SILVER TRIANGLE BUILDING
25505 WEST TWELVE MILE ROAD - SUITE 3000
SOUTHFIELD, MI 48034-8339
(248) 353-2700
WWW.CREDITACCEPTANCE.COM
NEWS RELEASE
FOR IMMEDIATE RELEASE DATE: AUGUST 11, 2004
INVESTOR RELATIONS: DOUGLAS W. BUSK
TREASURER
(248) 353-2700 EXT. 432
IR@CREDITACCEPTANCE.COM
NASDAQ SYMBOL: CACC
CREDIT ACCEPTANCE ANNOUNCES:
RENEWAL AND INCREASE OF REVOLVING WAREHOUSE FACILITY &
MODIFIED DUTCH AUCTION TENDER OFFER
SOUTHFIELD, MICHIGAN -- AUGUST 11, 2004 -- CREDIT ACCEPTANCE
CORPORATION (NASDAQ: CACC) Credit Acceptance Corporation (the "Company")
announced today that it has increased the amount of its revolving warehouse
facility with Variable Funding Capital Corporation, a multi-seller commercial
paper conduit administered by Wachovia Securities, from $100 to $200 million.
Additionally, the maturity of the facility was extended from September 28, 2004
to August 9, 2005. Under this facility the Company may contribute dealer-partner
advances to a wholly owned special purpose entity and receive 70% of the net
book value of the dealer-partner advances in non-recourse financing which bears
interest at a floating rate equal to the commercial paper rate plus 65 basis
points. The Company currently has $100 million outstanding on the facility.
Additionally, the Company announced that it has commenced a modified dutch
auction tender offer to purchase up to 3,000,000 of its outstanding common stock
at a price per share of $14.00 to $20.00. The tender offer will expire at 5:00
p.m., Eastern Standard Time, Thursday, September 9, 2004, unless extended by
Credit Acceptance. Tenders of shares must be made on or prior to the expiration
of the tender offer and shares may be withdrawn at any time on or prior to the
expiration of the tender offer. Credit Acceptance's obligation to purchase is
subject to the conditions set forth in the offer to purchase and letter of
transmittal documents being sent to shareholders.
Under the tender offer, shareholders of Credit Acceptance common stock will be
invited to choose a price at which they are willing to sell their shares to
Credit Acceptance, within the range of $14.00 to $20.00 per share. Credit
Acceptance will then select the lowest single purchase price that will allow it
to buy up to 3,000,000 shares of stock, or such lesser number of shares as are
properly tendered and not withdrawn. All shares acquired in the tender offer
will be purchased at the same purchase price regardless of whether the
shareholder selected a lower price. If more than the maximum number of shares
sought is tendered, tendering shareholders owning fewer than 100 shares will
have their shares purchased without proration and all other shares will be
purchased on a pro rata basis, subject to the conditional tender provisions
described in the Offer to Purchase. Shareholders whose shares are purchased in
the tender offer will be paid the purchase price net in cash, without interest,
promptly after the expiration of the tender offer. Shareholders whose shares are
not purchased in the tender offer will have their shares returned to them, free
of charge, promptly after the expiration of the tender offer. The offer is not
contingent upon any minimum number of shares being tendered.
Credit Acceptance anticipates that it will obtain all of the funds necessary to
purchase shares tendered in the tender offer, and to pay related fees and
expenses, from existing cash reserves and by borrowing under its $135 million
revolving credit facility. The tender offer is not conditioned upon the receipt
of financing.
As of August 10, 2004, Credit Acceptance 39,249,803 shares outstanding. The
closing price of Credit Acceptance's common stock on the Nasdaq on August 10,
2004, which was the last trading day prior to the commencement of the offer, was
$14.10 per share.
Georgeson Shareholder Communications, Inc. is the Information Agent for the
offer and Computershare Trust Company of New York is the Depositary. The Offer
to Purchase, Letter of Transmittal and related documents are being mailed to
registered shareholders and will also be made available for distribution to
beneficial owners of Credit Acceptance common stock. Questions related to the
offer and requests for copies of the Offer to Purchase, the Letter of
Transmittal and related documents may be directed to Georgeson Shareholder
Communications, Inc. at (866) 432-2787.
Neither Credit Acceptance nor its Board of Directors is making any
recommendation whether shareholders should tender or refrain from tendering
their shares or at what purchase price they should choose to tender their
shares. Credit Acceptance's directors and executive officers have advised Credit
Acceptance that they do not intend to tender any shares in the offer.
This press release is for informational purposes only and is not an offer to buy
or the solicitation of an offer to sell any shares of Credit Acceptance's common
stock. The solicitation of offers to buy Credit Acceptance's common stock will
only be made pursuant to the Offer to Purchase and related materials that Credit
Acceptance will be distributing to its shareholders. Shareholders are
urged to read Credit Acceptance's Tender Offer Statement on Schedule TO filed
with the Securities and Exchange Commission in connection with the tender offer,
which includes as exhibits the Offer to Purchase and the related Letter of
Transmittal, as well as any amendments or supplements to the Statement when they
become available, because they contain important information. Each of these
documents has been or will be filed with the SEC, and shareholders may obtain
them free of charge from the SEC at the SEC's Website (http://www.sec.gov/) or
from Georgeson Shareholder Communications, Inc., the Information Agent for the
tender offer, toll free at (866) 432-2787.
DESCRIPTION OF CREDIT ACCEPTANCE CORPORATION
Since 1972, Credit Acceptance has provided auto loans to consumers, regardless
of their credit history. Our product is offered through a nationwide network of
automobile dealers who benefit by selling vehicles to consumers who otherwise
could not obtain financing, by repeat and referral sales generated by these same
customers, and from sales to customers responding to advertisements for our
product, but who actually end up qualifying for traditional financing.
Without our product, consumers are often unable to purchase a vehicle or they
purchase an unreliable one and are not provided the opportunity to improve their
credit standing. As we report to the three national credit reporting agencies, a
significant number of our customers improve their lives by improving their
credit score and move on to more traditional sources of financing. Credit
Acceptance is publicly traded on the NASDAQ National Market under the symbol
CACC. For more information, visit www.creditacceptance.com.