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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/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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Independent proxy analysis firm does not back candidate of current management of
Wells Financial Corp.
On April 6, 2001, Wells Financial issued a press release which The PL Capital
Group believes is grossly misleading. In its press release, Wells Financial
stated that The PL Capital Group's stockholder proposal "calls for [Wells
Financial] to solicit offers for the immediate sale of [Wells Financial]." Wells
Financial then stated that Institutional Shareholder Services ("ISS"), a leading
independent proxy analysis firm, had recommended a vote against the stockholder
proposal. However, the PL Capital Group's proposal does not call for the
"immediate sale" or a "fire sale" of Wells Financial, but rather a fair and open
process that management and the Board of Directors of Wells have not undertaken,
as concluded by ISS. Moreover, Wells Financial ignores that The PL Capital
Group's proposal had other components with which ISS disagreed.
Wells Financial's press release also appear to imply that ISS endorsed all of
management's positions with respect to the proxy contest being conducted by The
PL Capital Group. In fact, ISS backed The PL Capital Group's nominee for
election at this year's annual meeting, Mr. Gary Pihlstrom.
Furthermore, ISS stated the following:
o "To follow ISS's recommendation, execute your votes on the dissident's
WHITE proxy card and discard management's TAN proxy card."
o "we believe shareholders would be best served by electing the
dissident nominee to Wells Financial's board"
o "Particularly given the slow reaction of the board to offers made for
the company thus far (one of the dissidents' prime complaints about
management is that Mr. Kruse and his board may be too "slow moving" in
an increasingly fast-paced financial services industry), the addition
of Mr. Philstrom could provide a valuable injection of energy to the
board while also prompting a revisitation of what a reasonable offer
for the company would be."
o "While we do not propose to determine a fair price for the company in
this analysis, the bids made so far reflect a substantial premium to
the company's historical market price that appear to merit, at the
least, the continuation of meaningful discussions with the offerors
and the execution of agreements that would allow legitimate bidders
access to information justifying a higher price."
o "when a company receives premium-priced bids from two separate
parties, management would be well served to take further steps beyond
merely cordial discussions.
o "Furthermore, we are not convinced that the range of Mr. Morrison's
interest (not to mention that of the out of state institution) is low
enough to justify management's decision to cease discussions. Even the
low end of Mr.
Morrison's expression of interest--$15.00 per share--reflects a
premium of 21.2 percent over Wells' stock price on the last day of
trading prior to PL Capital's initial 13D filing, and the $17.00 upper
end reflects a 37.4-percent premium. Prior to the dissidents' 13D, the
company's stock had not closed at or above $14.00 per share since
October 1999. And the last time the company's stock had closed at
$17.00 per share was November 1998. While we are sensitive to
management's concerns that PL Capital is merely a short-term
speculator seeking to make a quick profit, it appears that the
Morrison bid offers enough of a premium to benefit even long-term
shareholders of the company. The $19.00-per-share proposal made by the
out-of-state institution, of course, is even more attractive to
shareholders, notwithstanding the fact that it falls short of the
value management deems sufficient. And while multiples paid in other
transactions certainly offer valuable guidance on where Wells
Financial should sell, we recognize that the market is the final
arbiter of a company's worth."
o "PL Capital has an impressive history of bank investments, many of
which have yielded subsequent transactions that generated significant
premiums to shareholders."
We encourage shareholders to independently review ISS's report. We encourage you
to vote the White proxy card and support our candidate Gary Pihlstrom and our
proposal.
Wells Financial's Annual Meeting is scheduled for April 18th.
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.