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THE CHERRY CORPORATION
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CHERRY [Logo]
CONTACT: Dan King, Vice President of Finance and Administration
The Cherry Corporation
(847) 360-3541 FOR IMMEDIATE RELEASE
SPECIAL COMMITTEE OF CHERRY ACCEPTS ACQUISITION PROPOSAL
WAUKEGAN, Ill., June 5 /PRNewswire/ -- The Cherry Corporation (Nasdaq: CHER -
news) today announced that it has accepted a proposal made by Peter Cherry and
certain of his affiliates to acquire all of the outstanding common stock of the
Company not now owned by Peter Cherry and his affiliates for $26.40 per share.
Mr. Cherry and certain of his affiliates currently beneficially own about 52% of
all outstanding Cherry Corporation common stock and have advised the Company's
Board that they are not interested in selling their interests in the Company to
a third party. Peter Cherry is the Chairman and President of the Company.
The Board of Directors of the Company approved an Agreement and Plan of Merger
(the "Agreement") with a corporation owned by Peter Cherry and certain of his
affiliates ("Mergerco") after an independent director Special Committee
determined the transaction was fair to company shareholders other than Peter
Cherry and his affiliates. The Special Committee was advised by Wasserstein,
Perella & Co., Inc. and legal counsel, Sidley & Austin. Pursuant to the
Agreement, which contains customary conditions, Mergerco will commence as
promptly as practicable a cash tender offer for any and all shares of Cherry
Corporation common stock not now owned by Peter Cherry and his affiliates at a
price of $26.40 net to the seller in cash, subject to the condition that the
number of shares tendered when combined with those already owned by Peter Cherry
and certain of his affiliates equal more than 67% of the shares of common stock
issued and outstanding. No external financing will be required.
Following the tender offer, Mergerco will be merged with and into The Cherry
Corporation and holders of Cherry Corporation common stock (other than Peter
Cherry and certain of his affiliates) will have their shares converted into the
right to receive $26.40 in cash. If Mergerco acquires enough shares in the
tender offer so that Peter Cherry and certain of his affiliates own more than
90% of all outstanding shares of Cherry common stock, then the merger will take
place without a vote of shareholders of The Cherry Corporation immediately after
the tender offer is consummated.
The Cherry Corporation also announced the withdrawal of the proposal previously
received from another company for the acquisition of the Company for $26.00 per
share in cash and that its stockholders annual meeting previously scheduled for
June 22, 2000 will be postponed pending the outcome of these transactions.
In April 2000, four class action lawsuits were filed in the Court of Chancery of
the State of Delaware, alleging, inter alia, breach of fiduciary duties on the
part of the directors of the Company in connection with Peter Cherry's proposal.
On May 9, 2000, another class action suit was filed in Delaware Chancery Court.
The Company believes these suits (which include requests for injunctions) are
without merit.
The Cherry Corporation manufactures proprietary and custom electrical switches,
sensors, electronic keyboards and controls for the worldwide automotive,
computer, and consumer and commercial markets. The company has two operating
divisions in the United States and seven wholly owned subsidiaries in Germany,
England, France, Australia, Czech Republic, Mexico and Hong Kong. Cherry also
has 50-50 joint ventures in Japan, Hirose Cherry Precision Company Limited, and
in India, TVS Cherry Limited. Additional information is available on the
company's website at http://www.cherrycorp.com.
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