form8-k.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
8-K
Current
Report
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date
of Report (Date of earliest event reported): July 25,
2007
MC
SHIPPING INC.
(Exact
name of registrant as specified in its charter)
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Liberia
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1-10231
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98-0101881
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(State
or other jurisdiction of incorporation)
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Commission
file Number
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(IRS
Employer Identification No.)
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Richmond
House, 12 Par-la-ville Road, Hamilton HM CX.
Bermuda
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(Address
of principal executive offices)
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441-295-7933
(Registrant's
telephone number, including area code)
Not
Applicable
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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£
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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£
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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£
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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£
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Item
1.01.
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Entry
into a Material Definitive
Agreement.
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On
July
30, 2007, MC Shipping Inc., a corporation organized under the laws of Liberia
("MC Shipping” or the "Company"), entered into an Agreement and
Plan of Merger (the "Merger Agreement"), by and among the Company, Mast
Acquisition Ltd., a Bermuda exempted limited company organized under the laws
of
Bermuda (“Parent”), and Mast Merger Sub Corp., a corporation organized
under the laws of the Republic of Liberia and a wholly-owned subsidiary of
Parent ("Merger Sub"). Parent is a newly-formed entity
controlled by Bear Stearns Merchant Banking (“BSMB”), the private equity
affiliate of The Bear Stearns Companies Inc. The Board of Directors
of MC Shipping (the “Company Board”), based on the recommendation of
its Transaction Committee, consisting of four directors independent of the
Company’s principal shareholders and management, and a fairness opinion issued
by DnB NOR Markets, Inc., approved the Merger Agreement, determined that the
transactions contemplated by the Merger Agreement are advisable and in the
best
interest of MC Shipping’s shareholders and resolved to recommend that the MC
Shipping shareholders vote to adopt the Merger Agreement.
Pursuant
to the terms of the Merger Agreement, Merger Sub will merge with and into MC
Shipping (the "Merger"), with MC Shipping surviving the Merger as a
wholly-owned subsidiary of Parent controlled by BSMB (the "Surviving
Corporation"). At the effective time, and as a result, of the
Merger, MC Shipping shareholders will receive $14.25 per share in cash in
exchange for their MC Shipping shares. MC Shipping shareholders
who dissent from the Merger are entitled to assert appraisal rights in
accordance with the Business Corporation Act of the Republic of
Liberia.
Concurrent
with the signing of the Merger Agreement, the Company’s principal shareholders,
Navalmar Transportes Maritimos LDA (an entity controlled by Enrico Bogazzi)
and
Weco-Rederi Holding A/S (an entity controlled by Johan Wedell-Wedellsborg),
with
collective ownership of approximately 53% of the common stock of MC Shipping
(the “Principal Shareholders”), sold their shares of Company common stock
to BSMB at the same $14.25 price per share that is payable under the Merger
Agreement. Mr. Bogazzi and Mr. Wedell-Wedellsborg, as designees of
the Principal Shareholders, resigned their positions as directors of the Company
immediately prior to the Company Board meeting that approved the Merger
Agreement.
The
consummation of the transactions contemplated by the Merger Agreement is subject
to customary conditions, including receipt of the affirmative vote of the
holders of two-thirds of the shares of common stock of the Company present
in
person or represented by proxy (but in no event less than a majority of the
outstanding shares) at a special shareholders meeting to be held to approve
the
Merger Agreement (the "MC Shipping Shareholder
Approval").
A
special
meeting of MC Shipping shareholders has been scheduled for September 5,
2007 to vote on the Merger Agreement. Shareholders of record on
August 9, 2007 will be entitled to vote at this special
meeting. BSMB has agreed to vote its approximate 53% stake in favor
of the adoption of the Merger Agreement. Because completion of the
Merger is not conditioned on the receipt of any governmental or regulatory
approvals or third party consents, the Merger is expected to close immediately
following receipt of Company shareholder approval.
MC
Shipping has made customary representations, warranties and covenants in the
Merger Agreement, including, among others things, covenants to conduct its
business in all material respects in the ordinary course and in conformity
with
past practice during the period between execution of the Merger Agreement and
the effective time of the Merger and to refrain from specified activities during
that period without the consent of Parent (which generally may not be
unreasonably withheld, delayed or conditioned). None of the
representations and warranties of MC Shipping contained in the Merger Agreement,
nor any of its covenants to be performed in full prior to the closing, will
survive closing of the Merger.
During
the 35-day period following the signing of the Merger Agreement (the “Go-Shop
Period”), the Transaction Committee may actively solicit offers or proposals
for the acquisition of the Company (a “Takeover Proposal”),
including by engaging in negotiations or discussions, furnishing confidential
information or releasing third parties from standstill
agreements. Upon the termination of the Go-Shop Period, the
Transaction Committee must immediately cease all such activities, except with
any person (x) with whom the Transaction Committee is negotiating a Takeover
Proposal at the end of the Go-Shop Period that the Transaction Committee
determines in good faith constitutes or would reasonably be expected to lead
to
a Takeover Proposal that is a Superior Proposal (as defined in the Merger
Agreement) or (y) who thereafter submits an unsolicited Takeover Proposal that
the Transaction Committee determines in good faith constitutes or would
reasonably be expected to lead to a Superior Proposal.
MC
Shipping may cause the Company to
terminate the Merger Agreement if the Company Board determines in good faith
(after consultation with its outside legal counsel and financial advisor) that
(x) a Takeover Proposal constitutes a Superior Proposal and (y) such action
is
advisable in order for the Company Board to comply with its fiduciary duties
to
shareholders. The Company Board must give Parent five business days
notice prior to terminating the Merger Agreement in order to accept a Superior
Proposal, and Parent will have an opportunity during such five business day
period to match such Superior Proposal, in which case the Company will not
be
entitled to terminate the Merger Agreement. BSMB has agreed in the
Merger Agreement to support a qualified Superior Proposal accepted by the
Company Board (by tendering its shares or voting in favor of a merger, as
applicable) if such Superior Proposal has a price per share of at least $15.00
and is not subject to a financing condition or other conditions more onerous
than those contained in the Merger Agreement. In the event of such
termination, MC Shipping must pay Parent a termination fee equal to $7,750,000,
which represents approximately 2.7% of the Company’s enterprise
value.
In
the
event that the Merger Agreement is terminated for any reason, other than for
a
breach by Parent, and a Superior Proposal is not completed within 90 days
thereafter, Parent will be entitled (but only for so long as Parent owns more
than 50% of the Company Common Stock) to (x) 50% representation on the Company
Board until the Company’s next annual meeting (or June 30, 2008, if
sooner), and Company Board action during such period will require the approval
of at least one director who has not been designated by Parent and (y) from
and
after the next annual meeting (or June 30, 2008, if sooner) to
proportionate representation on the Company Board. During any period
in which Parent is entitled to proportionate representation on the Company
Board, the Company Board must also include three independent directors, and
any
transaction between Parent and Company (including mergers and acquisitions
of
additional shares) must be approved by a majority of the independent directors
or by a majority of the minority shareholders. Also during these
periods, Parent may not purchase any additional shares for a purchase price
below the Merger Consideration unless Parent makes an offer to acquire all
outstanding shares at the same price or receives approval of such purchase
from
a majority of the independent directors or a majority of the minority
shareholders.
The
foregoing description of the terms and conditions of the Merger Agreement is
a
summary and is qualified in its entirety by reference to the Merger Agreement,
which is attached as Exhibit 10.1 hereto and is incorporated herein by
reference in its entirety.
The
Merger Agreement has been included to provide investors and shareholders with
information regarding its terms. It is not intended to provide any
other factual information about MC Shipping or BSMB. The
representations, warranties and covenants contained in the Merger Agreement
were
made only for purposes of the Merger Agreement and as of specified dates, were
solely for the benefit of the parties to the Merger Agreement, and may be
subject to limitations agreed upon by the contracting parties, including
complete waiver or qualified by confidential disclosures exchanged between
the
parties in connection with the execution of the Merger Agreement. The
representations and warranties may have been made for the purposes of allocating
contractual risk between the parties to the Merger Agreement instead of
establishing these matters as facts, and may be subject to standards of
materiality applicable to the contracting parties that differ from those
applicable to investors. Investors are not third-party beneficiaries
under the Merger Agreement and should not rely on the representations,
warranties and covenants or any descriptions thereof as characterizations of
the
actual state of facts or condition of the parties or any of their respective
subsidiaries or affiliates. Moreover, information concerning the
subject matter of the representations and warranties may change after the date
of the Merger Agreement, which subsequent information may or may not be fully
reflected in MC Shipping’s public disclosures.
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Item
5.01.
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Changes
in Control of Registrant.
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Reference
is made to the disclosure with respect to the purchase by Parent (which is
controlled by BSMB) of the approximate collective 53% stake in the Company’s
common stock owned by the Principal Shareholders concurrent with the execution
and delivery of the Merger Agreement, as described under Item 1.01 of this
Current Report, which disclosure is incorporated herein by
reference.
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Item
5.02.
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Departure
of Directors or Certain Officers; Election of Directors; Appointment
of
Certain Officers; Compensatory Arrangements of Certain
Officers.
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As
described in Item 1.01 of this Current Report, prior to the Company Board’s
consideration of the approval of the Merger Agreement:
(a) On
July 25, 2007, Mr. Enrico Bogazzi, designee of Navalmar Transportes Maritimos
LDA, resigned as a Director of the Company.
(b) On
July 25, 2007, Mr. Johan Wedell-Wedellsborg, designee of Weco-Rederi Holding
A/S, resigned as a Director of the Company.
On
July
30, 2007, the Company and BSMB issued a joint press release announcing the
execution of the Merger Agreement and the other matters discussed herein, a
copy
of which is filed as Exhibit 99.1 hereto and
incorporated herein by reference.
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Item
9.01.
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Financial
Statements and Exhibits.
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Exhibit
Number
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Description
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10.1
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Form
of Agreement and Plan of Merger, dated as of July 30, 2007,
by and among Mast Acquisition Ltd., Mast Merger Sub Corp., and MC
Shipping
Inc.
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99.1
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Press
release issued jointly by Mast Acquisition Ltd. and MC Shipping Inc.
dated
July 30, 2007.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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MC
SHIPPING INC.
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/S/
A.S. Crawford
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Antony
S. Crawford
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Chief
Executive Officer
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(Principal
Executive Officer)
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Date:
July 31, 2007
Exhibit
Index
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Exhibit
Number
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Description
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Form
of Agreement and Plan of Merger, dated as of July 30, 2007,
by and among Mast Acquisition Ltd., Mast Merger Sub Corp., and MC
Shipping
Inc.
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Press
release issued jointly by Mast Acquisition Ltd. and MC Shipping Inc.
dated as of July 30, 2007.
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