OMB APPROVAL
----------------------------
OMB Number: 3235-0145
Expires: October 31, 2002
Estimated average burden
hours per response......14.9
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
Under the Securities Exchange Act of 1934
(Amendment No. ____)*
PriceSmart, Inc.
--------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $0.0001 per share
--------------------------------------------------------------------------------
(Title of Class of Securities)
741511109
--------------------------------------------------------------------------------
(CUSIP Number)
Sergio Montero and/or Federico Coronado
Ave. Ejercito Nacional 769-A
Delegacion Miguel Hidalgo
Col. Nueva Granada
11520 Mexico, D.F.
Mexico
011 (52-55) 52 69-8470 / 8121
Daniel S. Sternberg, Esq. and Jorge U. Juantorena, Esq.
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
(212) 225-2000
--------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
January 22, 2002
--------------------------------------------------------------------------------
(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 ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box. [ ]
*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).
SCHEDULE 13D
CUSIP No. 741511109 Page 2 of 12 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Grupo Gigante, S.A. de C.V.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3
4 SOURCE OF FUNDS (See Instructions)
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United Mexican States
7 SOLE VOTING POWER
NUMBER OF 600,000 (See Items 4 and 5.)
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH REPORTING
PERSON 9 SOLE DISPOSITIVE POWER
WITH
600,000 (See Items 4 and 5.)
10 SHARED DISPOSITIVE POWER
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
600,000 (See Item 5.)
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)
8.7% (See Item 5.)
14 TYPE OF REPORTING PERSON (See Instructions)
CO
Item 1. Security and Issuer.
This statement relates to the common stock, par value $0.0001 per share
(the "Common Stock"), of PriceSmart, Inc., a Delaware corporation (the
"Company"), whose principal executive offices are located at 4649 Morena Blvd.,
San Diego, CA 92117.
Item 2. Identity and Background.
This statement is filed by Grupo Gigante, S.A. de C.V. ("Gigante"). The
address of the principal business and office of Gigante is Ave. Ejercito
Nacional 769-A, Col. Nueva Granada, Delegacion Miguel Hidalgo, 11520 Mexico,
D.F., Mexico. Gigante is a corporation organized under the laws of the United
Mexican States, the principal business of which is to sell general merchandise,
food and related products and services through its subsidiaries.
The names, business addresses, principal occupations and citizenship of
the directors and executive officers of Gigante are set forth in Schedule I
attached hereto.
During the last five years, neither Gigante nor, to the best knowledge
of Gigante, any of the persons named in Schedule I has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
been 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.
Item 3. Source and Amount of Funds or Other Consideration.
As more fully described under Item 4 below, Gigante and the Company
have entered into the Purchase Agreement (as defined below), pursuant to which
Gigante has purchased the Series A Preferred Stock and the Warrant (each as
defined below) for aggregate consideration of $15,000,000 in cash. All of the
funds required for the purchase of the Series A Preferred Stock and the Warrant
by Gigante were obtained from Gigante's general funds.
Item 4. Purpose of Transaction.
Purchase Agreement. On January 15, 2002, Gigante and the Company
entered into a Series A Preferred Stock and Warrant Purchase Agreement (the
"Purchase Agreement") providing for, among other things, the purchase by Gigante
from the Company of (i) 15,000 shares of the Company's 8% Series A Cumulative
Convertible Redeemable Preferred Stock, par value $0.0001 per share (the "Series
A Preferred Stock"), and (ii) a warrant to purchase 200,000 shares of Common
Stock, at an exercise price of $37.50 per share (the "Warrant" and, together
with the Series A Preferred Stock, the "Shares"), on the terms and conditions
set forth in the Purchase Agreement.
The Purchase Agreement, the Certificate of Designation with respect to
the Series A Preferred Stock and the Warrant are filed as Exhibits 1, 2 and 3,
respectively, to this Schedule and are incorporated herein in their entirety by
this reference. The following description of these documents is a summary only
and is qualified in its entirety by reference to such documents.
Series A Preferred Stock. The Series A Preferred Stock has a
liquidation preference of $1,000 per share (plus accumulated and unpaid
dividends) and will accumulate dividends at a rate of 8.00% per annum. Dividends
may be paid in cash only. The Series A Preferred Stock is convertible into
Common Stock at any time at the option of the holders. The Series A Preferred
Stock contains customary antidilution provisions. The current conversion price
is $37.50 and the shares of Series A Preferred Stock held by Gigante are
currently convertible into an aggregate of 400,000 shares of Common Stock. Any
shares of Series A Preferred Stock that remain outstanding on January 17, 2012
will automatically be converted into Common Stock at the then applicable
conversion price. On or after January 17, 2007, the Series A Preferred Stock is
redeemable at the option of the Company at a price per share of $1,000 plus
accumulated and unpaid dividends. The Series A Preferred Stock has no voting
rights except as provided under Delaware law.
Warrant. The Warrant entitles its holder to purchase, upon exercise at
any time in whole or in part, up to 200,000 shares of Common Stock for a price
of $37.50 per share. The Warrant contains customary antidilution provisions. The
Warrant expires on January 17, 2003.
Gigante Nominee. The Purchase Agreement provides that the board of
directors of the Company (the "Board") will, upon Gigante's purchase of the
Shares, appoint to the Board a person designated by Gigante (a "Gigante
Nominee"). At each annual meeting of the Company's stockholders thereafter, the
Company has agreed to use its best efforts to cause a Gigante Nominee to be
elected as a director of the Company, including by including the Gigante Nominee
in the slate of nominees recommended by the Board to the stockholders of the
Company. In accordance with the Purchase Agreement, the Board has elected Angel
Losada Moreno, Gigante's Vice-Chairman and Executive President, to serve as a
director of the Company. Gigante will be entitled to designate a Gigante Nominee
for election to the Board so long as it and its affiliates own all of the shares
of Series A Preferred Stock purchased under the Purchase Agreement or any shares
of Common Stock issued upon conversion thereof and the Warrant and any shares of
Common Stock issued upon exercise thereof.
Gigante may in the future acquire additional equity securities of the
Company from the Company, in the open market, in privately-negotiated purchases,
pursuant to the Right of First Refusal described below in Item 6 or otherwise
and may also, depending on then current circumstances, dispose of all or a
portion of the Company's securities it holds in one or more transactions.
Additionally, concurrently with entering into the Purchase Agreement, on January
15, 2002, Gigante and the Company entered into agreements to establish a
commercial joint venture for the development and operation of warehouse stores
in Mexico. Gigante and the Company may in future enter into other commercial
arrangements relating to the operation and development of their respective
businesses.
Except as set forth in this statement, Gigante currently has no plans
or proposals that relate to or that would result in any of the actions or
transactions described in paragraphs (a) through (j) of Item 4 of the
instructions to Schedule 13D. However, Gigante reserves the right from time to
time to formulate plans or proposals regarding the Company or any of its
securities and to carry out any of the actions or transactions described in
paragraphs (a) through (j) of Item 4 of the instructions to Schedule 13D, to the
extent it deems advisable. In addition, any Gigante Nominee may, from time to
time, propose that the Board consider one or more of such actions or participate
in the consideration and formulation of plans and proposals regarding such
actions in his or her capacity as a member of the Board.
Item 5. Interest in Securities of the Issuer.
(a), (b) As of the date hereof, Gigante is the owner of 15,000 shares
of Series A Preferred Stock, which are currently convertible into 400,000 shares
of Common Stock, and the Warrant to purchase up to 200,000 shares of Common
Stock. Except for such holdings, neither Gigante nor, to the best of its
knowledge, any of the persons named in Schedule I, is the beneficial owner of
any shares of Common Stock.
Gigante may be deemed to beneficially own the 600,000 shares of Common
Stock which it has the right to acquire upon conversion of the Series A
Preferred Stock and/or exercise of the Warrant, representing in the aggregate
approximately 8.7% of the outstanding shares of Common Stock assuming full
conversion and exercise (based on 6,297,421 outstanding shares of Common Stock
outstanding - the number of shares of Common Stock represented by the Company in
the Purchase Agreement to be outstanding as of December 31, 2001 - and deeming
600,000 shares of Common Stock which are the subject of the Series A Preferred
Stock and the Warrant to be outstanding).
(c) Except as described herein, no transactions in shares of Common
Stock were effected during the past 60 days by Gigante or, to the best of its
knowledge, any of the persons named in Schedule I.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understanding or
Relationships with Respect to Securities of the Issuer.
In connection with entering into the Purchase Agreement, Gigante and
certain stockholders of the Company - Robert E. Price, Sol Price, The Price
Family Charitable Fund, The Price Group LLC, the Robert and Allison Price Trust,
the Robert & Allison Price Charitable Remainder Trust, the Price Family
Charitable Trust, and the Sol and Helen Price Trust (collectively the "Price
Entities") - have entered into a Right of First Refusal Agreement, dated as of
January 15, 2002 (the "Right of First Refusal"), pursuant to which the Price
Entities have granted Gigante a right of first refusal in connection with
certain proposed transfers by the Price Entities of substantially all shares of
Common Stock or Series A Preferred Stock beneficially owned by them. Gigante
believes that the Price Entities currently own beneficially an aggregate of
2,356,520 shares of Common Stock and 5,000 shares of Series A Preferred Stock.
The Right of First Refusal provides that for a period of one year from
January 22, 2002, subject to certain limited exceptions, no Price Entity will
transfer or agree to transfer beneficial ownership of any shares of Series A
Preferred Stock or Common Stock without first making an irrevocable written
offer to sell such shares to Gigante on the same terms. In the Right of First
Refusal the Price Entities have also granted Gigante a proxy to vote all shares
of Common Stock beneficially owned by them effective upon any election by
Gigante to exercise its right of first refusal. The Right of First Refusal also
provides that until the earlier of (x) January 22, 2004 and (y) such time as
Gigante is no longer entitled to designate or nominate a director to the Board
pursuant to the Purchase Agreement, each Price Entity shall vote all shares of
capital stock of the Company beneficially owned by it and entitled to vote in an
election of directors, in favor of the election of the Gigante Nominee.
The Right of First Refusal is filed as Exhibit 4 to this Schedule and
is incorporated herein in its entirety by this reference. The foregoing
description of this document is a summary only, and is qualified in its entirety
by reference to such document.
Gigante expressly disclaims beneficial ownership of any of the shares
of Common Stock or other securities to which the Right of First Refusal is or
may be applicable, until such time as one or more of the Price Entities gives it
notice of an intention to make a transfer subject to the Right of First Refusal.
Except as set forth in this statement, to the best knowledge of
Gigante, there are no other contracts, arrangements, understandings or
relationships (legal or otherwise) among Gigante or the persons named in
Schedule I or between such persons and any person with respect to any securities
of the Company, including but not limited to, transfer or voting of any of the
securities of the Company, joint ventures, loan or options arrangements, puts or
calls, guarantees of profits, division of profits or loss, or the giving or
withholding of proxies, or a pledge or contingency the occurrence of which would
give another person voting power over the securities of the Company.
Item 7. Material to be Filed as Exhibits
Exhibit 1 Series A Preferred Stock and Warrant Purchase Agreement, dated as of
January 15, 2002, by and between Grupo Gigante, S.A. de C.V. and
PriceSmart, Inc. (incorporated herein by reference to Exhibit 10.2
to PriceSmart, Inc.'s Current Report on Form 8-K (File No. 0-22793),
dated January 24, 2002).
Exhibit 2 Certificate of Designations, Preferences and Relative,
Participating, Optional and Other Special Rights of 8% Series A
Cumulative Convertible Redeemable Preferred Stock and
Qualifications, Limitations and Restrictions Thereof, dated as of
January 15, 2002 (incorporated herein by reference to Exhibit 3.2 to
PriceSmart, Inc.'s Current Report on Form 8-K (File No. 0-22793),
dated January 24, 2002).
Exhibit 3 Common Stock Purchase Warrant, dated as of January 17, 2002, issued
to Grupo Gigante, S.A. de C.V. (incorporated herein by reference to
Exhibit 10.3 to PriceSmart, Inc.'s Current Report on Form 8-K (File
No. 0-22793), dated January 24, 2002).
Exhibit 4 Right of First Refusal Agreement, dated as of January 15, 2002, by
and among Grupo Gigante, S.A. de C.V., Robert E. Price, Sol Price,
The Price Family Charitable Fund, The Price Group LLC, the Robert
and Allison Price Trust, the Robert & Allison Price Charitable
Remainder Trust, the Price Family Charitable Trust, and the Sol and
Helen Price Trust (incorporated herein by reference to Exhibit 10.5
to PriceSmart, Inc.'s Current Report on Form 8-K (File No. 0-22793),
dated January 24, 2002).
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: January 30, 2002
GRUPO GIGANTE S.A. DE C.V.
By: /s/ Roberto Salvo Horvilleur
--------------------------------------
Name: Roberto Salvo Horvilleur
Title: Director General (Chief Executive
Officer) and Apoderado
(Attorney-in-Fact)
SCHEDULE I
Potash Corporation of GIGANTE S.A. DE C.V.
Unless otherwise indicated, each of the individuals named below is a
citizen of Mexico and has his business address at Ave. Ejercito Nacional 769-A,
Col. Nueva Granada, Delegacion Miguel Hidalgo, 11520 Mexico, D.F., Mexico.
Name Position With Gigante, Principal Occupation
---- and Business Address
-------------------------------------------
Angel Losada Gomez Chairman of the Board
Mr. Losada is a citizen of Spain and his
principal occupation is Chairman of the
Board of Gigante.
Angel Losada Moreno Vice Chairman of the Board and Executive
President
Mr. Losada's principal occupation is Vice
Chairman and Executive President of
Gigante.
Roberto Salvo Horvilleur Director and Chief Executive Officer
Mr. Salvo is a citizen of Nicaragua and his
principal occupation is Chief Executive
Officer of Gigante.
Federico Coronado Brosig Chief Financial Officer
Mr. Coronado's principal occupation is
Chief Financial Officer of Gigante.
Jaime Alverde Losada Director
Mr. Alverde's principal occupation is
Director of Procurement of Super
Gigante/Super G (a division of Gigante).
Braulio Arsuaga Telleechea Director
Mr. Arsuaga's business address is Miguel de
Cervantes Saavedra 240, Col. Nueva Granada,
Delegacion Miguel Hidalgo, 11520 Mexico,
D.F. Mr. Arsuaga's principal occupation is
Vice Chairman of the Board of Ola Polanco,
S.A. de C.V. (a car dealership).
Gonzalo Barrutieta Losada Director
Mr. Barrutieta's principal occupation is
Director of Procurement of Bodega Gigante
(a division of Gigante).
Armando Garza Sada Director
Mr. Garza's business address is Ave. Gomez
Morin # 1111 Col. Carrisalejo, Casa Garcia,
Nuevo Leon C.P. 66254 Monterrey, N.L.,
Mexico. Mr. Garza's principal occupation is
Chief Executive Officer of Versax
Corporativo S.A de C.V. (holding company).
Manuel Medina Mora Director
Mr. Medina's business address is Actuario
Roberto Medellin # 800-5th Floor, Ala Sur,
Col. Santa Fe, C.P. 01210, Mexico, D.F. Mr.
Medina's principal occupation is Chief
Executive Officer of Grupo Financiero
Banamex - Citigroup, S.A. (financial and
banking group).
Gilberto Perez Alonso Cifuentes Director
Mr. Perez-Alonso's business address is
Campos Eliseos # 199 int. 802, Col. Polanco
C.P. 11560 Mexico, D.F. Mr. Perez-Alonso's
principal occupation is Chief executive
Officer of Rodegil, S.C. (financial and
strategic consulting).
Luis Rebollar Corona Director
Mr. Rebollar's business address is Londres
212 5th Floor, Col. Juarez C.P. 06600
Mexico, D.F. Mr. Rebollar's, principal
occupation is President and Chief Executive
Officer of Grupo Sidek, S.A. de C.V. (a
tourist, real estate and industrial group).
Luis Santana Castillo Director
Mr. Santana's business address is Homero
1855 - 6th Floor, Col. Chapultepec Morales
C.P. 11570, Mexico, D.F. Mr. Santana's
principal occupation is Executive President
of Asociacion Nacional de Tiendas de
Autoservicio y Departamentales, A.C. (the
Mexican National Association of Retailers).
Exhibit Index
Exhibit Title Page
------- ----- ----
1 Series A Preferred Stock and Warrant Purchase Agreement,
dated as of January 15, 2002 by and between Grupo
Gigante, S.A. de C.V. and PriceSmart, Inc. (incorporated
herein by reference to Exhibit 10.2 to PriceSmart,
Inc.'s Current Report on Form 8-K (File No. 0-22793),
dated January 24, 2002).
2 Certificate of Designations, Preferences and Relative,
Participating, Optional and Other Special Rights of 8%
Series A Cumulative Convertible Redeemable Preferred
Stock and Qualifications, Limitations and Restrictions
Thereof, dated January 15, 2002 (incorporated herein by
reference to Exhibit 3.2 to PriceSmart, Inc.'s Current
Report on Form 8-K (File No. 0-22793), dated January 24,
2002).
3 Common Stock Purchase Warrant, dated January 17, 2002,
issued to Grupo Gigante, S.A. de C.V. (incorporated
herein by reference to Exhibit 10.3 to PriceSmart,
Inc.'s Current Report on Form 8-K (File No. 0-22793),
dated January 24, 2002).
4 Right of First Refusal Agreement, dated as of January
15, 2002 by and among Grupo Gigante, S.A. de C.V.,
Robert E. Price, Sol Price, The Price Family Charitable
Fund, The Price Group LLC, the Robert and Allison Price
Trust, the Robert & Allison Price Charitable Remainder
Trust, the Price Family Charitable Trust, and the Sol
and Helen Price Trust (incorporated herein by reference
to Exhibit 10.5 to PriceSmart, Inc.'s Current Report on
Form 8-K (File No. 0-22793), dated January 24, 2002).