeb Holding Corporation. It is the investment adviser of LOF.
Gideon J. King and Thomas L. Kempner are Directors of LOF and Managers of LOM.
Loeb Marathon Fund ("LMF") is a Delaware limited partnership whose general
partner is LAM. Loeb Marathon Offshore Fund Ltd. ("LMOF") is a Cayman Islands
exempted company. LOM is the investment adviser of LMOF. The principal address
of each of LAF, LAM, LPC, LHC, LOF, LOM, LMF and LMOF is 61 Broadway, New York,
New York, 10006. All of the individuals named are United States citizens. None
have been, within the last five years, convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding been or are subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any
violations with respect to such laws.
Item 3. Source and Amount of Funds or Other Compensation.
------ ------------------------------------------------
Shares of Common Stock were acquired by LAF, LPC, LMF, LOF and LMOF in margin
accounts maintained with Bear Stearns Securities Corp.
Item 4. Purpose of Transaction.
------ ----------------------
LAF, LPC, LMF, LOF and LMOF ("Loeb") have acquired shares of Common Stock for
investment purposes. Loeb reserves the right, consistent with applicable law, to
acquire additional securities of the Issuer (whether through open market
purchases, block trades, private acquisitions, tender or exchange offers or
otherwise). As previously reported, Loeb intends to review its investment in the
Issuer on a continuing basis and may engage in discussions with management or
the Board of Directors of the Issuer concerning the business, operations and
future plans of the Issuer. Depending on various factors, including, without
limitation, the Issuer's financial position and investment strategy, the price
levels of the Common Stock, conditions in the securities markets and general
economic and industry conditions, Loeb may in the future take such actions with
respect to its investment in the Issuer as it deems appropriate including,
without limitation, seeking further Board representation, making further
proposals to the Issuer concerning the capitalization and operations of the
Issuer, purchasing additional Common Stock, selling some or all of its Common
Stock, engaging in short selling of or any hedging or similar transaction with
respect to the Common Stock or changing its intention partially or entirely with
respect to any and all matters referred to in Item 4. Loeb's current position
with respect to the Issuer is reflected in the following letter that was sent to
the Issuer's Board of Directors:
Attn: Board of Directors of Spartan Stores, Inc.
We are not satisfied with the practice of publicly ending an investigation of
strategic alternatives before you tell owners that the company has commenced
such a process. This approach is all too safe and cozy. This approach is perfect
for an apathetic management team and board that seek to be sheltered from
reasonable shareholder expectations. How could this board possibly end such a
process in a genuine fashion without at least concluding that a dividend must be
instituted or a self-tender effected? What is the present value of a financial
instrument that will not be monetized or that does not yield anything to
shareowners? Nothing. What is the value of free cash flow if acquisitions are
highly risky with low margin expectations? Hard to say. Your investigation of
ways to "enhance," not maximize value is not over. It can't be over until you
use your free cash flow as a tool to create immediate value. It can't be over
until you have presented your shareholders with the best offers for the company.
Please tell your owners what the results of your sale process were. There should
be nothing to hide from owners. Owners should have the right to decide if a
given offer for the company is acceptable. A shroud of secrecy is not
acceptable. Please respond to the following demands immediately.
We demand that the company conduct a fixed price tender offer for 20% of its
shares at $13.50 per share. Additionally, we demand that the company institute a
regular quarterly dividend of .125 cents (50 cents annually) beginning with the
fourth quarter of fiscal year 2006. These are reasonable demands for many
reasons. These actions would not create strain on the company balance sheet in
any way. In fact, after spending approximately $57 million to effect such a
tender, the company would have net debt to EBITDA of approximately 2x. Leverage
would be reduced to 1.7x by the end of fiscal year 2007 even after $23 million
of capital spending and the dividend payments of $9 million. Surely, any
knowledgeable board member would agree that this is a reasonable amount of
leverage. Our internal model shows that the tender would be accretive by 15
cents to fiscal year 2007 EPS, as the impact of the reduced shares outstanding
far outweighs the impact of higher interest costs. We are aware that you may
need to seek waivers from your lenders to effect such a transaction and we have
factored in a slightly higher interest cost.
At $11 per share and pro-forma for the self-tender the company would be trading
at a P/E multiple of 9x and an EV/EBITDA multiple of 4.7x using our projected
figures for fiscal year 2007. The company would have a dividend yield of 4.5%
and a free cash flow yield (pre dividend) of 11%. No bankers are needed for
simple logic. A caring board is all that is required to pluck low-hanging fruit.
If your stock languishes it is your fault and your miscarriage of duty. Exploit
your free cash flow for the benefit of owners. Stop crafting press releases to
avoid legal problems.
Our proposal will go some distance towards satisfying your owners in full. Those
that subscribe to your long term and somewhat vague plan of creating value may
not tender their shares and yet still look forward to a steady and sizeable
dividend. Those that doubt, as we do, your long term plan in the absence of
payouts to shareholders, will at least feel rewarded by access to the free cash
flow and balance sheet that are Spartan's most positive characteristics. We will
not go away until you reward us with access to our cash flows. It is problematic
in our view that we own more stock than the board and management combined and we
are ignored. The results of your investigation are hard to believe, as any
"investigation" would result in the least, in the absence of a sale of the
company (which we believe still possible), in dividends and buybacks. Despite
all the legal steps you have taken to protect management and the board, you have
failed in discharging your fiduciary duties because the most elemental steps
have been ignored in your evaluation of "enhancing" shareholder value. Again, we
will not go away, and if the board of Spartan does not take care of the basics,
we will use the shareholder proposal process to gain access to the cash flows
that are rightfully ours; we think any reasonable shareholder will vote for
buybacks and dividends that do not in any way put the company at risk
financially. The math is so simple and attractive. Break your streak of ignoring
your owners and create value by instituting our plan. Creating value is why you
are paid substantial sums of money, and right now you are not earning your pay,
which is another issue to be taken up at the appropriate time. As always, we are
open to a productive conversation and/or meeting with management and the board.
Further, we are open to conversations with your banker.
Loeb Partners Corporation
By:_____________________________
Gideon J. King
Item 5. Interest in Securities of the Issuer.
------ ------------------------------------
(a)The persons reporting hereby owned the following shares of Common Stock as
of September 7, 2005. Shares of Common Stock
Loeb Arbitrage Fund 947,433
Loeb Partners Corporation* 78,455
Loeb Offshore Fund Ltd. 88,419
Loeb Marathon Fund LP 124,264
Loeb Marathon Offshore Fund, Ltd. 82,430
-----------
1,321,001
The total shares of Common Stock constitute 6.44% of the 20,516,000 outstanding
shares of Common Stock as reported by the Issuer.
-------------------------
*Including shares of Common Stock purchased and sold for the account of one
customer of Loeb Partners Corporation as to which it has investment discretion.
(b) Loeb Arbitrage Fund has the sole power to direct the vote and the sole power
to direct the disposition of the 947,433 shares of Common Stock that may be
deemed to be beneficially owned by it. Loeb Partners Corporation has the sole
power to direct the vote and the sole power to direct the disposition of 44,760
shares of Common Stock that may be deemed to be beneficially owned by it and
shared power to direct the vote and direct the disposition of 33,695 shares of
Common Stock that may be deemed to be beneficially owned by it.* Loeb Offshore
Fund Ltd. has the sole power to direct the vote and the sole power to direct the
disposition of the 88,419 shares of Common Stock that may be deemed to be
beneficially owned by it. Loeb Marathon Fund LP has the sole power to direct the
vote and the sole power to direct the disposition of the 124,264 shares of
Common Stock that may be deemed to be beneficially owned by it. Loeb Marathon
Offshore Fund, Ltd. has the sole power to direct the vote and the sole power to
direct the disposition of the 82,430 shares of Common Stock that may be deemed
to be beneficially owned by it.
-------------------------
*Power is shared with respect to shares of Common Stock purchased and sold for
the account of one customer of Loeb Partners Corporation as to which it has
investment discretion.
(c) The following purchases and sales of Common Stock have been made since
Loeb's last filing on September 26, 2005:
None.
All reported transactions were effected on Nasdaq.
(d) Not applicable.
(e). Not applicable.
Item 6.Contracts, Arrangements, Understandings or Relationships with Respect to
the Issuer.
None.
Item 7. Materials to be Filed as Exhibits.
Previously filed.
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.
October 3, 2005 Loeb Partners Corporation
By: /s/ Gideon J. King
Executive Vice President
October 3, 2005 Loeb Arbitrage Fund
By: Loeb Arbitrage Management, Inc., G.P.
By: /s/ Gideon J. King
President
October 3, 2005 Loeb Offshore Fund Ltd.
By: /s/ Gideon J. King
Director
October 3, 2005 Loeb Marathon Fund LP
By: Loeb Arbitrage Management, Inc., G.P.
By: /s/ Gideon J. King
President
October 3, 2005 Loeb Marathon Offshore Fund
By: /s/ Gideon J. King
Director