SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
Destination Maternity Corporation
(Name of Issuer)
Common Stock
(Title of Class of Securities)
25065D100
(CUSIP Number)
Jeffrey Symons
Jones Day
222 East 41st Street
New York, New York 10017
(212) 326-3939
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 8, 2016
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box ¨.
Note. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
CUSIP No. 25065D100
| 1 |
NAMES OF REPORTING PERSONS
Orchestra-Premaman S.A. |
| 2 |
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (see Instructions) (a) ¨ (b) ¨
|
| 3 | SEC USE ONLY
|
| 4 |
SOURCE OF FUNDS (see Instructions)
WC |
| 5 |
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) ¨ |
| 6 |
CITIZENSHIP OR PLACE OF ORGANIZATION
France |
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH |
7 |
SOLE VOTING POWER 0
|
| 8 |
SHARED VOTING POWER 1,922,820
| |
| 9 |
SOLE DISPOSITIVE POWER 0
| |
| 10 |
SHARED DISPOSITIVE POWER 1,922,820
|
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,922,820
|
| 12 |
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see Instructions) ¨ |
| 13 |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13.9% |
| 14 |
TYPE OF REPORTING PERSON (see Instructions) CO |
| 2 |
CUSIP No. 25065D100
| 1 |
NAMES OF REPORTING PERSONS Yeled Invest S.A.
|
| 2 |
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (see Instructions) (a) ¨ (b) ¨
|
| 3 | SEC USE ONLY
|
| 4 |
SOURCE OF FUNDS (see Instructions)
AF |
| 5 |
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) ¨ |
| 6 |
CITIZENSHIP OR PLACE OF ORGANIZATION
Luxembourg |
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH |
7 |
SOLE VOTING POWER 0
|
| 8 |
SHARED VOTING POWER 1,922,820
| |
| 9 |
SOLE DISPOSITIVE POWER 0
| |
| 10 |
SHARED DISPOSITIVE POWER 1,922,820
|
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,922,820
|
| 12 |
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see Instructions) ¨ |
| 13 |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13.9% |
| 14 |
TYPE OF REPORTING PERSON (see Instructions) CO |
| 3 |
Item 1. Security and Issuer
This Amendment No. 1 to Schedule 13D (this “Amendment No. 1”) amends and supplements the statement on Schedule 13D originally filed with the Securities and Exchange Commission on December 14, 2015 (the “Original Schedule 13D”) by Orchestra-Premaman S.A. (“Orchestra-Premaman”) and Yeled S.A. (“Parent” and, together with Orchestra-Premaman, the “Reporting Persons”) with respect to the common stock, par value $0.01 per share (“DM Common Stock”), of Destination Maternity Corporation, a Delaware corporation (the “Issuer”). Capitalized terms not defined in this Amendment No. 1 have the respective meanings ascribed to them in the Original Schedule 13D.
Item 3. Source and Amount of Funds or Other Consideration
Item 3 of the Original Schedule 13D is amended and restated as follows:
The aggregate purchase price for the 1,922,820 shares of DM Common Stock acquired by Orchestra-Premaman is approximately $17,313,004. The purchases were funded by cash on hand.
The information set forth in Item 4 of the Original Schedule 13D is incorporated herein by reference.
Item 4. Interest in Securities of the Issuer
On February 8, 2016, Orchestra-Premaman sent a letter to the Board of Directors of the Issuer reaffirming its proposal to acquire 100% of the capital stock of the Issuer and addressing certain points that the Issuer made in its December 14 press release rejecting Orchestra-Premaman’s proposal. In addition, Orchestra-Premaman indicated that it is prepared to increase the cash component of its offer by 50%, to $37.5 million, which would translate into $2.6664 in cash and 0.0596 shares of Orchestra-Premaman common stock for each share of the Issuer’s Common Stock. The foregoing summary does not purport to be a complete description of the February 8, 2016 letter, a copy of which is attached as Exhibit 2.1 to this Amendment No. 1 and incorporated herein by reference.
No assurance can be given that any business combination or other transaction will be consummated.
Item 5. Interest in Securities of the Issuer
Item 5 of the Original Schedule 13D is amended and restated as follows:
(a) — (b) As of February 8, 2016, Orchestra-Premaman is the beneficial owners of, and has shared power to vote, dispose or direct the disposition of 1,922,820 shares of DM Common Stock, representing 13.9% of the outstanding shares of DM Common Stock.
As of February 8, 2016, Parent, as a result of its ownership of a controlling interest in Orchestra-Premaman, is deemed to beneficially own and have shared power to vote, dispose or direct the disposition of 1,922,820 shares of DM Common Stock, representing 13.9% of the outstanding shares of DM Common Stock.
The percentages of the outstanding shares set forth above were calculated based on 13,858,438 shares of DM Common Stock outstanding as of November 27, 2015, as disclosed in the Issuer’s Quarterly Report on Form 10-Q filed on December 3, 2015.
Except as set forth in this Item 5(a) – (b), none of the Reporting Persons, and, to the best of their knowledge, none of the persons named in Annex A to the Original Schedule 13D beneficially owns any shares of DM Common Stock.
(c) Information concerning transactions in shares of DM Common Stock effected during the past 60 days is set forth in Exhibit 99.1 to this Amendment No. 1 and incorporated herein by reference.
(d) — (e) Not applicable.
Item 7. Material to be Filed as Exhibits
| Exhibit 2.1 | Letter dated February 8, 2016 from Orchestra-Premaman to the Issuer |
| Exhibit 99.1 | Transactions in DM Common Stock Effected During the Past 60 Days |
| 4 |
After reasonable inquiry and to the best of its knowledge and belief, the undersigned each certifies that the information with respect to it set forth in this Amendment No. 1 is true, complete and correct.
| ORCHESTRA-PREMAMAN S.A. | ||
| By: | /s/Pierre Mestre | |
| Name: Pierre Mestre | ||
| Title: Chairman | ||
| YELED INVEST S.A. | ||
| By: | /s/Fons Mangen | |
| Name: Fons Mangen | ||
| Title: Director | ||
| By: | /s/Carine Reuter-Bonert | |
| Name: Carine Reuter-Bonert | ||
| Title: Director | ||
Dated: February 8, 2016
| 5 |
Exhibit 2.1
The Board of Directors
Destination Maternity Corporation
c/o Mr. Arnaud Ajdler
Chairman of the Board
232 Strawbridge Dr
Moorestown, NJ 08057
| St Aunès, February 8, 2016 |
Members of the Board,
Orchestra-Premaman S.A. (“Orchestra-Premaman”) hereby reaffirms its proposal of October 29, 2015, to acquire 100% of the capital stock of Destination Maternity Corporation (the “Company”). We are very disappointed that you rejected our proposal on December 14, 2015, and have consistently stalled and repeatedly resisted our efforts to commence a constructive dialogue regarding our proposal.
By doing so, we believe you are depriving the stockholders of Destination Maternity of a significant opportunity, as we believe that combining our two companies – and thereby alleviating the geographic and category limitations that currently impact the Company’s value and potential –will provide your stockholders with more upside and less risk than the status quo.
We have endeavoured to pursue our proposal privately, but your unwillingness to engage with us has left us with no option but to act publicly.
We want to take this opportunity to address certain points that you made in the press release announcing your decision not to pursue our proposal:
| · | Your press release succinctly describes Orchestra-Premaman as “a France-based retailer with no U.S. operations.” While Orchestra-Premaman S.A. is indeed organized under the laws of France, and it does not currently have a U.S. presence, this statement does not do justice to Orchestra-Premaman’s business or international reach. Orchestra-Premaman is an international leader in the babies and children’s fashion and childcare market with: |
| · | nearly 700 stores in 42 countries; |
| · | leading positions in France, Belgium, Spain, Greece, Switzerland, the Middle East and Morocco; |
| · | close to $600 million in sales in the last twelve months; and |
| · | approximately 2,500 employees worldwide. |
If your underlying point was that Orchestra-Premaman is not well-known to you or your stockholders, that point may be fair. Accordingly, we are today posting on our website (http://www.orchestra-kazibao.com/wp-content/uploads/2016/02/2016-01-20-Orchestra-Presentation-to-Diana-Board.pdf) and filing with the US Securities and Exchange Commission a copy of the presentation that we made to your Board of Directors on January 20, 2016, which provides an introduction to our company.
| · | Your press release states that, under our proposal, “Destination Maternity’s stockholders would receive an unspecified number of shares of common stock of Orchestra-Premaman and a limited |
amount of cash.” Our initial letter may not have expressly included an exchange ratio, but we felt it included sufficient information for it to be calculated. For the avoidance of doubt, our proposal was for a combination of the two companies in which the Company’s stockholders would receive a total of $25 million in cash and shares of common stock of Orchestra-Premaman based on an exchange ratio such that the Company would be valued at a 45% premium versus current (meaning as of the date of the letter) trading. This translated into $1.8035 in cash and 0.0665 shares of Orchestra-Premaman’s common stock for each share of the Company’s common stock.
| · | Your press release states that Orchestra-Premaman’s “common stock is traded on the Euronext Paris stock exchange and is illiquid, with the company being effectively controlled by one stockholder who owns over 90% of the shares outstanding.” However: |
| · | in connection with the proposed transaction, we intend to change our primary listing to either NASDAQ or the NYSE; |
| · | pro forma for the proposed transaction, Orchestra-Premaman’s public float would be significantly enlarged with the new shares issued. Additionally, we believe that the renewed growth prospects generated by our combined companies would provide the Company’s stockholders with better liquidity than what they currently enjoy; and |
| · | while Yeled Invest S.A. (“Yeled”) would clearly continue to be a significant stockholder of the combined companies, its ownership stake would be diluted by the newly issued shares. Furthermore, it is important to highlight that I and my family control Yeled, and that my stake in Yeled represents the overwhelming majority of my assets. In our experience, this concentration has helped ensure that Orchestra-Premaman’s business is managed with proper care, diligence and competence. That Orchestra-Premaman has grown and has been profitable1 in every single one of the last 20 years is evidence that supports our perspective. We think it is a disservice to somehow suggest that Yeled’s significant investment in Orchestra-Premaman is a negative. |
| · | Your press release states that pursuing our “stock-merger proposal would not be in the best interests of the Company’s stockholders considering the risks inherent in a primarily stock based merger transaction dependent on uncertain revenue synergies.” We firmly believe that there are meaningful potential cost synergies in the business combination, as the Company could benefit from greater purchasing efficiency by taking advantage of Orchestra-Premaman’s existing direct purchasing offices in manufacturing countries (rather than operating through agents, as Destination Maternity currently does). In addition, we firmly believe that meaningful growth could result from both the distribution of maternity wear through Orchestra-Premaman’s approximately 700 stores and network and the distribution of children’s wear and hardware, a market substantially bigger than the maternity market, through the Company’s network. As stated above, we believe this will alleviate the geographic and category limitations that the Company currently suffers from. We believe it is important that the stockholders of both companies are able to share in these synergies, which is a significant part of the reason why we have proposed a cash-and-stock transaction. |
We are very confident in our ability, working together with Destination Maternity’s management team, to achieve synergy benefits, based on our experience and track record in successfully acquiring and integrating businesses internationally. But, as we have previously proposed, we will engage a mutually acceptable consulting firm to provide an independent assessment of the
1 Except in 2001 when a loss resulted from the merger with Kazibao.
amount and feasibility of achieving synergies in order to provide stockholders of both companies with a separate evaluation of this critical aspect of our proposal.
| · | Subsequent to your press release, we heard that you considered the cash component of our offer to be insufficient. Although we believe that the financial capacity of both our companies should be focused on investing in our combined growth and development, and that it is important that the stockholders of both companies are able to share in the future development of the business, we are prepared to increase the cash component of our offer by 50% to $37.5 million. We are therefore prepared to adjust our offer accordingly, which translates into $2.6664 in cash and 0.0596 shares of Orchestra-Premaman’s common stock for each share of the Company’s common stock2. This represents a premium of: |
| · | 45% based on closing prices on October 29, 2015, when Orchestra-Premaman made its initial written proposal; and |
| · | 72% based on closing prices on November 30, 2015, which, we believe, is the last trading day before the Company’s stock price started being affected by the purchases made by Orchestra-Premaman in December 2015 and the subsequent public disclosure of our proposal on December 14, 2015. |
Orchestra-Premaman’s strong preference is to engage in a friendly negotiated transaction with the Company. We are, however, as the Company’s largest shareholder, prepared to take all steps necessary to protect the value of our ownership interest in the Company. We have extensive international transactional experience in the babies and children’s fashion and childcare segment and your employees, customers and business partners should know that we are prepared to commit the resources and effort necessary to expand the Company’s business over time within the Orchestra-Premaman family.
We are amending our Schedule 13D to make this letter public. We are available to meet with you and your representatives at any time to enter into a constructive dialogue and begin work on a mutually beneficial transaction. Please let us know how you would like to proceed.
Regards,
/s/ Pierre Mestre
Pierre Mestre
President / Chairman
Groupe Orchestra-Premaman
2 Based on a Company’s fully diluted shares of common stock, estimated as 14.064 million.
EXHIBIT 99.1
Transactions in DM Common Stock Effected During the Past 60 Days
All of the transactions in DM Common Stock listed below were made through open market purchases.
| Date of Transaction | Number
of Shares Purchased | Average
Purchase Price per Share | ||||||
| 12/10/2015 | 87,353 | $ | 8.2233 | |||||
| 12/11/2015 | 155,422 | $ | 8.8835 | |||||
| 12/14/2015 | 78,889 | $ | 9.2610 | |||||