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UNITED STATES |
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SECURITIES AND EXCHANGE |
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Washington, D.C. 20549 |
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SCHEDULE 13D |
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Hologic, Inc.
(Name of Issuer)
Common Stock, $0.01 par value
(Title of Class of Securities)
436440101
(CUSIP Number)
Ralph V. Whitworth
Relational Investors, LLC
12400 High Bluff Drive, Suite 600
San Diego, CA 92130
(858) 704-3333
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 10, 2013
(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 §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting persons 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).
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Type of Reporting Person (See Instructions) | |||
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Names of Reporting Persons. | |||
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Check the Appropriate Box if a Member of a Group (See Instructions) | |||
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Source of Funds (See Instructions) | |||
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Sole Voting Power | |||
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Type of Reporting Person (See Instructions) | |||
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Names of Reporting Persons. | |||
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Check the Appropriate Box if a Member of a Group (See Instructions) | |||
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(a) |
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Source of Funds (See Instructions) | |||
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Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o | |||
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Aggregate Amount Beneficially Owned by Each Reporting Person | |||
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Percent of Class Represented by Amount in Row (11) | |||
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Type of Reporting Person (See Instructions) | |||
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Check the Appropriate Box if a Member of a Group (See Instructions) | |||
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Source of Funds (See Instructions) | |||
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Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o | |||
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Citizenship or Place of Organization | |||
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Sole Voting Power | |||
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Shared Voting Power | ||||
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Shared Dispositive Power | ||||
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Aggregate Amount Beneficially Owned by Each Reporting Person | |||
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Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o | |||
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Percent of Class Represented by Amount in Row (11) | |||
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Type of Reporting Person (See Instructions) | |||
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Names of Reporting Persons. | |||
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Check the Appropriate Box if a Member of a Group (See Instructions) | |||
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(a) |
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SEC Use Only | |||
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Source of Funds (See Instructions) | |||
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Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o | |||
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Citizenship or Place of Organization | |||
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Sole Voting Power | |||
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Shared Voting Power | ||||
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Aggregate Amount Beneficially Owned by Each Reporting Person | |||
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Check the Appropriate Box if a Member of a Group (See Instructions) | |||
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SEC Use Only | |||
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Source of Funds (See Instructions) | |||
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Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o | |||
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Citizenship or Place of Organization | |||
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Sole Voting Power | |||
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Shared Voting Power | ||||
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Sole Dispositive Power | ||||
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Aggregate Amount Beneficially Owned by Each Reporting Person | |||
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Percent of Class Represented by Amount in Row (11) | |||
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Type of Reporting Person (See Instructions) | |||
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Names of Reporting Persons. | |||
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Check the Appropriate Box if a Member of a Group (See Instructions) | |||
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SEC Use Only | |||
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Source of Funds (See Instructions) | |||
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Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o | |||
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Citizenship or Place of Organization | |||
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Number of |
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Sole Voting Power | |||
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Shared Voting Power | ||||
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Sole Dispositive Power | ||||
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Shared Dispositive Power | ||||
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Aggregate Amount Beneficially Owned by Each Reporting Person | |||
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Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o | |||
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Percent of Class Represented by Amount in Row (11) | |||
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Type of Reporting Person (See Instructions) | |||
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Names of Reporting Persons. | |||
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Check the Appropriate Box if a Member of a Group (See Instructions) | |||
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(a) |
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SEC Use Only | |||
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Source of Funds (See Instructions) | |||
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Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o | |||
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Citizenship or Place of Organization | |||
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Sole Voting Power | |||
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Sole Dispositive Power | ||||
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Shared Dispositive Power | ||||
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Aggregate Amount Beneficially Owned by Each Reporting Person | |||
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Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o | |||
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Percent of Class Represented by Amount in Row (11) | |||
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Check the Appropriate Box if a Member of a Group (See Instructions) | |||
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Source of Funds (See Instructions) | |||
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Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o | |||
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Aggregate Amount Beneficially Owned by Each Reporting Person | |||
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Type of Reporting Person (See Instructions) | |||
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Names of Reporting Persons. | |||
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Check the Appropriate Box if a Member of a Group (See Instructions) | |||
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Source of Funds (See Instructions) | |||
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Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o | |||
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Sole Voting Power | |||
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Shared Voting Power | ||||
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Sole Dispositive Power | ||||
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Shared Dispositive Power | ||||
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Aggregate Amount Beneficially Owned by Each Reporting Person | |||
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Percent of Class Represented by Amount in Row (11) | |||
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Type of Reporting Person (See Instructions) | |||
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Names of Reporting Persons. | |||
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Check the Appropriate Box if a Member of a Group (See Instructions) | |||
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Source of Funds (See Instructions) | |||
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Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o | |||
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Citizenship or Place of Organization | |||
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Sole Dispositive Power | ||||
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Shared Dispositive Power | ||||
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Aggregate Amount Beneficially Owned by Each Reporting Person | |||
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Percent of Class Represented by Amount in Row (11) | |||
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Type of Reporting Person (See Instructions) | |||
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Names of Reporting Persons. | |||
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Check the Appropriate Box if a Member of a Group (See Instructions) | |||
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Source of Funds (See Instructions) | |||
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Citizenship or Place of Organization | |||
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Shared Dispositive Power | ||||
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Aggregate Amount Beneficially Owned by Each Reporting Person | |||
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Percent of Class Represented by Amount in Row (11) | |||
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Type of Reporting Person (See Instructions) | |||
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Names of Reporting Persons. | |||
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Check the Appropriate Box if a Member of a Group (See Instructions) | |||
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(a) |
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SEC Use Only | |||
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Source of Funds (See Instructions) | |||
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Citizenship or Place of Organization | |||
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Sole Voting Power | |||
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Shared Dispositive Power | ||||
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Aggregate Amount Beneficially Owned by Each Reporting Person | |||
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This Statement on Schedule 13D (this Statement) relates to the common stock, $0.01 par value (the Shares) of Hologic, Inc. (the Issuer or the Company). The Issuers principal executive offices are located at 35 Crosby Drive, Bedford, MA 01730.
Item 2. Identity and Background
This Statement is being filed by and on behalf of Relational Investors Mid-Cap Fund I, L.P. (MC I), Relational Investors Mid-Cap Fund II, L.P. (MC II), Relational Fund Partners, L.P. (RFP), Relational Coast Partners, L.P. (RCP), Relational Investors IX, L.P. (RI IX), Relational Investors XV, L.P. (RI XV), Relational Investors XVI, L.P. (RI XVI), Relational Investors XX, L.P. (RI XX), Relational Investors XXIII, L.P. (RI XXIII), Relational Investors XXIV, L.P. (RI XXIV) and RH Fund 1, L.P. (RHF 1), collectively, the Relational LPs. Each of the Relational LPs is a Delaware limited partnership. The principal business of each, is investing in securities.
This Statement is also being filed by Relational Investors, LLC (RILLC), a Delaware limited liability company. The principal business of RILLC is being the sole general partner or sole managing member of the general partner of certain investment partnerships, including the Relational LPs and the investment adviser of certain client managed accounts, the Managed Accounts. The Relational LPs and the Managed Accounts are the beneficial owners of the securities covered by this Statement. Pursuant to the Limited Partnership Agreement of each of the Relational LPs, and the investment management agreement of the Managed Accounts, RILLC has sole investment discretion and voting authority with respect to the securities covered by this Statement.
This Statement is also being filed by Ralph V. Whitworth and David H. Batchelder. Messrs. Whitworth and Batchelder are the Principals of RILLC, in which capacity they share voting control and dispositive power over certain securities covered by this Statement. As such, Messrs. Whitworth and Batchelder may be deemed to have indirect beneficial ownership of such securities, but, each of Mr. Whitworth and Mr. Batchelder disclaim beneficial ownership of the Shares except to the extent of his pecuniary interest therein. The present principal occupation of each of Messrs. Whitworth and Batchelder is serving as Principals of RILLC (Messrs. Whitworth and Batchelder, together with Relational LPs and RILLC, hereinafter, the Reporting Persons).
During the last five years, none of the Reporting Persons has been (i) convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction, and as a result of such proceeding, was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
The business address of each of the Reporting Persons is 12400 High Bluff Drive, Suite 600, San Diego, CA 92130.
Messrs. Whitworth and Batchelder are each citizens of the United States.
Item 3. Source and Amount of Funds or Other Consideration
RILLC and the Managed Accounts purchased an aggregate of 4,602,620 Shares for a total consideration (including brokerage commissions) of $99.6 million derived from capital of RILLC and the Managed Accounts.
The Relational LPs purchased an aggregate of 15,347,580 Shares for total consideration (including brokerage commissions) of $330.1 million derived from the capital of the Relational LPs and margin borrowings from Credit Suisse Securities (USA) LLC (CSSU) for RFP, RCP, RI XX, RI XXIII and RHF 1.
Interest on the margin debt balance of the margin accounts described above is charged at the then Federal Funds Rate plus 50 basis points. CSSU has a lien on the Shares held by RFP, RCP, RI XX, RI XXIII and RHF 1 to secure repayment of the margin borrowings described above.
Item 4. Purpose of Transaction
The Reporting Persons believe the Company, a leading developer, manufacturer, and supplier of diagnostic and medical imaging systems for the health needs of women, trades at a discount to fair value. The Reporting Persons attribute this discount to subpar operational execution and a history of deploying capital to over-priced acquisitions. These acquisitions have burdened the Company with excessive leverage and pushed the Companys return on invested capital below its cost of capital. Driving this acquisition strategy was a short-term executive compensation program focused on revenue and EPS targets, without regard to investment returns, as well as a long-term executive compensation program that did not include performance targets.
The Reporting Persons began accumulating shares of the Company in August 2013. Beginning in September 2013, the Reporting Persons have presented their views to the Company on the issues outlined above and emphasized that the Company should use its discretionary cash flows to normalize debt levels and accelerate debt reduction with selected divestitures. The Reporting Persons also stressed that the Company should adopt a disciplined capital allocation program designed to avoid future dilutive acquisitions. The Reporting Persons commend the Company for announcing a strategic review and adopting the Reporting Persons capital allocation recommendations on the Companys fourth quarter earnings call held November 11th, 2013. The Reporting Persons are further encouraged by recent management changes and the addition of shareholder representatives to the Board of Directors.
Management should continue to regularly communicate and report on its stated plan to pay down debt and return cash to shareholders. The Reporting Persons intend to monitor the Companys adherence to this strategic plan and capital allocation disciplines.
The Reporting Persons may exercise any and all of their respective rights as shareholders of the Company in a manner consistent with their equity interests. The Reporting Persons and their representatives and advisers intend to continue from time to time to discuss the Company and its performance with members of the Companys board and management. In addition, the Reporting Persons may communicate with other shareholders, industry participants and other interested parties concerning the Company. Although the Reporting Persons do not have any current plans, other than the monitoring and communication program outlined above, the Reporting Persons may in the future decide to seek representation on the Companys board of directors.
The Reporting Persons may from time to time (i) acquire additional Shares (subject to availability at prices deemed favorable) in the open market, in privately negotiated transactions or otherwise, or (ii) dispose of Shares at prices deemed favorable in the open market, in privately negotiated transactions or otherwise. The Reporting Persons may formulate plans or proposals for, and may from time to time explore, or make proposals relating to, transactions or actions which relate to or would result in any of the matters specified in clauses (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer
(a) As of the date of this Statement, the Reporting Persons beneficially owned in the aggregate 19,950,200 Shares, constituting 7.30% of the outstanding Shares. The percentage of Shares owned is based upon 273,128,747 Shares outstanding on November 18, 2013, as set forth in the Issuers Form 10-K for the year ended September 28, 2013. The Reporting Persons may be deemed to have direct beneficial ownership of the Shares as follows:
NAME |
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NUMBER OF SHARES |
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% OF OUTSTANDING SHARES |
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VOTING AND DISPOSITIVE POWER |
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RILLC |
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4,602,620 |
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1.69 |
% |
Sole |
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MC I |
|
7,035,728 |
|
2.58 |
% |
Sole |
|
MC II |
|
5,200,645 |
|
1.90 |
% |
Sole |
|
RFP |
|
44,720 |
|
0.02 |
% |
Sole |
|
RCP |
|
421,529 |
|
0.15 |
% |
Sole |
|
RI IX |
|
559,260 |
|
0.20 |
% |
Sole |
|
RI XV |
|
430,591 |
|
0.16 |
% |
Sole |
|
RI XVI |
|
243,121 |
|
0.09 |
% |
Sole |
|
RI XX |
|
396,483 |
|
0.15 |
% |
Sole |
|
RI XXIII |
|
561,766 |
|
0.21 |
% |
Sole |
|
RI XXIV |
|
80,245 |
|
0.03 |
% |
Sole |
|
RHF 1 |
|
373,492 |
|
0.14 |
% |
Sole |
|
RILLC, individually and in its capacity as an investment adviser, may be deemed to possess direct beneficial ownership of the 4,602,620 Shares that are owned by it and the Managed Accounts. Additionally, RILLC, as the sole general partner, or sole managing member of the general partner, of each of the Relational LPs may be deemed to beneficially own (as that term is defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) the 15,347,580 Shares beneficially owned by the Relational LPs because the limited partnership agreements of the Relational LPs specify that RILLC has sole investment discretion and voting authority with respect to those Shares.
Each of Messrs. Whitworth and Batchelder, as Principals of RILLC, may be deemed to share indirect beneficial ownership of the Shares which RILLC may beneficially own. Each of Messrs. Whitworth and Batchelder disclaims beneficial ownership of such Shares for all other purposes.
To the best of the knowledge of each of the Reporting Persons, other than as set forth above, none of the persons named in Item 2 is the beneficial owner of any Shares.
(b) See item (a) above.
(c) Except as set forth in Exhibit A to this Statement, none of the Reporting Persons has effected any transactions in the Shares during the past sixty days.
(d) No other person is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Shares covered by this Statement, except that dividends from, and proceeds from the sale of, the Shares held by accounts managed by RILLC may be delivered to such accounts.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
Except for the joint filing agreement between and among the Reporting Persons attached hereto as Exhibit B, and except for the investment discretion and voting authority described in Item 2 of this Statement and in the respective partnership agreements and investment management agreements of the Relational LPs and Managed Accounts which each contain provisions whereby RILLC may, after certain adjustments, receive a percentage of realized or unrealized profits, if any, derived from that partnerships or managed accounts investments, to the best of the knowledge of the Reporting Persons, there are no contracts, arrangements, understandings or relationships (legal or otherwise) among the Reporting Persons or between the Reporting Persons and any other person with respect to any securities of the Issuer, including but not limited to transfer or voting of any of the securities, finders fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies.
Item 7. Material to Be Filed as Exhibits
The following Exhibits are filed herewith:
Exhibit A Information concerning transactions in the Shares effected by the Reporting Persons in the last 60 days not previously reported.
Exhibit B Joint Filing Agreement.
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.
Dated: December 20, 2013
RELATIONAL INVESTORS MID-CAP FUND I, L.P.
RELATIONAL INVESTORS MID-CAP FUND II, L.P.
RELATIONAL FUND PARTNERS, L.P.
RELATIONAL COAST PARTNERS, L.P.
RELATIONAL INVESTORS IX, L.P.
RELATIONAL INVESTORS XV, L.P.
RELATIONAL INVESTORS XVI, L.P.
RELATIONAL INVESTORS XX, L.P.
RELATIONAL INVESTORS XXIII, L.P.
RELATIONAL INVESTORS XXIV, L.P.
RH FUND 1, L.P.
By: |
RELATIONAL INVESTORS, LLC |
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as general partner to each, |
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By: |
/s/ Ralph V. Whitworth |
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Ralph V. Whitworth, Principal | ||||
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RELATIONAL INVESTORS, LLC |
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By: |
/s/ Ralph V. Whitworth |
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Ralph V. Whitworth, Principal | ||||
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/s/ Ralph V. Whitworth |
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Ralph V. Whitworth |
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/s/ David H. Batchelder |
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David H. Batchelder |
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