EXHIBIT 99.2
FOR IMMEDIATE RELEASE
CONTACT: GENERAL HOST THE CYPRESS GROUP
ROBERT LOVEJOY OWEN BLICKSILVER
313-366-8400 212-303-7603
GENERAL HOST AGREES TO $5.50 PER SHARE
ACQUISITION BY THE CYPRESS GROUP
STAMFORD, CT, NOVEMBER 24, 1997 -- General Host Corporation (NYSE: GH)
announced today it had signed a definitive agreement to be acquired by The
Cypress Group, a New York-based private investment fund, in an all-cash
transaction valued at approximately $320 million, including expenses and the
assumption of debt.
Under the terms of the transaction, a corporation formed by Cypress will make a
cash offer to purchase all of the common stock outstanding for $5.50 a share, a
60% premium over General Host's closing stock price on Friday, November 21. The
tender offer is scheduled to commence this week. Following the tender offer,
Cypress will acquire any remaining shares through a merger in which the
remaining shares (and any in-the-money options) would be cashed out at $5.50 per
share.
The Board of Directors of General Host has unanimously approved the merger
agreement and has recommended that shareholders tender their shares in the
offer. Harris J. Ashton, Chairman and CEO of General Host and the holder of
approximately 6% of the shares, has agreed to tender his shares in the offer.
The remainder of the company's management and Board, who together hold
approximately 5% of the outstanding common stock, have indicated that they
intend to tender their shares.
General Host Corporation is the operator of Frank's Nursery & Crafts, Inc.,
Detroit, the nation's largest chain of specialty retail stores devoted to the
sale of lawn and garden products, crafts, Christmas merchandise and pet food and
supplies -- including more than 200 different proprietary lawn and garden
products. The company operates 258 stores in 15 states, mostly in the East and
Midwest, and had 1996 revenues in excess of $530 million.
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Following the tender offer closing, which is expected to occur by year end, the
company will operate solely under the Frank's Nursery & Crafts name and the
corporate headquarters will move from Stamford, CT, to Detroit.
Joseph R. Baczko, 52, will be named Chairman, President and CEO of the company,
replacing Mr. Ashton who will retire in 1998.
Cypress will be acquiring General Host entirely with cash provided by its funds,
and will put a new financing facility into place at the company in order to
refinance existing debt and to provide additional liquidity to the company. The
Chase Manhattan Bank, Chase Securities Inc. and Goldman Sachs Credit Partners
L.P. have delivered a commitment letter to Cypress agreeing to provide the
financing facility, which will be made available simultaneously with the closing
of the stock tender offer.
The merger agreement provides that the company will commence a tender offer and
consent solicitation for its 11-1/2% Senior Notes at the same time as the stock
tender offer in order to permit the financing facility and increase operating
flexibility. The two tender offers are expected to close together.
The stock tender offer will be subject to a number of conditions, including the
tender of two-thirds of General Host's common stock, the expiration of the Hart-
Scott-Rodino waiting period, and the simultaneous closing of the debt tender
offer. The debt tender offer will be conditioned upon, among other things, the
receipt of tenders and consents for a majority of the senior notes, the
consummation of the financing and the simultaneous closing of the stock tender
offer.
Following the consummation of the tender offers, Cypress currently expects that
General Host will redeem any remaining senior notes and all of its 8%
convertible subordinated notes. It is anticipated that such redemption would
take place on or after February 16, 1998.
"Frank's provides us with a unique opportunity to participate in the Lawn &
Garden market where we expect to experience significant growth," said David
Spalding, Vice Chairman of The Cypress Group. "Our strategy is to increase the
capital in the business to enable it to grow, renovate and refurbish Frank's 258
existing stores, strengthen the Company's core nursery products and services,
and expand the chain with a store opening program in present and new markets
over the next three years."
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"Since they first approached us, Cypress has been very supportive of our company
and thus we are pleased to have reached this agreement with them, which
represents a premium for our shareholders," Mr. Ashton said.
Joe Baczko is an acknowledged and highly respected retailing executive. In the
early 1990s, he was President and Chief Operating Officer of Blockbuster
Entertainment, during a period of significant domestic and international growth
for that Company. From 1983 to 1990, Mr. Baczko, responsible for the start-up
of Toys R Us' international operations, served as President of that Company's
International Division. Prior to that, Mr. Baczko was CEO of Max Factor's
European operations and also held executive positions with W.R. Grace & Co. For
the past four years, Mr. Baczko has served as a private investor and consultant
in the specialty retailing, services and consumer goods areas.
Credit Suisse First Boston Corporation acted as financial advisor to General
Host in connection with the transaction.
The Cypress Group manages a private equity fund which closed in February 1996
with more than $1 billion in commitments. Cypress invests in privately
negotiated transactions, targeting established operating businesses and
investing with management to foster continued growth. Investments made by
Cypress include Cinemark USA, Inc., Amtrol Inc., Scotsman Holdings, as well as
The Multicare Companies, via a new joint venture company called Genesis
ElderCare Corp. The Cypress Group, based in New York City, is headed by its
four partners, James A. Stern, Jeffrey P. Hughes, James L. (Jamie) Singleton and
David P. Spalding.
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