March 2, 2006
Via U.S. Mail
Jean K. FitzSimon
Senior Vice President and General Counsel
Whitehall Jewellers, Inc.
155 North Wacker Drive
Suite 500
Chicago, IL 60606
Re: Whitehall Jewellers, Inc.
Amendment No. 1 to Schedule 14D-9 and Schedule 13E-3
Filed February 28, 2006
SEC File No. 5-46037
Dear Ms. FitzSimon:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation
as to why our comment is inapplicable or a revision is
unnecessary.
Please be as detailed as necessary in your explanation. In some
of
our comments, we may ask you to provide us with information so we
may
better understand your disclosure. After reviewing this
information,
we may raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We
look forward to working with you in these respects. We welcome
any
questions you may have about our comments or any other aspect of
our
review. Feel free to call us at the telephone numbers listed at
the
end of this letter.
Schedule 14D-9
1. We note your response to prior comment 1 and your indication
that
the additional disclosure in the Schedule 13E-3 and the Schedule
14D-
9/A does not "materially alter the mix of information provided to
the
Company`s stockholders." Please elaborate upon your analysis in
this
regard and, in particular, address why you believe that it is
appropriate to not disseminate information with respect to the
analysis supporting the fairness determination rendered by the
Board,
which you have provided in response to Item 8 of the Schedule 13E-
3.
Item 4. The Solicitation or Recommendation
(b) Background of the Offer; Reasons for Recommendation
(ii) Reasons for the Recommendation
2. Consistent with prior comment 9, please expand the second
bullet
point to explain how the historical and recent market prices of
Shares
contributed to the Board`s decision to recommend the offer by
providing quantified information.
Schedule 13E-3
3. We note that you incorporate by reference much of the
disclosure
required by this Schedule 13E-3 from the Offer to Purchase that
was
filed as an exhibit to the Schedule TO on February 8, 2006.
Please
ensure that you also incorporate by reference and list as an
exhibit
Amendment No. 1 to the Schedule TO that was filed on February 22,
2006, which amends some of the information contained in the Offer
to
Purchase filed February 8, 2006.
Item 8. Fairness of the Transaction
4. We note your incorporation by reference of this disclosure from
Item 4(b)(ii) of the Schedule 14D-9. Here you indicate that the
Board
has "determined the terms of the Offer and Merger Agreement, taken
together, are fair to and in the best interests of the Company and
its
stockholders." Please revise your fairness determination to
indicate
that the going private transaction or, in this case, the Offer is
fair
to unaffiliated stockholders, as required pursuant to Item 1014 of
Regulation M-A. Please also note that each filing person must
disclose its belief as to whether the transaction is substantively
and
procedurally fair to unaffiliated stockholders. Please revise
accordingly.
5. Please clarify the role that the Special Committee played in
determining the fairness of the going private transaction. Did
they
determine the transaction to be fair? If so, what factors did
they
rely upon? Your disclosure ceases to refer to their role in the
negotiation process after October 27, 2005 so it is not clear to
what
extent, if any, they continued to evaluate the offers being made
for
the Company and, more specifically, to what extent they considered
the
fairness of the instant transaction.
6. We note your indication that the Board`s belief that the
transaction is fair to unaffiliated stockholders was not based on
net
book value or liquidation value. Please revise to explain why.
The
extent to which these factors were not considered or deemed
relevant
in the context of this particular transaction may be important for
shareholders in assessing the transaction and the company`s
fairness
determination. See Exchange Act Release 17719 (April 13, 1981).
7. In indicating that the going private transaction is fair to
unaffiliated stockholders, each filing person must discuss each of
the
material factors set forth in Instruction 2 to Item 1014 of
Regulation
M-A. It does not appear that the Board has addressed going
concern
value. Please revise to address what consideration was given, if
any,
to going concern value. If the Board relied upon the analysis of
this
factor as made by the fairness advisor, Duff & Phelps, the board
must
specifically disclose that it has adopted the analysis of Duff &
Phelps as it relates to their discounted cash flow analysis.
Please
revise or advise.
8. We note your indication that the board believes that the
transaction is fair despite the absence of certain procedural
safeguards. Please revise your disclosure to address how it was
able
to determine that the going private transaction is fair absent the
safeguard set forth in Item 1014(d) of Regulation M-A in rendering
its
fairness determination. In other words, why did the directors not
retain an unaffiliated representative to act solely on behalf of
unaffiliated security holders for purposes of negotiating the
terms of
the Offer?
Item 16. Exhibits
9. Please note that each and every report, opinion, consultation,
proposal, or presentation, whether oral or written, received by
any
filing person, their affiliates or representatives constitutes a
report within the meaning of Item 1015 of Regulation M-A, as
required
by Item 9 of Schedule 13E-3. Ensure that you have summarized all
the
presentations made by Duff & Phelps during the course of the
meetings
described, and file any written reports as exhibits pursuant to
Item 9
of Schedule 13E-3. Also, any written documentation furnished
along
with any oral presentation, for example, analyses, outlines or
evaluations must be filed as exhibits and summarized in a similar
fashion. We note, for example, your discussion of the September
21,
2005 meeting where an analysis of the two offers was presented by
Duff
& Phelps.
Closing Comments
As appropriate, please amend your filing and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response. You may wish to provide us with marked copies of
the
amendment to expedite our review. Please furnish a cover letter
with
your amendment that keys your responses to our comments and
provides
any requested supplemental information. Detailed cover letters
greatly facilitate our review. Please understand that we may have
additional comments after reviewing your amendment and responses
to
our comments.
If you have any questions regarding our comments, please do not
hesitate to contact me at (202) 551-3264. You may also reach me
by
facsimile at (202) 772-9203.
Sincerely,
Mara L. Ransom
Special Counsel
Office of Mergers and
Acquisitions
cc via facsimile at 212- 839-5599:
Lori Anne Czepiel, Esq.
Gabe Saltarelli, Esq.
Sidley Austin LLP
Whitehall Jewellers, Inc.
March 2, 2006
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-3628
DIVISION OF
CORPORATION FINANCE