Exhibit 99.4
[ATALANTA SOSNOFF LOGO]
101 PARK AVENUE, NEW YORK, NEW YORK 10178-0008 (212) 867-5000 FAX (212) 922-1834
January 31, 2003
Special Committee of the Board of Directors
of Atalanta/Sosnoff Capital Corporation
101 Park Avenue
New York, NY 10178
Gentlemen:
As I indicated at the December 5, 2002 meeting of the Board of
Directors of Atalanta/Sosnoff Capital Corporation (the "Company"), I would like
to acquire all of the shares of common stock of the Company not already owned by
me. Set forth below is further information as to the terms of, and reasons for,
my proposal.
Price. I propose to acquire all of the shares not already owned by me
at a price of $12.50 per share, such price subject to adjustment at the time of
the closing based upon the increase or decrease, as applicable, in the fair
market value of the "investments" shown on the balance sheet of the Company from
their value as at December 31, 2002. Assuming there is no adjustment to the
offer price of $12.50 per share, my proposal values the Company at approximately
$108 million on a fully diluted basis.
Structure of the Transaction. I currently intend to effectuate the
acquisition by means of a tender offer followed, if necessary, by a "short-form"
merger of the Company with and into a newly formed corporation wholly owned by
me. This structure will provide the other shareholders with cash for their
shares as quickly as possible. The Company would be the surviving corporation in
such merger. I expect that the current officers of the Company would continue to
serve in those same capacities after the merger (the members of the Special
Committee would resign as directors upon completion of the merger).
Reasons for the Proposal. After careful consideration, I believe this
proposal is in the best interests of the public shareholders of the Company for
the following key reasons:
1. Offer Price at a Significant Premium to Market Prices
o The offer price of $12.50 a share represents a premium of 22%
over the stock's closing price prior to the public announcement
of my proposal on December 6, 2002.
o The offer price also represents a premium of over 84% over the
stock's lowest closing price during the prior year.
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o In contrast to this premium, the Company's life as a public
company has been frustrating. Since the initial public offering
of the shares in June, 1986, the trading price of such shares has
declined despite a five-fold increase in the S&P 500.
2. Liquidity for the Shares
o The historical trading volume of the shares has been low and
inconsistent. Daily trading volume has averaged less than 2,000
shares or 0.02% of outstanding shares on a base of 8.5 million
shares outstanding, with no trades occurring in 112 of 253
trading days prior to the public announcement of my proposal on
December 6, 2002.
o The clear lack of liquidity creates potential price disruptions
as shareholders attempt to sell their shares in the market. The
tender offer and merger will provide shareholders with immediate
liquidity at the offer price without any price disruption.
3. Realization of the Operating Business Value
o Prior to the public announcement of my proposal on December 6,
2002, the stock has generally traded at a discount to reported
book value per share, as shown in Exhibit A. This differential
may be viewed as negative accretion to the value of the Company's
operating business.
o The offer price is 14% above estimated fully diluted book value,
providing the public shareholders with a significant premium for
their non-controlling interest.
4. Transfer of the Risk of Succession
o As you know, I am 71 years old and serve as Chairman, Chief
Executive Officer and Chief Investment Officer of the Company. I
am one of only two portfolio managers at the Company. Given my
vital role in managing client assets and my high visibility to
clients, the loss of my services could be expected to result in
significant diminution in the value of the Company's operating
business and stock price.
o The acquisition will transfer the risk of succession and loss of
my services from the public shareholders to the ensuing private
company.
5. Costs of Being Public Company; Lack of Business Reasons of Being a
Pubic Company
o The Company incurs significant annual costs as a result of being
a public company. In addition, the recently enacted corporate
governance standards and disclosure requirements under the
Sarbanes-Oxley Act and NYSE rules will increase such costs and
the reporting burden on the Company going forward.
o The Company also does not realize a corresponding benefit of
being a public company because its business is not a capital
intensive business requiring access to the capital markets.
Further, other traditional reasons for being a public company are
either not relevant (e.g., the ability to make acquisitions with
stock, improving the image of the Company, etc.) or have not been
validated in practice (e.g., increased liquidity for the shares,
more accurate valuation for the Company, etc.).
6. Tax Benefit of the Acquisition
o A significant portion of the assets of the Company consists of
investment assets (approximately $77 million as of December 31,
2002). The distribution of all or any portion of these
investments to the public shareholders as a dividend would be
taxable to the shareholders as ordinary income. However, any gain
from the sale of the shares by the pubic shareholders (which
inherently reflects the value attributable to these investments)
in the
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o tender offer or merger will be taxable to the shareholders as
long-term capital gain (assuming the shares were held for at
least 1 year), providing a significant tax benefit to the public
shareholders.
Conditions. Because I believe this proposal is in the best interests of
the public shareholders of the Company, I request the approval of the Special
Committee and the full Board of Directors of the Company for the tender offer
and merger (including the recommendation of the tender offer and merger by the
Board on Schedule 14D-9 at the appropriate time). I also expect that the inside
directors and officers of the Company will tender all shares owned by each of
them in the tender offer. In addition, my obligation to complete the tender
offer would be subject to customary conditions, including, the failure of public
shareholders to tender of a number of shares which, when taken together with
shares already owned by me, equal or exceed 90% of the outstanding shares of the
Company, adverse developments in the business or prospects of the Company or a
significant decline in the stock price.
This letter constitutes a statement of interest with respect to the
proposed transaction and will not itself be deemed to create any binding rights
or obligations in favor of any party. This proposal is also subject to the
negotiation and execution of definitive documentation. I will promptly advise
you in the event that I should decide to withdraw or modify this proposal.
I look forward to discussing this proposal with you and your advisors
at your earliest convenience.
Sincerely,
/s/ Martin T. Sosnoff
Martin T. Sosnoff
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