SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/x/ Soliciting Material Pursuant to ss. 240a-12
WELLS FINANCIAL CORP.
(Name of Registrant as Specified in Its Charter)
FINANCIAL EDGE FUND, LP
PL CAPITAL, LLC
FINANCIAL EDGE/STRATEGIC FUND, LP
JOHN PALMER
RICHARD LASHLEY
GARY PIHLSTROM
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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PL CAPITAL, LLC
2015 Spring Road
Suite 290
Oak Brook, Illinois 60523
Tel: (630) 928-0231
Fax: (630) 928-0232
AN IMPORTANT MESSAGE
TO FELLOW STOCKHOLDERS OF WELLS FINANCIAL CORP.
FROM THE PL CAPITAL GROUP
April 3, 2001
Dear Fellow Wells Financial Stockholder:
The management of Wells Financial sent you and other shareholders a letter on
April 2 which we believe contained a number of potentially misleading statements
and conclusions about the PL Capital Group and our efforts to increase the value
of Wells Financial stock.
Wells Financial's Version
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Management's April 2 letter acknowledges that in 2000 Wells received, and
rejected, two separate offers to acquire Wells. Management claims that at least
one of the offers was a "contingent offer, without proof of financial ability"
and that the Wells Financial Board of Directors "acted responsibly" in rejecting
both offers based upon "an independent valuation" which "confirmed" that the
offers "were not in the best interest of shareholders."
PL Capital's Response; What Wells Management Didn't Tell You
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To PL Capital's knowledge:
o Wells' management refused repeated requests to provide either potential
acquirer with a confidentiality agreement, a standard procedure in such
circumstances and a precursor to allowing additional due diligence by a
potential acquirer;
o Wells refused to supply either party with the purported "valuation" or any
other information that supported Wells' assertion that the offers were
"inadequate";
o Wells refused to supply either party with any other information which might
have induced one or both of the potential acquirers to increase their
offers;
o Wells took months to fully respond to the acquisition inquiries;
o Wells never informed their shareholders of the existence of the potential
acquisition inquiries, until we commenced our proxy contest; and
o Wells did not engage an investment banker or advisor to negotiate with
either party, or seek better offers from others, they simply engaged a firm
to prepare a valuation.
In our view, if this purported valuation is so reliable that Wells Board used it
as a basis to reject two potential acquirers, without allowing either party to
negotiate or perform any due diligence, we suggest that Wells:
(1) Disclose the value contained in the valuation, and
(2) Engage the firm that prepared the valuation to validate their opinion
by finding an actual acquirer willing to pay this purportedly higher
value in an actual transaction.
As one of Wells' largest shareholder groups, we hope, for the sake of ourselves
and all shareholders, that the value Wells apparently places upon itself is
obtainable. However, unless Wells is willing and able to do a self-tender, or
sell the company, at the per-share values apparently suggested by the
"valuation," the "valuation" is merely an academic exercise and does nothing for
Wells shareholders, in our opinion.
We are also concerned that in September 2000, the Board of Directors of Wells,
subsequent to an expression of interest to acquire Wells, granted to three of
its fellow Directors options to acquire 32,805 shares, in the aggregate, at a
price of $12.88 per share, a substantial discount to the value contained in the
expression of interest.
Wells Financial's Version
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Management's April 2 letter also portrays the PL Capital Group as seeking a
"quick profit" and that our actions would result in a "fire sale."
PL Capital Group's Response
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If we were so interested in a "quick profit," why haven't we sold our stock in
the marketplace at a profit and moved on? Why didn't we sell our stock back to
the Company in their recent 100,000 share buyback? We were approached numerous
times in 2000 and 2001 to sell our stock, at a significant profit to our cost
basis. Why are we expending significant amounts of money, time and effort to
pursue this proxy contest if all we want is a "quick profit"?
We are pursuing this proxy contest because we believe that Wells Financial's
Board does not understand Wells Financial's long term prospects as an
independent company or what the majority of their shareholders want. We also
want all of the shareholders of Wells to have an opportunity to maximize their
shareholder value. We also believed that no other shareholders, other than us,
were going to spend the time and money to pursue a proxy contest.
Wells also stated in their letter that our shareholder proposal would
effectively lead them into a "fire sale." We do not want, nor are we suggesting,
that there be a "fire sale." It is up to Wells to handle the marketing process,
not PL Capital. Wells' management should be capable of controlling whether it
becomes a fire sale. Their "fire sale" argument is a red herring to avoid a sale
of the Company, in our opinion.
We need your vote on the WHITE proxy card. If you would like to support us we
request that you vote the enclosed WHITE proxy card FOR our candidate for the
Board, Mr. Gary Pihlstrom, and FOR our stockholder proposal.
Time is short - please vote FOR today! - If you have already voted on
management's card or have not voted yet please follow these instructions:
Registered holders - If you hold your shares in registered name, you can mail
back a later dated proxy card or you can attend the meeting and vote in person.
Street name holders - If you hold your shares at a bank or broker, return the
proxy card mailed to you in the envelope provided or contact your representative
and instruct them to vote on your behalf. If you plan to attend the meeting and
vote in person, you must notify your broker and request a "legal proxy."
If you have any questions or need further assistance please contact our proxy
solicitor MalCon Advisors, Inc., 130 William Street, New York, NY 10038; (800)
475-9320; or PL Capital (Richard Lashley (973) 360-1666, or John Palmer (630)
928-0231).
Thank you for your consideration.
On behalf of The PL Capital Group,
John Palmer Richard Lashley
Principal Principal
We encourage you to read our proxy statement because it contains important
information. If you do not already have a proxy statement from us, you can get
our proxy statement, and any other relevant documents, for free at the web site
of the Securities and Exchange Commission (www.sec.gov). In addition, copies of
our recent Schedule 13D filings are available on the SEC's website. Our most
recent Schedule 13D filing contains a list of the participants in The PL Capital
Group's proxy solicitation and a detailed description of our security holdings
of Wells. You may also contact us directly to obtain free copies of our proxy
statement.