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Exhibit (a)(7)
THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF
AN OFFER TO SELL ANY SHARES. THE OFFER IS MADE SOLELY BY THE OFFER TO PURCHASE
DATED OCTOBER 3, 2000 AND THE RELATED LETTER OF TRANSMITTAL, AND IS BEING MADE
TO ALL HOLDERS OF SHARES. JLK IS NOT AWARE OF ANY STATE WHERE THE MAKING OF THE
OFFER IS PROHIBITED BY ADMINISTRATIVE OR JUDICIAL ACTION PURSUANT TO ANY VALID
STATE STATUTE. IF JLK BECOMES AWARE OF ANY VALID STATE STATUTE PROHIBITING THE
MAKING OF THE OFFER OR THE ACCEPTANCE OF THE SHARES PURSUANT THERETO, JLK SHALL
MAKE A GOOD FAITH EFFORT TO COMPLY WITH SUCH STATUTE OR SEEK TO HAVE SUCH
STATUTE DECLARED INAPPLICABLE TO THE OFFER. IF, AFTER SUCH GOOD FAITH EFFORT,
JLK CANNOT COMPLY WITH SUCH STATE STATUTE, THE OFFER WILL NOT BE MADE TO (NOR
WILL TENDERS BE ACCEPTED FROM OR ON BEHALF OF) HOLDERS OF SHARES IN SUCH STATE.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF CLASS A COMMON STOCK
OF
JLK DIRECT DISTRIBUTION INC.
AT
$8.75 NET PER SHARE
BY
JLK DIRECT DISTRIBUTION INC.
JLK Direct Distribution Inc., a Pennsylvania corporation
("JLK"), is offering to purchase all outstanding shares of its Class A Common
Stock, par value $0.01 per share (the "Shares"), at a price of $8.75 per Share,
net to the seller in cash, without interest (the "Offer Price"), upon the terms
and subject to the conditions set forth in the Offer to Purchase dated October
3, 2000 (the "Offer to Purchase"), and in the related Letter of Transmittal
(which, as amended or supplemented from time to time, together constitute the
"Offer"). The Offer is a self-tender offer by JLK to purchase at the Offer Price
all Shares tendered pursuant to the Offer.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
EASTERN TIME, ON TUESDAY, OCTOBER 31, 2000, UNLESS THE OFFER IS EXTENDED.
The Offer is conditioned upon, among other things, there being
validly tendered and not withdrawn prior to the expiration of the Offer a
majority of all then outstanding Shares (the "Minimum Condition"). The Offer is
also subject to other terms and conditions.
The Offer is being made pursuant to a Merger Agreement, dated
as of September 8, 2000 (the "Merger Agreement"), by and among JLK, Kennametal
Inc., a Pennsylvania corporation ("Kennametal"), and Pegasus Acquisition
Corporation, a Pennsylvania corporation and a wholly owned subsidiary of
Kennametal ("Merger Subsidiary"). Kennametal owns approximately 83% of the
equity in JLK and approximately 98% of the combined voting power of JLK's
outstanding common stock. The Merger Agreement provides, among other things,
that following the completion of the Offer and the satisfaction or waiver, if
permissible, of all conditions set forth in the Merger Agreement and in
accordance with the Pennsylvania Business Corporation Law, Merger Subsidiary
will be merged with and into JLK (the "Merger"), with JLK as the surviving
corporation. In the Merger, each outstanding Share (other than (i) treasury
stock of JLK, (ii) Shares owned by Kennametal or Merger Subsidiary and (iii)
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Dissenting Shares (as defined in the Merger Agreement), if any) will be
converted into the right to receive the Offer Price, without interest thereon
(the "Merger Consideration").
The purpose of the Offer and the Merger is for Kennametal to
achieve 100% ownership of JLK through a two-step transaction in which the
holders of Shares would be entitled to receive in exchange for their equity
interest in JLK cash in the amount of $8.75 per Share. Kennametal is undertaking
the transaction at this time in order to more efficiently and effectively
improve the performance of JLK's businesses.
The JLK Board of Directors (the "Board"), based upon the
unanimous recommendation of a special committee of independent directors, has
unanimously determined that the Offer and the Merger are in the best interests
of JLK and fair to the holders of Shares (other than Kennametal), has
unanimously approved the Merger Agreement, the Offer and the Merger and
unanimously recommends that holders of Shares accept the Offer and tender their
Shares pursuant to the Offer.
Tendering shareowners of record who tender Shares directly
will not be obligated to pay brokerage fees or commissions or, except as set
forth in Instruction 6 of the Letter of Transmittal, stock transfer taxes on the
purchase of Shares by JLK pursuant to the Offer. Shareowners who hold their
Shares through a bank or a broker should check with such institution as to
whether it charges any service fees. JLK will pay the expenses of ChaseMellon
Shareholder Services, L.L.C., which is acting as depositary (in such capacity,
the "Depositary") and the information agent (in such capacity, the "Information
Agent"), in connection with the Offer.
For purposes of the Offer, JLK will be deemed to have accepted
for payment, and thereby purchased, Shares validly tendered and not properly
withdrawn if, as and when JLK gives oral or written notice to the Depositary of
its acceptance for payment of such Shares. Upon the terms and subject to the
conditions of the Offer, payment for Shares accepted pursuant to the Offer will
be made by deposit of the purchase price therefor with the Depositary, which
will act as agent for tendering shareowners for the purpose of receiving
payments from JLK and transmitting such payments to tendering shareowners whose
Shares have been accepted for payment. Under no circumstances will interest on
the purchase price for Shares be paid by JLK, regardless of any delay in making
such payment. In all cases, payment for Shares accepted for payment pursuant to
the Offer will be made only after timely receipt by the Depositary of (i) the
certificates evidencing such Shares or a timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at the Book-Entry Transfer
Facility (as defined in the Offer to Purchase) pursuant to the procedures set
forth in the Offer to Purchase, (ii) the Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message (as
defined in the Offer to Purchase) and (iii) any other documents required by the
Letter of Transmittal.
The term "Expiration Date" shall mean 12:00 midnight, Eastern
time, on Tuesday, October 31, 2000, unless and until JLK (in accordance with the
terms of the Merger Agreement) extends the period of time during which the Offer
is open, in which event the term "Expiration Date" shall mean the latest time
and date at which the Offer, as so extended by JLK, shall expire. Subject to the
provisions of the Merger Agreement and the applicable rules and regulations of
the Securities and Exchange Commission (the "SEC"), JLK has the right to waive
any or all conditions to the Offer (other than the Minimum
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Condition, which may only be waived with the consent of Kennametal) and to make
any other changes in the terms of the Offer. However, JLK must waive the Minimum
Condition if Kennametal and Merger Subsidiary waive the condition to their
obligations to effect the Merger that JLK purchase in the Offer at least 50% of
the outstanding Shares. Subject to the provisions of the Merger Agreement and
the applicable rules and regulations of the SEC, if, by the Expiration Date, any
or all of the conditions to the Offer have not been satisfied, JLK may elect to
(i) terminate the Offer and return all tendered Shares to tendering shareowners,
(ii) waive all of the unsatisfied conditions (and in the case of the Minimum
Condition, obtain the consent of Kennametal to waive such condition) and
purchase all Shares validly tendered or (iii) extend the Offer.
JLK may extend the Offer beyond the initial Expiration Date in
the following events: (i) on one or more occasions for a period of up to ten
business days for each such extension if any of the conditions of the Offer
specified in the section "THE OFFER-- 9. Conditions to the Offer" shall not have
been satisfied or waived (subject to Kennametal's right to terminate the Merger
Agreement (and the Offer) if the Minimum Condition has not been satisfied by
November 30, 2000); and (ii) for any period required by any rule, regulation,
interpretation or position of the SEC or the staff thereof applicable to the
Offer or any period required by applicable law. Any such extension will be
followed by public announcement thereof no later than 9:00 a.m., Eastern time,
on the next business day after the previously scheduled Expiration Date. During
any such extension, all Shares previously tendered and not withdrawn will remain
subject to the Offer, subject to the rights of a tendering shareowner to
withdraw such shareowner's Shares. Without limiting the manner in which JLK may
choose to make any public announcement, JLK will have no obligation to publish,
advertise or otherwise communicate any such announcement other than by issuing a
press release to the Dow Jones News Service or otherwise as may be required by
applicable law.
Tenders of Shares made pursuant to the Offer are irrevocable
except that such Shares may be withdrawn at any time prior to the Expiration
Date and, unless theretofore accepted for payment pursuant to the Offer, may
also be withdrawn at any time on or after December 1, 2000. For a withdrawal to
be effective, a written, telegraphic or facsimile transmission notice of
withdrawal must be timely received by the Depositary at one of its addresses set
forth in the Offer to Purchase. Any such notice of withdrawal must specify the
name of the person who tendered the Shares to be withdrawn, the number of Shares
to be withdrawn and the name of the registered holder of such Shares, if
different from that of the person who tendered such Shares. If certificates
evidencing such Shares to be withdrawn 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 the signature(s) on the notice of withdrawal must be
guaranteed by an Eligible Institution (as defined in the Offer to Purchase),
unless such Shares have been tendered for the account of an Eligible
Institution. If Shares have been tendered pursuant to the procedures for
book-entry transfer as set forth in the section "THE OFFER-- 3. Procedures for
Accepting the Offer and Tendering Shares" of the Offer to Purchase, 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. However,
withdrawn Shares may be re-tendered by again following one of the procedures
described in the section "THE OFFER-- 3. Procedures for Accepting the Offer and
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Tendering Shares" of the Offer to Purchase 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 JLK, in its sole discretion,
whose determination will be final and binding. None of JLK, Kennametal,
ChaseMellon Shareholder Services, as Depositary and Information Agent, or any
other person will be under any duty to give notification of any defects or
irregularities in any tender or notice of withdrawal or incur any liability for
failure to give any such notification. Except as otherwise provided in the Offer
to Purchase, tenders of Shares are irrevocable.
The information required to be disclosed by Rule 13e-3(e)(1),
Rule 13e-4(d)(1) and Rule 14d-6(d)(1) of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended, is contained in the Offer to
Purchase and is incorporated herein by reference.
The receipt of cash in exchange for Shares pursuant to the
Offer or in the Merger will be a taxable transaction for U.S. federal income tax
purposes and possibly for state, local or foreign tax income purposes as well.
Generally, a shareowner who receives cash in exchange for Shares pursuant to the
Offer (or the Merger) will recognize gain or loss for U.S. federal income tax
purposes equal to the difference between the amount of cash received and such
shareowner's adjusted tax basis in the Shares exchanged therefor. Provided that
such Shares constitute capital assets in the hands of the shareowner, such gain
or loss will be capital gain or loss, and will be long-term capital gain or loss
if the shareowner has held the Shares for more than one year at the time of
sale. Gain or loss will be calculated separately for each block of Shares
tendered pursuant to the Offer or converted pursuant to the Merger. The maximum
U.S. federal income tax rate applicable to individual taxpayers on long-term
capital gain is 20%, and the deductibility of capital losses is subject to
certain limitations. In certain circumstances, some tendering shareowners whose
Shares are purchased in the Offer may be treated for U.S. federal income tax
purposes as having received an amount taxable as a distribution or dividend
rather than as a capital gain or loss. All shareowners should consult with their
tax advisors as to the particular tax consequences of the Offer and the Merger
to them, including the applicability and effect of the alternative minimum tax
and any state, local or foreign income and other tax laws and of changes in such
tax laws. Shareowners are strongly encouraged to read the Offer to Purchase for
additional information regarding the U.S. federal tax consequences of the Offer
and the Merger.
The Offer to Purchase, the related Letter of Transmittal and
other relevant documents will be mailed to record holders of Shares whose names
appear on JLK's shareowner lists and will be furnished to brokers, dealers,
commercial banks, trust companies and similar persons whose names, or the names
of whose nominees, appear on the shareowner lists or, if applicable, who are
listed as participants in a clearing agency's security position listing, for
subsequent transmittal to beneficial owners of Shares.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL
CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION
IS MADE WITH RESPECT TO THE OFFER.
Any questions or requests for assistance may be directed to
the Information Agent at its telephone number and address set forth below.
Additional copies of the Offer to Purchase,
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the Letter of Transmittal and other tender offer documents may be obtained from
the Information Agent at the telephone number and address set forth below.
Shareowners may also contact their broker, dealer, commercial bank, trust
company or nominee for assistance concerning the Offer. No fees or commissions
will be paid to brokers, dealers or other persons (other than the Information
Agent) for soliciting tenders of Shares pursuant to the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[CHASEMELLON SHAREHOLDER SERVICES LOGO]
44 Wall Street
New York, New York 10005
Bankers and Brokers Call Collect (917) 320-6285
All Others Call Toll-Free (888) 634-6468
October 3, 2000