EXHIBIT 99(a)(1)(A)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
WYANT CORPORATION
AT
$4.00 NET PER SHARE
BY
PERKINS ACQUISITION CORP.,
A WHOLLY OWNED SUBSIDIARY OF
PERKINS PAPERS LTD.
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THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON THURSDAY, OCTOBER 5, 2000,
UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
A SUMMARY OF THE PRINCIPAL TERMS OF THE OFFER APPEARS ON PAGES 3 THROUGH 6.
YOU SHOULD READ THIS ENTIRE DOCUMENT CAREFULLY BEFORE DECIDING WHETHER TO TENDER
YOUR SHARES.
THE OFFER IS BEING MADE PURSUANT TO THE AGREEMENT AND PLAN OF MERGER DATED
AS OF AUGUST 30, 2000, AMONG PERKINS PAPERS LTD., PERKINS ACQUISITION CORP. AND
WYANT CORPORATION (THE "COMPANY"). THE BOARD OF DIRECTORS OF THE COMPANY BY
UNANIMOUS VOTE OF ALL DIRECTORS PRESENT AT A MEETING HELD ON AUGUST 30, 2000
(I) DETERMINED THAT THE MERGER IS ADVISABLE AND THAT THE TERMS OF THE OFFER AND
MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY AND ITS
STOCKHOLDERS, (II) APPROVED THE OFFER AND THE MERGER AND ADOPTED AND APPROVED
THE MERGER AGREEMENT AND (III) RECOMMENDED THAT THE COMPANY'S STOCKHOLDERS
ACCEPT THE OFFER AND, IF APPROVAL IS REQUIRED BY APPLICABLE LAW, APPROVE THE
MERGER AND APPROVE AND ADOPT THE MERGER AGREEMENT.
--------------------------
THE OFFER IS SUBJECT TO SATISFACTION OF CERTAIN CONDITIONS AS SET FORTH IN
THE MERGER AGREEMENT, INCLUDING THE EXPIRATION OF THE APPLICABLE WAITING PERIODS
UNDER THE U.S. HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED,
AND THE COMPETITION ACT (CANADA), BUT IS NOT CONDITIONED UPON THERE BEING
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER ANY
MINIMUM NUMBER OF SHARES.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF
SUCH TRANSACTION OR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED
IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares should either (1) complete and sign the Letter of Transmittal (or
facsimile thereof) in accordance with the instructions in the Letter of
Transmittal, have such stockholder's signature thereon guaranteed if required by
Instruction 1 to the Letter of Transmittal, mail or deliver the Letter of
Transmittal (or such facsimile) and any other required documents to Harris Trust
Company of New York (the "DEPOSITARY") and deliver the certificates for such
Shares to the Depositary along with the Letter of Transmittal (or such
facsimile) or, in the case of a book-entry transfer effected pursuant to the
procedures described in Section 2, deliver an Agent's Message (as defined
herein) and any other required documents to the Depositary and deliver such
Shares pursuant to the procedures for book-entry transfer described in
Section 2, in each case prior to the expiration of the Offer, or (2) request
such stockholder's broker, dealer, bank, trust company or other nominee to
effect the transaction for such stockholder. A stockholder having Shares
registered in the name of a broker, dealer, bank, trust company or other nominee
must contact such broker, dealer, bank, trust company or other nominee if such
stockholder desires to tender such Shares.
A stockholder who desires to tender Shares and whose certificates for such
Shares are not immediately available or who cannot comply in a timely manner
with the procedure for book-entry transfer, or who cannot deliver all required
documents to the Depositary prior to the expiration of the Offer, may tender
such Shares by following the procedures for guaranteed delivery described in
Section 2.
Questions and requests for assistance may be directed to MacKenzie
Partners, Inc. (the "INFORMATION AGENT") at its address and telephone number set
forth on the back cover of this Offer to Purchase. Additional copies of this
Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery
or any other tender materials may be obtained from the Information Agent or from
brokers, dealers, banks, trust companies or other nominees.
--------------------------
THE INFORMATION AGENT FOR THE OFFER IS:
abcdef
September 8, 2000
TABLE OF CONTENTS
PAGE
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SUMMARY TERM SHEET.......................................... 3
INTRODUCTION................................................ 7
THE TENDER OFFER............................................ 9
1. Terms of the Offer.................................... 9
2. Procedures for Tendering Shares....................... 11
3. Withdrawal Rights..................................... 14
4. Acceptance for Payment and Payment.................... 14
5. Certain U.S. Federal Income Tax Consequences.......... 15
6. Price Range of the Shares; Dividends on the Shares.... 16
7. Effect of the Offer on the Market for the Shares;
Nasdaq Listing; Exchange Act
Registration; Margin Regulations..................... 17
8. Certain Information Concerning the Company............ 18
9. Certain Information Concerning Parent and the
Purchaser............................................... 20
10. Source and Amount of Funds............................ 21
11. Contacts and Transactions with the Company; Background
of the Offer............................................ 21
12. Purpose of the Offer; the Merger Agreement; the Stock
Purchase Agreement;
the Confidential Disclosure and Standstill Agreement;
Opinion of the Company's Financial Advisor; Plans for
the Company; Appraisal Rights; Going Private
Transactions......................................... 22
13. Dividends and Distributions........................... 32
14. Certain Conditions of the Offer....................... 32
15. Certain Legal Matters................................. 33
16. Fees and Expenses..................................... 36
17. Miscellaneous......................................... 36
SCHEDULE I-- Executive Officers and Directors of Perkins
Papers Ltd. ("PARENT"), Perkins Acquisition
Corp. ("PURCHASER") and Cascades Inc.
("CASCADES").................................... I-1
2
SUMMARY TERM SHEET
Perkins Acquisition Corp. is offering to purchase all of the outstanding
common stock of Wyant Corporation for $4.00 net per share, in cash. The
following are some of the questions you, as a stockholder of Wyant Corporation,
may have and answers to those questions. We urge you to read carefully the
remainder of this offer to purchase and the letter of transmittal because the
information in this summary is not complete. Additional important information is
contained in the remainder of this offer to purchase and the letter of
transmittal.
- - WHO IS OFFERING TO BUY MY SHARES?
Our name is Perkins Acquisition Corp. We are a New York corporation formed
for the purpose of making a tender offer for all of the outstanding common stock
of Wyant Corporation. We are a wholly owned subsidiary of Perkins Papers Ltd., a
Canada corporation. Perkins Papers Ltd. is a subsidiary of Cascades Inc., a
Quebec corporation. See "Introduction" and Section 9--"Certain Information
Concerning Parent and the Purchaser"--of this offer to purchase.
- - WHAT SHARES ARE BEING SOUGHT IN THE OFFER?
We are seeking to purchase all of the outstanding shares of common stock of
Wyant Corporation. See "Introduction" and Section 1--"Terms of the Offer"--of
this offer to purchase.
- - HOW MUCH ARE YOU OFFERING TO PAY, WHAT IS THE FORM OF PAYMENT AND WILL I HAVE
TO PAY ANY FEES OR COMMISSIONS?
We are offering to pay $4.00 per share, net to you, in cash. If you are the
record owner of your shares and you tender your shares to us in the offer, you
will not have to pay brokerage fees or similar expenses. If you own your shares
through a broker or other nominee, and your broker tenders your shares on your
behalf, your broker or nominee may charge you a fee for doing so. You should
consult your broker or nominee to determine whether any charges will apply. See
"Introduction" and Section 1--"Terms of the Offer"--of this offer to purchase.
- - DO YOU HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?
Perkins Papers Ltd., our parent company, will provide us with sufficient
funds to acquire all tendered shares and any shares to be acquired in the merger
that is expected to follow the successful completion of the offer. The offer is
not conditioned upon any financing arrangements. See Section 10--"Source and
Amount of Funds"--of this offer to purchase.
- - IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?
We do not think our financial condition is relevant to your decision whether
to tender shares and accept the offer because:
- the offer is being made for all outstanding shares solely for cash,
- the offer is not subject to any financing condition, and
- if we consummate the offer, we will acquire all remaining shares for the
same cash price in the merger.
- - HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
You will have until 12:00 midnight, New York City time, on Thursday,
October 5, 2000, to tender your shares in the offer, unless the expiration date
of the offer is extended. Further, if you cannot deliver everything that is
required in order to make a valid tender by that time, you may be able to use a
guaranteed delivery procedure, which is described later in this offer to
purchase. See Section 1--"Terms of the Offer"--and Section 2--"Procedures for
Tendering Shares"--of this offer to purchase.
3
- - CAN THE OFFER BE EXTENDED AND UNDER WHAT CIRCUMSTANCES?
Subject to the terms of the merger agreement, we can extend the offer,
including as follows:
- if fewer than ninety percent of the shares of common stock of Wyant
Corporation outstanding have been tendered, we may extend the offer for a
period of no more than ten business days; and
- we may elect to provide a "subsequent offering period" for the offer. A
subsequent offering period, if one is included, will be an additional
period of time beginning after we have purchased shares tendered during
the offer, during which stockholders may tender, but not withdraw, their
shares and receive the offer consideration. We do not currently intend to
include a subsequent offering period, although we reserve the right to do
so.
See Section 1--"Terms of the Offer"--of this offer to purchase.
- - HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?
If we extend the offer, we will inform Harris Trust Company of New York, the
depositary for the offer, of that fact and will make a public announcement of
the extension, not later than 9:00 a.m., New York City time, on the next
business day after the day on which the offer was scheduled to expire. See
Section 1--"Terms of the Offer"--of this offer to purchase.
- - WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER?
There is no financing condition to the offer, or minimum number of shares
which must be tendered in the offer; however, we are not obligated to purchase
any tendered shares if:
there is a material adverse change in the business or financial condition of
Wyant Corporation and its subsidiaries; or the applicable waiting periods under
the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or
under the Competition Act (Canada) have not expired or been terminated.
The offer is also subject to a number of other conditions. See
Section 14--"Certain Conditions of the Offer"--of this offer to purchase.
- - HOW DO I TENDER MY SHARES?
To tender shares, you must deliver the certificates representing your
shares, together with a completed letter of transmittal and any other documents
required, to Harris Trust Company of New York, the depositary for the offer, not
later than the time the tender offer expires. If your shares are held in street
name, the shares can be tendered by your nominee through The Depository Trust
Company. If you cannot deliver something that is required to be delivered to the
depositary by the expiration of the tender offer, you may get a little extra
time to do so by having a broker, a bank or other fiduciary that is a member of
the Securities Transfer Agents Medallion Program or other eligible institution
guarantee that the missing items will be received by the depositary within three
Nasdaq trading days. For the tender to be valid, however, the depositary must
receive the missing items within that three trading day period. See
Section 2--"Procedures for Tendering Shares"--of this offer to purchase.
- - UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SHARES?
You can withdraw shares at any time until the offer has expired and, if we
have not by Tuesday, November 7, 2000, agreed to accept your shares for payment,
you can withdraw them at any time after such time until we accept shares for
payment. This right to withdraw will not apply to any subsequent offering
period, if one is included. See Section 1--"Terms of the Offer"--and
Section 3--"Withdrawal Rights"--of this offer to purchase.
4
- - HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES?
To withdraw shares, you must deliver a written notice of withdrawal, or a
facsimile of one, with the required information to the depositary while you
still have the right to withdraw the shares. See Section 1--"Terms of the
Offer"--and Section 3--"Withdrawal Rights"--of this offer to purchase.
- - WHAT DOES THE WYANT CORPORATION BOARD OF DIRECTORS THINK OF THE OFFER?
We are making the offer pursuant to a merger agreement among us, Perkins
Papers Ltd. and Wyant Corporation. The Wyant Corporation board of directors has
unanimously approved our tender offer and our proposed merger with Wyant
Corporation and has adopted and approved the merger agreement. The board of
directors of Wyant Corporation has determined that the terms of the offer and
the merger are fair to, and in the best interests of Wyant Corporation and the
stockholders of Wyant Corporation and unanimously recommends that stockholders
accept the offer and tender their shares and, if approval is required by
applicable law, approve the merger and adopt the merger agreement. See the
"Introduction" to this offer to purchase.
- - WILL THE TENDER OFFER BE FOLLOWED BY A MERGER IF ALL THE SHARES ARE NOT
TENDERED IN THE OFFER?
Yes, we have agreed to do so in the merger agreement. After we accept for
payment and pay for all of the shares tendered and not withdrawn, we will be
merged with Wyant Corporation. We know that at least a majority of the shares
will have been tendered in the offer, because we have entered into a stock
purchase agreement with James A. Wyant and certain members of his family, who
control the majority of the shares, requiring them to cause the tender of those
shares in the offer. This majority will give us the ability to effect the merger
even if no one else tenders shares. When that merger takes place, Perkins
Papers Ltd. will own all of the shares of Wyant Corporation, and all other
stockholders of Wyant Corporation will receive $4.00 per share in cash. For a
discussion of the stock purchase agreement see Section 12 "Purpose of the Offer;
the Merger Agreement; The Stock Purchase Agreement; Plans for the Company" of
this offer to purchase.
There are no appraisal rights available in connection with the offer.
However, if the merger takes place, stockholders who have not sold their shares
in the offer will have appraisal rights under New York law. See
Section 12--"Purpose of the Offer; the Merger Agreement; the Stock Purchase
Agreement; the Confidential Disclosure and Standstill Agreement; Plans for the
Company; Appraisal Rights; Going Private Transactions"--of this offer to
purchase.
- - IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?
If the merger takes place, stockholders who do not tender in the offer will
receive the same amount of cash per share that they would have received had they
tendered their shares in the offer, subject to their right to pursue appraisal
under New York law. Therefore, if the merger takes place and you do not perfect
your appraisal rights, the only difference to you between tendering your shares
and not tendering your shares is that you will be paid earlier if you tender
your shares. However, if the merger does not take place, the number of
stockholders and of shares of Wyant Corporation that are still in the hands of
the public may be so small that there may no longer be a public trading market
for the shares. Also, the shares may no longer be eligible to be traded on the
Nasdaq SmallCap Market or any securities exchange, and Wyant Corporation may
cease making filings with the SEC or otherwise cease being required to comply
with the SEC's rules relating to publicly held companies. See
Section 7--"Effect of the Offer on the Market for the Shares; Nasdaq Listing;
Exchange Act Registration; Margin Regulations"--and Section 12--"Purpose of the
Offer; the Merger Agreement; the Stock Purchase Agreement; the Confidential
Disclosure and Standstill Agreement; Plans for the Company; Appraisal Rights;
Going Private Transactions"--of this offer to purchase.
5
- - WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
On August 29, 2000, the last trading day before Wyant Corporation and
Perkins Papers Ltd. announced that they had signed the merger agreement, the
last sale price of the shares reported on the Nasdaq SmallCap Market was $2.75
per share. On September 7, 2000, the last trading day before we commenced our
tender offer, the last sale price of the shares was $3.875 per share. We advise
you to obtain a recent quotation for shares of Wyant Corporation in deciding
whether to tender your shares. See Section 6--"Price Range of the Shares;
Dividends on the Shares"--of this offer to purchase.
- - TO WHOM CAN I TALK IF I HAVE QUESTIONS ABOUT THE TENDER OFFER?
You can call MacKenzie Partners, Inc. at (800) 322-2885 (toll free).
MacKenzie Partners, Inc. is acting as the information agent for our tender
offer. See the back cover of this offer to purchase.
6
To the Holders of Common Stock of WYANT CORPORATION
INTRODUCTION
PERKINS ACQUISITION CORP., a New York corporation (the "PURCHASER") and a
wholly owned subsidiary of PERKINS PAPERS LTD., a Canada corporation ("PARENT"),
hereby offers to purchase all the outstanding shares of Common Stock, par value
$0.01 per share (the "SHARES"), of WYANT CORPORATION, a New York corporation
(the "COMPANY"), at a price of $4.00 per Share, net to the seller in cash,
without interest thereon, upon the terms and subject to the conditions set forth
in this Offer to Purchase and in the related Letter of Transmittal (which,
together with any amendments or supplements hereto or thereto, collectively
constitute the "OFFER").
Tendering stockholders whose shares are registered in their own names and
who tender directly to the Depositary (as defined below) will not be obligated
to pay brokerage fees or commissions or, except as set forth in Instruction 6 of
the Letter of Transmittal, transfer taxes on the purchase of Shares pursuant to
the Offer. Stockholders who hold their Shares through banks or brokers should
check with such institutions as to whether they charge any service fees. The
Purchaser will pay all fees and expenses of Harris Trust Company of New York,
which is acting as the Depositary (the "DEPOSITARY"), and MacKenzie
Partners, Inc., which is acting as the Information Agent (the "INFORMATION
AGENT"), incurred in connection with the Offer. See Section 16.
The Offer is being made pursuant to the Agreement and Plan of Merger dated
as of August 30, 2000 (the "MERGER AGREEMENT"), among Parent, the Purchaser and
the Company, pursuant to which, following the consummation of the Offer and the
satisfaction or waiver of certain conditions, the Purchaser will be merged with
and into the Company, with the surviving entity becoming a wholly owned
subsidiary of Parent (the "MERGER"). In the Merger each outstanding Share (other
than Shares owned by Parent, the Purchaser or the Company or any subsidiary of
Parent or the Company (or by stockholders, if any, who are entitled to and
properly exercise appraisal rights under New York law)) will be converted into
the right to receive the price per Share paid pursuant to the Offer in cash,
without interest thereon.
Parent and Purchaser have entered into a stock purchase agreement, dated
August 30, 2000, with James A. Wyant, John Derek Wyant, Lynne Ellen Emond, and
the Estate of Gerald W. Wyant (collectively, the "WYANT FAMILY") (the "STOCK
PURCHASE AGREEMENT"), who control in aggregate the majority of the outstanding
Shares, requiring them to cause the tender of those Shares in the Offer. In
addition, pursuant to the Stock Purchase Agreement, Parent will purchase from
James A. Wyant, or one or more entities controlled by him, certain shares of
Class E Exchangeable Preferred Stock of Wood Wyant Inc., a Canada corporation
and a wholly owned subsidiary of the Company, exchangeable on a one-for-one
basis for Shares, for the same per-share consideration being offered to holders
of the Shares in the Offer.
The Merger Agreement and Stock Purchase Agreement are more fully described
in Section 12.
THE BOARD OF DIRECTORS OF THE COMPANY BY UNANIMOUS VOTE OF ALL DIRECTORS
PRESENT AT A MEETING HELD ON AUGUST 30, 2000 (I) DETERMINED THAT THE MERGER IS
ADVISABLE AND THAT THE TERMS OF THE OFFER AND MERGER ARE FAIR TO AND IN THE BEST
INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS, (II) APPROVED THE OFFER AND THE
MERGER AND ADOPTED AND APPROVED THE MERGER AGREEMENT AND (III) RECOMMENDED THAT
THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND, IF APPROVAL IS REQUIRED BY
APPLICABLE LAW, APPROVE THE MERGER AND APPROVE AND ADOPT THE MERGER AGREEMENT.
THE FACTORS CONSIDERED BY THE BOARD OF DIRECTORS OF THE COMPANY IN ARRIVING AT
ITS FOREGOING DECISION AND TO RECOMMEND THAT STOCKHOLDERS OF THE COMPANY ACCEPT
THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER ARE DESCRIBED IN THE
COMPANY'S SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 (THE
"SCHEDULE 14D-9"), WHICH HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION (THE "COMMISSION") AND IS BEING MAILED TO STOCKHOLDERS OF THE COMPANY
CONCURRENTLY HEREWITH.
7
HOULIHAN LOKEY HOWARD & ZUKIN FINANCIAL ADVISORS, INC. ("HOULIHAN LOKEY")
HAS ACTED AS THE COMPANY'S FINANCIAL ADVISOR IN CONNECTION WITH THE OFFER AND
THE MERGER. THE OPINION OF HOULIHAN LOKEY, DATED AUGUST 30, 2000, TO THE BOARD
OF DIRECTORS OF THE COMPANY TO THE EFFECT THAT, AS OF SUCH DATE, AND BASED AND
IN RELIANCE UPON THE MATTERS DESCRIBED IN THE OPINION, THE CONSIDERATION TO BE
RECEIVED BY THE HOLDERS OF SHARES (OTHER THAN THE WYANT FAMILY) IN THE OFFER AND
THE MERGER IS FAIR TO SUCH HOLDERS FROM A FINANCIAL POINT OF VIEW, IS SET FORTH
IN FULL AS AN ANNEX TO THE SCHEDULE 14D-9. STOCKHOLDERS ARE URGED TO, AND
SHOULD, READ THE SCHEDULE 14D-9 AND SUCH OPINION CAREFULLY IN THEIR ENTIRETY.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, ANY WAITING PERIOD UNDER
THE U.S. HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED (THE
"HSR ACT") AND THE COMPETITION ACT (CANADA) APPLICABLE TO THE PURCHASE OF SHARES
HAVING EXPIRED OR BEEN TERMINATED.
Consummation of the Merger is subject to a number of conditions, including
approval by the stockholders of the Company holding at least a majority of the
outstanding Shares in the event that fewer than 90% of the outstanding Shares
are acquired by the Purchaser pursuant to the Offer. Such approval is assured,
however, because pursuant to the Stock Purchase Agreement the Purchaser will be
acquiring a majority of the outstanding Shares in the Offer, with the result
that the Purchaser, acting alone, will hold sufficient Shares to approve the
Merger. In the event the Purchaser acquires 90% or more of the outstanding
Shares pursuant to the Offer, the Purchaser will be able to merge the Purchaser
with and into the Company pursuant to the "short-form" merger provisions of the
New York Business Corporation Law (the "BCL"), without prior notice to, or any
action by, any other stockholder of the Company. See Section 12.
The Company has informed the Purchaser that, as of August 29, 2000, there
were 2,270,617 Shares issued and outstanding and 1,695,017 Shares reserved for
issuance upon the exercise of outstanding options, warrants or other rights to
purchase Shares from the Company, representing 3,965,634 Fully Diluted Shares.
The term "FULLY DILUTED SHARES" mean all outstanding securities entitled
generally to vote in the election of directors of the Company on a fully diluted
basis, after giving effect to the exercise or conversion of all options, rights
and securities exercisable or convertible into such voting securities. Based
upon the foregoing, Purchaser will acquire 90% of the outstanding Shares if at
least 2,043,556 Shares are validly tendered and not withdrawn prior to the
Expiration Date. The actual number of Shares required to be tendered to achieve
this percentage will depend upon the actual number of outstanding Shares on the
date that the Purchaser accepts Shares for payment pursuant to the Offer.
IN ANY EVENT, STOCKHOLDER APPROVAL OF THE MERGER IS ASSURED BECAUSE,
PURSUANT TO THE STOCK PURCHASE AGREEMENT, AND SUBJECT TO THE PROVISIONS THEREOF,
A MAJORITY OF THE OUTSTANDING SHARES WILL BE TENDERED IN THE OFFER, AND THE
PURCHASER WILL ACCEPT FOR PAYMENT SUCH SHARES AND WILL POSSESS, UPON
CONSUMMATION OF THE OFFER, SUFFICIENT VOTING POWER TO CAUSE THE COMPANY TO
CONSUMMATE THE MERGER WITHOUT THE AFFIRMATIVE VOTE OF ANY OTHER STOCKHOLDER OF
THE COMPANY. SEE SECTION 12.
Certain U.S. federal income tax consequences of the sale of Shares pursuant
to the Offer and the conversion of Shares pursuant to the Merger are described
in Section 5.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND YOU SHOULD READ THEM CAREFULLY AND IN THEIR ENTIRETY
BEFORE YOU MAKE ANY DECISION WITH RESPECT TO THE OFFER.
8
THE TENDER OFFER
1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer, the Purchaser
will accept for payment and pay for all Shares validly tendered prior to the
Expiration Date and not theretofore withdrawn in accordance with Section 3. The
term "EXPIRATION DATE" means 12:00 midnight, New York City time, on Thursday,
October 5, 2000, unless and until the Purchaser shall have extended the period
of time during which the Offer is open in accordance with the terms of the
Merger Agreement, in which event the term "EXPIRATION DATE" shall mean the
latest time and date on which the Offer, as so extended by the Purchaser, will
expire.
The Purchaser may, without the consent of the Company, and the Purchaser
expressly reserves the right (but shall not be obligated), to extend the Offer,
and thereby delay acceptance for payment of, and the payment for, any Shares, by
giving oral or written notice of such extension to the Depositary, (a) for any
period required by any rule, regulation, interpretation or position of the
Commission or the staff thereof applicable to the Offer, (b) for one or more
periods of time that the Purchaser determines, if at the Expiration Date any of
the conditions to the Purchaser's obligation to purchase Shares are not
satisfied or waived; or (c) for up to ten business days in the aggregate beyond
the latest expiration date that would otherwise be permitted under (a) or (b),
if at the scheduled or any extended expiration date of the Offer fewer than 90%
of the then issued and outstanding Shares have been validly tendered and not
withdrawn in the Offer. Under no circumstances will interest be paid on the
purchase price for tendered Shares, regardless of any extension of or amendment
to the Offer or any delay in paying for such Shares.
The Purchaser expressly reserves the right (but shall not be obligated), at
any time and from time to time, to waive any condition to the Offer or modify
the terms of the Offer, by giving oral or written notice of such waiver or
modification to the Depositary, except that, without the consent of the Company,
the Purchaser shall not (i) reduce the number of Shares subject to the Offer,
(ii) reduce the price per Share to be paid pursuant to the Offer, (iii) modify
in any manner adverse to the holders of Shares or add to the conditions of the
Offer, (iv) except as provided above, extend the Offer or (v) change the form of
consideration payable in the Offer.
In the event that any condition to the Offer has not been satisfied or
waived at the scheduled expiration date of the Offer, the Purchaser may extend
the expiration date of the Offer in such increments as the Purchaser may
determine until the earliest to occur of (a) the satisfaction or waiver of such
condition, (b) Parent reasonably determines that such condition to the Offer is
not capable of being satisfied on or prior to the Outside Date, (c) the
termination of the Merger Agreement in accordance with its terms and (d) the
Outside Date. The term "Outside Date" means March 31, 2001.
If by 12:00 midnight, New York City time, on Thursday, October 5, 2000 (or
any date or time then set as the Expiration Date), any of or all the conditions
to the Offer have not been satisfied or waived, the Purchaser, subject to the
terms of the Merger Agreement and the applicable rules and regulations of the
Commission, reserves the right (but shall not be obligated) (a) to terminate the
Offer and not accept for payment or pay for any Shares and return all tendered
Shares to tendering stockholders, (b) to waive all the unsatisfied conditions
and accept for payment and pay for all Shares validly tendered prior to the
Expiration Date and not theretofore validly withdrawn, (c) as set forth above,
to extend the Offer and, subject to the right of stockholders to withdraw Shares
until the Expiration Date, retain the Shares that have been tendered during the
period or periods for which the Offer is extended or (d) except as set forth
above, to amend the Offer.
Any extension, waiver, amendment or termination will be followed as promptly
as practicable by public announcement thereof. An announcement in the case of an
extension will be made no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date. Without limiting
the manner in which Purchaser may choose to make any public announcement,
subject to applicable law (including Rules 14d-4(d) and 14d-6(c) under the
Securities Exchange Act of 1934, as
9
amended (the "EXCHANGE ACT"), which require that material changes be promptly
disseminated to holders of Shares), the Purchaser will have no obligation to
publish, advertise or otherwise communicate any such public announcement other
than by issuing a release to the PR Newswire. As used in this Offer to Purchase,
"BUSINESS DAY" has the meaning set forth in Rule 14d-1 under the Exchange Act.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
the Purchaser will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 14d-4(d), 14d-6(c) and 14e-1 under the
Exchange Act. The minimum period during which an offer must remain open
following material changes in the terms of such offer or information concerning
such offer, other than a change in price or a change in the percentage of
securities sought, will depend upon the facts and circumstances then existing,
including the relative materiality of the changed terms or information. With
respect to a change in price or a change in the percentage of securities sought,
a minimum period of 10 business days is generally required to allow for adequate
dissemination to stockholders.
Pursuant to Rule 14d-11 under the Exchange Act, although the Purchaser does
not currently intend to do so, the Purchaser may, subject to certain conditions,
elect to provide a subsequent offering period of from three business days to 20
business days in length following the expiration of the Offer on the Expiration
Date and acceptance for payment of the Shares tendered in the Offer (a
"SUBSEQUENT OFFERING PERIOD"). A Subsequent Offering Period would be an
additional period of time, following the expiration of the Offer and the
purchase of Shares in the Offer, during which stockholders may tender Shares not
tendered in the Offer.
During a Subsequent Offering Period, tendering stockholders will not have
withdrawal rights and the Purchaser will promptly purchase and pay for any
Shares tendered at the same price paid in the Offer. Rule 14d-11 provides that
the Purchaser may provide a Subsequent Offering Period so long as, among other
things, (i) the initial 20-business day period of the Offer has expired,
(ii) the Purchaser offers the same form and amount of consideration for Shares
in the Subsequent Offering Period as in the initial Offer, (iii) the Purchaser
immediately accepts and promptly pays for all securities tendered during the
Offer prior to its expiration, (iv) the Purchaser announces the results of the
Offer, including the approximate number and percentage of Shares deposited in
the Offer, no later than 9:00 a.m., New York City time, on the next business day
after the Expiration Date and immediately begins the Subsequent Offering Period
and (v) the Purchaser immediately accepts and promptly pays for Shares as they
are tendered during the Subsequent Offering Period. The Purchaser will be able
to include a Subsequent Offering Period, if it satisfies the conditions above,
after Thursday, October 5, 2000. In a public release, the Commission has
expressed the view that the inclusion of a Subsequent Offering Period would
constitute a material change to the terms of the Offer requiring the Purchaser
to disseminate new information to stockholders in a manner reasonably calculated
to inform them of such change sufficiently in advance of the Expiration Date
(generally five business days). In the event the Purchaser elects to include a
Subsequent Offering Period, it will notify stockholders of the Company
consistent with the requirements of the Commission.
THE PURCHASER DOES NOT CURRENTLY INTEND TO INCLUDE A SUBSEQUENT OFFERING
PERIOD IN THE OFFER, ALTHOUGH IT RESERVES THE RIGHT TO DO SO IN ITS SOLE
DISCRETION. PURSUANT TO RULE 14D-7 UNDER THE EXCHANGE ACT, NO WITHDRAWAL RIGHTS
APPLY TO SHARES TENDERED DURING A SUBSEQUENT OFFERING PERIOD AND NO WITHDRAWAL
RIGHTS APPLY DURING THE SUBSEQUENT OFFERING PERIOD WITH RESPECT TO SHARES
TENDERED IN THE OFFER AND ACCEPTED FOR PAYMENT. THE SAME CONSIDERATION WILL BE
PAID TO STOCKHOLDERS TENDERING SHARES IN THE OFFER OR IN A SUBSEQUENT OFFERING
PERIOD, IF ONE IS INCLUDED.
The Company has provided the Purchaser with the Company's stockholder lists
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase, the related Letter of Transmittal and
other relevant materials will be mailed to record holders of Shares, and will be
furnished to brokers, dealers, banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on the stockholder lists, or, if
applicable, who are listed as
10
participants in a clearing agency's security position listing, for subsequent
transmittal to beneficial owners of Shares.
2. PROCEDURES FOR TENDERING SHARES
VALID TENDER. For a stockholder validly to tender Shares pursuant to the
Offer, (a) the certificates for tendered Shares, together with a Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, any
required signature guarantees and any other required documents, must, prior to
the Expiration Date, be received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase; (b) in the case of a transfer
effected pursuant to the book-entry transfer procedures described under
"Book-Entry Transfer", either a Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, and any required signature guarantees, or
an Agent's Message (as defined below), and any other required documents, must be
received by the Depositary at one of such addresses, such Shares must be
delivered pursuant to the book-entry transfer procedures described below and a
Book-Entry Confirmation (as defined below) must be received by the Depositary,
in each case prior to the Expiration Date; or (c) the tendering stockholder
must, prior to the Expiration Date, comply with the guaranteed delivery
procedures described below under "Guaranteed Delivery".
The valid tender of Shares pursuant to one of the procedures described above
will constitute a binding agreement between the tendering stockholder and the
Purchaser upon the terms and subject to the conditions of the Offer.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY
(AS DEFINED BELOW), IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER.
SHARES WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY
(INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION).
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
BOOK-ENTRY TRANSFER. The Depositary will establish an account with respect
to the Shares at The Depository Trust Company (the "BOOK-ENTRY TRANSFER
FACILITY") for purposes of the Offer within two business days after the date of
this Offer to Purchase. Any financial institution that is a participant of the
Book-Entry Transfer Facility's system may make book-entry delivery of Shares by
causing the Book-Entry Transfer Facility to transfer such Shares into the
Depositary's account in accordance with the Book-Entry Transfer Facility's
procedures for such transfer. However, although delivery of Shares may be
effected through book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility, the Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees, or
an Agent's Message, and any other required documents, must be, in any case,
received by the Depositary at one of its addresses set forth on the back cover
of this Offer to Purchase prior to the Expiration Date for a valid tender of
Shares by book-entry. The confirmation of a book-entry transfer of Shares into
the Depositary's account at the Book-Entry Transfer Facility as described above
is referred to herein as a "BOOK-ENTRY CONFIRMATION". DELIVERY OF DOCUMENTS TO
THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH THE BOOK-ENTRY TRANSFER
FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
The term "AGENT'S MESSAGE" means a message, transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
SIGNATURE GUARANTEES. No signature guarantee is required on the Letter of
Transmittal if (a) the Letter of Transmittal is signed by the registered
holder(s) (which term, for purposes of this Section 2,
11
includes any participant in the Book-Entry Transfer Facility's system whose name
appears on a security position listing as the owner of the Shares) of Shares
tendered therewith and such registered holder has not completed either the box
entitled "Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the Letter of Transmittal or (b) such Shares are tendered for
the account of a financial institution (including most commercial banks, savings
and loan associations and brokerage houses) that is a participant in the
Security Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(such participant, an "ELIGIBLE INSTITUTION"). In all other cases, all
signatures on the Letter of Transmittal must be guaranteed by an Eligible
Institution. See Instructions 1 and 5 to the Letter of Transmittal. If the
certificates for Shares are registered in the name of a person other than the
signer of the Letter of Transmittal, or if payment is to be made or certificates
for Shares not tendered or not accepted for payment are to be returned to a
person other than the registered holder of the certificates surrendered, the
tendered certificates must be endorsed or accompanied by appropriate stock
powers, in either case signed exactly as the name or names of the registered
holders or owners appear on the certificates, with the signatures on the
certificates or stock powers guaranteed as aforesaid. See Instructions 1 and 5
to the Letter of Transmittal.
GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or the book-entry transfer procedures cannot be completed on a timely
basis or time will not permit all required documents to reach the Depositary
prior to the Expiration Date, such stockholder's tender may be effected if all
the following conditions are met:
(a) such tender is made by or through an Eligible Institution;
(b) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser, is received
by the Depositary at one of its addresses set forth on the back cover of
this Offer to Purchase prior to the Expiration Date; and
(c) Either (i) the certificates for tendered Shares together with a
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, and any required signature guarantees, and any other required
documents are received by the Depositary at one of its addresses set forth
on the back cover of this Offer to Purchase within three trading days after
the date of execution of such Notice of Guaranteed Delivery or (ii) in the
case of a book-entry transfer effected pursuant to the book-entry transfer
procedures described above under "Book-Entry Transfer", either a Letter of
Transmittal (or facsimile thereof), properly completed and duly executed,
and any required signature guarantees, or an Agent's Message, and any other
required documents, are received by the Depositary at one of such addresses,
such Shares are delivered pursuant to the book-entry transfer procedures
above and a Book-Entry Confirmation is received by the Depositary, in each
case within three trading days after the date of execution of such Notice of
Guaranteed Delivery. A "TRADING DAY" is any day on which the Nasdaq SmallCap
Market (the "NASDAQ SMALLCAP MARKET") operated by the Nasdaq Stock
Market, Inc. ("NASDAQ"), a subsidiary of the National Association of
Securities Dealers, Inc. is open for business.
The Notice of Guaranteed Delivery may be delivered by hand to the Depositary
or transmitted by telegram, facsimile transmission or mail to the Depositary and
must include a guarantee by an Eligible Institution in the form set forth in
such Notice of Guaranteed Delivery.
OTHER REQUIREMENTS. Notwithstanding any provision hereof, payment for
Shares accepted for payment pursuant to the Offer will in all cases be made only
after timely receipt by the Depositary of (a) certificates for (or a timely
Book-Entry Confirmation with respect to) such Shares, (b) a Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature
12
guarantees (or, in the case of a book-entry transfer, an Agent's Message in lieu
of the Letter of Transmittal) and (c) any other documents required by the Letter
of Transmittal. Accordingly, tendering stockholders may be paid at different
times depending upon when certificates for Shares or Book-Entry Confirmations
with respect to Shares are actually received by the Depositary. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID BY THE PURCHASER ON THE PURCHASE PRICE OF
THE SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT.
APPOINTMENT. By executing a Letter of Transmittal (or facsimile thereof)
(or, in the case of a book-entry transfer, by delivery of an Agent's Message, in
lieu of a Letter of Transmittal), a tendering stockholder will irrevocably
appoint designees of the Purchaser as such stockholder's attorneys-in-fact and
proxies in the manner set forth in the Letter of Transmittal, each with full
power of substitution, to the full extent of such stockholder's rights with
respect to the Shares tendered by such stockholder and accepted for payment by
the Purchaser and with respect to any and all other Shares or other securities
or rights issued or issuable in respect of such Shares on or after August 30,
2000. All such proxies will be considered coupled with an interest in the
tendered Shares. Such appointment will be effective when, and only to the extent
that, the Purchaser accepts for payment Shares tendered by such stockholder as
provided herein. Upon the effectiveness of such appointment, all prior powers of
attorney, proxies and consents given by such stockholder with respect to such
Shares or other securities or rights will, without further action, be revoked
and no subsequent powers of attorney, proxies, consents or revocations may be
given (and, if given, will not be effective). The designees of the Purchaser
will thereby be empowered to exercise all voting and other rights with respect
to such Shares and other securities or rights in respect of any annual, special
or adjourned meeting of the Company's stockholders, actions by written consent
in lieu of any such meeting or otherwise, as they in their sole discretion deem
proper. The Purchaser reserves the right to require that, in order for Shares to
be deemed validly tendered, immediately upon the Purchaser's acceptance for
payment of such Shares, the Purchaser must be able to exercise full voting,
consent and other rights with respect to such Shares and other securities or
rights, including voting at any meeting of stockholders.
DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by the Purchaser in its sole discretion, which determination
will be final and binding. The Purchaser reserves the absolute right to reject
any or all tenders determined by it not to be in proper form or the acceptance
for payment of or payment for which may, in the opinion of the Purchaser, be
unlawful. The Purchaser also reserves the absolute right to waive any defect or
irregularity in the tender of any Shares of any particular stockholder whether
or not similar defects or irregularities are waived in the case of other
stockholders. No tender of Shares will be deemed to have been validly made until
all defects or irregularities relating thereto have been cured or waived. None
of the Purchaser, Parent, the Company, the Depositary, the Information Agent or
any other person will be under any duty to give notification of any defects or
irregularities in tenders or incur any liability for failure to give any such
notification. The Purchaser's interpretation of the terms and conditions of the
Offer (including the Letter of Transmittal and the instructions thereto and any
other related documents thereto) will be final and binding.
BACKUP WITHHOLDING. In order to avoid "backup withholding" of U.S. federal
income tax on payments of cash pursuant to the Offer, a stockholder surrendering
Shares in the Offer must, unless an exemption applies, provide the Depositary
with such stockholder's correct taxpayer identification number ("TIN") on a
Substitute Form W-9 and certify under penalties of perjury that such TIN is
correct and that such stockholder is not subject to backup withholding. If a
stockholder does not provide such stockholder's correct TIN or fails to provide
the certifications described above, the Internal Revenue Service (the "IRS") may
impose a penalty on such stockholder and payment of cash to such stockholder
pursuant to the Offer may be subject to backup withholding of 31%. All
stockholders surrendering Shares pursuant to the Offer should complete and sign
the main signature form and the Substitute Form W-9 included as part of the
Letter of Transmittal to provide the information and certification
13
necessary to avoid backup withholding (unless an applicable exemption exists and
is proved in a manner satisfactory to the Purchaser and the Depositary). Certain
stockholders (including, among others, all corporations, individual retirement
accounts and certain foreign individuals and entities) are not subject to backup
withholding. Noncorporate foreign stockholders should complete and sign the main
signature form and a Form W-8, Certificate of Foreign Status, a copy of which
may be obtained from the Depositary, in order to avoid backup withholding. See
Instruction 9 to the Letter of Transmittal.
3. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 3, tenders of Shares are
irrevocable. Shares tendered pursuant to the Offer may be withdrawn pursuant to
the procedures set forth below at any time prior to the Expiration Date and,
unless theretofore accepted for payment and paid for by the Purchaser pursuant
to the Offer, may also be withdrawn at any time after Tuesday, November 7, 2000.
For a withdrawal to be effective, a written or facsimile transmission notice
of withdrawal must be timely received by the Depositary at one of its addresses
set forth on the back cover of this Offer to Purchase and must specify the name
of the person having tendered the Shares to be withdrawn, the number of Shares
to be withdrawn and the name of the registered holder of the Shares to be
withdrawn, if different from the name of the person who tendered the Shares. If
certificates for Shares have been delivered or otherwise identified to the
Depositary, then, prior to the physical release of such certificates, the serial
numbers shown on such certificates must be submitted to the Depositary and,
unless such Shares have been tendered by an Eligible Institution, any and all
signatures on the notice of withdrawal must be guaranteed by an Eligible
Institution. If Shares have been tendered pursuant to the book-entry transfer
procedures described in Section 2, any notice of withdrawal must also specify
the name and number of the account at the Book-Entry Transfer Facility to be
credited with the withdrawn Shares and otherwise comply with the Book-Entry
Transfer Facility's procedures. Withdrawals of tenders of Shares may not be
rescinded, and any Shares properly withdrawn will thereafter be deemed not
validly tendered for purposes of the Offer. However, withdrawn Shares may be
retendered by again following one of the procedures described in Section 2 at
any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of any
notice of withdrawal will be determined by the Purchaser in its sole discretion,
which determination will be final and binding. None of the Purchaser, Parent,
the Company, the Depositary, the Information Agent or any other person will be
under any duty to give notification of any defects or irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification.
In the event the Purchaser provides a Subsequent Offering Period following
the Offer, no withdrawal rights will apply to Shares tendered during such
Subsequent Offering Period or to Shares tendered in the Offer and accepted for
payment.
4. ACCEPTANCE FOR PAYMENT AND PAYMENT
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), the Purchaser will accept for payment and will pay for all Shares
validly tendered prior to the Expiration Date and not properly withdrawn in
accordance with Section 3 promptly after the Expiration Date. The Purchaser,
subject to the Merger Agreement, expressly reserves the right, in its sole
discretion, to delay acceptance for payment of or payment for Shares in order to
comply in whole or in part with any applicable law, including, without
limitation, the HSR Act and the Competition Act (Canada). Any such delays will
be effected in compliance with Rule 14e-1(c) under the Exchange Act (relating to
a bidder's obligation to pay for or return tendered securities promptly after
the termination or withdrawal of such bidder's offer).
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (a) the certificates
for such Shares, together with a Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, and any required signature guarantees
14
or (b) in the case of a transfer effected pursuant to the book-entry transfer
procedures described in Section 2, a Book-Entry Confirmation and either a Letter
of Transmittal (or facsimile thereof), properly completed and duly executed, and
any required signature guarantees, or an Agent's Message, and any other required
documents. Accordingly, tendering stockholders may be paid at different times
depending upon when certificates for Shares or Book-Entry Confirmations with
respect to Shares are actually received by the Depositary.
The per Share consideration paid to any stockholder pursuant to the Offer
will be the highest per Share consideration paid to any other stockholder
pursuant to the Offer.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered to the Purchaser and not
properly withdrawn as, if and when the Purchaser gives oral or written notice to
the Depositary of the Purchaser's acceptance for payment of such Shares. Upon
the terms and subject to the conditions of the Offer, payment for Shares
accepted for payment pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as an agent for
tendering stockholders for the purpose of receiving payment from the Purchaser
and transmitting payment to tendering stockholders whose Shares have been
accepted for payment. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE
PURCHASE PRICE FOR TENDERED SHARES, REGARDLESS OF ANY EXTENSION OF OR AMENDMENT
TO THE OFFER OR ANY DELAY IN PAYING FOR SUCH SHARES.
If the Purchaser is delayed in its acceptance for payment of or payment for
Shares or is unable to accept for payment or pay for Shares pursuant to the
Offer for any reason, then, without prejudice to the Purchaser's rights under
the Offer (but subject to compliance with Rule 14e-1(c) under the Exchange Act
(relating to a bidder's obligation to pay for or return tendered securities
promptly after the termination or withdrawal of such bidder's offer) and the
terms of the Merger Agreement (requiring that the Purchaser pay for Shares
accepted for payment as soon as practicable after the Expiration Date)), the
Depositary may, nevertheless, on behalf of the Purchaser, retain tendered
Shares, and such Shares may not be withdrawn except to the extent tendering
stockholders are entitled to do so as described in Section 3.
If any tendered Shares are not accepted for payment pursuant to the terms
and conditions of the Offer for any reason, the certificates for such Shares
will be returned (and, if certificates are submitted for more Shares than are
tendered, new certificates for the Shares not tendered will be sent) in each
case without expense to the tendering stockholder (or, in the case of Shares
delivered by book-entry transfer of such Shares into the Depositary's account at
the Book-Entry Transfer Facility pursuant to the book-entry transfer procedures
described in Section 2, such Shares will be credited to an account maintained at
the Book-Entry Transfer Facility), as promptly as practicable after the
expiration or termination of the Offer.
The Purchaser reserves the right to transfer or assign, in whole or, from
time to time, in part, to Parent, or to one or more direct or indirect wholly
owned subsidiaries of Parent, the right to purchase Shares tendered pursuant to
the Offer, but any such transfer or assignment will not relieve the Purchaser of
its obligations under the Offer, nor the Parent of its obligations to ensure the
Purchaser's performance of its obligations, and will in no way prejudice the
rights of tendering stockholders to receive payment for Shares validly tendered
and accepted for payment pursuant to the Offer.
5. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
The receipt of cash pursuant to the Offer or the Merger will be a taxable
transaction for U.S. federal income tax purposes under the Internal Revenue Code
of 1986, as amended (the "CODE") and may also be a taxable transaction under
applicable state, local or foreign income tax laws.
Generally, for U.S. federal income tax purposes, a tendering stockholder
will recognize gain or loss equal to the difference between the amount of cash
received by the stockholder pursuant to the Offer or Merger and the aggregate
adjusted tax basis in the Shares tendered by the stockholder and purchased
pursuant to the Offer or converted into cash in the Merger, as the case may be.
Gain or loss will be
15
calculated separately for each block of Shares tendered and purchased pursuant
to the Offer or converted into cash in the Merger, as the case may be. If
tendered Shares are held by a tendering stockholder as capital assets, gain or
loss recognized by such stockholder will be capital gain or loss, which will be
long-term capital gain or loss if such stockholder's holding period for the
Shares exceeds one year. In the case of a tendering noncorporate stockholder,
long-term capital gains will be eligible for a maximum U.S. federal income tax
rate of 20%. In addition, the ability to use capital losses to offset ordinary
income is limited.
A stockholder (other than certain exempt stockholders including, among
others, all corporations, individual retirement accounts and certain foreign
individuals and entities) that tenders Shares may be subject to 31% backup
withholding unless the stockholder provides its TIN and certifies that such
number is correct (or properly certifies that it is awaiting a TIN) and
certifies as to no loss of exemption from backup withholding and otherwise
complies with the applicable requirements of the backup withholding rules. A
stockholder that does not furnish a required TIN or that does not otherwise
establish a basis for an exemption from backup withholding may be subject to a
penalty imposed by the IRS. See "Backup Withholding" under Section 2. Each
stockholder should complete and sign the Substitute Form W-9 included as part of
the Letter of Transmittal so as to provide the information and certification
necessary to avoid backup withholding.
If backup withholding applies to a stockholder, the Depositary is required
to withhold 31% from payments to such stockholder. Backup withholding is not an
additional tax. Rather, the amount of the backup withholding can be credited
against the U.S. federal income tax liability of the person subject to the
backup withholding, provided that the required information is given to the IRS.
If backup withholding results in an overpayment of tax, a refund can be obtained
by the stockholder by filing a U.S. federal income tax return.
The foregoing discussion may not be applicable with respect to Shares
received pursuant to the exercise of employee stock options or otherwise as
compensation or with respect to holders of Shares who are subject to special tax
treatment under the Code--such as non-U.S. persons, life insurance companies,
tax-exempt organizations and financial institutions--and may not apply to a
holder of Shares in light of individual circumstances, such as holding Shares as
a hedge or as part of a straddle or a hedging, constructive sale, integrated or
other risk-reduction transaction. STOCKHOLDERS ARE URGED TO CONSULT THEIR OWN
TAX ADVISORS TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO THEM (INCLUDING THE
APPLICATION AND EFFECT OF ANY STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX LAWS)
OF THE OFFER AND THE MERGER.
6. PRICE RANGE OF THE SHARES; DIVIDENDS ON THE SHARES
The Shares are listed on the Nasdaq SmallCap Market under the symbol "WYNT".
The following table sets forth, for each of the periods indicated, the high and
low sales prices per Share.
HIGH LOW
-------- --------
Year Ended December 31, 1998:
First Quarter............................................... 7.406 4.594
Second Quarter.............................................. 6.750 5.188
Third Quarter............................................... 5.750 3.250
Fourth Quarter.............................................. 4.500 3.250
Year Ended December 31, 1999:
First Quarter............................................... 4.313 2.250
Second Quarter.............................................. 3.250 2.375
Third Quarter............................................... 3.625 1.750
Fourth Quarter.............................................. 2.625 1.000
Year Ending December 31, 2000:
First Quarter............................................... 4.500 1.250
Second Quarter.............................................. 2.125 1.250
16
On August 29, 2000, the last full trading day before the public announcement
of the execution of the Merger Agreement, the last reported sales price on the
Nasdaq SmallCap Market of the Shares was $2.75 per Share. On September 7, 2000,
the last full trading day before commencement of the Offer, the last reported
sales price on the Nasdaq SmallCap Market of the Shares was $3.875 per Share.
STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
The Purchaser has been advised by the Company that the Company has never
declared or paid any cash or stock dividends on the Shares, except that in
May 1998 the Company effected a four-for-three stock split in the form of a
stock dividend pursuant to which each holder of Shares received one third of a
Share for each Share held.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; NASDAQ LISTING; EXCHANGE
ACT REGISTRATION; MARGIN REGULATIONS
MARKET FOR THE SHARES. The purchase of Shares pursuant to the Offer will
reduce the number of holders of Shares and the number of Shares that might
otherwise trade publicly and could adversely affect the liquidity and market
value of the remaining Shares held by the public.
NASDAQ LISTING. Depending upon the number of Shares purchased pursuant to
the Offer, the Shares may no longer meet the requirements for continued
designation for the Nasdaq SmallCap Market. Continued inclusion in the Nasdaq
SmallCap Market would require that there be 300 round-lot holders, there be at
least 500,000 publicly held shares, the publicly held shares have a market value
of at least $1 million, there be two registered and active market makers, of
which one may be entering stabilizing bids, and the issuer have either net
tangible assets of at least $2 million, market capitalization of at least
$35 million or net income of $500,000 in the most recently completed fiscal year
or in two of the last three most recently completed fiscal years. Shares held
directly or indirectly by directors, officers or beneficial owners of more than
10% of the Shares are not considered as being publicly held for this purpose.
EXCHANGE ACT REGISTRATION. The Shares are currently registered under the
Exchange Act. Such registration may be terminated upon application of the
Company to the Commission if the Shares are neither listed on a national
securities exchange nor held by 300 or more holders of record. Termination of
registration of the Shares under the Exchange Act would reduce the information
required to be furnished by the Company to its stockholders and to the
Commission and would make certain provisions of the Exchange Act no longer
applicable to the Company, such as the short-swing profit-recovery provisions of
Section 16(b) of the Exchange Act and the requirement of furnishing a proxy or
information statement pursuant to Section 14(a) or 14(c) of the Exchange Act in
connection with stockholders' meetings and the related requirement of furnishing
an annual report to stockholders. Furthermore, the ability of "affiliates" of
the Company and persons holding "restricted securities" of the Company to
dispose of such securities pursuant to Rule 144 or 144A promulgated under the
Securities Act of 1933, as amended, may be impaired or eliminated. The Purchaser
intends to seek to cause the Company to apply for termination of registration of
the Shares under the Exchange Act as soon after the completion of the Offer as
the requirements for such termination are met.
MARGIN REGULATIONS. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"FEDERAL RESERVE BOARD"), which has the effect, among other things, of allowing
brokers to extend credit on the collateral of the Shares. Depending upon factors
similar to those described above regarding listing and market quotations, it is
possible that, following the Offer, the Shares would no longer constitute
"margin securities" for the purposes of the margin regulations of the Federal
Reserve Board and therefore could no longer be used as collateral for loans made
by brokers.
17
8. CERTAIN INFORMATION CONCERNING THE COMPANY
The Company is a New York corporation with its principal offices at 1170
U.S. Highway 22 East, Suite 203, Bridgewater, New Jersey 08875, telephone number
(514) 636-9926. According to the Company's 1999 Annual Report, the Company is an
integrated sanitation and facility maintenance supply company with extensive
manufacturing, sales and distribution capabilities; operates three manufacturing
plants, including a sanitary paper products converting plant, a chemical
manufacturing plant and a converting operation manufacturing disposable wiping
products; and its business is conducted in North America through two
subsidiaries, Wood Wyant Inc. and IFC Disposables, Inc., employing approximately
475 people in the United States and Canada.
Set forth below is certain selected financial data with respect to the
Company and its subsidiaries excerpted from the information contained in the
Company's annual report on Form 10-K for the year ended December 31, 1999 and
quarterly report on Form 10-Q for the quarter ended June 30, 2000. More
comprehensive financial information is included in such reports and other
documents filed by the Company with the Commission, and the following summary is
qualified in its entirety by reference to such reports, other documents and all
the financial information (including any related notes) contained therein. Such
reports and other documents should be available for inspection and copies
thereof should be obtainable in the manner set forth below under "Available
Information".
WYANT CORPORATION
SELECTED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31 JUNE 30
------------------------------ -------------------
1999 1998 1997 2000 1999
-------- -------- -------- -------- --------
(UNAUDITED)
STATEMENTS OF OPERATIONS DATA:
Net sales....................................... $78,851 $67,124 $63,560 $39,536 $38,826
Gross profit.................................... 26,989 23,906 23,869 14,390 13,145
Income (loss) from continuing operations
before extraordinary gain....................... (543) 554 999 900 93
Discontinued operations, net of income taxes.... 722 1,021 (581) -- 974
Extraordinary gain, net of income taxes......... -- -- 92 -- --
Net income...................................... 179 1,575 510 900 1,067
PER COMMON SHARE:
BASIC
Income (loss) from continuing operations
before extraordinary gain....................... $ (0.25) $ 0.06 $ 0.22 $ 0.20 $ (0.03)
Discontinued operations......................... 0.20 0.28 (0.16) -- 0.27
Net income (loss)............................... (0.05) 0.34 0.09 0.20 0.24
DILUTED
Income (loss) from continuing operations before
extraordinary gain............................ (0.25) 0.06 0.22 0.20 (0.03)
Discontinued operations......................... 0.20 0.27 (0.16) -- 0.25
Net income (loss)............................... (0.05) 0.33 0.09 0.20 0.23
AS AT DECEMBER 31
------------------------------ AT JUNE 30
1999 1998 1997 2000
-------- -------- -------- ----------
BALANCE SHEET DATA:
Working capital of continuing operations................ $ 7,554 $ 1,822 $ 82 $ 7,619
Total assets............................................ 41,248 42,540 37,156 39,859
Long-term obligations (excluding current maturities).... 2,391 3,888 1,998 2,245
Redeemable preferred shares............................. 6,028 5,990 4,930 5,447
Cash dividends declared per common share................ -- -- -- --
18
CERTAIN COMPANY PROJECTIONS. During the course of discussions between
representatives of Parent and the Company, the Company provided Parent or its
representatives with certain non-public business and financial information about
the Company. This information included the following projections of net sales,
gross profit and earnings before tax ("EBT") for the years ended December 31,
2000 through 2005:
MANAGEMENT PROJECTIONS
(IN THOUSANDS OF DOLLARS)
YEAR ENDED DECEMBER 31
---------------------------------------------------------------
2000 2001 2002 2003 2004 2005
-------- -------- -------- -------- -------- --------
WOOD WYANT INC.
Net sales................................. $63,333 $64,198 $65,076 $65,967 $66,872 $67,790
Gross profit.............................. 24,139 24,524 24,924 25,332 25,746 26,167
EBT....................................... 2,810 3,352 3,824 4,085 4,352 4,623
IFC DISPOSABLES, INC.
Net sales................................. $20,286 $20,692 $21,106 $21,528 $21,958 $22,397
Gross profit.............................. 3,449 3,569 3,693 3,821 3,952 4,088
EBT....................................... 243 323 393 466 542 620
WYANT CORPORATION (CONSOLIDATED)
Net sales................................. $79,969 $81,240 $82,532 $83,845 $85,180 $86,537
Gross profit.............................. 27,587 28,093 28,618 29,153 29,698 30,254
EBT....................................... 2,693 3,315 3,857 4,192 4,534 4,884
The Company has advised the Purchaser and Parent that it does not as a
matter of course make public any projections as to future performance or
earnings, and the projections set forth above are included in this Offer to
Purchase only because this information was provided to Parent. The projections
were not prepared with a view to public disclosure or compliance with the
published guidelines of the Commission or the guidelines established by the
American Institute of Certified Public Accountants regarding projections or
forecasts. The projections do not purport to present operations in accordance
with generally accepted accounting principles, and the Company's independent
auditors have not examined or compiled the projections and accordingly assume no
responsibility for them. The Company has advised the Purchaser and Parent that
its internal financial forecasts (upon which the projections provided to Parent
and the Purchaser were based in part) are, in general, prepared solely for
internal use and budgeting and other management decisions and are subjective in
many respects and thus susceptible to interpretations and periodic revision
based on actual experience and business developments. The projections also
reflect numerous assumptions made by management of the Company, including
assumptions with respect to the market for the Company's products and services,
general business, economic, market and financial conditions and other matters,
including interest rates and the anticipated amount of borrowings by the
Company, all of which are difficult to predict, many of which are beyond the
Company's control, and none of which were subject to approval by Parent or the
Purchaser. Accordingly, there can be no assurance that the assumptions made in
preparing the projections will prove accurate. It is expected that there will be
differences between actual and projected results, and actual results may be
materially greater or less than those contained in the projections. The
inclusion of the projections herein should not be regarded as an indication that
any of Parent, the Purchaser, the Company or their respective affiliates or
representatives considered or consider the projections to be a reliable
prediction of future events, and the projections should not be relied upon as
such. None of Parent, the Purchaser, the Company or any of their respective
affiliates or representatives has made or makes any representation to any person
regarding the ultimate performance of the Company compared to the information
contained in the projections, and none of them intends to update
19
or otherwise revise the projections to reflect circumstances existing after the
date when made or to reflect the occurrence of future events even in the event
that any or all of the assumptions underlying the projections are shown to be in
error.
AVAILABLE INFORMATION. The Company is subject to the informational
requirements of the Exchange Act and, in accordance therewith, is required to
file reports and other information with the Commission relating to its business,
financial condition and other matters. Certain information as of particular
dates concerning the Company's directors and officers, their remuneration, stock
options and other matters, the principal holders of the Company's securities and
any material interest of such persons in transactions with the Company is
required to be disclosed in the Company's proxy statements distributed to the
Company's stockholders and filed with the Commission. Such reports, proxy
statements and other information should be available for inspection at the
public reference facilities of the Commission at 450 Fifth Street, N.W.,
Washington, DC 20549, and at the Commission's public reference rooms in New
York, New York and Chicago, Illinois. Please call the Commission at
1-800-SEC-0330 for further information on the public reference rooms. Copies of
such information should be obtainable, by mail, upon payment of the Commission's
customary charges, by writing to the Commission's principal office at 450 Fifth
Street, N.W., Washington, DC 20549. The Commission also maintains a Web site on
the Internet at http://www.sec.gov that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission. Such information should also be on file at the Nasdaq Stock
Market, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
Except as otherwise stated in this Offer to Purchase, the information
concerning the Company contained herein has been taken from or based upon
publicly available documents on file with the Commission and other publicly
available information. Although Parent and the Purchaser do not have any
knowledge that any such information is untrue, neither the Purchaser nor Parent
takes any responsibility for the accuracy or completeness of such information or
for any failure by the Company to disclose events that may have occurred and may
affect the significance or accuracy of any such information.
9. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER
The Purchaser, a New York corporation that is a wholly owned subsidiary of
Parent, was organized to acquire the Company and has not conducted any unrelated
activities since its organization. All outstanding shares of capital stock of
the Purchaser are owned by Parent.
Parent is a Canada corporation. Parent, operating through divisions and
subsidiaries in Canada and the United States, is a manufacturer and converter of
tissue paper and a seller of finished and semi-finished products in the retail,
and in the commercial and industrial, markets in Canada and the United States.
The principal office of Parent and the Purchaser is located at 77,
Marie-Victorin Boulevard, Candiac, Quebec, J5R 1C3 Canada, telephone number
(450) 444-6400. Parent is a subsidiary of Cascades Inc., a Quebec corporation
("CASCADES"). Cascades is a producer of paper and packaging products, operating
through more than one hundred subsidiaries and divisions in Canada, the United
States and Europe, specializing in the production of boxboard, fine papers,
tissue paper, containerboard and specialty products. The address of Cascades's
principal office is 404, rue Marie-Victorin, C.P. 30, Kingsey Falls, Quebec,
J0A 1B0 Canada.
The name, citizenship, business address, present principal occupation or
employment and five-year employment history of each of the directors and
executive officers of the Purchaser, Parent and Cascades are set forth in
Schedule I hereto.
Because the only consideration in the Offer and Merger is cash and the Offer
covers all outstanding Shares, and in view of the absence of a financing
condition and the financial capacity of Parent and its affiliates, the Purchaser
believes the financial condition of Parent and its affiliates is not material to
a decision by a holder of Shares whether to hold, sell or tender Shares pursuant
to the Offer.
20
10. SOURCE AND AMOUNT OF FUNDS
The Offer is not conditioned on any financing arrangements.
The total amount of funds required by Parent and the Purchaser to purchase
all outstanding Shares pursuant to the Offer, to pay the holders of certain
employee stock options as provided in the Merger Agreement (discussed in
Section 12 below), to purchase certain shares of Preferred Stock as provided in
the Stock Purchase Agreement (discussed in Section 12 below) and to pay fees and
expenses related to the Offer and the Merger is estimated to be approximately
$15 million. The Purchaser plans to obtain all funds needed for the Offer and
the Merger through capital contributions or intercompany advances from Parent.
11. CONTACTS AND TRANSACTIONS WITH THE COMPANY; BACKGROUND OF THE OFFER
Cascades and the Company have done business together since 1976 when the
Company entered into a Joint Venture Agreement with Cascades as equal fifty
percent venturers to create Industries Cascades Inc. ("INDUSTRIES-CANADA"), a
Canada corporation, for the purpose of building and operating a tissue paper
mill in Kingsey Falls, Quebec. In 1980, Industries-Canada added a second tissue
paper machine to complete the product mix.
In 1978, Industries-Canada entered into a supply agreement with the Company
to supply tissue paper to the Company.
In 1983, Industries-Canada acquired an idle tissue paper mill in Rockingham,
North Carolina through Cascades Industries, Inc. ("INDUSTRIES-U.S."), a North
Carolina corporation and a wholly owned subsidiary of Industries-Canada. In
April 1986, Cascades bought from Industries-Canada all of the stock of
Industries-U.S., with the result that Industries-U.S. became a wholly owned
subsidiary of Cascades. Industries-U.S. also bought from the Company certain
assets consisting of another Rockingham, North Carolina converting plant.
In 1983, the 1978 supply agreement described above was amended to include
tissue paper supplied by Industries-U.S.
In February 1994, the Company sold its fifty percent interest in
Industries-Canada to Cascades for ten million Canadian dollars. At the time of
that sale, Industries-Canada, now owned one hundred percent by Cascades, agreed
to sell to the Company, and the Company agreed to purchase from
Industries-Canada, for a period of five years, sixteen thousand short tons
annually of parent rolls of paper toweling and tissue at market prices.
In 1995, Cascades acquired Parent by selling its one hundred percent
interest in Industries-Canada and Industries-U.S. to Parent for a total
consideration payable in common shares of Parent, with the result that Cascades
acquired a majority of the shares of Parent.
In January, 1999, Industries-Canada became a division of Parent and
Industries-U.S. changed its name to Perkins Papers (USA) Ltd. Parent continues
to supply parent rolls of paper toweling and tissue at market prices to the
Company, pursuant to a new five year supply agreement entered into in
January 1999. Pursuant to this agreement the Company is obligated to purchase a
minimum of sixteen thousand two hundred short tons of product per year. The
products sold under this agreement constitute one hundred percent of the
Company's requirements for these products. The most recent annual cost to the
Company of these products was approximately fourteen million dollars.
In September, 1999, Mr. Donald C. MacMartin, President and Chief Executive
Officer of the Company met with Ms. Suzanne Blanchet, President and Chief
Executive Officer of Parent, to discuss the possibility of Parent acquiring the
Company or certain assets of the Company. These discussions were exploratory in
nature and terminated in November 1999 without agreement between the parties.
Mr. James A. Wyant, who together with certain members of his family controls
a majority of the Shares, and Mr. Bernard Lemaire, Chairman of the Board of
Cascades, met on February 7 and 17, 2000, to discuss the possibility of Parent
purchasing the Shares held directly or indirectly by Mr. Wyant and the
21
members of his family, with a simultaneous purchase, for the same consideration,
of the Shares held by all of the Company's other shareholders. Mr. Wyant and
Mr. Lemaire met again to continue discussions on April 26, 2000 and on May 8,
2000.
By letter dated May 12, 2000 addressed to the Company to the attention of
Mr. Wyant, Parent presented an offer to the Company to purchase all of the
outstanding Shares for a total consideration of $3 per share in cash.
On June 20, 2000, Mr. Wyant and Mr. MacMartin met with Mr. Robert F. Hall,
Vice President Legal Affairs and Corporate Secretary of Cascades, to discuss the
timing of the offer with respect to the ongoing restructuring of the Cascades
Group of companies, which restructuring included the privatization of the
Parent.
On June 27, 2000 representatives of Parent including Mr. Hall, Ms. Michele
Beauchamp, in house legal counsel and Corporate Secretary of Parent and
Mr. Andre Belzile, Vice President Finance and CFO of Cascades, met with
representatives of the Company including Mr. Marc D'Amour, Vice President
Finance and CFO of the Company and Mr. Thomas R. M. Davis, a member of the
Company's Board of Directors, a co-executor of the Estate of Gerald W. Wyant
which is a holder of Shares, and the Company's outside legal counsel for Canada,
to further discuss the offer. Outside U.S. legal counsel for Parent and the
Company were also present.
At the commencement of the June 27 meeting, representatives of the Company
presented to representatives of Parent a proposed Confidential Disclosure and
Standstill Agreement. Representatives of the Company next stated the Company's
position that the $3.00 per share being offered by Parent was inadequate, and
therefore unacceptable. Company representatives argued for a higher price, and
in support of this stated their willingness to share certain financial
projections with representatives of Parent, subject to the execution of the
Confidential Disclosure and Standstill Agreement. This agreement was discussed
at the meeting, but not signed. The meeting ended with the parties undertaking
to continue their discussions.
The next day, June 28, after further discussion, the parties signed the
Confidential Disclosure and Standstill Agreement. See description of the
Confidential Disclosure and Standstill Agreement in Section 12.
Messrs. D'Amour, Belzile and Jacques met again on June 29, 2000 to continue
their discussions. At this time, in support of the Company's argument for a
higher price, the Company presented the financial projections. See, "Certain
Company Projections" discussed in Section 8.
Following these discussions, by letter dated July 4, 2000 addressed to the
Company to the attention of Mr. Wyant, Parent increased the price offered to
$4.00 per share.
On July 7, 2000, Messrs. D'Amour, Hall, Ms. Blanchet and Mr. Laurent
Lemaire, President and CEO of Cascades, and outside U.S. legal counsel to the
Company, participated in a conference call to discuss the amended offer. Later
that day, on July 7, 2000, the Board of Directors of the Company authorized
Mr. James A. Wyant, on behalf of the Board and the Company, to communicate to
Parent the Company's acceptance of Parent's $4.00 per share offer, subject to
the negotiation and execution of definitive agreements and any required
regulatory approval.
12. PURPOSE OF THE OFFER; THE MERGER AGREEMENT; THE STOCK PURCHASE AGREEMENT;
THE CONFIDENTIAL DISCLOSURE AND STANDSTILL AGREEMENT; OPINION OF THE
COMPANY'S FINANCIAL ADVISOR; PLANS FOR THE COMPANY; APPRAISAL RIGHTS; GOING
PRIVATE TRANSACTIONS
PURPOSE OF THE OFFER
The purpose of the Offer is to enable Parent to acquire control of the
Company and is a first step to acquire all of the outstanding Shares. The
purpose of the Merger is to acquire all outstanding Shares not tendered and
purchased pursuant to the Offer or otherwise.
22
THE MERGER AGREEMENT
The following summary of the Merger Agreement is qualified in its entirety
by reference to the Merger Agreement, a copy of which is filed as
Exhibit (d)(1) to the Schedule TO (described in the last paragraph of
Section 17). You should read the Merger Agreement in its entirety for a more
complete description of the matters summarized below.
The Merger Agreement provides that, following the satisfaction or waiver of
the conditions described below under "Conditions to the Merger", the Purchaser
will be merged with and into the Company, with the Company being the surviving
corporation. In the Merger, each issued Share (other than Shares owned by
Parent, the Purchaser or the Company or a subsidiary of Parent, the Purchaser or
the Company or by stockholders, if any, who are entitled to and who properly
exercise appraisal rights under New York law) will be converted into the right
to receive the highest price per Share paid pursuant to the Offer in cash,
without interest thereon.
VOTE REQUIRED TO APPROVE MERGER. The BCL requires, among other things, that
the adoption of any plan of merger of the Company must be approved by the Board
of Directors of the Company and, if the "short-form" merger procedure described
below is not available, approved by the holders of a majority of the Company's
outstanding voting securities. The Board of Directors of the Company has
approved the Offer and the Merger and adopted and approved the Merger Agreement;
consequently, the only additional action of the Company that may be necessary to
effect the Merger is approval of the Merger Agreement by the Company's
stockholders if such "short-form" merger procedure is not available. If required
by the BCL, the Company will call and hold a meeting of its stockholders
promptly following the consummation of the Offer for the purposes of voting upon
the approval of the Merger Agreement. At any such meeting all Shares then owned
by Parent or the Purchaser will be voted in favor of the approval of the Merger
Agreement. If the Purchaser acquires, through the Offer or otherwise, voting
power with respect to at least a majority of the outstanding Shares (which will
be the case upon the performance by the parties to the Stock Purchase Agreement
of their obligations thereunder), it would have sufficient voting power to
effect the Merger without the affirmative vote of any other stockholder of the
Company.
"SHORT-FORM" MERGER PROCEDURE. The BCL also provides that, if a parent
company owns at least 90% of the outstanding shares of each class of stock of a
subsidiary, the parent company may merge into that subsidiary, pursuant to the
"short-form" merger procedures, without prior notice to, or the approval of, the
other stockholders of the subsidiary. In order to consummate the Merger pursuant
to these provisions of the BCL, the Purchaser would have to own at least 90% of
the outstanding Shares. If the Purchaser acquires at least 90% of the
outstanding Shares pursuant to the Offer or otherwise, it intends to effect the
Merger under this procedure without prior notice to, or any action by, any other
stockholder of the Company.
CONDITIONS TO THE MERGER. The Merger Agreement provides that the respective
obligations of each party to effect the Merger are subject to the following
conditions:
(a) NO INJUNCTION OR OTHER LEGAL PROHIBITION. There shall not be any
injunction, or action taken, or any statute, rule, regulation or order
enacted, promulgated or issued or deemed applicable to the Merger by any
United States or Canadian federal or state or provincial government or
governmental agency or instrumentality or court, which would make the
consummation of the Merger illegal; and
(b) APPROVALS. All governmental and other consents and approvals necessary,
including approval by the Company's stockholders if required by the BCL,
to permit the consummation of the Merger shall have been received, or
applicable waiting periods shall have run.
23
TERMINATION OF THE MERGER AGREEMENT. The Merger Agreement may be terminated
at any time prior to the effective time of the Merger (the "EFFECTIVE TIME"),
whether before or after adoption of the Merger Agreement by the stockholders of
the Company by the party indicated, in the following circumstances:
(a) by written consent of all of the parties;
(b) by Parent or by the Company, by written notice to the other, if the
Merger shall not have been consummated on or before March 31, 2001(or
such later date as Parent and the Company may agree in writing);
provided, that the right to terminate the Merger Agreement under this
clause (b) shall not be available to any party whose failure to fulfill
any obligations under the Merger Agreement has been the cause of, or
resulted in, the failure of the Effective Time to occur on or before this
date; provided further, that the passage of such period shall be tolled
(and the date for such consummation shall be correspondingly extended)
for any part thereof (but not exceeding 60 days in the aggregate) during
which any party shall be subject to a nonfinal order, decree, ruling or
action restraining, enjoining or otherwise prohibiting consummation of
the Merger and the other transactions contemplated by the Merger
Agreement or the calling or holding of the meeting of the holders of
Shares for purposes of approving the Merger, if required by the BCL;
(c) by Parent, by written notice to the Company, if at any time prior to the
Effective Time the board of directors of the Company (i) shall withdraw
or modify in any manner adverse to Parent its approval or recommendation
of the Merger Agreement, the Offer, the Merger or the other transactions
contemplated by the Merger Agreement, (ii) shall approve any Alternative
Proposal (as defined below, see "Alternative Proposals"), or (iii) shall
resolve to take any of the actions specified in sub-clause (i) or
(ii) of this clause (c);
(d) by Parent, by written notice to the Company if (i) Parent shall
terminate the Offer prior to accepting for payment Shares tendered
therein as provided in the Merger Agreement in one or more of the
circumstances set forth in Exhibit 1.1 thereto (See Section 14. "Certain
Conditions of the Offer"), or (ii) any of the conditions to the Merger
described above (See "Conditions to the Merger") have not been satisfied;
(e) by the Company, by written notice to Parent if any of the conditions to
the Merger described above (See "Conditions to the Merger") have not been
satisfied;
(f) by the Company, by written notice to Parent, if the board of directors
of the Company, in the good faith exercise of its business judgment,
after the receipt of written advice of Winthrop, Stimson, Putnam &
Roberts, the Company's legal counsel, has determined that the board of
directors of the Company continuing to recommend to the stockholders of
the Company the approval of the Merger Agreement and the Offer or the
Merger would be a breach of the fiduciary duty of the board of directors
of the Company under New York law;
(g) by Parent or the Company, by written notice to the other, if (i) upon a
vote at the meeting of the holders of Shares for purposes of approving
the Merger, if required by the BCL, shareholder approval shall not have
been obtained or (ii) such meeting, if required by the BCL, shall not
have been held by March 31, 2001;
(h) by Parent or the Company, by written notice to the other, if any court
of competent jurisdiction or other federal, state, provincial, local or
foreign government or governmental department, commission,
instrumentality, board, bureau, agency or authority shall have issued an
order, decree or ruling or taken any other action permanently enjoining,
restraining or otherwise prohibiting the Offer, the Merger or the
consummation of the other material transactions contemplated by the
Merger Agreement and such order, decree, ruling or other action shall
have become final and non-appealable; or
(i) by Parent if there shall have been a material breach of Section 4.5 of
the Merger Agreement, pertaining to Alternative Proposals (See
"Alternative Proposals" below).
24
ALTERNATIVE PROPOSALS. The Merger Agreement provides that, in consideration
of the substantial expenditure of time, effort and expense undertaken and to be
undertaken by Parent and Purchaser in connection with the Offer and the Merger,
and as a material condition to the execution and delivery of the Merger
Agreement by Parent and Purchaser, the Company and its subsidiaries covenant
that, until such time as the Merger Agreement may be terminated as provided
therein, none of them shall, nor shall any of them permit any officer, director
or employee of the Company, any subsidiary, or any affiliate thereof to, or
authorize any investment banker, attorney, accountant or other representative
retained by the Company, any subsidiary, or any affiliate thereof to, directly
or indirectly, solicit or encourage, or furnish information with respect to the
Company or any subsidiary to, or otherwise have any communication with, any
person in connection with the possible sale of the Company or any subsidiary, or
any affiliate or asset thereof, or any merger or similar transaction with
respect thereto (an "ALTERNATIVE PROPOSAL"); provided, however, that if and so
long as the Company and each subsidiary has complied in all material respects
with its obligations under Section 4.5 of the Merger Agreement, if the Company
receives an unsolicited Alternative Proposal then (1) the Company may discuss
such Alternative Proposal with the party presenting such Alternative Proposal,
participate in negotiations with respect to such Alternative Proposal with the
party making such proposal and its representatives, and provide information with
respect to the Company to such party and its representatives, if and to the
extent, but only to the extent, that the members of the board of directors of
the Company reasonably believe, after the receipt of written advice of Winthrop,
Stimson, Putnam & Roberts, the Company's legal counsel, that the directors of
the Company are under a fiduciary obligation to so cooperate with such party,
(2) the Company shall promptly notify Parent and Purchaser orally and in writing
of the receipt of any such Alternative Proposal, and (3) the Company may engage
an investment banking firm or other financial advisor to assist it in connection
with such Alternative Proposal discussions and negotiations.
FEES AND EXPENSES; BREAKUP FEE. The Merger Agreement provides that all fees
and expenses incurred in connection with the Merger Agreement, the Offer, the
Merger and the other transactions contemplated by the Merger Agreement shall be
paid by the party incurring such fees or expenses, whether or not the Merger is
consummated.
The Company will pay to Parent a fee of $750,000 (the "BREAKUP FEE") (x) if
at any time prior to the Effective Time the board of directors of the Company
(i) shall withdraw or modify in any manner adverse to Parent its approval or
recommendation of the Merger Agreement, the Offer, the Merger or the other
transactions contemplated by the Merger Agreement, (ii) shall approve any
Alternative Proposal, or (iii) shall resolve to take any of the actions
specified in sub-clause (i) or (ii) of this paragraph or (y) there shall have
been a material breach by the Company of Section 4.5 of the Merger Agreement
(pertaining to Alternative Proposals).
CONDUCT OF BUSINESS. The Merger Agreement provides that during the period
from the date of the Merger Agreement to the Effective Time, the Company and its
subsidiaries shall, and the Company shall cause the subsidiaries to,
(a) conduct their business and operations only according to their ordinary and
usual course of business as presently and formerly conducted, and (b) use
commercially reasonable efforts to preserve intact the Company's and the
subsidiaries' business organization, keep available the services of their
officers and employees and maintain satisfactory relationships with their
licensors, suppliers, distributors, customers, subcontractors, independent
contractors, partners or other co-owners in any venture, and others having
business relationships with them, and, pending the Effective Time and except as
may be first approved in writing by Parent and Purchaser or as is otherwise
permitted or required by the Merger Agreement, neither the Company nor any
subsidiary will, and the Company will not cause or allow any subsidiary to, in
each case subject to commercially reasonable efforts, take any action which if
it had been taken after December 31, 1999 and prior to the date of the Merger
Agreement would have resulted in a misrepresentation or breach of warranty under
Article II of the Merger Agreement.
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COORDINATION. During the period from the date of the Merger Agreement to
the Effective Time, the Company and its subsidiaries shall, and the Company
shall cause the subsidiaries to, confer on a regular and frequent basis with one
or more designated representatives of Parent and Purchaser to report material
operational matters and to report the general status of on-going operations. The
Company and the subsidiaries shall, and the Company shall cause the subsidiaries
to, notify Parent and Purchaser of any event which if it had occurred after
December 31, 1999 and prior to the date of the Merger Agreement would have
resulted in a misrepresentation or breach of warranty under Article II of the
Merger Agreement, and of any unexpected event or other change in the normal
course of their business or in the operation of their properties and of any
governmental complaints, investigations or hearings, or communications
indicating that the same may be contemplated, litigation, claims, arbitration,
adjudicatory proceedings, and to keep Parent and Purchaser reasonably fully
informed of such events and permit its representatives reasonably prompt access
to all materials prepared in connection therewith, provided that in no event
shall Parent or Purchaser interfere with the normal business operations of the
Company. The scope of the parties' obligations as set forth in this paragraph
shall be limited to the minimum extent required to conform to applicable law.
STOCK OPTIONS. The Merger Agreement provides that promptly following the
acceptance for payment of Shares pursuant to the Offer (the "ACQUISITION DATE"),
each holder of an option (an "EMPLOYEE OPTION") to purchase Shares granted by
the Company pursuant to the Company's 1991 Stock Option Plan and the 1997 Stock
Option Plan (the "PLANS") which is outstanding as of the date of the Merger
Agreement, August 30, 2000, and which has not been exercised prior to the
Acquisition Date, whether or not then exercisable or vested, shall be entitled
to receive from Purchaser, upon the disposition of or as consideration for such
Employee Option, a cash payment in an amount per share equal to the excess of
$4.00 over the Option Price (as defined in the Plans) of such Employee Option,
multiplied by the number of Shares covered by such Employee Option, subject to
any required withholding taxes pursuant to the legislation of the jurisdiction
where the employment is exercised; provided, however, that to the extent $4.00
is less than the Option Price of any Employee Option, the holder of any such
Employee Option shall not receive any payment therefor, but rather all of the
same shall be cancelled by the Parent without further obligation on the part of
the Parent, the Purchaser or the Company. Prior to the Acquisition Date, the
Company agrees to use its commercially reasonable best efforts to attempt to
obtain any consents from holders of Employee Options which may be necessary or
appropriate to effectuate the foregoing. It is anticipated that the cost to the
Purchaser of its compliance with these provisions will be approximately
$330,000.
REASONABLE EFFORTS; NOTIFICATION. The Merger Agreement provides that each
of the parties shall deliver or cause to be delivered at the Effective Time, and
at such other times and places as shall be reasonably necessary or desirable,
such additional instruments and other documents, and shall take such other
action, as the other parties may reasonably request for the purpose of carrying
out the transactions contemplated in the Merger Agreement.
REPRESENTATIONS AND WARRANTIES. The Merger Agreement contains various
customary representations and warranties, including representations relating to
corporate existence and power; capitalization; corporate authorizations;
subsidiaries; Commission filings; financial statements; absence of certain
changes; absence of restrictions on ability to compete; government
authorizations; litigation; brokers' and other fees and the opinion of the
Company's financial advisor.
Certain representations and warranties in the Merger Agreement provide
exceptions for items that are not "material" or that are not reasonably likely
to have a "Material Adverse Effect". For purposes of the Merger Agreement and
the Offer, a "MATERIAL ADVERSE EFFECT" means a material adverse effect on the
business or financial condition of the Company and its subsidiaries, taken as a
whole.
26
PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR WAIVER. The Merger
Agreement may be amended by the parties at any time by an instrument in writing
signed on behalf of each of the parties thereto.
At any time prior to the Effective Time, the parties may (a) extend the time
for the performance of any of the obligations or other acts of the other
parties, (b) waive any inaccuracies in the representations and warranties
contained in the Merger Agreement or in any document delivered pursuant thereto
or (c) waive compliance with any of the agreements or conditions contained
therein. Any agreement on the part of a party to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf of
such party. The failure by any party to the Merger Agreement to assert any of
its rights under the Merger Agreement or otherwise shall not constitute a waiver
of such rights.
THE STOCK PURCHASE AGREEMENT
The following summary of the Stock Purchase Agreement is qualified in its
entirety by reference to the Stock Purchase Agreement, a copy of which is filed
as Exhibit (d)(2) to the Schedule TO. You should read the Stock Purchase
Agreement in its entirety for a more complete description of the matters
summarized below.
The Stock Purchase Agreement provides, among other things, that the Wyant
Family (as defined in "Introduction" above), as sellers under the Agreement,
will sell to Purchaser, by tendering in the Offer, all of the Shares owned
directly or indirectly by them, consisting of 1,261,352 Shares, which
constitutes approximately fifty-six percent of all of the issued and outstanding
Shares. In addition, James A. Wyant, as a seller under the Agreement, will sell
to Parent, at the time Purchaser purchases the Shares pursuant to the Offer, all
of the Class E Exchangeable Preferred Stock ("PREFERRED STOCK") of Wood
Wyant Inc., a wholly owned subsidiary of the Company, ("WOOD WYANT"), owned
directly or indirectly by him, which are exchangeable, on demand and without
additional consideration, for Shares on a one-for-one basis, at a purchase price
of $4.00 per share of such Preferred Stock. Parent also agrees in the Stock
Purchase Agreement to guarantee to members of the Wyant Family the full and
faithful performance of Wood Wyant of its obligations under certain other
classes of preferred stock owned directly or indirectly by some or all members
of the Wyant Family.
THE CONFIDENTIAL DISCLOSURE AND STANDSTILL AGREEMENT
The following summary of the Confidential Disclosure and Standstill
Agreement is qualified in its entirety by reference to the Confidential
Disclosure and Standstill Agreement, a copy of which is filed as Exhibit (d)(3)
to the Schedule TO. You should read the Confidential Disclosure and Standstill
Agreement in its entirety for a more complete description of the matters
summarized below.
Cascades Inc., the corporate parent of Parent, and the Company entered into
a Confidential Disclosure and Standstill Agreement on June 28, 2000. Pursuant to
the Confidential Disclosure and Standstill Agreement, Cascades Inc. on behalf of
itself and its affiliates including Parent and Purchaser, and the Company
agreed, subject to certain exceptions, to keep confidential certain information
provided by the Company or its representatives. The Confidential Disclosure and
Standstill Agreement also provides, among other things, that, prior to Parent's
purchase of any Shares in which James A. Wyant has a beneficial interest,
whether pursuant to the Stock Purchase Agreement described above or otherwise,
Parent shall make an offer to all other holders of the Shares to purchase such
holders' shares on terms no less favorable to them than those being offered to
James A. Wyant.
OPINION OF THE COMPANY'S FINANCIAL ADVISOR
As previously stated in the "Introduction," Houlihan Lokey has acted as the
Company's financial advisor in connection with the Offer and the Merger, and in
that connection has prepared and delivered to the Company's Board of Directors
(the "Board") an opinion dated August 30,2000 (the "Fairness
27
Opinion") to the effect that, as of such date, and based and in reliance upon
the matters described in the Fairness Opinion, the consideration to be received
by the holders of the Shares (other than the Wyant Family) in the Offer and the
Merger is fair to such holders from a financial point of view.
Parent and the Purchaser have been informed by Houlihan Lokey of the
following with regard to the preparation of fairness opinions generally and the
preparation of the Fairness Opinion.
The preparation of a fairness opinion is a complex process and is not
necessarily susceptible to partial analysis or summary description. The
following is a brief summary and general description of the valuation
methodologies utilized by Houlihan Lokey. The summary does not purport to be a
complete statement of the analyses and procedures applied, the judgements made
or the conclusion reached by Houlihan Lokey or a complete description of its
presentation. Houlihan Lokey believes, and so advised the Board, that its
analyses must be considered as a whole and that selecting portions of its
analyses and of the factors considered by it, without considering all factors
and analyses, could create an incomplete view of the process underlying its
analyses and opinions.
The Company retained Houlihan Lokey to render an opinion as to the fairness
to the Company, from a financial point of view, of the Offer and the Merger
pursuant to the Merger Agreement (the "Transaction"). At the August 30, 2000
meeting of the Board, Houlihan Lokey presented its analysis as hereinafter
described and delivered its written opinion that as of such date and based on
the matters described therein, the consideration to be received by the holders
of the Shares (other than the Wyant Family) in the Transaction is fair to such
holders from a financial point of view.
THE COMPLETE TEXT OF HOULIHAN LOKEY'S FAIRNESS OPINION IS SET FORTH IN FULL
AS AN ANNEX TO THE SCHEDULE 14D-9 DESCRIBED IN THE "INTRODUCTION". THE SUMMARY
OF THE FAIRNESS OPINION SET FORTH BELOW IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FAIRNESS OPINION. THE COMMON STOCKHOLDERS ARE URGED TO READ
SUCH FAIRNESS OPINION CAREFULLY IN ITS ENTIRETY FOR A DESCRIPTION OF THE
PROCEDURES FOLLOWED, THE FACTORS CONSIDERED AND THE ASSUMPTIONS MADE BY HOULIHAN
LOKEY.
Houlihan Lokey's Fairness Opinion to the Board addresses only the fairness
of the consideration to be received by the holders of the Shares (other than the
Wyant Family) from a financial point of view, and does not constitute a
recommendation to the stockholders as to whether such stockholders should tender
their Shares pursuant to the Offer. Houlihan Lokey's Fairness Opinion does not
address the Company's underlying business decision to effect the Transaction.
Houlihan Lokey has not been requested to, and did not, solicit third party
indications of interest in acquiring all or part of the Company. Furthermore, at
the Board's request, Houlihan Lokey did not (i) participate in the negotiations
with regard to the Transaction, nor (ii) advise the Board with respect to their
alternatives to the Transaction.
In connection with the preparation of its Fairness Opinion, Houlihan Lokey
made such reviews, analyses and inquiries as they deemed necessary and
appropriate under the circumstances. Among other things, Houlihan Lokey:
(i) reviewed the Company's audited financial statements on Form 10-K for the
three fiscal years ended December 31, 1999, and unaudited financial statements
on Form 10-Q for the two quarters ended June 30, 2000, which the Company's
management has identified as being the most current financial statements
available; (ii) reviewed internally prepared, unaudited financial statements for
the Company's subsidiary Wood Wyant Inc. ("Wood Wyant") for the two fiscal years
ended December 31, 1999; (iii) reviewed internally prepared, unaudited financial
statements for the Company's subsidiary IFC Disposables, Inc. ("IFC") for the
two fiscal years ended December 31, 1999; (iv) spoke with certain members of the
senior management of the Company to discuss the operations, financial condition,
future prospects and projected operations and performance of the Company;
(v) reviewed forecasts and projections prepared by the Company's management with
respect to Wood Wyant and IFC for the fiscal years ending December 31, 2000
through 2005; (vi) reviewed the draft of this Offer to Purchase dated
August 24, 2000; (vii) reviewed the draft of the Merger Agreement dated
August 24, 2000; (viii) reviewed the draft of the Stock Purchase Agreement dated
August 28, 2000; (ix) reviewed the
28
historical market prices and trading volume for the Company's publicly traded
securities; (x) reviewed certain publicly available financial data for certain
companies that Houlihan Lokey deems comparable to the Company, and publicly
available prices paid in other transactions that Houlihan Lokey considered
similar to the Transaction; and (xi) conducted such other studies, analyses and
inquiries as Houlihan Lokey deemed appropriate.
In assessing the financial fairness of the Transaction to the Company,
Houlihan Lokey: (i) analyzed the value of the Company implied by the Offer;
(ii) performed an independent valuation of the Company's wholly-owned
subsidiaries Wood Wyant and IFC; (iii) valued the preferred stock of the Company
and Wood Wyant; (iv) compared the Offer to Houlihan Lokey's independent
valuation of the Company; and (v) considered certain strategic alternatives
available to the Company.
VALUATION OF WYANT.
Houlihan Lokey completed an independent valuation of the Company using the
market multiple, discounted cash flow and comparable transaction approaches.
Each approach was performed for the Company's two operating subsidiaries, Wood
Wyant and IFC.
MARKET MULTIPLE APPROACH. The first approach, the market
multiple approach involved the multiplication of revenue and cash flow measures
by appropriate risk-adjusted multiples. Multiples were determined through an
analysis of certain publicly traded companies, selected on the basis of
operational and economic similarity with the principal business operations of
Wood Wyant and IFC respectively. Revenue and cash flow multiples were calculated
for the comparative companies based upon daily trading prices. A comparative
risk analysis between each of Wood Wyant and IFC and their respective tier of
public companies formed the basis for the selection of appropriate risk adjusted
multiples for Wood Wyant and IFC. The risk analysis incorporated both
quantitative and qualitative risk factors, which relate to, among other things,
the nature of the industry in which Wood Wyant, IFC, and the other comparative
companies were engaged.
For purposes of its analysis, Houlihan Lokey selected four publicly traded
distributor companies as comparable to Wood Wyant. The companies include
Avnet Inc., Daisytek International Corp., Handleman Co., and United Stationers.
In addition, Houlihan Lokey selected seven publicly traded tissue and/or
paper companies as comparable to IFC. The companies include Boise Cascade Corp.,
Chesapeake Corp., Ecolab, Fort James, Ivex Packaging Corp., Kimberly-Clark, and
Tufco Tech Inc.
DISCOUNTED CASH FLOW APPROACH. In the second approach, the
discounted cash flow approach, pro forma projections prepared by the Company's
management were utilized. The projected cash flows were analyzed on a
"debt-free" basis (before cash payments to equity and interest-bearing debt
investors) in order to develop a value indication for each of Wood Wyant and
IFC. A provision for the value of each of Wood Wyant and IFC at the end of the
forecast period, or terminal value, was also made. The present value of the
interim cash flows and the terminal value was determined using a risk-adjusted
rate of return or "discount rate." The discount rate, in turn, was developed
through an analysis of rates of return on alternative investment opportunities
on investments in companies with similar risk characteristics to each of Wood
Wyant and IFC.
COMPARABLE TRANSACTION APPROACH. The final approach, the
comparable transaction approach, also involved multiples of revenue and cash
flow. Multiples analyzed in this approach involved controlling interest
transactions for companies with operations similar in some manner to either Wood
Wyant's or IFC's operations. For Wood Wyant, Houlihan Lokey analyzed six
transactions completed between 1997 and 2000. For IFC, Houlihan Lokey analyzed
two transactions completed between 1998 and 1999.
29
Houlihan Lokey also considered the impact of non-allocated corporate
expenses. Houlihan Lokey informed the Board that based on these three
approaches, and the consideration of non-allocated corporate expenses, Houlihan
Lokey concluded that the value of the Company on a total enterprise value basis
("TEV") is reasonably stated in the range of $23.0 million to $26.5 million.
After the addition of cash and subtraction of debt and the Class A, B and F
preferred stocks, Houlihan Lokey concluded that the common equity value of the
Company is reasonably stated in the range of $3.20 to $4.00 per share.
FAIRNESS ANALYSIS.
To determine the fairness of the Transaction to the Company from a financial
point of view, Houlihan Lokey performed a two-part fairness analysis. The first
part involved a comparison of the value of the Offer to Houlihan Lokey's
independent valuation of the Company. The second part of the analysis involved a
comparison of the control premium implied by the Offer to control premiums
observed in transactions deemed to be comparable to the Transaction.
For the first part of this analysis Houlihan Lokey noted that the Offer of
$4.00 per Share was at the upper most end of Houlihan Lokey's valuation range of
$3.20 to $4.00 per Share.
For the second part of this analysis Houlihan Lokey analyzed the control
premium implied by the Offer to control premiums observed in transactions deemed
to be comparable to the Transaction. Houlihan Lokey considered the same
transactions which were utilized as part of the comparable transaction approach.
Houlihan Lokey observed that for the comparable transaction the one week control
premiums ranged from a discount of 2.9% to a premium of 62.2% with a median of
35.1%. Houlihan Lokey noted that the one week control premium implied by the
Offer made by the Purchaser herein is 68.4%.
ASSESSMENT OF THE COMPANY'S STRATEGIC ALTERNATIVES TO THE TRANSACTION.
In evaluating the fairness of the Transaction, from a financial point of
view, Houlihan Lokey considered the expected value to Houlihan Lokey of
completing the Transaction and certain alternatives to the Transaction. With
regard to each alternative, Houlihan Lokey's analysis qualitatively considered
the valuation implications to the Company, the probability of successfully
completing the alternative, and the cost and time to implement. In assessing
strategic alternatives available, Houlihan Lokey also considered the agreement
of the Wyant Family to tender their Shares.
For purposes of this analysis Houlihan Lokey considered the following
strategic alternatives: (i) status quo; (ii) sale to another buyer; and
(iii) liquidation of the Company. Houlihan Lokey noted that of the strategic
alternatives considered, the Transaction appears to provide the greatest value
to the Company.
Houlihan Lokey relied upon and assumed, without independent verification,
that the financial forecasts and projections provided to them, and as adjusted
based on their discussions with management, were reasonably prepared and
reflected the best currently available estimates of the future financial results
and condition of the Company, and that there had been no material change in the
assets, financial condition, business or prospects of the Company since the date
of the most recent financial statements made available to them.
Houlihan Lokey did not independently verify the accuracy and completeness of
the information supplied to them with respect to the Company and does not assume
any responsibility with respect to it. Houlihan Lokey has not made any
independent appraisal of any of the properties or assets of the Company.
Houlihan Lokey's opinion was necessarily based on business, economic, market and
other conditions as they existed and could be evaluated by them at the date of
the Fairness Opinion.
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Houlihan Lokey is a nationally recognized investment banking firm with
special expertise in, among other things, valuing businesses and securities and
rendering fairness opinions. Houlihan Lokey is continually engaged in the
valuation of businesses and securities in connection with mergers and
acquisitions, leveraged buyouts, private placements of debt and equity,
corporate reorganizations, employee stock ownership plans, corporate and other
purposes. The Company selected Houlihan Lokey because of its experience and
expertise in performing valuation and fairness analysis. Houlihan Lokey does not
beneficially own nor has it ever beneficially owned any interest in the Company.
FEES AND EXPENSES. Pursuant to an agreement dated May 22, 2000, Houlihan
Lokey was retained by the Company to (i) prepare an independent valuation of the
Company on a controlling interest basis, and (ii) render an opinion as to the
fairness, from a financial point of view, to the Company as to the fairness of
the Transaction. The Company has agreed to pay Houlihan Lokey total fees of
$100,000 plus its reasonable out-of-pocket expenses incurred in connection with
the rendering of a fairness opinion. The Company has further agreed to indemnify
Houlihan Lokey against certain liabilities and expenses in connection with the
rendering of its services.
PLANS FOR THE COMPANY
Following completion of the Offer and the Merger, Parent intends to operate
the Company as a subsidiary of Parent under the direction of Parent's
management. Parent's principal reason for acquiring the Company is the strategic
fit of the Company's operations with Parent's operations. Parent intends to
continue to review the Company and its assets, corporate structure, dividend
policy, capitalization, operations, properties, policies, management and
personnel and to consider what, if any, changes would be desirable in light of
the circumstances then existing, and reserves the right to take such actions or
effect such changes as it deems desirable. Such changes could include changes in
the Company's corporate structure, operational headquarters, capitalization,
management or dividend policy.
APPRAISAL RIGHTS
The holders of Shares do not have appraisal rights as a result of the Offer.
However, if the Merger is consummated, holders of Shares at the Effective Time
will have certain rights pursuant to the provisions of Sections 910 and 623 of
the BCL (the "APPRAISAL PROVISIONS") to dissent and demand appraisal of their
Shares. Under the Appraisal Provisions, dissenting stockholders who comply with
the applicable statutory procedures will be entitled to demand payment of fair
value for their stock. If a stockholder and the surviving corporation do not
agree on such fair value, the stockholder will have the right to a judicial
determination of fair value of such stockholder's Shares and to receive payment
of such fair value in cash, together with any interest as determined by the
court. Any such judicial determination of the fair value of Shares could be
based upon factors other than, or in addition to, the price per Share to be paid
in the Merger or the market value of the Shares. The value so determined could
be more or less than the price per Share to be paid in the Merger.
The foregoing summary of the Appraisal Provisions does not purport to be
complete and is qualified in its entirety by reference to the Appraisal
Provisions, a copy of which are filed as Exhibit (f) to the Schedule TO. You
should read the Appraisal Provisions in their entirety for a more complete
description thereof. FAILURE TO FOLLOW THE STEPS REQUIRED BY THE APPRAISAL
PROVISIONS FOR PERFECTING APPRAISAL RIGHTS MAY RESULT IN THE LOSS OF SUCH
RIGHTS.
GOING PRIVATE TRANSACTIONS
Rule 13e-3 under the Exchange Act is applicable to certain "going private"
transactions. The Purchaser does not believe that Rule 13e-3 will be applicable
to the Merger unless the Merger is consummated more than one year after the
termination of the Offer. If applicable, Rule 13e-3 requires, among other
things, that certain financial information concerning the fairness of the Merger
and the
31
consideration offered to minority stockholders in the Merger be filed with the
Commission and disclosed to stockholders prior to the consummation of the
Merger.
13. DIVIDENDS AND DISTRIBUTIONS
The Merger Agreement provides that during the period from the date of the
Merger Agreement to the Effective Time, neither the Company nor any subsidiary
shall declare, set aside, or pay any dividend or make any distribution on any
shares of its capital stock, or redeem, purchase or otherwise acquire any shares
of its capital stock or any option, warrant or other right to purchase or
acquire any such shares, except for the required redemptions of and dividends on
the various classes of Preferred Stock of Wood Wyant Inc., in accordance with
the terms thereof.
14. CERTAIN CONDITIONS OF THE OFFER
The Merger Agreement provides that the Purchaser will not be required to
accept for payment or, subject to any applicable rules and regulations of the
Commission, including Rule 14e-1(c) under the Exchange Act (relating to the
Purchaser's obligation to pay for or return tendered Shares promptly after the
termination or withdrawal of the Offer), to pay for any Shares tendered pursuant
to the Offer unless any waiting periods under the HSR Act or the Competition Act
(Canada) applicable to the purchase of Shares pursuant to the Offer shall have
expired or been terminated.
Notwithstanding any other provision of the Offer or the Merger or the Merger
Agreement, Purchaser will not be required to accept for payment or, subject to
any applicable rules and regulations of the Commission, including the foregoing
Rule 14e-1(c), to pay for, any Shares not theretofore accepted for payment or
paid for, and may terminate or amend the Offer as provided in the Merger
Agreement, (A) with the consent of the Company, or (B) if at the expiration date
of the Offer, in the case of paragraph (a) below, or at any time on or after the
date of the Merger Agreement, and before the acceptance of such Shares for
payment or the payment therefor (the "TENDER OFFER CLOSING"), in the case of
paragraphs (b) through (h) below, any of the following conditions exist:
(a) INJUNCTION. An injunction which prevents the acceptance for
payment of, or payment for, any Shares shall have been issued and shall
remain in effect.
(b) ILLEGALITY. There shall be any action taken, or any statute, rule,
regulation or order enacted, promulgated or issued or deemed applicable to
the Offer or the Merger by any United States or Canadian federal or state or
provincial government or governmental agency or instrumentality or court,
which would make the acceptance for payment of, or payment for, any Shares,
or consummation of the Merger, illegal.
(c) MATERIAL ADVERSE CHANGE. Between December 31, 1999 and the date of
the Tender Offer Closing (the "TENDER OFFER CLOSING DATE"), there shall have
been a material adverse change in the business or financial condition of the
Company and its subsidiaries taken as a whole (a "MATERIAL ADVERSE EFFECT"),
or the Company shall have failed to deliver to Parent a certificate, dated
the Tender Offer Closing Date, certifying the absence of any such Material
Adverse Effect.
(d) FALSITY OF REPRESENTATIONS AND WARRANTIES. Any one or more of the
representations and warranties of the Company contained in the Merger
Agreement, including all Schedules and Exhibits delivered pursuant thereto,
shall not be true and correct in all material respects on and as of any
Tender Offer Closing Date with the same force and effect as though such
representations and warranties had been made on and as of such Date, or,
with respect to any representation or warranty contained in Sections 2.3
("No Material Interest"), 2.4 ("The Company's and Each Subsidiary's
Existence and Good Standing; Authority"), 2.6 ("Subsidiaries and
Investments"), 2.7 ("SEC Reports; Financial Statements"), 2.8 ("No
Competition Restrictions") or 2.9 ("No Litigation"), if not true and correct
to such extent the particular facts and circumstances which shall render
such
32
representations or warranties no longer to be true and correct to such
extent are not such as have resulted in a Material Adverse Effect, or the
Company shall have failed to deliver to Parent a certificate, dated the
Tender Offer Closing Date, certifying the absence of any such falsity.
(e) NON-PERFORMANCE OF AGREEMENTS. Any one or more of the covenants
and agreements of the Company to be performed on or before the Tender Offer
Closing Date pursuant to the terms of the Merger Agreement shall not have
been duly performed in all material respects, except where the failure of
such performance shall not result in a Material Adverse Effect, or the
Company shall have failed to deliver to Parent a certificate, dated the
Tender Offer Closing Date, certifying the absence of any non-performance.
(f) APPROVALS. Any one or more of the governmental or other consents
and approvals necessary to permit the consummation of the transactions
contemplated by the Merger Agreement shall not have been received, or
applicable waiting periods shall not have run, or the Company shall have
failed to deliver to Parent a certificate, dated the Tender Offer Closing
Date, certifying the absence of such non-approval or consent.
(g) PROCEEDINGS. Any one or more of the proceedings to be taken in
connection with the transactions contemplated in the Merger Agreement and
all documents incident thereto shall not be reasonably satisfactory in form
and substance to Parent and its counsel, or Parent shall not have received
copies of all such documents and other evidence as Parent or its counsel may
reasonably request in order to establish the consummation of such
transactions and the taking of all proceedings in connection therewith.
(h) TERMINATION OF AGREEMENT. The Merger Agreement shall have been
terminated in accordance with its terms or the Offer shall have been
terminated with the consent of the Company.
The foregoing conditions are for the sole benefit of Parent and may be
asserted by Parent regardless of the circumstances giving rise to such condition
or may be waived by Parent in whole or in part at any time and from time to time
in its sole discretion. The failure by Parent at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right, the waiver of
any such right with respect to particular facts and other circumstances shall
not be deemed a waiver with respect to any other facts and circumstances, and
each such right shall be deemed an ongoing right that may be asserted at any
time and from time to time.
15. CERTAIN LEGAL MATTERS
Except as described in this Section 15, based on a review of publicly
available filings made by the Company with the Commission and other publicly
available information concerning the Company and discussions of representatives
of Parent with representatives of the Company, none of the Purchaser, Parent or
the Company is aware of any license or regulatory permit that appears to be
material to the business of the Company and its subsidiaries, taken as a whole,
that might be adversely affected by the Purchaser's acquisition of Shares (and
the indirect acquisition of the stock of the Company's subsidiaries) as
contemplated herein or of any approval or other action by any governmental
entity that would be required or desirable for the acquisition or ownership of
Shares by the Purchaser as contemplated herein. Should any such approval or
other action be required or desirable, Parent and the Purchaser currently
contemplate that such approval or other action will be sought, except as
described below under "State Takeover Laws". While (except as otherwise
expressly described in this Section 15) the Purchaser does not presently intend
to delay the acceptance for payment of or payment for Shares tendered pursuant
to the Offer pending the outcome of any such matter, there can be no assurance
that any such approval or other action, if needed, would be obtained or would be
obtained without substantial conditions or that failure to obtain any such
approval or other action might not result in consequences adverse to the
Company's business or that certain parts of the Company's business might not
have to be disposed of if such approvals were not obtained or such other actions
were not taken or in
33
order to obtain any such approval or other action. If certain types of adverse
action are taken with respect to the matters discussed below, the Purchaser
could, subject to the terms and conditions of the Merger Agreement, decline to
accept for payment or pay for any Shares tendered. See Section 14 for a
description of certain conditions to the Offer.
STATE TAKEOVER LAWS. A number of states throughout the United States have
enacted takeover statutes that purport, in varying degrees, to be applicable to
attempts to acquire securities of corporations that are incorporated or have
assets, stockholders, executive offices or places of business in such states. In
EDGAR V. MITE CORP., the Supreme Court of the United States held that the
Illinois Business Takeover Act, which involved state securities laws that made
the takeover of certain corporations more difficult, imposed a substantial
burden on interstate commerce and therefore was unconstitutional. In CTS CORP.
V. DYNAMICS CORP. OF AMERICA, however, the Supreme Court of the United States
held that a state may, as a matter of corporate law and, in particular, those
laws concerning corporate governance, constitutionally disqualify a potential
acquiror from voting on the affairs of a target corporation without prior
approval of the remaining stockholders, provided that such laws were applicable
only under certain conditions. Subsequently, a number of U.S. federal courts
ruled that various state takeover statutes were unconstitutional insofar as they
apply to corporations incorporated outside the state of enactment.
Based on information supplied by the Company and the adoption and approval
of the Merger Agreement and the approval of the Merger and the Offer by the
Board of Directors of the Company, the Purchaser does not believe that any state
takeover statutes or similar laws purport to apply to the Offer or the Merger.
Neither the Purchaser nor Parent has currently complied with any state takeover
statute or regulation. The Purchaser reserves the right to challenge the
applicability or validity of any state law purportedly applicable to the Offer
or the Merger and nothing in this Offer to Purchase or any action taken in
connection with the Offer or the Merger is intended as a waiver of such right.
If it is asserted that any state takeover statute is applicable to the Offer or
the Merger and an appropriate court does not determine that it is inapplicable
or invalid as applied to the Offer or the Merger, the Purchaser might be
required to file certain information with, or to receive approvals from, the
relevant state authorities, and the Purchaser might be unable to accept for
payment or pay for Shares tendered pursuant to the Offer, or be delayed in
consummating the Offer or the Merger. In such case, the Purchaser may not be
obligated to accept payment or pay for any Shares tendered pursuant to the
Offer. See Section 14.
ANTITRUST
UNITED STATES ANTITRUST LAW. Under the provisions of the HSR Act applicable
to the Offer, the acquisition of Shares under the Offer may be consummated after
the expiration of a 15-calendar day waiting period commenced by the filing of a
Notification and Report Form, which is required to be filed by Cascades as the
ultimate parent entity of Parent, with respect to the Offer, unless Cascades
receives a request for additional information or documentary material from the
Antitrust Division of the Department of Justice or the Federal Trade Commission
(the "FTC") or unless early termination of the waiting period is granted.
Cascades has prepared and made such filing. If, within the initial 15-day
waiting period, either the Antitrust Division or the FTC requests additional
information from Parent concerning the Offer, the waiting period will be
extended and would expire at 11:59 p.m., New York City time, on the tenth
calendar day after the date of substantial compliance by Cascades with such
request. Only one extension of the waiting period pursuant to a request for
additional information is authorized by the HSR Act. Thereafter, such waiting
period may be extended only by court order or with the consent of Cascades. In
practice, complying with a request for additional information or material can
take a significant amount of time. In addition, if the Antitrust Division or the
FTC raises substantive issues in connection with a proposed transaction, the
parties frequently engage in negotiations with the relevant governmental agency
concerning possible means of addressing those issues and may agree to delay
consummation of the transaction while such negotiations continue. Expiration or
termination of the applicable waiting period
34
under the HSR Act is a condition to the Purchaser's obligation to accept for
payment and pay for Shares tendered pursuant to the Offer.
The Merger will not require an additional filing under the HSR Act if the
Purchaser owns 50% or more of the outstanding Shares at the time of the Merger,
which it is assured of doing under the Stock Purchase Agreement, or if the
Merger occurs within one year after the HSR Act waiting period applicable to the
Offer expires or is terminated.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the Purchaser's proposed acquisition
of the Company. At any time before or after the Purchaser's acquisition of
Shares pursuant to the Offer, the Antitrust Division or the FTC could take such
action under the antitrust laws as it deems necessary or desirable in the public
interest, including seeking to enjoin the purchase of Shares pursuant to the
Offer or the consummation of the Merger or seeking the divestiture of Shares
acquired by the Purchaser or the divestiture of substantial assets of the
Company or its subsidiaries or Cascades or its subsidiaries. Private parties may
also bring legal action under the antitrust laws under certain circumstances.
There can be no assurance that a challenge to the Offer on antitrust grounds
will not be made or, if such a challenge is made, of the result thereof.
CANADIAN ANTITRUST LAW. Under the Competition Act (Canada) (the
"COMPETITION ACT"), certain transactions involving the acquisition of voting
shares of a corporation that carries on an operating business in Canada require
notification to the Commissioner of Competition at the Competition Bureau (the
"COMMISSIONER"). If a transaction is subject to the notification requirement (a
"NOTIFIABLE TRANSACTION"), notification must be made either on the basis of a
short-form filing (with a fourteen (14) day waiting period) or a long-form
filing (with a forty-two (42) day waiting period). The decision as to whether to
make a short-form or long-form filing is at the discretion of the parties;
however, if a short-form filing is made, the Commissioner may, within the
14 day waiting period, require that the parties make a long-form filing, thereby
extending the waiting period for a further 42 days following receipt of the
long-form filing.
A Notifiable Transaction may not be completed until the applicable statutory
waiting period has expired. However, the Commissioner's review of a Notifiable
Transaction may take longer than the statutory waiting period. Upon completion
of the Commissioner's review of a Notifiable Transaction, the Commissioner may
decide to (i) challenge the Notifiable Transaction on the basis that it is
likely to substantially lessen or prevent competition and ultimately seek an
order of the Competition Tribunal enjoining or unwinding the Notifiable
Transaction if the parties insist on proceeding with it without addressing the
Commissioner's concerns; (ii) issue a "no-action letter" indicating that the
Commissioner will not challenge the Notifiable Transaction at that time but
retains the authority to do so for three years after completion of the
Notifiable Transaction; or (iii) issue an advance ruling certificate ("ARC").
Where an ARC is issued and the Notifiable Transaction to which the ARC relates
is substantially completed within one year after the ARC is issued, the
Commissioner cannot seek an order of the Competition Tribunal enjoining or
unwinding the Notifiable Transaction solely on the basis of information that is
the same or substantially the same as the information on the basis of which the
ARC was issued.
Based on information provided by the Company, the Purchaser believes that
the purchase and sale of the Shares pursuant to the Offer is a Notifiable
Transaction, and Parent and the Purchaser have filed a short-form notification
filing with the Commissioner on September 1, 2000, and the Company did so on
September 5, 2000. The 14 day waiting period in which the Commissioner could
require the parties to make a long-form filing expires on September 19, 2000.
The obligations of the Purchaser and the Company to consummate the Offer and the
Merger are subject to the condition that the applicable waiting period under the
Competition Act shall have expired.
OTHER FOREIGN ANTITRUST LAWS. Based on information provided by the Company,
the Purchaser does not believe that the antitrust laws of nations other than the
United States and Canada are applicable to the Offer and the Merger. However,
there can be no assurance that a challenge to the Offer under these
35
foreign laws on competition or other grounds will not be made or, if such a
challenge is made, of the result thereof.
16. FEES AND EXPENSES
Parent and the Purchaser have retained MacKenzie Partners, Inc. to act as
the Information Agent and Harris Trust Company of New York to serve as the
Depositary in connection with the Offer. The Information Agent and the
Depositary each will receive reasonable and customary compensation for their
services, be reimbursed for certain reasonable out-of-pocket expenses and be
indemnified against certain liabilities and expenses in connection therewith,
including certain liabilities and expenses under the U.S. federal securities
laws.
Neither the Purchaser nor Parent will pay any fees or commissions to any
broker or dealer or other person in connection with the solicitation of tenders
of Shares pursuant to the Offer. Brokers, dealers, banks, trust companies and
other members will be reimbursed by the Purchaser upon request for customary
mailing and handling expenses incurred by them in forwarding material to their
customers.
17. MISCELLANEOUS
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of such
jurisdiction.
WE HAVE NOT AUTHORIZED ANY PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR PARENT NOT CONTAINED HEREIN OR IN
THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, YOU MUST NOT RELY UPON SUCH
INFORMATION OR REPRESENTATION AS HAVING BEEN AUTHORIZED.
Parent and the Purchaser have filed with the Commission the Schedule TO
pursuant to Rule 14d-3 under the Exchange Act, together with exhibits,
furnishing certain additional information with respect to the Offer, and may
file amendments thereto. In addition, the Company has filed the Schedule 14D-9
pursuant to Rule 14d-9 under the Exchange Act, together with exhibits, setting
forth its recommendation with respect to the Offer and the reasons for such
recommendation and furnishing certain additional related information. Such
Schedules and any amendments thereto, including exhibits, should be available
for inspection and copies should be obtainable in the manner set forth in
Section 8 (except that such material will not be available at the regional
offices of the Commission).
PERKINS ACQUISITION CORP.
September 8, 2000
36
SCHEDULE I
EXECUTIVE OFFICERS AND DIRECTORS OF PERKINS PAPERS LTD. ("PARENT"),
PERKINS ACQUISITION CORP. ("PURCHASER") AND CASCADES INC.
1. EXECUTIVE OFFICERS AND DIRECTORS OF PARENT. The name, citizenship,
business address, present principal occupation or employment and material
occupations, positions, offices or employment for the past five years of each of
the executive officers and directors of Parent are set forth below. Unless
otherwise indicated, all occupations, positions, offices or employment were with
Parent. Unless otherwise indicated, all occupations, positions, offices or
employment were held during the last five years.
PRESENT PRINCIPAL OCCUPATION
MATERIAL POSITIONS HELD
NAME PRESENT BUSINESS ADDRESS DURING THE PAST FIVE YEARS CITIZENSHIP
- ---- -------------------------------- -------------------------------- -----------
EXECUTIVE OFFICERS
Suzanne Blanchet................ Perkins Papers Ltd. President and Chief Executive Canadian
77 Marie Victorin Officer since April 1997;
Candiac, Quebec Executive Vice President prior
J5R 1C3 thereto.
Canada
Laurent Lemaire................. Cascades Inc. Chairman of the Board; Canadian
404 Marie Victorin President and Chief Executive
Kingsey Falls Officer from August 1995 to
Quebec, J0A 1B0 April 1997; President and Chief
Canada Executive Officer,
Cascades Inc.
Michele Beauchamp............... Cascades Inc. Corporate Secretary and Legal Canadian
772 Sherbrooke St. West Counsel since April 1999;
Montreal, Quebec Legal Counsel, Cascades Inc.,
H3A 1G1 since June 1996;
Canada Member of the law firm
Desjardins Ducharme Stein Monast
prior thereto.
Robert F. Hall.................. Cascades Inc. Assistant Corporate Secretary Canadian
404 Marie Victorin since April 1999 and Corporate
Kingsey Falls Secretary prior thereto;
Quebec, J0A 1B0 Vice President, Legal Affairs
Canada and Corporate Secretary,
Cascades Inc.
Matt DelVecchio................. Perkins Papers Ltd. Vice President, Sales and Canadian
77 Marie Victorin Marketing, Commercial and
Candiac, Quebec Industrial Market, since
J5R 1C3 March 1999;
Canada Vice President, Sales and
Marketing, Fireco Inc., from
1997 to 1999;
Vice President and owner of
Dominmarc Inc. in 1995 and 1996.
I-1
PRESENT PRINCIPAL OCCUPATION
MATERIAL POSITIONS HELD
NAME PRESENT BUSINESS ADDRESS DURING THE PAST FIVE YEARS CITIZENSHIP
- ---- -------------------------------- -------------------------------- -----------
Tony Clark...................... 48 N. Dexter Drive Successively Sales Manager; Vice Canadian/
Basking Ridge NJ 07920 President, Sales and Marketing, American
U.S.A. Retail Market; and Vice
President, Sales and Marketing,
Retail Market, United States,
since January 1998;
President of Vision Sales Inc.
prior thereto.
Yvon Jacques.................... Perkins Papers Ltd. Corporate Controller since April Canadian
77 Marie Victorin 1997;
Candiac, Quebec Projects Manager, Cooperative
J5R 1C3 Federee de Quebec, from June
Canada 1996 to April 1997;
Controller, Groupe Paul Masson
Inc. prior thereto.
DIRECTORS
Suzanne Blanchet................ Perkins Papers Ltd. President and Chief Executive Canadian
77 Marie Victorin Officer since April 1997;
Candiac, Quebec Executive Vice President prior
J5R 1C3 thereto.
Canada
Laurent Lemaire................. Cascades Inc. Chairman of the Board; President Canadian
404 Marie Victorin and Chief Executive Officer from
Kingsey Falls August 1995 to April 1997;
Quebec, J0A 1B0 President and Chief Executive
Canada Officer, Cascades Inc.
Alain Lemaire................... Cascades Inc. Executive Vice President, Canadian
404 Marie Victorin Cascades Inc.; President and
Kingsey Falls Chief Executive Officer,
Quebec, J0A 1B0 Norampac Inc.*, since December
Canada 1997; Chairman of the Board,
Rolland Inc.*, since April 1997;
President and Chief Executive
Officer, Rolland Inc.*, from
1992 to April 1997.
Bernard Lemaire................. Cascades Inc. Chairman of the Board, Cascades Canadian
404 Marie Victorin Inc.; Chairman of the Board and
Kingsey Falls Chief Executive Officer, Boralex
Quebec, J0A 1B0 Inc.*, since February 2000;
Canada Chairman of the Board and
President and Chief Executive
Officer, Boralex Inc.*, from
December 1995 to February 2000.
Germain P. Lecours.............. Saint-Aix, Groupe Conseil Senior Partner of Saint-Aix, Canadian
1010 Sherbrooke Str West Groupe Conseil.
Suite 2200
Montreal, Quebec
H3A 2R7
Canada
I-2
PRESENT PRINCIPAL OCCUPATION
MATERIAL POSITIONS HELD
NAME PRESENT BUSINESS ADDRESS DURING THE PAST FIVE YEARS CITIZENSHIP
- ---- -------------------------------- -------------------------------- -----------
Robert P. Kanee................. Cole and Partners Senior Counsel of Cole and Canadian
80 Richmond Street Partners since October 1999;
Suite 2000 Vice President, Abitibi-
Toronto, Ontario Consolidated Inc. prior thereto.
M5H 2A4
Canada
Yves Seguin..................... BMO Harris Private Banking Vice President and Head of BMO Canadian
630 Blvd. Rene-Levesque W. Harris Private Banking, Quebec,
Montreal, since June 2000; Vice President,
Quebec Private Bank, Quebec, Executive
H3B 1S6 Vice President and Executive
Canada Advisor to the President,
Quebec, Bank of Montreal Group
of Companies, from September
1999 to June 2000;
Vice President, Business
Development, Jones Heward
Investment Management Inc. from
February to September 1999;
Delegate for Canadian Affairs
prior thereto.
2. EXECUTIVE OFFICERS AND DIRECTORS OF THE PURCHASER. The name,
citizenship, business address, present principal occupation or employment and
material occupations, positions, offices or employment for the past five years
of each of the executive officers and directors of the Purchaser are indicated
below. Each executive officer and director is a citizen of Canada. The business
address of each such executive officer and director is Perkins Acquisition Corp.
in care of Perkins Papers Ltd., 77, Marie-Victorin Boulevard, Candiac, Quebec,
J5R 1C3 Canada.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME, POSITION WITH PURCHASER MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ----------------------------- ------------------------------------------------------------
Suzanne Blanchet.......................... (see above information)
President and Director
Laurent Lemaire........................... (see above information)
Director
Michele Beauchamp......................... (see above information)
Secretary
I-3
3. EXECUTIVE OFFICERS AND DIRECTORS OF CASCADES INC. The name,
citizenship, business address, present principal occupation or employment and
material occupations, positions, offices or employment for the past five years
of each of the executive officers and directors of Cascades Inc. are set forth
below. Unless otherwise indicated, all occupations, positions, offices or
employments were with Cascades Inc. Unless otherwise indicated, all occupations,
positions, offices or employment were held during the last five years.
PRESENT PRINCIPAL OCCUPATION
MATERIAL POSITIONS HELD
NAME PRESENT BUSINESS ADDRESS DURING THE PAST FIVE YEARS CITIZENSHIP
- ---- -------------------------------- -------------------------------- -----------
EXECUTIVE OFFICERS
Bernard Lemaire................. Cascades Inc. Chairman of the Board; Canadian
404 Marie Victorin Chairman of the Board and Chief
Kingsey Falls Executive Officer, Boralex
Quebec, J0A 1B0 Inc.*, since February 2000;
Canada Chairman of the Board and
President and Chief Executive
Officer, Boralex Inc.*, from
December 1995 to February 2000.
Laurent Lemaire................. Cascades Inc. President and Chief Executive Canadian
404 Marie Victorin Officer; Chairman of the Board,
Kingsey Falls Perkins Papers Ltd.*, since
Quebec, J0A 1B0 April 1997; President and Chief
Canada Executive Officer, Perkins
Papers Ltd.* from August 1995 to
April 1997.
Alain Lemaire................... Cascades Inc. Executive Vice President; Canadian
404 Marie Victorin President and Chief Executive
Kingsey Falls Officer, Norampac Inc.*, since
Quebec, J0A 1B0 December 1997; Chairman of the
Canada Board, Rolland Inc.*, since
April 1997;
President and Chief Executive
Officer, Rolland Inc.*, from
1992 to April 1997.
Robert F. Hall.................. Cascades Inc. Vice President, Legal Affairs Canadian
404 Marie Victorin and Corporate Secretary.
Kingsey Falls
Quebec, J0A 1B0
Canada
Andre Belzile................... Cascades Inc. Vice President and Chief Canadian
404 Marie Victorin Financial Officer.
Kingsey Falls
Quebec, J0A 1B0
Canada
Norman Boisvert................. Cascades Inc. Vice President, Administration. Canadian
404 Marie Victorin
Kingsey Falls
Quebec, J0A 1B0
Canada
Claude Cossette................. Cascades Inc. Vice President, Human Resources Canadian
404 Marie Victorin since March 1998;
Kingsey Falls Plant Manager from 1996 to 1998
Quebec, J0A 1B0 and Training Coordinator prior
Canada thereto.
I-4
PRESENT PRINCIPAL OCCUPATION
MATERIAL POSITIONS HELD
NAME PRESENT BUSINESS ADDRESS DURING THE PAST FIVE YEARS CITIZENSHIP
- ---- -------------------------------- -------------------------------- -----------
Jean-Luc Bellemare.............. Cascades Inc. Vice president, Information Canadian
404 Marie Victorin Technologies since April 1999;
Kingsey Falls General Manager, Autobus Thomas
Quebec, J0A 1B0 Inc. from 1998 to April 1999;
Canada Executive Vice President and
General Manager, Groupe Sodisco
Howden prior thereto.
Mario Plourde................... Cascades Inc. President and Chief Executive Canadian
404 Marie Victorin Officer, Specialty Products,
Kingsey Falls since May 2000;
Quebec, J0A 1B0 Vice President and Chief
Canada Operating Officer, Specialty
Products, from 1997 to May 2000;
General Manager of the Plastic
Group prior thereto.
Alain Ducharme.................. Cascades Inc. Corporate Vice President since Canadian
404 Marie Victorin June 1997;
Kingsey Falls Vice President Administration,
Quebec, J0A 1B0 Norampac Inc.* from January 1998
Canada to December 1999;
Executive Vice President,
Rolland Inc.* and General
Manager, Moulded Pulp Group,
Cascades Inc. from June 1995 to
June 1996.
DIRECTORS
Bernard Lemaire................. Cascades Inc. Chairman of the Board; Canadian
404 Marie Victorin Chairman of the Board and Chief
Kingsey Falls Executive Officer, Boralex
Quebec, J0A 1B0 Inc.*, since January 2000;
Canada Chairman of the Board and
President and Chief Executive
Officer, Boralex Inc.*, from
December 1995 to February 2000.
Laurent Lemaire................. Cascades Inc. President and Chief Executive Canadian
404 Marie Victorin Officer;
Kingsey Falls Chairman of the Board, Perkins
Quebec, J0A 1B0 Papers Ltd.* since April 1997;
Canada President and Chief Executive
Officer, Perkins Papers Ltd.
from August 1995 to April 1997.
Alain Lemaire................... 404 Marie Victorin Executive Vice President; Canadian
Kingsey Falls President and Chief Executive
Quebec, J0A 1B0 Officer, Norampac Inc.*, since
Canada December 1997;
Chairman of the Board, Rolland
Inc.*, since April 1997;
President and Chief Executive
Officer, Rolland Inc.*, from
1992 to April 1997.
I-5
PRESENT PRINCIPAL OCCUPATION
MATERIAL POSITIONS HELD
NAME PRESENT BUSINESS ADDRESS DURING THE PAST FIVE YEARS CITIZENSHIP
- ---- -------------------------------- -------------------------------- -----------
Andre Belzile................... Cascades Inc. Vice President and Chief Canadian
404 Marie Victorin Financial Officer.
Kingsey Falls
Quebec, J0A 1B0
Canada
Norman Boisvert................. Cascades Inc. Vice President, Administration. Canadian
404 Marie Victorin
Kingsey Falls
Quebec, J0A 1B0
Canada
Martin P. Pelletier............. Rolland Inc. President and Chief Executive Canadian
2 Rolland Avenue Officer, Rolland Inc.*, since
St. Jerome, Quebec April 2000;
J7Z 5S1 Vice President and Chief
Canada Operating Officer --
Containerboard, Norampac Inc.*
from January 1998 to April 2000;
Vice President and Chief
Operating Officer --
Containerboard, Cascades Inc.
prior thereto.
Elise Pelletier................. Norampac Inc. Vice President, Management and Canadian
752 Sherbrooke St. West Human Resources, Norampac Inc.,
Montreal, since January 1998;
Quebec Vice President, Human Resources,
H3A 1G1 Cascades Inc. prior thereto.
Canada
Paul R. Bannerman............... Etcan International Inc. Chairman of the Board, Etcan Canadian
772 Sherbrooke St. West International Inc.
2nd Floor
Montreal, Quebec
H3A 1G1
Canada
Jacques Aubert.................. 799 Principale St. President and Chairman of the Canadian
Ham Nord, Quebec Board and Chief Executive
G0P 1A0 Officer, Junex Inc., since 1998;
Canada Vice President, SOQUIP Inc.,
from 1997 to 1998;
Independent Contractor prior
thereto.
Simon L'Heureux................. 875 Holland St., #402 Retired. Canadian
Quebec, Quebec
G1S 4W2
Canada
Andre Desaulniers............... La Massana Parc Retired. Director of Paperboard Canadian
Edifici Windsor, #3 Industries International Inc.*
Andorra
Europe
Paul Pelletier.................. 280 Place Carillon Consultant. Canadian
Sherbrooke, Quebec
J1J 2L4
Canada
I-6
PRESENT PRINCIPAL OCCUPATION
MATERIAL POSITIONS HELD
NAME PRESENT BUSINESS ADDRESS DURING THE PAST FIVE YEARS CITIZENSHIP
- ---- -------------------------------- -------------------------------- -----------
Louis Garneau................... Louis Garneau Sports Inc. President of Louis Garneau Canadian
30, des Grands-Lacs St. Sports Inc.
St-Augustin-de-Desmaures
Quebec, G3A 2E6
Canada
Sylvie Lemaire.................. Fempro Inc. President and General Manager of Canadian
734 Farrell Street Fempro Inc. since 2000;
Drummondville, Quebec Vice President and General
J2C 5X3 Manager of Fempro Inc. from 1996
Canada to 2000;
President of Inovi Recyclage
Inc. prior thereto
- ------------------------------
* Affiliate of Cascades Inc.
I-7
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for Shares and any other
required documents should be sent or delivered by each stockholder of the
Company or such stockholder's broker, dealer, bank, trust company or other
nominee to the Depositary at one of its addresses set forth below.
THE DEPOSITARY FOR THE OFFER IS:
HARRIS TRUST COMPANY OF NEW YORK
BY HAND OR OVERNIGHT COURIER: BY MAIL:
Harris Trust Company of New York Harris Trust Company of New York
Wall Street Plaza Wall Street Station
88 Pine Street--19th Floor P.O. Box 1023
New York, NY 10005 New York, NY 10268-1023
FOR INFORMATION (AND TO CONFIRM RECEIPT OF FACSIMILE TRANSMISSION):
(212) 701-7624
BY FACSIMILE TRANSMISSION (CONFIRM BY TELEPHONE):
(212) 701-7636
Questions and requests for assistance may be directed to the Information
Agent at its telephone number and address listed below. Additional copies of
this Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed
Delivery or any other tender offer materials may be obtained from the
Information Agent. You may also contact your broker, dealer, bank, trust company
or other nominee for assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
E-mail: proxy@mackenziepartners.com
or
CALL TOLL FREE (800) 322-2885