EXHIBIT 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE
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JULY 13, 2003 CONTACT: INVESTOR RELATIONS
PHONE: 865-380-3206
FAX: 865-380-3784
CLAYTON HOMES, INC. (CMH: NYSE) ISSUES LETTER TO STOCKHOLDERS
Dear Fellow Stockholders:
We would like to eliminate any confusion surrounding Cerberus Capital
Management's expression of interest in the company three business days prior to
the stockholders vote on the Berkshire Hathaway offer to acquire Clayton Homes.
Since the vote is scheduled for Wednesday of this week, we want to provide you
with the current facts.
Some would have you believe that there is now, or that there will be, a higher
offer for your stock. The fact is, there is no offer--not from Cerberus or from
anyone other than Berkshire--despite the fact that since announcement of the
Berkshire Hathaway offer on April 1, 2003, it has been public knowledge that
superior offers could be considered by our board. I repeat, there is only one
offer on the table--the Berkshire Hathaway offer of $12.50 per share in cash.
Interestingly Cerberus waited until late last Thursday to advise the company
that they were considering making a proposal that could provide greater value to
our stockholders than the Berkshire Hathaway transaction. Cerberus is a company
that specializes in acquiring the debt and other assets of distressed companies
and is acting in its own best interests. First and foremost, Cerberus has not
made any sort of binding offer for our company. Cerberus simply faxed, without
any prior communication, a brief letter indicating that they wanted to perform
due diligence, and possibly make a superior offer to that of Berkshire.
Why did a company with a significant new investment in a competing finance
company (Conseco) wait until three business days before the vote on the merger
to publicly state its interest in Clayton Homes? From our proxy statement,
Cerberus has known for months that our agreement with Berkshire Hathaway
permitted us to enter into negotiations with any party interested in making a
superior offer for 39 days following the announcement of our agreement with
Berkshire Hathaway. Furthermore, even after this 39-day window, the agreement
still permitted us to accept an offer superior to that of Berkshire Hathaway.
Despite this fact and speculation from a few stockholders that the $12.50 per
share price of the Berkshire Hathaway deal undervalued Clayton Homes, no offer
has materialized.
We did not pour cold water on the Cerberus expression of interest. We responded
that we would be happy to consider a superior offer that maximizes value for all
stockholders, noting that time is of the essence.
Rather than make such an offer, this past weekend Cerberus advised us that they
would not be making a proposal prior to the stockholders meeting. Instead,
Cerberus said that in the event the Berkshire merger is rejected, they would
like to conduct due diligence for the purpose of possibly submitting a proposal.
The Board of Directors met at noon today to consider the expression of interest
by Cerberus. After deliberating separately, the independent board members
unanimously voted in favor of the Berkshire Hathaway transaction. After noting
that the Berkshire Hathaway offer is the only binding offer received, and given
the outlook for the industry and the uncertainty of the financing resources
likely to be available, the full board unanimously reaffirmed its recommendation
that Clayton Homes stockholders vote for the Berkshire offer.
Until a few months ago, industry participants believed that the asset backed
securitization (ABS) capital markets would remain reliable. Now the ABS
investors are incurring significant losses and require much greater disciplined
underwriting. This new industry-financing paradigm has redefined the size of the
industry to a significantly lower level. With a forty-year track record gauging
the state of the industry, we see little likelihood of a foreseeable
recovery. Accordingly we are uncomfortable leaving our ownership, and that of
our other stockholders, at risk.
We urge you to vote in favor of the merger agreement with Berkshire Hathaway.
Stockholders who require voting assistance are urged to contact our proxy
solicitor, Georgeson Shareholder Communications, toll-free at 800.669.9886.
Banks and brokerage firms can call collect at 212.440.9800.
Yours truly,
Kevin T. Clayton
Chief Executive Officer and President
Clayton Homes, Inc.
This press release contains forward-looking statements with respect to
management's beliefs about the financial condition, results of operations and
business of Clayton Homes in the future. These statements involve risks and
uncertainties. The actual outcome could differ materially from that contemplated
by such statements. Factors that could cause or contribute to such differences
could include, but are not limited to: market conditions in the manufactured
housing market, the degree of continued market acceptance of Clayton Homes'
products, competition, failure of the requisite stockholders to approve the
merger, litigation related to the merger, and merger-related costs and expenses.
The non-merger related factors mentioned above, as well as other factors that
could affect Clayton Homes' business, are discussed in Clayton Homes' Annual
Report on Form 10-K for the fiscal year ended June 30, 2002, on file with the
Securities and Exchange Commission. Clayton Homes does not undertake any
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.