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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 14D-9/A
(AMENDMENT NO. 2)
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
WHITEHALL JEWELLERS, INC.
(Name of Subject Company)
WHITEHALL JEWELLERS, INC.
(Name of Person Filing Statement)
COMMON STOCK, PAR VALUE $0.001 PER SHARE
(Title of Class of Securities)
965063100
(CUSIP Number of Class of Securities)
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JEAN K. FITZSIMON
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
WHITEHALL JEWELLERS, INC.
155 N. WACKER DRIVE
SUITE 500
CHICAGO, IL 60606
(312) 782-6800
(Name, Address and Telephone Number of Person Authorized to Receive
Notice and Communications on Behalf of the Person Filing Statement)
COPIES TO:
LORI ANNE CZEPIEL, ESQ.
SIDLEY AUSTIN LLP
787 SEVENTH AVENUE
NEW YORK, NY 10019
(212) 839-5300
AND
JOHN J. SABL, ESQ.
SIDLEY AUSTIN LLP
ONE SOUTH DEARBORN STREET
CHICAGO, IL 60603
(312) 853-7000
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer
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This Amendment No. 2 to the Solicitation/Recommendation Statement on
Schedule 14D-9 of Whitehall Jewellers, Inc. ("Whitehall" or the "Company"),
originally filed with the Securities and Exchange Commission (the "SEC") on
February 13, 2006 (the "Original Schedule 14D-9" and, together with the
amendments thereto, the "Schedule 14D-9"), relates to the tender offer for all
of the outstanding shares of common stock, par value $0.001 per share, of the
Company (the "Common Stock"), and the associated preferred stock purchase rights
(the "Rights" and, together with the Common Stock, the "Shares") by WJ
Acquisition Corp. ("Purchaser"), WJ Holding Corp. ("Holdco"), Prentice Capital
Management, LP ("Prentice"), Holtzman Opportunity Fund, L.P. ("Holtzman", and
together with Prentice, the "Investors"), PWJ Funding LLC ("PWJ Funding"), PWJ
Lending LLC ("PWJ Lending"), Holtzman Financial Advisors, LLC, SH Independence,
LLC, Jonathan Duskin, Michael Zimmerman and Seymour Holtzman (collectively
referred to as the "Purchaser Group") upon the terms and subject to the
conditions set forth in the Offer to Purchase dated February 8, 2006 (as
amended, the "Offer to Purchase") and the related Letter of Transmittal (which
together constitute the "Offer"), filed as exhibits to the Schedule TO of the
Purchaser Group, filed with the SEC on February 8, 2006 and amended on February
22, 2006 and on March 6, 2006 (as so amended, the "Schedule TO"). Defined terms
used but not otherwise defined herein have the meanings ascribed to such terms
in the Original Schedule 14D-9.
ITEM 4. THE SOLICITATION OR RECOMMENDATION
Item 4 is hereby amended by revising the last two sentences of the fifth
paragraph on page 11 of the Schedule 14D-9 to read as follows:
On September 12, 2005, the Special Committee met telephonically to discuss
the Newcastle proposal and its contingencies. This proposal expired by its
terms on September 15, 2005.
Item 4 is hereby amended by revising the last sentence of the second paragraph
on page 12 of the Schedule 14D-9 to read as follows:
On September 18, 2005, the Special Committee met telephonically to
discuss the Newcastle proposal, and noted its lack of definition and
its lack of trade support. This proposal expired by its terms on
September 19, 2005.
Item 4 is hereby amended by revising the fourth full paragraph on page 18 of the
Schedule 14D-9 to read as follows:
On November 29, 2005, Mr. Pully effectively resigned from the Board of
Directors.
Item 4 is hereby amended by amending and restating the first paragraph under
"(ii) Reasons for the Recommendation" of the Schedule 14D-9 to read as follows:
After careful consideration by the Board, including a review of the
Offer with the Company's management and financial and legal advisors,
the Board determined the terms of the Offer and the Merger Agreement,
taken together, are substantively and procedurally fair to and in the
best interests of the Company and its unaffiliated stockholders, and
the Company's stockholders as a whole. Therefore, the Board has
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determined to recommend that Whitehall stockholders accept the Offer
and tender their Shares in the Offer.
Item 4 is hereby amended by amending and restating the second bullet point of
the second paragraph under "(ii) Reasons for the Recommendation" of the Schedule
14D-9 to read as follows:
o the fact that the Offer Price represents a premium over the
prices at which the Shares traded prior to the negotiation and
execution of the Merger Agreement contributed to the Board's
decision to recommend the Offer, since the trading prices of
the Shares have been depressed since September 2005. (For
example, (1) the Offer Price represents a premium of
approximately 82% over the $0.88 last reported sales price per
share of Common Stock reported on the Pink Sheets on November
28, 2005, the last trading day before Newcastle's announcement
of its intention to commence the Newcastle Offer, (2) the
Offer Price represents a premium of approximately 10% over the
$1.45 last reported sales price per share of Common Stock
reported on the Pink Sheets on February 1, 2006, the last
trading day before the announcement of execution of the Merger
Agreement, and (3) the low closing price since September 1,
2005 was $0.79 on October 26, 2005 and the high closing price
since September 1, 2005 was $2.08 on September 29, 2005.);
Item 4 is hereby amended by amending and restating the sixth bullet point of the
second paragraph under "(ii) Reasons for the Recommendation" of the Schedule
14D-9 to read as follows:
o the written opinions of Duff & Phelps dated February 1, 2006,
to the effect that, as of such date, and based upon and
subject to certain matters stated in such opinions, (i) the
revised Prentice transaction was fair to the Company's
stockholders (other than Prentice, Holdco, Purchaser, Holtzman
or their respective affiliates) from a financial point of
view, without giving effect to any impacts of the revised
Prentice transaction on any particular stockholder other than
in its capacity as a stockholder (the "Prentice Fairness
Opinion"), and (ii) the revised Prentice transaction was more
favorable, from a financial point of view, to the Company, its
stockholders and creditors, taken as a whole, than the
Newcastle binding proposal (as amended and restated in
connection with Schedule 14D-9 Amendment No. 1, the "Prentice
Superior Proposal Opinion" and collectively with the Prentice
Fairness Opinion, the "Duff & Phelps Opinions"), and the
presentations made by Duff & Phelps to the Board relating to
the financial analysis performed by Duff & Phelps in
connection with such opinions, including the fact that the
consideration to be received by the Company's stockholders in
the Offer and the Merger was within the range of going concern
values as indicated by the discounted cash flow analysis and
other analyses performed by Duff & Phelps. (The full text of
each of the written opinions of Duff & Phelps, dated February
1, 2006, which set forth the assumptions made, matters
considered and limitations on the review undertaken by Duff &
Phelps, are filed as Annexes II and III hereto and are
incorporated herein by reference. The fairness opinion of
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Duff & Phelps was limited to the fairness to the Company's
stockholders (other than Prentice, Holdco, Purchaser, Holtzman
or their respective affiliates) from a financial point of
view, without giving effect to any impacts of the revised
Prentice transaction on any particular stockholder other than
in its capacity as a stockholder, and does not constitute a
recommendation as to how any stockholder should vote or act
with respect to any matters relating to the revised Prentice
transaction, or whether to proceed with the revised Prentice
transaction or any related transaction, nor does it indicate
that the consideration paid is the best possible attainable
under any circumstances. Holders of Shares are urged to read
such opinion carefully in its entirety.);
Item 4 is hereby amended by amending and restating the last sentence of second
paragraph under "(ii) Reasons for the Recommendation" of the Schedule 14D-9 to
read as follows:
All of the factors listed above supported the Board's determination
that the Offer and the Merger are substantively fair to and in the best
interests of the Company and its unaffiliated stockholders, and the
Company's stockholders, as a whole, and its determination to recommend
that the Company's stockholders accept the Offer and tender their
Shares in the Offer. The Board's determination that the Offer and the
Merger are procedurally fair was supported by (1) the arm's length
negotiations among the parties, (2) the written opinions and analysis
of Duff & Phelps and (3) the fact that none of the directors of the
Company are employees of the Company or affiliates of Prentice,
Holtzman or Newcastle.
ITEM 9. EXHIBITS
Item 9 is hereby amended by adding a reference to the Purchaser Group's
Amendment No. 1 and Amendment No. 2 to the Schedule TO filed on February 22,
2006 and March 6, 2006, respectively with the SEC under exhibit numbers (a)(3),
(a)(4), (a)(5), (a)(6), (a)(7) and (a)(8).
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete, and correct.
WHITEHALL JEWELLERS, INC.
By:
/s/ JOHN R. DESJARDINS
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John R. Desjardins
Executive Vice President and Chief
Financial Officer
Date: March 7, 2006
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EXHIBIT INDEX
Exhibit No. Document
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(a)(1) Letter dated February 13, 2006 from the Company to its
stockholders *
(a)(2) Press release issued by the Company on February 2, 2006
(incorporated by reference to Exhibit 99.1 of the Company's
Current Report on Form 8-K filed with the SEC on February 3,
2006)
(a)(3) Offer to Purchase dated as of February 8, 2006 (incorporated
by reference to Exhibit (a)(1)(i) of the Purchaser Group's
Schedule TO filed with the SEC on February 8, 2006, as amended
on February 22, 2006 and on March 6, 2006)
(a)(4) Form of Letter of Transmittal (incorporated by reference to
Exhibit (a)(1)(ii) of the Purchaser Group's Schedule TO filed
with the SEC on February 8, 2006, as amended on February 22,
2006 and on March 6, 2006)
(a)(5) Form of Notice of Guaranteed Delivery (incorporated by
reference to Exhibit (a)(1)(iii) of the Purchaser Group's
Schedule TO filed with the SEC on February 8, 2006, as amended
on February 22, 2006 and on March 6, 2006)
(a)(6) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees (incorporated by reference to
Exhibit (a)(1)(iv) of the Purchaser Group's Schedule TO filed
with the SEC on February 8, 2006, as amended on February 22,
2006 and on March 6, 2006)
(a)(7) Form of Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees
(incorporated by reference to Exhibit (a)(1)(v) of the
Purchaser Group's Schedule TO filed with the SEC on February
8, 2006, as amended on February 22, 2006 and on March 6, 2006)
(a)(8) Form of Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 (incorporated by
reference to Exhibit (a)(1)(vi) of the Purchaser Group's
Schedule TO filed with the SEC on February 8, 2006, as amended
on February 22, 2006 and on March 6, 2006)
(a)(9) The following excerpts from the Company's Definitive Proxy
Statement dated as of December 27, 2005, filed with the SEC on
December 27, 2006: "Proposal 1 -- Background of the
Financing," "Proposal 1 -- Interests of Certain Persons in the
Financing," "Proposal 3 -- Executive Compensation and Other
Information -- Severance and Employment Agreements," and
"Proposal 3 -- Certain Relationships and Related Transactions"
(incorporated by reference to Annex A of the Company's
Schedule 14D-9 filed with the SEC on December 16, 2005)
(e)(1) Agreement and Plan of Merger, dated as of February 1, 2006,
among the Company, Prentice, Holtzman, Holdco and Purchaser
(incorporated by reference to Exhibit 2.1 of the Company's
Current Report on Form 8-K filed with the SEC on February 3,
2006)
(e)(2) Amended and Restated Term Loan Credit Agreement dated as of
February 1, 2006, among the Company, PWJ Lending and other
lenders thereto (incorporated by reference to Exhibit 10.1 of
the Company's Current Report on Form 8-K filed with the SEC on
February 3, 2006)
(e)(3) Second Amendment to the Amended and Restated Stockholder
Rights
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Agreement, dated as of February 1, 2006 (incorporated by
reference to Exhibit 4.1 of the Company's Current Report on
Form 8-K filed with the SEC on February 3, 2006)
(e)(4) Form of Executive Severance Agreements, as amended, each dated
May 7, 1996, between the Company and each of Hugh M. Patinkin,
John R. Desjardins and Matthew M. Patinkin (incorporated by
reference to Exhibit 10.3 of the Company's Registration
Statement on Form S-3 as filed with the SEC on January 27,
2000)
(e)(5) Employment Agreement dated November 30, 2004 between the
Company and Lucinda M. Baier (incorporated by reference to
Exhibit 10.1 of the Company's Current Report on Form 8-K as
filed with the SEC on December 1, 2004)
(e)(6) Employment Agreement dated October 31, 2005 between the
Company and Robert L. Baumgardner (incorporated by reference
to Exhibit 10.1 of the Company's Current Report on Form 8-K as
filed with the SEC on November 2, 2005)
Annex I Information Statement Pursuant to Section 14(f) of the
Securities Exchange Act of 1934, as Amended and Rule 14(f)
Thereunder *
Annex II Fairness Opinion of Duff & Phelps, LLC dated February 1,
2006 *
Annex III Amended Superior Proposal Opinion of Duff & Phelps, LLC
dated February 1, 2006*
* Previously filed.
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