SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[x] Soliciting Material Under Rule 14a-12
ChemFirst Inc.
------------------------------------
(Name of Registrant as Specified in Its Charter)
------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------------
The following is an email that was sent out to ChemFirst employees at 5:00pm
on July 30, 2002. The email includes edited scripts of the DuPont conference
call held on July 24, 2000 at 12:00pm EST.
*******************
Last Wednesday, July 24, Kelley Williams and Mike Summerford
participated in a joint conference call hosted by DuPont management for the
investment community. The purpose of the call was to review the strategic
rationale for DuPont's acquisition of ChemFirst and to provide an opportunity
for questions from analysts and others. I believe you will find the call
transcript very informative with regard to DuPont's plans for our businesses
and will also see in it an enthusiasm that will give you pride in what you've
accomplished.
We have edited the Q&A portion of the transcript to keep it brief. A
replay of the entire call is available at the DuPont website.
DuPont Conference Call
Moderator: Ann Gualtieri
July 24, 2002
12:00 p.m. EST
ANN GUALTIERI, VICE PRESIDENT INVESTOR RELATIONS, DUPONT: Thank you, and
welcome to the call. As you know, DuPont and ChemFirst announced yesterday
that DuPont has signed a definitive agreement to acquire ChemFirst.
The purpose of this call is to briefly review the strategic rationale for
this acquisition and provide an opportunity for clarifying questions from
the investment community. With me on the call are Dave Miller, Vice
President and General Manager of the DuPont Electronic Technologies
business. He's joining us from his office in Research Triangle Park, North
Carolina. Jeff Coe, who is Vice President and General Manager of the DuPont
Chemical Solutions Enterprise, is here in the room with me. And also
joining us on the line from Jackson, Mississippi are Kelley Williams,
Chairman and CEO of ChemFirst, and Mike Summerford, President and Chief
Operating Officer of ChemFirst.
Let me remind you that this call is open to the media and the general
public on a listen-only mode. A separate call is scheduled for 12:45 to
respond to questions from the media. Members of the investment community
who are on DuPont's e-mail list already have a short PowerPoint
presentation attached to our notification of this conference call. Others
on the call may access the presentation from DuPont's Web site, which is
www.dupont.com, and go to the "Investor Center". These slides are
supplementary to my remarks. So, if you don't have them in front of you,
don't worry about. They're just really for background.
During the course of this conference call, we may make forward-looking
statements. All statements that address expectations or projections about
the future are forward-looking statements. Although they reflect our
current expectations, these statements are not guarantees of future
performance, but involve a number of risks. We urge you to review both
DuPont and ChemFirst SEC filings for a discussion of some of the factors
that could cause actual results to differ materially.
Now, let me start with a description of ChemFirst. As you can see on slide
one, ChemFirst comprises three operating units. ChemFirst Electronic
Materials and EKC Technologies are leading global suppliers of products
used to manufacture semiconductor chips. Taken together, sales for these
units were $86 million last year. The third operating unit, First Chemical
Corporation, is a major producer of polyurethane intermediates, primarily
aniline, with 2001 sales of $192 million.
DuPont will acquire ChemFirst in a cash merger transaction valued at $408
million, with ChemFirst per share value of $29.20. This represents a 28
percent premium to yesterday's closing share price and an 11 percent
premium to the six-month average share price for ChemFirst. The acquisition
is expected to be about one cent dilutive to DuPont for the first 12 months
after the transaction closes due to integration costs. It will be accretive
thereafter.
The closing of the transaction is subject to the approval of ChemFirst
shareholders and regulatory approval. We expect to close in the fourth
quarter of this year.
Our primary objective in acquiring ChemFirst is to strengthen DuPont's
electronic and communications technologies growth platform. At the same
time, we expect the excellent fit of ChemFirst's aniline business with
DuPont's chemical solutions enterprise to add attractive earnings to the
equation. Slide two summarizes the overall strategic fit of ChemFirst.
Now, I'll first cover the strategic fit with DuPont Electronic
Technologies. ChemFirst's strong position in the semiconductor industry
will complement DuPont's existing product portfolio and enhance our efforts
to develop and commercialize the next-generation of materials for market
segments that are expected to grow at double-digit rates. In particular,
ChemFirst is a leading manufacturer of photoresist polymers for the current
generation of high end, that is, 248 nanometer, semiconductor chips.
In addition to being attractive in its own right, this business would give
us access to several technologies critical to the manufacture and
commercialization of DuPont's next-generation polymers, which we have
spoken to our investors about on numerous occasions, those being our 193
nanometer and 157 nanometer polymers. These markets have a projected
forward growth of 13 percent on a compounded annual growth rate. Second,
ChemFirst also has a leading global position in strippers and removers for
semiconductor fabrication, which would strengthen our access and
relationships with semiconductor manufacturers worldwide. Demand for these
materials is projected to grow at 14 percent on a compounded annual growth
rate.
And finally, ChemFirst has an emerging position in slurries for chemical
mechanical planarization, or CMP, which is critical for advanced
semiconductors. Use of CMP technology is expected to grow at more than 20
percent on a compounded annual growth rate, as smaller and smaller features
are incorporated in semiconductor chips. ChemFirst's CMP technologies and
products are complementary to those of DuPont's CMP joint venture with Air
Products and will be offered to the joint venture per our agreement with
Air Products.
Slide three and four highlight ChemFirst's position in the key electronic
material segments that it serves. And I think that you will agree that the
fit of ChemFirst with our electronic technologies business is a win-win for
both ChemFirst and DuPont.
Now, turning to the chemical side of the acquisition, ChemFirst's chemical
operations focus on aniline, which DuPont also produces. Aniline is a key
intermediate used to make monomers for rigid polyurethane foam, a
mid-performance polymer used mainly in the construction, automotive and
appliance industries. Rigid polyurethanes are growing at approximately two
times GDP, as they continue to replace metal and wood. ChemFirst's aniline
business is quite profitable and a good cash generator.
ChemFirst also produces a family of toluene based intermediates, which are
also sustainably profitable cash generators. By acquiring ChemFirst, DuPont
will be able to realize significant synergies in technology, operations and
supply chains while also diversifying its customer base.
To conclude, we are excited about the growth in earnings potential inherent
in the ChemFirst acquisition. ChemFirst is an excellent fit with two of
DuPont's five growth platforms. It provides products and technologies that
complement DuPont's current and future presence in fast growing segments
within the semiconductor industry, and its chemical intermediates business
will add attractive earnings from day one. That concludes my opening
remarks. I will now open the floor to questions.
PJ JUVEKAR , SALOMON SMITH BARNEY: Most of ChemFirst aniline is sold to
Bayer, so you got one big customer. Is that a significant risk to the
business?
JEFFREY COE, VICE PRESIDENT AND GENERAL MANAGER, DUPONT: Bayer is certainly
a major customer of ChemFirst. We're quite confident in Bayer's
relationship with ChemFirst and that it will secure us a very good place
with them, both now and long-term. These types of arrangements on chemical
intermediates tend to have very long-term contractual agreements that give
us quite a bit of confidence going forward.
In addition, there will be additional capacity that we'll have from the
assets that we're acquiring and we'll be able to do more than sell to
Bayer. There will be other opportunities, particularly in Asia, where we
see some additional growth. So I think while what you say is true, the
business is more broad based than Bayer individually.
Sergey Vasnetsov, LEHMAN BROTHERS: A question about the two parts of the
businesses that you acquired. Which was the driver in the transaction and
going forward? Shall we say deal done to compliment already existing
businesses on the production side such as electronics, or to get some
attractive businesses with high growth rates which might represent
chemistry such that DuPont does not have right now?
ANN GUALTIERI: Clearly the driver on this was the electronics businesses
and I think it's an excellent fit with our technologies. And by the way, he
chemical intermediate part of the business is a very good earnings and cash
generator and it's an attractive part of the acquisition.
In terms of our broad strategy around acquisitions, I think that this is a
good example. It fits very nicely with two of our five growth platforms and
we have quite a number of things that we're looking at that would fit with
areas like electronics, safety and protection where we see high growth
potential.
DAVE MILLER, VICE PRESIDENT AND GENERAL MANAGER, DUPONT: Sergey, in our May
conference call with investors we discussed our electronic strategy; this
acquisition fits extremely well. We have a very strong intent to go into IC
fabrications. Kelley and Mike have put together a first rate operation,
great technology, great products, great customer contacts. We've done a lot
of due diligence on all three of those (electronics businesses)
incidentally and we're very impressed and it just fits very well.
We're extremely excited about their electronic technologies because they
fill a couple of key gaps in our strategy and, again, we're very impressed
with their team, first-rate people, and we're looking forward to
integrating them into our business mix.
ANN GUALTIERI: I thank all of you on the line for your interest. I thank
Mike Summerford and Kelley Williams for joining us. This is very exciting
for DuPont. This is a great fit, as I think you heard from both Dave and
Jeff. We have the utmost respect for ChemFirst as business people. Their
businesses are great and we can't wait to move on with this merger.
**************************
In connection with the transaction discussed in the email, ChemFirst Inc.
intends to file a proxy statement with the Securities and Exchange Commission.
Security holders are urged to read the proxy statement when it becomes
available because it will contain important information. Security holders may
obtain a free copy of the proxy statement when it becomes available, as well
as other materials filed with the Securities and Exchange Commission
concerning ChemFirst, at the Securities and Exchange Commission's web site at
http://www.sec.gov. Security holders of ChemFirst Inc. may also obtain for
free the proxy statement filed by the ChemFirst Inc. with the Securities and
Exchange Commission in connection with the transaction by directing a request
to ChemFirst Inc., Attention: Investor Relations Department, P.O. Box 1249,
Jackson, MS 39215-1249, (601) 949-0213.
ChemFirst Inc. and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from ChemFirst shareholders
with respect to the transaction. Information regarding these directors and
executive officers and their ownership of ChemFirst common stock is
contained in ChemFirst Inc.'s proxy statement on Schedule 14A, filed with
the Securities and Exchange Commission on March 25, 2002, in connection
with the 2002 annual meeting ChemFirst shareholders. Investors may obtain
additional information regarding the interests of such participants by
reading the proxy statement regarding the transaction when it becomes
available.