UNITED STATES
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
(Amendment No. 5)
ZIPREALTY,
INC.
(Name of Subject Company)
ZIPREALTY,
INC.
(Names of Persons Filing Statement)
COMMON STOCK,
PAR VALUE $0.001 PER SHARE
(Title of Class of Securities)
98974V 107
(CUSIP Number
of Class of Securities)
Charles C. Baker
President and Chief Executive Officer
ZipRealty, Inc.
2000
Powell Street, Suite 300
Emeryville, CA 94608
(510) 735-2600
With
copies to:
Brett Cooper
Richard V. Smith
Orrick,
Herrington & Sutcliffe LLP
The Orrick Building
405 Howard Street
San
Francisco, California 94105
(415) 773-5700
(Name, address, and telephone numbers of person authorized to receive notices and communications
on behalf of the persons filing statement)
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Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.
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Purpose of Amendment
This Amendment No. 5 (this
Amendment
) amends and supplements the Solicitation/Recommendation Statement on
Schedule 14D-9 of ZipRealty, Inc. (the
Company
) filed with the Securities and Exchange Commission (the
SEC
) on July 16, 2014 (as amended and supplemented from time to time, the
Schedule 14D-9
). The Schedule 14D-9 relates to the tender offer by Honeycomb Acquisition, Inc., a Delaware corporation (
Purchaser
) and a wholly-owned indirect subsidiary of Realogy
Group LLC, a Delaware limited liability company (
Realogy
), to purchase all of the outstanding shares of Common Stock (collectively, the Shares), at a purchase price of $6.75 per Share, net to the seller thereof in
cash, without interest (the
Consideration
), upon the terms and subject to the conditions set forth in the Offer to Purchase, dated July 16, 2014 (together with any amendments or supplements thereto, the
Offer to
Purchase
), and in the related Letter of Transmittal (together with any amendments or supplements thereto, the
Letter of Transmittal
, which together with the Offer to Purchase, constitute the
Offer
).
The Offer is described in the Tender Offer Statement on Schedule TO (together with any amendments or supplements thereto, the
Schedule TO
), filed by Realogy and Purchaser with the SEC on July 16, 2014. The Offer to Purchase
and Letter of Transmittal are filed as Exhibits (a)(1) and (a)(2) to the Schedule 14D-9 and are incorporated by reference herein.
Except as otherwise set forth below, the information set forth in the Schedule 14D-9 remains unchanged and is incorporated by reference as
relevant to the items in this Amendment. Capitalized terms used and not defined herein shall have the meanings assigned to such terms in the Schedule 14D-9. This Amendment is being filed to reflect certain updates as reflected below and should be
read in conjunction with the Schedule 14D-9, which should be read in its entirety. Any page references in the information below are to pages in the Schedule 14D-9.
ITEM 4.
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THE SOLICITATION OR RECOMMENDATION
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Item 4 of the
Schedule 14D-9 is hereby amended and supplemented by adding the paragraph below under the heading
Background and Reasons for the Recommendation Background of the Offer and the Merger
after the current 8
th
paragraph on page 13:
On June 23, 2014, Mr. Smith
phoned Mr. Baker to discuss, among other things, certain employment matters, including with respect to potential equity grants to Mr. Baker and members of the Companys management team to help motivate and retain key team members.
Item 4 of the Schedule 14D-9 is hereby amended and supplemented by replacing the current 9
th
and 10
th
paragraphs on page 13 under the heading
Background and Reasons for the Recommendation Background of the Offer and
the Merger
with the following two paragraphs:
On June 24, 2014, Realogy submitted its second
proposal to acquire all outstanding shares of the Company at $6.75 per share, less the Companys transactions costs (including the Companys financial advisor and legal expenses). The Company estimated its transaction costs to be
approximately $0.24 per share, which resulted in a net price per share of approximately $6.51. The offer was conditioned on the entry into agreements, including employment arrangements for certain unspecified employees that would contain
noncompetition provisions.
On June 25, 2014, the Company Board held a telephonic meeting with participation by
representatives from GCA Savvian and Orrick to discuss the proposal from Realogy and the status of discussions with Parties A, B and C. Representatives of Orrick discussed with the Company Board their fiduciary duties in the context of the sale of
the Company. Representatives of GCA Savvian then provided the Company Board with an overview of the Realogy proposal and informed the Company Board that Parties A, B and C had declined to submit a final proposal. After further discussion, the
Company Board instructed GCA Savvian to request that Realogy improve its offer price and remove certain other terms in its offer, including any condition that certain employees enter into employment agreements or noncompetition provisions. The Board
requested that Realogy identify the specific employees that Realogy would require employment agreements with, and make such agreements a condition to signing the Merger Agreement rather than a condition to closing the Offer to provide certainty to
close.
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Item 4 of the Schedule 14D-9 is hereby amended and supplemented by replacing the
current 12
th
paragraph on page 13 under the heading
Background and Reasons for the Recommendation Background of the Offer and the Merger
with the following paragraph:
On June 26, 2014, Realogy revised its offer price to $6.80 per share, less the Companys transaction
expenses. The Company estimated its transaction costs to be approximately $0.25 per share, which resulted in a net price per share of approximately $6.55. The revised proposal was conditioned on employment arrangements with Mr. Baker and James
Wilson, the Companys Senior Vice President of Technology to be entered into concurrent with the execution of the Merger Agreement.
Item 4 of the Schedule 14D-9 is hereby amended and supplemented by adding the paragraph below under the heading
Background and Reasons for the Recommendation Background of the Offer and the Merger
after the current 5
th
paragraph on page 14:
On July 3, 2014, Realogy presented a term sheet to Mr. Baker setting forth the proposed terms of his continued
employment with the Company and the terms of his noncompetition agreement. Between July 3, 2014 and July 13th, Mr. Baker and Mr. Wilson negotiated with Realogy on the terms of their employment arrangements.
Item 4 of the Schedule 14D-9 is hereby amended and supplemented by replacing the current
6
th
paragraph on page 14 under the heading
Background and Reasons for the Recommendation Background of the Offer and the Merger
with the following paragraph:
On July 14, 2014, the Company Board held a telephonic meeting with the Companys legal and financial advisors. During the
meeting, representatives of GCA Savvian presented its financial analysis of the consideration to be received by the holders of Shares pursuant to the Merger Agreement to the Company Board and delivered to the Company Board its oral opinion, which
was confirmed by delivery of a written opinion dated July 14, 2014, to the effect that, as of such date and based upon and subject to the considerations, limitations and other matters set forth therein, the consideration to be received by the
holders of Shares pursuant to the Merger Agreement is fair, from a financial point of view, to such holders. In addition, representatives of Orrick reviewed the Company Boards fiduciary duties in the context of the Company Boards
strategic alternatives process. Orrick also reviewed the key provisions of the Merger Agreement, including structure and timing considerations, offer conditions, required regulatory approvals, non-solicitation provisions that would permit the
Company to negotiate and accept an unsolicited superior proposal, subject to compliance with the Merger Agreement and Realogys matching rights, termination provisions, the termination fee, and circumstances under which the termination fee
would be payable. The Company Board asked questions and discussed the provisions of the Merger Agreement and related documentation, including the proposed employment arrangements with Mr. Baker and Mr. Wilson. After further discussion, the Company
Board unanimously (i) determined that the Merger Agreement, the Offer, the Top-Up Option, the Merger and the other transactions contemplated by the Merger Agreement, are fair and in the best interests of the Company and its stockholders, (ii)
approved the Offer, the Top-Up Option, the Merger and the other transactions contemplated by the Merger Agreement in accordance with the DGCL, (iii) approved and declared advisable the Merger Agreement and the transactions contemplated thereby, (iv)
directed that the Merger Agreement and the Merger, if required by applicable law, be submitted to the stockholders of the Company for adoption and approval, and (v) resolved to recommend that the stockholders of the Company accept the Offer and
tender their Shares into the Offer.
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Item 4 of the Schedule 14D-9 is hereby amended and supplemented by replacing the current 3
rd
paragraph on page 27 under the heading
Opinion of the Companys Financial Advisor Miscellaneous
with the following paragraph:
GCA Savvian has acted as financial advisor to the Company Board in connection with the Offer and the Merger and its opinion
and will receive an aggregate fee for its services of approximately $5.82 million. GCA Savvian received three months of monthly retainer fees of $25,000 during its engagement and a $500,000 fee was paid following delivery of the opinion, all of
which will be credited against the aggregate fee payable to GCA Savvian. The remainder of the fee payable to GCA Savvian of approximately $5.25 million, which represents the substantial majority of the fees payable to GCA Savvian, is contingent upon
the successful completion of the Offer. In addition, the Company has agreed to reimburse GCA Savvians expenses and indemnify it against certain liabilities arising out of its engagement.
3
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Schedule 14D-9 is true,
complete and correct.
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ZipRealty, Inc.
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Dated: August 4, 2014
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By:
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/s/ Samantha Harnett
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Name:
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Samantha Harnett
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Title:
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General Counsel
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