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Exhibit (a)(3)
[WWW.SIERRACITIES.COM] [SIERRA CITIES.COM LOGO]
600 Travis Street
Suite 7050
Houston, TX 77002
November 16, 2000
Dear Stockholder:
We are pleased to inform you that SierraCities has signed a
merger agreement with VerticalNet, Inc., pursuant to which
VerticalNet has commenced an offer to exchange $7.00 of
VerticalNet common stock for each SierraCities share, subject to a
"collar." The number of VerticalNet shares to be delivered will be
based on the average closing price of VerticalNet's stock over the
ten trading days ending two days before the closing of the offer.
The collar functions as follows: if the average VerticalNet
closing price is (1) less than $21.00, the SierraCities
stockholders shall receive 0.3333 of a VerticalNet share for each
SierraCities share, (2) at least $21.00 but less than or equal to
$35.00, SierraCities stockholders shall receive a fraction of a
VerticalNet share equal to $7.00 divided by the average
VerticalNet closing price for each SierraCities share, (3) more
than $35.00 but less than or equal to $51.00, the SierraCities
stockholders shall receive 0.20 of a VerticalNet share for each
SierraCities share, and (4) greater than $51.00, SierraCities
stockholders shall receive a fraction of a VerticalNet share equal
to $10.20 divided by the average VerticalNet closing price for
each SierraCities share. SierraCities will have the right to
terminate the merger agreement if the average VerticalNet closing
price is less than $15.00. The average VerticalNet closing price
cannot be determined at this time. On November 15, 2000, the
closing price for the VerticalNet shares was $20.1875. If the
average VerticalNet closing price were to equal this closing
price, a SierraCities stockholder would receive VerticalNet shares
in the offer with a value of approximately $6.73 per SierraCities
share. We urge you to obtain a current quote for the VerticalNet
shares.
The offer is subject to, among other things, the tender of at
least two thirds of the shares, determined on a fully diluted
basis. Following the completion of the offer, a subsidiary of
VerticalNet will be merged with SierraCities and each remaining
SierraCities share will be converted into the same number of
VerticalNet shares as will be paid in the offer.
After careful consideration, your board of directors has
unanimously approved the merger agreement, the offer and the
merger and determined that the offer and the merger are fair to
and in the best interests of SierraCities and its stockholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU ACCEPT THE
OFFER AND TENDER YOUR SHARES PURSUANT TO THE OFFER. In arriving at
its determination and recommendation, the board of directors took
into account the factors described in the attached Solicitation/
Recommendation Statement on Schedule 14D-9, including the opinion
of Donaldson, Lufkin & Jenrette Securities Corporation to the
effect that the consideration to be received in the offer and the
merger by the holders of shares is fair to such holders from a
financial point of view.
Enclosed is VerticalNet's Prospectus, together with related
materials, including the Letter of Transmittal to be used for
tendering shares. These documents set forth the terms and
conditions of the offer. We urge you to read the attached Schedule
14D-9 and the enclosed materials carefully.
If you need assistance tendering your shares, please contact
D.F. King & Co., Inc., the information agent for the offer, at its
address or telephone number appearing on the back cover of the
Prospectus.
Very truly yours,
/s/ Thomas J. Depping
Thomas J. Depping
Chairman of the Board, President and
Chief Executive Officer
713 221 8822 PHONE
713 221-1818 FAX
800 745-9292 TOLL FREE NUMBERS