July 18, 2005
By Facsimile and U.S. Mail
Karen E. Bertero
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Lost Angeles, California 90071
Re: Worldwide Restaurant Concepts, Inc.
Schedule 13E-3 filed by Worldwide Restaurant Concepts,
Inc.,
Kevin W. Perkins, Pacific Equity Partners Fund II, L.P.,
Aus Holdco Pty Limited and US Mergeco, Inc.
Filed June 15, 2005
Dear Ms. Bertero:
We have the following comments on the above-referenced
filing.
Please note that we have limited our review to issues related to
Rule
13e-3:
Schedule 13E-3
1. Please revise the Schedule and the document to be disseminated
to
security holders to clarify each filing person`s response to Item
6
and 7 of Schedule 13E-3. In doing so, please be certain to
disclose
the information regarding effects required by Instructions 2 and 3
to
Item 1013 of Regulation M-A.
Chapter 1-The Merger, page 2
2. We note from page 4 that Mr. Kevin Perkins, a filing person,
and
additional members of the Australian Management Group, who are
currently members of management of CFG will have the opportunity
to
exchange CFG shares for shares of the surviving entity. We also
note
that other management employees will have the opportunity to
subscribe for equity interests in the surviving company. Please
tell
us what consideration was given as to whether these additional
persons, to the extent that they subscribe for equity interests in
the surviving entity, should be filing persons on the Schedule
13E-3.
Refer to section II.D.3. of our Current Issues Outline, publicly
available on our website, www.sec.gov, for further guidance on the
determination of when members of senior management become
affiliates
engaged in the Rule 13e-3 transaction.
3. Your Q&A and summary together are 17 pages long. Please revise
the document to eliminate repetitive disclosure in these sections
and
to shorten the summary. The summary term sheet should address
all
of the most material terms of the transaction and should begin
immediately after any state law notice to security holders.
4. We note that the per share consideration to be received in the
transaction is based on a formula. Please revise the document as
follows:
* Revise the summary to provide a toll free telephone number
shareholders may call prior to determine the exact consideration
to
be received on a per share basis.
* Add an illustrative table showing the range of consideration per
share that may be received between the set high and low.
* Clarify whether the parties may terminate the transaction if
exchange rates fluctuate beyond values that would result in the
high
and low threshold consideration.
* If material, address the volatility of the exchange rate over a
recent period, such as 90 days.
* Disclose the time period between the vote and the closing of the
transaction.
* Disclose that the actual value of the consideration may differ
from
the example as of the latest practicable date, given that the
actual
consideration will not be determined until immediately preceding
closing.
5. Revise to clarify the board`s plans if Houlihan Lokey is not
able
to provide fairness opinion the day before the special meeting, as
discussed on page 14. Confirm that you will amend the Schedule
13E-3
to include any additional reports prepared by Houlihan Lokey as
exhibits to the document as required by Items 1015 and 1016 of
Regulation M-A. Also, please tell us how you intend to
disseminate
to security holders the results of Houlihan Lokey`s analysis, a
summary of any report, and the board`s consideration of their
conclusion.
Risk Factors, page 17
6. At the bottom of page 18 you state that "[c]ertain statements
and
assumptions in this proxy statement and in the documents attached
or
incorporated by reference in this prosy statement contain or are
based on `forward-looking` information . . . .[and] that such
statements are `forward-looking statements` within the meaning of
the
Private Securities Litigation Reform Act of 1995." Note that the
safe harbor protections for forward-looking statements contained
in
the federal securities laws do not apply to statements made in
connection with a going-private transaction. See Section
21E(b)(2)(E) of the Securities Exchange Act of 1934 and Regulation
M-
A telephone interpretation M.2 available at www.sec.gov in the
July
2001 Supplement to the Division of Corporation Finance`s Manual of
Publicly Available Telephone Interpretations. Please eliminate
the
reference to the Act or otherwise clarify your disclosure.
7. In addition, you state, "WRC does not undertake any obligation
to
update or release any revisions to any forward-looking statements
or
to report any events or circumstances after the date of this proxy
statement or to reflect the occurrence of unanticipated events,
except as required by law." Please revise to clarify your
obligation
under Rules 13e-3(d)(2) and (f)(1)(iii) to amend the Schedule to
reflect a material change in the information previously disclosed.
The Merger, page 20
8. Refer to the fifth full paragraph on page 21. Please disclose
the
criteria used to select the final seven potential acquirors.
9. On page 23, revise to clarify the outstanding issues between
April
20 and April 27.
Consideration Relating to the Merger, page 24
10. Generally, the factors outlined in Instruction 2 to Item 1014
are
considered relevant in assessing the fairness of the consideration
to
be received in a going private transaction. To the extent any of
the
listed factors was not deemed relevant in the context of this
transaction, or was given little weight, this in itself may be an
important part of the decision-making process that should be
explained for shareholders. For example, it does not appear that
you
have addressed liquidation value, net book value or historical
market
prices. See Q&A No. 20 in Exchange Act Release No. 17719 (April
13,
1981). Please revise the investor group`s fairness discussion in
this regard as well.
11. Revise the sixth bullet point on page 25 to clarify the
potential
consideration from the "other possible liquidity events" that the
board considered in reaching its fairness determination. Also
revise
the sixth bullet point on page 26 to clarify what about the
"current
and prospective environment . . . and, in particular, competitive
factors" the board considered and how this weighed in favor of the
fairness determination. Please make similar changes to the
investor
group`s fairness determination, as applicable.
12. Please revise this section to clarify how the board reached
its
procedural fairness determination despite the absence of all of
the
safeguards found in Item 1014 of Regulation M-A. See Q&A No. 21
in
Exchange Act Release No. 17719. In this regard, we note the
statement in the last full paragraph on page 24 that "[b]ecause
WRC
is not affiliated with PEP and its affiliates, the Special
Committee
and the WRC Board of Directors determined that it was not
necessary
to retain an unaffiliated representative to act solely on behalf
of
stockholders of WRC that are not employees or affiliates." As it
appears that the two are affiliated, please revise this statement
or
advise. For a discussion of affiliates of an issuer within the
scope
of Rule 13e-3, please see Item II.D.3 of the Division of
Corporation
Finance`s Manual of Publicly Available Telephone Interpretations,
discussed above.
Recommendation of the WRC Board of Directors, page 27
13. We note that the merger agreement and recommendation to
security
holders to vote in favor of the transaction were approved by "a
unanimous vote of all directors at the meeting." Please clarify
which directors did not vote on these matters.
Opinion of Financial Advisor, page 27
14. Each presentation, discussion or report by the financial
advisor
during the course of the meetings you describe must be summarized
in
considerable detail and filed as exhibits pursuant to Item 9 of
Schedule 13E-3. This applies to oral as well as written reports
and
preliminary as well as final reports. Revise to summarize each
report prepared by Houlihan Lokey Financial Advisors and file each
report as an exhibit to the Schedule 13E-3. In this regard, we
note
from page 29 that Houlihan, an affiliate of Houlihan Lokey
Financial
Advisors, also provided financial advisory services in connection
with this transaction. Please revise to provide all Item 1015
information with respect to Houlihan or tell us why disclosure is
not
required.
15. Revise the discussion in the carryover paragraph at the top of
page 29 to clarify the scope of Houlihan`s engagement as WRC`s
financial advisor with respect to the merger, and how this
differed
from the scope of Houlihan Lokey Financial Advisors` role in the
transaction. Finally, as the two advisors have similar names,
please
revise the reference to the fairness opinion, which you refer to
as
the "Houlihan opinion" to clarify the source of that opinion.
16. On page 33, you state that "the financial projections may not
be
relied upon as necessarily indicative of future results." While
it
may be acceptable to include qualifying language concerning
subjective analyses, it is inappropriate to disclaim
responsibility
for statements made in the document. Please revise the disclosure
to
clarify why the projections are no longer valid, if true, and
eliminate this disclaimer.
17. Please revise to clarify, if true, that the projections and
underlying assumptions provided to the financial advisor are
disclosed on pages 73-76.
18. We note that the financial advisor considered a draft merger
agreement in reaching its fairness determination. Please revise
to
disclose the changes to the merger agreement after this draft, and
whether any of those changes were material.
Position of the Investor Group as to Fairness, page 34
19. Please disclose the historical stock value of WRC that the
investor group considered, and what consideration they gave to
these
values.
The Financing, page 39
20. We note that the financing agreements for the funds necessary
to
complete the transaction have not been finalized. Confirm to us
that
when the financing is complete, you will file the relevant
agreements
as exhibits to the Schedule 13E-3.
The Merger Agreement, page 48
21. You state that the "description of the material provisions of
the
merger agreement is qualified by reference to the text of the"
merger
agreement. Please eliminate this disclaimer, as security holders
are
entitled to rely on your disclosure in the document.
22. You state that "[t]he merger agreement is not intended to
provide
stockholders with factual information regarding the current state
of
the business or operations of WRC. Such information is provided
elsewhere, or incorporated by reference, in this proxy statement
and
in the filings made by WRC with the Securities and Exchange
Commission . . . which together contain all material information
about WRC." Please revise to remove any potential implication
that
the referenced merger agreement does not constitute public
disclosure
under the federal securities laws.
Proxy Solicitation, page 68
23. Revise to provide all information required by Item 1009(a) of
Regulation M-A with respect to Georgeson. In doing so, quantify
the
compensation to be paid to Georgeson.
Ownership of More than 5% of WRC Common Stock, page 83
24. Please revise each of the beneficial ownership tables to
disclose
the number of shares outstanding on which you base the
percentages.
25. Revise the beneficial ownership table to identify the
individual(s) with voting and/or investment control over the
shares
held by entities named in the table.
Where Stockholders Can Find More Information, page 85
26. Schedule 13E-3 does not specifically permit "forward
incorporation" of any documents filed under Sections 13(a), 13(c),
14
or 15(d) of the Exchange Act. Rather, if you make any such
filings
while this Offer is pending, you must amend the Schedule 13E-3 to
specifically incorporate them by reference, if necessary. Please
confirm that you will do so and revise this section to clarify.
27. We note the disclaimers in the second and third full
paragraphs
on page 86. This disclosure is inconsistent with your obligation
under Rules 13e-3(d)(2) and (f)(1)(iii) to amend the Schedule to
reflect a material change in the information previously disclosed.
Please revise.
28. We note the disclosure in the penultimate paragraph on this
page
that:
A stockholder should pursue his, her or its own independent
evaluation and make any investigation he or she deems appropriate
in
deciding whether or not to join in the proxy solicitation for
purposes of approving the merger. The information contained in or
incorporated by reference in this document is not intended to be
legal, tax or investment advice. Stockholders are strongly
encouraged to consult with his, her or its own legal, tax and
financial advisors regarding the consequences of the transactions
described in this document.
Security holders are entitled to rely on the disclosure in your
document. Please revise to eliminate this disclaimer and to
clarify
the reference to "join in the proxy solicitation."
Form of Proxy
29. If proposal two has been provided to permit the board to
adjourn
the meeting to solicit additional votes in favor of the
transaction,
please revise the proposal to clarify. Also, please revise the
document to provide a separate section to discuss the reasons for
the
second proposal.
30. Please revise the form of proxy and any associated disclosure
in
the document to clarify those matters for which proxies may use
discretionary authority to exercise their vote. See Rule 14a-
4(c)(3).
Closing Comments
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require.
Since the filing persons, the company and its management are in
possession of all facts relating to their disclosure, they are
responsible for the accuracy and adequacy of the disclosures they
have made.
In connection with responding to our comments, please
provide,
in writing, a statement from (1) the company, and (2) each of the
filing persons acknowledging that
* the company/filing person is responsible for the adequacy and
accuracy of the disclosure in the filings;
* staff comments or changes to disclosure in response to staff
comments in the filings reviewed by the staff do not foreclose the
Commission from taking any action with respect to the filing; and
* the company/filing person may not assert staff comments as a
defense in any proceeding initiated by the Commission or any
person
under the federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
* * *
Please respond to these comments by promptly amending the
filing and submitting a response letter filed via EDGAR under the
label "CORRESP." If you do not agree with a comment, please tell
us
why in your response. Please note that Rule 14a-6(h) requires you
to
filed revised preliminary proxy materials that are marked to show
changes. Direct any questions to me at (202) 551-3262. You may
also
contact me by facsimile at (202) 772-9203.
Sincerely,
Abby Adams
Special Counsel
Office of Mergers and Acquisitions
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Karen E. Bertero
July 18, 2005
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0303
DIVISION OF
CORPORATION FINANCE