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DEXTER CORPORATION
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As filed with the Commission on June 9, 2000
[Letterhead of Dexter Corporation]
June 2, 2000
Dear Fellow Dexter Shareholder:
Lately you and we have received numerous letters and press releases from
Mr. Sam Heyman. Undoubtedly you have seen allegations from Mr. Heyman about
Dexter, the Dexter Board and the way that the Board has been conducting its
effort to maximize value for you in the short term. I would like to try to
put all of this in perspective for you and to suggest a few questions you
may wish to ask Mr. Heyman about his campaign to elect himself and his two
cohorts as members of the Board of Directors.
More than six months ago -- December 1999 -- Mr Heyman invited himself to a
meeting at Dexter and proclaimed that Dexter's wholly owned businesses were
incompatible with Dexter's investment in Life Technologies and should be
split apart.
In January Mr Heyman, on behalf of his 76% owned subsidiary ISP, announced
that he was commencing a proxy contest against Dexter in an attempt to:
o Enlarge and pack the Board with a majority of his hand-picked
nominees to give him control of Dexter (a move which the
Connecticut Federal District Court has now declared illegal).
o Persuade shareholders that ISP was willing to pay more than $45 if
Dexter afforded ISP due diligence access to the company and its
management.
Dexter's reply was swift and unequivocal:
o Dexter invited ISP into the company and provided it with due
diligence access.
o Dexter encouraged and assisted ISP so that it could put forward its
best possible price and terms.
o Dexter and its representatives were available to ISP virtually
around the clock for several weeks to enable ISP to make its best
offer.
Indeed, ISP deployed an army of more than 30 representatives bankers,
lawyers and even a biotechnology consultant on a due diligence effort that
extended through all of February, all of March and more than half of April.
Prior to finishing its due diligence, in mid-March ISP increased its public
proposal to Dexter from $45 to $50 per share, indicating yet again that it
was willing to pay even more than $50 if its due diligence findings
supported a higher price. On April 20 ISP submitted a proposal to acquire
Dexter for $50 plus a Contingent Value Right that would have afforded a
share of the proceeds from a later sale of Life Technologies to Dexter
shareholders.
After affording ISP a three-week head start on due diligence, at the end of
February Dexter announced a program to maximize shareholder value in the
short term through a merger or sale of the Company, a financial
restructuring, or a spin-off or sale of one or more of the Company's
businesses. The Company has diligently pursued this program since it was
announced, and continues to do so today.
Against this background, let's look at where Mr. Heyman and ISP stand today
and what they have done to deliver on their commitments to you and to us
since December.
We think you should be asking Mr Heyman the following questions:
If you are truly committed to acquiring Dexter, Mr Heyman, why have you
not simply made a cash tender offer to all Dexter shareholders?
Why, Mr Heyman, when ISP is a stockholder of Dexter, have you sought to
make it more difficult for the Company to implement its program by
creating the following obstacles?
o In January ISP commenced a lawsuit in the Connecticut Federal
District Court to declare its Board packing scheme legal. ISP then
opposed Dexter's effort to obtain a quick resolution of that
issue. Instead, ISP argued strenuously that the Court should
decide nothing and should wait until after the shareholders voted.
o In May ISP asked the Connecticut Federal District Court to take
immediate action prohibiting Dexter from even contracting to sell
any Dexter business without a shareholder vote (which the Court
refused to do).
o ISP requested a meeting with a qualified bidder for Life
Technologies -- purportedly to fashion a superior joint bid for
all of Dexter -- and Dexter arranged that meeting. However, ISP
then refused to proceed with the meeting and publicly announced
withdrawal of its $50 proposal to acquire Dexter.
Is it possible, Mr. Heyman, that you would like to see prospective
buyers of Dexter decide not to pursue a transaction in order to avoid
the potential controversy and uncertainty created by your activities?
What about taxes?
In our meeting last December Mr. Heyman confidently proclaimed that
separating Dexter's wholly owned businesses from Life Technologies could be
accomplished "on a tax-free basis." In February we publicly invited Mr.
Heyman and ISP to send their tax advisors to meet with the Company's tax
advisors to develop a common analytical conclusion for the most tax
efficient means of accomplishing that separation. Mr. Heyman and ISP have
ignored our invitation.
Why is Mr. Heyman now making damaging statements -- unsupported by the
facts in public forums suggesting that separation of Dexter's wholly
owned businesses from Life Technologies will cause enormous tax
liabilities?
Where are we today?
To date, the only thing Mr. Heyman and ISP have accomplished is to create
disruption and distraction with:
o Illegal shareholder proposals to be presented at our annual meeting.
o Court proceedings to oppose and resist Dexter's ability to create
a value maximization plan around business segment divestitures.
o Promises of possible increases in their offering price coupled
with actual reduction of that price (and a threat of further price
reductions).
By contrast our first priority is to complete our program to maximize the
value of your Dexter shares in the short term.
We are pursuing a three-pronged course of action at this time because we
believe that all opportunities should be explored simultaneously. We are
continuing our efforts to sell Dexter in a single transaction. We are
pursuing the sale of Dexter's individual businesses. We have provided ISP
with acceptable forms of acquisition agreements and offered to negotiate a
sale of Dexter based on those agreements. Only at the end of this process
can you be assured that you have received the best available transaction.
With this in mind the most important question Dexter shareholders should be
asking themselves and Mr. Heyman is this:
Are you and ISP truly a buyer of Dexter? Or are you simply trying to
get control of Dexter by the least expensive means possible -- i.e., by
winning seats on the Board via a proxy contest?
And finally, shareholders should ask themselves one last question.
If this is how ISP and Mr. Heyman support my interests when they are on the
outside of Dexter, what would they do if they became members of the Board?
Your Board has acted responsibly and fairly in protecting your interests.
Deliver a strong message to Mr. Heyman. Vote to support your present Board.
Please sign, date and mail your WHITE proxy card TODAY.
Sincerely,
K. GRAHAME WALKER
Chairman and Chief Executive Officer
Note -- We are required to include with all communications regarding our
program to maximize value for our stockholders the following cautionary
statement -- "No assurance can be given that shareholder value will be
maximized."
