Longs Drug Stores Corp - Statement of Ownership: Solicitation (SC 14D9)
12 Settembre 2008 - 9:29PM
Edgar (US Regulatory)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT UNDER SECTION 14(d)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934
Longs Drug Stores Corporation
(Name of Subject Company)
Pershing Square Capital Management, L.P, et al.
(Name of Persons Filing Statement)
Common Stock
(Title of Class of Securities)
Roy J. Katzovicz, Esq.
Pershing Square Capital Management, L.P.
888 Seventh Avenue, 42
nd
Floor
New York, New York 10019
212-813-3700
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
with a copy to:
Peter G. Samuels, Esq.
Proskauer Rose LLP
1585 Broadway, New York, New York 10036
212-969-3000
o
Check the box if the filing relates to preliminary communications made before the
commencement date of a tender offer.
TABLE OF CONTENTS
ITEM 1. SUBJECT COMPANY INFORMATION
Name and Address
. The name of the subject company is Longs Drug Stores Corporation, a
Maryland corporation (the Company). The address of the Companys principal executive offices is
141 North Civic Drive, Walnut Creek, California, 94596, and the telephone number of the Companys
principal executive offices is (925) 937-1170.
Securities
. The title of the class of equity securities to which this Schedule 14D-9 relates
is the common stock, par value $0.50 per share, of the Company (the Common Stock).
As of the close of business on August 14, 2008, there were 36,007,597 shares of Common Stock
outstanding, as reported in the Companys quarterly report on Form 10-Q for the period ending July
31, 2008.
ITEM 2. IDENTITY AND BACKGROUND OF FILING PERSON
Name and Address
. This Schedule 14D-9 is being filed by: (i) Pershing Square Capital
Management, L.P. (Pershing Square); (ii) PS Management GP, LLC, a Delaware limited liability
company (PS Management); (iii) Pershing Square GP, LLC, a Delaware limited liability company
(Pershing Square GP); and (iv) William A. Ackman, a citizen of the United States of America
(collectively, the Reporting Persons).
The business address of each of the Reporting Persons is 888 Seventh Avenue, 42
nd
Floor, New York, New York 10019.
Tender Offer
. This Schedule 14D-9 relates to the tender offer (the Offer) by Blue MergerSub
Corp., a Maryland corporation (Purchaser) and an indirect wholly owned subsidiary of CVS Caremark
Corporation, a Delaware corporation (CVS), to purchase all outstanding Common Stock for $71.50
per share, net to the seller in cash, without interest (the Offer Price), upon the terms and
subject to the conditions set forth in the Purchasers Offer to Purchase dated August 18, 2008 (as
amended or supplemented from time to time, the Offer to Purchase) and in the related Letter of
Transmittal, as amended or supplemented from time to time, copies of which were filed with the U.S.
Securities and Exchange Commission (the SEC) on August 18, 2008. The Offer is described in a
Tender Offer Statement on Schedule TO (as amended or supplemented from time to time, the Schedule
TO), which was filed with the SEC on August 18, 2008.
The Offer is being made pursuant to an Agreement and Plan of Merger dated as of August 12,
2008, among the Company, CVS and Purchaser (the Merger Agreement). The Merger Agreement provides,
among other things, that as soon as possible after consummation of the Offer, Purchaser will merge
with and into the Company (the Merger ), with the Company continuing as the surviving corporation
and an indirect wholly owned subsidiary of CVS. At the effective time of the Merger, each
outstanding share of Common Stock (other than any shares held by CVS or any subsidiary of the
Company or CVS) will be converted into the right to receive the Offer Price. A copy of the Merger
Agreement was filed with the SEC on August 18, 2008.
The Schedule TO states that the address of the principal executive offices of Purchaser is One
CVS Drive, Woonsocket, Rhode Island 02895, and Purchasers telephone number at such principal
executive offices is (401) 765-1500.
ITEM 3. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS
None.
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ITEM 4. THE SOLICITATION OR RECOMMENDATION
Solicitation
or Recommendation; Reasons; Intent to Tender.
Reference is made to the Reporting Persons Letter to
Shareholders, dated September 11, 2008, a copy of which is filed
as Exhibit (g)(1) hereto and is
incorporated herein by reference.
ITEM 5. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED
The Reporting Persons have retained The Blackstone Group to help identify strategic and
financial buyers with a possible interest in the Company.
The Reporting Persons have agreed to provide customary indemnification to The Blackstone Group in
connection with such engagement, but have not entered into other agreements with The Blackstone
Group.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY
Securities Transactions.
Pershing Square advises a number of client accounts, including the
accounts of Pershing Square, L.P., Pershing Square II, L.P. and Pershing Square International, Ltd.
(collectively, the Pershing Square Funds). An aggregate of 3,137,659 shares of
Common Stock and certain cash-settled total return swaps referencing
6,094,996 notional shares were purchased for the account of the
Pershing Square Funds, for
a total consideration (including brokerage commissions) of $136,609,962 derived from the capital of
the Pershing Square Funds.
All transactions in Common Stock and Swaps were reported by the Reporting Persons on Schedule
13D, as originally filed with the SEC on August 5, 2008, as amended from time to time (the
Schedule 13D). The trading data in the Reporting Persons transactions in Common Stock and Swaps
during the past 60 days can be found at:
http://sec.gov/Archives/edgar/data/764762/000095012308009502/y65622exv99w1.htm
and
http://sec.gov/Archives/edgar/data/764762/000095012308009338/y65281exv99w1.htm. The shares of Common Stock were
purchased in the open market at prices ranging from
$40.77 to $45.92 per share of Common Stock.
In addition to the Common Stock beneficially held by the Reporting Persons, between July 31,
2008 and August 13, 2008, certain of the Reporting Persons entered into certain Swaps for Pershing
Square, L.P. (the PSLP Swaps) and Pershing Square International, Ltd., a Cayman Islands exempted
company (the PSIL Swaps, and together with the PSLP Swaps, the Swaps). The Swaps constitute
economic exposure to approximately 6,094,996 notional shares of Common Stock in the aggregate, have
reference prices ranging from $46.55 to $70.36 and expire on dates ranging from November 30, 2009
to August 31, 2010. Under the terms of the Swaps (i) the applicable Pershing Square Fund will be
obligated to pay to the counterparty any negative price performance of the notional number of
shares of Common Stock subject to the applicable Swap as of the expiration date of such Swap, plus
interest, and (ii) the counterparty will be obligated to pay to the applicable Pershing Square Fund
any positive price performance of the notional number of shares of Common Stock subject to the
applicable Swap as of the expiration date of the Swaps. With regard to the PSIL Swaps, any
dividends received by the counterparty on such notional shares of Common Stock will be paid to
Pershing Square International, Ltd. during the term of the PSIL Swap. With regard to the PSLP
Swaps, any dividends received by the counterparty on such notional shares of Common Stock during
the term of the PSLP Swaps will be paid to Pershing Square, L.P. at maturity. All balances will be
cash settled at the expiration date of the Swaps. The Pershing Square Funds counterparty for the
Swaps includes entities related to BNP Paribas, Citibank, Credit Suisse and UBS.
These Swaps do not give the Reporting Persons direct or indirect voting, investment, or
dispositive control over any securities of the Company and do not require the counterparty thereto
to acquire, hold, vote or dispose of any securities of the Company. Accordingly, the Reporting
Persons disclaim any beneficial ownership in notional securities that may be referenced in such contracts or
that may be held from time to time by any counterparty to the contracts.
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ITEM 7. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS
Not applicable.
ITEM 8. ADDITIONAL INFORMATION
The information incorporated by reference is deemed to be part of this Schedule 14D-9, except
for any information superseded by information contained directly in this Schedule 14D-9.
ITEM 9. EXHIBITS
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Item No.
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Description
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(g)(1)
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Letter to the Board of Directors of
Longs Drug Stores Corporation, dated September 11, 2008
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(g)(2)
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Transcript of William A. Ackmans
appearance on Squawk Box on September 10, 2008.
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SIGNATURE
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.
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Date: September 12, 2008
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PERSHING SQUARE CAPITAL MANAGEMENT, L.P.
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By:
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PS Management GP, LLC,
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its General Partner
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By:
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/s/ William A. Ackman
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William A. Ackman
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Managing Member
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PS MANAGEMENT GP, LLC
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By:
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/s/ William A. Ackman
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William A. Ackman
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Managing Member
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PERSHING SQUARE GP, LLC
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By:
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/s/ William A. Ackman
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William A. Ackman
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Managing Member
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/s/ William A. Ackman
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William A. Ackman
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