SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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CAPTEC NET LEASE REALTY, INC.
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(Name of Registrant as Specified in Its Charter)
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October 29, 2001
Dear Fellow Captec Stockholder:
There he goes again...
Dissident stockholder and consummate self-promoter Phillip Goldstein is at it
again. In another desperate effort to advance his own interests at the expense
of the truth and Captec stockholders, Mr. Goldstein is, for the second straight
year, attacking Captec's management and board of directors. In a letter sent to
Captec stockholders last week, he has unleashed yet another baseless and vicious
personal attack, this time against our merger with Commercial Net Lease Realty,
Inc. (CNLR). True to form, he has offered no alternative plan. We believe that
his shameless self-promotion jeopardizes the value of your investment. Mr.
Goldstein can ignore and distort the truth, but he cannot change the facts - our
proposed merger with CNLR maximizes your investment in Captec and is in the best
interests of Captec stockholders.
LET'S SET THE RECORD STRAIGHT -- GOLDSTEIN OFFERS
NO PROPOSAL AND NO PLAN FOR CAPTEC STOCKHOLDERS
WHO IS PHIL GOLDSTEIN? Phil Goldstein is an amateur stockholder dissident who
has no experience in running or selling a public company.
We believe that Mr. Goldstein has no interest in creating long-term value for
Captec stockholders and that you should not trust him. We are confident that
Captec stockholders will recognize Phil Goldstein's latest ploy for exactly what
it is: a desperate effort to create a platform for himself. We believe it is in
your best interests to approve the value-creating transaction with CNLR. Here
are some plain-truth facts that Mr. Goldstein hopes Captec stockholders will
ignore:
FACT: YOU CANNOT TRUST PHIL GOLDSTEIN. Mr. Goldstein's letter is filled with
personal attacks, half-truths and outright falsehoods. Mr. Goldstein has a
history of resorting to deceit in order to advance his own agenda.
Specifically, Mr. Goldstein posted on the Internet a forged press release in
the name of a mutual fund with which he was engaged in a dispute. After he
had been caught red-handed and faced the threat of litigation, Mr. Goldstein
was forced to post a retraction. Other people may let Mr. Goldstein play
these kinds of games with their hard-earned money; you should not.
FACT: PHIL GOLDSTEIN IS OFFERING NOTHING TO CAPTEC STOCKHOLDERS. Mr.
Goldstein has not presented Captec stockholders with any value-enhancing
proposal. In fact, Mr. Goldstein's suggestions were thoroughly evaluated by
your board of directors and rejected as not in the best interests of Captec
stockholders.
FACT: PHIL GOLDSTEIN'S ACTIONS SPEAK LOUDER THAN HIS WORDS. In the past
year, Mr. Goldstein has amassed more than 300,000 Captec shares with a
current value of more than $3 million. What is especially telling is that he
continued to purchase Captec shares even after the announcement of the CNLR
merger. IGNORE WHAT MR. GOLDSTEIN SAYS AND FOLLOW THE MONEY. Although Mr.
Goldstein had previously advocated the sale of our company, now that a
transaction is in hand, he suddenly opposes it. There may be a plan behind
Mr. Goldstein's schizophrenia, but it will not benefit Captec's
stockholders.
FACT: MR. GOLDSTEIN HAS BEEN INVITED TO MEET WITH CAPTEC MANAGEMENT BUT HAS
REFUSED. More than a year ago, Patrick Beach invited Mr. Goldstein to meet
with Captec management, but he declined. Additionally, Mr. Goldstein chose
not to participate in the process that resulted in the sale of Captec.
Having failed to take advantage of these opportunities, Mr. Goldstein has no
significant knowledge of any Captec assets and the erroneous and
irresponsible valuation he attributed to Captec's non-real estate assets in
his recent letter is supported by nothing more than his imagination.
DO NOT SUPPORT GOLDSTEIN'S SELF-SERVING CAUSE
DO NOT ALLOW GOLDSTEIN TO DENY YOU
THE VALUE OF THE CNLR MERGER
YOUR BOARD OF DIRECTORS CONDUCTED A THOROUGH AND COMPLETE SALE PROCESS. Your
board of directors already considered Mr. Goldstein's "new ideas" and examined a
variety of strategic alternatives for Captec. The board unanimously determined
that a sale of Captec is the best alternative to deliver superior and immediate
value to Captec stockholders. A special committee of independent Captec
directors, together with its financial advisor, UBS Warburg LLC, undertook an
open sale process - a process previously advocated by Mr. Goldstein - in which
more than 50 companies were invited to participate.
CONTRARY TO MR. GOLDSTEIN'S SUGGESTION, ALL OF CAPTEC'S ASSETS WERE OFFERED FOR
SALE AND INCLUDED IN THE COMPREHENSIVE SALE PROCESS. In that process, interested
parties indicated that they were not willing to acquire, or would offer only
nominal value for, the non-real estate assets. CNLR, the high bidder, was not
willing to purchase these assets as part of the transaction. No other
participant in the sale process submitted a bid for all of Captec that equaled
the value to be received by the Captec stockholders in the CNLR merger as
currently structured.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT ALL CAPTEC
STOCKHOLDERS SIGN, DATE AND RETURN THE ENCLOSED WHITE PROXY
CARD TODAY TO VOTE FOR THE PROPOSED MERGER
CAPTEC'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE
PROPOSED MERGER WITH CNLR. To vote your shares, please sign, date and return the
enclosed WHITE proxy card and mail it promptly in the enclosed, self-addressed,
stamped envelope. Your vote is extremely important. Failure to vote your shares
has the same effect as voting against the merger. If you have any questions or
require any assistance in executing or delivering your proxy or voting
instructions, please call our proxy solicitor:
_________________________________________________________
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| GEORGESON SHAREHOLDER COMMUNICATIONS |
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| TOLL FREE |
| 1-800-223-2064 |
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| OUTSIDE THE U.S. |
| 1-212-440-9800 |
|_________________________________________________________|
Thank you for your continued confidence and support.
On behalf of Captec's Board of Directors,
/s/ Edward G. Ptaszek
Edward G. Ptaszek
Secretary
Captec Net Lease Realty, Inc.