Harbinger Group Inc.
    Print Page | Close Window

SEC Filings

HRG GROUP, INC. filed this Form DEFA14A on 11/30/1995
Entire Document
 << Previous Page | Next Page >>
  CHANGES TO THE PROXY STATEMENT. The sections set forth below replace the
sections of the Proxy Statement captioned: "Background of the Energy Industries
Sale Proposal--General" (pages 3-4 of the Proxy Statement) and "Recommendation
of the Company's Board of Directors" (pages 9-10 of the Proxy Statement).
  General. The Company is a Delaware corporation which was organized in 1954
and which historically has operated within the energy industry. The Company was
previously engaged in the operation of offshore drilling rigs, marine service
and supply vessels and oil and gas operations. All of these operations have
been divested in the last few years, with the exception of the Company's
remaining interest in a Bolivian oil and gas operation.
  In fiscal 1993, the Company began to narrow the focus of its operations to
the natural gas services market. In connection with that strategy, the Company
acquired Cimarron Gas Holding Company ("Cimarron") in November 1992. Cimarron
is engaged in the business of gathering and processing natural gas and its
constituent products, as well as marketing and trading natural gas liquids. In
September 1993, Cimarron purchased additional gathering and processing assets
and expanded its operations through the acquisition of Stellar Energy
Corporation and three affiliated companies. In November 1993, the Company
acquired the natural gas compression business of Energy Industries. Energy
Industries is engaged in the business of renting, fabricating, selling,
installing and servicing natural gas compressor packages. Energy Industries
operates one of the ten largest rental fleets of natural gas compressor
packages in the United States. See "--Business of Energy Industries."
  In late 1994 and early 1995, members of senior management of the Company
began to develop a strategic plan for the Company which involves repositioning
the Company in the food packaging, food and food service equipment and supply
(collectively, "food services") businesses and exiting the energy business in
which the Company has historically operated. The strategic plan that was
developed called for the divestiture of the Company's remaining energy
operations, consisting primarily of Energy Industries, Cimarron and the
Company's remaining domestic oil and gas assets, and the acquisition of, or
joint ventures with, selected companies in the food services industry. In
connection with the development of such strategic plan, certain members of
senior management and certain members of the Board of Directors reviewed
various publicly available 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. Members of senior
management and Board members continued to evaluate information of the food
services industry and, at a meeting held in May 1995, there emerged a consensus
among the members of the Board of Directors to pursue the redirection of the
Company's business into the food services industry.
  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.
  In April 1995, the Company engaged Schroder Wertheim 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,

 << Previous Page | Next Page >>