Harbinger Group Inc.
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SEC Filings

PRER14A
HRG GROUP, INC. filed this Form PRER14A on 11/14/1995
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materials regarding the food services industry, including information on
overall market size, susceptibility of the industry to consolidation, general
revenue and earnings history and trends and other relevant information. As a
result of such evaluations and informal exchanges of information, a consensus
developed among such senior management and Board members that the food services
industry might provide better opportunities to increase the earnings and
revenues of the Company as compared to the businesses in which the Company had
historically operated. The Company publicly announced its decision to exit the
energy business in April 1995. Certain members of senior management and certain
Board members continued to evaluate information of the food services industry
and the Board of Directors formally ratified the Company's strategic plan at a
May 31, 1995 Board meeting.
 
  In March 1995, the Company executed an agreement to sell its marine protein
operations to an investor group. However, that agreement was terminated in
April 1995 due to the investor group's failure to obtain sufficient financing.
The Board of Directors has since decided to retain the Company's marine protein
operations in connection with the Company's focus on the food services
industry.
 
  In April 1995, the Company engaged Schroder Wertheim & Co. Incorporated
("Schroder Wertheim"), an investment banking firm, as its financial advisor to
assist in the potential divestiture of Energy Industries and Cimarron. In
selecting Schroder Wertheim, the Board of Directors took into account Schroder
Wertheim's expertise, reputation and familiarity with the natural gas industry.
The Board of Directors had also engaged Schroder Wertheim in connection with
the Envirodyne transaction described below. Schroder Wertheim, as a customary
part of its investment banking business, is engaged in the valuation of
businesses and their securities in connection with mergers and acquisitions,
negotiated underwritings, private placements and valuations for estate,
corporate and other purposes. In connection with the Energy Industries
divestiture, Schroder Wertheim initiated contacts with a significant number of
prospective purchasers which are described below under "--The Energy Industries
Sale Proposal."
 
  A meeting of the Company's Board of Directors was held on May 5, 1995 to
review and discuss the status of the sale of Energy Industries and Cimarron. At
that meeting, the Board ratified the engagement of Schroder Wertheim and
authorized the appropriate officers of the Company to negotiate terms and
conditions of sale with viable bidders for each of Energy Industries and
Cimarron, subject to formal approval by the Board of Directors. The authorized
officers were the Chairman of the Board, the President, the General Counsel and
the Chief Financial Officer of the Company. These officers were selected based
on their positions and history with the Company and their collective
operational, legal and financial expertise. Schroder Wertheim also was granted
authority to negotiate terms on behalf of the Company, and participated in
negotiations in consultation with the President, General Counsel and Chief
Financial Officer of the Company, subject to final approval by the Board of
Directors.
 
  In June 1995, the Company sold a portion of its natural gas reserves in the
Gulf of Mexico. In August 1995, the Company sold its remaining domestic oil and
gas operations, including its interests in five offshore federal leases in the
Gulf of Mexico.
 
  In August 1995, the Company purchased 31% of the common stock of Envirodyne
Industries, Inc. ("Envirodyne") for $18.8 million from Malcolm Glazer, Chairman
of the Board of the Company and, through his beneficial ownership of a trust, a
major stockholder of the Company. Mr. Glazer is also a director of Envirodyne.
Such shares represented all of Mr. Glazer's interest in Envirodyne. The Company
paid the purchase price by issuing a subordinated promissory note bearing
interest at the prime rate and maturing in August 1997. This transaction was
approved by an independent special committee composed of disinterested members
of the Company's Board of Directors. Schroder Wertheim served as financial
advisor to the Company in connection with the transaction and also provided a
fairness opinion to the Board of Directors regarding the fairness, from a
financial point of view, of the transaction. Envirodyne is a major supplier of
food packaging products and food service supplies and Envirodyne is a leading
worldwide producer of cellulosic casings used in the preparation and packaging
of processed meat products and the world's second largest producer of heat
shrinkable plastic bags and specialty films for packaging and preserving fresh
and
 
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