UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant T
Filed by a Party other than the Registrant £
Check the appropriate box:
| £ | Preliminary Proxy Statement |
| £ | Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2)) |
| £ | Definitive Proxy Statement |
| T | Definitive Additional Materials |
| £ | Soliciting Material under Rule 14a-12 |
Dresser-Rand Group 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):
| £ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11. |
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Title of each class of securities to which transaction applies: |
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Aggregate number of securities to which transaction applies: |
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): |
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Proposed maximum aggregate value of transaction: |
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Total fee paid: |
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| £ | 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. |
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Amount Previously Paid: |
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Form, Schedule or Registration Statement No.: |
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SUPPLEMENT TO DEFINITIVE PROXY STATEMENT
In connection with the settlement of certain
outstanding stockholder suits as described in this Form 8-K, the Company has agreed to make these supplemental disclosures to the
Definitive Proxy Statement. This supplemental information should be read in conjunction with the Definitive Proxy Statement, which
should be read in its entirety.
The following disclosure supplements
the disclosure on page 54 of the Definitive Proxy Statement by adding the following table immediately following the first table
on such page, which with respect to EBIT, excludes non-recurring expenses and was made available to the Company’s board of
directors:
Fiscal years ended December 31,
| |
2015 | | |
2016 | | |
2017 | | |
2018 | |
Earnings before Interest and Income Taxes (“EBIT”) | |
| 497 | | |
| 690 | | |
| 763 | | |
| 845 | |
Depreciation & Amortization | |
| 90 | | |
| 92 | | |
| 93 | | |
| 96 | |
Unlevered Free Cash Flow | |
| 293 | | |
| 353 | | |
| 534 | | |
| 580 | |
The penultimate full paragraph on page
30 of the Definitive Proxy Statement is replaced, in its entirety, with the following:
On September 16, 2013, Mr. Volpe and a representative
of a potential partner (a potential strategic buyer) for a strategic transaction (“Company A”) met in Paris, France
to discuss the potential for a transaction. Subsequently, on September 19, 2013, representatives of a financial advisor for Company
A’s largest stockholder (the “Company A Stockholder”) met with representatives of DRC to express the Company
A Stockholder’s interest in becoming a significant stockholder of DRC.
The last full paragraph on page 30 of
the Definitive Proxy Statement is replaced, in its entirety, with the following:
On October 4, 2013, Mr. Volpe and William
E. Macaulay, the Chairman of the DRC Board, met with a representative of Company A and of the Company A Stockholder to discuss
a potential business combination. Following this discussion, on October 10, 2013, Mr. Volpe sent a letter on behalf of the DRC
Board to representatives of the Company A Stockholder to note that, while the DRC Board did believe a strategic transaction with
Company A had the potential to be a value-creating transaction for both companies, as well as for DRC’s stockholders, the
positions outlined by Company A and the Company A Stockholder during the October 4, 2013, meeting regarding relative value and
ownership were inconsistent with the views of the DRC Board on those matters, given, among other things, the DRC Board’s
belief that the positions outlined by Company A and the Company A Stockholder did not represent sufficient value to DRC and DRC’s
stockholders. The letter further noted that, unless Company A and the Company A Stockholder were to agree to a proposal that met
the views of the DRC Board with respect to such matters, the DRC Board did not believe further discussions regarding a strategic
transaction would be appropriate. After additional further correspondence between representatives of DRC and representatives of
Company A and the Company A Stockholder, the parties determined that, in light of their differing views regarding relative value
and ownership, they would not proceed with further discussions at such time.
The second full paragraph on page 31
of the Definitive Proxy Statement is replaced, in its entirety, with the following:
On July 17, 2014, a German business publication,
Manager Magazine, citing unidentified sources, published an article reporting that Siemens Parent had engaged a financial advisor
and had been preparing for a potential bid for DRC for several months. Prior to the publication of that article, DRC was not aware
that Siemens Parent was preparing a potential bid for DRC. DRC and Siemens Parent did not have any discussions with each other
regarding any potential transaction during this time.
The fourth full paragraph on page 31
of the Definitive Proxy Statement is replaced, in its entirety, with the following:
Following this July 18, 2014, meeting, representatives
of Wachtell, Lipton, Rosen & Katz (“Wachtell Lipton”) and Gibson Dunn & Crutcher LLP (“Gibson Dunn”),
DRC’s external legal counsel, as well as representatives of Niederer Kraft & Frey AG (“Niederer Kraft”),
DRC’s Swiss legal counsel, engaged in preliminary discussions with representatives of Company A, the Company A Stockholder
and their respective counsel regarding draft forms of confidentiality agreements to be executed by the parties. Representatives
of DRC also sent representatives of Company A and the Company A Stockholder a communication containing certain key principles that
DRC stated would need to be part of any transaction between DRC and Company A, including with respect to governance and management
of the post-transaction company.
The last full paragraph on page 31 of
the Definitive Proxy Statement is replaced, in its entirety, with the following:
Also on August 6, 2014, representatives
of DRC received a non-binding indicative term sheet for a potential merger-of-equals from Company A, which provided for, among
other things, a proposed pro forma ownership and headquarters of the post-transaction company, as well as the division of the Chairman
and Vice Chairman and Chief Executive Officer and President roles among representatives of DRC and Company A, a four-week period
of exclusive negotiation between DRC and Company A and DRC’s reimbursing Company A and the Company A Stockholder for all
reasonable expenses incurred by them during the exclusivity period.
The last sentence of the last paragraph
on page 31 of the Definitive Proxy Statement, which continues on page 32 thereof, is replaced, in its entirety, with the following:
In light of the renewed discussions with
Siemens Parent and Company A, the DRC Board determined that it would be advisable to approve the continuing engagement of Morgan
Stanley as financial advisor as well as the engagement of Zaoui as financial advisor because of, among other things, Morgan Stanley’s
and Zaoui’s complementary geographic competence and their respective financial expertise, industry knowledge and experience
in advising companies in business combination transactions.
The second full sentence of the first
paragraph on page 32 of the Definitive Proxy Statement is replaced, in its entirety, with the following:
The DRC Board and its legal counsel also
considered potential strategies to negotiate separately with both Siemens Parent and Company A to receive the highest indication
of value from both parties, including negotiating to conclusion open issues with a potential strategic transaction with each of
Siemens Parent and Company A and negotiating best and final offers from each of those companies.
The second full paragraph on page 32
of the Definitive Proxy Statement is replaced, in its entirety, with the following:
Following this meeting, on August 13, 2014,
the DRC Board held a telephonic meeting with its financial advisors and legal counsel to discuss the outcome of the August 12,
2014 meeting, the potential financial and corporate governance terms of a strategic transaction with Company A and the terms and
conditions of the potential confidentiality agreement being negotiated with representatives of Company A, including Company A’s
continued request for an exclusive negotiation period. Representatives of DRC’s senior management and DRC’s advisors
noted that, if granted, any period of exclusive negotiation would need to be very short, and in any event not past August 31, 2014.
The DRC Board and DRC’s senior management and financial and legal advisors also discussed the fact that a post-transaction
company organized under the laws of Switzerland and listed on the SIX Swiss Exchange would be subject to certain restrictions on
executive compensation that could adversely impact the retention and recruitment of executives for the post-transaction company
but that representatives of Company A suggested that there were alternative compensation arrangements that could potentially reduce
the impact of such restrictions. Following these discussions, the DRC Board requested that DRC’s senior management and financial
advisors and legal counsel continue to explore and negotiate the terms of a potential transaction with Company A.
The last sentence on page 32 of the Definitive
Proxy Statement, which continues on page 33 thereof, is replaced, in its entirety, with the following:
These restrictions, however, did not prohibit
any activities with respect to third parties with whom the relevant party had any discussions regarding a business combination
in the prior two years (from DRC’s perspective, this exception was specifically to permit DRC to have discussions with Siemens
Parent during the exclusivity period). Separately, Company A was notified by DRC that a meeting between Mr. Volpe and a representative
of another potential purchaser was scheduled to occur on September 1, 2014.
The fourth full paragraph on page 33
of the Definitive Proxy Statement is replaced, in its entirety, with the following:
On August 29, 2014, the DRC Board held a
telephonic meeting with representatives of DRC’s senior management and its financial advisors and legal counsel to discuss
this demand from Company A, as well as to discuss generally the current status of the negotiations with Company A and the Company
A Stockholder. Following discussion, the DRC Board determined that it was premature to engage with Company A with respect to the
proposed exchange ratio in light of the outstanding open items, including with respect to governance and management of the post-transaction
company, and so directed representatives of DRC’s senior management to convey to representatives of Company A that DRC was
not prepared to agree to Company A’s proposed exchange ratio, but that the September 2, 2014, meeting should still take place
in order to resolve any other key issues that remained outstanding. The DRC Board scheduled a follow-up meeting on September 2,
2014, for an update on conversations with Company A, as well as an update on the outcome of Mr. Volpe’s scheduled meeting
with Mr. Kaeser on September 1, 2014.
The last full paragraph on page 33 of
the Definitive Proxy Statement is replaced, in its entirety, with the following:
On September 1, 2014, Mr. Volpe met with
Mr. Kaeser in Paris to discuss further their earlier telephone conversation. During their meeting, Mr. Kaeser indicated Siemens
Parent’s interest in an all cash acquisition of DRC, but did not propose a specific valuation for such transaction. While
Mr. Kaeser also expressed Siemens Parent’s interest in potentially retaining certain members of DRC’s senior management
following consummation of the potential transaction, Messrs. Kaeser and Volpe agreed that any discussions regarding retention of
specific employees or the terms of any such continued employment would only occur after the execution and announcement of definitive
agreements with respect to the potential transaction.
The third full sentence on page 34 of
the Definitive Proxy Statement is replaced, in its entirety, with the following:
The DRC Board also discussed the current
status of negotiations with Company A and the Company A Stockholder and determined that an exchange ratio that would result in
DRC’s stockholders owning 50% of the post-transaction company did not represent sufficient value to DRC and DRC’s stockholders
relative to the value of DRC as a standalone company. The DRC Board further considered at what exchange ratio a proposed strategic
transaction with Company A would represent sufficient value to DRC and its stockholders. On August 29, 2014, the DRC Board held
a telephonic meeting with representatives of DRC’s senior management and its financial advisors and legal counsel to discuss
this demand from Company A, as well as to discuss generally the current status of the negotiations with Company A and the Company
A Stockholder.
The third full paragraph on page 34 of
the Definitive Proxy Statement is replaced, in its entirety, with the following:
On September 7, 2014, representatives of
DRC’s senior management and Company A’s senior management and board of directors agreed to defer the discussion of
the exchange ratio in order to attempt to negotiate and resolve the other outstanding issues remaining in the proposed transaction
agreements, including, among other things, the structure of the proposed transaction, governance and management issues (such as
the governance rights of and restrictions on the Company A Stockholder with respect to the post-transaction company and the composition
and role of the board, board committees and management of the post-transaction company), deal protection provisions and the name
of the post-transaction company. Between September 8 and 12, 2014, financial advisors and legal counsel for DRC, Company A and
the Company A Stockholder resumed negotiation of the terms of the transaction agreements for the proposed strategic transaction
between DRC and Company A and between DRC and the Company A Stockholder.
The last paragraph on page 34 of the
Definitive Proxy Statement, which continues on page 35 thereof, is replaced, in its entirety, with the following:
Later that day, the DRC Board held a telephonic
meeting with representatives of DRC’s senior management and its financial advisor and legal counsel, at which meeting Mr.
Volpe informed the DRC Board of his conversation with Mr. Kaeser. Representatives of DRC’s senior management also updated
the board on the ongoing negotiations with Company A and the Company A Stockholder. After discussion with its financial advisors
and legal counsel, the DRC Board instructed Mr. Volpe to communicate to Mr. Kaeser that Siemens Parent’s proposed per-share
acquisition price would need to be in the $80s to represent sufficient value to the DRC stockholders, and that DRC would need strong
commitments from Siemens Parent relating to transaction certainty. The DRC Board, considering the timing expectations of Company
A and the Company A Stockholder with respect to the proposed transaction, the various reports in the press regarding a potential
transaction involving DRC and the DRC Board’s desire to conclude negotiations with Siemens Parent and Company A to minimize
continued distraction of DRC’s management and diversion of other DRC’s resources, also instructed Mr. Volpe to communicate
to Mr. Kaeser that DRC would need to receive a firm and highest-value proposal from Siemens Parent as quickly as possible (and
prior to the DRC Board meeting scheduled for September 16, 2014, if practicable). Following this meeting, Mr. Volpe spoke with
Mr. Kaeser to communicate the message from the DRC Board, including emphasizing the need for a firm and highest-value proposal
prior to the September 16, 2014, board meeting. Following the call, Mr. Volpe sent a confidentiality agreement to Mr. Kaeser to
permit Siemens Parent’s review of certain confidential information regarding DRC, which agreement contained certain standstill
restrictions prohibiting Siemens Parent from acquiring additional shares of DRC common stock or engaging in certain strategic transactions
involving DRC (other than the contemplated transaction with Siemens Parent), subject to exceptions in the event a third-party transaction
were to be approved by the DRC Board. On September 13, 2014, the parties executed the confidentiality agreement, and Siemens Parent
commenced its due diligence review of DRC’s confidential information.
The last full paragraph on page 35 of
the Definitive Proxy Statement is replaced, in its entirety, with the following:
Later that day, the DRC Board held a telephonic
meeting with representatives of DRC’s senior management and its financial advisors and legal counsel, during which representatives
of DRC’s senior management updated the DRC Board on the Siemens Parent offer letter and the ongoing negotiations with representatives
of Company A. After discussion with its financial and legal advisors, the DRC Board, considering the timing expectations of Company
A and the Company A Stockholder with respect to the proposed transaction, the various reports in the press regarding a potential
transaction involving DRC and the DRC Board’s desire to conclude negotiations with Siemens Parent and Company A to minimize
continued distraction of DRC’s management and diversion of other DRC’s resources, instructed representatives of DRC’s
senior management and its financial advisors and legal counsel to continue negotiating the terms of a potential transaction with
Siemens Parent and the terms of a potential transaction with Company A, with the goal of receiving the highest indication of value
from both parties. The DRC Board also scheduled a follow-up meeting for the morning of September 21, 2014, with the goal of reviewing
both parties’ best and final indications of value.
The following disclosure supplements
the disclosure on page 35 of the Definitive Proxy Statement by adding a new sentence immediately after the last sentence of the
second full paragraph on page 35 of the Definitive Proxy Statement:
The firm offer did not include any agreements,
arrangements or commitments with respect to the employment of Mr. Volpe or any other member of DRC’s senior management following
consummation of the potential transaction. The parties agreed that any discussions, if any, regarding any such agreements, arrangements
or commitments would only occur after the execution and announcement of definitive agreements with respect to the potential transaction.
The last paragraph on page 35 of the
Definitive Proxy Statement, which continues on page 36 thereof, is replaced, in its entirety, with the following:
Pursuant to these instructions, between
September 16 and 21, 2014, representatives of DRC’s, Company A’s and the Company A Stockholder’s respective senior
management, financial advisors and legal counsel continued to negotiate the terms of transaction agreements for a potential strategic
transaction with Company A. During these discussions, the DRC representatives stressed the fact that Company A would need to present
its highest indication of value for the transaction as soon as possible, and representatives of Company A’s senior management
indicated that the highest exchange ratio Company A was prepared to offer was an exchange ratio that would result in DRC’s
current stockholders owning 51.5% of the post-transaction company. Similarly, during this period representatives of DRC’s
and Siemens Parent’s respective senior management, financial advisors and legal counsel continued to negotiate the terms
of transaction agreements for a potential acquisition of DRC by Siemens Parent DRC’s senior management and financial and
legal advisors also considered the means by which DRC’s stockholders could be compensated if the time period to the closing
of a potential acquisition of DRC by Siemens Parent was extended due to the regulatory approval process. In that regard, representatives
of DRC’s senior management requested that Siemens Parent agree to pay a monthly “ticking fee” if a transaction
between DRC and Siemens Parent were not completed expeditiously after executing definitive documents for such transaction. DRC’s
and Siemens Parent’s respective senior management and financial and legal advisors then began negotiating the amount of such
fee and the period during which it would apply. Subsequently, representatives of Siemens Parent’s senior management agreed
that Siemens Parent would pay a “ticking fee” of $0.55 per share per month (in addition to the $83 per share of “base”
merger consideration originally offered), with such monthly fee to accrue from the fifth month after execution of definitive documents
to the month in which the transaction is consummated.
The following disclosure supplements
the disclosure on page 36 of the Definitive Proxy Statement by adding the following new sentences immediately following the first
sentence of the last full paragraph on page 36 of the Definitive Proxy Statement:
DRC’s senior management and financial
advisors believed that this proposal represented an implicit value of approximately $80.90 per share of DRC common stock. The September
20 proposal did not include any other revised terms.
The following disclosure supplements
the disclosure on page 36 of the Definitive Proxy Statement by adding a new sentence immediately before the last sentence on page
36 of the Definitive Proxy Statement:
The DRC Board also considered that no third
party was likely to emerge with a proposal that represented superior value to DRC’s stockholders relative to Siemens Parent’s
all-cash offer, given, among other things, the various reports in the press regarding a potential transaction involving DRC and
no third party had provided DRC with a proposed transaction that provided superior value to the proposed transaction with Siemens,
and the significant value offered by the transaction with Siemens Parent.
Additional Information and
Where to Find It
In connection with the
meeting of the Company’s shareholders to be held with respect to the proposed merger involving the Company and Siemens,
on October 22, 2014, the Company filed with the SEC a definitive proxy statement on Schedule 14A. The definitive proxy
statement was mailed to the Company’s stockholders on or about October 22, 2014. The Company and Siemens may file with
the SEC other documents relating to the proposed transaction. INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THESE
MATERIALS AND ANY OTHER RELEVANT DOCUMENTS CAREFULLY AND IN THEIR ENTIRETY BEFORE MAKING ANY VOTING OR INVESTMENT DECISION
WITH RESPECT TO THE PROPOSED TRANSACTION BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders may
obtain a free copy of the proxy statement and other documents that the Company files with the SEC from the SEC’s
website at www.sec.gov and the Company’s website at www.dresser-rand.com. In addition, the proxy statement and other
documents filed by the Company with the SEC may be obtained from the Company free of charge by directing a request to
Dresser-Rand Group Inc., Investor Relations, West8 Tower, Suite 1000, 10205 Westheimer Road, Houston, Texas 77042,
713-973-5497.
Participants in Solicitation
The Company and its
directors, executive officers and employees may be deemed, under SEC rules, to be participants in the solicitation of proxies
from the Company’s stockholders with respect to the proposed acquisition of the Company by Siemens. Security holders
may obtain information regarding the names, affiliations and interests of such individuals in the Company’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2013, and its definitive proxy statement for the 2014 annual
meeting of stockholders. Additional information regarding the interests of such individuals in the proposed acquisition of
the Company by Siemens is included in the proxy statement relating to such acquisition that was filed with the SEC on October
22, 2014. These documents may be obtained free of charge from the SEC’s website at www.sec.gov and
the Company’s website at www.dresser-rand.com.
Forward Looking Statements
Any statements in this communication about the Company’s
expectations, beliefs, plans, objectives, prospects, financial condition, assumptions or future events or performance, including
statements regarding the proposed acquisition of the Company by Siemens, the expected timetable for completing the transaction,
benefits and synergies of the transaction and future opportunities for the combined company that are not historical facts are forward-looking
statements. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking
statements contained in Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Reform Act of
1995. In some cases, forward-looking statements can be identified by the following words: “may,” “will,”
“could,” “would,” “should,” “expect,” “intend,” “plan,”
“anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,”
“continue,” “ongoing,” “outlook,” “guidance” and similar expressions, although
not all forward-looking statements contain these words. The forward-looking information and statements are or may be based on a
series of projections and estimates and involve risks and uncertainties. These risks and uncertainties include such factors as:
(1) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement,
(2) the failure to obtain the approval of the Company’s stockholders or the failure to satisfy any of the other closing conditions,
(3) risks related to disruption of management’s attention from the Company’s ongoing business operations due to the
proposed transaction and (4) the effect of the announcement of the transaction on the ability of the Company to retain and hire
key personnel and maintain relationships with its customers, suppliers and others with whom it does business, or on its operating
results and business generally. Additional risks are described under Item 1A, “Risk Factors,” in the Company’s
periodic filings with the SEC, including the Company’s annual report on Form 10-K for the year ended December 31, 2013 and
recent current reports on Form 8-K. Because the factors referred to above could cause actual results or outcomes to differ materially
from those expressed or implied in any forward-looking statements made by the Company, you should not place undue reliance on any
such forward-looking statements. Further, any forward-looking statement speaks only as of the date of this communication, and the
Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after such date.