SPCHB (MM)

 

 

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. 8)

 

 

SPORT CHALET, INC.

(Name of Subject Company (Issuer))

EVEREST MERGER SUB, INC.

(Names of Filing Persons (Offeror))

a wholly-owned subsidiary of

VESTIS RETAIL GROUP, LLC

(Names of Filing Persons (Parent of Offeror))

Versa Capital Fund II, L.P.

Versa Capital Fund II-A, L.P.

(Names of Filing Persons (Others))

Class A Common Stock, par value $0.01 per Share

(Title of Class of Securities)

849163209

(CUSIP Number of Class of Securities)

Class B Common Stock, par value $0.01 per Share

(Title of Class of Securities)

849163308

(CUSIP Number of Class of Securities)

Thomas Kennedy

Versa Capital Management, LLC

Cira Centre

2929 Arch Street

Philadelphia, PA 19104

(215) 609-3400

(Name, address and telephone number of person authorized to receive notices and communications on behalf of the filing persons)

 

 

Copies to:

Alison S. Ressler

Rita-Anne O’Neill

Sullivan & Cromwell LLP

1888 Century Park East, 21st Floor

Los Angeles, CA 90067

 

 

CALCULATION OF FILING FEE

 

Transaction Valuation*		Amount of Filing Fee**
$19,612,280.40		$2,526.06

*

Estimated for purposes of calculating the filing fee only. The transaction was calculated by multiplying (a) $1.20, the tender offer price, by (b) the sum of (i) 12,414,490, the number of issued and outstanding shares of Class A common stock of Sport Chalet, Inc., (ii) 1,775,821, the number of shares of Class B common stock of Sport Chalet, Inc., (iii) 2,127,506, the number of shares of Class A common stock issuable upon the vesting and exercise of issued and outstanding stock options and (iv) 25,750, the number of shares of Class B common stock issuable upon the vesting and exercise of issued and outstanding options. The foregoing figures were provided by Sport Chalet, Inc. as of June 30, 2014.

**

The amount of the filing fee, calculated in accordance with Rule 0-11 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Fee Rate Advisory No. 1 for fiscal year 2014 issued by the Securities and Exchange Commission on August 30, 2013, by multiplying the transaction valuation by .0001288.

 

 

 

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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:		$2,526.06		Filing Party:		Everest Merger Sub, Inc., Vestis Retail Group, LLC, Versa Capital Fund II, L.P. and Versa Capital Fund II-A, L.P.
Form or Registration No.:		Schedule TO		Date Filed:		July 3, 2014

 

¨	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:

 

x

third-party tender offer subject to Rule 14d-1.

¨

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:  x

This Amendment No. 8 to the Tender Offer Statement on Schedule TO amends and supplements the Tender Offer Statement on Schedule TO filed with the Securities and Exchange Commission on July 3, 2014 (together with any amendments and supplements thereto, the “Schedule TO”) by Vestis Retail Group, LLC, a Delaware limited liability company (“Vestis”), Everest Merger Sub, Inc., a Delaware corporation (“Purchaser”) and a wholly-owned subsidiary of Vestis, Versa Capital Fund II, L.P., a Delaware limited partnership (“Fund II”) and Versa Capital Fund II-A, L.P., a Delaware limited partnership (“Fund II-A”). The Schedule TO relates to the offer by Purchaser to purchase all outstanding shares of Class A common stock, par value $0.01 per share, and Class B common stock, par value $0.01 per share, of Sport Chalet, Inc., a Delaware corporation (“Sport Chalet”), at a purchase price of $1.20 per share (as such price per share may be reduced pursuant to the Agreement and Plan of Merger, by and among Sport Chalet, Purchaser and Vestis, dated June 30, 2014, as amended on August 3, 2014), net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase dated July 3, 2014 (the “Offer to Purchase”) and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the “Offer”).

All capitalized terms used in this Amendment No. 8 and not otherwise defined have the respective meanings ascribed to them in the Offer to Purchase.

Items 1–11.

Items 1–11 of the Schedule TO are hereby amended and supplemented as follows:

At 12:00 midnight, New York City time, at the end of August 15, 2014, the Offer expired as scheduled and was not extended. Purchaser was advised by the Depositary that, as of the Expiration Date, a total of 4,178,979 shares of Class A Common Stock and 1,455,923 shares of Class B Common Stock were validly tendered into and not withdrawn from the Offer, representing approximately 33.7% and 82.0% of the currently outstanding Class A Common Shares and Class B Common Shares, respectively, on a fully diluted basis. In addition, the Depositary advised that Notices of Guaranteed Delivery have been delivered with respect to 26,312 shares of Class A Common Stock and 27,192 shares of Class B Common Stock, representing approximately 0.2% and 1.5% of the currently outstanding Class A Common Shares and Class B Common Shares, respectively, on a fully diluted basis. The number of Shares tendered pursuant to the Offer, together with the Shares to be acquired by Vestis or Purchaser pursuant to the Stock Purchase Agreement and the Shares issuable pursuant to the Top-Up Option, satisfies the Minimum Condition and exceeds the minimum number of Shares required to avoid the occurrence of a Price Reduction Trigger. All conditions to the Offer having been satisfied, Purchaser accepted for payment, and expects to promptly pay for, all Shares validly tendered into and not validly withdrawn from the Offer.

Purchaser intends to exercise the Top-Up Option to purchase additional Shares directly from Sport Chalet for $1.20 per Share so that it holds at least 90% of the outstanding shares of each of the Class A Common Stock and Class B Common Stock following such exercise.

        Following the consummation of the Offer and the Stock Purchase Agreement transaction and the issuance of the Top-Up Shares, and subject to the satisfaction of the remaining conditions set forth in the Merger Agreement, Vestis and Purchaser intend to complete the acquisition of Sport Chalet through the Merger as promptly as practicable without a vote of any other stockholders of Sport Chalet in accordance with Section 253 of the DGCL. At the Effective Time, each Share then outstanding (other than Shares that are held by any stockholders who are entitled to and who properly demand appraisal in connection with the Merger as described in Section 17 — “Certain Legal Matters; Regulatory Approvals—Appraisal Rights” of the Offer to Purchase) will be converted into the right to receive $1.20 per Share, without interest, less any applicable withholding taxes, except for Shares then owned by Vestis, Purchaser, Sport Chalet or any of their respective direct or indirect subsidiaries or affiliates, which Shares will be cancelled and retired and will cease to exist, and no consideration will be delivered in exchange therefor.

Following the Merger, all Shares will be delisted and will cease to trade on the NASDAQ.

On August 18, 2014, Vestis and Sport Chalet issued a press release announcing the expiration and results of the Offer. The full text of the press release is attached as Exhibit (a)(5)(vii) to the Schedule TO and is incorporated herein by reference.

Item 12. Exhibits.

Item 12 of the Schedule TO is hereby amended and supplemented by adding the following exhibit:

 

Exhibit No.		Description
(a)(5)(vii)		Joint Press Release issued by Vestis Retail Group, LLC and Sport Chalet, Inc. on August 18, 2014.

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SIGNATURES

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: August 18, 2014

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EXHIBIT INDEX

 

Exhibit No.		Description
(a)(1)(i)		Offer to Purchase, dated July 3, 2014.*
(a)(1)(ii)		Form of Letter of Transmittal.*
(a)(1)(iii)		Form of Notice of Guaranteed Delivery.*
(a)(1)(iv)		Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.*
(a)(1)(v)		Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.*
(a)(1)(vi)		Summary Advertisement as published on July 3, 2014 in The New York Times.*
(a)(2)(i)		Not applicable.
(a)(5)(i)		Joint Press Release issued by Vestis Retail Group, LLC and Sport Chalet, Inc. on June 30, 2014.**
(a)(5)(ii)		Letter to Beneficial Holders of Common Stock of Sport Chalet, Inc., dated July 18, 2014, from Sport Chalet, Inc.*
(a)(5)(iii)		Letter to Registered Holders of Common Stock of Sport Chalet, Inc., dated July 18, 2014, from Sport Chalet, Inc.*
(a)(5)(iv)		Press Release issued by Sport Chalet, Inc. on July 31, 2014.*
(a)(5)(v)		Joint Press Release issued by Vestis Retail Group, LLC and Sport Chalet, Inc. on August 4, 2014.*
(a)(5)(vi)		Press Release issued by Sport Chalet, Inc. on August 12, 2014.*
(a)(5)(vii)		Joint Press Release issued by Vestis Retail Group, LLC and Sport Chalet, Inc. on August 18, 2014.
(b)		Not applicable.
(d)(1)		Agreement and Plan of Merger, by and among Sport Chalet, Inc., Everest Merger Sub, Inc. and Vestis Retail Group, LLC, dated June 30, 2014.*
(d)(2)(i)		Form of Tender and Support Agreement, dated as of June 30, 2014, by and among Vestis Retail Group, LLC, Everest Merger Sub, Inc. and each of Craig L. Levra, Howard K. Kaminsky and Dennis Trausch.*
(d)(2)(ii)		Stock Purchase Agreement, by and among Vestis Retail Group, LLC, Everest Merger Sub, Inc., The Olberz Family Trust dated 05/06/1997, Irene M. Olberz and Eric S. Olberz, dated June 30, 2014.*
(d)(2)(iii)		Severance Waiver Agreement, by and between Sport Chalet, Inc. and Craig L. Levra, dated June 30, 2014.*
(d)(2)(iv)		Severance Waiver Agreement, by and between Sport Chalet, Inc. and Howard K. Kaminsky, dated June 30, 2014.*
(d)(2)(v)		Confidentiality Agreement, by and between Versa Capital Management, LLC and Cappello Capital Corp., dated January 7, 2014.*
(d)(3)		Amendment No.1, dated as of August 3, 2014, to the Agreement and Plan of Merger, dated as of June 30, 2014, by and among Sport Chalet, Inc., Vestis Retail Group, LLC and Everest Merger Sub, Inc.*
(g)		None.
(h)		None.

 

*	Previously filed.

**	Previously filed as Exhibit 99.1 to Everest Merger Sub, Inc.’s Schedule TO-C, dated June 30, 2014, and incorporated herein by reference.

Exhibit (a)(5)(vii)

 

Vestis Retail Group Completes Tender Offer for All Outstanding Shares of Sport Chalet Stock

MERIDEN, CT and LA CAÑADA, CA—August 18, 2014—Vestis Retail Group, LLC (“Vestis”) today announced the successful completion of the cash tender offer (the “Offer”) by it and its wholly owned subsidiary, Everest Merger Sub, Inc. (“Merger Sub”), for all outstanding Class A and Class B shares (the “Shares”) of Sport Chalet, Inc. (NASDAQ: SPCHA, SPCHB) at a price of $1.20 per Share, net to the seller in cash (less any required withholding taxes and without interest). Computershare Trust Company, N.A., the depositary for the Offer, has advised Vestis that, as of 12:00 midnight, New York City time, at the end of August 15, 2014 (the “Expiration Date”), approximately 4,178,979 Class A shares and 1,455,923 Class B shares had been validly tendered and not withdrawn in the Offer. Such tendered Shares, when combined with the Shares that Vestis has separately agreed to purchase from Sport Chalet’s founding family members immediately after consummation of the Offer (the “Family Shares”), represent approximately 94.7% of the outstanding Class A shares and 89.0% of the outstanding Class B shares. In addition, 26,312 Class A shares and 27,192 Class B shares were tendered through Notices of Guaranteed Delivery that had not been delivered in settlement or satisfaction of such guarantee, representing approximately 0.2% of the outstanding Class A shares and 1.5% of the outstanding Class B shares). Vestis has accepted for payment all Shares validly tendered and not withdrawn (other than Shares tendered through Notices of Guaranteed Delivery that had not been delivered in settlement or satisfaction of such guarantee prior to such acceptance) and will promptly pay for such Shares.

Merger Sub will acquire all of the remaining outstanding Shares by means of a “short form” merger under Delaware law promptly following the purchase of Shares in the Offer and the purchase of the Family Shares immediately after consummation of the Offer. As a result of the purchase of Shares in the Offer and the purchase of the Family Shares, Merger Sub has sufficient voting power to approve the merger without the affirmative vote of any other Sport Chalet stockholder. In order to accomplish the merger as a “short form” merger, Merger Sub currently intends to exercise its “top-up” option pursuant to the previously announced merger agreement between Vestis, Merger Sub and Sport Chalet, which permits Merger Sub to purchase additional Shares directly from Sport Chalet for $1.20 per Share (the same purchase price paid in the Offer). Based on the number of Class B shares validly tendered (excluding Class B shares tendered through Notices of Guaranteed Delivery that had not been delivered in settlement or satisfaction of such guarantee prior to acceptance of Shares in the Offer) and the Family Shares, which collectively represent approximately 89.0% of the outstanding Class B shares, Vestis expects to exercise the top-up option for approximately 173,500 Class B shares to enable it to accomplish the short-form merger. Following the merger, Sport Chalet will become a wholly owned subsidiary of Vestis, and each Share (including Shares tendered through Notices of Guaranteed Delivery that had not been delivered in settlement or satisfaction of such guarantee prior to acceptance of Shares in the Offer) will be cancelled and converted into the right to receive the same $1.20 per Share consideration, without interest, received by stockholders who validly tendered their Shares in the Offer prior to the Expiration Date (subject to exercise of appraisal rights).

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About Sport Chalet

Sport Chalet (Nasdaq: SPCHA, SPCHB) is a premier, full service specialty sporting goods retailer featuring the industry’s top sports brands in apparel, footwear, and sports equipment. Founded in 1959 by Norbert Olberz, the company has 50 stores in Arizona, California, Nevada and Utah; an online store at www.sportchalet.com; and a Team Sales division; and offers more than 50 specialty services for the sports enthusiast, including online same day delivery, climbing, backcountry skiing, ski mountaineering, avalanche education, and mountain trekking instruction, car rack installation, snowboard and ski rental and repair, Scuba training and certification, Scuba boat charters, gait analysis, baseball/softball glove steaming and lacing, racquet stringing, and bicycle tune-up and repair at its store locations. For more information, visit Sport Chalet at www.sportchalet.com.

About Vestis Retail Group

Based in Connecticut, Vestis Retail Group, LLC was formed by Versa Capital Management, LLC and encompasses Bob’s Stores (Bob’s) and Eastern Mountain Sports (EMS). Bob’s is a 60-year-old, award-winning Northeastern retailer of value-oriented footwear, apparel and work wear. EMS is the second largest U.S. multi-channel retailer of human-powered outdoor sports apparel and equipment with stores in the Northeastern and Mid-Atlantic states. More information is available at www.bobstores.com and www.ems.com.

About Versa Capital Management

Based in Philadelphia, PA, Versa Capital Management, LLC is a private equity investment firm with more than $1.4 billion of assets under management focused on control investments in special situations involving middle market companies where value and performance growth can be achieved through enhanced operational and financial management. Versa’s portfolio includes retailers Avenue Stores, EMS and Bob’s Stores; restaurants such as Black Angus Steakhouses; community newspapers under Civitas Media; and manufacturers that service a variety of industries. More information can be found at www.versa.com.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements, including all statements regarding the intent, belief or current expectation of the companies and members of their senior management teams. These forward-looking statements involve significant risks and uncertainties, including those discussed below and others that can be found in Sport Chalet’s Form 10-K for the year ended March 30, 2014, and in any subsequent periodic reports from Sport Chalet on Form 10-Q and Form 8-K. Vestis and Sport Chalet are providing this information as of the date of this news release and do not undertake any obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise. Forward-looking statements can be identified by the use of words such as “will,” “could,” “should,” “may,” “anticipate,” “expect,” “intend,” “estimate,” “believe,” “project,” “plan,” “potential,” “continue,” or other similar expressions.

Forward-looking statements include, without limitation, statements regarding business combinations and similar transactions, prospective performance and opportunities, and the outlook for Vestis’s and Sport Chalet’s businesses, performance and opportunities; the expected timing of the completion of the transactions contemplated by the Merger Agreement; the ability to complete the

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transactions considering the various closing conditions; and any assumptions underlying any of the foregoing. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those currently anticipated due to a number of risks and uncertainties. Risks and uncertainties that could cause the actual results to differ from expectations contemplated by forward-looking statements include: uncertainties regarding the two companies’ ability to integrate successfully; uncertainties as to the timing of the Offer and the Merger; uncertainties as to how many of Sport Chalet’s stockholders will tender their stock in the Offer; the possibility that competing offers will be made; the failure of Sport Chalet’s stockholders to approve the Merger; the failure to complete the Offer or the Merger in the timeframe expected by the parties or at all; the possibility that various closing conditions for the transactions may not be satisfied or waived; Sport Chalet’s ability to maintain relationships with employees, customers, or suppliers; the negative effect of the economic downturn and the lack of winter weather on the Sport Chalet’s sales; limitations on borrowing under Sport Chalet’s credit facilities; Sport Chalet’s ability to control operating expenses and costs; the competitive environment of the sporting goods industry in general and in Sport Chalet’s specific market areas; the challenge of maintaining Sport Chalet’s competitive position; Sport Chalet’s ability to maintain the growth of its Team Sales Division and online business; Sport Chalet’s ability to regain or subsequently maintain compliance with the requirements for continued listing of its common stock; and changes in costs of goods and services. These and other risks are more fully described in Sport Chalet’s filings with the SEC.

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Information Agent:

Georgeson Inc.

(866) 856-6388

Sport Chalet Contact:

Steve Teng

investorrelations@sportchalet.com

818.949.5300 ext. 728

Versa and Vestis Contacts:

Chuck Dohrenwend, 212.371.5999, cod@abmac.com

Rivian Bell, 213.630.6550, rlb@abmac.com

Abernathy MacGregor