SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE TO
TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1) OF THE
SECURITIES EXCHANGE ACT OF 1934
Brown-Forman Corporation
(Name of Subject Company (Issuer) and Filing Person (Offeror))
CLASS A COMMON STOCK, PAR VALUE $.15 PER SHARE
CLASS B COMMON STOCK, PAR VALUE $.15 PER SHARE
(Title of Classes of Securities)
CLASS A COMMON STOCK, 115637 10 0
CLASS B COMMON STOCK, 115637 20 9
(CUSIP Number of Classes of Securities)
MICHAEL B. CRUTCHER WITH A COPY TO:
SENIOR VICE PRESIDENT ERNEST W. WILLIAMS
GENERAL COUNSEL AND SECRETARY OGDEN NEWELL & WELCH PLLC
BROWN-FORMAN CORPORATION 1700 PNC PLAZA
850 DIXIE HIGHWAY 500 WEST JEFFERSON STREET
LOUISVILLE, KENTUCKY 40210 LOUISVILLE, KENTUCKY 40202-2874
(502) 585-1100 (502) 582-1601
(Name, Address and Telephone Number
of Person Authorized to Receive Notices and
Communications on Behalf of Filing Person)
February 4, 2003
(Date Tender Offer First Published, Sent or Given to Security Holders)
Calculation of Filing Fee
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TRANSACTION VALUATION* AMOUNT OF FILING FEE
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$605,900,000 $55,742.80
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* For the purpose of calculating the filing fee only, this amount is based on
the purchase of 1,500,000 shares of Class A Common Stock and 6,800,000 shares
of Class B Common Stock at the maximum tender offer price of $73.00 per share.
[ ] Check the box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: -------------
Filing Party: -----------------------
Form or Registration No.: --------------
Date Filed: ----------------------------
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[ ] third-party tender offer subject to Rule 14d-1.
[X] issuer tender offer subject to Rule 13e-4.
[ ] going-private transaction subject to Rule 13e-3.
[ ] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer: [ ]
This Issuer Tender Offer Statement on Schedule TO is filed by Brown-Forman
Corporation, a Delaware corporation (the "Company"), in connection with its
offer to purchase up to 1,500,000 shares of its Class A Common Stock, par value
$.15 per share ("Class A Shares"), and up to 6,800,000 shares of its Class B
Common Stock, par value $.15 per share ("Class B Shares," and together with the
Class A Shares, the "Shares"), in each case, at a price per share between $63.00
and $73.00, net to the seller in cash, without interest. The tender offer is
being made upon and subject to the terms and conditions set forth in the Offer
to Purchase dated February 4, 2003 (the "Offer to Purchase"), and the related
Letters of Transmittal (the "Letters of Transmittal"), which together as each
may be amended or supplemented from time to time constitute the "Offer."
This Issuer Tender Offer Statement on Schedule TO is intended to satisfy
the reporting requirements of Rule 13e-4 under the Securities Exchange Act of
1934, as amended. The information contained in the Offer to Purchase and the
Letters of Transmittal, copies of which are attached to this Schedule TO as
Exhibits (a)(1)(i) and (a)(1)(ii), respectively, is incorporated herein by
reference in response to all of the items of this Schedule TO as more
particularly described below. Capitalized terms used herein and not otherwise
defined have the meaning ascribed to such terms in the Offer to Purchase.
ITEM 1. SUMMARY TERM SHEET.
The information set forth in the section of the Offer to Purchase captioned
"Summary Term Sheet" is incorporated herein by reference.
ITEM 2. SUBJECT COMPANY INFORMATION.
(a) The name of the issuer is Brown-Forman Corporation, a Delaware
corporation. The Company's principal executive offices are located at 850 Dixie
Highway, Louisville, Kentucky 40210-1091 (mailing address: P.O. Box 1080,
Louisville, Kentucky 40201-1080). Its telephone number is (502) 585-1100.
(b) The class of equity securities to which this Schedule TO relates is
Class A Common Stock, par value $.15 per share, and Class B Common Stock, par
value $.15 per share, of the Company. The information set forth in the section
of the Offer to Purchase captioned "11. Interest of Directors and Executive
Officers; Transactions and Arrangements Concerning the Shares" is incorporated
herein by reference.
(c) The information set forth in the section of the Offer to Purchase
captioned "7. Price Range of Shares; Dividends" is incorporated herein by
reference.
ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON.
(a) This Tender Offer Statement is filed by the Company. The information
set forth in the section of the Offer to Purchase captioned "10. Certain
Information About Us" and "11. Interest of Directors and Executive Officers;
Transactions and Arrangements Concerning the Shares" is incorporated herein by
reference.
ITEM 4. TERMS OF THE TRANSACTION.
(a) The information set forth in the sections of the Offer to Purchase
captioned "Summary Term Sheet", "1. Number of Shares; Proration", "2. Tenders by
Holders of Fewer than 100 Shares", "3. How to Tender Shares", "4. Withdrawal
Rights", "5. Purchase of Shares and Payment of Purchase Price", "6. Certain
Conditions of the Offer", "14. Certain Federal Income Tax Consequences", "15.
Extension of Offer; Termination; Amendments" and in the Letters of Transmittal
is incorporated herein by reference.
(b) The information set forth in the section of the Offer to Purchase
captioned "11. Interest of Directors and Executive Officers; Transactions and
Arrangements Concerning the Shares" is incorporated herein by reference.
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ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
(e) The information set forth in the section of the Offer to Purchase
captioned "11. Interest of Directors and Executive Officers; Transactions and
Arrangements Concerning the Shares" is incorporated herein by reference.
ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
(a) and (b) The information set forth in the section of the Offer to
Purchase captioned "8. Background and Purpose of the Offer" is incorporated
herein by reference.
(c) The information set forth in the section of the Offer to Purchase
captioned "11. Interest of Directors and Executive Officers; Transactions and
Arrangements Concerning the Shares" is incorporated herein by reference.
ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a), (b) and (d) The information set forth in the section of the Offer to
Purchase captioned "9. Source and Amount of Funds" is incorporated herein by
reference. Negotiations for further financing are currently in progress, and any
final agreement reached will be filed as an amendment to this Schedule TO.
ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) and (b) The information set forth in the section of the Offer to
Purchase captioned "11. Interest of Directors and Executive Officers;
Transactions and Arrangements Concerning the Shares" is incorporated herein by
reference.
ITEM 9. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED.
(a) The information set forth in the section of the Offer to Purchase
captioned "16. Fees and Expenses" is incorporated herein by reference.
ITEM 10. FINANCIAL STATEMENTS.
(a) The information set forth in the section of the Offer to Purchase
captioned "10. Certain Information About Us" and the financial information
included in Item 8 of the Company's Annual Report on Form 10-K for its fiscal
year ended April 30, 2002, filed with the Securities and Exchange Commission
(the "Commission") on July 26, 2002, and Part 1 of the Company's Quarterly
Report on Form 10-Q for its fiscal quarter ended October 31, 2002, filed with
the Commission on December 11, 2002, is incorporated herein by reference. In
accordance with Instruction 6 to Item 10 of Schedule TO, summary financial
information is contained in the section of the Offer to Purchase captioned "10.
Certain Information About Us."
(b) The following pro forma information discloses the effect of the Offer
on the Company's income statement, balance sheet and book value per share.
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UNAUDITED PRO FORMA FINANCIAL INFORMATION
12 MONTHS ENDED 4/30/02 6 MONTHS ENDED 10/31/02
------------------------------------ ------------------------------------
AT MINIMUM AT MAXIMUM AT MINIMUM AT MAXIMUM
($63 PER ($73 PER ($63 PER ($73 PER
HISTORICAL SHARE) SHARE) HISTORICAL SHARE) SHARE)
---------- ---------- ---------- ---------- ---------- ----------
(IN MILLIONS, EXCEPT PER SHARE DATA AND FINANCIAL RATIOS)
INCOME STATEMENT
Net Sales......................... $2,208 $2,208 $2,208 $1,171 $1,171 $1,171
Cost of Goods Sold................ 1,075 1,075 1,075 585 585 585
------ ------ ------ ------ ------ ------
Gross Profit...................... 1,133 1,133 1,133 586 586 586
Advertising Expense............... 299 299 299 165 165 165
SG&A.............................. 481 481 481 241 241 241
------ ------ ------ ------ ------ ------
Operating Income.................. 353 353 353 181 181 181
Interest Expense, net(1).......... (5) (26) (29) (2) (12) (14)
------ ------ ------ ------ ------ ------
Pre-Tax Income.................... 348 327 324 179 168 167
Taxes(2).......................... (120) (113) (112) (62) (58) (58)
------ ------ ------ ------ ------ ------
Net Income........................ $ 228 $ 214 $ 212 $ 117 $ 110 $ 109
====== ====== ====== ====== ====== ======
Weighted # of shares (diluted).... 68.484 60.184 60.184 68.592 60.292 60.292
EPS............................... $ 3.33 $ 3.56 $ 3.52 $ 1.71 $ 1.83 $ 1.81
====== ====== ====== ====== ====== ======
Book Value Per Share.............. $19.14 $13.28 $11.90 $20.24 $14.45 $13.07
Ratio of Earnings To Fixed
Charges......................... 18.9x 9.2x 8.6x 21.2x 9.9x 8.9x
BALANCE SHEET
ASSETS:
Cash and cash equivalents......... $ 116 $ 116 $ 116 $ 136 $ 136 $ 136
Accounts Receivable............... 280 280 280 404 404 404
Inventories....................... 578 578 578 620 620 620
Other current assets.............. 55 55 55 50 50 50
------ ------ ------ ------ ------ ------
Total Current Assets.............. 1,029 1,029 1,029 1,211 1,211 1,211
PP&E, net......................... 437 437 437 446 446 446
Goodwill.......................... 247 247 247 247 247 247
Other Assets...................... 304 304 304 311 311 311
------ ------ ------ ------ ------ ------
Total Assets...................... $2,016 $2,016 $2,016 $2,215 $2,215 $2,215
====== ====== ====== ====== ====== ======
LIABILITIES:
Commercial Paper.................. $ 167 $ 167 $ 167 $ 259 $ 259 $ 259
Accounts Payable.................. 296 296 296 325 325 325
Accrued taxes on income........... 32 32 32 49 49 49
------ ------ ------ ------ ------ ------
Total Current Liabilities......... 495 495 495 633 633 633
Long Term Debt.................... 40 552 635 40 557 640
Deferred Income Taxes............. 58 58 58 36 36 36
Accrued Postretirement Benefits... 60 60 60 61 61 61
Other Liabilities................. 52 52 52 56 56 56
------ ------ ------ ------ ------ ------
Total Liabilities................. 705 1,217 1,300 827 1,344 1,427
Shareholders' Equity.............. 1,311 799 716 1,388 871 788
Total Liabilities and
Shareholders' Equity............ $2,016 $2,016 $2,016 $2,215 $2,215 $2,215
====== ====== ====== ====== ====== ======
Book Value Per Share.............. $19.14 $13.28 $11.90 $20.24 $14.45 $13.07
---------------
(1) The interest rates on borrowings to finance the Offer were assumed to be
4.0% for both the year ended April 30, 2002 and the six months ended October
31, 2002.
(2) The tax rate was assumed to be 34.5% for both the year ended April 30, 2002
and the six months ended October 31, 2002.
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ITEM 11. ADDITIONAL INFORMATION.
(a) The information set forth in the sections of the Offer to Purchase
captioned "11. Interest of Directors and Executive Officers; Transactions and
Arrangements Concerning the Shares" and "13. Certain Legal Matters; Regulatory
and Foreign Approvals" is incorporated herein by reference.
(b) The information set forth in the Offer to Purchase and the related
Letters of Transmittal is incorporated herein by reference.
ITEM 12. EXHIBITS.
(a)(1)(i) Offer to Purchase dated February 4, 2003.
(a)(1)(ii) (a) Letter of Transmittal, Class A Common Stock
(b) Letter of Transmittal, Class B Common Stock
(a)(2) Not Applicable.
(a)(3) Not Applicable.
(a)(4) Not Applicable.
(a)(5) (a) Notice of Guaranteed Delivery, Class A Common Stock
(b) Notice of Guaranteed Delivery, Class B Common Stock
(c) Letter from Dealer Manager to Brokers
(d) Letter from Brokers to Clients
(e) Letter from Owsley Brown II to Shareholders
(f) Press Release
(g) Advertisement
(b) Under negotiation; this Schedule TO will be amended to
incorporate any finalized credit agreement promptly after
execution.
(d) Not Applicable.
(g) Not Applicable.
(h) Not Applicable.
ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3.
Not applicable.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
BROWN-FORMAN CORPORATION
By:
------------------------------------
Name: Lawrence K. Probus
Title: Senior Vice President
Date: February 4, 2003
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------- -----------
(a)(1)(i) Offer to Purchase dated February 4, 2003.
(a)(1)(ii) (a) Letter of Transmittal, Class A Common Stock
(b) Letter of Transmittal, Class B Common Stock
(a)(2) Not Applicable.
(a)(3) Not Applicable.
(a)(4) Not Applicable.
(a)(5) (a) Notice of Guaranteed Delivery, Class A Common Stock
(b) Notice of Guaranteed Delivery, Class B Common Stock
(c) Letter from Dealer Manager to Brokers
(d) Letter from Brokers to Clients
(e) Letter from Owsley Brown II to Shareholders
(f) Press Release
(g) Advertisement
(b) Under negotiation; this Schedule TO will be amended to
incorporate any finalized credit agreement promptly after
execution.
(d) Not Applicable.
(g) Not Applicable.
(h) Not Applicable.
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