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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE TO
(RULE 14d-100)
TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
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U.S. FRANCHISE SYSTEMS, INC.
(Name of Subject Company (Issuer))
USFS ACQUISITION CO.
SDI, INC.
(Names of Filing Persons (Offerors)
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CLASS A COMMON STOCK, $0.01 PAR VALUE
(Title of Class of Securities)
902956309
(CUSIP Number of Class of Securities)
HAROLD S. HANDELSMAN
SDI, INC.
200 WEST MADISON STREET, SUITE 3800
CHICAGO, ILLINOIS 60606
(312) 750-8102
(Name, Address and Telephone Numbers of Person
Authorized to Receive Notices and Communications on Behalf of Filing Persons)
COPIES TO:
BRUCE G. WILSON, ESQ.
ADAM R. KLEIN, ESQ.
KATTEN MUCHIN ZAVIS
525 WEST MONROE STREET, SUITE 1600
CHICAGO, ILLINOIS 60661
(312) 902-5446
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[X] Check the box if the filing relates solely to preliminary
communications made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to
which the statement relates:
[X] third-party tender offer subject to Rule 14d-1.
[ ] issuer tender offer subject to Rule 13e-4.
[X] going-private transaction subject to Rule 13e-3.
[ ] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer: [ ]
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U.S. FRANCHISE SYSTEMS, INC. ACCEPTS OFFER TO BE ACQUIRED BY
PRITZKER FAMILY BUSINESS INTERESTS FOR $5.00 PER SHARE
ATLANTA, September 19, 2000 - U.S. Franchise Systems, Inc. (NASDAQ: USFS)
announced today that it had entered into a definitive agreement with interests
of the Pritzker family of Chicago whereby those interests would seek to acquire
all of the outstanding common stock of USFS for $5.00 per share, and in a
related announcement, by mutual agreement between USFS and the acquiring
entities, the termination of the previously announced Recapitalization
Agreement. The Recapitalization Agreement had provided for USFS to self-tender
for a portion of its outstanding shares and the Pritzker family business
interests to acquire new convertible preferred stock of the company. The offer
by Pritzker family business interests to acquire all outstanding shares of USFS
would exclude shares already owned by Pritzker family business interests and a
material portion of shares owned by the family of Michael A. Leven, USFS's CEO,
who will become a shareholder of the acquiring entity upon completion of the
offer. The acquisition agreement provides for the acquiring entity to commence a
tender offer for any and all of the outstanding common stock of USFS at $5.00
per share and a subsequent merger between USFS and the purchaser in which
non-tendering stockholders of USFS would receive the same price. Upon completion
of that transaction, Pritzker family business interests, together with Mr. Leven
and members of his family, and Steven Romaniello, President and Chief Operating
Officer of the company who may acquire shares following the completion of the
merger, will own all of the outstanding shares of the company which will no
longer be publicly traded.
Mike Leven, CEO of USFS, commented "This is a win-win transaction for all
concerned. It is an attractive offer for our shareholders, and will provide for
our franchisees and our employees the continuation of USFS's distinctive
approach to the lodging franchise business under the leadership of Steve
Romaniello and me, with powerful strategic and financial advantages provided by
the ownership and sponsorship of the Pritzker family business interests. This is
good news for our shareholders, our franchisees and our employees."
Leven continued, "I'm appreciative of the efforts of our board of directors
which devoted considerable time and effort to reach this point, after extensive
review of the circumstances and strategic options available to the company. I'm
pleased the board found both the form and terms of this transaction to be
attractive and clearly in the best interests of our shareholders."
Doug Geoga, President of Hospitality Investment Fund, L.L.C., advisor to the
acquiring entities, said "We are pleased to have reached this agreement that
will provide a favorable outcome for the existing shareholders while allowing
USFS, following the completion of those transactions, to pursue its business
with an enhanced focus on the needs of its franchisees. We remain excited at the
prospect of working closely with Mike Leven, Steve Romaniello and the dedicated
employees of USFS."
It is expected that the tender offer will commence shortly. The consummation of
the tender offer and the subsequent merger are subject to customary conditions,
including the purchase by the acquirers in the tender of a sufficient number of
shares such that they control a majority of the
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outstanding shares of the company, and expiration or termination of the waiting
period under the Hart-Scott-Rodino Antiturst Improvement Acts of 1976.
USFS was advised in the transaction by Bank of America Securities LLC.
Atlanta-based U.S. Franchise Systems franchises Microtel Inns & Suites, a chain
of all newly-constructed, budget hotels, Hawthorn Suites, a predominantly
upscale extended-stay chain, and Best Inns & Suites, an economy/mid-priced
chain. The company trades under the symbol USFS on the Nasdaq National Market.
Certain statements in this press release, including statements about the
proposed acquisition agreement, constitute "forward-looking statements" within
the meaning of the Private Securities Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
including those factors in the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 2000 and other reports and filings with the Securities
and Exchange Commission. There can be no assurance that the transactions
contemplated by the acquisition agreement, which is subject to numerous
conditions, will be completed.
THE TENDER OFFER FOR THE OUTSTANDING SHARES OF U.S. FRANCHISE SYSTEMS, INC.
CLASS A COMMON STOCK AND CLASS B COMMON STOCK DESCRIBED IN THIS ANNOUNCEMENT HAS
NOT YET COMMENCED. AT THE TIME THE OFFER IS COMMENCED, THE OFFEROR WILL FILE A
TENDER OFFER STATEMENT ON SCHEDULE TO WITH THE SECURITIES AND EXCHANGE
COMMISSION AND U.S. FRANCHISE SYSTEMS, INC. WILL FILE A
SOLICITATION/RECOMMENDATION STATEMENT WITH RESPECT TO THE OFFER ON SCHEDULE
14D-9. SECURITY HOLDERS SHOULD READ EACH OF THE TENDER OFFER STATEMENT AND THE
SOLICITATION/RECOMMENDATION STATEMENT WHEN IT IS AVAILABLE BECAUSE EACH CONTAINS
IMPORTANT INFORMATION. SECURITY HOLDERS CAN OBTAIN THE TENDER OFFER STATEMENT
(INCLUDING AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND OTHER OFFER
DOCUMENTS), THE SOLICITATION/RECOMMENDATION STATEMENT AND OTHER FILED DOCUMENTS
FOR FREE AT THE SECURITIES AND EXCHANGE COMMISSION'S WEBSITE AT WWW.SEC.GOV.
OTHER FREE DOCUMENTS AVAILABLE AT SUCH WEBSITE INCLUDE U.S. FRANCHISE SYSTEMS,
INC.'S PERIODIC REPORTS FILED UNDER THE SECURITIES EXCHANGE ACT OF 1934.
