UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of
1934
Date
of
Report (Date of the earliest event reported)
February
28, 2007
Valhi,
Inc.
(Exact
name of registrant as specified in its charter)
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Delaware
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1-5467
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87-0110150
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(State
or other jurisdiction of incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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5430
LBJ Freeway, Suite 1700, Dallas, Texas
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75240-2697
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code
(972)
233-1700
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(Former
name or former address, if changed since last report.)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Item
7.01
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Regulation
FD Disclosure.
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The
registrant hereby furnishes the information set forth in its press release
issued on February 28, 2007, a copy of which is attached hereto as Exhibit
99.1
and incorporated herein by reference.
The
information, including the exhibit, the registrant furnishes in this report
is
not deemed “filed” for purposes of section 18 of the Securities Exchange Act of
1934, as amended, or otherwise subject to the liabilities of that section.
Registration statements or other documents filed with the U.S. Securities and
Exchange Commission shall not incorporate this information by reference, except
as otherwise expressly stated in such filing.
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Item
9.01
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Financial
Statements and Exhibits.
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(d)
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Exhibits
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Item
No.
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Exhibit
Index
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99.1
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Press
release dated February 28, 2007 issued by the
registrant.
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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Valhi,
Inc.
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(Registrant)
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By: /s/
A. Andrew R. Louis
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Date:
January 3, 2007
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A.
Andrew R. Louis, Secretary
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INDEX
TO EXHIBITS
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Item
No.
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Exhibit
Index
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99.1
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Press
release dated February 28, 2007 issued by the
registrant.
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VALHI
DECLARES REGULAR QUARTERLY CASH DIVIDEND AND SPECIAL DIVIDEND OF TIMET COMMON
STOCK
DALLAS,
TEXAS . . . February 28, 2007 . . . Valhi, Inc. (NYSE: VHI) announced today
that
its board of directors has declared:
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·
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a
regular quarterly cash dividend;
and
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·
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a
special dividend in the form of shares of Titanium Metals Corporation
(“TIMET”)
common stock (NYSE: TIE) owned by
Valhi.
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Regular
Quarterly Cash Dividend
Valhi
announced that its board of directors has declared a regular quarterly cash
dividend of ten cents ($0.10) per share on its common stock, payable on March
30, 2007 to stockholders of record at the close of business on March 12,
2007.
Special
Dividend of TIMET Common Stock
Valhi’s
board of directors also has declared a special dividend to its stockholders
to
be paid in the form of shares of TIMET common stock owned by Valhi. This
special
dividend is payable on March 26, 2007 to Valhi’s stockholders of record at
the close of business on March 12, 2007. As a result of this special
dividend declaration:
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·
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Valhi
will distribute approximately 56.8 million shares of TIMET common
stock,
representing approximately 35.1% of the outstanding TIMET common
stock;
and
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·
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each
Valhi stockholder will receive approximately 0.48 of a share of
TIMET
common stock for each share of Valhi common stock outstanding on
March 12,
2007 and cash in lieu of any resulting fractional share of TIMET
common
stock.
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The
exact
ratio of a share of TIMET common stock to be received in the special dividend
per share of Valhi common stock will be determined on the record
date.
Valhi
has
been advised that a “when issued” public market for Valhi common stock will
begin some time before the record date on the New York Stock Exchange and
continue through the payment date under the symbol “VHI wi.” “When issued”
refers to buying Valhi common stock shares without the TIMET shares to be
received upon the payment date.
Immediately
after the payment of the special dividend, Contran Corporation and its
subsidiaries and related parties will continue to own approximately 51.9%
of the
outstanding TIMET common stock compared to the approximately 53.8% held prior
to
the special dividend, in each case assuming the full conversion of any TIMET
6¾%
series A preferred stock held by such entities or parties. In making its
determination to distribute the TIMET shares, the Valhi board of directors
determined that Valhi’s ownership interest in TIMET had not been adequately
reflected in the market value of Valhi common stock and that the dividend
of
TIMET common stock is in the best interests of all of Valhi’s
stockholders.
Any
holder who sells shares of Valhi common stock in the “regular way” market on or
before the payment date may be selling the right to receive the special dividend
of shares of TIMET common stock. Holders
of Valhi common stock are encouraged to consult with their financial advisor
regarding the specific implications of selling Valhi common stock on or before
the payment date.
Tax
Matters
Subject
to the determination of Valhi’s 2007 year-end earnings and profits, the federal
income tax treatment to a Valhi stockholder of the special dividend and regular
quarterly cash dividends (the “distributions”)
will
be as follows:
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·
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The
amount of the distributions will be the value on the payment date
of the
TIMET shares and cash received by a Valhi
stockholder;
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·
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The
distributions will be taxable as dividend income to the extent
of Valhi’s
current or accumulated earnings and profits;
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·
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If
the distributions exceed Valhi’s current or accumulated earnings and
profits, they will be treated as a non-taxable return of capital
to the
extent of a stockholder’s basis in such stockholder’s Valhi stock;
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·
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Any
remaining portion of the distributions will be treated as a capital
gain;
and
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·
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If
a stockholder receives cash in lieu of a fractional share of TIMET
common
stock, such holder may recognize short-term capital gain or loss
equal to
the difference between the cash received and the portion of the
value of
TIMET common stock that is allocable to the fractional
share.
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Valhi
currently believes that a majority, if not all, of the distributions will
likely
be considered either a non-taxable return of capital and/or a capital gain.
However, if any or all of the distributions were to be treated as a dividend
for
federal income tax purposes, such dividend could be considered an “extraordinary
dividend” for Valhi stockholders that are corporations, which could result in a
reduction to such corporate stockholders’ tax basis in their Valhi stock.
The
specific tax treatment of the distributions will
not be determined until after December 31, 2007.
Each
stockholder should receive a Form 1099 or a letter from Valhi reporting the
appropriate tax treatment. Holders
of Valhi common stock are urged to consult with their tax advisor as to their
specific tax treatment of the distributions.
Valhi
is
a member of the consolidated U.S. federal tax group of which Contran Corporation
is the parent company. As a member of the Contran tax group and pursuant
to a
tax policy between Valhi and Contran, Valhi computes its provision for U.S.
income taxes on a separate company basis using tax elections made by Contran
and
makes payments to Contran or receives payments from Contran in amounts it
would
have paid to or received from the U.S. Internal Revenue Service had it not
been
a member of the Contran tax group but instead had been a separate
taxpayer.
Upon
the
payment of the special dividend and pursuant to the tax policy between Valhi
and
Contran, Valhi will incur a tax obligation to Contran equal to the market
value
on the payment date of the TIMET common stock shares distributed less Valhi’s
tax basis in such shares, which obligation is estimated to be approximately
$622
million based on the closing sales price for a share of TIMET common stock
on
February 27, 2007. In order to settle this obligation to Contran, Valhi and
Contran have agreed that concurrently with the payment of the special dividend,
Valhi will issue to Contran 5,000 shares of a new issue of Valhi 6% series
A
preferred stock having an aggregate liquidation preference equal to the actual
tax obligation created by the special dividend.
Valhi
Valhi
is
engaged in the titanium dioxide pigments, component products (security products,
furniture components and performance marine components) and waste management
industries.
Forward
Looking Statements
The
statements in this release relating to matters that are not historical facts
are
forward-looking statements that represent management’s beliefs and assumptions
based on currently available information. Forward-looking statements can
be
identified by the use of words such as “believes,” “intends,” “may,” “will,”
“should,” “could,” “anticipates,” “expects,” or comparable terminology or by
discussions of strategy or trends. Although Valhi believes that the expectations
reflected in such forward-looking statements are reasonable, it cannot give
any
assurances that these expectations will prove to be correct. Such statements
by
their nature involve risks and uncertainties, including, but not limited
to, the
cyclicality of the titanium dioxide industry, global economic and political
conditions, changes in global productive capacity, changes in customer inventory
levels, changes in product pricing, changes in product costing, changes in
foreign currency exchange rates, competitive technology positions, operating
interruptions (including, but not limited to, labor disputes, leaks, fires,
explosions, unscheduled downtime, transportation interruptions, war and
terrorist activities), the ultimate resolution of pending or possible future
lead pigment litigation and legislative developments related to the lead
paint
litigation, the outcome of other litigation, and other risks and uncertainties
detailed in the Valhi’s Securities and Exchange Commission filings. Should one
or more of these risks materialize (or the consequences of such a development
worsen), or should the underlying assumptions prove incorrect, actual results
could differ materially from those forecasted or expected. Valhi disclaims
any
intention or obligation to update publicly or revise such statements, whether
as
a result of new information, future events or otherwise.
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