SCHEDULE 13E-4
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
ISSUER TENDER OFFER STATEMENT
(Pursuant to Section 13(e)(1) of the
Securities Exchange Act of 1934)
ENStar Inc.
(Name of Issuer)
Peter E. Flynn
Executive Vice President
ENStar Inc.
6479 City West Parkway
Eden Prairie, Minnesota 55344-3246
(612) 941-3200
(Name of Person(s) Filing Statement)
Common Stock, par value $.01 per share
(Title of Class of Securities)
29358M 10 8
(CUSIP Number of Class of Securities)
Peter E. Flynn
Executive Vice President
ENStar Inc.
6479 City West Parkway
Eden Prairie, Minnesota 55344-3246
(612) 941-3200
(Name, Address and Telephone Number
of Person Authorized to Receive Notices and Communications
on Behalf of the Persons Filing Statement)
Copy to:
J. Andrew Herring
Dorsey & Whitney LLP
220 South Sixth Street
Minneapolis, Minnesota 55402
(612) 340-5681
June 24, 1997
(Date Tender Offer First Published,
Sent or Given to Security Holders)
CALCULATION OF FILING FEE
================================================================================
Transaction Valuation $3,750,000* Amount of Filing Fees: $1,136.36
================================================================================
* Calculated solely for purposes of determining the filing fee, based upon the
purchase of 600,000 shares at the maximum tender offer price per share of
$6.25.
<PAGE>
[] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
Amount Previously Paid: N/A
Filing Party:N/A
Form or Registration No. N/A
Date File N/A
<PAGE>
This Issuer Tender Offer Statement on Schedule 13E-4 (the "Statement")
relates to the tender offer by ENStar Inc., a Minnesota corporation
(the "Company"), to purchase up to 600,000 shares of its common stock, par
value $.01 per share (the "Shares" or the "Common Stock"), at prices, net to
the seller in cash, not greater than $6.25 nor less than $4.75 per share, upon
the terms and subject to the conditions set forth in the Offer to Purchase,
dated June 24, 1997 (the "Offer to Purchase"), and the related Letter of
Transmittal (which are herein collectively referred to as the "Offer"). Copies
of such documents are filed as Exhibits (a)(1) and (a)(2), respectively, to this
Statement.
Item 1. Security and Issuer
(a) The name of the issuer is ENStar Inc., a Minnesota corporation.
The address of its principal executive offices is 6479 City West
Parkway, Eden Prairie, Minnesota 55344-3246.
(b) The information set forth in "Introduction," "Section 1. Number
of Shares; Proration" and "Section 9. Interests of Directors and Executive
Officers; Transactions and Arrangements Concerning the Shares" in the Offer to
Purchase is incorporated herein by reference. The Offer is being made to all
holders of Shares, including officers, directors and affiliates of the Company,
although the Company has been advised that none of its directors or executive
officers intends to tender any Shares pursuant to the Offer.
(c) The information set forth in "Introduction" and "Section 7.
Price Range of Shares; Dividends" in the Offer to Purchase is incorporated
herein by reference.
(d) This Statement is being filed by the issuer.
Item 2. Source and Amount of Funds or Other Consideration
(a)-(b) The information set forth in "Section 10. Source and
Amount of Funds" in the Offer to Purchase is incorporated herein by
reference.
Item 3. Purpose of the Tender Offer and Plans or Proposals of the Issuer
(a)-(j) The information set forth in "Introduction," "Section 8.
Background and Purpose of the Offer; Certain Effects of the Offer," "Section 9.
Interests of Directors and Executive Officers; Transactions and Arrangements
Concerning the Shares," "Section 10. Source and Amount of Funds" and "Section
12. Effects of the Offer on the Market for Shares; Registration Under the
Exchange Act" in the Offer to Purchase is incorporated herein by reference.
<PAGE>
Item 4. Interest in Securities of the Issuer
The information set forth in "Section 9. Interests of Directors and
Executive Officers; Transactions and Arrangements Concerning the Shares" in the
Offer to Purchase is incorporated herein by reference.
Item 5. Contracts, Arrangements, Understandings or Relationships with
Respect to the Issuer's Securities.
The information set forth in "Introduction," "Section 8. Background
and Purpose of the Offer; Certain Effects of the Offer" and "Section 9.
Interests of Directors and Executive Officers; Transactions and Arrangements
Concerning the Shares" in the Offer to Purchase is incorporated herein by
reference.
Item 6. Persons Retained, Employed or to be Compensated
The information set forth in "Introduction" and "Section 16. Fees
and Expenses" in the Offer to Purchase is incorporated herein by reference.
Item 7. Financial Information
(a)-(b) The information set forth in "Section 11. Certain
Information About the Company" in the Offer to Purchase is incorporated herein
by reference. The financial information set forth in (i) "Part II, Item 6.
Selected Financial Data" and "Part IV, Item 14. Exhibits, Financial Statement
Schedules, and Reports on Form 8-K, (a)1. Consolidated Financial Statements and
(a)2. Consolidated Financial Statement Schedules" in the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1996, filed as Exhibit
(g)(1) hereto; and (ii) "PartI Financial Information, Item I Financial
Statements in the Company's Quarterly Report on Form 10-Q for the three months
ended March 31, 1997, filed as Exhibit (g)(2) hereto, in each case, is
incorporated herein by reference.
Item 8. Additional Information
(a) Not applicable.
(b) The information set forth in "Section 13. Certain Legal
Matters; Regulatory and Foreign Approvals" in the Offer to Purchase is
incorporated herein by reference.
(c) The information set forth in "Section 12. Effects of the Offer
on the Market for Shares; Registration Under the Exchange Act" in the Offer to
Purchase is incorporated herein by reference.
(d) Not applicable.
(e) The information set forth in the Offer to Purchase and the
related Letter of Transmittal, copies of which are attached hereto as Exhibits
(a)(1) and (a)(2), respectively, is incorporated herein by reference.
<PAGE>
Item 9. Material to be Filed as Exhibits
(a)(1) Form of Offer to Purchase dated June 24, 1997.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of Letter dated June 24, 1997 to Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.
(a)(5) Form of Letter dated June 24, 1997 to Clients for use by
Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(a)(6) Form of Letter dated June 24, 1997 to shareholders from the
Chief Executive Officer and President of the Company.
(a)(7) Form of Press Release issued by the Company dated June
17, 1997.
(a)(8) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
(g)(1) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996, File No. 0-29026, is incorporated herein by
reference.
(g)(2) The Company's Quarterly Report on Form 10-Q for the three
months ended March 31, 1997, File No. 0-29026, is incorporated
herein by reference.
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.
ENStar Inc.
by /s/Jeffrey J. Michael
------------------------
Jeffrey J. Michael
Chief Executive Officer and President
Dated: June 24, 1997
<PAGE>
INDEX TO EXHIBITS
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Item Description Page
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(a)(1) Form of Offer to Purchase dated June 24, 1997
(a)(2) Form of Letter of Transmittal
(a)(3) Form of Notice of Guaranteed Delivery
(a)(4) Form of Letter dated June 24, 1997 to Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees
(a)(5) Form of Letter dated June 24, 1997 to Clients for use by Brokers,
Dealers, Commercial Banks, Trust Companies and Other Nominees
(a)(6) Form of Letter dated June 24, 1997 to shareholders from the
Chief Executive Officer and President of the Company
(a)(7) Form of Press Release issued by the Company dated June 17, 1997
(a)(8) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9
(b) Not applicable
(c) Not applicable
(d) Not applicable
(e) Not applicable
(f) Not applicable
(g)(1) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996, File No. 0-29026, is incorporated herein
by reference
(g)(2) The Company's Quarterly Report on Form 10-Q for the three months ended
March 31, 1997, File No. 0-29026, is incorporated herein by reference
</TABLE>
EXHIBIT (a)(1)
ENStar Inc.
Offer to Purchase For Cash
up to 600,000 Shares of its Common Stock
at a Purchase Price Not Greater Than
$6.25 Nor Less Than $4.75 Per Share.
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT
4.00 P.M., MINNEAPOLIS TIME, ON FRIDAY, JULY 25, 1997,
UNLESS THE OFFER IS EXTENDED.
ENStar Inc., a Minnesota corporation (the "Company"), invites its
shareholders to tender shares of its common stock, par value $.01 per share (the
"Shares" or the "Common Stock"), to the Company at prices not greater than $6.25
nor less than $4.75 per share in cash, specified by tendering shareholders, upon
the terms and subject to the conditions set forth in this Offer to Purchase and
the related Letter of Transmittal (which together constitute the "Offer").
The Company will, upon the terms and subject to the conditions of the
Offer, determine a single per share price (not greater than $6.25 nor less than
$4.75 per share), net to the seller in cash (the "Purchase Price"), that it will
pay for Shares validly tendered and not withdrawn pursuant to the Offer, taking
into account the number of Shares so tendered and the prices specified by
tendering shareholders. The Company will select the lowest Purchase Price that
will allow it to buy 600,000 Shares (or such lesser number of Shares as are
validly tendered at prices not greater than $6.25 nor less than $4.75 per share)
validly tendered and not withdrawn pursuant to the Offer. The Company will pay
the Purchase Price for all Shares validly tendered at prices at or below the
Purchase Price and not withdrawn, upon the terms and subject to the conditions
of the Offer, including the proration terms hereof. The Company reserves the
right, in its sole discretion, to purchase more than 600,000 Shares pursuant to
the Offer.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 6.
The Shares are traded on the Nasdaq National Market under the symbol
"ENSR". On June 16, 1997 the last full trading day on the Nasdaq National
Market prior to the announcement by the Company of the Offer, the closing per
share sales price as reported on the Nasdaq National Market was $4.75.
Shareholders are urged to obtain current market quotations for the shares. See
Section 7.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES.
SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO,
HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE
TENDERED. THE COMPANY HAS BEEN ADVISED THAT NONE OF ITS DIRECTORS OR EXECUTIVE
OFFICERS INTENDS TO TENDER ANY SHARES PURSUANT TO THE OFFER.
<PAGE>
IMPORTANT
Any shareholder desiring to tender all or any portion of such holder's
Shares should either (i) complete and sign the Letter of Transmittal or a
facsimile thereof in accordance with the instructions in the Letter of
Transmittal, mail or deliver it with any required signature guarantee and any
other required documents to Norwest Bank Minnesota, N.A. (the "Depositary"),
and either mail or deliver the stock certificates for such Shares to the
Depositary (with all such other documents) or follow the procedure for
book-entry delivery set forth in Section 3, or (ii) request a broker, dealer,
commercial bank, trust company or other nominee to effect the transaction for
such shareholder. A shareholder having Shares registered in the name of a
broker, dealer, commercial bank, trust company or other nominee must contact
that broker, dealer, commercial bank, trust company or other nominee if such
shareholder desires to tender such Shares. Shareholders who desire to tender
Shares and whose certificates for such Shares are not immediately available
or who cannot comply with the procedure for book-entry transfer on a timely
basis or whose other required documentation cannot be delivered to the
Depositary, in any case, by the expiration of the Offer should tender such
Shares by following the procedures for guaranteed delivery set forth in
Section 3. TO EFFECT A VALID TENDER OF THEIR SHARES, SHAREHOLDERS MUST VALIDLY
COMPLETE THE LETTER OF TRANSMITTAL, INCLUDING THE SECTION RELATING TO THE PRICE
AT WHICH THEY ARE TENDERING SHARES.
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to: Peter E. Flynn, Executive Vice President,
ENStar Inc., 6479 City West Parkway, Eden Prairie, Minnesota 55344-3246
(telephone (612) 941-3200).
The Date of this Offer to Purchase is June 24, 1997.
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
COMPANY AS TO WHETHER SHAREHOLDERS SHOULD TENDER OR REFRAIN FROM TENDERING
SHARES PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THE OFFER ON BEHALF
OF THE COMPANY OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE
LETTER OF TRANSMITTAL. DO NOT RELY ON ANY SUCH RECOMMENDATION OR ANY SUCH
INFORMATION OR REPRESENTATIONS, IF GIVEN OR MADE, AS HAVING BEEN AUTHORIZED
BY THE COMPANY.
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TABLE OF CONTENTS
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Section Page
SUMMARY 4
INTRODUCTION 6
THE OFFER 8
1. Number of Shares; Proration 8
2. Tenders by Owners of Fewer than 100 Shares 10
3. Procedure for Tendering Shares 11
4. Withdrawal Rights 16
5. Purchase of Shares and Payment of Purchase Price 17
6. Certain Conditions of the Offer 18
7. Price Range of Shares; Dividends 21
8. Background and Purpose of the Offer; Certain
Effects of the Offer 22
9. Interests of Directors and Executive Officers;
Transactions and Arrangements Concerning the Shares 24
10. Source and Amount of Funds 25
11. Certain Information about the Company 25
12. Effects of the Offer on the Market for Shares;
Registration under the Exchange Act 38
13. Certain Legal Matters; Regulatory and Foreign
Approvals 39
14. Certain U.S. Federal Income Tax Consequences 39
15. Extension of the Offer; Termination; Amendments 42
16. Fees and Expenses 44+
17. Miscellaneous 44
</TABLE>
<PAGE>
SUMMARY
This general summary is provided for the convenience of the Company's
shareholders and is qualified in its entirety by reference to the full text
and more specific details of this Offer to Purchase.
Number of Shares to be Purchased 600,000 Shares (or such lesser number of
Shares as are validly tendered). The
Company reserves the right, in its sole
discretion to purchase more than 600,000
Shares pursuant to the Offer.
Purchase Price The Company will determine a single per
share cash price, not greater than $6.25
nor less than $4.75 per share, that it
will pay for Shares validly tendered.
All Shares acquired in the Offer will be
acquired at the Purchase Price even if
tendered below the Purchase Price. Each
shareholder desiring to tender Shares
must specify in the Letter of Transmittal
the minimum price (not greater than $6.25
nor less than $4.75 per share) at which
such shareholder is willing to have
Shares purchased by the Company.
How to Tender Shares See Section 3. Call: Peter E. Flynn,
Executive Vice President, ENStar Inc., 6479
City West Parkway, Eden Prairie, Minnesota
55344-3246 (telephone (612) 941-3200) or
consult your broker for assistance.
Brokerage Commissions None.
Stock Transfer Tax None, if payment is made to the
registered holder.
Expiration and Proration Dates July 25, 1997, at 4.00 p.m., Minneapolis
time, unless extended by the Company.
Payment Date As soon as practicable after the
Expiration Time.
Position of the Company and
its Directors Neither the Company nor its Board of
Directors makes any recommendation to any
shareholder as to whether to tender or
refrain from tendering Shares.
<PAGE>
Withdrawal Rights Tendered Shares may be withdrawn at any
time until 4.00 p.m., Minneapolis time,
on Friday, July 25, 1997, unless the
the Offer is extended by the Company and,
unless previously purchased, after 12:00
midnight, Minneapolis time, on August 15,
1997. See Section 4.
Odd Lots There will be no proration of Shares
tendered by any shareholder owning
beneficially fewer than 100 Shares in the
aggregate as of the close of business on
June 17, 1997, and as of the Expiration
Time, who tenders all such Shares at or
below the Purchase Price prior to the
Expiration Time and who checks the
"Odd Lots" box in the Letter of
Transmittal.
Further Developments Regarding
the Offer Call: Peter E. Flynn, Executive Vice President,
ENStar Inc., 6479 City West Parkway, Eden
Prairie, Minnesota 55344-3246 (telephone
612-941-3200) or consult your broker.
<PAGE>
To the Holders of Shares of Common Stock of ENStar Inc.:
INTRODUCTION
ENStar Inc., a Minnesota corporation (the "Company"), invites its
shareholders to tender shares ("Shares") of its common stock, par value $.01 per
share (the "Common Stock"), to the Company at prices not greater than $6.25 nor
less than $4.75 per share in cash, specified by tendering shareholders, upon the
terms and subject to the conditions set forth in this Offer to Purchase and the
related Letter of Transmittal (which together constitute the "Offer").
The Company will, upon the terms and subject to the conditions of the
Offer, determine a single per share price (not greater than $6.25 nor less than
$4.75 per share), net to the seller in cash (the "Purchase Price"), that it will
pay for Shares validly tendered and not withdrawn pursuant to the Offer, taking
into account the number of Shares so tendered and the prices specified by
tendering shareholders. The Company will select the lowest Purchase Price that
will allow it to buy 600,000 Shares (or such lesser number of Shares as are
validly tendered at prices not greater than $6.25 nor less than $4.75 per share)
validly tendered and not withdrawn pursuant to the Offer. The Company will pay
the Purchase Price for all Shares validly tendered prior to the Expiration Time
(as defined in Section 1) at prices at or below the Purchase Price and not
withdrawn, upon the terms and subject to the conditions of the Offer, including
the proration terms described below. The Company reserves the right, in its
sole discretion, to purchase more than 600,000 Shares pursuant to the Offer.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 6.
If, before the Expiration Time, more than 600,000 Shares (or such greater
number of Shares as the Company may elect to purchase) are validly tendered at
or below the Purchase Price and not withdrawn, the Company will, upon the terms
and subject to the conditions of the Offer, purchase Shares first from all Odd
Lot Owners (as defined in Section 2) who validly tender all their Shares at or
below the Purchase Price and then on a pro rata basis from all other
shareholders who validly tender Shares at prices at or below the Purchase Price.
The Company will return at its own expense all Shares not purchased pursuant to
the Offer, including Shares tendered at prices greater than the Purchase Price
and not withdrawn and Shares not purchased because of proration. The Purchase
Price will be paid net to the tendering shareholders in cash for all Shares
purchased. Tendering shareholders will not be obligated to pay brokerage
commissions, solicitation fees or, subject to Instruction 7 of the Letter of
Transmittal, stock transfer taxes on the Company's purchase of Shares pursuant
to the Offer. However, any tendering shareholder or other payee who fails to
complete, sign and return to the Depositary (as defined below) the Substitute
<PAGE>
Form W-9 that is included with the Letter of Transmittal may be subject to
required backup federal income tax withholding of 31% of the gross proceeds
payable to such shareholder or other payee pursuant to the offer. See
Section 3. In addition, the Company will pay all fees and expenses of Norwest
Bank Minnesota, N.A. (the "Depositary") in connection with the Offer. See
Section 16.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES.
SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO,
HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE
TENDERED. THE COMPANY HAS BEEN ADVISED THAT NONE OF ITS DIRECTORS OR EXECUTIVE
OFFICERS INTENDS TO TENDER ANY SHARES PURSUANT TO THE OFFER.
The Company announced on June 17, 1997 its intention to commence the Offer
during the week of June 23, 1997 and included in such announcement certain terms
of the Offer consistent with those set forth in this Offer to Purchase.
The Company is making the Offer because the Board of Directors believes
that (i) the Offer will afford those shareholders who desire liquidity an
opportunity to sell all or a portion of their Shares, which might otherwise be
more difficult given the historical daily trading volumes of the Common Stock
since the stock began trading in February 1997, and (ii) the purchase of the
Shares is an attractive investment opportunity for a portion of the cash that
has been generated pursuant to the Company's subordinated debenture program,
while still allowing the Company to have sufficient cash and access to other
sources of capital to fund its capital expenditure requirements and growth
initiatives.
As of June 16, 1997, there were 3,306,000 Shares outstanding and 22,687
Shares issuable upon exercise of outstanding vested stock options under the
Company's 1996 Incentive Stock Option plan (the "Options"). The 600,000 Shares
that the Company is offering to purchase represent approximately 18.1% of the
outstanding Shares. The Shares are approved for quotation, and traded on the
Nasdaq National Market under the symbol "ENSR." On June 16, 1997, the last full
trading day prior to the announcement by the Company of the Offer, the closing
per share sales price as reported on the Nasdaq National Market was $4.75. The
Company urges shareholders to obtain current quotations on the market price of
the Shares.
<PAGE>
THE OFFER
1. Number of Shares; Proration
Upon the terms and subject to the conditions of the Offer, the Company
will accept for payment (and thereby purchase) 600,000 Shares or such lesser
number of Shares as are validly tendered before the Expiration Time (and not
withdrawn in accordance with Section 4) at a net cash price (determined in the
manner set forth below) not greater than $6.25 nor less than $4.75 per share.
The term "Expiration Time" means 4.00 p.m. Minneapolis time, on Friday, July 25,
1997, unless and until the Company in its sole discretion shall have extended
the period of time during which the Offer is open, in which event the term
"Expiration Time" shall refer to the latest time and date at which the Offer, as
so extended by the Company, shall expire. See Section 15 for a description of
the Company's right to extend the time during which the Offer is open and to
delay, terminate or amend the Offer. Subject to Section 2, if the Offer is
oversubscribed, Shares tendered at or below the Purchase Price before the
Expiration Time will be eligible for proration. The proration period also
expires at the Expiration Time.
The Company will, upon the terms and subject to the conditions of the
Offer, determine a single per share Purchase Price that it will pay for Shares
validly tendered and not withdrawn pursuant to the Offer, taking into account
the number of Shares so tendered and the prices specified by tendering
shareholders. The Company will select the lowest Purchase Price that will allow
it to buy 600,000 Shares (or such lesser number as are validly tendered at
prices not greater than $ 6.25 nor less than $4.75 per share) validly tendered
and not withdrawn pursuant to the Offer. The Company reserves the right, in its
sole discretion, to purchase more than 600,000 Shares pursuant to the Offer.
See Section 15. In accordance with applicable regulations of the Securities and
Exchange Commission (the "Commission"), the Company may purchase pursuant to the
Offer an additional amount of Shares not to exceed 2% of the outstanding Shares
without amending or extending the Offer. If (i) the Company increases or
decreases the price to be paid for Shares, the Company increases the number of
Shares being sought and such increase in the number of Shares being sought
exceeds 2% of the outstanding Shares, or the Company decreases the number of
Shares being sought and (ii) the Offer is scheduled to expire at any time
earlier than the expiration of a period ending on the tenth business day from,
and including, the date that notice of such increase or decrease is first
published, sent or given in the manner specified in Section 15, the Offer will
be extended until the expiration of such period of ten business days. For
purposes of the Offer, a "business day" means any day other than a Saturday,
Sunday or federal holiday and consists of the time period from 12:01 a.m.
through 12:00 midnight, Eastern Daylight Time.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 6.
<PAGE>
In accordance with Instruction 5 of the Letter of Transmittal, each
shareholder desiring to tender Shares must specify the price (not greater than
$6.25 nor less than $4.75 per share) at which such shareholder is willing to
have the Company purchase Shares. As promptly as practicable following the
Expiration Time, the Company will, in its sole discretion, determine the
Purchase Price (not greater than $6.25 nor less than $4.75 per share) that it
will pay for Shares validly tendered and not withdrawn pursuant to the Offer,
taking into account the number of Shares so tendered and the prices specified
by tendering shareholders. The Company will pay the Purchase Price, even if
such Shares were tendered below the Purchase Price, for all Shares validly
tendered prior to the Expiration Time at prices at or below the Purchase Price
and not withdrawn, upon the terms and subject to the conditions of the Offer.
All Shares not purchased pursuant to the Offer, including Shares tendered at
prices greater than the Purchase Price and Shares not purchased because of
proration, will be returned to the tendering shareholders at the Company's
expense as promptly as practicable following the Expiration Time.
If the number of Shares validly tendered at or below the Purchase Price
and not withdrawn prior to the Expiration Time is less than or equal to 600,000
Shares (or such greater number of Shares as the Company may elect to purchase),
the Company will, upon the terms and subject to the conditions of the Offer,
purchase at the Purchase Price all Shares so tendered.
Priority. Upon the terms and subject to the conditions of the Offer, in the
event that prior to the Expiration Time more than 600,000 Shares (or such
greater number of Shares as the Company may elect to purchase pursuant to the
Offer) are validly tendered at or below the Purchase Price and not withdrawn,
the Company will purchase such validly tendered Shares in the following order
of priority:
(i) all Shares validly tendered at or below the Purchase Price and not
withdrawn prior to the Expiration Time by any Odd Lot Owner (as defined in
Section 2) who:
(a) tenders all Shares beneficially owned by such Odd Lot Owner at
or below the Purchase Price (partial tenders will not qualify for
this preference); and
(b) completes the box captioned "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed Delivery;
and
(ii) after purchase of all of the foregoing Shares, all other Shares
validly tendered at or below the Purchase Price and not withdrawn prior to
the Expiration Time on a pro rata basis.
<PAGE>
Proration. In the event that proration of tendered Shares is required, the
Company will determine the final proration factor as promptly as practicable
after the Expiration Time. Proration for each shareholder tendering Shares
(other than Odd Lot Owners) shall be based on the ratio of the number of Shares
tendered by such shareholder at or below the Purchase Price to the total number
of Shares tendered by all shareholders (other than Odd Lot Owners) at or below
the Purchase Price. This ratio will be applied to shareholders tendering Shares
(other than Odd Lot Owners) to determine the number of Shares that will be
purchased from each such shareholder pursuant to the Offer. Although the
Company does not expect to be able to announce the final results of such
proration until approximately seven business days after the Expiration Time,
it will announce preliminary results of proration by press release as promptly
as practicable after the Expiration Time. Shareholders can obtain such
preliminary information from Peter E. Flynn, Executive Vice President, ENStar
Inc., 6479 City West Parkway, Eden Prairie, Minnesota 55344-3246 and may be able
to obtain such information from their brokers.
As described in Section 14, the number of Shares that the Company will
purchase from a shareholder may affect the United States federal income tax
consequences to the shareholder of such purchase and therefore may be relevant
to a shareholder's decision whether to tender Shares. The Letter of Transmittal
affords each tendering shareholder the opportunity to designate the order of
priority in which Shares tendered are to be purchased in the event of
proration.
This Offer to Purchase and the related Letter of Transmittal will be mailed
to holders of record of Shares as of June 24, 1997, and will be furnished to
brokers, banks and similar persons whose names, or the names of whose nominees,
appear on the Company's shareholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Shares.
2. Tenders by Owners of Fewer Than 100 Shares
The Company, upon the terms and subject to the conditions of the Offer,
will accept for purchase, without proration, all Shares validly tendered at or
below the Purchase Price by or on behalf of shareholders who beneficially owned
as of the close of business on June 17, 1997, and continue to beneficially own
as of the Expiration Time, an aggregate of fewer than 100 Shares ("Odd Lot
Owners"). To avoid proration, however, an Odd Lot Owner must validly tender at
or below the Purchase Price all such Shares that such Odd Lot Owner beneficially
owns; partial tenders will not qualify for this preference. This preference is
not available to partial tenders or to owners of 100 or more Shares in the
aggregate, even if such owners have separate stock certificates for fewer than
100 such Shares. Any Odd Lot Owner wishing to tender all such Shares
beneficially owned by such shareholder pursuant to this Offer must complete the
box captioned "Odd Lots" in the Letter of Transmittal and, if applicable, on the
Notice of Guaranteed Delivery and must properly indicate in the section entitled
"Price (In Dollars) Per Share At Which Shares Are Being Tendered" in the Letter
<PAGE>
of Transmittal the price at which such Shares are being tendered, except that
an Odd Lot Owner may check the box in the section entitled "Odd Lots" indicating
that the shareholder is tendering all of such shareholder's Shares at the
Purchase Price. See Section 3. Shareholders owning an aggregate of less than
100 Shares whose Shares are purchased pursuant to the Offer will avoid both the
payment of brokerage commissions and any applicable odd lot discounts payable on
a sale of their Shares in transactions on the Nasdaq National Market.
3. Procedure for Tendering Shares
Proper Tender of Shares. For Shares to be validly tendered pursuant to the
Offer:
(i) the certificates for such Shares (or confirmation of receipt of such
Shares pursuant to the procedures for book-entry transfer set forth below),
together with a properly completed and duly executed Letter of Transmittal
(or manually signed facsimile thereof) with any required signature
guarantees, and any other documents required by the Letter of Transmittal,
must be received prior to the Expiration Time by the Depositary at its
address set forth on the back cover of this Offer to Purchase; or
(ii) the tendering shareholder must comply with the guaranteed delivery
procedure set forth below.
As specified in Instruction 5 of the Letter of Transmittal, each
shareholder desiring to tender Shares pursuant to the Offer must properly
indicate in the Section entitled "Price (In Dollars) Per Share At Which Shares
Are Being Tendered" in the Letter of Transmittal the price (in multiples of
$.0625) at which such shareholder's Shares are being tendered, except that an
Odd Lot Owner may check the box in the section of the Letter of Transmittal
entitled "Odd Lots" indicating that such shareholder is tendering all of such
shareholder's shares at the Purchase Price. Shareholders desiring to tender
Shares at more than one price must complete separate Letters of Transmittal for
each price at which Shares are being tendered, except that the same Shares
cannot be tendered (unless properly withdrawn previously in accordance with the
terms of the Offer) at more than one price. In order validly to tender Shares,
one and only one price box must be checked in the appropriate section on each
Letter of Transmittal.
Signature Guarantees and Method of Delivery. No signature guarantee is required
on the Letter of Transmittal if (i) the Letter of Transmittal is signed by the
registered holder of the Shares (which term, for purposes of this Section,
includes any participant in The Depository Trust Company ("DTC") whose name
appears on a security position listing as the holder of the Shares) tendered
therewith and payment and delivery are to be made directly to such registered
holder, or (ii) if Shares are tendered for the account of a member firm of a
registered national securities exchange, a member of the National Association of
Securities Dealers, Inc. or a commercial bank or trust company (not a savings
bank or savings and loan association) having an office, branch or agency in the
<PAGE>
United States (each such entity being hereinafter referred to as an "Eligible
Institution"). In all other cases, all signatures on the Letter of Transmittal
must be guaranteed by an Eligible Institution. See Instruction 1 of the Letter
of Transmittal. If a certificate representing Shares is registered in the name
of a person other than the signer of a Letter of Transmittal, or if payment is
to be made, or Shares not purchased or tendered are to be issued, to a person
other than the registered holder, the certificate must be endorsed or
accompanied by an appropriate stock power, in either case signed exactly as the
name of the registered holder appears on the certificate, with the signature on
the certificate or stock power guaranteed by an Eligible Institution. In this
regard see Section 5 for information with respect to applicable stock transfer
taxes. In all cases, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of certificates for such Shares (or a timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at DTC as described
above), a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile thereof) and any other documents required by the
Letter of Transmittal.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING SHARE CERTIFICATES, THE
LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND
RISK OF THE TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
Book-Entry Delivery. The Depositary will establish an account with respect
to the Shares at DTC for purposes of the Offer within two business days after
the date of this Offer to Purchase. Any financial institution that is a
participant in DTC's book-entry transfer system may make book-entry delivery
of the Shares by causing such facility to transfer such Shares into the
Depositary's account in accordance with the DTC's procedure for such transfer.
Even though delivery of Shares may be effected through book-entry transfer into
the Depositary's account at DTC, a properly completed and duly executed Letter
of Transmittal (or manually signed facsimile thereof), with any required
signature guarantees and other required documents must, in any case, be
transmitted to and received by the Depositary at one of its addresses set forth
on the back cover of this Offer to Purchase prior to the Expiration Time, or the
guaranteed delivery procedure set forth below must be followed. Delivery of the
Letter of Transmittal and any other required documents to DTC does not
constitute delivery to the Depositary.
<PAGE>
Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's Share certificates cannot be delivered to the
Depositary prior to the Expiration Time (or the procedures for book-entry
transfer cannot be completed on a timely basis) or time will not permit all
required documents to reach the Depositary before the Expiration Time, such
Shares may nevertheless be tendered provided that all of the following
conditions are satisfied:
(i) such tender is made by or through an Eligible Institution;
(ii) the Depositary receives (by hand, mail, overnight courier,
telegram or facsimile transmission), at or prior to the Expiration
Time, a properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form the Company has provided with this
Offer to Purchase (indicating the price at which the Shares are being
tendered), including (where required) a signature guarantee by an
Eligible Institution in the form set forth in such Notice of
Guaranteed Delivery; and
(iii) the certificates for all tendered Shares in proper form for
transfer (or confirmation of book-entry transfer of such Shares into
the Depositary's account at DTC), together with a properly completed
and duly executed Letter of Transmittal (or manually signed facsimile
thereof) and any required signature guarantees or other documents
required by the Letter of Transmittal, are received by the Depositary
within three Nasdaq National Market trading days after the date the
Depositary receives such Notice of Guaranteed Delivery.
If any tendered Shares are not purchased, or if less than all Shares
evidenced by a shareholder's certificates are tendered, certificates for
unpurchased Shares will be returned as promptly as practicable after the
expiration or termination of the Offer or, in the case of Shares tendered by
book-entry transfer at DTC, such Shares will be credited to the appropriate
account maintained by the tendering shareholder at the Book-Entry Transfer
Facility, in each case without expense to such shareholder.
Backup Federal Income Tax Withholding. Under the United States federal
income tax backup withholding rules, 31% of the gross proceeds payable to a
shareholder or other payee pursuant to the Offer must be withheld and remitted
to the United States Treasury unless an exemption applies under the applicable
law and regulations or unless the shareholder or other payee provides such
person's taxpayer identification number (employer identification number or
social security number) to the Depositary and certifies under penalties of
perjury that such number is correct. Therefore, each tendering shareholder
should complete and sign the Substitute Form W-9 included as part of the Letter
of Transmittal so as to provide the information and certification necessary to
avoid backup withholding. Certain shareholders (including, among others, all
corporations and certain foreign shareholders (in addition to foreign
corporations)) are not subject to these backup withholding and reporting
<PAGE>
requirements. In order for a foreign shareholder to qualify as an exempt
recipient, that shareholder must submit an IRS Form W-8 or a Substitute
Form W-8, signed under penalties of perjury, attesting to that shareholder's
exempt status. Such statements can be obtained from the Depositary. See
Instructions 10 and 11 of the Letter of Transmittal.
For a discussion of certain other United States federal income tax
consequences to tendering shareholders, see Section 14.
Withholding For Foreign Shareholders. Even if a foreign shareholder has
provided the required certification to avoid backup withholding, the Depositary
will withhold United States federal income taxes equal to 30% of the gross
payments payable to a foreign shareholder or his or her agent unless the
Depositary determines that a reduced rate of withholding is available pursuant
to a tax treaty or that an exemption from withholding is applicable because
such gross proceeds are effectively connected with the conduct of a trade or
business within the United States. For this purpose, a foreign shareholder is
any shareholder that is not (i) a citizen or resident of the United States,
(ii) a corporation, partnership, or other entity created or organized in or
under the laws of the United States, any State or any political subdivision
thereof or (iii) an estate or trust, the income of which is subject to United
States federal income taxation regardless of the source of such income. In
order to obtain a reduced rate of withholding pursuant to a tax treaty, a
foreign shareholder must deliver to the Depositary before the payment a properly
completed and executed IRS Form 1001. In order to obtain an exemption from
withholding on the grounds that the gross proceeds paid pursuant to the Offer
are effectively connected with the conduct of a trade or business within the
United States, a foreign shareholder must deliver to the Depositary a properly
completed and executed IRS Form 4224. The Depositary will determine a
shareholder's status as a foreign shareholder and eligibility for a reduced rate
of, or exemption from, withholding by reference to any outstanding certificates
or statements concerning eligibility for a reduced rate of, or exemption from,
withholding (e.g., IRS Form 1001 or IRS Form 4224) unless facts and
circumstances indicate that such reliance is not warranted. A foreign
shareholder may be eligible to obtain a refund of all or a portion of any tax
withheld if such shareholder meets the "complete redemption", "substantially
disproportionate" or "not essentially equivalent to a dividend" test described
in Section 14 or is otherwise able to establish that no tax or a reduced amount
of tax is due. Backup withholding generally will not apply to amounts subject
to the 30% or a treaty-reduced rate of withholding. Foreign shareholders are
urged to consult their own tax advisors regarding the application of United
States federal income tax withholding, including eligibility for a withholding
tax reduction or exemption, and the refund procedure. See Instructions 10 and
11 of the Letter of Transmittal.
<PAGE>
Tendering Shareholder's Representation and Warranty; Company's Acceptance
Constitutes an Agreement. It is a violation of Rule 14e-4 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), for a person
acting alone or in concert with others, directly or indirectly, to tender Shares
for such person's own account unless at the time of tender and at the Expiration
Time such person has a "net long position" equal to or greater than the amount
tendered in (i) the Shares, and will deliver or cause to be delivered such
Shares for the purpose of tendering to the Company within the period specified
in the Offer, or (ii) other securities immediately convertible into, exercisable
for or exchangeable into Shares ("Equivalent Securities") and, upon the
acceptance of such tender, will acquire such Shares by conversion, exchange or
exercise of such Equivalent Securities to the extent required by the terms of
the Offer and will deliver or cause to be delivered such Shares so acquired for
the purpose of tender to the Company within the period specified in the Offer.
Rule 14e-4 also provides a similar restriction applicable to the tender or
guarantee of a tender on behalf of another person. A tender of Shares made
pursuant to any method of delivery set forth herein will constitute the
tendering shareholder's representation and warranty to the Company that
(i) such shareholder has a "net long position" in Shares or Equivalent
Securities being tendered within the meaning of Rule 14e-4, and (ii) such
tender of Shares complies with Rule 14e-4. The Company's acceptance for payment
of Shares tendered pursuant to the Offer will constitute a binding agreement
between the tendering shareholder and the Company upon the terms and subject to
the conditions of the Offer.
Determinations of Validity; Rejection of Shares; Waiver of Defects; No
Obligation to Give Notice of Defects. All questions as to the number of Shares
to be accepted, the price to be paid therefor and the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares will be determined by the Company, in its sole discretion, which
determination shall be final and binding on all parties. The Company reserves
the absolute right to reject any or all tenders it determines not to be in
proper form or the acceptance of or payment for which may, in the opinion of the
Company's counsel, be unlawful. The Company also reserves the absolute right to
waive any of the conditions of the Offer and any defect or irregularity in the
tender of any particular Shares. No tender of Shares will be deemed to be
properly made until all defects or irregularities have been cured or waived.
None of the Company, the Depositary or any other person is or will be obligated
to give notice of any defects or irregularities in tenders, and none of them
will incur any liability for failure to give any such notice.
CERTIFICATES FOR SHARES, TOGETHER WITH A PROPERLY COMPLETED LETTER OF
TRANSMITTAL AND ANY OTHER DOCUMENTS REQUIRED BY THE LETTER OF TRANSMITTAL, MUST
BE DELIVERED TO THE DEPOSITARY AND NOT TO THE COMPANY. ANY SUCH DOCUMENTS
DELIVERED TO THE COMPANY WILL NOT BE FORWARDED TO THE DEPOSITARY AND THEREFORE
WILL NOT BE DEEMED TO BE VALIDLY TENDERED.
<PAGE>
4. Withdrawal Rights
Except as otherwise provided in this Section 4, tenders of Shares pursuant
to the Offer are irrevocable. Shares tendered pursuant to the Offer may be
withdrawn at any time before the Expiration Time and, unless accepted for
payment by the Company as provided in this Offer to Purchase, may also be
withdrawn after 12:00 midnight, Minneapolis time, on August 15, 1997. For a
withdrawal to be effective, the Depositary must receive (at its address set
forth on the back cover of this Offer to Purchase) a notice of withdrawal in
written, telegraphic or facsimile transmission form on a timely basis. Such
notice of withdrawal must specify the name of the person who tendered the Shares
to be withdrawn, the number of Shares tendered, the number of Shares to be
withdrawn and the name of the registered holder, if different from that of the
person who tendered such Shares. If the certificates have been delivered or
otherwise identified to the Depositary, then, prior to the release of such
certificates, the tendering shareholder must also submit the serial numbers
shown on the particular certificates evidencing the Shares and the signature on
the notice of withdrawal must be guaranteed by an Eligible Institution (except
in the case of Shares tendered by an Eligible Institution). If Shares have been
tendered pursuant to the procedure for book-entry transfer set forth in
Section 3, the notice of withdrawal must specify the name and the number of the
account at DTC to be credited with the withdrawn Shares and otherwise comply
with the procedures of such facility. All questions as to the form and validity
(including time of receipt) of notices of withdrawal will be determined by the
Company, in its sole discretion, which determination shall be final and binding
on all parties. None of the Company, the Depositary or any other person is or
will be obligated to give any notice of any defects or irregularities in any
notice of withdrawal, and none of them will incur any liability for failure to
give any such notice. Withdrawals may not be rescinded, and any Shares properly
withdrawn will thereafter be deemed not tendered for purposes of the Offer.
Withdrawn Shares, however, may be retendered before the Expiration Time by again
following any of the procedures described in Section 3.
If the Company extends the Offer, is delayed in its purchase of Shares or
is unable to purchase Shares pursuant to the Offer for any reason, then, without
prejudice to the Company's rights under the Offer, the Depositary may, subject
to applicable law, retain on behalf of the Company all tendered Shares, and such
Shares may not be withdrawn except to the extent tendering shareholders are
entitled to withdrawal rights as described in this Section 4.
5. Purchase of Shares and Payment of Purchase Price
The Company will, upon the terms and subject to the conditions of the
Offer, determine a single per share Purchase Price that it will pay for Shares
validly tendered and not withdrawn pursuant to the Offer, taking into account
the number of Shares so tendered and the prices specified by tendering
shareholders, and will accept for payment and pay for (and thereby purchase)
Shares validly tendered at or below the Purchase Price and not withdrawn as
soon as practicable after the Expiration Time. For purposes of the Offer, the
<PAGE>
Company will be deemed to have accepted for payment (and therefore purchased),
subject to proration, Shares that are validly tendered at or below the Purchase
Price and not withdrawn when, as and if it gives oral or written notice to the
Depositary of its acceptance of such Shares for payment pursuant to the Offer.
Upon the terms and subject to the conditions of the Offer, the Company will
purchase and pay a single per share Purchase Price for all of the Shares
accepted for payment pursuant to the Offer as soon as practicable after the
Expiration Time. In all cases, payment for Shares tendered and accepted for
payment pursuant to the Offer will be made promptly (subject to possible delay
in the event of proration) but only after timely receipt by the Depositary of
certificates for Shares (or of a timely confirmation of a book-entry transfer of
such Shares into the Depositary's account at DTC), a properly completed and duly
executed Letter of Transmittal (or manually signed facsimile thereof) and any
other required documents.
Payment for Shares purchased pursuant to the Offer will be made by
depositing the aggregate Purchase Price therefor with the Depositary, which will
act as agent for tendering shareholders for the purpose of receiving payment
from the Company and transmitting payment to the tendering shareholders.
In the event of proration, the Company will determine the proration factor and
pay for those tendered Shares accepted for payment as soon as practicable after
the Expiration Time. The Company does not, however, expect to be able to
announce the final results of any such proration until approximately seven
business days after the Expiration Time. Under no circumstances will the
Company pay interest on the Purchase Price including, without limitation, by
reason of any delay in making payment. Certificates for all Shares not
purchased, including all Shares tendered at prices greater than the Purchase
Price and Shares not purchased due to proration, will be returned (or, in the
case of Shares tendered by book-entry transfer, such Shares will be credited to
the account maintained with DTC by the participant who so delivered such Shares)
as promptly as practicable following the Expiration Time or termination of the
Offer without expense to the tendering shareholder. In addition, if certain
events occur, the Company may not be obligated to purchase Shares pursuant to
the Offer. See Section 6.
The Company will pay all stock transfer taxes, if any, payable on the
transfer to it of Shares purchased pursuant to the Offer; provided, however,
that if payment of the Purchase Price is to be made to, or (in the circumstances
permitted by the Offer) if unpurchased Shares are to be registered in the name
of, any person other than the registered holder, or if tendered certificates are
registered in the name of any person other than the person signing the Letter of
Transmittal, the amount of all stock transfer taxes, if any (whether imposed on
the registered holder or such other person), payable on account of the transfer
to such person will be deducted from the Purchase Price unless evidence
satisfactory to the Company of the payment of such taxes or exemption therefrom
is submitted. See Instruction 7 of the Letter of Transmittal.
<PAGE>
ANY TENDERING SHAREHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY, SIGN
AND RETURN TO THE DEPOSITARY THE SUBSTITUTE FORM W-9 INCLUDED WITH THE LETTER OF
TRANSMITTAL WILL BE SUBJECT TO REQUIRED BACKUP FEDERAL INCOME TAX WITHHOLDING OF
31% OF THE GROSS PROCEEDS PAID TO SUCH SHAREHOLDER OR OTHER PAYEE PURSUANT TO
THE OFFER. SEE SECTION 3. ALSO SEE SECTION 3 REGARDING FEDERAL INCOME TAX
CONSEQUENCES FOR FOREIGN SHAREHOLDERS.
6. Certain Conditions of the Offer
Notwithstanding any other provision of the Offer, the Company shall not be
required to accept for payment, purchase or pay for any Shares tendered, and may
terminate or amend the Offer or may postpone the acceptance for payment of, or
the purchase of and the payment for Shares tendered, subject to Rule 13e-4(f)
promulgated under the Exchange Act, if at any time on or after June 24, 1997,
and prior to the time of payment for any such Shares (whether any Shares have
theretofore been accepted for payment, purchased or paid for pursuant to the
Offer) any of the following events shall have occurred (or shall have been
determined by the Company to have occurred) that, in the Company's judgment in
any such case and regardless of the circumstances giving rise thereto (including
any action or omission to act by the Company), makes it inadvisable to proceed
with the Offer or with such acceptance for payment or payment:
(a) there shall have been threatened, instituted or pending before
any court, agency, authority or other tribunal any action, suit or
proceeding by any government or governmental, regulatory or
administrative agency or authority or by any other person, domestic
or foreign, or any judgment, order or injunction entered, enforced or
deemed applicable by any such court, authority, agency or tribunal,
which:
(i) challenges or seeks to make illegal, or to delay or
otherwise directly or indirectly to restrain, prohibit or
otherwise affect the making of the Offer or the acquisition
of Shares pursuant to the Offer or is otherwise related in any
manner to, or otherwise affects, the Offer; or
(ii) could, in the sole judgment of the Company, materially
affect the business, condition (financial or other), income,
operations or prospects of the Company and its subsidiaries,
taken as a whole, or otherwise materially impair in any way the
contemplated future conduct of the business of the Company and
its subsidiaries, taken as a whole, or materially impair the
Offer's contemplated benefits to the Company; or
(b) there shall have been any action threatened or taken, or any
approval withheld, or any statute, rule or regulation invoked,
proposed, sought, promulgated, enacted, entered, amended, enforced
or deemed to be applicable to the Offer or the Company or any of its
<PAGE>
subsidiaries, by any government or governmental, regulatory or
administrative authority or agency or tribunal, domestic or foreign,
which, in the sole judgment of the Company, would or might directly or
indirectly result in any of the consequences referred to in clause (i)
or (ii) of paragraph (a) above; or
(c) there shall have occurred:
(i) the declaration of any banking moratorium or any suspension
of payments in respect of banks in the United States (whether o
not mandatory);
(ii) any general suspension of trading in, or limitation on
prices for, securities on any United States national securities
exchange or in the over-the-counter market;
(iii) the commencement of a war, armed hostilities or any other
national or international crisis directly or indirectly involving
the United States;
(iv) any limitation (whether or not mandatory) by any
governmental, regulatory or administrative agency or authority
on, or any event which, in the sole judgment of the Company,
might materially affect, the extension of credit by banks or
other lending institutions in the United States;
(v) any significant decrease in the market price of the Shares
or in the market prices of equity securities generally in the
United States;
(vi) any change in the general political, market, economic or
financial conditions or in the commercial paper markets in the
United States or abroad that could have, in the sole judgment of
the Company, a material adverse effect on the business,condition
(financial or otherwise), income, operations or prospects of the
Company and its subsidiaries, taken as a whole, or on the trading
in the Shares; or
(vii) in the case of any of the foregoing existing at the time
of the announcement of the Offer, a material acceleration or
worsening thereof; or
(d) any change shall occur or be threatened in the business,
condition (financial or other), income, operations or prospects of the
Company and its subsidiaries, taken as a whole, which, in the sole
judgment of the Company, is or may be material to the Company and its
subsidiaries taken as a whole; or
<PAGE>
(e) a tender or exchange offer with respect to some or all of the
Shares (other than the Offer), or any merger, business combination or
similar transaction with or involving the Company or any subsidiary,
shall have been proposed, announced or made by any person; or
(f) any entity or "group" (as that term is used in Section 13(d)(3)
of the Exchange Act) or person (other than entities, groups or
persons, if any, who have filed with the Securities and Exchange
Commission (the "Commission") on or before June 23, 1997, a Schedule
13G or a Schedule 13D with respect to any of the Shares) shall have
acquired or proposed to acquire beneficial ownership of more than 5%
of the outstanding Shares; or
(g) any entity, group or person who has filed with the Commission on
or before such date a Schedule 13G or Schedule 13D with respect to the
Shares shall have acquired, or proposed to acquire, beneficial
ownership of additional Shares constituting more than 5% of the
outstanding Shares or shall have been granted any option or right to
acquire beneficial ownership of more than 5% of the outstanding
Shares; or
(h) any person or group shall have filed a Notification and Report
Form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976
reflecting an intent to acquire the Company or any of its Shares or
assets.
The foregoing conditions are for the Company's sole benefit and may be asserted
by the Company regardless of the circumstances giving rise to any such condition
(including any action or inaction by the Company) or may be waived by the
Company in whole or in part. The Company's failure at any time to exercise any
of the foregoing rights shall not be deemed a waiver of any such right, and each
such right shall be deemed an ongoing right that may be asserted at any time and
from time to time. Any determination by the Company concerning the events
described above and any related judgment or decision by the Company regarding
the inadvisability of proceeding with the purchase of or payment for any Shares
tendered will be final and binding on all parties.
<PAGE>
7. Price Range of Shares; Dividends
The Shares are approved for quotation, and traded on the Nasdaq National
Market. The high and low bid quotations per share on the Nasdaq National Market
as compiled from published financial sources for the periods indicated are
listed below:
High Low
------ ------
1997
1st Quarter (Commencing Feb. 28, 1997) $ 9.00 $ 6.00
2nd Quarter (through June 16, 1997) $ 6.50 $ 4.75
On June 16, 1997, the last full trading day on the Nasdaq National Market
prior to the announcement of the Offer by the Company, the closing per share
sales price as reported on the Nasdaq National Market was $4.75. The Company
urges shareholders to obtain current quotations of the market price of the
Shares.
The Company does not anticipate paying any cash dividends on the Company's
Common Stock in the foreseeable future.
8. Background and Purpose of the Offer; Certain Effects of the Offer
For information with respect to the Company, see "Certain Information about
the Company" in Section 11. The Company announced on June 17, 1997, its
intention to commence the Offer during the week of June 23, 1997, and included
in such announcement certain terms of the Offer consistent with those set forth
in this Offer to Purchase.
The Company is making the Offer because the Board of Directors believes
that (i) the Offer will afford those shareholders who desire liquidity an
opportunity to sell all or a portion of their Shares which might otherwise be
more difficult given the historical daily trading volumes of the Common Stock
since the stock began trading in February 1997, and (ii)the purchase of the
Shares is an attractive investment opportunity for a portion of the cash that
has been generated pursuant to the Company's subordinated debenture program,
while still allowing the Company to have sufficient cash and access to other
sources of capital to fund its capital expenditure requirements and growth
initiatives. For information concerning the Company's subordinated debenture
program, see "Certain Information about the Company" in Section 11.
The Offer provides shareholders who are considering a sale of all or a
portion of their Shares the opportunity to determine the price or prices (not
greater than $6.25 nor less than $4.75 per share) at which they are willing to
sell their Shares and, if any such Shares are purchased pursuant to the Offer,
to sell those Shares for cash to the Company. Any Odd Lot Owners whose Shares
are purchased pursuant to the Offer will avoid both the payment of brokerage
commissions and any applicable odd lot discounts payable on sales of odd lots.
<PAGE>
To the extent the purchase of Shares in the Offer results in a reduction in
the number of shareholders of record, the costs to the Company for services to
shareholders will be reduced. Shareholders who determine not to accept the
Offer will increase their proportionate interest in the Company's equity, and
thus in the Company's future earnings and assets, subject to the Company's right
to issue additional Shares and other equity securities in the future.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES.
SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO,
HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE
TENDERED. THE COMPANY HAS BEEN ADVISED THAT NONE OF ITS DIRECTORS OR EXECUTIVE
OFFICERS INTENDS TO TENDER ANY SHARES PURSUANT TO THE OFFER.
The Company's Common Stock currently is approved for quotation, and traded
on the Nasdaq National Market. The current Nasdaq National Market maintenance
standards require companies listed on the Nasdaq National Market to maintain a
public float of 200,000 shares. These shares must have a total market value of
$1,000,000.
The Company's current public float is approximately 1,230,000 shares with a
market value of approximately $5,842,500, based on the closing price for the
Shares on June 16, 1997, which was $4.75. Upon completion of the Offer, if
600,000 Shares are purchased by the Company, the Company's public float will be
reduced to approximately 630,000 shares having a market value of approximately
$2,992,500, based on a share price of $4.75 per share.
The Nasdaq Stock Market, Inc. (the "Nasdaq") currently is proposing
changing its maintenance standards for the Nasdaq National Market. Two
proposals are currently under consideration and one or both may be implemented
in the near future. If adopted, such new maintenance standards would replace
the current standards. The first proposal requires a public float of 750,000
shares with a market value of $5,000,000. The second proposal requires a public
float of 1,100,000 shares with a market value of $15,000,000.
If the Offer is completed and 600,000 Shares are purchased by the Company,
the Company will not satisfy the maintenance standards of either proposal. If
the Company does not in the future satisfy the Nasdaq National Market
maintenance standards and the Nasdaq does not permit the Company's Common Stock
to continue to be approved for quotation and traded on the Nasdaq National
Market, the Company plans to have its Shares approved for quotation on the
Nasdaq SmallCap System rather than the Nasdaq National Market. The Nasdaq
SmallCap System, like the Nasdaq National Market, is an inter-dealer quotation
system of a registered national securities association.
<PAGE>
The Company may in the future purchase additional Shares on the open
market, in private transactions, through tender offers or otherwise. Any such
purchases may be on the same terms as, or on terms that are more or less
favorable to shareholders than, the terms of the Offer. Rule 13e-4 promulgated
under the Exchange Act, however, generally prohibits the Company and its
affiliates from purchasing any Shares, other than pursuant to the Offer, until
at least ten business days after the expiration or termination of the Offer.
Any possible future purchases by the Company will depend on many factors,
including the market price of the Shares, the results of the Offer, the
Company's business and financial position and general economic and market
conditions.
Shares the Company acquires pursuant to the Offer will be authorized but
unissued shares and will be available for the Company to issue without further
shareholder action (except as required by applicable law or, the rules of the
Nasdaq National Market or any securities exchange on which Shares are listed)
for purposes including, but not limited to, the acquisition of other businesses,
the raising of additional capital for use in the Company's business and the
satisfaction of obligations under existing or future employee benefit plans.
The Company has no current plans for issuance of the Shares repurchased pursuant
to the Offer.
9. Interests of Directors and Executive Officers; Transactions and
Arrangements Concerning the Shares
As of June 16, 1997, there were 3,306,000 Shares outstanding and 142,750
Shares issuable upon exercise of all outstanding Options. As of June 16, 1997,
the Company's directors and executive officers as a group (7 persons)
beneficially owned 2,081,791 Shares (including 22,687 Shares issuable to such
persons upon exercise of Options exercisable within sixty days of such date)
which constituted 63.0% of the outstanding Shares at such time. If the
Company purchases 600,000 Shares pursuant to the Offer (18.1% of the outstanding
Shares as of June 16, 1997) and no director or executive officer tenders Shares
pursuant to the Offer, then, after the purchase of Shares pursuant to the Offer,
the Company's directors and executive officers as a group would beneficially own
approximately 76.9% of the outstanding Shares (including Shares issuable if
Options held by the Company's directors and executive officers exercisable
within sixty days of such date were exercised). Further, James H. Michael and
Jeffrey J. Michael, who together currently beneficially own 1,925,588 Shares
(including Shares issuable if options held by them that are exercisable within
60 days were exercised) or approximately 58.2% of the outstanding Shares, will,
together, beneficially own approximately 71.2% of the outstanding Shares, if the
Company purchases 600,000 Shares pursuant to the Offer. James H. Michael is the
father of Jeffrey J. Michael.
The Company has been advised that none of its directors or executive
officers intends to tender any Shares pursuant to the Offer.
<PAGE>
Based upon the Company's records and upon information provided to the
Company by its directors, executive officers, associates and subsidiaries,
neither the Company nor any of its associates or subsidiaries or persons
controlling the Company nor, to the best of the Company's knowledge, any of
the directors or executive officers of the Company or any of its subsidiaries,
nor any associates or subsidiaries of any of the foregoing, has effected any
transactions in the Shares during the 40 business days prior to the date
hereof.
Except as set forth in this Offer to Purchase, neither the Company nor any
person controlling the Company nor, to the Company's knowledge, any of its
directors or executive officers, is a party to any contract, arrangement,
understanding or relationship with any other person relating, directly or
indirectly, to the Offer with respect to any securities of the Company
(including, but not limited to, any contract, arrangement, understanding or
relationship concerning the transfer or the voting of any such securities, joint
ventures, loan or option arrangements, puts or calls, guarantees of loans,
guarantees against loss or the giving or withholding of proxies, consents or
authorizations).
Except as disclosed herein, neither the Company nor its executive officers
or directors has current plans or proposals that relate to or would result in
any extraordinary corporate transaction involving the Company or its
subsidiaries, such as a merger, reorganization, sale or transfer of a material
amount of its or their assets, any material change in its present dividend
policy or indebtedness or capitalization, any other material change in its
business or corporate structure, any material change in its Articles of
Incorporation or Bylaws, or any actions causing the Company's Common Stock to
cease to be approved for quotation, and trading on the Nasdaq National Market
or cease to be registered pursuant to Section 12(g) of the Exchange Act, or
suspend the Company's obligation to file reports pursuant to Section 15(d) of
the Exchange Act, or any actions similar to any of the foregoing.
10. Source and Amount of Funds
Assuming that the Company purchases 600,000 Shares pursuant to the Offer
at the maximum purchase price of $6.25 per share, the Company expects the
maximum aggregate cost, including all fees and expenses applicable to the Offer,
to be approximately $3,800,000. The Company anticipates that all of the funds
necessary to pay such amount will come from cash on hand at the Company.
Substantially all of the Company's current cash, which was approximately
$11,807,000 at May 31, 1997, represents proceeds from the sale of subordinated
debentures by the Company. For information concerning the Company's
subordinated debenture program, see "Certain Information about the Company" in
Section 11.
11. Certain Information About the Company
General. The Company, a Minnesota corporation formed in 1995, is a
holding company. Its principal subsidiaries are Americable, Inc. ("Americable")
and Transition Networks, Inc. ("Transition"). The Company also owns 1,025,000
shares of common stock of CorVel Corporation ("CorVel"), or an approximate 24%
<PAGE>
interest in Corvel. In connection with transactions (the "Reorganization
Transaction") consummated pursuant to a reorganization agreement entered into
between North Star Universal, Inc. ("NSU") and Michael Foods, Inc. ("Michael"),
NSU transferred to the Company, on or prior to February 28, 1997, certain of its
assets, including its shares of common stock of Americable and Transition and
its shares of CorVel. Pursuant to the Reorganization Transactions, (i) NSU
merged with Michael and (ii) the outstanding Common Stock of the Company was
distributed to the shareholders of NSU (the "Distribution"). As a result of the
Distribution, the Company ceased to be a subsidiary of NSU and became a publicly
owned company.
Americable was organized in 1981 and was acquired by NSU in 1986.
Americable is a provider of networking and connectivity products and services
used in providing solutions for customers operating a wide range of data
communications systems. As a network integrator, Americable provides products
and services designed to build and manage LAN and WAN infrastructures for large
and medium sized end-users. These network services include planning,
implementation, maintenance, security and product fulfillment. Following the
completion of the Reorganization Transactions, Americable's network integration
business was renamed ENStar Networking Corporation. As a value-added
distributor, Americable supplies a wide array of voice and data communications
related products such as cable (both copper and fiber optic), cable assemblies,
components (blocks, jacks, connectors, patch cords and patch panels) and
networking hardware. Through Americable Custom Products, Americable provides
manufacturing capabilities to satisfy the needs of customers that require custom
or specialty cable assemblies.
Transition develops, manufactures, markets and supports a broad line of
data networking hardware products that provide physical connectivity for LANs
and mini-and mainframe networks. Physical connectivity devices enable computing
and other electronic devices to communicate over a LAN. These devices include
high-speed switches, managed and unmanaged hubs, transceivers, media converters
and other related networking devices. Transition's products include intelligent
hubs and switches and passive and active terminal and related products.
Transition sells its products to a number of volume distributors and VARs
throughout the United States and certain countries worldwide.
CorVel is an independent nationwide provider of medical cost containment
and managed care services designed to address escalating medical costs.
CorVel's services include preferred provider organizations, automated medical
fee auditing, medical case management, independent medical examinations,
utilization review and vocational rehabilitation services. Such services are
provided to insurance companies, third party administrators and employers to
assist them in managing the medical costs and monitoring the quality of care
associated with medical claims.
<PAGE>
CorVel is authorized for quotation and traded on the Nasdaq National Market
under the symbol "CRVL." Additional information regarding CorVel is available
from the reports and other documents prepared and filed by CorVel with the
Commission.
In November 1996, the Company commenced a program similar to one previously
maintained by NSU, whereby it sells subordinated debentures of various
maturities (two, five and ten years) to primarily individual investors. The
debentures are offered on a continuous basis at interest rates that change from
time to time depending on market conditions. In connection with the
Reorganization Transactions, the debentures previously issued by NSU were
redeemed in April 1997. Following such redemption, many of the same investors
purchased the Company's subordinated debentures resulting in proceeds to the
Company of $10,621,000 in April and May 1997. At June1, 1997, the Company had
$13,741,000 principal amount of subordinated debentures outstanding with a
weighted average interest rate of 9.65%. Interest on the Company's outstanding
debentures accrues annually and is payable monthly, quarterly, or at maturity.
The mailing address of the Company's principal executive office is 6479
City West Parkway, Eden Prairie, Minnesota, 55344, its telephone number is
(612) 941-3200.
Recent Developments. On June 16, 1997, the Company announced that its
subsidiary Americable continued to experience lower sales during the first
two months of the second quarter compared to the same period last year.
Furthermore, operating expenses have continued to rise during the second quarter
as Americable focuses on increasing its level of service revenues derived from
network integration. The higher operating expenses include increased selling
expenses related to the introduction of ENStar Networking Corporation, its
networking services business, and the addition of new sales and engineering
personnel. Principally, as a result of these two factors, the Company expects
to report a net operating loss before income taxes and equity in earnings of
unconsolidated subsidiary of approximately $1.5 million for the second quarter.
Additionally, the Company disclosed that Americable incurred a potential
loss of approximately $900,000 in late May as a result of a fraudulent scheme by
a group of persons who falsely claimed to be employees of a large company in
connection with the purchase of products from Americable. Americable has
notified appropriate authorities concerning the theft of the products pursuant
to this scheme. The Company has reviewed its business insurance policies and
believes that substantially all of the loss is covered by insurance. The
Company has notified its insurance carriers of the loss, however, its insurance
carriers are reviewing the claims and have not, as yet, agreed to provide
coverage. If coverage is denied, the Company will be required to record the
full amount of the loss unless the products are recovered.
<PAGE>
On May 9, 1997, CorVel reported record earnings per share of $.49 for the
quarter ended March 31, up 21% from per share earnings for the same quarter of
the prior year. Net income for the quarter was also a record at $2,205,000,
compared to $1,919,000 for the prior year's March quarter. March quarter
revenues were $31.7 million, up 12% from $28.3 million in the March quarter of
1996.
For the fiscal year ended March 31, 1997, revenues were $121.7 million,
representing a 12% increase over the $109.1 million of revenues achieved in
fiscal 1996. CorVel reported net income of $1.82 per share for fiscal 1997,
up 16% from earnings of $1.57 per share in the prior year.
Additionally, CorVel has previously announced that its board of directors
approved a 200,000 share expansion to its existing stock repurchase plan. Since
commencing this program in the fall of 1996, CorVel has repurchased
approximately 465,000 common shares. The Company currently does not intend to
sell any additional shares to CorVel in connection with CorVel's repurchase
program. CorVel had approximately 4,230,000 shares of common stock outstanding
at May 31, 1997. On June 16, 1997, the closing price of CorVel's common stock
was $30.00.
Summary Historical Consolidated Financial Information. The tables below
set forth summary historical consolidated financial information of the Company
and its subsidiaries. The historical consolidated financial information for
fiscal years 1995 and 1996 (other than the ratios of earnings to fixed charges)
has been derived from, and should be read in conjunction with, the audited
consolidated financial statements of the Company as reported in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996, which,
along with the unaudited consolidated financial statements of the Company as
reported in the Company's Quarterly Report on Form 10-Q for the period ended
March 31, 1997, is hereby incorporated herein by reference. On or before
June 30, 1997, once such information becomes available to the Company from
CorVel, the Company intends to file an amendment to its Annual Report on Form
10-K to include audited financial information of CorVel for the fiscal year
ended March 31, 1997. Copies of such reports may be inspected or obtained from
the Commission in the manner specified in "Additional Information" below. The
summary historical consolidated financial information should be read in
conjunction with, and is qualified in its entirety by reference to, the
financial statements and the related notes thereto from which it has been
derived.
<PAGE>
<TABLE>
<CAPTION>
ENStar Inc.
Summary Historical Consolidated Financial Information
(In thousands, except per share and ratio data)
Three Months Ended Fiscal Years Ended
March 31, December 31,
------------------------------------------------------
(unaudited)
CONSOLIDATED STATEMENTS OF OPERATIONS
<S> <C> <C> <C> <C>
1997 1996 1996 1995
------------------------------------------------------
Revenues $ 11,932 $ 15,362 $ 64,123 $ 54,891
Operating and product costs 8,363 11,200 47,286 39,525
Gross profit 3,569 4,162 16,837 15,366
Selling, general and
administrative expenses 4,826 3,879 16,890 14,333
------------------------------------------------------
Operating income (loss) (1,257) 283 (53) 1,033
Interest expenses, net (84) (66) (204) (247)
------------------------------------------------------
Income (loss) before income taxes
and equity in earnings of
unconsolidated subsidiary (1,341) 217 (257) 786
Income tax provision (benefit) (450) 104 (25) 405
------------------------------------------------------
Income (loss) before equity
in earnings of unconsolidated
subsidiary (891) 113 (232) 381
Equity in earnings of
unconsolidated subsidiary 309 304 1,304 1,191
------------------------------------------------------
Net income (loss) $ (582) $ 417 $ 1,072 $ 1,572
======================================================
Net income (loss) per share $ (0.18) $ 0.13 $ 0.32 $ 0.49
======================================================
Weighted average shares
outstanding 3,304 3,296 3,309 3,217
Ratio of earnings to fixed
charges (6.80x) 2.54x 0.50x 2.54x
Earnings coverage deficit
below 1 to 1 ratio $ 1,341 $ --- $ 257 $ ---
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENStar Inc.
Summary Historical Consolidated Financial Information
(In thousands, except per share data)
CONSOLIDATED BALANCE SHEETS March 31, December 31,
-------------------
1997 1996 1995
------------------------------------------------
<S> <C> <C> <C>
ASSETS (unaudited)
Current Assets
Cash and cash equivalents $ 1,867 $ 824 $ 246
Accounts receivable, net 7,868 8,785 8,784
Inventories 6,546 5,706 6,631
Prepaid expenses and other
current assets 266 481 274
Net assets held for sale --- --- 1,032
------------------------------------------------
Total current assets 16,547 15,796 16,967
Property and equipment, net 1,758 1,742 1,453
Goodwill, net 4,762 4,801 4,960
Investment in unconsolidated subsidiary 10,926 13,519 11,682
Other assets 229 157 189
------------------------------------------------
$ 34,222 $ 36,015 $ 35,251
================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Notes payable to bank $ 1,435 $ 1,310 $ 937
Current portion of long-term debt 29 28 1,088
Accounts payable 4,618 4,101 5,239
Accrued expenses 5,427 4,830 5,163
------------------------------------------------
Total current liabilities 11,509 10,269 12,427
Long-term debt, net of current
maturities 3,330 1,150 158
Deferred income taxes 2,217 3,649 2,972
Shareholders' Equity
Common stock, $.01 par value,
100,000,000 shares authorized,
3,304,279 shares issued and
outstanding in 1997 and 1996 33 33 ---
Additional paid-in-capital 17,511 20,710 ---
Retained earnings (deficit) (378) 204 ---
Operating unit equity --- --- 19,694
------------------------------------------------
Total shareholders' equity 17,166 20,947 19,694
------------------------------------------------
$ 34,222 $ 36,015 $ 35,251
================================================
Working capital $ 5,038 $ 5,527 $ 4,540
Total indebtedness 17,056 15,068 15,557
Book value per common share 5.20 6.34 ---
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENStar Inc.
Summary Historical Consolidated Financial Information
(In thousands)
Three Months Ended Fiscal Years Ended
March 31, December 31,
-----------------------------------------------------
(unaudited)
<S> <C> <C> <C> <C>
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS 1997 1996 1996 1995
------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (582) $ 417 $ 1,072 $ 1,572
Adjustments to reconcile net
income to net cash provided
by (used in) operating
activities:
Equity in earnings of
unconsolidated subsidiary (309) (304) (1,304) (1,191)
Depreciation and amortization 255 222 940 837
Deferred income taxes (450) (56) (25) (465)
Changes in operating assets
and liabilities
Accounts receivable 917 28 (1) (1,268)
Inventories (840) (92) 925 (548)
Accounts payable, accrued
expenses and other 1,329 (723) (1,679) 2,202
--------------------------------------------------
Net cash provided by (used in)
operating activities 322 (508) (72) 1,139
--------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (232) (210) (1,070) (543)
Collections on notes receivable --- --- 258 1,096
Other (72) (76) (226) ---
Net cash used in investing
activities (304) (286) (1,038) (553)
---------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt 2,187 --- 69,017 56,073
Payments on long-term debt (7) --- (68,712) (57,497)
Proceeds from notes payable 14,039 16,192 --- ---
Payments on notes payable (13,914) (16,027) --- ---
Additional capital invested
(constructive dividends) (1,280) 512 1,383 (96)
---------------------------------------------------
Net cash provided by (used in)
financing activities 1,025 677 1,688 (1,520)
Net increase (decrease) in cash
and cash equivalents 1,043 (117) 578 172
Cash and cash equivalents at
beginning of year 824 246 246 74
---------------------------------------------------
Cash and cash equivalents
at end of year $ 1,867 129 $ 824 $ 246
===================================================
</TABLE>
<PAGE>
Summary Unaudited Pro Forma Condensed Consolidated Financial Information.
The summary unaudited pro forma condensed consolidated statements of operations
assume that the purchase of Shares pursuant to the Offer has occurred as of the
first day of the period presented. Interest expense for the periods ended
March 31, 1997 and December 31, 1996 would have been $155,000 and $489,000,
respectively, using the current prevailing effective rate of 10% under the
Company's subordinated debenture program and a purchase price of $4.75.
Interest expense using a purchase price of $6.25 would have been $178,000 and
$579,000 for the periods ended March 31, 1997 and December 31, 1996,
espectively, using the current prevailing effective rate of 10% under the
Company's subordinated debenture program. The tax provision for income taxes
has been adjusted based on the appropriate effective rates.
The summary unaudited pro forma condensed consolidated balance sheets
assume that the purchase of Shares occurred as of the balance sheet dates.
These condensed balance sheets also assume the funds for the purchase of Shares
were provided from long-term debt borrowings funded through the sale of
subordinated debentures.
<PAGE>
<TABLE>
<CAPTION>
ENStar Inc.
Summary Unaudited Pro Forma Condensed Consolidated Financial Information
(In thousands, except per share and ratio data)
Year Ended December 31, 1996
----------------------------------------
At $4.75 At $6.25
Purchase Purchase
Historical Price Price
----------------------------------------
SUMMARY UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS:
<S> <C> <C> <C>
Revenues $ 64,123 $ 64,123 $ 64,123
Operating and product costs 47,286 47,286 47,286
---------------------------------------
16,837 16,837 16,837
Selling, general and
administrative expenses 16,890 16,890 16,890
Operating loss (53) (53) (53)
---------------------------------------
Interest expense, net (204) (489) (579)
---------------------------------------
(257) (542) (632)
Income tax benefit 25 119 149
---------------------------------------
(232) (423) (483)
Equity in earnings of
unconsolidated subsidiary 1,304 1,304 1,304
---------------------------------------
Net income $ 1,072 $ 881 $ 821
=======================================
Net income per share $ 0.32 $ 0.33 $ 0.30
=======================================
Weighted average shares outstanding 3,309 2,709 2,709
Ratio of earnings to fixed charges 0.50x 0.32x 0.29x
Earnings coverage deficit below
1 to 1 ratio $ 257 $ 542 $ 632
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENStar Inc.
Summary Unaudited Pro Forma Condensed Consolidated Financial Information
(In thousands, except per share and ratio data)
Three Months Ended March 31, 1997
----------------------------------------
At $4.75 At $6.25
Purchase Purchase
Historical Price Price
----------------------------------------
SUMMARY UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS:
<S> <C> <C> <C>
Revenues $ 11,932 $ 11,932 $ 11,932
Operating and product costs 8,363 8,363 8,363
---------------------------------------
3,569 3,569 3,569
Selling, general and
administrative expenses 4,826 4,826 4,826
---------------------------------------
Operating loss (1,257) (1,257) (1,257)
Interest expense, net (84) (155) (178)
---------------------------------------
(1,341) (1,412) (1,435)
Income tax benefit 450 474 481
---------------------------------------
(891) (938) (954)
Equity in earnings of
unconsolidated subsidiary 309 309 309
---------------------------------------
Net loss $ (582) $ (629) $ (645)
=======================================
Net loss per share $ (0.18) $ (0.23) $ (0.24)
=======================================
Weighted average shares outstanding 3,304 2,704 2,704
Ratio of earnings to fixed charges (6.80x) (4.81x) (4.39x)
Earnings coverage deficit below
1 to 1 ratio $ 1,341 $ 1,412 $ 1,435
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENStar Inc.
Summary Unaudited Pro Forma Condensed Consolidated Balance Sheet
(In thousands, except per share data)
March 31, 1997
----------------------------------------
At $4.75 At $6.25
Purchase Purchase
Historical Price Price
----------------------------------------
SUMMARY UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED BALANCE SHEETS:
ASSETS
<S> <C> <C> <C>
Cash and cash equivalents $ 1,867 $ 1,867 $ 1,867
Other current assets 14,680 14,680 14,680
Other assets 15,917 15,917 15,917
Property and equipment, net 1,758 1,758 1,758
-------------------------------------
Total assets $ 34,222 $ 34,222 $ 34,222
=====================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities 11,509 11,509 11,509
Long-term debt 3,330 6,180 7,080
Other non-current liabilities 2,217 2,217 2,217
Shareholders' equity 17,166 14,316 13,416
-------------------------------------
Total liabilities and
shareholders' equity $ 34,222 $ 34,222 $ 34,222
=====================================
Working capital $ 5,038 $ 5,038 $ 5,038
Total indebtedness 17,056 19,906 20,806
Book value per common share 5.20 5.29 4.96
</TABLE>
<PAGE>
Additional Information. The Company is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is obligated to
file reports and other information with the Commission relating to its business,
financial condition and other matters. Information, as of particular dates,
concerning the Company's directors and officers, their remuneration, options
granted to them, the principal holders of the Company's securities and any
material interest of such persons in transactions with the Company is required
to be disclosed in proxy statements distributed to the Company's shareholders
and filed with the Commission. Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Room 2120, Washington
D.C. 20549; and at its regional offices located at 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511; and 7 World Trade Center, New York,
New York 10048. Copies of such material may also be obtained by mail, upon
payment of the Commission's customary charges, from the Public Reference Section
of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington D.C.
20549. The Commission also maintains a Web site on the World Wide Web at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission. Such reports, proxy statements and other information concerning
the Company also can be inspected at the offices of the Nasdaq Stock Market,
1735 K. Street, N.W., Washington D.C. 20006, on which the Shares are listed.
12. Effects of the Offer on the Market for Shares; Registration Under the
Exchange Act
The Company's purchase of Shares pursuant to the Offer will reduce the
number of Shares that might otherwise trade publicly and is likely to reduce
the number of shareholders. Nonetheless, the Company believes that there will
still be a sufficient number of Shares outstanding and publicly traded following
the Offer to ensure a continued trading market in the Shares. Based on the
current published guidelines of the Nasdaq National Market, the Company does
not believe that its purchase of Shares pursuant to the Offer will cause the
remaining Shares to cease to be approved for quotation and trading on the Nasdaq
National Market, unless the new maintenance standards, discussed in Section 8
under "Background and Purpose of the Offer; Certain Effects of the Offer," are
adopted by Nasdaq and the Shares cease to be approved for quotation and trading
on the Nasdaq National Market.
The Shares are currently "margin securities" under the rules of the
Federal Reserve Board. This has the effect, among other things, of allowing
brokers to extend credit on the collateral of the Shares. The Company believes
that, following the purchase of Shares pursuant to the Offer, the Shares will
continue to be "margin securities" for purposes of the Federal Reserve Board's
margin regulations, unless the new maintenance standards, discussed in Section 8
under "Background and Purpose of the Offer; Certain Effects of the Offer," are
adopted by the Nasdaq and the Shares cease to be approved for quotation and
trading on the Nasdaq National Market (even if the Shares are then approved for
quotation and trading on the Nasdaq SmallCap System).
<PAGE>
The Shares are registered under the Exchange Act, which requires, among
other things, that the Company furnish certain information to its shareholders
and to the Commission and comply with the Commission's proxy rules in connection
with meetings of the Company's shareholders. As of June 16, 1997 the Shares
were held by approximately 210 shareholders of record; accordingly, while they
are currently eligible for deregistration under the Exchange Act (and most
likely will continue to be eligible after the completion of the Offer), the
Company currently does not plan to deregister the Shares under the Exchange Act.
13. Certain Legal Matters; Regulatory and Foreign Approvals
The Company is not aware of any license or regulatory permit that appears
to be material to its business that might be adversely affected by its
acquisition of Shares as contemplated in the Offer or of any approval or other
action by any government or governmental, administrative or regulatory authority
or agency, domestic or foreign, that would be required for the Company's
acquisition or ownership of Shares as contemplated by the Offer. Should any
such approval or other action be required, the Company currently contemplates
that it will seek such approval or other action. The Company cannot predict
whether it may determine that it is required to delay the acceptance for payment
of, or payment for, Shares tendered pursuant to the Offer pending the outcome of
any such matter. There can be no assurance that any such approval or other
action, if needed, would be obtained or would be obtained without substantial
conditions or that the failure to obtain any such approval or other action might
not result in adverse consequences to the Company's business. The Company's
obligations under the Offer to accept for payment and pay for Shares are subject
to certain conditions. See Section 6.
14. Certain U. S. Federal Income Tax Consequences
The following summary describes certain United States federal income tax
consequences relevant to the Offer. The discussion contained in this summary is
based upon the Internal Revenue Code of 1986, as amended to the date hereof (the
"Code"), existing and proposed United States Treasury regulations promulgated
thereunder, rulings, administrative pronouncements and judicial decisions,
changes to which could materially affect the tax consequences described herein
and could be made on a retroactive basis. As discussed below, depending upon a
shareholder's particular circumstances, the Company's purchase of such
shareholder's Shares pursuant to the Offer may be treated either as a sale
or a dividend for United States federal income tax purposes. Accordingly, such
a purchase generally will be referred to in this section of the Offer to
Purchase as an exchange of Shares for cash.
This summary may not apply to Shares acquired as compensation (including
Shares acquired upon the exercise of Options or which were or are subject to
forfeiture restrictions). The summary also does not address the state, local or
foreign tax consequences of participating in the Offer. The summary discusses
only Shares held as capital assets, within the meaning of Section 1221 of the
Code, and does not address all of the tax consequences that may be relevant to
particular shareholders in light of their personal circumstances, or to certain
types of shareholders (such as certain financial institutions, dealers in
<PAGE>
securities or commodities, insurance companies, tax exempt organizations or
persons who hold Shares as a position in a "straddle" or as a part of a
"hedging" or "conversion" transaction for United States federal income tax
purposes). In particular, the discussion of the consequences of an exchange of
Shares for cash pursuant to the Offer applies only to a United States Holder.
For purposes of this summary, a "United States Holder" is a holder of shares
that is (i) a citizen or resident of the United States, (ii) a corporation,
partnership or other entity created or organized in or under the laws of the
United States, any State or any political subdivision thereof, or (iii) an
estate or trust, the income of which is subject to United States federal
income taxation regardless of its source. This discussion does not address
the tax consequences to foreign shareholders who will be subject to United
States federal income tax on a net basis on the proceeds of their exchange
of Shares pursuant to the Offer because such income is effectively connected
with the conduct of a trade or business within the United States. Such
shareholders are generally taxed in a manner similar to United States Holders;
however, certain special rules apply. Foreign shareholders who are not subject
to United States federal income tax on a net basis should see Section 3 for a
discussion of the applicable United States withholding rules and the potential
for obtaining a refund of all or a portion of the tax withheld. Each
shareholder should consult such shareholder's tax advisor as to the
particular consequences of participation in the Offer.
United States Holders Who Receive Cash Pursuant To The Offer. An exchange
of Shares for cash pursuant to the Offer by a United States Holder will be a
taxable transaction for United States federal income tax purposes. As a
consequence of the exchange, a United States Holder will, depending on such
holder's particular circumstances, be treated either as having sold such
holder's Shares or as having received a dividend distribution from the Company,
with the tax consequences described below.
Under Section 302 of the Code, a United States Holder whose Shares are
exchanged pursuant to the Offer will be treated as having sold such holder's
Shares, and thus will recognize gain or loss if the exchange (i) is "not
essentially equivalent to a dividend" with respect to the holder, (ii) is
"substantially disproportionate" with respect to such holder or (iii) results
in a "complete termination" of such holder's equity interest in the Company,
each as discussed below. In applying these tests, a United States Holder will
be treated as owning Shares actually or constructively owned by certain related
individuals and entities.
If a United States Holder sells Shares to persons other than the Company
at or about the time such holder also sells Shares to the Company pursuant to
the Offer, and the various sales effected by the holder are part of an overall
plan to reduce or terminate such holder's proportionate interest in the Company,
then the sales to persons other than the Company may, for United States federal
income tax purposes, be integrated with the holder's exchange of Shares pursuant
to the Offer and, if integrated, should be taken into account in determining
whether the holder satisfies any of the three tests described below.
A United States Holder will satisfy the "not essentially equivalent to a
dividend" test if the reduction in such holder's proportionate interest in the
Company constitutes a "meaningful reduction" given such holder's particular
facts and circumstances. The IRS has indicated in published rulings that any
reduction in the percentage interest of a shareholder whose relative stock
interest in a publicly held corporation is minimal (an interest of less than 1%
should satisfy this requirement) and who exercises no control over corporate
affairs should constitute such a "meaningful reduction."
An exchange of Shares for cash will be "substantially disproportionate"
with respect to a United States Holder if the percentage of the then outstanding
Shares actually and constructively owned by such holder immediately after the
exchange is less than 80% of the percentage of the Shares actually and
constructively owned by such holder immediately before the exchange.
A United States Holder that exchanges all Shares actually or constructively
owned by such holder for cash pursuant to the Offer will be treated as having
completely terminated such holder's equity interest in the Company.
If a United States Holder is treated as having sold such holder's Shares
under the tests described above, such holder will recognize gain or loss equal
to the difference between the amount of cash received and such holders' tax
basis in the Shares exchanged therefor. Any such gain or loss will be capital
gain or loss and will be long-term capital gain or loss if the holding period of
the Shares exceeds one year as of the date of the exchange.
If a United States Holder who exchanges Shares pursuant to the Offer is not
treated under Section 302 as having sold such holder's Shares for cash, the
entire amount of cash received by such holder will be treated as a dividend to
the extent of the Company's current and accumulated earnings and profits, which
the Company anticipates will be sufficient to cover the amount of any such
dividend and will be includible in the holder's gross income as ordinary income
in its entirety, without reduction for the tax basis of the Shares exchanged.
No loss will be recognized. The United States Holder's tax basis in the Shares
exchanged generally will be added to such holder's tax basis in such holder's
remaining Shares. To the extent that cash received in exchange for Shares is
treated as a dividend to a corporate United States Holder, such holder will be
(i) eligible for a dividends received deduction (subject to applicable
limitations) and (ii) subject to the "extraordinary dividend" provisions of the
Code. To the extent, if any, that the cash received by a United States Holder
exceeds the Company's current and accumulated earnings and profits, it will be
treated first as a tax free return of such holder's tax basis in the Shares and
thereafter as capital gain.
The Company cannot predict whether or to what extent the Offer will be
oversubscribed. If the Offer is oversubscribed, proration of tenders pursuant
to the Offer will cause the Company to accept fewer Shares than are tendered.
Therefore, a Holder can be given no assurance that a sufficient number of such
Holder's Shares will be exchanged pursuant to the Offer to ensure that such
exchange will be treated as a sale, rather than as a dividend, for United States
federal income tax purposes pursuant to the rules discussed above.
<PAGE>
Shareholders Who Do Not Receive Cash Pursuant To The Offer. Shareholders,
none of whose Shares are exchanged pursuant to the Offer, will not incur any tax
liability as a result of the consummation of the Offer.
See Section 3 with respect to the application of United States federal
income tax withholding to payments made to foreign shareholders and backup
withholding.
THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION
ONLY. EACH SHAREHOLDER IS URGED TO CONSULT SUCH HOLDER'S OWN TAX ADVISOR TO
DETERMINE THE PARTICULAR TAX CONSEQUENCES TO HIM OR HER OF THE OFFER, INCLUDING
THE APPLICABILITY AND EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS.
15. Extension of the Offer; Termination; Amendments
The Company expressly reserves the right, in its sole discretion, at any
time and from time to time, to extend the period of time during which the Offer
is open by giving oral or written notice of such extension to the Depositary,
followed by a public announcement thereof no later than 9:00 a.m., Minneapolis
time, on the next business day after the previously scheduled Expiration Time.
There can be no assurance that the Company will exercise its right to extend the
Offer. During any such extension, all Shares previously tendered and not
accepted or payment or withdrawn will remain subject to the Offer and may be
accepted for payment by the Company, except to the extent that such Shares may
be withdrawn as set forth in Section 4.
The Company also expressly reserves the right, in its sole discretion, to
terminate the Offer and not accept for payment or pay for any Shares not
theretofore accepted for payment or paid for or, subject to applicable law, to
postpone payment for Shares upon the occurrence of any of the conditions
specified in Section 6 hereof by giving oral or written notice of such
termination or postponement to the Depositary and making a public announcement
thereof. The Company's reservation of the right to delay payment for Shares
which it has accepted for payment is limited by Rule 13e-4(f)(5)promulgated
under the Exchange Act, which requires that the Company must pay the
consideration offered or return the Shares tendered promptly after termination
or withdrawal of a tender offer. Subject to compliance with applicable law, the
Company further reserves the right, in its sole discretion, and regardless of
whether any of the events set forth in Section 6 shall have occurred or shall be
deemed by the Company to have occurred, to amend the Offer in any respect
(including, without limitation, by decreasing or increasing the consideration
offered in the Offer to holders of Shares or by decreasing or increasing the
number of Shares being sought in the Offer). Amendments to the Offer may be
made at any time and from time to time effected by public announcement thereof,
such announcement, in the case of an extension, to be issued no later than 9:00
a.m., Minneapolis time, on the next business day after the last previously
scheduled or announced Expiration Time.
Any public announcement made pursuant to the Offer will be disseminated
promptly to shareholders in a manner reasonably designated to inform
shareholders of such change. Without limiting the manner in which the Company
may choose to make any public announcement, except as provided by applicable law
(including Rule 13e-4(e)(2) promulgated under the Exchange Act), the Company
shall have no obligation to publish, advertise or otherwise communicate any such
public announcement other than by making a release to the Dow Jones News
Service.
If the Company makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, the Company will extend the Offer to the extent required by Rules
13e-4(d)(2) and 13e-4(e)(2) promulgated under the Exchange Act, which require
that the minimum period during which an offer must remain open following
material changes in the terms of the offer or information concerning the offer
(other than a change in price or a change in percentage of securities sought)
will depend upon the facts and circumstances, including the relative materiality
of such terms or information. If (i) the Company increases or decreases the
price to be paid for Shares, the Company increases the number of Shares being
sought and such increase in the number of Shares being sought exceeds 2% of the
outstanding Shares, or the Company decreases the number of Shares being sought,
and (ii) the Offer is scheduled to expire at any time earlier than the
expiration of a period ending on the tenth business day from, and including, the
date that notice of such increase or decrease is first published, sent or given,
the Offer will be extended until the expiration of such period of ten business
days.
16. Fees and Expenses
The Company has retained Norwest Bank Minnesota, N.A. as Depositary in
connection with the Offer. The Depositary will receive reasonable and customary
compensation for their services. The Company will also reimburse the Depositary
for out-of-pocket expenses, including reasonable attorneys' fees, and has agreed
to indemnify the Depositary against certain liabilities in connection with the
Offer, including certain liabilities under the federal securities laws. The
Depositary has not been retained to make solicitations or recommendations in
connection with the Offer.
The Company will not pay fees or commissions to any broker, dealer,
commercial bank, trust company or other person for soliciting any Shares
pursuant to the Offer. The Company will, however, on request, reimburse such
persons for customary handling and mailing expenses incurred in forwarding
materials in respect of the Offer to the beneficial owners for which they act
as nominees. No such broker, dealer, commercial bank or trust company has been
authorized to act as the Company's agent for purposes of the Offer. The Company
will pay (or cause to be paid) any stock transfer taxes on its purchase of
Shares, except as otherwise provided in Instruction 7 of the Letter of
Transmittal.
17. Miscellaneous
The Company is not aware of any jurisdiction where the making of the Offer
is not in compliance with applicable law. If the Company becomes aware of any
jurisdiction where the making of the Offer is not in compliance with any valid
applicable law, the Company will make a good faith effort to comply with such
law. If, after such good faith effort, the Company cannot comply with such law,
the Offer will not be made to (nor will tenders be accepted from or on behalf
of) the holders of Shares residing in such jurisdiction.
<PAGE>
Pursuant to Rule 13e-4 promulgated under the Exchange Act, the Company has
filed with the Commission an Issuer Tender Offer Statement on Schedule 13E-4
(the "Schedule 13E-4") which contains additional information with respect to the
Offer. The Schedule 13E-4, including the exhibits and any amendments thereto,
may be examined, and copies may be obtained, at the same places and in the same
manner as is set forth in Section 11 with respect to information concerning the
Company.
June 24, 1997 ENStar Inc.
<PAGE>
Facsimile copies of the Letter of Transmittal will be accepted. The Letter
of Transmittal and certificates for the Shares and any other required documents
should be sent or delivered by each shareholder or such shareholder's broker,
dealer, commercial bank, trust company or other nominee to the Depositary at its
address set forth below:
The Depositary for the Offer is:
NORWEST BANK MINNESOTA, N.A.
By Mail: By Facsimile Transmission: By Overnight Courier:
Norwest Shareowner (612) 450-4163 Norwest Shareowner Services
Services Confirm by Telephone: 161 North Concord Exchange
P.O. Box 418 (800) 380-1372 Stock Transfer Department
South St. Paul, MN South St. Paul, MN 55075
55075-0418
By Hand:
Norwest Shareowner Services Norwest Trust Company
161 North Concord Exchange of New York
2nd Floor or 3 New York Plaza
South St. Paul, MN 55075 New York, NY 10004
Any questions or requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to: Peter E. Flynn, Executive Vice President, ENStar
Inc., 6479 City West Parkway, Eden Prairie, Minnesota 55344-3246. Shareholders
may also contact their broker, dealer, commercial bank or trust company for
assistance concerning the Offer. To confirm delivery of Shares, shareholders
are directed to contact the Depositary.
June 24, 1997
<PAGE>
EXHIBIT (a)(2)
LETTER OF TRANSMITTAL
To Tender Shares of Common Stock
of
ENStar Inc.
Pursuant to the Offer to Purchase Dated June 24, 1997
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT
4.00 P.M., MINNEAPOLIS TIME, ON JULY 25, 1997
UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
Norwest Bank Minnesota, N.A.
By Mail: By Facsimile Transmission:
Norwest Shareowner Services (612) 450-4163
P.O. Box 64858 Confirm by Telephone:
South St. Paul, MN 55164-0858 (800) 380-1372
By Overnight Courier:
Norwest Shareowner Services
161 North Concord Exchange
Reorganization Department
South St. Paul, MN 55075
By Hand:
Norwest Shareowner Services Norwest Trust Company
161 North Concord Exchange of New York
2nd Floor or or 3 New York Plaza
South St. Paul, MN 55075 New York, NY 10004
<PAGE>
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description of Shares Tendered
(See Instructions 3 and 4)
<S> <S>
Name(s) and Address(es)* of Registered Holder(s) Shares Tendered (Attach
(Please fill in exactly as name(s) appear(s) additional signed list
on certificate(s)) if necessary)
- -------------------------------------------------------------------------------------------------
Total
Number
of Shares Number
Represented of
Certificate by Shares
Number(s)** Certificate(s) Tendered***
------------------------------------------------
------------------------------------------------
------------------------------------------------
------------------------------------------------
- -------------------------------------------------------------------------------------------------
Total Shares
- -------------------------------------------------------------------------------------------------
[ ] I have lost my certificate for ______
shares and require assistance with replacing
the shares.
- -------------------------------------------------------------------------------------------------
Indicate in this box the order (by certificate number) in which shares are to be purchased in the
event of proration.**** (Attach additional signed list if necessary.)
See Instruction 16
1st: ; 2nd: ; 3rd: ; 4th: ; 5th:
- -------------------------------------------------------------------------------------------------
* If your permanent address should be changed on our records please indicate address change in
this box.
** Need not be completed by shareholders tendering shares by book-entry transfer.
*** Unless otherwise indicated, it will be assumed that all shares represented by each share
certificate delivered to the Depositary are being tendered hereby. See Instruction 4.
**** If you do not designate an order, then in the event less than all shares tendered are
purchased due to proration, shares will be selected for purchase by the Depositary. See
Instruction 16.
- -------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
- -------------------------------------------------------------------------------------------------
FOR OFFICE USE ONLY
<S> <C> <C> <C> <C>
Debit Shares _____ Partial _____ SIBL/LT _____ Alt Payee _____ Spec Del _____
Legend _____ Approved _____ Input _____ Audit _________ Mailed ______
- -------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE INSTRUCTIONS
SET FORTH IN THIS LETTER OF TRANSMITTAL CAREFULLY.
Delivery of this instrument to an address other than as set forth above or
transmission of instructions via a facsimile number other than the ones listed
above will not constitute a valid delivery.
This Letter of Transmittal is to be used only if certificates are to be
forwarded herewith or if delivery of Shares (as defined below) is to be made by
book-entry transfer to the Depositary's account at The Depository Trust Company
("DTC") pursuant to the procedures set forth in Section 3 of the Offer to
Purchase (as defined below).
Shareholders who cannot deliver their Share certificates and any other
documents required to the Depositary by the Expiration Time (as defined in the
Offer to Purchase) must tender their Shares using the guaranteed delivery
procedure set forth in Section 3 of the Offer to Purchase. See Instruction 2.
3
<PAGE>
(BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
TO THE DEPOSITARY'S ACCOUNT AT DTC AND COMPLETE THE FOLLOWING:
Name of Tendering Institution _________________________________________________
Account No.____________________________________________________________________
Transaction Code No. __________________________________________________________
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Holder(s) _______________________________________________
Date of Execution of Notice of Guaranteed Delivery ____________________________
Name of Institution that Guaranteed Delivery __________________________________
If delivery is by book-entry transfer:
Name of Tendering Institution _________________________________________________
Account No. at DTC ____________________________________________________________
Transaction Code No. __________________________________________________________
4
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to ENStar Inc., a Minnesota corporation
(the "Company"), the above-described shares (the "Shares") of the Company's
common stock, par value $.01 per share, at the price per share indicated in this
Letter of Transmittal, net to the seller in cash, upon the terms and subject to
the conditions set forth in the Offer to Purchase, dated June 24, 1997 (the
"Offer to Purchase"), receipt of which is hereby acknowledged, and in this
Letter of Transmittal (which together constitute the "Offer").
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the undersigned hereby
sells, assigns and transfers to, or upon the order of, the Company all right,
title and interest in and to all the Shares that are being tendered hereby or
orders the registration of such Shares tendered by book-entry transfer that are
purchased pursuant to the Offer to or upon the order of the Company and hereby
irrevocably constitutes and appoints the Depositary the true and lawful agent
and attorney-in-fact of the undersigned with respect to such Shares, with full
power of substitution (such power of attorney being deemed to be an irrevocable
power coupled with an interest), to:
(i) deliver certificates for such Shares, or transfer ownership of such
Shares on the account books maintained by DTC, together, in any such case,
with all accompanying evidences of transfer and authenticity, to or upon the
order of the Company upon receipt by the Depositary, as the undersigned's
agent, of the Purchase Price (as defined below) with respect to such Shares;
(ii) present certificates for such Shares for cancellation and transfer on
the books of the Company; and
(iii) receive all benefits and otherwise exercise all rights of beneficial
ownership of such Shares, all in accordance with the terms of the Offer.
The undersigned hereby represents and warrants to the Company that the
undersigned has full power and authority to tender, sell, assign and transfer
the Shares tendered hereby and that, when and to the extent the same are
accepted for payment by the Company, the Company will acquire good, marketable
and unencumbered title thereto, free and clear of all liens, restrictions,
charges, encumbrances, conditional sales agreements or other obligations
relating to the sale or transfer thereof, and the same will not be subject to
any adverse claims. The undersigned will, upon request, execute and deliver
any additional documents deemed by the Depositary or the Company to be
necessary or desirable to complete the sale, assignment and transfer of the
Shares tendered hereby.
5
<PAGE>
The undersigned represents and warrants to the Company that the
undersigned has read and agrees to all of the terms of the Offer. All
authority herein conferred or agreed to be conferred shall not be affected by
and shall survive the death or incapacity of the undersigned, and any obligation
of the undersigned hereunder shall be binding upon the heirs, personal
representatives, successors and assigns of the undersigned. Except as stated in
the Offer, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
Instructions will constitute the undersigned's representation and warranty to
the Company that (i) the undersigned has a net long position in the Shares or
equivalent securities being tendered within the meaning of Rule 14e-4
promulgated under the Securities Exchange Act of 1934, as amended, and (ii) the
tender of such Shares complies with Rule 14e-4. The Company's acceptance for
payment of Shares tendered pursuant to the Offer will constitute a binding
agreement between the undersigned and the Company upon the terms and subject to
the conditions of the Offer.
The names and addresses of the registered holders should be printed, if
they are not already printed above, exactly as they appear on the certificates
representing Shares tendered hereby. The certificate numbers, the number of
Shares represented by such certificates, the number of Shares that the
undersigned wishes to tender and the purchase price at which such Shares are
being tendered should be indicated in the appropriate boxes on this Letter of
Transmittal.
The undersigned understands that the Company will determine a single per
share price (not greater than $6.25 nor less than $4.75 per share), net to the
Seller in cash (the "Purchase Price"), that it will pay for Shares validly
tendered and not withdrawn pursuant to the Offer, taking into account the number
of Shares so tendered and the prices specified by tendering shareholders. The
undersigned understands that the Company will select the lowest Purchase Price
that will allow it to purchase 600,000 Shares (or such lesser number of Shares
as are validly tendered at prices not greater than $6.25 nor less than $4.75 per
share) and not withdrawn pursuant to the Offer. The undersigned understands
that all Shares validly tendered at prices at or below the Purchase Price and
not withdrawn will be purchased at the Purchase Price, net to the seller in
cash, upon the terms and subject to the conditions of the Offer, including its
proration provisions, and that the Company will return all other Shares,
including Shares tendered at prices greater than the Purchase Price and not
withdrawn and Shares not purchased because of proration.
The undersigned recognizes that, under certain circumstances set forth in
the Offer to Purchase, the Company may terminate or amend the Offer or may
postpone the acceptance for payment of, or the payment for, Shares tendered or
may not be required to purchase any of the Shares tendered hereby or may accept
for payment fewer than all of the Shares tendered hereby.
6
<PAGE>
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the Purchase Price of any Shares purchased, and/or return
any Shares not tendered or not purchased, in the name(s) of the undersigned
(and, in the case of Shares tendered by book-entry transfer, by credit to the
account at DTC). Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail the check for the Purchase Price of any Shares
purchased and/or any certificates for Shares not tendered or not purchased (and
accompanying documents, as appropriate) to the undersigned at the address shown
below the undersigned's signature(s). In the event that both "Special Payment
Instructions" and "Special Delivery Instructions" are completed, please issue
the check for the Purchase Price of any Shares purchased and/or return any
Shares not tendered or not purchased in the name(s) of, and mail such check
and/or any certificates to, the person(s) so indicated. The undersigned
recognizes that the Company has no obligation, pursuant to the "Special Payment
Instructions," to transfer any Shares from the name of the registered holder(s)
thereof if the Company does not accept for payment any of the Shares so
tendered.
The undersigned understands that acceptance of Shares by the Company for
payment will constitute a binding agreement between the undersigned and the
Company upon the terms and subject to the conditions of the Offer.
7
<PAGE>
- -------------------------------------------------------------------------------
PRICE (IN DOLLARS) PER SHARE
AT WHICH SHARES ARE BEING TENDERED
- -------------------------------------------------------------------------------
IF SHARES ARE BEING TENDERED AT MORE THAN ONE PRICE,
A SEPARATE LETTER OF TRANSMITTAL FOR EACH PRICE SPECIFIED
MUST BE USED.
- -------------------------------------------------------------------------------
CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX IS CHECKED
(EXCEPT AS PROVIDED IN THE ODD LOTS BOX AND INSTRUCTIONS BELOW), THERE IS NO
VALID TENDER OF SHARES.
[ ]$4.7500 [ ]$5.1875 [ ]$5.5625 [ ]$5.9375
[ ]$4.8125 [ ]$5.2500 [ ]$5.6250 [ ]$6.0000
[ ]$4.8750 [ ]$5.3125 [ ]$5.6875 [ ]$6.0625
[ ]$4.9375 [ ]$5.3750 [ ]$5.7500 [ ]$6.1250
[ ]$5.0000 [ ]$5.4375 [ ]$5.8125 [ ]$6.1875
[ ]$5.0625 [ ]$5.5000 [ ]$5.8750 [ ]$6.2500
[ ]$5.1250
- -------------------------------------------------------------------------------
8
<PAGE>
- -------------------------------------------------------------------------------
ODD LOTS
(See Instruction 9)
This section is to be completed ONLY if Shares are being tendered by or on
behalf of a person who owns beneficially, as of the close of business on June
17, 1997, and who continues to own beneficially as of the Expiration Time, an
aggregate of fewer than 100 Shares.
The undersigned either (check one box):
[ ] owned beneficially, as of the close of business on June 17, 1997, and
continues to own beneficially as of the Expiration Time, an aggregate of
fewer than 100 Shares, all of which are being tendered, or
[ ] is a broker, dealer, commercial bank, trust company or other nominee that
(i) is tendering, for the beneficial owners thereof, Shares with respect
to which it is the record owner, and (ii) believes, based upon
representations made to it by each such beneficial owner, that such
beneficial owner owned beneficially, as of the close of business on June
17, 1997 and continues to own beneficially as of the Expiration Time, an
aggregate of fewer than 100 Shares, and is tendering all of such Shares.
- -------------------------------------------------------------------------------
If you do not wish to specify a purchase price, check the following box,
in which case you will be deemed to have tendered at the Purchase Price
determined by the Company in accordance with the terms of the Offer (persons
checking this box need not indicate the price per share in the box entitled
"Price (In Dollars) Per Share At Which Shares Are Being Tendered" in this
Letter of Transmittal). [ ]
- -------------------------------------------------------------------------------
9
<PAGE>
- -------------------------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 6, 7 and 8)
To be completed ONLY if the check for the aggregate Purchase Price of
Shares purchased and/or certificates for Shares not tendered or not
purchased are to be issued in the name of someone other than the
undersigned.
Issue [ ]check and/or [ ] certificate(s) to:
Name __________________________________________________________________________
_______________________________________________________________________________
(Please Print)
Address _______________________________________________________________________
_______________________________________________________________________________
(Include Zip Code)
____________________________________
(Taxpayer Identification or Social Security No.)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 6 and 8)
To be completed ONLY if the check for the Purchase Price of Shares
purchased and/or certificates for Shares not tendered or not purchased are
to be mailed to someone other than the undersigned or to the undersigned
at an address other than that shown below the undersigned's signature(s).
Mail [ ] check and/or [ ] certificates to:
Name __________________________________________________________________________
_______________________________________________________________________________
(Please Print)
Address _______________________________________________________________________
_______________________________________________________________________________
(Include Zip Code)
- -------------------------------------------------------------------------------
10
<PAGE>
- -------------------------------------------------------------------------------
PLEASE SIGN HERE
(To be Completed By All Shareholders)
Signature(s) of Owner(s) ______________________________________________________
Dated __________________________________________________________________ ,1997
Name(s) _______________________________________________________________________
(Please Print)
Capacity (full title) _________________________________________________________
Address _______________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Include Zip Code)
Area Code and Telephone No. ___________________________________________________
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
share certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, please set forth full title and see
Instruction 6.)
Guarantee of Signature(s)
(See Instructions 1 and 6)
Name of Firm __________________________________________________________________
Authorized Signature __________________________________________________________
Name __________________________________________________________________________
(Please Print)
Title _________________________________________________________________________
Address _______________________________________________________________________
(Include Zip Code)
Area Code and Telephone No. ___________________________________________________
Dated ___________________, 1997
- -------------------------------------------------------------------------------
11
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a firm that is an
Eligible Institution (as defined in the Offer to Purchase), unless (i) this
Letter of Transmittal is signed by the registered holder(s) of the Shares (which
term, for purposes of this document, shall include any participant in DTC's
book-entry transfer system whose name appears on a security position listing as
the owner of Shares) tendered herewith and such holder(s) have not completed the
box entitled "Special Payment Instructions" or the box entitled "Special
Delivery Instructions" on this Letter of Transmittal, or (ii) such Shares are
tendered for the account of an Eligible Institution. See Instruction 6.
2. Delivery of Letter of Transmittal and Share Certificates;
Guaranteed Delivery Procedures. This Letter of Transmittal is to be used either
if Share certificates are to be forwarded herewith or if delivery of Shares is
to be made by book-entry transfer pursuant to the procedures set forth in
Section 3 of the Offer to Purchase. Certificates for all physically delivered
Shares, or a confirmation of a book-entry transfer into the Depositary's account
at DTC of all Shares delivered electronically, as well as a properly completed
and duly executed Letter of Transmittal (or manually signed facsimile thereof)
and any other documents required by this Letter of Transmittal, must be
received by the Depositary at one of its addresses set forth on the front page
of this Letter of Transmittal prior to the Expiration Time. If certificates
are forwarded to the Depositary in multiple deliveries, a properly completed
and duly executed Letter of Transmittal must accompany each such delivery.
Shareholders whose Share certificates are not immediately available, who
cannot deliver their Shares and all other required documents to the Depositary
or who cannot complete the procedures for delivery by book-entry transfer prior
to the Expiration Time may tender their Shares pursuant to the guaranteed
delivery procedures set forth in Section 3 of the Offer to Purchase. Pursuant
to such procedures: (i) such tender must be made by or through an Eligible
Institution, (ii) a properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form provided by the Company (with any required
signature guarantees) must be received by the Depositary prior to the Expiration
Time, and (iii) the certificates for all physically delivered Shares in proper
form for transfer by delivery, or a confirmation of a Book-Entry transfer into
the Depositary's account at DTC of all Shares delivered electronically, in each
case together with a properly completed and duly executed Letter of Transmittal
(or facsimile thereof) and any other documents required by this Letter of
Transmittal, must be received by the Depositary within three Nasdaq trading days
after the date the Depositary receives such Notice of Guaranteed Delivery, all
as provided in Section 3 of the Offer to Purchase.
The method of delivery of all documents, including Share certificates,
the Letter of Transmittal, and any other required documents, is at the election
and risk of the tendering shareholder, and the delivery will be deemed made only
when actually received by the Depositary. If delivery is by mail, registered
mail with return receipt requested, properly insured, is recommended. In all
cases, sufficient time should be allowed to ensure timely delivery.
12
<PAGE>
No alternative or contingent tenders will be accepted. By executing this
Letter of Transmittal (or facsimile thereof), the tendering shareholder waives
any right to receive any notice of the acceptance for payment of the Shares.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
signed schedule and attached to this Letter of Transmittal.
4. Partial Tenders (Not Applicable to Shareholders Who Tender by
Book-Entry Transfer). If fewer than all the Shares represented by any
certificate delivered to the Depositary are to be tendered, fill in the number
of Shares that are to be tendered in the box entitled "Number of Shares
Tendered." In such case, a new certificate for the remainder of the Shares
represented by the old certificate will be sent to the person(s) signing this
Letter of Transmittal, unless otherwise provided in the "Special Payment
Instructions" or "Special Delivery Instructions" boxes on this Letter of
Transmittal, as promptly as practicable following the expiration or termination
of the Offer. All Shares represented by certificates delivered to the
Depositary will be deemed to have been tendered unless otherwise indicated.
5. Indication of Price At Which Shares Are Being Tendered. For Shares
to be validly tendered, the shareholder must check the box indicating the price
per Share at which such shareholder is tendering Shares under "Price (In
Dollars) Per Share At Which Shares Are Being Tendered" in this Letter of
Transmittal, except that Odd Lot Owners (as defined in Section 2 of the Offer to
Purchase) may check the box above in the section entitled "Odd Lots" indicating
that such shareholder is tendering all Shares at the Purchase Price determined
by the Company. Only one box may be checked. If more than one box is checked
or (other than as described above for odd lot owners) if no box is checked,
there is no valid tender of shares. A shareholder wishing to tender portions of
such shareholder's Share holdings at different prices must complete a separate
Letter of Transmittal for each price at which such shareholder wishes to tender
each such portion of such shareholder's Shares. The same Shares cannot be
tendered (unless previously validly withdrawn as provided in Section 4 of the
Offer to Purchase) at more than one price.
6. Signatures on Letter of Transmittal; Stock Powers and Endorsements.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, the signatures(s) must correspond with the name(s) as
written on the face of the certificates without alteration, enlargement or any
change whatsoever.
If any of the Shares tendered hereby is held of record by two or more
persons, all such persons must sign this Letter of Transmittal.
13
<PAGE>
If any of the Shares tendered hereby are registered in different names on
different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal (or facsimiles thereof) as there are
different registrations of certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of certificates or separate stock powers
are required unless payment of the Purchase Price is to be made to, or Shares
not tendered or not purchased are to be registered in the name of, any person
other than the registered holder(s), in which case the certificate(s) evidencing
the Shares tendered hereby must be endorsed or accompanied by appropriate stock
powers, in either case signed exactly as the name(s) of the registered holder(s)
appear(s) on such certificates. Signatures on any such certificates or stock
powers must be guaranteed by an Eligible Institution. See Instruction 1.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, certificates evidencing the
Shares tendered hereby must be endorsed or accompanied by appropriate stock
powers, in either case, signed exactly as the name(s) of the registered
holder(s) appear(s) on such certificate(s). Signature(s) on any such
certificates or stock powers must be guaranteed by an Eligible Institution. See
Instruction 1.
If this Letter of Transmittal or any certificate or stock power is signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory to
the Company of the authority of such person so to act must be submitted.
7. Stock Transfer Taxes. The Company will pay or cause to be paid any
stock transfer taxes with respect to the sale and transfer of any Shares to it
or its order pursuant to the Offer. If, however, payment of the aggregate
Purchase Price is to be made to, or Shares not tendered or not purchased are to
be registered in the name of, any person other than the registered holder(s), or
if tendered Shares are registered in the name of any person other than the
person(s) signing this Letter of Transmittal, the amount of any stock transfer
taxes (whether imposed on the registered holder(s), such other person or
otherwise) payable on account of the transfer to such person will be deducted
from the Purchase Price unless satisfactory evidence of the payment of such
taxes, or exemption therefrom, is submitted. See Section 5 of the Offer to
Purchase. Except as provided in this Instruction 7, it will not be necessary to
affix transfer tax stamps to the certificates representing Shares tendered
hereby.
14
<PAGE>
8. Special Payment and Delivery Instructions. If a check for the
Purchase Price of any Shares tendered hereby is to be issued in the name of,
and/or any Shares not tendered or not purchased are to be returned to, a person
other than the person(s) signing this Letter of Transmittal, or if the check
and/or any certificates for Shares not tendered or not purchased are to be
mailed to someone other than the person(s) signing this Letter of Transmittal or
to an address other than that shown above in the box captioned "Description of
Shares Tendered," then the boxes captioned "Special Payment Instructions" and/or
"Special Delivery Instructions" on this Letter of Transmittal should be
completed. Shareholders tendering Shares by book-entry transfer will have any
Shares not accepted for payment returned by crediting the account maintained by
such shareowner at the Book-Entry Transfer Facility from which such transfer was
made.
9. Odd Lots. As described in Section 1 of the Offer to Purchase, if
fewer than all Shares validly tendered at or below the Purchase Price and not
withdrawn prior to the Expiration Time are to be purchased, the Shares purchased
first will consist of all Shares tendered by any shareholder who owned
beneficially, as of the close of business on June 17, 1997, and continues to own
beneficially as of the Expiration Time, an aggregate of fewer than 100 Shares
and who validly tendered all such Shares at or below the Purchase Price
(including by not designating a purchase price as described above). Partial
tenders of Shares will not qualify for this preference and this preference will
not be available unless the box captioned "Odd Lots" in this Letter of
Transmittal and the Notice of Guaranteed Delivery, if any, is completed.
10. Substitute Form W-9 and Form W-8. Under the United States federal
income tax backup withholding rules, unless an exemption applies under the
applicable law and regulations, 31% of the gross proceeds payable to a
shareholder or other payee pursuant to the Offer must be withheld and remitted
to the United States Treasury, unless the shareholder or other payee provides
such person's taxpayer identification number (employer identification number or
social security number) to the Depositary and certifies that such number is
correct. Therefore, each tendering shareholder should complete and sign the
Substitute Form W-9 included as part of the Letter of Transmittal so as to
provide the information and certification necessary to avoid backup withholding,
unless such shareholder otherwise establishes to the satisfaction of the
Depositary that it is not subject to backup withholding. Certain shareholders
(including, among others, all corporations and certain foreign shareholders (in
addition to foreign corporations)) are not subject to these backup withholding
and reporting requirements. In order for a foreign shareholder to qualify as an
exempt recipient, that shareholder must submit an IRS Form W-8 or a Substitute
Form W-8, signed under penalties of perjury, attesting to that shareholder's
exempt status. Such statements may be obtained from the Depositary.
15
<PAGE>
11. Withholding on Foreign Shareholders. Even if a foreign shareholder
has provided the required certification to avoid backup withholding, the
Depositary will withhold United States federal income taxes equal to 30% of the
gross payments payable to a foreign shareholder or his or her agent unless the
Depositary determines that a reduced rate of withholding is available pursuant
to a tax treaty or that an exemption from withholding is applicable because such
gross proceeds are effectively connected with the conduct of a trade or business
in the United States. For this purpose, a foreign shareholder is any
shareholder that is not (i) a citizen or resident of the United States, (ii) a
corporation, partnership or other entity created or organized in or under the
laws of the United States, any State or any political subdivision thereof or
(iii) an estate or trust, the income of which is subject to United States
federal income taxation regardless of the source of such income. In order to
obtain a reduced rate of withholding pursuant to a tax treaty, a foreign
shareholder must deliver to the Depositary a properly completed IRS Form 1001.
In order to obtain an exemption from withholding on the grounds that the gross
proceeds paid pursuant to the Offer are effectively connected with the conduct
of a trade or business within the United States, a foreign shareholder must
deliver to the Depositary a properly completed IRS Form 4224. The Depositary
will determine a shareholder's status as a foreign shareholder and eligibility
for a reduced rate of, or an exemption from, withholding by reference to
outstanding certificates or statements concerning eligibility for a reduced rate
of, or exemption from, withholding (e.g., IRS Form 1001 or IRS Form 4224) unless
facts and circumstances indicate that such reliance is not warranted. A foreign
shareholder may be eligible to obtain a refund of all or a portion of any tax
withheld if such shareholder meets the "complete redemption," "substantially
disproportionate" or "not essentially equivalent to a dividend" test described
in Section 14 of the Offer to Purchase or is otherwise able to establish that no
tax or a reduced amount of tax is due. Backup withholding generally will not
apply to amounts subject to the 30% or treaty-reduced rate of withholding.
Foreign shareholders are urged to consult their tax advisors regarding the
application of United States federal income tax withholding, including
eligibility for a withholding tax reduction or exemption and refund procedures.
12. Requests for Assistance or Additional Copies. Any questions or
requests for assistance may be directed to Peter E. Flynn, Executive Vice
President, ENStar Inc., 6479 City West Parkway, Eden Prairie, Minnesota 55344-
3246 (telephone (612) 941-3200). Requests for additional copies of the Offer to
Purchase, this Letter of Transmittal or other tender offer materials may be
directed to the Company to the attention of Peter E. Flynn, and such copies will
be furnished promptly at the Company's expense. Shareholders may also contact
their local broker, dealer, commercial bank or trust company for documents
relating to, or assistance concerning, the Offer.
16
<PAGE>
13. Irregularities. All questions as to the number of Shares to be
accepted, the price to be paid therefor and the validity, form, eligibility
(including time of receipt) and acceptance for payment of any tender of Shares
will be determined by the Company, in its sole discretion, which determination
shall be final and binding on all parties. The Company reserves the absolute
right to reject any or all tenders it determines not to be in proper form or the
acceptance of or payment for which may, in the opinion of the Company's counsel,
be unlawful. The Company also reserves the absolute right to waive any of the
conditions of the Offer and any defect or irregularity in the tender of any
particular Shares or any particular shareholder. No tender of Shares will be
deemed to be validly made until all defects or irregularities have been cured or
waived. None of the Company, the Depositary or any other person is or will be
obligated to give notice of any defects or irregularities in tenders, and none
of them will incur any liability for failure to give any such notice.
14. Order of Purchase in Event of Proration. As described in Section 1
of the Offer to Purchase, shareholders may designate the order in which their
Shares are to be purchased in the event of proration. The order of purchase may
have an effect on the United States federal income tax classification of any
gain or loss on the Shares purchased. See Sections 1 and 14 of the Offer to
Purchase.
IMPORTANT: This Letter of Transmittal (or a facsimile thereof) together
with Share certificates or confirmation of book-entry transfer and all other
required documents must be received by the Depositary, or the Notice of
Guaranteed Delivery must be received by the Depositary, prior to the Expiration
Time. Shareholders are encouraged to return a completed Substitute Form W-9
with their Letter of Transmittal.
17
<PAGE>
<TABLE>
<CAPTION>
Payer's Name: Norwest Bank Minnesota, N.A.
<S> <C> <C>
SUBSTITUTE Part 1: PLEASE PROVIDE YOUR TIN Social Security Number or
Form W-9 IN THE BOX AT RIGHT AND CERTIFY Employer Identification
BY SIGNING AND DATING BELOW Number:
_____________________
-------------------------------------------------------------------------
Part 2: For Payees exempt from backup withholding, see the enclosed
PAYER'S REQUEST Guidelines for Certification of Taxpayer Identification Number on
FOR TAXPAYER Substitute Form NUMBER W-9 and complete as instructed therein.
IDENTIFICATION (TIN)
-------------------------------------------------------------------------
Part 3: Awaiting TIN [ ]
-------------------------------------------------------------------------
CERTIFICATION Under the penalties of perjury, I certify that (i) the number
shown on this form is my correct Taxpayer Identification Number (or I am
waiting for a number to be issued to me) and either (a) I have mailed or
delivered an application to receive a taxpayer identification number to the
appropriate IRS center or Social Security Administration office or (b) I
intend to mail or deliver an application in the near future) and (ii) I am
not subject to backup withholding because: (a) I am exempt from backup
withholding; or (b) I have not been notified by the IRS that I am subject to
backup withholding as a result of a failure to report all interest or
dividends; or (c) the IRS has notified me that I am no longer subject to
backup withholding. Certification instructions--You must cross out Item
(ii) above if you have been notified by the IRS that you are currently
subject to backup withholding because of underreporting interest or
dividends on your tax return.
Signature___________________________________ Date _______________________
Name (Please Print)______________________________________________________
Address (Include Zip Code) ______________________________________________
_________________________________________________________________________
- -------------------------------------------------------------------------------------------------
</TABLE>
FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF
31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THIS OFFER. PLEASE REVIEW THE
ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
- --------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service center or Social Security Administration Office or (2)
I intend to mail or deliver an application in the near future. I understand
that if I do not provide a taxpayer identification number by the time of
payment, 31% of all payments of the purchase price made to me thereafter will be
withheld until I provide a number.
Signature ________________________________Date: ________________________, 1997.
- --------------------------------------------------------------------------------
18
<PAGE> EXHIBIT (a)(3)
ENStar Inc.
Notice of Guaranteed Delivery
of Shares of Common Stock
This form, or a form substantially equivalent to this form, must be used
to accept the Offer (as defined below) if certificates for the shares of common
stock, par value $.01 per share, of ENStar Inc. are not immediately available,
if the procedure for book-entry transfer cannot be completed on a timely basis,
or if time will not permit all other documents required by the Letter of
Transmittal to be delivered to the Depositary (as defined below) prior to the
Expiration Time (as defined in Section 1 of the Offer to Purchase defined
below). Such form may be delivered by hand or transmitted by mail or overnight
courier, or (for Eligible Institutions only) by facsimile transmission, to the
Depositary. See Section 3 of the Offer to Purchase. The Eligible Institution
which completes this form must communicate the Guarantee to the Depositary and
must deliver the Letter of Transmittal and Shares to the Depositary within the
time shown herein. Failure to do so could result in a financial loss to such
Eligible Institution.
The Depositary for the Offer is:
Norwest Bank Minnesota, N.A.
By Mail: By Facsimile Transmission:
Norwest Shareowner Services (612) 450-4163
P.O. Box 64858 Confirm by Telephone:
South St. Paul, MN 55164-0858 (800) 380-1372
By Overnight Courier:
Norwest Shareowner Services
161 North Concord Exchange
Reorganization Department
South St. Paul, MN 55075
By Hand:
Norwest Shareowner Services Norwest Trust Company
161 North Concord Exchange of New York
2nd Floor or 3 New York Plaza
South St. Paul, MN 55075 New York, NY 10004
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
1
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to ENStar Inc., a Minnesota corporation (the
"Company"), upon the terms and subject to the conditions set forth in the Offer
to Purchase, dated June 24, 1997 (the "Offer to Purchase"), and the related
Letter of Transmittal (which together constitute the "Offer"), receipt of which
is hereby acknowledged, the number of shares (the "Shares") of common stock, par
value $.01 per share, of the Company listed below, pursuant to the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase.
- -------------------------------------------------------------------------------
Number of Shares:
________________________________ ___________________________
Certificate Nos.: (if available) Name(s) (Please Print)
________________________________ ___________________________
____________________________________________________________________________
If Shares will be tendered by book- Address
entry transfer:
Name of Tendering Institution:
________________________________ ___________________________
Area Code and Telephone Number
___________________________
Signature(s)
Account No.________________ at The Depository Trust Company
2
<PAGE>
- -------------------------------------------------------------------------------
PRICE (IN DOLLARS) PER SHARE
AT WHICH SHARES ARE BEING TENDERED
IF SHARES ARE BEING TENDERED AT MORE THAN ONE PRICE,
A SEPARATE NOTICE OF GUARANTEED DELIVERY FOR EACH PRICE SPECIFIED
MUST BE USED.
CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX IS CHECKED
(EXCEPT AS PROVIDED IN THE ODD LOTS BOX AND INSTRUCTIONS BELOW), THERE IS NO
VALID TENDER OF SHARES.
[]$4.7500 []$5.1875 []$5.5625 []$5.9375
[]$4.8125 []$5.2500 []$5.6250 []$6.0000
[]$4.8750 []$5.3125 []$5.6875 []$6.0625
[]$4.9375 []$5.3750 []$5.7500 []$6.1250
[]$5.0000 []$5.4375 []$5.8125 []$6.1875
[]$5.0625 []$5.5000 []$5.8750 []$6.2500
[]$5.1250
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
ODD LOTS
This section is to be completed ONLY if Shares are being tendered by or on
behalf of a person who owned beneficially, as of the close of business on June
17, 1997, and who continues to own beneficially as of the Expiration Time, an
aggregate of fewer than 100 Shares.
The undersigned either (check one box):
[] owned beneficially, as of the close of business on June 17, 1997, and
continues to own beneficially as of the Expiration Time, an aggregate of
fewer than 100 Shares, all of which are being tendered, or
[] is a broker, dealer, commercial bank, trust company or other nominee that
(i) is tendering, for the beneficial owners thereof, Shares with respect
to which it is the record owner, and (ii) believes, based upon
representations made to it by each such beneficial owner, that such
beneficial owner owned beneficially, as of the close of business on June
17, 1997, and continues to own beneficially as of the Expiration Time, an
aggregate of fewer than 100 Shares and is tendering all of such Shares.
If you do not wish to specify a purchase price, check the following box,
in which case you will be deemed to have tendered at the Purchase Price
determined by the Company in accordance with the terms of the Offer (persons
checking this box need not indicate the price per share in the box entitled
"Price (In Dollars) Per Share At Which Shares Are Being Tendered" above).[]
- -------------------------------------------------------------------------------
GUARANTEE (Not to be used for signature guarantee)
3
<PAGE>
The undersigned, a firm that is a member of a registered national
securities exchange or the National Association of Securities Dealers, Inc. or a
commercial bank or trust company (not a savings bank or savings and loan
association) having an office, branch or agency in the United States hereby
guarantees (i) that the above-named person(s) has a net long position in the
Shares being tendered within the meaning of Rule 14e-4 promulgated under the
Securities Exchange Act of 1934, as amended, (ii) that such tender of Shares
complies with Rule 14e-4, and (iii) to deliver to the Depositary at one of its
addresses set forth above certificate(s) for the Shares tendered hereby, in
proper form for transfer, or a confirmation of the book-entry transfer of the
Shares tendered hereby into the Depositary's account at The Depository Trust
Company together with a properly completed and duly executed Letter(s) of
Transmittal (or facsimile(s) thereof), with any required signature guarantee(s)
and any other required documents, all within three Nasdaq National Market
trading days after the date hereof.
- -------------------------------------------------------------------------------
__________________________ _________________________
Name of Firm Authorized Signature
__________________________ _________________________
Address Name
__________________________ _________________________
City, State, Zip Code Title
_________________________________________________________________________
Dated:__________________, 1997 ____________ Area Code and Telephone Number
- -------------------------------------------------------------------------------
DO NOT SEND SHARE CERTIFICATES WITH THIS FORM.
YOUR SHARE CERTIFICATES MUST BE SENT WITH
THE LETTER OF TRANSMITTAL.
4
<PAGE>
EXHIBIT (a) (4)
ENStar Inc.
Offer to Purchase for Cash
Up to 600,000 Shares of Its Common Stock
at a Purchase Price not Greater than $6.25 per Share nor Less than
$4.75 per Share
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE
AT 4:00 P.M., MINNEAPOLIS TIME, ON FRIDAY, JULY 25, 1997,
UNLESS THE OFFER IS EXTENDED.
June 24, 1997
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
We are enclosing the material listed below relating to the offer of ENStar
Inc., a Minnesota corporation (the "Company"), to purchase up to 600,000 shares
(the "Shares") of its common stock, par value $.01 per share, at prices not
greater than $6.25 nor less than $ 4.75 per share, net to the seller in cash,
specified by tendering shareholders, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated June 24, 1997 (the "Offer
to Purchase"), and in the related Letter of Transmittal (which together
constitute the "Offer").
The Company will determine a single price (not greater than $6.25 nor less
than $ 4.75 per share), net to the seller in cash, that the Company will pay for
Shares validly tendered and not withdrawn pursuant to the Offer (the "Purchase
Price"), taking into account the number of Shares so tendered and the prices
specified by tendering shareholders. The Company will select the lowest Purchase
Price that will allow it to purchase 600,000 Shares (or such lesser number of
Shares as is validly tendered at prices not greater than $6.25 nor less than
$4.75 per share) and not withdrawn pursuant to the Offer. The Company will
purchase all Shares validly tendered at prices at or below the Purchase Price
and not withdrawn, upon the terms and subject to the conditions of the Offer,
including the provisions relating to proration described in the Offer to
Purchase. See Section 1 of the Offer to Purchase.
The Purchase Price will be paid in cash, net to the seller, with respect to
all Shares purchased. Shares tendered at prices in excess of the Purchase Price
and Shares not purchased because of proration will be returned.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 6 OF THE OFFER TO PURCHASE.
The Company will not pay any fees or commissions to any broker, dealer or
other person for soliciting tenders of Shares pursuant to the Offer. The
Company will, upon request, reimburse brokers, dealers, commercial banks and
trust
<PAGE>
companies for reasonable and customary handling and mailing expenses incurred by
them in forwarding materials relating to the Offer to their customers. The
Company will pay all stock transfer taxes applicable to its purchase of Shares
pursuant to the Offer, subject to Instruction 7 of the Letter of Transmittal.
For your information and for forwarding to your clients, we are enclosing
the following documents:
1. The Offer to Purchase.
2. The Letter of Transmittal for your use and for the information of
your clients.
3. A letter to shareholders of the Company from Jeffrey J. Michael,
Chief Executive Officer and President of the Company.
4. The Notice of Guaranteed Delivery to be used to accept the Offer if
the Shares and all other required documents cannot be delivered to
the Depositary by the Expiration Time (each as defined in the Offer
to Purchase).
5. A letter that may be sent to your clients for whose accounts you
hold Shares registered in your name or in the name of your nominee,
with space for obtaining such clients' instructions with regard to
the Offer.
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 providing information relating to backup federal
income tax withholding.
7. A return envelope addressed to Norwest Bank Minnesota, N.A., the
Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 4.00 P.M.,
MINNEAPOLIS TIME, ON JULY 25, 1997, UNLESS THE OFFER IS EXTENDED.
As described in the Offer to Purchase, if more than 600,000 Shares have
been validly tendered at or below the Purchase Price and not withdrawn prior to
the Expiration Time, as defined in Section 1 of the Offer to Purchase, the
Company will accept Shares for purchase in the following order of priority:
(i) all Shares validly tendered at or below the Purchase Price and not withdrawn
prior to the Expiration Time by any shareholder who owned beneficially, as of
the close of business on June17, 1997, and who continues to own beneficially as
of the Expiration Time, an aggregate of fewer than 100 Shares and who validly
tenders all of such Shares (partial tenders will not qualify for this
preference) and completes the box captioned "Odd Lots" in the Letter of
Transmittal and, if applicable, the Notice of Guaranteed Delivery; and (ii)
after purchase of all of the foregoing Shares, all other Shares validly tendered
at or below the Purchase Price and not withdrawn prior to the Expiration Time on
a pro rata basis.
<PAGE>
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES.
SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO,
HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE
TENDERED. THE COMPANY HAS BEEN ADVISED THAT NONE OF ITS DIRECTORS OR EXECUTIVE
OFFICERS INTENDS TO TENDER ANY SHARES PURSUANT TO THE OFFER.
Any questions or requests for assistance or additional copies of the
enclosed materials may be directed to: Peter E. Flynn, Executive Vice President,
ENStar Inc., 6479 City West Parkway, Eden Prairie, Minnesota 55344-3246.
Very truly yours,
ENStar Inc.
by/s/Jeffrey J. Michael
-----------------------------
Jeffrey J. Michael
Chief Executive Officer and President
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON THE AGENT OF THE COMPANY, OR THE DEPOSITARY, OR AUTHORIZE YOU
OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY
OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH
AND THE STATEMENTS CONTAINED THEREIN.
EXHIBIT (a) (5)
ENStar Inc,
Offer to Purchase for Cash
Up to 600,000 Shares of its Common Stock
at a Purchase Price not Greater than $6.25 nor Less than $4.75 per Share
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 4.00 P.M.,
MINNEAPOLIS TIME, ON FRIDAY, JULY 25, 1997, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated June 24,
1997 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer") setting forth an offer by ENStar Inc., a
Minnesota corporation (the "Company"), to purchase up to 600,000 shares of its
common stock, par value $.01 per share (the "Shares"), at prices not greater
than $6.25 or less than $4.75 per share, net to the seller in cash, specified by
tendering shareholders, upon the terms and subject to the conditions of the
Offer. Also enclosed herewith is certain other material related to the Offer,
including a letter from Jeffrey J. Michael, Chief Executive Officer and
President of the Company, to shareholders.
The Company will determine a single per share price (not greater than
$6.25 nor less than $4.75 per share) (the "Purchase Price") that it will pay for
the Shares validly tendered pursuant to the Offer and not withdrawn, taking into
account the number of Shares so tendered and the prices specified by tendering
shareholders. The Company will select the lowest Purchase Price that will allow
it to purchase 600,000 Shares (or such lesser number of Shares as are validly
tendered at prices not greater than $6.25 nor less than $4.75 per share) and not
withdrawn pursuant to the Offer. The Company will purchase all Shares validly
tendered at prices at or below the Purchase Price and not withdrawn, upon the
terms and subject to the conditions of the Offer, including the provisions
thereof relating to proration. See Section 1 of the Offer to Purchase.
We are the holder of record of Shares held for your account. As such, a
tender of such Shares can be made only by us as the holder of record and
pursuant to your instructions. The Letter of Transmittal is furnished to you
for your information only and cannot be used by you to tender shares held by us
for your account.
We request instructions as to whether you wish us to tender any or all of
the Shares held by us for your account, upon the terms and subject to the
conditions set forth in the Offer to Purchase and the Letter of Transmittal.
Your attention is invited to the following:
1
<PAGE>
1. You may tender Shares at prices, which cannot be greater than $6.25
nor less than $4.75 per share, as indicated in the attached Instruction Form,
net to you in cash.
2. The Offer is extended for up to 600,000 Shares, constituting
approximately 18.1% of the total Shares outstanding as of June 16, 1997. The
Offer is not conditioned on any minimum number of Shares being tendered. The
Offer is, however, subject to certain other conditions set forth in the Offer to
Purchase.
3. The Offer, proration period and withdrawal rights will expire at
4.00 p.m., Minneapolis time, on July 25, 1997, unless the Offer is extended.
Your instructions to us should be forwarded to us in ample time to permit us to
submit a tender on your behalf.
4. As described in the Offer to Purchase, if more than 600,000 Shares
have been validly tendered at or below the Purchase Price and not withdrawn
prior to the Expiration Time, as defined in Section 1 of the Offer to Purchase,
the Company will purchase Shares in the following order of priority:
(i) all Shares validly tendered at or below the Purchase Price
and not withdrawn prior to the Expiration Time by any shareholder who
owned beneficially, as of the close of business on June 17, 1997, and who
continues to own beneficially as of the Expiration Time, an aggregate of
fewer than 100 Shares and who validly tenders all of such Shares (partial
tenders will not qualify for this preference) and completes the box
captioned "Odd Lots" in the Letter of Transmittal and, if applicable, the
Notice of Guaranteed Delivery; and
(ii) after purchase of all the foregoing Shares, all other Shares
validly tendered at or below the Purchase Price and not withdrawn prior to
the Expiration Time on a pro rata basis. See Section 1 of the Offer to
Purchase for a discussion of proration.
5. Tendering shareholders will not be obligated to pay any brokerage
commissions or solicitation fees on the Company's purchase of Shares in the
Offer. Any stock transfer taxes applicable to the purchase of Shares by the
Company pursuant to the Offer will be paid by the Company, except as otherwise
provided in Instruction 7 of the Letter of Transmittal.
6. If you wish to tender portions of your Shares at different prices,
you must complete a separate Instruction Form for each price at which you wish
to tender each portion of your Shares. We must submit separate Letters of
Transmittal on your behalf for each price you will accept.
2
<PAGE>
7. If you owned beneficially, as of the close of business on June 17,
1997, and continue to own beneficially as of the Expiration Time, an aggregate
of fewer than 100 Shares, and you instruct us to tender at or below the Purchase
Price on your behalf all such Shares prior to the Expiration Time and check the
box captioned "Odd Lots" in the Instruction Form, all such Shares will be
accepted for purchase before proration, if any, of the other tendered Shares.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES.
SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO,
HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE
TENDERED. THE COMPANY HAS BEEN ADVISED THAT NONE OF ITS DIRECTORS OR EXECUTIVE
OFFICERS INTENDS TO TENDER ANY SHARES PURSUANT TO THE OFFER.
If you wish to have us tender any or all of your Shares held by us for
your account upon the terms and subject to the conditions set forth in the Offer
to Purchase, please so instruct us by completing, executing and returning to us
the attached Instruction Form. An envelope to return your instructions to us is
enclosed. If you authorize tender of your Shares, all such Shares will be
tendered unless otherwise specified on the Instruction Form. Your instructions
should be forwarded to us in ample time to permit us to submit a tender on your
behalf by the expiration of the Offer.
The Offer is being made to all holders of Shares. The Company is not aware
of any jurisdiction where the making of the Offer is not in compliance with
applicable law. If the Company becomes aware of any jurisdiction where the
making of the Offer is not in compliance with any valid applicable law, the
Company will make a good faith effort to comply with such law. If, after such
good faith effort, the Company cannot comply with such law, the Offer will not
be made to (nor will tenders be accepted from or on behalf of) the holders of
Shares residing in such jurisdiction.
3
<PAGE>
INSTRUCTION FORM
With Respect to Offer to Purchase for Cash
Up to 600,000 Shares of Common Stock
of
ENStar Inc.
At a Purchase Price not Greater than
$6.25 nor Less than $4.75 per Share
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated June 24, 1997, and the related Letter of Transmittal
(which together constitute the "Offer") in connection with the Offer by ENStar
Inc. (the "Company") to purchase up to 600,000 shares of its common stock, par
value $.01 per share (the "Shares"), at prices not greater than $6.25 nor less
than $4.75 per share, net to the undersigned in cash, specified by the
undersigned, upon the terms and subject to the terms and conditions of the
Offer.
This will instruct you to tender to the Company the number of Shares
indicated below (or, if no number is indicated below, all Shares) that are held
by you for the account of the undersigned, at the price per share indicated
below, upon the terms and subject to the conditions of the Offer.
- -------------------------------------------------------------------------------
SHARES TENDERED
[] By checking this box, the undersigned hereby instructs us to tender the
following number of Shares held by us for the account of the undersigned,
at the Purchase Price per share indicated in the box entitled "Price (In
Dollars) Per Share At Which Shares Are Being Tendered":
_________________________Shares*
- -------------------------------------------------------------------------------
*The undersigned understands and agrees that all Shares held by us for the
account of the undersigned will be tendered if the above box is checked
and the space above is left blank.
4
<PAGE>
- -------------------------------------------------------------------------------
PRICE (IN DOLLARS) PER SHARE
AT WHICH SHARES ARE BEING TENDERED
IF SHARES ARE BEING TENDERED AT MORE THAN ONE PRICE,
A SEPARATE INSTRUCTION FORM FOR EACH PRICE SPECIFIED
MUST BE USED.
CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX IS CHECKED
(EXCEPT AS PROVIDED IN THE ODD LOTS BOX AND INSTRUCTIONS BELOW), THERE IS NO
VALID TENDER OF SHARES.
[]$4.7500 []$5.0625 []$5.3750 []$5.6875 []$6.0000
[]$4.8125 []$5.1250 []$5.4375 []$5.7500 []$6.0625
[]$4.8750 []$5.1875 []$5.5000 []$5.8125 []$6.1250
[]$4.9375 []$5.2500 []$5.5625 []$5.8750 []$6.1875
[]$5.0000 []$5.3125 []$5.6250 []$5.9375 []$6.2500
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
ODD LOTS
[] By checking this box, the undersigned represents that the undersigned
owned beneficially, as of the close of business on June 17, 1997, and
continues to own beneficially as of the Expiration Time, an aggregate of
fewer than 100 Shares and is tendering all of such Shares.
If you do not wish to specify a purchase price, check the following box, in
which case you will be deemed to have tendered at the Purchase Price determined
by the Company in accordance with the terms of the Offer (persons checking this
box need not indicate the price per share in the box entitled "Price (In
Dollars) Per Share At Which Shares Are Being Tendered" above). []
- -------------------------------------------------------------------------------
5
<PAGE>
THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE ELECTION AND RISK OF THE
TENDERING SHAREHOLDERS. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
- -------------------------------------------------------------------------------
SIGN HERE
________________________________
Signature(s)
Dated:_________________, 1997 Name ________________________________________
Address ________________________________________
______________________________
Social Security or Taxpayer ID No.
- -------------------------------------------------------------------------------
6
<PAGE>
EXHIBIT (a) (6)
June 24, 1997
Dear Shareholder:
ENStar Inc. (the "Company") is offering to purchase up to 600,000 shares of
its common stock, par value $.01 per share ("Common Stock"), at a price not
greater than $6.25 nor less than $4.75 per share (the "Offer"). The Company is
conducting the Offer through a procedure commonly referred to as a modified
"Dutch Auction." This procedure allows you to select the price within the
specified price range at which you are willing to sell all or a portion of
your shares to the Company.
Based upon the number of shares tendered and the prices specified by the
tendering shareholders, the Company will determine a single per share price
within that price range that will allow it to buy 600,000 shares (or such lesser
number of shares as are properly tendered). All of the shares that are properly
tendered at prices at or below that purchase price (and are not withdrawn) will,
subject to possible proration, be purchased for cash at that purchase price, net
to the selling shareholder. All other shares that have been tendered and not
purchased will be returned to the shareholder. The Offer is not conditioned on
any minimum number of shares being tendered.
If you do not wish to participate in the offer, you do not need to take any
action.
The Company is making the Offer because the Board of Directors believes
that (i) the Offer will afford those shareholders who desire liquidity an
opportunity to sell all or a portion of their shares, which might otherwise be
more difficult given the historical daily trading volumes of the Common Stock
since the stock began trading in February 1997, and (ii) the purchase of the
shares is an attractive investment opportunity for a portion of the cash that
has been generated pursuant to the Company's subordinated debenture program,
while still allowing the Company to have sufficient cash and access to other
sources of capital to fund its capital expenditure requirements and growth
initiatives.
<PAGE>
The Offer is explained in detail in the enclosed Offer to Purchase and
Letter of Transmittal. If you wish to tender your shares, instructions on how
to tender shares are provided in the enclosed materials. I encourage you to
read these materials carefully before making any decision with respect to the
Offer. Neither the Company nor its Board of Directors makes any recommendation
to any shareholder as to whether to tender any or all shares.
Please note that the Offer is scheduled to expire at 4.00 p.m., Minneapolis
time, on July 25, 1997 unless extended by the Company. Questions regarding the
Offer should be directed to: Peter E. Flynn, Executive Vice President, ENStar
Inc., 6479 City West Parkway, Eden Prairie, Minnesota 55344-3246.
Sincerely,
by/s/Jeffrey J. Michael
-----------------------------
Jeffrey J. Michael
Chief Executive Officer and President
<PAGE> EXHIBIT (a)(7)
DATE: June 17, 1997
CONTACT: Peter Flynn (612) 996-1571
FOR IMMEDIATE RELEASE
ENSTAR INC. TO LAUNCH MODIFIED "DUTCH AUCTION" SELF-TENDER OFFER
MINNEAPOLIS, June 17 -- ENStar Inc. (NASDAQ: ENSR) today announced that its
Board of Directors has authorized a modified "Dutch Auction" self-tender offer
for up to 600,000 shares of ENStar's common stock. The tender price range will
be $4.75 to $6.25 per share. The offer is expected to commence during the week
of June 24, 1997, with the distribution of the offering materials, and will
be subject to the terms and conditions therein. The offer is expected to expire
at 5:00 pm, Minneapolis time, on July 25, 1997, unless extended.
As of June 17, 1997, ENStar had 3,306,000 shares of common stock
outstanding. The closing price for ENStar common stock today was $4 3/4.
Jeffrey Michael, President and Chief Executive Officer of ENStar Inc.,
stated that "we are making the offer because we believe it is a good use of a
portion of our cash and we want to provide liquidity to those shareholders who
may desire to sell some or all of their shares."
Under terms of modified Dutch Auction offer, shareholders are given
an opportunity to specify prices, within a stated price range, at which they
are willing to tender their shares. Upon receipt of the tenders, the offering
company will select a final price that enables it to purchase up to the stated
amount of shares from those shareholders who agreed to sell at or below the
company-selected price.
The Company said the offer will give shareholders who are considering the
sale of all or a portion of their shares an opportunity to determine the price,
within a range, at which they are willing to sell. If the Company agrees to
purchase their shares, sellers will avoid the normal transaction costs
associated with market sales. The Company is not making any recommendation to
its shareholders regarding the tendering of shares. The Company has been
advised that none of its officers or directors intend to tender any shares
pursuant to the offer.
ENStar Inc., a Minnesota corporation formed in 1995, is a holding company.
Its principal subsidiaries are Americable, Inc., including Enstar Networking
Corporation, and Transition Networks, Inc. Enstar Inc. also owns 1,025,000
shares of common stock, or an approximate 24% interest in CorVel Corporation
(NASDAQ: CRVL). ENStar's common stock is quoted on the Nasdaq National Market
under the symbol "ENSR".
<PAGE> EXHIBIT (a)(8)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give to Payer.-
Social Security numbers have nine digits separated by two hyphens:
i.e., 000-00-0000. Employer identification numbers have nine digits separated
by only one hyphen: i.e. 00-0000000. The table below will help determine the
number to give the payer.
For this type of account: Give the Social Security number of:
- ------------------------- -----------------------------------
1. An individual's account The individual
2. Two or more individuals The actual owner of the account or,
(joint account) if combined funds, any one of the
individuals (1)
3. Custodian account of a minor The minor (2)
(Uniform Gift to Minors Act)
4. a. The usual revocable savings The grantor-trustee(1)
trust account (grantor is
also trustee)
b. So-called trust account that The actual owner(1)
is not a legal or valid trust
under State law
5. Sole proprietorship account The owner(3)
6. A valid trust, estate, or pension The legal entity (Do not furnish
trust the identifying number of the
personal representative or trustee
unless the legal entity itself is not
designated in the account title.) (4)
- ------------------------- -----------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Show the name of the owner. You may also enter your business name. You
may use your Social Security Number or Employee Identification Number.
(4) List first and circle the name of the legal trust, estate, or pension
trust.
Note: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 2
- ------------------------- -----------------------------------
For this type of account: Give the Employer Identification
number of:
- ------------------------- -----------------------------------
7. Corporate account The corporation
8. Religious, charitable, or The organization
educational organization
account
9. Partnership The partnership
10. Association, club, or other The organization
tax-exempt organization
11. A broker or registered nominee The broker or nominee
12. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a State
or local government, school
district, or prison) that receives
agricultural program payments
- ------------------------------------------------------------
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 3
Obtaining a Number
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or
Form SS-4, Application for Employer Identification Number, at the local office
of the Social Security Administration or the Internal Revenue Service and apply
for a number.
Payees Exempt from Backup Withholding
Payees specifically exempted from withholding on ALL payments include the
following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency, or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S.
or a possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust or a non-exempt trust described in
section 4947(a)(1).
- An entity registered at all times under the Investment Company Act of
1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 4
Payments of interest not generally subject to backup withholding include
the following:
- Payments of interest on obligations issued by individuals. Note: You
may be subject to backup withholding if this interest is $600 or more
and is paid in the course of the payer's trade or business and you have
not provided your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends
under section 852).
- Payments described in section 6049(b)(5) to non-resident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS,
ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends,
that are also not subject to backup withholding. For details, see the
regulations under sections 6041, 6041A(a), 6045 and 6045A.
Privacy Act Notice.-- Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Payers must generally withhold 31% of taxable
interest, dividend, and certain other payments to a payee who does not furnish
a taxpayer identification number to a payer. Certain penalties may also apply.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 5
Penalties
(1) Penalty for Failure to Furnish Taxpayer Identification Number -- If you
fail to furnish your taxpayer identification number to a payer, you are subject
to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) Civil Penalty for False Information With Respect to Withholding - If
you make a false statement with no reasonable basis which results in no
imposition of backup withholding, you are subject to a penalty of $500.
(3) Criminal Penalty for Falsifying Information -- Falsifying certifications
or affirmations may subject you to criminal penalties including fines and/or
imprisonment.
For Additional Information Contact Your Tax Consultant or the Internal Revenue
Service.
