Filed by Robertson-Ceco Corporation
pursuant to Rule 425 under the
Securities Act of 1933 and deemed filed
pursuant to Rule 14a-12 and Rule 14d-2
under the Securities Exchange Act of
1934
Subject Company: Butler Manufacturing
Company
Commission File No. 001-12335
Date: April 14, 2004
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CONTACTS:
FROM ROBERTSON-CECO CORPORATION:
Christopher B. Campbell
Tel: (312) 419-8220
Fax: (312) 419-9417
ccampbell@heico-acq.com
FROM CCG INVESTOR RELATIONS:
Crocker Coulson, Partner
Tel: (818) 789 0100
crocker.coulson@ccgir.com
ROBERTSON-CECO CORPORATION MAKES PROPOSAL
TO COMBINE BUSINESSES WITH BUTLER MANUFACTURING COMPANY
PROPOSAL OFFERS BUTLER SHAREHOLDERS $23.00 PER SHARE
CHICAGO, April 14, 2004. Robertson-Ceco Corporation, a Delaware
corporation ("RCC"), today announced that it had submitted a proposal to Butler
Manufacturing Company ("Butler") (NYSE: BBR) to combine the businesses of Butler
and the three operating divisions of RCC and to provide Butler shareholders with
the option to exchange their shares of Butler stock for $23.00 per share. The
three operating divisions of RCC, each of which is engaged in North America in
the design, fabrication and sale of pre-engineered buildings, are Star Building
Systems ("Star"), Ceco Building Systems ("CECO") and Robertson Building Systems
Canada ("RBS").
Under RCC's proposal, Butler shareholders will have the right to elect
to surrender their shares for a purchase price of $23 per share or alternatively
to continue their ownership of shares in the combined company. RCC would receive
shares in the combined company reflecting a value of $26.00 per share. In
addition, the combined company will refinance outstanding Butler debt, including
letters of credit.
RCC believes that its proposal is superior to the current agreement for
BlueScope Steel Limited to acquire Butler for $22.50 per share. Therefore, RCC
believes that the Butler Board of Directors should determine in fulfillment of
its fiduciary duties to withdraw its recommendation that the Butler shareholders
vote for approval of the Blue Scope proposal and instead accept this offer by
RCC.
"Our proposal represents a unique opportunity to build a leading supplier in the
North American pre-engineered metal buildings market, while providing a premium
for those Butler shareholders who desire liquidity," said Michael E. Heisley
Sr., Chief Executive Officer of RCC.
The full text of the letter sent to Butler is attached.
ABOUT ROBERTSON-CECO
Robertson-Ceco manufactures pre-engineered metal buildings for the industrial
and construction industries. The company's three metal-building manufacturing
companies, Ceco Building Systems, Star Building Systems, and H. H. Robertson
Building Systems, operate five plants in the US and one in Canada. It
manufactures buildings that range in size from under 150,000 sq. ft. to up to 1
million sq. ft. and up to four stories high. Robertson-Ceco sells through a
builder/dealer network in the US and Canada and through direct sales and local
dealers in Asia.
# # #
April 13, 2004
CONFIDENTIAL
------------
The Board of Directors
Butler Manufacturing Company
1540 Genessee Street
Kansas City, Missouri 64102
Gentlemen:
This letter sets forth a proposal for the combination of the businesses
of Butler Manufacturing Company, a Delaware corporation ("Butler"), and the
three operating divisions of Robertson Ceco Corporation, a Delaware corporation
("RCC"), and an opportunity for liquidity for Butler shareholders who desire it.
The three operating divisions of RCC, each of which is engaged in North America
in the design, fabrication and sale of pre-engineered buildings, are Star
Building Systems ("Star"), Ceco Building Systems ("Ceco") and Robertson Building
Systems Canada ("RBS").
Under our proposal, Butler shareholders will have the right to elect to
receive in cash $23 per share or alternatively to continue their ownership of
shares in the combined company. We believe the shares in the publicly traded,
combined company will have a long term value significantly above $23 per share.
We have arranged to refinance outstanding Butler debt, including
letters of credit. We are prepared to purchase all three series of the 8.02%,
the 6.57% and the 7.87% Senior Notes issued by Butler and further extend the
Noteholder Amendment and Acknowledgement Agreements. In connection therewith, we
are prepared to offer the existing noteholders a value of par plus accrued
interest plus the "make-whole" payment at the completion of the transaction.
We believe that our proposal as set forth below is superior to the
BlueScope buyout proposal. Accordingly, we respectfully suggest that the Butler
Board of Directors should determine in fulfillment of its fiduciary duties to
withdraw its recommendation that the Butler shareholders vote for approval of
the BlueScope proposal.
The combined net sales and EBITDA of Star, Ceco and RBS for the year
ended December 31, 2003, and the average annual combined net sales and EBITDA of
Star, Ceco and RBS for the five years ended December 31, 2003 are as follows:
Board of Directors
Butler Manufacturing Company
April 13, 2004
Page 2
------------------- -------------------------------------------- ----------------------------------------------------
Average Annual for Five Years
Year Ended December 31, 2003 Ended December 31, 2003
---------------------------- -----------------------
------------------- -------------------------------------------- ----------------------------------------------------
Net sales $287.6 million $291.9 million
------------------- -------------------------------------------- ----------------------------------------------------
EBITDA $ 16.6 million $ 27.3 million
------------------- -------------------------------------------- ----------------------------------------------------
A combined balance sheet for the three divisions at December 31, 2003, excluding
all assets and liabilities to be retained by RCC, is attached hereto as Exhibit
A.
We propose to combine the operating divisions of RCC and Butler in a
transaction that values the shares of Butler common stock at $26.00 per share.
The RCC operating divisions would be valued at 6.7x the average EBITDA of the
divisions for the five years ended December 31, 2003. The multiple of 6.7x
EBITDA when applied to Butler's average annual EBITDA for the same period
results in a value of $22.50 per Butler common share, as proposed to be paid by
BlueScope. Based on these values, we believe the combination of Butler and the
RCC operating divisions is immediately accretive to Butler's shareholders. See
Exhibit B. As part of the transaction proposed by us, Butler shareholders who do
not wish to continue their ownership of shares in the combined enterprise would
be given the opportunity to receive $23.00 per Butler common share in cash.
We propose that the transaction will be effected as follows:
1. RCC will transfer all of the operating assets and
liabilities of each of Star, Ceco and RBS to newly
formed corporations for each respective division. In
addition, each division will assume any currently
outstanding indebtedness relating to its business and
assets. RCC will retain certain intercompany
obligations owed to it by affiliates and certain
liabilities (including contingent claims) relating to
discontinued operations.
2. RCC will transfer the stock of the newly formed
corporations to a newly formed corporation ("Newco"),
and Newco will form an acquisition subsidiary ("Newco
Acquisition").
3. Butler will commit to issue shares of its common
stock at a price of $23.00 per share immediately
prior to the merger described below, in an amount
sufficient to fund the cash portion of the merger
described in item 4 below, but not less than $60
million of newly issued shares. RCC has identified
investors who are prepared to commit to purchase the
shares to be issued.
4. Newco Acquisition will merge with and into Butler.
Butler shareholders will elect to either receive cash
at $23 per share or receive one registered Newco
share for each Butler share. Newco will own 100% of
Butler, will change its name to Butler ("New
Butler"), and will become the public reporting
Board of Directors
Butler Manufacturing Company
April 13, 2004
Page 3
company. It is anticipated that following the merger,
a minimum of approximately 43.1% of the New Butler
shares will be held by RCC and 16.6% by the new
investors.
5. Following the merger, RCC nominees will constitute a
majority of the board of directors of New Butler. At
least three (3) current Butler directors will be
asked to continue as members of the board of New
Butler.
6. The Butler management contracts will be honored.
7. Outstanding indebtedness of Butler will be
refinanced.
8. RCC will continue in existence with substantial net
worth and will discharge its liabilities as they come
due.
As a result of (a) the refinancing of Butler debt, (b) the synergies
derived from the combined operations, (c) value associated with the successful
conclusion of the Louisiana Pacific litigation and (d) input from RCC designated
board members, we believe that the market value of the New Butler shares will
significantly exceed the current BlueScope valuation of $22.50 per share.
Recognizing that the business cycle for the pre-engineered metal buildings
businesses in which Butler and RCC participate was at a five-year low in 2003,
we expect that Butler shareholders would also benefit from being able to
continue their share ownership when the business cycle improves. For these
reasons, we believe our proposal is superior for Butler shareholders than the
current BlueScope buyout proposal.
RCC is ready to immediately negotiate and sign a definitive agreement
for the transaction, without contingencies. We believe that HSR clearance should
be obtained expeditiously. We suggest that any review by Butler of the Star,
Ceco and RBS businesses could be commenced immediately and concluded during the
next week or so while definitive agreements are prepared. Because we have also
conducted significant due diligence during our participation in your sale
process in late 2003, we have substantially completed our review of Butler. We
believe the transaction structure proposed herein allows us to put a value on
Butler above our valuation arrived at during the 2003 sales process.
Board of Directors
Butler Manufacturing Company
April 13, 2004
Page 4
Provided that Butler's Board of Directors withdraws not later than
April 23, 2004 its recommendation that its shareholders approve the BlueScope
buyout proposal, our proposal will remain open until the close of business on
April 30, 2004. Please contact the undersigned at (312) 419-8220 to indicate
your acceptance of our proposal and with any questions you may have.
Very truly yours,
E.A. Roskovensky
President
EAR:idt
EXHIBIT A
---------
ROBERTSON CECO CORPORATION
CECO BUILDINGS, STAR BUILDINGS, HH ROBERTSON OPERATING DIVISIONS
PROPOSED COMBINED BALANCE SHEET
DECEMBER 31, 2003
(IN THOUSANDS)
ASSETS
Current Assets:
Cash and cash equivalents 9,449
Accounts and notes receivable 30,202
Inventories 16,985
Deferred taxes - current 1,079
Other current assets 566
------------
Total current assets 58,281
Property, plant & equipment, net 38,370
Notes receivable from affiliates 0
Goodwill 3,123
Deferred taxes 6,413
Other noncurrent assets 876
------------
TOTAL ASSETS 107,063
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion - long-term debt 6,697
Accounts payable 16,194
Accrued payroll and benefits 6,357
Other accrued liabilities 8,455
------------
Total Current assets 37,703
Long - term debt 9,298
Minimum pension liability 18,293
Long - term warranty 3,219
Other long - term liabilities 3,320
Stockholders' Equity:
Capital surplus 77,354
Accumulated deficit (30,183)
Accumulated and comprehensive income (11,941)
------------
Total stockholders' equity 35,230
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 107,063
============
Exhibit B
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1 Blue Scope Multiple Paid of Butlers last 5 years EBITDA 6.7x
2 RCC 5 years average EBITDA 27.3
EBITDA Multiple 6.7
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RCC Enterprise Value 183
Less Debt 7
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Equity Value 176 mm
New Butler shares issued to
RCC @26 6.77 mm
Value of shares issued @ $23 (1) 155.7 mm
Value transfer to Butler shareholders $20 mm
(Approximate $3 per share)
(1) implies an EBITDA multiple of 5.97 times
NOTE: THE FOLLOWING NOTICE IS INCLUDED TO MEET CERTAIN LEGAL REQUIREMENTS:
FORWARD LOOKING STATEMENTS
This filing contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. In some cases, you can
identify those so-called "forward-looking statements" by words such as "may,"
"will," "should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential," or "continue," or the negative of those words and other
comparable words. You are cautioned that actual events or results may differ
materially from the expectations expressed in such forward-looking statements as
a result of various factors, including risks and uncertainties, many of which
are beyond the control of RCC. Factors that could cause actual results to differ
materially include, but are not limited to: (1) the businesses of RCC and Butler
may not be integrated successfully or such integration may be more difficult,
time-consuming or costly than expected; (2) expected combination benefits from
the RCC/Butler transaction may not be fully realized or realized within the
expected time frame; (3) revenues following the RCC/Butler transaction may be
lower than expected; (4) operating costs, customer loss and business disruption,
including, without limitation, difficulties in maintaining relationships with
employees, customers, clients or suppliers, may be greater than expected
following the RCC/Butler transaction; (5) the regulatory approvals required for
the RCC/Butler transaction may not be obtained on the proposed terms or on the
anticipated schedule; (6) the effects of legislative and regulatory changes; (7)
the potential for increased competition; (8) fluctuations in customer demand,
order patterns and pricing pressures which could affect demand for RCC or Butler
services; (9) industry cyclicality and seasonality; (10) changes in labor,
equipment and capital costs or availability; (11) general business and economic
conditions; and (12) other risks described from time to time in Butler's
periodic reports filed with the Securities and Exchange Commission (the
"Commission").
Any information concerning Butler contained in this filing has been
taken from, or is based upon, publicly available information. Although RCC does
not have any information that would indicate that any information contained in
this filing that has been taken from such documents is inaccurate or incomplete,
RCC does not take any responsibility for the accuracy or completeness of such
information.
This announcement is neither an offer to purchase nor a solicitation of
an offer to sell shares of Butler or the combined company. Investors and
security holders are urged to read the disclosure documents regarding the
proposed RCC/Butler transaction, when they become available, because they will
contain important information. The disclosure documents will be filed with the
Commission by RCC. Investors and security holders may obtain a free copy of the
disclosure documents (when they are available) and other documents filed by RCC
with the Commission at the Commission's website at www.sec.gov. The disclosure
documents and these other documents (when they are available) may also be
obtained for free from RCC by directing a request to Robertson-Ceco Corporation,
5600 Three First National, Chicago, Illinois 60602.
RCC is not currently engaged in a solicitation of proxies or consents
from its shareholders or from the shareholders of Butler. However, in connection
with its proposal to merge with Butler, certain directors and officers of RCC
may participate in meetings or discussions with RCC shareholders some of whom
may also be Butler shareholders or other persons who may also be Butler
shareholders. RCC does not believe that any of these persons is a "participant"
as defined in Schedule 14A promulgated under the Securities Exchange Act of
1934, as amended, in the solicitation of proxies or consents, or that Schedule
14A requires the disclosure of certain information concerning any of them.
If in the future RCC does engage in a solicitation of proxies or
consents from its shareholders or the shareholders of Butler in connection with
its proposal to merge with Butler it will amend the information provided above
to disclose the information concerning participants in that solicitation
required by Rule 14a-12 under the Securities Exchange Act of 1934.