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
(Amendment No. 1)
TIMET Capital Trust I
Titanium Metals Corporation
(Name of Subject Company)
Valhi, Inc.
(Names of Filing Persons (Offeror))
6 5/8% Convertible Preferred Securities of TIMET Capital Trust I
Convertible Preferred Securities Guarantee of Titanium Metals Corporation
(Title of Class of Securities)
887381408 and 887381309
(CUSIP Number of Class of Securities)
Steven L. Watson
President and Chief Executive Officer
Valhi, Inc.
Three Lincoln Centre
5430 LBJ Freeway, Suite 1700
Dallas, Texas 75240
(972) 233-1700
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications on Behalf of Filing Persons)
Copy to:
Don M. Glendenning
Toni Weinstein
Locke Liddell & Sapp LLP
2200 Ross Avenue, Suite 2200
Dallas, Texas 75201
(214) 740-8000
CALCULATION OF FILING FEE
Transaction Value * Amount of Filing Fee**
$10,000,000 $2,000
* Estimated for purposes of calculating the amount of the filing fee only.
Calculated by multiplying the $10.00 tender offer price by 1,000,000, the
maximum amount of securities to be purchased in the offer.
** Calculated as 1/50 of 1% of the transaction value.
|X| 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: $2,000 Filing Party: Valhi, Inc.
Form or Registration No.: Schedule TO Date Filed: May 5, 2003
|_| Checkthe box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes 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 Amendment No. 1 amends and supplements the Tender Offer Statement on
Schedule TO filed on May 5, 2003 (the "Schedule TO") by Valhi, Inc., a Delaware
corporation ("Purchaser"). The Schedule TO relates to the offer by Purchaser to
purchase up to 1,000,000 6 5/8% Convertible Preferred Securities, Beneficial
Unsecured Convertible Securities, liquidation preference $50 per security (the
"Securities"), which represent undivided beneficial ownership interests in the
assets of TIMET Capital Trust I, a Delaware statutory business trust (the
"Trust"), at a purchase price of $10.00 per Security, net to the seller in cash,
upon the terms and subject to the conditions set forth in the Offer to Purchase
dated May 5, 2003 (the "Offer to Purchase") and in the related Letter of
Transmittal, copies of which were attached to the Schedule TO as Exhibits (a)(1)
and (a)(2) (which, together with any amendments or supplements thereto,
collectively constitute the "Offer"). The Securities include the associated
guarantee by Titanium Metals Corporation, a Delaware corporation ("TIMET").
Capitalized terms used and not otherwise defined herein shall have the meanings
assigned to them in the Offer to Purchase or the Schedule TO.
Item 1. Summary Term Sheet
Item 1 of the Schedule TO is hereby amended and supplemented to include the
following information:
The second bullet point in the Summary Term Sheet contained in the Offer to
Purchase on Page 1 is amended and restated to read in its entirety as follows:
o "Valhi, Inc., a Delaware corporation. We may be deemed to be an
affiliate of TIMET and the TIMET Capital Trust I, and, along with
certain related parties and affiliates, own approximately 42.2% of the
outstanding securities of the class that we are offering to purchase
and approximately 48.9% of the outstanding shares of common stock of
TIMET (approximately 51.7%, assuming full conversion of only such
securities we beneficially own into shares of TIMET common stock). See
"Section 8. Certain Information Concerning Purchaser."
The Summary Term Sheet contained in the Offer to Purchase is further
amended and supplemented to include the following information:
"RISK FACTORS
Before deciding whether or not to tender any of your securities, you
should consider carefully the following risks and potential disadvantages
of the offer:
We did not obtain a third-party valuation or appraisal and did not
determine the terms of our offer through arms-length negotiation.
We did not base our determination of the terms of our offer on any
third-party appraisal or valuation. We established the terms of our offer
without any arms-length negotiation. We do not know whether our offer
reflects the price that could be realized upon a sale of your securities to
another party. You may be able to obtain a higher price for your securities
now or in the future from another party.
Our offer may not represent fair market value.
There is no established or regular trading market for your securities,
and trading in the securities has been limited and sporadic. Our offer does
not necessarily reflect the price that you would receive if there was an
active trading market for your securities. Such prices could be higher than
our offer.
Our offer is substantially less than the redemption value of the
securities.
The offer is substantially below the redemption price of the
securities. While there is no assurance the securities will ever be
redeemed, if they were to be redeemed, it would be at a higher price than
our offer. We may be deemed to control TIMET and therefore, subject to the
financial capability of TIMET, we could take action to cause TIMET to
redeem the securities at some future date. However, we do not presently
intend to do so.
Holding your securities may result in greater future value.
Although we do not believe that a redemption of the securities is
currently contemplated, you might receive more value if you retain your
securities until such time as the securities are redeemed. Additionally, in
the future you may receive a higher value for your securities in market
transactions, privately negotiated sales or through subsequent tender
offers made by us or other persons.
We are not making a recommendation with respect to this offer.
We are not making any recommendation to any holder as to whether to
tender securities and are remaining neutral towards the offer. We believe
that this is a personal investment decision for each holder. Each holder
must make its own investment decision as to whether to tender its
securities and, if so, how many securities to tender. Each holder should
discuss whether to tender its securities with its financial and tax
advisors.
The sale of your securities is a taxable transaction.
If your securities are purchased in the offer, your receipt of cash
will be a taxable transaction to you for federal income tax purposes. In
general, for federal income tax purposes, you will recognize gain or loss
equal to the difference between your adjusted basis in the securities
(including any accrued and unpaid distributions through the date of
purchase pursuant to the offer) and the amount of cash you receive for
those securities. However, your tax consequences from the tender of your
securities in the offer can be complicated, and you should consult your own
tax advisor to understand how the offer will affect you.
If you tender securities to us in this offer, you will no longer be
entitled to distributions.
If you tender your securities in response to our offer, you will
transfer to us all right, title and interest in and to all of the
securities we accept, and the right to receive all distributions in respect
of such securities on and after the date on which we accept such securities
for purchase. Accordingly, for any securities that we acquire from you, you
will not receive any future distributions. In addition, no payments will be
made in the offer for any distributions that are accrued and unpaid as of
the date payment is made for the securities. TIMET has deferred
distribution payments on the securities, beginning with the scheduled
distribution payment on December 1, 2002. As of May 1, 2003, the total
amount of deferred distributions per security was $2.24.
If we acquire a sufficient number of securities in this offer, we could own
a majority of the outstanding securities and direct some actions relating
to the securities.
It is possible that, as a result of the offer, we and our affiliates
may beneficially own a majority of the outstanding securities. The holders
of a majority of the securities have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the
trustee under the indenture relating to the guarantee or to direct the
exercise of any trust or power conferred upon such trustee under the
guarantee. In addition, the holders of a majority of the securities have
the right to direct the time, method, and place of conducting any
proceeding for any remedy available to certain trustees under the Trust's
Declaration of Trust or to direct the exercise of any trust or power
conferred upon such trustees under the Declaration of Trust, including the
right to direct such trustees to exercise the remedies available to them as
a holder of the convertible debentures issued concurrently with the
securities. In addition, termination of the Trust requires the consent of
at least a majority of the securities. The maturity date of the securities
cannot be changed, the principal amount and interest rate of the securities
cannot be reduced and the time when interest is due on the securities
cannot be extended, in each case without the consent of all of the holders
of the securities.
We may delay our acceptance of, and payment for, your securities.
We reserve the right to extend the period of time during which our
offer is open and thereby delay acceptance for payment of any tendered
securities. Although you will retain your withdrawal rights during an
extension of the offer, the offer may be extended indefinitely, and no
payment will be made in respect of tendered securities until the expiration
of the offer and acceptance of securities for payment."
Item 2. Subject Company Information
Item 2 of the Schedule TO is hereby amended and supplemented to include the
following information:
Section 6 of the Offer to Purchase on page 13 is amended to add the
following after the table of sales prices for the TIMET Shares:
"The high and low sales prices for the periods indicated for the
Securities as reported by NASDAQ are set forth below.
High Low
2001
----
First Quarter..........................................*.. *
Second Quarter......................................$32.50 $ 5.29
Third Quarter.......................................$26.39 $16.00
Fourth Quarter......................................$17.66 $ 5.00
2002
----
First Quarter**.....................................$15.00 $15.00
Second Quarter......................................$20.13 $19.03
Third Quarter.........................................* *
Fourth Quarter......................................$14.07 $ 5.00
2003
----
First Quarter.......................................$15.54 $ 2.25
Second Quarter (through May 13, 2003)...............$19.50 $10.00
* No reported trades during the indicated quarter.
** Only one reported trade during the indicated quarter."
Section 6 of the Offer to Purchase on page 14 is amended to add the
following as the last paragraph of Section 6:
"All rights of a holder of Securities to receive distributions in
respect of Securities tendered in the Offer will be transferred to
Purchaser on the date on which Purchaser accepts such Securities for
purchase. Accordingly, the current holder of such Securities will not
receive any future distributions on such Securities on and after such date.
In addition, Purchaser will not make any payments in the Offer for any
distributions that are accrued and unpaid as of the date payment is made
for the Securities. As of May 1, 2003, the total amount of deferred
distributions per Security was $2.24."
Section 7 of the Offer to Purchase on page 14 is amended to add the
following as the last sentence to the first full paragraph of Section 7.
"Purchaser remains responsible for the information contained in this
Offer to Purchase."
Section 7 of the Offer to Purchase on page 14 is amended to add the
following as the second to last paragraph of Section 7:
"The Convertible Debentures mature on December 1, 2026 and bear
interest at the rate of 6.625% per annum, payable quarterly in arrears. The
Convertible Debentures have provisions with respect to interest,
redemption, conversion into TIMET Shares and certain other terms
substantially similar or analogous to those of the Securities. Interest
payment periods may be extended from time to time by TIMET for successive
periods not exceeding 20 consecutive quarters for each such period (during
which interest will continue to accrue and compound quarterly). Prior to
the termination of any extension period, TIMET may further extend such
extension period; provided that such extension period may not exceed 20
consecutive quarters and may not extend beyond the maturity date of the
Convertible Debentures. Upon the termination of any extension period and
the payment of all amounts then due, TIMET may commence a new extension
period, subject to certain limitations. No interest will be due and payable
during an extension period. The Convertible Debentures are subordinated to
all senior indebtedness of TIMET and effectively subordinated to all
existing and future indebtedness and liabilities, including trade payables,
of TIMET's subsidiaries. The Trust holds $201.241 million principal amount
of the Convertible Debentures, representing all of the issued and
outstanding Convertible Debentures."
Item 3. Identity and Background of the Filing Person.
Item 3 of the Schedule TO is hereby amended and supplemented to include the
following information:
Schedule I to the Offer to Purchase is amended and restated to read in its
entirety as follows:
"SCHEDULE I
INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER
The following table sets forth the name and present principal occupation or
employment, and material occupations, positions, offices or employments for the
past five years of each currently serving director and executive officer of
Purchaser. The current business address of each person is c/o Valhi, Inc., Three
Lincoln Centre, 5430 LBJ Freeway, Suite 1700, Dallas, Texas 75240. Each such
person is a citizen of the United States of America.
Positions and Offices Material Positions Held During
Name Held with Purchaser the Past Five Years
Thomas E. Barry Director Dr. Barry is vice president for
executive affairs at Southern
Methodist University and has been a
professor of marketing in the Edwin
L. Cox School of Business at
Southern Methodist University since
prior to 1998. Dr. Barry is also a
director of Keystone.
Norman S. Edelcup Director Since 2001, Mr. Edelcup has served
as senior vice president of Florida
Savings Bancorp. He also serves as
a trustee for the Baron Funds, a
mutual fund group. Mr. Edelcup
served as senior vice president of
Item Processing of America, Inc., a
processing service bureau ("IPA"),
from 1999 to 2000 and as chairman
of the board of IPA from prior to
1998 to 1999.
Edward J. Hardin Director Mr. Hardin is also a director of
CompX. Mr. Hardin has been a
partner of the law firm of Rogers &
Hardin LLP since its formation in
1976. Mr. Hardin also serves as a
director of Westrup, Inc., a
manufacturer of seed processing
machinery.
Glenn R. Simmons Vice Chairman of the Mr. Simmons has been vice chairman
Board of the board of Purchaser and
Contran since prior to 1998. Mr.
Simmons is a director of NL;
chairman of the board of Keystone
and CompX; and a director of TIMET.
Mr. Simmons has been an executive
officer and/or director of various
companies related to Purchaser and
Contran since 1969. Mr. Simmons is
a brother of Harold C. Simmons.
Harold C. Simmons Chairman of the Board Mr. Simmons has been chairman of
the board of Purchaser and Contran
since prior to 1998 and was chief
executive officer of Purchaser from
prior to 1998 to 2002 and president
of Purchaser and Contran from prior
to 1997 to 1998. Mr. Simmons is
chairman of the board of NL. Mr.
Simmons has been an executive
officer and/or director of various
companies related to Purchaser and
Contran since 1961. Mr. Simmons is
a brother of Glenn R. Simmons.
J. Walter Tucker, Jr. Director Mr. Tucker has been the president,
treasurer and a director of Tucker
& Branham, Inc., a mortgage
banking, insurance and real estate
company, and vice chairman of the
board and a director of Keystone
since prior to 1998. Mr. Tucker has
been an executive officer and/or
director of various companies
related to Purchaser and Contran
since 1982.
Steven L. Watson President and Chief Mr. Watson has been president of
Executive Officer Purchaser and Contran, and a
and Director director of Contran, since 1998 and
chief executive officer of
Purchaser since 2002. Mr. Watson is
also a director of CompX, Keystone,
NL and TIMET. From prior to 1997 to
1998, Mr. Watson served as vice
president and secretary of
Purchaser and Contran. Mr. Watson
has served as an executive officer
and/or director of various
companies related to Purchaser and
Contran since 1980.
William J. Lindquist Senior Vice President Mr. Lindquist has served as senior
vice president of Purchaser and
Contran, and a director of Contran,
since 1998. From prior to 1998, Mr.
Lindquist served as vice president
and tax director of Purchaser and
Contran. Mr. Lindquist has served
as an executive officer and/or
director of various companies
related to Purchaser and Contran
since 1980.
Bobby D. O'Brien Vice President, Chief Mr. O'Brien has served as chief
Financial Officer financial officer of Purchaser
and Treasurer since 2002 and vice president and
treasurer of Purchaser and Contran
since prior to 1998. Mr. O'Brien
has served in financial and
accounting positions with various
companies related to Purchaser and
Contran since 1988.
Robert D. Graham Vice President Mr. Graham has served as vice
president of Purchaser and Contran
since October 2002. From January
1997 to October 2002, Mr. Graham
served as an executive officer, and
most recently as executive vice
president and general counsel, of
Software Spectrum, Inc. ("SSI").
SSI is a global
business-to-business software
services provider that is a wholly
owned subsidiary of Level 3
Communications. From 1991 to June
2002, SSI was a publicly traded
corporation. From 1985 to 1997, Mr.
Graham was a partner in the law
firm of Locke Purnell Rain Harrell
(A Professional Corporation), a
predecessor to Locke Liddell and
Sapp LLP.
J. Mark Hollingsworth Vice President and Mr. Hollingsworth has served as
General Counsel vice president of Purchaser and
Contran since 1998 and as general
counsel of Purchaser and Contran
since prior to 1998. Mr.
Hollingsworth has served as legal
counsel of various companies
related to Purchaser and Contran
since 1983.
Gregory M. Swalwell Vice President and Mr. Swalwell has served as vice
Controller president of Purchaser and Contran
since 1998 and controller of
Purchaser and Contran since prior
to 1998. Mr. Swalwell has served in
accounting positions with various
companies related to Purchaser and
Contran since 1988.
Eugene K. Anderson Vice President and Mr. Anderson has served as vice
Assistant Treasurer president and assistant treasurer
of Purchaser and Contran since
prior to 1998. Mr. Anderson has
served as an executive officer of
various companies related to
Purchaser and Contran since 1980.
A. Andrew R. Louis Secretary Mr. Louis has served as secretary
of Purchaser and Contran since
1998. From prior to 1998, Mr. Louis
served as corporate counsel of
Purchaser and Contran. Mr. Louis
has served as legal counsel of
various companies related to
Purchaser and Contran since 1995.
Kelly D. Luttmer Tax Director Ms. Luttmer has served as tax
director of Purchaser and Contran
since 1998. From prior to 1998, Ms.
Luttmer served as assistant tax
manager of Purchaser and Contran.
Ms. Luttmer has served in tax
accounting positions with various
companies related to Purchaser and
Contran since 1989."
Item 4. Terms of the Transaction.
Item 4 of the Schedule TO is hereby amended and supplemented to include the
following information:
The last sentence of the second paragraph of Section 1 of the Offer to
Purchase on page 6 is amended and restated to read in its entirety as follows:
"Subject to the terms of the Offer as of the scheduled Expiration Date,
which will initially be 20 business days following the commencement of the
Offer (the "Initial Expiration Date"), and the other conditions set forth
in "Section 11. Conditions of the Offer," Purchaser will accept for payment
and pay for all Securities validly tendered and not withdrawn pursuant to
the Offer promptly after the Expiration Date."
The third sentence of the first paragraph of Section 2 of the Offer to
Purchase on page 7 is amended and restated to read in its entirety as follows:
"Subject to applicable rules and regulations of the SEC, Purchaser reserves
the right to delay acceptance of or payment for Securities subsequent to
the Expiration Date in anticipation of receiving necessary governmental
approvals."
The second to last paragraph of Section 2 of the Offer to Purchase on page
8 is amended and restated to read in its entirety as follows:
"If Purchaser does not purchase Securities in the Offer, certificates
evidencing unpurchased Securities will be returned, without expense to the
tendering holder, Security Certificates evidencing unpurchased Securities
will be returned, without expense to the tendering holder (or, in the case
of Securities tendered by book-entry transfer into the Depositary's account
at DTC pursuant to the procedure described in "Section 3. Procedures for
Accepting the Offer and Tendering Securities," such Securities will be
credited to an account maintained at such Book-Entry Transfer Facility),
promptly following the expiration or termination of the Offer."
The first bullet point of Section 11 of the Offer to Purchase on page 20 is
amended and restated to read in its entirety as follows:
o "any statute, rule, regulation, judgment, order, stay, decree or
injunction shall have been threatened, proposed, sought,
promulgated, enacted, entered, enforced, or deemed to be
applicable by any court or governmental regulatory or
administrative agency, authority or tribunal, domestic or
foreign, which, in Purchaser's reasonable judgment, would or
might directly or indirectly prohibit, prevent, restrict or delay
the consummation of the Offer, including any such event that
would make the Offer illegal;"
The third bullet point of Section 11 of the Offer to Purchase on page 20 is
amended and restated to read in its entirety as follows:
o "there shall have occurred (a) any general suspension of,
shortening of hours for or limitation on prices for trading in
securities on The New York Stock Exchange or in the
over-the-counter market (whether or not mandatory); (b) any
significant adverse change in the United States' securities or
financial markets such that there shall have occurred at least a
25 basis point increase in LIBOR or the prime rate, or at least a
5% decrease in the price of the 10-year Treasury Bond or the
30-year Treasury Bond, or at least a 5% decrease in the S&P 500
Index, the Dow Jones Industrial Average Index or the NASDAQ
Composite Index, in each case measured between close on the last
trading day preceding the date of the Offer and the close on the
last trading day preceding the Expiration Date; (c) a declaration
of a banking moratorium or any suspension of payments in respect
of banks by federal or state authorities in the United States
(whether or not mandatory); (d) the commencement of a war, armed
hostilities or other national or international emergency or
crisis; (e) any limitation (whether or not mandatory) by any
governmental authority on, or other event having a reasonable
likelihood of affecting, the extension of credit by banks or
other lending institutions in the United States; (f) any
significant change in United States currency exchange rate such
that there shall have occurred at least a 5% change in the spot
foreign currency exchange rate between the U.S. Dollar and any of
the euro, the British pound, the Japanese yen, the Canadian
dollar or the Swiss franc, in each case measured between the
close on the last trading day preceding the date of the Offer and
the close on the last trading day preceding the Expiration Date,
or a suspension of, or limitation on, the markets therefor
(whether or not mandatory); (g) a decline in the closing price of
a TIMET Share or a share of Purchaser's common stock of more than
5% measured from the close on the last trading day preceding the
date of the Offer and the close on the last trading day preceding
the Expiration Date; or (h) in the case of any of the foregoing
existing at the time of the commencement of the Offer, a
significant acceleration or worsening thereof;"
The fifth bullet point of Section 11 of the Offer to Purchase on page 20 is
amended and restated to read in its entirety as follows:
o "there shall have occurred, exist or be likely to occur or exist
any event or series of events or condition that, in Purchaser's
sole judgment, (a) could prohibit, prevent, restrict or delay
consummation of the Offer; (b) will, or is reasonably likely to,
result in the consummation of the Offer not being, or not being
reasonably likely to be, in Purchaser's best interest; or (c)
materially and adversely affect Purchaser's and its subsidiaries'
business, assets, condition (financial or otherwise), income,
operations or prospects or stock ownership, taken as a whole, or
otherwise materially impair in any way the contemplated future
conduct of Purchaser's business;"
Item 5. Past Contacts, Transactions, Negotiations and Agreements.
Item 5 of the Schedule TO is hereby amended and supplemented to include the
following information:
Section 8 of the Offer to Purchase on page 18 is amended to add the
following before the last paragraph of subsection entitled "Certain
Relationships and Transactions":
"Insurance Matters. Tall Pines Insurance Company ("Tall Pines"),
Valmont Insurance Company ("Valmont") and EWI RE, Inc. ("EWI") provide for
or broker certain of TIMET's insurance policies. Tall Pines is a wholly
owned captive insurance company of Tremont. Valmont is a wholly owned
captive insurance company of Purchaser. Parties related to Contran own all
of the outstanding common stock of EWI. Through December 31, 2000, a
son-in-law of Harold C. Simmons managed the operations of EWI. Subsequent
to December 31, 2002, pursuant to an agreement that may be terminated upon
90 days written notice by either party, this son-in-law provides advisory
services to EWI as requested by EWI, for which the son-in-law is paid
$11,875 per month and receives certain other benefits under EWI's benefit
plans. Since March 2003, such son-in-law serves as the chairman of the
board of EWI. Consistent with insurance industry practices, Tall Pines,
Valmont and EWI receive commissions from the insurance and reinsurance
underwriters for the policies that they provide or broker. During 2002,
TIMET paid approximately $3.4 million for policies provided or brokered by
Tall Pines, Valmont and/or EWI. These amounts principally included payments
for reinsurance and insurance premiums paid to unrelated third parties, but
also included commissions paid to Tall Pines, Valmont and EWI.
Proposed Transaction. On September 19, 2001, Purchaser announced a
proposal whereby the shares of the common stock of NL held by Purchaser and
Tremont would be transferred to TIMET in exchange for TIMET debt and equity
securities. On September 27, 2001, Purchaser withdrew its proposal to
TIMET, concluding that the business and financial prospects of NL and TIMET
in the then current economic environment would be difficult, resulting in
an impairment of the parties ability to properly and adequately value the
securities of both companies.
Utility Services. In connection with the operations of TIMET's
Henderson, Nevada facility, TIMET purchases certain utility services from
Basic Management, Inc. and its subsidiaries (referred to collectively
herein as "BMI") pursuant to various agreements. A wholly owned subsidiary
of Tremont owns approximately 32% of the outstanding equity securities of
BMI (representing 26% of the voting securities of BMI). During 2002, fees
for such utility services provided by BMI to TIMET were approximately $2.8
million."
Item 6. Purposes of the Transaction and Plans or Proposals.
Item 6 of the Schedule TO is hereby amended and supplemented to include the
following information:
The first paragraph of Section 10 of the Offer to Purchase on page 19 is
amended and restated in its entirety to read as follows:
"Purpose of the Offer. The purpose of the Offer is to acquire
Securities for investment purposes. Historically, the titanium metal
industry, and therefore TIMET's results of operations, have been highly
cyclical. The titanium industry historically has derived a substantial
portion of its business from the aerospace industry. The cyclical nature of
the aerospace industry has been the principal reason for the historical
fluctuations in the performance of titanium companies. Over the past 20
years, the titanium industry had cyclical peaks in mill product shipments
in 1989, 1997 and 2001 and cyclical lows in 1983, 1991 and 1999. Demand for
titanium reached its highest peak in 1997 when industry mill product
shipments reached an estimated 60,000 metric tons. Industry mill product
shipments subsequently declined approximately 5% to an estimated 57,000
metric tons in 1998. After falling 16% from 1998 levels to 48,000 metric
tons in 1999 and 2000, industry shipments climbed to 55,000 metric tons in
2001. However, primarily due to a decrease in demand for titanium from the
commercial aerospace sector, total industry mill product shipments fell
approximately 20% to an estimated 44,000 metric tons in 2002. TIMET expects
total industry mill product shipments in 2003 will decrease slightly from
2002 levels. Given this highly cyclical nature of TIMET's business,
Purchaser believes that the Securities may represent a long-term investment
opportunity."
Section 10 of the Offer to Purchase on page 19 is amended to add the
following as the second paragraph of such Section:
"Purchaser did not base its determination of the terms of the Offer on
any third-party appraisal or valuation. Purchaser established the terms of
the Offer without any arms-length negotiation. Purchaser does not know
whether the Per Security Amount reflects the value that would be realized
upon a sale of the Securities to another party. Security holders may be
able to obtain a higher price for their Securities now or in the future
from another party."
Item 8. Interest in Securities of the Subject Company.
Item 8 of the Schedule TO is hereby amended and supplemented to include the
following information:
The third sentence of the second paragraph on page 15 of the Offer to
Purchase is amended and restated to read in its entirety as follows:
"Assuming the conversion of only the Securities that Mr. Simmons may
be deemed to beneficially own, Mr. Simmons may be deemed to beneficially
own approximately 51.7% of the outstanding TIMET Shares."
The table indicating beneficial ownership of TIMET Shares on page 15 of the
Offer to Purchase is amended and restated to read in its entirety as follows:
Amount and Nature of Percent of Class
"Name of Beneficial Owner Beneficial Ownership (1) (1)(2)
Thomas E. Barry....................... -0- (3) -0-
Norman S. Edelcup..................... -0- (3) -0-
Edward J. Hardin...................... -0- (3) -0-
Glenn R. Simmons...................... 1,800 (3)(4) *
Harold C. Simmons..................... 1,648,660 (3)(5) 51.7%
J. Walter Tucker, Jr.................. -0- (3) -0-
Steven L. Watson...................... 2,550 (3)(4) *
William J. Lindquist.................. -0- (3) -0-
Bobby D. O'Brien...................... -0- (3) -0-
Gregory M. Swalwell................... -0- (3) -0-
J. Mark Hollingsworth................. -0- (3) -0-
Eugene K. Anderson.................... -0- (3) -0-
A. Andrew R. Louis.................... -0- (3) -0-
Kelly D. Luttmer...................... 10 (3) *"
Footnote 5 on page 16 of the Offer to Purchase is amended and restated to
read in its entirety as follows:
"The TIMET Shares shown as beneficially owned by Harold C. Simmons
include the 1,643,900 TIMET Shares in the aggregate beneficially owned by
Tremont, the Master Trust, Contran and Purchaser. Mr. Simmons may be deemed
the beneficial owner of these shares. See footnote 3 above. In addition,
the TIMET Shares shown as beneficially owned by Mr. Simmons include 4,760
shares held by a trust, for which Mr. Simmons and his wife are co-trustees
and the beneficiaries of which are his wife's grandchildren (the
"Grandchildren's Trust"). Mr. Simmons shares the power to vote and direct
the disposition of the TIMET Shares the Grandchildren's Trust directly
holds. The TIMET Shares shown as beneficially owned by Harold C. Simmons
excludes 133,900 TIMET Shares issuable to Mr. Simmon's spouse upon
conversion of 1,000,000 Securities that she directly owns. The percentage
ownership of TIMET Shares attributable to Mr. Simmons assumes the full
conversion of only the Securities that Contran directly holds. Mr. Simmons
disclaims beneficial ownership of any and all of such Securities that
Tremont, the Master Trust, Contran, Purchaser, his spouse or the
Grandchildren's Trust directly or indirectly holds."
Item 12. Material to Be Filed as Exhibits.
(a)(1) Offer to Purchase dated May 5, 2003.*
(a)(2) Form of Letter of Transmittal.*
(a)(3) Form of Notice of Guaranteed Delivery.*
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees.*
(a)(5) Form of Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Nominees.*
(a)(6) Form of Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9.*
(a)(7) Press Release issued by Purchaser on May 5, 2003.*
(b) None.
(d)(1) Intercorporate Services Agreement between TIMET and NL Industries,
Inc., effective as of January 1, 2002 (incorporated by reference to
Exhibit 10.3 to NL Industries, Inc.'s Quarterly Report on Form 10-Q
for the quarter ended March 31, 2002).
(d)(2) Intercorporate Services Agreement between TIMET and Tremont
Corporation, effective as of January 1, 2002 (incorporated by
reference to Exhibit 10.2 to TIMET's Quarterly Report on Form 10-Q for
the quarter ended March 31, 2002).
(d)(3) Shareholders' Agreement, dated February 15, 1996, among TIMET, Tremont
Corporation, IMI plc, IMI Kynoch Ltd., and IMI Americas, Inc.
(incorporated by reference to Exhibit 2.2 to Tremont Corporation's
Current Report on Form 8-K (File No. 1-10126) filed with the
Securities and Exchange Commission on March 1, 1996).
(d)(4) Amendment to the Shareholders' Agreement, dated March 29, 1996, among
TIMET, Tremont Corporation, IMI plc, IMI Kynoch Ltd. and IMI Americas,
Inc. (incorporated by reference to Exhibit 10.30 to Tremont
Corporation's Annual Report on Form 10-K (File No. 1-10126) for the
year ended December 31, 1995).
(d)(5) Amended and Restated Declaration of Trust of TIMET Capital Trust I,
dated as of November 20, 1996, among Titanium Metals Corporation, as
Sponsor, JP Morgan Chase Bank (f/k/a The Chase Manhattan Bank), as
Property Trustee, Chase Manhattan Bank (Delaware), as Delaware Trustee
and Joseph S. Compofelice, Robert E. Musgraves and Mark A. Wallace, as
Regular Trustees (incorporated by reference to Exhibit 4.2 to TIMET's
Current Report on Form 8-K filed with the Securities and Exchange
Commission on December 5, 1996.)
(d)(6) Form of 6 5/8% Convertible Preferred Securities (incorporated by
reference to Exhibit 4.4 to TIMET's Current Report on Form 8-K filed
with the Securities and Exchange Commission on December 5, 1996).
(d)(7) Convertible Preferred Securities Guarantee, dated as of November 20,
1996, between TIMET, as Guarantor, and JP Morgan Chase Bank (f/k/a The
Chase Manhattan Bank), as Guarantee Trustee (incorporated by reference
to Exhibit 4.7 to TIMET's Current Report on Form 8-K filed with the
Securities and Exchange Commission on December 5, 1996).
(d)(8) Indenture for the 6 5/8% Convertible Subordinated Debentures, dated as
of November 20, 1996 among TIMET and JP Morgan Chase Bank (f/k/a The
Chase Manhattan Bank), as Trustee (incorporated by reference to
Exhibit 4.3 to TIMET's Current Report on Form 8-K filed with the
Securities and Exchange Commission on December 5, 1996).
(g) None.
(h) None.
* Incorporated by reference to the Schedule TO filed by Purchaser on May 5,
2003.
Item 13. Information Required by Schedule 13E-3.
Not applicable.
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.
Dated: May 16, 2003 VALHI, INC.
By: /s/ Steven L. Watson
-----------------------------------
Steven L. Watson
President and Chief Executive Officer
EXHIBIT INDEX
Exhibit No.
(a)(1) Offer to Purchase dated May 5, 2003.*
(a)(2) Form of Letter of Transmittal.*
(a)(3) Form of Notice of Guaranteed Delivery.*
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees.*
(a)(5) Form of Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Nominees.*
(a)(6) Form of Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9.*
(a)(7) Press Release issued by Purchaser on May 5, 2003.*
(b) None.
(d)(1) Intercorporate Services Agreement between TIMET and NL Industries,
Inc., effective as of January 1, 2002 (incorporated by reference to
Exhibit 10.3 to NL Industries, Inc.'s Quarterly Report on Form 10-Q
for the quarter ended March 31, 2002).
(d)(2) Intercorporate Services Agreement between TIMET and Tremont
Corporation, effective as of January 1, 2002 (incorporated by
reference to Exhibit 10.2 to TIMET's Quarterly Report on Form 10-Q for
the quarter ended March 31, 2002).
(d)(3) Shareholders' Agreement, dated February 15, 1996, among TIMET, Tremont
Corporation, IMI plc, IMI Kynoch Ltd., and IMI Americas, Inc.
(incorporated by reference to Exhibit 2.2 to Tremont Corporation's
Current Report on Form 8-K (File No. 1-10126) filed with the
Securities and Exchange Commission on March 1, 1996).
(d)(4) Amendment to the Shareholders' Agreement, dated March 29, 1996, among
TIMET, Tremont Corporation, IMI plc, IMI Kynoch Ltd. and IMI Americas,
Inc. (incorporated by reference to Exhibit 10.30 to Tremont
Corporation's Annual Report on Form 10-K (File No. 1-10126) for the
year ended December 31, 1995).
(d)(5) Amended and Restated Declaration of Trust of TIMET Capital Trust I,
dated as of November 20, 1996, among Titanium Metals Corporation, as
Sponsor, JP Morgan Chase Bank (f/k/a The Chase Manhattan Bank), as
Property Trustee, Chase Manhattan Bank (Delaware), as Delaware Trustee
and Joseph S. Compofelice, Robert E. Musgraves and Mark A. Wallace, as
Regular Trustees (incorporated by reference to Exhibit 4.2 to TIMET's
Current Report on Form 8-K filed with the Securities and Exchange
Commission on December 5, 1996.)
(d)(6) Form of 6 5/8% Convertible Preferred Securities (incorporated by
reference to Exhibit 4.4 to TIMET's Current Report on Form 8-K filed
with the Securities and Exchange Commission on December 5, 1996).
(d)(7) Convertible Preferred Securities Guarantee, dated as of November 20,
1996, between TIMET, as Guarantor, and JP Morgan Chase Bank (f/k/a The
Chase Manhattan Bank), as Guarantee Trustee (incorporated by reference
to Exhibit 4.7 to TIMET's Current Report on Form 8-K filed with the
Securities and Exchange Commission on December 5, 1996).
(d)(8) Indenture for the 6 5/8% Convertible Subordinated Debentures, dated as
of November 20, 1996 among TIMET and JP Morgan Chase Bank (f/k/a The
Chase Manhattan Bank), as Trustee (incorporated by reference to
Exhibit 4.3 to TIMET's Current Report on Form 8-K filed with the
Securities and Exchange Commission on December 5, 1996).
(g) None.
(h) None.
* Incorporated by reference to the Schedule TO filed by Purchaser on May 5,
2003.