UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
INFORMATION TO BE INCLUDED IN STATEMENTS
FILED PURSUANT TO RULE 13d-1(a)
Chiron Corporation
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(Name of Issuer)
Common Stock, $0.01 par value
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(Title of Class of Securities)
170040109
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(CUSIP Number)
Michael Rosenbaum
CAM North America, LLC
399 Park Avenue
New York, NY 10043
212-559-3627
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
January 25, 2006
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 240.13d-1(b)(e), 240.13d-1(f) or 240.13d-1(g) check the
following box [X].
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 240.13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act(however, see the Notes).
SCHEDULE 13D
CUSIP NO. 170040109
1. Name Of Reporting Person: CAM North America, LLC
Tax Identification No: 01-0846058
2. Check The Appropriate Box If A Member Of A Group
(a) [X]
(b) [ ]
3. Sec Use Only
4. Source Of Funds: OO
5. Check Box If Disclosure Of Legal Proceedings Is Required Pursuant To Items
2(d) or 2(e): [ ]
6. Place Of Organization: Delaware
Number of shares beneficially owned by Reporting Person with:
7. Sole Voting Power: - 0 -
8. Shared Voting Power Beneficially: 13,516,345
9. Sole Dispositive Power: - 0 -
10. Shared Dispositive Power: 14,356,145
11. Aggregate Amount Beneficially Owned By Reporting Person: 14,356,145
12. Check Box If The Aggregate Amount In Row (11) Excludes Certain Shares: [ ]
13. Percent Of Class Represented By Amount In Row (11): 7.61%
14. Type Of Reporting Person: IA
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SCHEDULE 13D
CUSIP NO. 170040109
1. Name Of Reporting Person: Smith Barney Fund Management LLC
Tax Identification No: 13-2616913
2. Check The Appropriate Box If A Member Of A Group
(a) [X]
(b) [ ]
3. Sec Use Only
4. Source Of Funds: OO
5. Check Box If Disclosure Of Legal Proceedings Is Required Pursuant To Items
2(d) or 2(e): [ ]
6. Place Of Organization: Delaware
Number of shares beneficially owned by Reporting Person with:
7. Sole Voting Power: - 0 -
8. Shared Voting Power Beneficially: 8,773,465
9. Sole Dispositive Power: - 0 -
10. Shared Dispositive Power: 8,773,465
11. Aggregate Amount Beneficially Owned By Reporting Person: 8,773,465
12. Check Box If The Aggregate Amount In Row (11) Excludes Certain Shares [ ]
13. Percent Of Class Represented By Amount In Row (11): 4.65%
14. Type Of Reporting Person: IA
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SCHEDULE 13D
CUSIP NO. 170040109
1. Name Of Reporting Person: Salomon Brothers Asset Management Inc
Tax Identification No: 13-3440564
2. Check The Appropriate Box If A Member Of A Group*
(a) [X]
(b) [ ]
3. Sec Use Only
4. Source Of Funds: OO
5. Check Box If Disclosure Of Legal Proceedings Is Required Pursuant To Items
2(d) or 2(e): [ ]
6. Place Of Organization: Delaware
Number of shares beneficially owned by Reporting Person with:
7. Sole Voting Power: - 0 -
8. Shared Voting Power Beneficially: 96,247
9. Sole Dispositive Power: - 0 -
10. Shared Dispositive Power: 96,247
11. Aggregate Amount Beneficially Owned By Reporting Person: 96,247
12. Check Box If The Aggregate Amount In Row (11) Excludes Certain Shares: [ ]
13. Percent Of Class Represented By Amount In Row (11): 0.05%
14. Type Of Reporting Person: IA
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ITEM 1. SECURITY AND ISSUER.
This Schedule 13D relates to the Common Stock $0.01 par value
(the "Common Stock") of Chiron Corporation, a Delaware corporation
(the "Issuer"). The address of the principal executive offices of the Issuer is
4560 Horton Street, Emeryville, CA 94608.
ITEM 2. IDENTITY AND BACKGROUND.
This statement is filed jointly by CAM North America, LLC ("CAM NA"),
Smith Barney Fund Management LLC ("SBFM") and Salomon Brothers Asset Management
Inc. ("SaBAM", and together with CAM NA and SBFM, the "Reporting Persons").
Each of CAM NA and SBFM is a Delaware limited liability company, and SaBAM is a
Delaware corporation. Each of CAM NA, SBFM and SaBAM is a registered investment
adviser under the Investment Advisers Act of 1940 ("Advisers Act") with its
principal office located at 399 Park Avenue - 4th Floor, New York, NY 10043.
Except as described below, none of the entities identified in this Item 2 has
during the past five years been convicted in any criminal proceeding, nor been
a party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
On May 31, 2005, the Securities and Exchange Commission (the "SEC") issued an
order in connection with the settlement of an administrative proceeding against
SBFM and Citigroup Global Markets, Inc. ("CGM") relating to the appointment of
an affiliated transfer agent for the Smith Barney family of mutual funds
(the "Smith Barney Funds"). At the time the order was issued, SBFM was an
affiliate of CGM.
The SEC order finds that SBFM and CGM willfully violated Section 206(1) of the
Advisers Act. Specifically, the order finds that SBFM and CGM knowingly or
recklessly failed to disclose to the Boards of the Smith Barney Funds in 1999
when proposing a new transfer agent arrangement with an affiliated transfer
agent that: First Data Investors Services Group ("First Data"), the Smith
Barney Funds' then-existing transfer agent, had offered to continue as transfer
agent and do the same work for substantially less money than before; and that
Citigroup Asset Management, then a Citigroup business unit that included the
Smith Barney Funds' investment manager and other investment advisory companies,
had entered into a side letter with First Data under which Citigroup Asset
Management agreed to recommend the appointment of First Data as sub-transfer
agent to the affiliated transfer agent in exchange, among other things, for a
guarantee by First Data of specified amounts of asset management and investment
banking
fees to Citigroup Asset Management and CGM. The order also finds that SBFM and
CGM willfully violated Section 206(2) of the Advisers Act by virtue of the
omissions discussed above and other misrepresentations and omissions in the
materials provided to the Smith Barney Funds' Boards, including the failure to
make clear that the affiliated transfer agent would earn a high profit for
performing limited functions while First Data continued to perform almost all
of the transfer agent functions, and the suggestion that the proposed
arrangement was in the Smith Barney Funds' best interests and that no viable
alternatives existed. SBFM and CGM do not admit or deny any wrongdoing or
liability. The settlement does not establish wrongdoing or liability for
purposes of any other proceeding.
The SEC censured SBFM and CGM and ordered them to cease and desist from
violations of Sections 206(1) and 206(2) of the Advisers Act. The order
requires Citigroup to pay $208.1 million, including $109 million in disgorgement
of profits, $19.1 million in interest, and a civil money penalty of $80
million. Approximately $24.4 million has already been paid to the Smith Barney
Funds, primarily through fee waivers. The remaining $183.7 million, including
the penalty, has been paid to the U.S. Treasury and will be distributed pursuant
to a plan to be prepared by Citigroup and submitted within 90 days of the entry
of the order for approval by the SEC. The order also requires that transfer
agency fees received from the Smith Barney Funds since December 1, 2004 less
certain expenses be placed in escrow and provides that a portion of such fees
may be subsequently distributed in accordance with the terms of the order.
The order requires SBFM to recommend a new transfer agent contract to the
Smith Barney Fund Boards within 180 days of the entry of the order; if a
Citigroup affiliate submits a proposal to serve as transfer agent or
sub-transfer agent, an independent monitor must be engaged at the expense of
SBFM and CGM to oversee a competitive bidding process. Under the order,
Citigroup also must comply with an amended version of a vendor policy that
Citigroup instituted in August 2004. That policy, as amended, among other
things, requires that when requested by a Smith Barney Fund Board, Citigroup
Asset Management will retain at its own expense an independent consulting expert
to advise and assist the Board on the selection of certain service providers
affiliated with Citigroup.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The source of funds used for the purchase of the Issuer's securities were funds
in certain investment advisory accounts managed by the Reporting Persons.
The aggregate funds used by the Reporting Persons to make the purchases were
$974,972,903.
ITEM 4. PURPOSE OF TRANSACTION.
The Reporting Persons have acquired the Issuer's Common Stock for investment
purposes on behalf of certain investment advisory accounts, and such purchases
have been made in the Reporting Persons' ordinary course of business as
investment advisers.
Depending on the Reporting Persons' assessment of future developments, one or
more of the Reporting Persons may acquire additional securities of the Issuer or
may determine to sell or otherwise dispose of all or some holdings in the
Issuer.
On November 25, 2005, the Issuer filed a Schedule 14A with the Commission
regarding the acquisition by Novartis of all of the outstanding shares of the
Issuer not already owned by Novartis at a price of $45 per share
(the "Transaction").
On January 25, 2006, CAM NA, on behalf of itself and certain affiliated
advisers, sent a letter (the "Letter") to Howard H. Pien, Chairman of the Board
of Directors and Chief Executive Officer of the Issuer, stating that they
believed the merger consideration of $45 in cash per Chiron share being
offered by Novartis in the proposed Transaction is financially inadequate.
The Letter further stated that CAM NA and such affiliated advisers intend to
vote against the proposed Transaction. A copy of the Letter is attached as
Exhibit B to this Schedule 13D and is incorporated herein by reference.
The Reporting Persons may at any time reconsider and change their plans or
proposals relating to the foregoing.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) and (b). Set forth below is the beneficial ownership of shares of Common
Stock of the Issuer for the Reporting Persons named in Item 2.
As of the date hereof, CAM NA is the beneficial owner of 14,356,145 shares of
Common Stock, representing approximately 7.61% of the Issuer's outstanding
Common Stock, SBFM is the beneficial owner of 8,773,465 shares of Common Stock,
representing approximately 4.65% of the Issuer's outstanding Common Stock, and
SaBAM is the beneficial owner of 96,247 shares of Common Stock, representing
approximately 0.05% of the Issuer's outstanding Common Stock.
All percentages set forth in this Schedule 13D are based upon the Issuer's
reported 188,575,753 outstanding shares of Common Stock reported in the Issuer's
Form 10-Q for the quarterly period ended September 30, 2005.
(c) The following table sets forth the Reporting Persons' transactions in the
shares of Common Stock of the Issuer during the sixty (60) days preceding the
date of this report:
Reporting Person Date Shares Price Transaction
CAM NA 11/25/2005 1,910 44.35 Open Market Sale
CAM NA 11/28/2005 6,148 44.28 Open Market Sale
CAM NA 11/29/2005 8,546 44.34 Open Market Sale
CAM NA 11/30/2005 6,095 44.27 Open Market Sale
CAM NA 11/30/2005 10 44.31 Open Market Purchase
CAM NA 12/1/2005 8,791 44.33 Open Market Sale
CAM NA 12/1/2005 15 44.31 Open Market Purchase
CAM NA 12/2/2005 7,721 44.31 Open Market Sale
CAM NA 12/2/2005 750 44.32 Open Market Purchase
SBFM 12/2/2005 500 44.42 Open Market Purchase
CAM NA 12/5/2005 6,533 44.32 Open Market Sale
CAM NA 12/6/2005 11,227 44.50 Open Market Sale
CAM NA 12/6/2005 120 44.49 Open Market Purchase
CAM NA 12/7/2005 7,684 44.49 Open Market Sale
CAM NA 12/8/2005 7,167 44.49 Open Market Sale
CAM NA 12/8/2005 65 44.49 Open Market Purchase
CAM NA 12/9/2005 8,302 44.51 Open Market Sale
CAM NA 12/12/2005 7,656 44.54 Open Market Sale
CAM NA 12/13/2005 12,635 44.58 Open Market Sale
CAM NA 12/14/2005 20,957 44.59 Open Market Sale
CAM NA 12/15/2005 15,456 44.68 Open Market Sale
CAM NA 12/16/2005 8,457 44.79 Open Market Sale
CAM NA 12/16/2005 2 44.68 Open Market Purchase
CAM NA 12/19/2005 7,671 44.83 Open Market Sale
CAM NA 12/20/2005 9,149 44.65 Open Market Sale
CAM NA 12/21/2005 13,384 44.67 Open Market Sale
CAM NA 12/22/2005 11,370 44.72 Open Market Sale
CAM NA 12/22/2005 540 44.73 Open Market Purchase
CAM NA 12/23/2005 5,977 44.63 Open Market Sale
CAM NA 12/27/2005 9,600 44.60 Open Market Sale
CAM NA 12/28/2005 13,551 44.64 Open Market Sale
CAM NA 12/29/2005 13,845 44.55 Open Market Sale
CAM NA 12/30/2005 5,917 44.42 Open Market Sale
CAM NA 1/3/2006 9,298 44.63 Open Market Sale
CAM NA 1/4/2006 9,964 44.69 Open Market Sale
CAM NA 1/5/2006 7,644 44.62 Open Market Sale
CAM NA 1/6/2006 6,100 44.70 Open Market Sale
CAM NA 1/9/2006 6,380 44.71 Open Market Sale
CAM NA 1/9/2006 250 44.73 Open Market Purchase
CAM NA 1/10/2006 6,513 44.69 Open Market Sale
CAM NA 1/11/2006 5,436 44.71 Open Market Sale
CAM NA 1/12/2006 7,314 44.66 Open Market Sale
CAM NA 1/13/2006 6,114 44.70 Open Market Sale
CAM NA 1/17/2006 5,858 44.73 Open Market Sale
CAM NA 1/18/2006 6,728 44.78 Open Market Sale
CAM NA 1/18/2006 10 44.80 Open Market Purchase
CAM NA 1/19/2006 7,030 44.80 Open Market Sale
CAM NA 1/20/2006 6,111 44.74 Open Market Sale
CAM NA 1/23/2006 8,818 44.72 Open Market Sale
(d) and (e): Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
Other than as described elsewhere in this Schedule 13D, the Reporting Persons
have no understandings, arrangements, relationships or contracts relating to the
Common Stock which are required to be described hereunder.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
A) Joint Filing Agreement
B) Letter from CAM NA dated January 25, 2006 to the Issuer.
SIGNATURES
After reasonable 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.
Date: January 25, 2006
CAM North America, LLC
By: /s/ George Shively
George Shively, Secretary
Smith Barney Fund Management LLC
By: /s/ Michael Kocur
Michael Kocur, Assistant Secretary
Salomon Brothers Asset Management Inc
By: /s/ George Shively
George Shively, Secretary
Exhibit A
JOINT FILING UNDERTAKING
This Joint Filing Agreement confirms the agreement by and among the undersigned
parties that the Schedule 13D is being filed jointly on behalf of each of them
with the Securities and Exchange Commission pursuant to Section 13(d) of the
Securities Exchange Act of 1934, as amended.
Date: January 25, 2006
CAM North America, LLC
By: /s/ George Shively
George Shively, Secretary
Smith Barney Fund Management LLC
By: /s/ Michael Kocur
Michael Kocur, Assistant Secretary
Salomon Brothers Asset Management Inc
By: /s/ George Shively
George Shively, Secretary
Exhibit B
LETTER
January 25, 2006
By Overnight Delivery
Mr. Howard H. Pien
Chairman of the Board and Chief Executive Officer
Chiron Corporation
4560 Horton Street
Emeryville, California 94608
Re: Proposed Acquisition of Chiron Corporation By Novartis International AG
Dear Mr. Pien:
CAM North America, LLC and/or certain affiliated entities (collectively, "CAM")
serve as adviser to various advisory clients that have been long-term
shareholders of Chiron Corporation ("Chiron"), dating back to 1986. Included
among these clients is the Smith Barney Aggressive Growth Fund(. Currently,
certain of CAM's advisory clients' accounts own approximately 23,225,857 shares
of Chiron common stock((, representing 12.32% of all Chiron common shares
outstanding and 21.26% of the shares held by shareholders other than Novartis
International AG ("Novartis").
As we have informed you previously, we believe the merger consideration offered
by Novartis of $45 in cash per Chiron share is financially inadequate;
therefore, in keeping with our obligations to act in the best interest of
clients, we cannot support this transaction and intend to vote against the
proposed acquisition of Chiron by Novartis.
Very truly yours,
Richard A. Freeman
Managing Director
CAM North America, LLC
cc: Daniel L. Vasella, Chairman and Chief Executive Officer, Novartis
Raymund Breu, Director, Chiron
Vaughn D. Bryson, Director, Chiron
Lewis W. Coleman, Director, Chiron
Pierre E. Douaze, Director, Chiron
J. Richard Fredericks, Director, Chiron
Paul L. Herrling, Director, Chiron
Denise O'Leary, Director, Chiron
Edward E. Penhoet, Director, Chiron
Pieter J. Strijkert, Director, Chiron
( Under a licensing agreement between Citigroup and Legg Mason, the names of
funds, the names of any classes of shares of funds, and the names of investment
advisers of funds, as well as all logos, trademarks and service marks related to
Citigroup or any of its affiliates ("Citi Marks") are licensed for use by Legg
Mason Citi Marks include, but are not limited to, "Smith Barney," "Salomon
Brothers," "Citi," "Citigroup Asset Management," and "Davis Skaggs Investment
Management," Legg Mason and its affiliates, as well as the fund's investment
adviser, are not affiliated with Citigroup.
All Citi Marks are owned by Citigroup, and are licensed for use until no later
than one year after the date of the licensing agreement.
(( Of those shares, CAM has sole or shared voting power over at least 22,386,057
shares.