-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ci2huG2XygRy/8o489rj3V7WBsyd9CEl+hi5ASIfs4DHTKKbj94d9ZcwiJqZ+soZ kXXWiFrJ5kSOrByhYno5uw== 0000902664-05-002022.txt : 20051018 0000902664-05-002022.hdr.sgml : 20051018 20051018093009 ACCESSION NUMBER: 0000902664-05-002022 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20051018 DATE AS OF CHANGE: 20051018 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: WALTER INDUSTRIES INC /NEW/ CENTRAL INDEX KEY: 0000837173 STANDARD INDUSTRIAL CLASSIFICATION: GEN BUILDING CONTRACTORS - RESIDENTIAL BUILDINGS [1520] IRS NUMBER: 133429953 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-44983 FILM NUMBER: 051142092 BUSINESS ADDRESS: STREET 1: 1500 N DALE MABRY HWY CITY: TAMPA STATE: FL ZIP: 33607 BUSINESS PHONE: 8138714811 MAIL ADDRESS: STREET 1: 1500 N DALE MABRY HWY STREET 2: 1500 NORTH MABRY HGWY CITY: TAMPA STATE: FL ZIP: 33607 FORMER COMPANY: FORMER CONFORMED NAME: HILLSBOROUGH HOLDINGS CORP DATE OF NAME CHANGE: 19910814 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Pirate Capital LLC CENTRAL INDEX KEY: 0001295984 IRS NUMBER: 030445177 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 200 CONNECTICUT AVENUE STREET 2: 4TH FLOOR CITY: NORWALK STATE: CT ZIP: 06854 BUSINESS PHONE: 203 854 1100 MAIL ADDRESS: STREET 1: 200 CONNECTICUT AVENUE STREET 2: 4TH FLOOR CITY: NORWALK STATE: CT ZIP: 06854 SC 13D/A 1 sc13da.txt WALTER INDUSTRIES, INC. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------- SCHEDULE 13D/A* (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. 3) Walter Industries, Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, par value $0.01 per share - -------------------------------------------------------------------------------- (Title of Class of Securities) 014055525 - -------------------------------------------------------------------------------- (CUSIP Number) Thomas R. Hudson Jr. Pirate Capital LLC 200 Connecticut Avenue, 4th Floor Norwalk, CT 06854 (203) 854-1100 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) October 17, 2005 - -------------------------------------------------------------------------------- (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 that 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. (Continued on following pages) (Page 1 of 8 Pages) - -------------------------- * 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. 014055525 SCHEDULE 13D/A PAGE 2 OF 8 PAGES - ------------------------------ --------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) PIRATE CAPITAL LLC - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* (see Item 3) - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 721,000 (see Item 5) ---------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY -0- OWNED BY ---------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON WITH 3,172,655 (see Item 5) ---------------------------------------------------------- 10 SHARED DISPOSITIVE POWER -0- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 3,172,655 (see Item 5) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.2% (see Item 5) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* 00 (see Item 2) - -------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT! - ------------------------------ --------------------- CUSIP NO. 014055525 SCHEDULE 13D/A PAGE 3 OF 8 PAGES - ------------------------------ --------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) THOMAS R. HUDSON JR. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* (see Item 3) - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 2,451,655 (see Item 5) ---------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 721,000 OWNED BY ---------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON WITH -0- ---------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 3,172,655 (See Item 5) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 3,172,655 (see Item 5) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.2% (see Item 5) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - -------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT! - ------------------------------ --------------------- CUSIP NO. 014055525 SCHEDULE 13D/A PAGE 4 OF 8 PAGES - ------------------------------ --------------------- The Schedule 13D filed on May 25, 2005 relating to the common stock, $0.01 par value (the "Shares"), of Walter Industries, (the "Issuer"), as amended by Amendment No. 1 dated August 3, 2005 and Amendment No. 2 dated October 10, 2005, is hereby amended as set forth below by this Amendment No. 3 to the Schedule 13D. ITEM 2. IDENTITY AND BACKGROUND Paragraphs (a), (b), (c) and (f) of Item 2 of the Schedule 13D are hereby amended and restated as follows: Pirate Capital LLC is a limited liability company, organized under the laws of Delaware, whose principal executive office is 200 Connecticut Avenue, 4th Floor, Norwalk, Connecticut 06854. The principal business of Pirate Capital LLC is providing investment management services to investment partnerships and other entities. Thomas R. Hudson Jr. is the sole owner and Managing Member of Pirate Capital LLC and a citizen of the United States. Each of the aforesaid reporting persons ("Reporting Persons") is deemed to be the beneficial owner of an aggregate of 3,172,655 shares of the Common Stock of the Shares, which Shares are owned of record, in part, by each of Jolly Roger Fund LP, Jolly Roger Offshore Fund LTD and Mint Master Fund Ltd (the "Holders"). The persons filing this report disclaim that they and/or the Holders are members of a group as defined in Regulation 13D-G. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. Item 3 of the Schedule 13D is hereby amended and restated as follows: Funds for the purchase of the Shares were derived from available capital of the Holders. A total of $122,210,124.91 was paid to acquire the Shares and $385,452.90 was paid to acquire the options as detailed in Item 5. ITEM 4. PURPOSE OF TRANSACTION. Item 4 of the Schedule 13D is hereby amended by the addition of the following: On October 17, 2005, the Reporting Persons met with representatives of the Issuer in order to discuss alternative means to maximize shareholder value. At this meeting, the Reporting Persons suggested that the Issuer immediately initiate the sale of its Finance and Homebuilding subsidiaries, that it form a special committee to consider strategic alternatives for Jim Walter Resources, Inc. and that it pursue an IPO of 20% of Mueller Water Products with a subsequent spin-off to shareholders. The Reporting Persons have set a deadline of October 31, 2005 for the Issuer's Board of Directors to publicly announce its intention to immediately implement these proposed initiatives. If the Reporting Persons' proposal is not met by this deadline, the Reporting Persons intend to initiate a consent solicitation to remove a majority of the Issuer's existing directors and replace them with directors focused on maximizing value for all shareholders. The Reporting Persons continue to support Chairman and CEO Gregory Hyland and the Issuer's management, but strongly feel that the proposed initiatives would be a significant step towards unlocking shareholder value. On October 17, 2005, the Reporting Persons sent a written memorialization of this discussion to the Issuer (the "Presentation Memorialization"). A copy of the Presentation Memorialization is filed herewith as Exhibit 2 and incorporated herein by reference, and any descriptions herein of the Presentation Memorialization are qualified in their entirety by reference to the Presentation Memorialization. - ------------------------------ --------------------- CUSIP NO. 014055525 SCHEDULE 13D/A PAGE 5 OF 8 PAGES - ------------------------------ --------------------- ITEM 5. INTEREST IN SECURITIES OF THE COMPANY. Paragraphs (a), (b) and (c) of Item 5 of the Schedule 13D are hereby amended and restated as follows: (a) By virtue of its position as general partner of Jolly Roger Fund LP and an agreement between it and the sole owner of Mint Master Fund, Ltd., Pirate Capital LLC has sole power to vote or direct the voting, and to dispose or direct the disposition of, all of the Shares owned by Jolly Roger Fund LP and Mint Master Fund Ltd. By virtue of an agreement between it and Jolly Roger Offshore Fund, LTD. Pirate Capital LLC has sole disposition power with respect to all of the Shares owned by Jolly Roger Offshore Fund LTD. By virtue of his position as sole Managing Member of Jolly Roger Offshore Fund LTD, Thomas R. Hudson Jr. has sole voting power with respect to the Shares owned by Jolly Roger Offshore Fund Ltd. By virtue of his position as sole Managing Member of Pirate Capital LLC, Thomas R. Hudson Jr. is deemed to have shared voting power and shared disposition power with respect to all Shares as to which Pirate Capital, LLC has voting power or disposition power. (b) Pirate Capital LLC has sole voting power with respect to 721,000 of the Shares and sole disposition power with respect to 3,172,655 of the Shares; Thomas R. Hudson Jr. has sole voting power with respect to 2,451,655 of the Shares and shared voting power with respect to 711,000 of the Shares and shared disposition power with respect to 3,172,655 of the Shares. The aggregate percentage of Shares reported to be beneficially owned by the Reporting Person is based upon 38,709,762 Shares outstanding, which is the total number of Shares outstanding as of July 31, 2005 as reported in the Issuer's Prospectus Supplement filed on October 17, 2005. (c) The following transactions in the Shares were effected since the Reporting Persons' most recent filing on Schedule 13D. All of the Shares were purchased by the Holders in open market transactions. Jolly Roger Fund LP Trade Date Shares Purchased Price per Share - ---------- ---------------- --------------- 10/14/05 10,000 $40.97 10/17/05 10,000 $40.97 Jolly Roger Offshore Fund LTD Trade Date Shares Purchased Price per Share - ---------- ---------------- --------------- 10/13/05 15,000 $39.57 10/14/05 40,000 $40.93 10/17/05 40,000 $40.93 - ------------------------------ --------------------- CUSIP NO. 014055525 SCHEDULE 13D/A PAGE 6 OF 8 PAGES - ------------------------------ --------------------- ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Item 6 of the Schedule 13D is hereby amended and restated as follows: As set forth below, the Holders hold, as of the close of business on October 17, 2005, options to acquire 59,400 Shares, each of which was acquired on the open market: Jolly Roger Fund LP Shares Date of Underlying Exercise Price Purchase Options per Share ($) - -------------------------------------------- 08/31/05 6,900 40.00 09/27/05 18,500 40.00 Jolly Roger Offshore Fund LTD Shares Date of Underlying Exercise Price Purchase Options per Share ($) - -------------------------------------------- 09/22/05 9,000 40.00 09/22/05 10,000 40.00 09/22/05 10,000 40.00 09/22/05 5,000 40.00 Except as otherwise set forth herein, the Reporting Person does not have any contract, arrangement, understanding or relationship with any person with respect to securities of the Issuer. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Item 7 of the Schedule 13D is hereby amended by the addition of the following: 2. Presentation Memorialization - --------------------------- ------------------- CUSIP NO. 014055525 SCHEDULE 13D/A PAGE 7 OF 8 PAGES - --------------------------- ------------------- SIGNATURES 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. Dated: October 18, 2005 PIRATE CAPITAL LLC By: /s/ Thomas R. Hudson Jr. --------------------------- Name: Thomas R. Hudson Jr. Title: Portfolio Manager - --------------------------- ------------------- CUSIP NO. 014055525 SCHEDULE 13D/A PAGE 8 OF 8 PAGES - --------------------------- ------------------- EXHIBIT INDEX 1. Proposal Letter from the Reporting Persons to the Issuer (previously filed). 2. Presentation Memorialization. EX-99 2 walterindustriesinc.txt WALTER INDUSTRIES, INC -VALUE-CREATION DISCUSSION Walter Industries Inc. Value-Creation Discussion October 17, 2005 Private and Confidential: For Discussion Purposes Only RECENT DEVELOPMENTS o Acquisition of Mueller Water Products ("Mueller") creates the industry leader within the water infrastructure space - Substantial cost synergies and cross-bundling within water infrastructure subsidiary - Significant market opportunity to be had in the rebuilding of the Gulf Coast due to Hurricane Katrina o Met Coal Prices continue to be strong, setting the stage for robust cash flows out of Jim Walter Resources ("JWR") in 2006 - Natural gas prices have climbed dramatically and JWR should see improved cash flows in 2006 from its Black Warrior Methane operating unit o Turnaround within Jim Walter Homes ("JWH") will prove more challenging due to price increases in lumber, building materials and a tighter labor market in the Gulf Coast 1 Private and Confidential: For Discussion Purposes Only SITUATIONAL OVERVIEW o Walter Industries ("Walter") continues to trade at a material discount to its intrinsic value - Walter's conglomerate structure obfuscates true value - Coal investor vs. water infrastructure investor - Walter is not covered by bulge-bracket investment banks - Financing subsidiary complicates balance sheet - Homebuilding subsidiary's underperformance necessitates significant senior level management attention o Coal companies have appreciated substantially over the last two years - Coal comparables are currently trading between 5.8x - 8.0x 2006E EBITDA o Water-infrastructure companies trade at multiples in the 8.5x - 10.5x 2006EBITDA range o Mortgage Finance & Homebuilding companies have traded off significantly over the last couple of weeks on interest rate concerns 2 Private and Confidential: For Discussion Purposes Only PIRATE CAPITAL PROPOSAL o Immediately initiate the sale of the Finance & Homebuilding subsidiaries - Streamlines corporate structure - Simplifies the balance sheet - Allows senior management to focus on the water and coal subsidiaries - Use proceeds to pay down Term Loan B at Walter Industries o Form special committee to immediately consider strategic alternatives for JWR - Take advantage of robust coal valuations - Analyze sell vs. build scenarios o Announce the intention to pursue an IPO of 20% of Mueller (target IPO date - early second quarter of 2006) with a subsequent spin-off to shareholders - Take advantage of robust water valuations - Allows adequate time to integrate Mueller & U.S. Pipe - Create appropriate capitalization for Mueller by using IPO proceeds to tender for 14.75% Senior Discount Holdco. Notes - Decrease interest expense - Create valuable acquisition currency 3 Private and Confidential: For Discussion Purposes Only PIRATE CAPITAL TIMETABLE o Pirate Capital has set an October 31st deadline for Walter's Board of Directors (the "Board") to publicly announce their intention to immediately implement our proposed initiatives o Should Pirate Capital's proposal not be met, we intend to immediately initiate a consent solicitation to remove a majority of the existing directors and replace them with directors focused on maximizing value for all shareholders - Pirate Capital's slate of directors would include representatives from both Pirate Capital, as well as individuals with significant backgrounds in the coal and/or general industrials industries o Pirate Capital has held extensive discussions with potential financial advisors in regards to various value-creating scenarios o Pirate Capital continues to support Chairman & CEO Gregory Hyland and management, but strongly feels that the proposed initiatives would be a significant step towards unlocking shareholder value 4 -----END PRIVACY-ENHANCED MESSAGE-----