Ex. 99(A)(5)(iv)
NEWCASTLE PARTNERS, L.P.
300 CRESCENT COURT, SUITE 1110
DALLAS, TEXAS 75201
PLEASE RETURN THE ENCLOSED GREEN PROXY CARD
TO VOTE AGAINST THE PRENTICE FINANCING AND
FOR THE NEWCASTLE PARTNERS DIRECTOR NOMINEES
December 28, 2005
Dear Fellow Stockholder:
Newcastle Partners, L.P. is the second largest stockholder of Whitehall
Jewellers, Inc., owning 2,018,400 shares or approximately 12% of the Company's
outstanding shares. We believe that Whitehall's intention to engage in financing
transactions with Prentice Capital Management and Holtzman Opportunity Fund
(collectively, the "Prentice Financing") is not in the best interests of
stockholders. IF THE PRENTICE FINANCING IS APPROVED, PRENTICE AND ITS COHORTS
COULD OBTAIN CONTROL OF APPROXIMATELY 87% OF YOUR COMPANY. We are urging all
stockholders to vote AGAINST the Prentice Financing and to vote FOR the
Newcastle director nominees at the special meeting of stockholders scheduled to
be held on January 19, 2006. We hope you will vote to protect your investment in
Whitehall by signing, dating and returning the enclosed GREEN proxy card at your
earliest convenience.
WE BELIEVE THE NEWCASTLE $1.20 PER SHARE TENDER OFFER GIVES
STOCKHOLDERS THE BEST AND MOST CERTAIN OPPORTUNITY TO
MAXIMIZE VALUE
On December 5, 2005, Newcastle launched a tender offer to acquire all of
the outstanding shares of Whitehall that it does not already own. Our offer of
$1.20 per share represents a premium of 36% over the trading price of Whitehall
on the day before we made the offer. It also represents a 60% premium to the
$.75 per share Prentice recently paid upon exercising its Warrants to become the
Company's largest stockholder. Please remember that the existing Board of
Directors did not ask you to vote on whether Prentice would become the Company's
largest stockholder. They are only asking you to vote now because they are
legally compelled to do so prior to diluting your ownership by up to 87%.
We believe that our offer is fair to all stockholders and affords
stockholders the best and most certain alternative to monetize their investment.
Unfortunately, the current Board of Directors has decided to reject our offer
and, as a result, we feel compelled to solicit votes AGAINST the ill-conceived
Prentice Financing that we believe could have a negative impact on all Whitehall
stockholders. We continue to believe that our tender offer is superior to the
Prentice Financing and believe that you, the true owners of the Company, should
have a voice in the future of your investment.
THE PRENTICE FINANCING COULD HAVE A DISASTROUS IMPACT ON
YOUR INVESTMENT
At the special meeting, you will be asked to vote to approve the issuance
of shares of common stock that could result from the Prentice Financing. If this
proposal is passed, we believe that the dilutive effect on current stockholders
would be devastating, with the new investors gaining control of approximately
87% of the Company's outstanding stock at a price of $.75 per share. IN EFFECT,
THE NEW INVESTORS WOULD OBTAIN TOTAL CONTROL OF OUR COMPANY WITHOUT PAYING ANY
PREMIUM TO EXISTING STOCKHOLDERS. We hope you will agree with us that such a
proposal is not in your best interests and must be rejected.
In addition to asking you to agree to have your stake in the Company
drastically diluted, the Company is also asking stockholders to approve a
1-for-2 reverse stock split. We are concerned that the proposed reverse split is
fraught with unacceptable risks and offers no assurance that the Company's
market capitalization will increase anymore than it would in the absence of a
split. In fact, we believe, and the Company acknowledges, that a decline in the
market price for the common stock after the reverse split may result in a
greater percentage decline than would occur if there were no reverse split. This
concern, as well as the potential negative effect on liquidity and a likelihood
of increased volatility, fortify our belief that the reverse split offers many
risks without providing stockholders with any upside potential. We also believe
the Prentice Financing was structured to require as a condition to closing a
reverse split of the outstanding capital stock as this action only requires
approval from the holders of a majority of the outstanding shares of common
stock. Absent the reverse split, the Company would have had to seek the approval
from the holders of 75% of the outstanding shares of common stock to approve the
Prentice Financing. We question whether the Prentice Financing was intentionally
structured to require a reverse stock split rather than amending the charter to
increase the number of authorized shares so that the more difficult
supermajority voting threshold could be cleverly avoided. PLEASE JOIN US IN
TELLING THE COMPANY THAT YOU ARE NOT WILLING TO BET YOUR INVESTMENT ON THEIR
QUESTIONABLE PLAN - VOTE AGAINST THE REVERSE STOCK SPLIT.
VOTE FOR THE NEWCASTLE NOMINEES WHO WILL BE DEDICATED TO
MAXIMIZING VALUE FOR ALL STOCKHOLDERS
As a condition to the closing of the Prentice Financing, designees of
Prentice must be elected to the Whitehall Board. If these designees are elected,
Prentice would effectively gain control of the Board - again without
stockholders receiving any premium for the change in control. To prevent this
from happening, Newcastle has nominated a slate of five potential directors who
will take all actions necessary to consummate the Newcastle Tender Offer and
will evaluate any alternative offers the Company may receive, as dictated by
their fiduciary duties as directors. WE URGE ALL STOCKHOLDERS TO VOTE FOR THE
NEWCASTLE NOMINEES TO PREVENT A CHANGE IN CONTROL WHERE STOCKHOLDERS WILL
RECEIVE ABSOLUTELY NO CONSIDERATION AS THE COMPANY EFFECTIVELY ATTEMPTS TO GIVE
ITSELF AWAY.
DEMAND VALUE FOR YOUR INVESTMENT - VOTE THE GREEN PROXY
CARD TODAY!
As significant stockholders of the Company, we are counting on your support
to maximize value for all stockholders. We encourage all stockholders to vote
promptly and to discard any proxy materials you may receive from management. If
you have already returned management's white proxy card, you can still change
your vote by executing the enclosed GREEN proxy card. If you have any questions,
or need assistance in voting your GREEN proxy card, please call our proxy
solicitors, MacKenzie Partners, Inc. toll-free at (800) 322-2885 or (212)
929-5500 (call collect).
Thank you in advance for your support.
Sincerely,
/s/ Mark E. Schwarz
Mark E. Schwarz
Newcastle Partners, L.P.
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IF YOU HAVE ANY QUESTIONS, REQUIRE ASSISTANCE IN VOTING YOUR GREEN PROXY CARD,
OR NEED ADDITIONAL COPIES OF NEWCASTLE PARTNERS' PROXY MATERIALS, PLEASE CALL
MACKENZIE PARTNERS AT THE PHONE NUMBERS LISTED BELOW.
MACKENZIE PARTNERS, INC.
105 Madison Avenue
New York, NY 10016
proxy@mackenziepartners.com
(212) 929-5500 (Call Collect)
or
TOLL-FREE (800) 322-2885
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Newcastle Partners L P
Filed: 28 Dec 05, 12:00am