CONTACT: William L. Remley
President & CEO
CPT Holdings, Inc.
(212) 391-1392
FOR IMMEDIATE RELEASE
CPT AND MENTMORE SUE SWVA AND DIRECTORS OVER POISON PILL
NEW YORK, NEW YORK, May 14, 1997 - CPT Holdings, Inc. ("CPT"), the
parent of J&L Structural, Inc. ("J&L"), and its affiliate, Mentmore
Holdings Corporation, today announced that they have filed a
lawsuit in the Court of Chancery of the State of Delaware against
Steel of West Virginia (NASDAQ: SWVA) and its board of directors.
In the complaint filed today, CPT and Mentmore are seeking to
invalidate SWVA's stockholder rights plan, a so-called "poison
pill."
William L. Remley, President and Chief Executive Officer of CPT,
said, "After we submitted a formal written proposal to SWVA last
February suggesting that we merge our two companies, SWVA announced
on March 17 the adoption of a poison pill and disingenuously failed
to disclose to stockholders, the press and the wider financial
community that our proposal had prompted its adoption."
"When companies install poison pills, they typically explain their
action by saying that such arrangements induce bidders to negotiate
with the board of directors. That was precisely the outcome CPT
was trying to achieve before the SWVA pill was put in place. Yet,
even with the poison pill in place, the SWVA board of directors
refuses to meet with us without imposing burdensome conditions on
CPT," said Mr. Remley.
"One of the most unusual and disturbing aspects of SWVA's poison
pill is its 'dead-hand' provision. The effect of the dead-hand
provision is that the poison pill will remain in effect --
preventing stockholders from accepting a premium offer for the
company -- even if stockholders remove the current board of
directors and replace it with a new one that wishes to accept such
an offer. This poison pill and its dead-hand provision in no way
serves the interests of SWVA stockholders. It is an obstacle to
the maximization of stockholder value and prevents stockholders
from being able to choose to take advantage of a fair bid for
SWVA," Mr. Remley concluded
Among other things, the CPT and Mentmore complaint says that, "[the
directors] are the elected representatives of the stockholders.
Steel's board of directors does not have the power to decree that
for ten years future directors elected by stockholders will be
barred from redeeming the poison pill or negotiating a sale of the
Company. The defendants should not be permitted to turn the
fundamental relationship between stockholders and directors on its
head."
Mr. Remley also said that, "Our primary objective is to negotiate
with SWVA's management and board of directors a fair price for the
company. If there is more than $9.00 per share of value in the
company, we are willing to pay for it."
J&L Structural, Inc., produces high quality, lightweight structural
steel shapes (I-beams) for the manufactured housing, truck trailer
component and highway safety systems industries and is a market
leader in the Northeast, Southeast and Mid-Atlantic states. At its
uniquely designed mill in Aliquippa, Pennsylvania, which includes
a recently installed $10 million state-of-the-art walking beam
reheat furnace, J&L has been an innovator in reducing the weight
of its steel products without compromising their structural
integrity. J&L Structural is a majority-owned subsidiary of CPT
Holdings, Inc., a Mentmore Holdings Corporation affiliate.
Mentmore Holdings Corporation is a privately owned company which
has completed acquisitions or significant equity investments in
companies with total revenues in 1996 of more than $1 billion.
Mentmore typically acquires companies involved in basic industrial
businesses and manufacturing, such as steel production, metal
fabrication, injection molded plastics, textiles, and machinery
manufacturing for the packaging industry.
CPT and J&L are soliciting proxies in connection with SWVA's Annual
Meeting of Stockholders (a) in favor of the adoption of a non-
binding resolution requesting that SWVA's Board enter into good
faith negotiations with qualified bidders for SWVA, including CPT,
in an effort to negotiate the sale of SWVA and (b) against the
Board's proposals to amend SWVA's Certificate of Incorporation.
The participants in this solicitation may include Mentmore, CPT and
J&L. As of April 30, 1997, Mentmore and CPT are each record owners
of 50 shares of SWVA common stock. The directors and executive
officers of Mentmore and CPT may be deemed to beneficially own the
shares of common stock owned by Mentmore and CPT. Other than as
set forth herein, as of April 30, 1997, neither J&L, nor any of the
directors and executive officers of Mentmore, CPT and J&L have any
security holdings in SWVA.
Mentmore, CPT and J&L and their respective directors and executive
officers, have an interest in the adoption by stockholders of the
non-binding resolution and the disapproval by stockholders of the
SWVA Board's proposals to amend the the SWVA Certificate of
Incorporation, due to the fact that CPT and J&L have approached
SWVA with a merger proposal and a vote by the stockholders in this
manner may encourage SWVA's Board to entertain an offer from CPT
and J&L. Except as disclosed above, to the knowledge of CPT and
J&L, none of Mentmore, CPT and J&L and their respective directors
and executive officers has any interest, direct or indirect, by
security holdings or otherwise in SWVA.
