SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of
the Commission Only (as
[ ] Definitive Proxy Statement permitted by Rule 14a-6(e)
(2))
[ ] Definitive Additional Materials
[x] Soliciting Material Under Rule 14a-12
ChemFirst Inc.
--------------------
(Name of Registrant as Specified in Its Charter)
------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy 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 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:
------------------------------------------------------------------------------
Transaction with DuPont
Press Conference
July 23, 2002
Remarks by J. Kelley Williams
-----------------------------
Our board of directors voted unanimously today upon management's
recommendation to approve a transaction of ChemFirst with DuPont at a price
of $29.20 per share cash. We expect it to close before yearend. We think
this is a fair deal for our shareholders, employees, and other
constituents. Here's why.
Shareholders judge a deal by price, currency, timing, and alternatives.
Employees by impact on their jobs - security, pay, opportunity, working
conditions, etc. Customers by effect on quality, reliability, price,
innovation, and other attributes of products and services. Communities
where we have a presence by changes in headquarters, headcount, payroll,
civic and charitable support.
Shareholders. The price of 29.20 is 28% above yesterday's close and 99% of
our all time high. This is the worst market in years. The DJ is 34% off its
high, the NASDAQ is off 75%, and the S&P 500 47%. Our peers are well off
their highs too. Some over 60%. This is a fair price that reflects current
conditions and discounts future growth and risk. And the currency is cash.
As a liquidity event for shareholders the timing could not be better.
This transaction originated as an unsolicited inquiry last fall. We did not
pick the timing. However, we knew from experience that there are only a few
potential acquirers for our entire company because of our diverse
businesses. We have had other inquiries and discussions with other
companies which were primarily interested in electronic chemicals. Since we
thought an attractive sale or merger of the entire company would be good
for shareholders, we decided to explore this possibility.
We recognized that the semiconductor industry was in recession. But we
expected it to recover. We also expected our businesses to improve. And
they have. We had a good Q1 and a better Q2. But the industry recovery has
been slow and spotty. It's impossible to predict now when the upturn will
come. So we concluded it would not be prudent to turn this offer down and
hope for a possible future transaction that might have a better present
value. I think our shareholders will be pleased with this bird in the hand.
Employees. We expect most subsidiary employees will keep their jobs since
you will be needed to run the businesses. There will likely be significant
cuts at headquarters. Maybe some cuts elsewhere too due to administrative
duplication and overlap. But this transaction is not driven by cost
cutting. We are a lean company. There just aren't that many costs to cut.
It is driven by growth. Our businesses are complementary to and extensions
of DuPont's businesses. We think DuPont intends to grow these businesses.
So there should be career and growth opportunities with DuPont which has
much greater resources to sustain and drive growth.
DuPont is known as a good company to work for. It is the industry leader in
occupational health and safety and environmental responsibility. I
appreciate your loyalty, integrity, creativity, and good work. I go back
over thirty years with some of you. You deserve a good company. You are
getting one of the best. If you do lose your job as a result of the
transaction, you will receive severance payments which will be explained to
you. Most of you are shareholders and will also benefit as shareholders
from the transaction.
Customers. DuPont is well known to our customers and enjoys a premier
reputation for quality, reliability, innovation, safety, environmental
awareness, and competitiveness. Customers may have natural concerns about
the transaction transition and operational integration and expect it to go
smoothly with no disruptions. DuPont is very experienced in such matters.
And they have conducted extensive and exhaustive due diligence of our
operations. They know what we have and what needs to be done for a smooth
transition. I expect it to be routine.
Communities. DuPont is a good corporate citizen as we have tried to be. I
expect DuPont will continue to be involved in and supportive of the
communities where we have a presence as we have been. There should be
little change at most locations. However, it will be different at corporate
headquarters in Jackson. DuPont may maintain a presence here. But it will
not be an independent NYSE company headquarters.
ChemFirst and before that First Mississippi has been a major supporter of
community activities and charities. It was one of the first companies in
Mississippi to form and fund a foundation to support education and
community projects. Its employees have been involved in service and
leadership roles in business, civic, and political affairs. It was the
first company chartered in Mississippi to be listed on the New York Stock
Exchange and to be included in the S&P 500. It had the highest return to
shareholders of all listed U.S. companies in the decade of the 70's. And it
has generated a compound annual return to investors of about 12.4% since it
was founded 45 years ago by Owen Cooper and LeRoy Percy to help promote
business and industry in Mississippi. This return which does not include
dividends compares to 8.1% for the S&P 500 and 7.4% for the Dow over the
same period. ($1000 invested in our company at founding would be worth
$187,420 today.) Not bad in any league.
I would like to think the company will be missed. But to everything there
is a season - a time to keep and a time to cast away. I am grateful for my
35 years with the company and am proud of my association with you and of
what all of us who have worked at First Mississippi and ChemFirst have
accomplished.
QUESTIONS AND ANSWERS
Question:
Of the 480 employees now with the company, how many of those are in
Pascagoula and how many are in Jackson?
Answer:
About 50 in Jackson and about 150 in Pascagoula.
Question:
I talked to Peter Ricchuiti (Director of Research at Burkenroad Reports at
Tulane University in New Orleans) earlier today and he said, "thanks for
making his (fund/firm/research?) look so good. An all cash exchange will
make it look even better. For the past few years, since ChemFirst bought
EKC it has had two sides to the company - a low profit margin, high volume
business and a low volume, high profit margin business. Were there
discussions of following any further restructuring in the company that
would have spun off the electronic chemicals?
Answer:
For the last several years we've been trying to make the company simpler,
and better, not necessarily bigger and we've pretty much accomplished that,
ending up with two major lines of business - the electronic chemical
business and the polyurethane business. The polyurethane business is a good
business by most any yardstick, but it's not a glamour business. It has
generated good returns and good cash flow which we have used to fund and
support the growth of electronic chemicals which is a glamour business.
There have been lots of companies who've been interested in our electronic
chemicals business. When we first received an inquiry from DuPont last
fall, they were interested in all our businesses. Since we thought we could
generate a good deal for shareholders by the investigation of the sale of
the entire company as opposed to a part of the company, we decided to enter
into discussion with DuPont and negotiations which have culminated in this
transaction.
Question:
The company has a balance of about 90 million in debts - how does that work
in the purchase price?
Answer:
Well, it's not quite that much. The cash would obviously be netted against
the stock price and price of the transaction.
We'd like basically your thoughts on the growth of this company and the
things you've been able to accomplish to look attractive to a company like
DuPont. What is it about ChemFirst that has made it so successful.
We have two very effective businesses. Our electronic chemicals
business and our polyurethane business. DuPont was interested in
both of these businesses. The electronic chemicals business is a
fast growth glamour business. Our polyurethane business where we
supply aniline from Pascagoula to Bayer and other manufacturers of
MDI is a good business; a solid business but you wouldn't call it
a glamour business. DuPont likes them both. (?)
As far as changes here at the headquarters and at your other companies -
what could happen after the purchase?
ChemFirst is a NYSE company. This is the headquarters. If this
transaction is approved by shareholders ChemFirst will be acquired
by DuPont and it will be a wholly owned subsidiary of DuPont and
it will no longer be headquarters of an independent NYSE company.
As a result we think there will be a reduction in the number of
people employed here. DuPont may maintain a presence here, but as
I said, it will no longer be an independent NYSE company.
* * * * * * * * * * * * * *
In connection with the transaction discussed in this press conference,
ChemFirst Inc. intends to file a proxy statement with the Securities and
Exchange Commission. Security holders are urged to read the proxy statement
when it becomes available because it will contain important information.
Security holders may obtain a free copy of the proxy statement when it
becomes available, as well as other materials filed with the Securities and
Exchange Commission concerning ChemFirst, at the Securities and Exchange
Commission's web site at http://www.sec.gov. Security holders of ChemFirst
Inc. may also obtain for free the proxy statement filed by ChemFirst Inc.
with the Securities and Exchange Commission in connection with the
transaction by directing a request to ChemFirst Inc., Attention: Investor
Relations Department, P.O. Box 1249, Jackson, MS 39215-1249, (601)
949-0213.
ChemFirst Inc. and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from ChemFirst shareholders
with respect to the transaction. Information regarding these directors and
executive officers and their ownership of ChemFirst common stock is
contained in ChemFirst Inc.'s proxy statement on Schedule 14A, filed with
the Securities and Exchange Commission on March 25, 2002, in connection
with the 2002 annual meeting ChemFirst shareholders. Investors may obtain
additional information regarding the interests of such participants by
reading the proxy statement regarding the transaction when it becomes
available.