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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): May 18, 2005
METALS USA, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 1-13123 76-0533626
(State or Other Jurisdiction
of Incorporation) (Commission (IRS Employer
File Number) Identification No.)
One Riverway, Suite 1100
Houston, Texas 77056
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (713) 965-0990
N/A
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[X] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry Into A Material Definitive Agreement.
Metals USA, Inc., (the "Company"), a Delaware corporation, announced that it has
entered into an Agreement and Plan of Merger, dated as of May 18, 2005 (the
"Merger Agreement"), with Flag Holdings Corporation, a Delaware corporation
("Parent"), and Flag Acquisition Corporation, a Delaware corporation and a
wholly owned subsidiary of Parent ("Merger Sub"). Subject to the satisfaction or
waiver of the conditions contained in the Merger Agreement, Merger Sub will
merge with and into the Company (the "Merger"), with the Company continuing as
the surviving corporation ("Surviving Corporation") and as a wholly owned
subsidiary of Parent. Parent is owned by affiliates of Apollo Management, L.P.,
a private investment firm. Certain members of the Company's management will
participate as equity holders in Surviving Corporation or Parent after the
closing of the Merger. Completion of the Merger is subject to receipt of the
approval of the Company's shareholders and certain regulatory authorities and
other customary closing conditions set forth in the Merger Agreement.
Pursuant to the Merger Agreement and subject to the conditions therein, at the
effective time of the Merger, each outstanding share of common stock, par value
$.01 per share (the "Shares"), of the Company (excluding any Shares owned by the
Company, Parent, Merger Sub or any of their respective direct or indirect wholly
owned subsidiaries (which shall be cancelled and shall cease to exist with no
payment being made with respect thereto) and any Shares owned by stockholders
properly exercising appraisal rights under Delaware law), shall be converted
into and represent the right to receive $22.00 in cash, without interest.
Pursuant to the Merger Agreement and subject to the conditions therein, from and
after the effective time of the Merger, each outstanding warrant to purchase
Shares ("Warrant") issued pursuant to the Warrant Agreement, dated as of October
31, 2002, by and between the Company and Equiserve Trust Company, N.A. (the
"Warrant Agreement"), or otherwise, shall represent the right to receive (upon
surrender of such Warrant and the payment to the Surviving Corporation of the
exercise price thereunder) a cash payment, without interest, equal to $22.00 for
each Share underlying the Warrants. If there are any Warrants that have not been
exercised prior to the effective time of the Merger then, on the effective time,
the Company will deliver notice to the Warrant Agent and the holders of
unexercised Warrants notifying them that the Company has elected to accelerate
the expiration of the Warrants to the 60th day following the effective time. If
a Warrant has not been exercised prior to the effective time of the Merger but
was exercised prior to the 60th day following the Merger, such holder will be
entitled to receive (upon surrender of the Warrant and the payment to the
Surviving Corporation of the exercise price thereunder) the cash payment
referenced above. Any Warrant that remains unexercised for more than 60 days
following the expiration acceleration notice will expire.
Pursuant to the Merger Agreement and subject to the conditions therein, as of
the effective time of the Merger, each option to purchase Shares under the
Company's 2002 Long-Term Incentive Plan (the "2002 Plan") or otherwise (whether
vested or unvested) (other than options held by certain executive officers and
other members of senior management who may be required to convert their options
into the right to purchase the stock of either the Parent or the Surviving
Corporation) will be cancelled and shall be entitled to receive, from Parent or
from the Surviving Corporation, as soon as practicable following the Effective
Time, a cash payment equal to the amount by which $22.00 exceeds the exercise
price for each Share underlying such option, less applicable withholding taxes.
Pursuant to the Merger Agreement and subject to the conditions therein, as of
the effective time of the Merger, each outstanding and unvested right to receive
one Share ("MUSA Deferred Stock Right") granted under the 2002 Plan or
otherwise, will be cancelled and converted into the right to receive, from
Parent or from the Surviving Corporation, as soon as practicable following the
Effective Time, an amount in cash equal to the Merger Consideration (less any
applicable withholding taxes and without interest).
The foregoing description of the Merger Agreement does not purport to be
complete and is qualified in its entirety by reference to the Merger Agreement,
which is filed as an exhibit hereto, and is incorporated herein by reference.
Item 8.01. Other Events
In connection with the Merger Agreement, at the specific request of Parent, and
as a condition to Parent's willingness to enter into the Merger Agreement,
Citadel Equity Fund Ltd. ("CEF") and Citadel Credit Trading Ltd. ("CCT")
(individually a "Stockholder" and collectively, the "Stockholders") entered into
a Support Agreement, dated as of May 18, 2005, with Parent (the "Support
Agreement"). Pursuant to the Support Agreement, the Stockholders agreed to be
present (in person or by proxy) at any meeting of the Company's stockholders and
at every postponement or adjournment thereof and to vote or cause to be voted,
all of their Shares: (a) in favor of (1) approval of the Merger Agreement and
the transactions contemplated thereby, including the Merger and (2) any other
matter that is required by law or any regulatory authority to be approved by the
stockholders of the Company to facilitate the transactions contemplated by the
Merger Agreement, including the Merger and (b) against (1) any Acquisition
Proposal (as defined below) other than as contemplated by the Merger Agreement,
(2) any liquidation or winding up of the Company and (3) any other action that
may reasonably be expected to impede, interfere with, delay, postpone or attempt
to discourage or have the effect of discouraging the consummation of the
transactions contemplated by the Merger Agreement, including the Merger. The
Support Agreement also provides that in certain limited circumstances in which a
Stockholder fails either to be present at the meeting or to provide a proxy in
advance of the meeting, such Stockholder grants Parent an irrevocable proxy to
vote such Stockholder's shares of Common Stock, solely on the matters described
in the immediately preceding sentence, effective until the valid termination of
the Support Agreement.
Each Stockholder also agreed to certain restrictions on its ability to sell or
transfer its Shares until the termination of the Support Agreement. These
restrictions include an agreement not to: (i) sell, transfer, pledge, encumber,
assign, otherwise dispose of, or enter any contract, option or other arrangement
or understanding to do any of the foregoing or limit its voting rights; (ii)
grant any proxies or powers of attorney, deposit any Shares into a voting trust
or enter into any voting agreement; (iii) take any action that would cause any
representation or warranty of the Stockholders contained in the Support
Agreement to be untrue or have the effect of preventing or disabling the
Stockholders from performing its obligations thereunder; or (iv) commit or agree
to do any of the foregoing.
The Support Agreement terminates upon the earlier of: (i) termination of the
Merger Agreement in accordance with its terms; (ii) consummation of the Merger;
(iii) any amendment to the Merger Agreement without the prior written consent of
the Stockholders that reduces the Merger Consideration below $22.00 per share or
changes the form of Merger Consideration to other than cash; and (iv) December
15, 2005.
"Acquisition Proposal" means any proposal or offer with respect to (i) a merger,
reorganization, share exchange, consolidation, business combination,
recapitalization, dissolution, liquidation or similar transaction involving the
Company; (ii) any purchase of an equity interest (including by means of a tender
or exchange offer) representing an amount equal to or greater than a 25% voting
or economic interest in the Company; or (iii) any purchase of assets, securities
or ownership interests representing an amount equal to or greater than 25% of
the consolidated assets of the Company and its subsidiaries taken as a whole
(including stock of the subsidiaries of the Company).
Item 9.01. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired.
Not Applicable.
(b) Pro Forma Financial Information.
Not Applicable.
(c) Exhibits.
2.1 Agreement and Plan of Merger, dated as of May 18, 2005, by and among
Flag Holdings Corporation, Flag Acquisition Corporation, a wholly
owned subsidiary of Flag Holdings Corporation, and Metals USA, Inc.
4.2 Warrant Agreement, dated as of October 31, 2002, by and between the
Company and Equiserve Trust Company, N.A., as Warrant Agent,
incorporated herein by reference to Exhibit 2.3 to the Company's
registration statement on Form 8-A (File No. 1-13123), filed with the
Commission on November 20, 2002.
10.5 Support Agreement, dated as of May 18, 2005, by and among Flag
Holdings Corporation, Citadel Equity Fund Ltd., and Citadel Credit
Trading Ltd.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Metals USA, Inc.
(Registrant)
Date: May 19, 2005 By: /s/ Terry L. Freeman
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Name: Terry L. Freeman
Title: Senior Vice President & Chief
Financial Officer
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
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2.1 Agreement and Plan of Merger, dated as of May 18, 2005, by and
among Flag Holdings Corporation, Flag Acquisition Corporation, a
wholly owned subsidiary of Flag Holdings Corporation, and Metals
USA, Inc.
4.2 Warrant Agreement, dated as of October 31, 2002, by and between
the Company and Equiserve Trust Company, N.A., as Warrant Agent,
incorporated herein by reference to Exhibit 2.3 to the Company's
registration statement on Form 8-A (File No. 1-13123), filed with
the Commission on November 20, 2002.
10.5 Support Agreement, dated as of May 18, 2005, by and among Flag
Holdings Corporation, Citadel Equity Fund Ltd., and Citadel
Credit Trading Ltd.