SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(D)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
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DEXTER CORPORATION
(Name of Subject Company)
DEXTER CORPORATION
(Name of Person(s) Filing Statement)
COMMON STOCK, PAR VALUE $1.00 PER SHARE,
TOGETHER WITH ASSOCIATED RIGHTS TO PURCHASE
FRACTIONAL UNITS OF PREFERRED STOCK
(Title of Class of Securities)
252165105
(CUSIP NUMBER OF CLASS OF SECURITIES)
K. GRAHAME WALKER
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
DEXTER CORPORATION
ONE ELM STREET
WINDSOR LOCKS, CONNECTICUT 06096-2334
(Name, address and telephone number of person
authorized to receive notice and communications on
behalf of the person(s) filing statement).
With Copies to:
J. MICHAEL SCHELL
MARGARET L. WOLFF
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
FOUR TIMES SQUARE
NEW YORK, NEW YORK 10036-6522
(212) 735-3000
ITEM 1. SUBJECT COMPANY INFORMATION.
The name of the subject company is Dexter Corporation, a
Connecticut corporation ("Dexter"). The address of the principal executive
offices of Dexter is One Elm Street, Windsor Locks, Connecticut 06096-2334.
The title of the class of equity securities to which this Statement relates
is the common stock, par value $1.00 per share, of Dexter (the "Dexter
Common Stock"), together with the associated rights to purchase fractional
units of Preferred Stock (the "Rights") issued pursuant to the Rights
Agreement, dated as of August 23, 1996, between Dexter and ChaseMellon
Shareholder Services, L.L.C., as amended (the "Dexter Rights Plan"). Except
where the context otherwise requires, all references herein to the Dexter
Common Stock shall include the Rights.
As of June 29, 2000, there were outstanding 23,195,195 shares of
Dexter Common Stock.
ITEM 2. IDENTITY AND BACKGROUND OF FILING PERSON.
The filing person is the subject company. Dexter's name, business
address and business telephone are set forth in Item 1 above.
This Statement relates to the offer to purchase all of the
outstanding shares of Dexter Common Stock which is described in a Tender
Offer Statement on Schedule TO (the "Schedule TO") of ISP Acquisition Corp.
(the "Purchaser"), a Delaware corporation and an indirect wholly owned
subsidiary of International Specialty Products Inc. ("ISP"), filed with the
Securities and Exchange Commission (the "Commission") on June 26, 2000.
According to the Schedule TO, the Purchaser is offering, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated June
26, 2000, and in the related Letter of Transmittal (together, the "ISP
Offer"), to purchase all of the outstanding shares of Dexter Common Stock
for $45 per share, net to the seller in cash, without interest thereon (the
"Offer Price").
According to the Schedule TO, ISP intends, as soon as practicable
after consummation of the ISP Offer, to seek to have Dexter consummate a
merger or similar business combination with the Purchaser or another direct
or indirect wholly-owned subsidiary of the Purchaser (the "Proposed
Merger").
According to the Schedule TO, the principal executive offices of
the Purchaser and ISP are located at 1361 Alps Road, Wayne, New Jersey
07470.
ITEM 3. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
Except as described (i) in this Statement and (ii) on pages 23 and
31 through 43 of Dexter's Proxy Statement, dated June 2, 2000 (the "2000
Dexter Proxy Statement"), sent by Dexter to its shareholders in connection
with its Annual Meeting of Shareholders, which is filed as Exhibit 2 to
this Statement and incorporated herein by reference, there are no material
contracts, agreements, arrangements or understandings, or any actual or
potential conflicts of interest between Dexter or its affiliates and (1)
its executive officers, directors or affiliates or (2) the Purchaser, its
executive officers, directors or affiliates.
Stock Options and Restricted Stock
As described on pages 36 and 37 of Dexter's Proxy Statement filed
hereto as Exhibit 2, Dexter has entered into severance agreements with its
thirteen executive officers. Each of these severance agreements provides,
among other things, that upon a change in control of Dexter, and without
regard to the termination of the employment of the executive officer, (i)
all outstanding and unexercised options theretofore granted to the
executive officer by Dexter shall become immediately exercisable in full
and (ii) restrictions on all outstanding restricted stock theretofore
granted to the executive officer by Dexter shall lapse. A change in control
will be triggered under the severance agreements if, among other things,
ISP, or any other individual, entity or group, acquires beneficial
ownership of 19% or more of Dexter's Common Stock. Currently, ISP owns
approximately 9.98% of Dexter's Common Stock.
The following table sets forth, with respect to each named
executive officer and the eight other executive officers as a group, (i)
the number of shares of Dexter Common Stock subject to options held by such
persons that will become exercisable as a result of a change in control of
Dexter and (ii) the weighted average exercise price for such options.
Options which Weighted
become Average
Exercisable Exercise Price
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K. Grahame Walker 113,001 $46.34
Kathleen Burdett 34,501 46.55
David G. Gordon 45,000 48.98
John D. Thompson 18,667 46.97
Bruce H. Beatt 18,668 46.97
Other Executive Officers as a 110,303 47.54
Group
The number of shares of restricted stock upon which restriction
would lapse held by Messrs. Walker, Gordon, Thompson and Beatt and Ms.
Burdett are 48,222, 15,120, 14,774, 13,950 and 21,107, respectively and
56,788 for all other executive officers as a group.
Severance Payments
As more fully described on pages 36 and 37 of Dexter's Proxy
Statement filed hereto as Exhibit 2, each executive officer is a party to a
severance agreement and will be entitled to a lump sum cash severance
payment upon a qualifying termination of employment with Dexter following a
change in control. Upon a qualifying termination of employment, each
executive officer will be entitled to a lump sum cash severance payment
equal to two hundred percent of the sum of (i) his or her base salary at
the time of the qualifying termination and (ii) the highest annual
incentive compensation paid to the named executive officer in the three
full years immediately prior to the change in control. Upon a qualifying
termination after a change of control Messrs. Walker, Gordon, Thompson and
Beatt and Ms. Burdett would be entitled to an approximate lump sum cash
severance payment of $2,543,000, $873,000, $750,000, $693,000 and $947,000,
respectively.
Executive Incentive Compensation Plan
As more fully described on page 39 of Dexter's Proxy Statement
filed hereto as Exhibit 2, each of Dexter's executive officers, other than
the Chief Executive Officer, K. Grahame Walker, participates in Dexter's
Executive Incentive Compensation Plan (the "EIC Plan"). Under the EIC Plan,
participants are eligible to receive an annual cash bonus based upon
personal performance and corporate and/or business unit financial
performance. Upon a change in control, which will be triggered under the
EIC Plan if, among other things, ISP, or any other individual, entity or
group, acquires beneficial ownership of 19% or more of Dexter's Common
Stock, the EIC Plan provides that a terminated participant's award will be
calculated with an assumed performance factor of 1.00 and a full bonus
potential percentage of salary for the period up to the participant's
termination of employment.
Executive Supplemental Retirement Plan
As more fully described on pages 35-36 of Dexter's Proxy Statement
filed hereto as Exhibit 2, Dexter has an executive supplemental pension
plan (the "SERP") in which each of the executive officers is eligible to
participate. The SERP provides for a normal retirement pension that
commences upon the first day of the month coincident with or next following
a SERP participant's 65th birthday. A SERP participant may request an early
payment of his or her pension, in which case the pension will be reduced by
an early retirement factor. After a change in control, the reduction
attributable to the early retirement factor for participants who have
attained age 55 with 10 or more years of service is reduced (i.e., the
pension payable is increased).
Currently, only three executive officers, Messrs. Walker, Benham
and McClelland, have attained age 55 with ten or more years of service and
would be entitled to an enhanced early retirement pension as a result of
the application of the post-change in control early retirement factor.
The 1996 Non-Employee Directors' Stock Plan
As more fully described on page 23 of Dexter's Proxy Statement
filed hereto as Exhibit 2, Dexter maintains the 1996 Non-Employee
Directors' Stock Plan (the "Director Plan"). Under the Director Plan, a
non-employee director may elect to receive shares of Dexter Common Stock in
lieu of all or a portion of the cash retainer he or she is to receive in
respect of Board service. Such election must be made in advance of the
calendar year in respect of which the retainer is to be paid. The Director
Plan provides that a non-employee director may elect to convert shares of
Dexter Common Stock otherwise issuable under the Directors Plan to
restricted stock. The restrictions upon such stock will lapse upon the
non-employee director's death, disability, retirement, or approved
termination of service and also upon a change in control. A change in
control will be triggered under the Director Plan in much the same manner
as under the severance agreements. If a non-employee director ceases to be
a director while holding restricted stock, and such cessation is for any
reason other than as described above, the restricted stock is forfeited.
The number of shares of restricted stock held by each non-employee director
pursuant to an election made under the Director Plan is shown below.
Charles H. Curl - 2,451
Peter G. Kelly - 1,791
Jean-Francois Saglio - 0
Henrietta Holsman Fore - 361
Bernard M. Fox - 1,955
George M. Whitesides - 736
Robert M. Furek - 2,451
Martha Clark Goss - 0
Edgar G. Hotard - 1,754
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
(a) Recommendation of the Dexter Board of Directors
AS MORE FULLY DESCRIBED BELOW, THE DEXTER BOARD OF DIRECTORS HAS
UNANIMOUSLY REJECTED THE ISP OFFER AS INADEQUATE AND NOT IN THE BEST
INTERESTS OF DEXTER AND ITS SHAREHOLDERS. THE DEXTER BOARD OF DIRECTORS
UNANIMOUSLY RECOMMENDS THAT ALL HOLDERS OF DEXTER COMMON STOCK REJECT THE
ISP OFFER AND NOT TENDER THEIR SHARES TO THE PURCHASER.
(b)(i) Background of the ISP Offer; Contacts with ISP
In 1998 Dexter's management undertook an extensive strategic review
of all of Dexter's businesses and operations. As part of this review
process, the management reviewed its investment in its majority owned
subsidiary, Life Technologies Inc. Life Technologies develops, manufactures
and supplies more than 3,000 products used in life sciences, research and
commercial manufacture of genetically engineered products. Dexter's
management concluded that it was important to acquire the remaining
minority equity interest in Life Technologies that it did not own as part
of its long-term strategy to focus its efforts and resources on businesses
with strong market positions, and in particular to serve as the platform
from which to develop a broader participation in the life sciences market.
In furtherance of this strategy, on July 7, 1998, Dexter proposed to
acquire the remaining outstanding shares of Life Technologies that it did
not own at a price of $37.00 per share in cash. Following receipt of
Dexter's proposal, the Life Technologies Board of Directors formed a
special committee consisting of Thomas H. Adams, Ph.D., Frank E. Samuel,
Jr. and Iain C. Wylie to consider and respond to the proposal. The special
committee retained a financial advisor and legal counsel. After evaluating
Dexter's proposal with the assistance of its financial and legal advisors,
on September 14, 1998, the special committee determined that $37.00 per
share would not adequately compensate the public shareholders for the
inherent value of their shares. On October 27, 1998, the special committee
informed the Life Technologies Board of Directors that the special
committee was not prepared to recommend Dexter's proposal to the public
shareholders. In response to the special committee's findings, Mr. K.
Grahame Walker, Chairman of the Board and Chief Executive Officer of
Dexter, withdrew Dexter's $37.00 per share proposal in a letter he
presented to the Life Technologies Board. The letter stated:
"Dexter has determined that it is desirable to initiate a
process to enable the LTI public stockholders to accept this
attractive price in a timely manner and to end the
uncertainties which have arisen over the past
three-and-a-half months. Accordingly, Dexter will shortly
commence a tender offer for all of the outstanding shares of
LTI that it does not currently own at a cash price of $37.00
per share."
In light of the withdrawal of Dexter's proposal, the Life
Technologies Board disbanded the special committee, over the objection of
its three members, because in the view of the five Dexter-affiliated
directors who voted to disband the special committee there appeared to be
no purpose in continuing its existence. After the special committee was
disbanded, two of the three members of the special committee resigned from
the Board. On November 2, 1998, Dexter commenced an all cash tender offer
for the outstanding shares of Life Technologies at $37.00 per share and the
tender offer would be followed by a merger in which all shares not
purchased in the offer would be acquired for $37.00 per share.
On November 16, 1998, Life Technologies filed a Schedule 14D-9
Solicitation/Recommendation Statement with the SEC in which Life
Technologies disclosed that the Life Technologies Board would remain
neutral and express no opinion with respect to Dexter's tender offer, since
a majority of the Life Technologies Board was affiliated with Dexter. The
Schedule 14D-9 discussed the special committee's findings, including its
determination that Dexter's $37.00 per share proposal would not adequately
compensate Life Technologies' public stockholders for the inherent value of
their Life Technologies shares. In particular, the members of the special
committee believed that Dexter's $37.00 per share proposal omitted
"significant components to LTI's long term inherent value and earning
power. Foremost among these is the value of the products in LTI's R&D
pipeline that have not been commercialized."
On December 7, 1998, Dexter amended its tender offer by increasing
the purchase price from $37.00 per share to $39.125 per share. Dexter's
offer expired on December 22, 1998, at which time Dexter purchased all
shares tendered resulting in Dexter's owning approximately 71% of the
outstanding shares of Life Technologies.
Since the completion of its tender offer in December 1998, Dexter
has been pursuing what it believes to be a shareholder value growth
strategy by focusing on life sciences. In particular, it has been
attempting to acquire 100% of Life Technologies. Virtually
contemporaneously with Dexter's publicly announced efforts to maximize
value for all Dexter shareholders by pursuit of its life sciences strategy,
we believe ISP and its Chairman of the Board, Samuel J. Heyman, have been
frustrating Dexter's efforts. Specifically, as Dexter was pursuing its
public tender offer at $39.125 per share in cash for all outstanding Life
Technologies shares, ISP was engaged in an open- market purchase program
resulting in ISP's acquiring 15% of the Life Technologies shares. On
November 20, 1998, ISP filed a Schedule 13D with the SEC revealing its
ownership in Life Technologies and stating that it acquired its shares
because the Life Technologies shares were "substantially undervalued," and
that it considered its "equity position to be for investment purposes
only." ISP said it had no present plans or intentions that would result in
or relate to an acquisition of LTI, a change in LTI's board of directors or
any other change in LTI's business or corporate structure, among other
things. ISP's Schedule 13D revealed that ISP embarked on its open- market
purchase program on September 23, 1998 by purchasing 7,500 shares at $35.75
per share.
ISP's share ownership position and group formation, creating a
block of more that 20% of the outstanding Life Technologies shares, gave it
a veto over any amendments to Life Technologies' certificate of
incorporation and to other extraordinary corporate transactions that did
not receive the requisite Board approval. In practical effect, ISP's
ownership position made it extremely difficult - if not impossible - for
Dexter to pursue any value creation strategy through Life Technologies
because many of the transactions or steps it might take, such as a spin-
off or merger or joint venture, were likely to need ISP's cooperation. In
addition, one potential merger-of-equals partner with whom Dexter had a
brief discussion took the position that it could not proceed with Dexter
until Dexter resolved the uncertainties posed by ISP. For these and similar
reasons, Dexter believes that ISP's actions were instrumental in preventing
Dexter from realizing cost savings and cash flow benefits that could have
been achieved from owning 100% of Life Technologies as well as the ability
to secure its platform for growth in life sciences.
Contemporaneously with establishing its position in Life
Technologies, on September 15, 1998, ISP embarked on an open-market
purchase program in the Dexter shares. ISP first announced its ownership
position in Dexter in a Schedule 13D filed with the Commission on April 22,
1999, once again stating that the purpose of its purchases was that the
shares were "undervalued" and that it had acquired the shares "for
investment purposes only." ISP continued to acquire (and on a number of
occasions, sell) Dexter shares through September 1999, until its publicly
reported ownership reached 9.98% of Dexter's outstanding shares.
On October 4, 1999, the Dexter Board of Directors amended Dexter's
Rights Plan to change the definition of "Acquiring Person" in the Rights
Agreement by lowering the beneficial ownership percentage threshold
required to become an Acquiring Person, and at which the Rights become
exercisable, from 20% to 11% of the common shares of Dexter then
outstanding and to exclude from the definition of "Acquiring Person" any
person who beneficially owns less than 20% of the outstanding Dexter shares
and is entitled to report its ownership on Schedule 13G under the federal
securities laws. A person is entitled to file a Schedule 13G if, among
other things, such person has acquired less than 20% of the securities in
the ordinary course of business and not with the purpose nor the effect of
changing or influencing the control of the issuer.
At the request of Mr. Heyman, representatives of Dexter met with
representatives of ISP on December 3, 1999. Dexter had requested an agenda
for the meeting, but Mr. Heyman declined to provide one. At the meeting the
ISP representatives expressed their belief that Life Technologies, with its
higher growth and higher margins, could better fulfill its potential as an
independent entity or in combination with another similarly strategically
situated company, rather than in combination with Dexter. The ISP
representatives argued that there are no apparent synergies between Dexter
and Life Technologies that would justify Dexter's continued control of Life
Technologies and, as an independent company, Life Technologies would likely
have greater access to the capital markets and receive a higher level of
analyst coverage. They recommended that Dexter and Life Technologies be
separate corporate entities. Mr. Heyman specifically recommended that
Dexter spin off Life Technologies to Dexter shareholders, which he claimed
could be accomplished tax-free, a claim which he subsequently recanted
after Dexter proposed a meeting of tax experts to explore whether a
tax-free spinoff could work. Nevertheless, Mr. Heyman continued to say
publicly that he had offered "to work with Dexter to try to develop a tax
efficient strategy . . . to separate Dexter and Life Technologies" and that
"a tax-free spin-off of Dexter's LTI shares is not a 'key aspect' of, or
even related in any way to, ISP's $45 per share acquisition proposal."
The December 3 meeting was rather short, approximately 45 minutes,
and concluded without any mutual understanding or agreement to meet or
speak again in the future. The Dexter representatives did inform the ISP
representatives that they intended to give ISP's proposals additional
thought and might share further reactions with ISP, but Mr. Heyman somewhat
curiously indicated that he might confirm some of his own thoughts
expressed in the meeting in a follow-up letter to Dexter. The Dexter
representatives did not respond.
Without giving Dexter an opportunity to explain what Dexter
believed were the serious fallacies in ISP's recommendations, including the
potentially enormous tax cost associated with such a separation, just 11
days later ISP proposed to acquire Dexter for $45.00 per share in cash,
subject to the execution of a mutually acceptable merger agreement. In Mr.
Heyman's letter of December 14, 1999, to Mr. Walker, Mr. Heyman stated:
"In addition, if you would provide us additional information
on Dexter Corporation and Life Technologies that justifies
an increased price we would be willing to pay more. We would
be willing to enter into a confidentiality agreement in
connection therewith (but not any such agreement that would
limit our rights as shareholders)."
It was not until ISP filed its December 14, 1999 letter in an
amendment to its Schedule 13D that ISP revealed to the Dexter shareholders
that it had changed its "investment only" purpose for acquiring its Dexter
investment.
Following a careful consideration of ISP's $45.00 per share
proposal with its financial and legal advisors, on December 23, 1999, the
Dexter Board of Directors unanimously concluded that ISP's proposal was
both inadequate and contrary to the best interests of the shareholders of
Dexter and rejected it. The Board's conclusions were based upon the
following factors and considerations:
o The opinion of Dexter's financial advisor, Lehman Brothers
Inc., that the $45 per share was inadequate from a financial
point of view
o The fact that ISP's proposal was unfinanced and that, even
if it could be financed, the resulting entity would be very
highly leveraged
o The absence of any details of the proposal, such as a merger
agreement or a term sheet outlining proposed terms and
conditions of an ISP acquisition
o The Board's belief that long-term shareholder value would be
better served by continued pursuit of Dexter's plan for
growth through life sciences
o Mr. Heyman's involvement with Union Carbide in 1985, CBI in
1986, Borg-Warner in 1987 and Cabot Corporation in 1988
where he generally acquired an investment in the company,
made an acquisition proposal at a low price and ultimately
sold his position in the company at a profit -- a pattern of
which the Board was informed based on publicly available
information
In an effort to pursue aggressively a strategic plan Dexter
believed would maximize value for all Dexter shareholders by focusing on
life sciences, initially through the acquisition of 100% of Life
Technologies, on January 20, 2000, Dexter announced that it had sent a
letter to Life Technologies proposing to acquire all of the remaining
outstanding Life Technologies shares that it did not own in a merger
transaction at $49.00 per share in cash. Dexter's letter indicated that
before a definitive agreement could be signed and before the Life
Technologies Board of Directors responded to the proposal, Dexter needed
appropriate indications of support for the merger from ISP and the other
"group" members who filed the Schedule 13D concerning the Life Technologies
shares.
Rather than allow Dexter to pursue its growth strategy by
supporting Dexter's $49.00 per share merger proposal with Life
Technologies, Mr. Heyman once again embarked on what we consider to be a
program of frustrating the Dexter Board's longstanding and considered
strategy it believed would maximize value for all Dexter shareholders by
becoming a preeminent life sciences supplier by commencing his proxy
contest to elect his hand- picked directors and to seek approval of the
other ISP proposals. On January 27, 2000, Mr. Heyman sent Mr. Walker a
letter indicating that ISP intended to present the Board Size Bylaw
Proposal, the Additional Directors Election Proposal, the Omnibus Proposal
and the other ISP Proposals at the annual meeting and solicit proxies in
favor of the proposals. On January 27, ISP also gave written notice to
Dexter of its intention to bring these proposals before the annual meeting.
Mr. Heyman's letter contained no mention of litigation. Nonetheless, in
addition to diverting Dexter management's attention from Dexter's business
and operations with his proxy contest, Mr. Heyman also commenced litigation
in support of his proxy fight in the United States District Court in the
District of Connecticut.
Following a special meeting of the Dexter Board of Directors on
February 8, 2000, Dexter took the following actions:
o Dexter offered both ISP and Chase Securities Inc., ISP's
financial advisor, the opportunity to review confidential
business and financial information for the purpose of
determining whether they would be willing to increase their
$45.00 per share proposal to acquire Dexter.
o Dexter amended its rights plan to address ISP's concerns
evidenced by its shareholder proposals in a manner that
Dexter believes to be fair, even-handed and in the best
interests of its shareholders. Specifically, Dexter amended
the Rights Agreement to cause the rights to be inapplicable
to any tender or exchange offer that:
o is for all outstanding shares,
o is fully financed,
o is, in the Board's reasonable judgment, substantially
unconditional,
o remains available to Dexter shareholders for 60 days,
and
o assuming all of the foregoing conditions are met,
Dexter's investment banker opines is at a price that
is fair to the Dexter shareholders.
o Dexter requested that ISP make whatever financing commitment
letters that it had received public so that shareholders
could evaluate the terms, conditions and sufficiency of
ISP's financing arrangements for its $45.00 per share cash
proposal.
o Dexter offered a meeting among its tax advisors and those of
ISP for the purpose of understanding how ISP would separate
Life Technologies on a tax-free basis.
On Wednesday, February 23, 2000, ISP entered into a confidentiality
agreement and a total of 20 different representatives of ISP, 11 different
representatives of Chase Securities Inc., one representative from its legal
counsel, Weil, Gotshal & Manges, LLP, and one representative of a
biotechnology consulting firm visited the Dexter due diligence data room
(which contains in excess of 60,000 pages of due diligence material) on 11
separate days. However, ISP never accepted Dexter's offer for a meeting
among Dexter's and ISP's tax advisors in order to reach a common
understanding with respect to the significant tax implications associated
with separating Life Technologies from Dexter.
Following a meeting of the Dexter Board of Directors, on Monday,
February 28, 2000, Dexter issued the following press release:
"Contact:
Kathleen Burdett
John Thompson
Dexter Corporation
(860) 292-7675
or
Lawrence A. Rand
Michael Freitag
Kekst and Company
(212) 521-4800
FOR IMMEDIATE RELEASE
DEXTER BOARD AUTHORIZES EXPLORATION OF STRATEGIC ALTERNATIVES
WINDSOR LOCKS, CONNECTICUT, February 28, 2000 -- Dexter Corporation
(NYSE:DEX) said today its Board of Directors has authorized the
Company's management and its financial advisor, Lehman Brothers, to
explore all strategic alternatives that may be available to Dexter
to maximize shareholder value in the short term.
K. Grahame Walker, Chairman and Chief Executive Officer of Dexter,
said: "Based on the current circumstances that our company is
facing, our Board has decided to institute a process in which we
will survey all of the Company's available options. Several
specific factors contributed to the Board's decision, including the
acquisition by International Specialty Products, Inc. (NYSE:ISP) of
a blocking position in Life Technologies, Inc. (OTC Bulletin
Board:LTEK) that made it impossible for Dexter to complete our plan
to achieve 100 percent ownership of LTI as a platform for
implementation of Dexter's life sciences growth strategy."
"Rather than negotiate a reasonable exit from LTI," Mr. Walker
continued, "ISP instead launched a proxy contest for control of
Dexter's Board with an unfinanced and inadequate $45 negotiation
proposal. The Board strongly believes and has confidence in the
long-term prospects for Dexter's growth strategy. However, ISP's
self-serving insistence on a debate confined to a short-term focus
coupled with ISP's ability to prevent Dexter from effectively
implementing its growth strategy made it necessary to explore all
other options at this time."
Dexter emphasized its Board has made no decision to sell the
Company at this time, but said every available alternative --
including 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 -- would be examined and considered. In
pursuit of that objective, third parties will be invited to sign
confidentiality agreements, review comprehensive data room
materials and receive Dexter management presentations. The Company
has entered into a confidentiality agreement with ISP, and, as of
February 24, three representatives of ISP and 10 representatives of
ISP's financial advisor, Chase Securities, began to visit Dexter's
data room. There can be no assurance that these discussions will
result in a transaction or other action by Dexter.
Any statements in this press release that are not historical facts
are "forward-looking statements" as that term is defined under the
Federal Securities Laws. Forward-looking statements are subject to
risks, uncertainties and other factors, which could cause actual
results to differ materially from those stated in such statements.
These and other risks are detailed in the Company's filings with
the Securities and Exchange Commission.
Dexter Corporation is a global specialty materials supplier with
three operating segments: life sciences, nonwovens, and specialty
polymers. The company supplies specialty materials to the
aerospace, electronics, food packaging, and medical markets. . . ."
On March 21, 2000, Mr. Walker wrote the following letter to Mr. Heyman:
"Dear Mr. Heyman:
On March 10, 2000, our financial advisor Lehman Brothers
sent you a letter inviting you to submit a non-binding written
indication of interest for the purchase of Dexter or one or more of
its businesses. Lehman's letter requested that your proposal be
submitted by Noon (EST) on March 24, 2000.
In view of the conflict and disharmony that have plagued the
contacts and communications between our two companies, I believe it
is appropriate to address a few special comments to ISP alone with
respect to this process.
First, this is a serious and deliberate process. . .
.Second, the Board of Dexter is unconstrained by any objective or
bias except what is best for the shareholders. Put differently,
what will count in this process is price and certainty -- nothing
else. Third, Lehman's invitation on our behalf is genuine because
the Dexter Board wants ISP to submit its best possible competitive
proposal. Please understand that Dexter will negotiate any proposal
with ISP, provided the proposal is competitive as to price and
likely to be consummated. Fourth, your tactics and strategy in this
process are, of course, up to you and your Board, but I want to
caution you it is critical to your staying in the running to
acquire Dexter that you submit a competitive proposal this Friday.
You can be assured that the Dexter Board will be interested only in
what is submitted on Friday afternoon, and not in the rhetoric of
your proxy campaign nor in some new threat of litigation.
Let me also remind you what I have previously advised both
you and Mr. Kumar. Dexter has made an extraordinary effort to
accommodate ISP in its due diligence investigation. Since February
23, a total of 19 different representatives of ISP and 11 different
representatives of Chase Securities Inc. have visited the data room
on 6 separate days -- a data room that contains more than 60,000
pages of materials. Seven of your representatives and 3 Chase
representatives have visited on more than one occasion. A total of
approximately 40 hours of data room time has been dedicated to
various subgroups of these 30 people conducting your due diligence
investigation. Nothing short of a voluminous quantity of
information from the data room has been copied and sent to either
ISP or Chase or both of you. This Thursday, March 23, we have
scheduled a management presentation for 5 ISP representatives and
4 Chase representatives to be given by senior management of our
corporation.
As I said, all proposals are due on Friday. Depending upon
the responses to this invitation, we anticipate there will be a
more select group of bidders proceeding into a second round.
However, we are telling participants that, if the circumstances
warrant, Dexter would be willing to consider and perhaps respond to
a pre-emptive proposal. For this and other reasons, you should
assume that the only sure means for staying in the process is to
submit a competitive proposal. If you fail to do so, you will have
no assurance either that you will be included in the next round or,
indeed, that there will be a next round. Specifically, you should
anticipate the possibility that Dexter could, in appropriate
circumstances, respond to requests for a "lock-up" or "break-up"
arrangements from a pre-emptive bidder that make it materially more
expensive for any other bidder to compete thereafter. Naturally, if
ISP would like to submit a pre-emptive proposal, we would be
willing to discuss its implications with you and your advisors as
well.
If you have any questions, let me suggest that you have
Chase Securities discuss them with Lehman or Weil Gotshal discuss
them with Skadden Arps.
Sincerely,
/s/ K. Grahame Walker"
On March 23, 2000, Mr. Heyman wrote a letter to Mr. Walker stating
that ISP's board had authorized an increase in the price of ISP's cash
merger proposal from $45.00 to $50.00 per share. Mr. Heyman attached to
this revised proposal a commitment letter from Chase Securities to provide
senior credit facilities in the aggregate amount of up to $1.825 billion in
order to finance ISP's acquisition of Dexter. Mr. Heyman further stated:
"If we receive the proper cooperation from Dexter in connection
with the balance of the due diligence process and Dexter can
demonstrate the value of the Company would justify a higher price,
we would consider increasing this price as well."
In response to Mr. Heyman's letter, on March 23, 2000, Dexter
issued the following press release:
"Contact:
Kathleen Burdett
John Thompson
Dexter Corporation
(860) 292-7675
or
Lawrence A. Rand
Michael Freitag
Kekst and Company
(212)521-4800
FOR IMMEDIATE RELEASE
DEXTER TO REVIEW REVISED OFFER FROM ISP; CONTINUES EXPLORATION OF
STRATEGIC ALTERNATIVES
WINDSOR LOCKS, CONNECTICUT, March 23, 2000 - Dexter Corporation
(NYSE:DEX), said today that it has received a letter from
International Specialty Products (NYSE:ISP), increasing its cash
merger proposal to $50 per share of Dexter common stock. Dexter's
Board of Directors plans to give this revised proposal full
consideration.
As announced last February 28, the Dexter Board has authorized the
Company's management and its financial advisor, Lehman Brothers, to
explore all strategic alternatives that may be available to Dexter
to maximize shareholder value in the short term.
K. Grahame Walker, Chairman and Chief Executive Officer of Dexter,
said: "Today's announcement from ISP confirms our view of ISP's
previous proposal of $45 per share as inadequate. The Board will
evaluate ISP's new proposal along with all other alternatives
presented to us as part of our program to maximize value in the
short term."
As previously announced, the Dexter Board is examining and
considering a wide range of alternatives - including a merger or
sale of the Company, a financial restructuring, or a spin- off or
sale or one or more of the Company's businesses in order to achieve
maximum value for shareholders in the short term. In pursuit of
that objective, 29 third parties including ISP have signed
confidentiality agreements. Dexter emphasized that every available
alternative will be examined and the one that will maximize the
value of the Dexter shareholders' investment will be aggressively
pursued. Dexter also said that there can be no assurance that these
discussions will result in a transaction or other action by Dexter.
. . ."
Also, on March 23, 2000, Dexter's counsel, Skadden, Arps, Slate,
Meagher & Flom LLP, received a letter from ISP's counsel, Weil, Gotshal &
Manges LLP, requesting an amendment to the Rights Plan Amendment Proposal
to reflect the increase in the price of ISP's acquisition proposal from
$45.00 to $50.00 per share. Dexter's counsel responded to such letter by
reiterating Dexter's belief that ISP's Rights Plan Amendment Proposal is
illegal and not a proper subject for action by Dexter's shareholders and
suggesting that ISP consider withdrawing its Rights Plan Amendment Proposal
in order to eliminate the necessity for explaining why it is advancing an
amendment and resolution with a $45.00 per share floor when ISP's proposal
is at $50.00 and may be some other number in the future.
On April 2, 2000, Dexter issued the following press release:
"Contact:
Kathleen Burdett
John Thompson
Dexter Corporation
(860) 292-7675
or
Lawrence A. Rand
Michael Freitag
Kekst and Company
(212)521-4800
FOR IMMEDIATE RELEASES
DEXTER PLEASED WITH FIRST STAGE OF PROGRAM TO MAXIMIZE SHAREHOLDER
VALUE POSTPONES ANNUAL MEETING TO COMPLETE SALE PROCESS
WINDSOR LOCKS, CONNECTICUT, April 2, 2000 - Dexter Corporation
(NYSE:DEX) announced today that the results of the first stage of
its program to maximize the short-term value of its shareholders'
investment were very positive. Dexter said that it had received
several indications of interest in acquiring the entire company and
had also received multiple indications of interest in Dexter's
various constituent businesses. Dexter added that selected
potential merger partners and buyers are currently receiving
management presentations, facility tours and data room access.
K. Grahame Walker, Chairman of the Board and Chief Executive
Officer of Dexter said, "We are very pleased with the results of
the first stage of our sale process. Our first priority is to
maximize the value of our shareholders' investment in the short
term and based on progress to date we expect to be in a position to
make a definitive announcement in the next few weeks or so. In the
meantime, we are reinforced by the strong support we have received
from our shareholders who wish to see the sale process concluded in
a deliberate, orderly and successful manner. Based on this and
other factors, our Board of Directors has determined to postpone
our Annual Meeting of Shareholders until June 30, 2000. Of course,
it is our objective to present a definitive transaction to our
shareholders well before that date. . . . Dexter cautioned
shareholders that there can be no assurance that its discussions to
sell the Company will result in the consummation of a sale
transaction. . . ."
Between April 3 and April 18, 2000, of the 17 parties that had
submitted indications of interest in acquiring all or part of Dexter, 6
were selected to participate in management presentations, to conduct site
visits of Dexter's facilities and to review the due diligence materials in
Dexter's data room.
By letter dated, April 12, 2000, each of the 6 parties
participating in the second stage of the sale process, including ISP, was
advised by Lehman Brothers that final bids would be due on April 19, 2000,
and what the procedures would be for submitting definitive acquisition
proposals. Bidders were requested to submit proposals to acquire both the
Dexter shares as well as the Life Technologies shares not owned by Dexter.
The Lehman Brothers' bid letter also required that each proposal "remain
open until May 19, 2000, unless rejected earlier in writing by Dexter."
Subsequently, Dexter's legal counsel distributed forms of
acquisition agreements for both Dexter and Life Technologies to each of the
bidders along with an invitation to negotiate the terms of the agreements
in advance of the April 19, 2000, submission date. ISP declined this
invitation.
Following the April 19, 2000 bid submission deadline, on April 20,
2000, ISP submitted a proposal only to acquire the outstanding common stock
of Dexter but declined to include a proposal to acquire the publicly-held
shares of Life Technologies. ISP offered to acquire the Dexter shares at a
price per share of $50.00 plus one "contingent value right." The contingent
value rights purported to allow Dexter's shareholders to participate in the
proceeds from a subsequent sale by ISP of Dexter's shares in Life
Technologies if such sale occurred on or prior to September 30, 2001 and
the sale price for the shares of Life Technologies was greater than $50.00
per share. However, the term sheet for the contingent value rights provided
to Dexter imposed no obligation on ISP to sell Life Technologies in advance
of September, 2001. Furthermore, ISP intended to cap the value each right
holder would receive to $10.00 per contingent value right The terms of
contingent value rights also provided that if ISP were to sell less than
100% of Life Technologies, ISP's shares and Dexter's shares of Life
Technologies would be included in the sale on a pro rata basis. ISP'S APRIL
20, 2000 PROPOSAL STATES "ISP'S PROPOSAL IS NOT CONDITIONED ON FURTHER DUE
DILIGENCE." In addition, contrary to the instructions provided to ISP by
Lehman Brothers as to the length of time bids should remain open, ISP's
proposal indicated that it would expire on Monday, April 24, 2000, unless
Dexter commenced substantive negotiations with ISP before that time.
Following receipt of ISP's proposal, ISP's representatives were advised
that Dexter's Board would not be meeting until that Monday afternoon and
thus the deadline for their bid was unreasonable.
Following a meeting of the Dexter Board of Directors, on April 24,
2000, Dexter issued the following press release:
"Contact:
Kathleen Burdett
John Thompson
Dexter Corporation
(860) 292-7675
or
Lawrence A. Rand
Michael Freitag
Kekst and Company
(212)521-4800
FOR IMMEDIATE RELEASE
DEXTER CONTINUES DELIBERATIONS
WINDSOR LOCKS, CONNECTICUT, April 24, 2000 - Dexter Corporation
(NYSE-DEX) announced that its Board of Directors had met today to
review the status of its exploration of alternatives to maximize
shareholder value in the short term. The Board received reports
concerning proposals received and other pertinent developments. The
Board reached no conclusions, but authorized management and its
advisors to proceed with next steps in the process.
. . ."
On May 1, 2000, Mr. Heyman sent a letter to Mr. Walker stating that
". . . ISP is terminating further discussions with Dexter and continuing
its proxy contest . . . ." In response to Mr. Heyman's letter, on May 2,
2000, Mr. Walker sent the following letter to Mr. Heyman:
"Dear Mr. Heyman:
This is in reply to your letter of May 1, 2000, which came
as a total surprise. The reasons you assign for your precipitous
and very public new position require some rebuttal.
In discussing your April 20 proposal, our representatives
expressed to yours the Board's desire for the best possible
economics on the best possible contract terms. If you choose to
translate those objectives into a characterization of your proposal
as unacceptable, so be it. Your suggestion that our representatives
"refused to meet" with yours over the April 22-23 weekend does not
reflect the facts. In fact, Dexter's representatives offered not
only to meet with ISP's representatives, but also to negotiate a
transaction if ISP submitted a proposal at a "compelling price,"
which ISP refused to do. Nonetheless, our representatives were told
by yours in telephone discussions that occurred during the April
22-23 weekend that they believed ISP's proposal had flexibility to
be increased. Moreover, in response to ISP's self-imposed deadline
of Monday, April 24, 2000, our representatives told yours that the
Dexter Board would not be meeting until Monday afternoon when it
would consider its alternatives. Promptly following the Board
meeting, on Monday evening our representatives called yours and
said the Board was prepared to authorize a transaction with ISP at
a price higher than what ISP was offering and invited ISP to
negotiate. Your representatives refused and demanded that ISP be
shown all of the bids received by Dexter in its value maximization
process, a demand which on its face was unreasonable.
Your suggestion that Dexter refused to provide ISP with
information regarding third party interest in Life Technologies is
entirely inaccurate. Not only did Dexter introduce ISP last
Thursday to a third party bidder for Life Technologies that had
indicated strong interest at an attractive value, but Dexter also
acceded to ISP's demand (which was made a non-negotiable condition
of proceeding) that Dexter be excluded from any discussions between
ISP and the third party. In view of the facts, your contention is
hardly credible. Moreover, your position is even less credible when
considered in light of the facts that ISP never had a meeting with
the third party, that ISP demanded to know the third party's bid as
a condition of the meeting and that there were no conversations at
all between ISP and the third party after last Sunday.
Your contention regarding a "creditable alternative to
[ISP's] proposals for the Company" is similarly untenable. The
problem here is not creditable alternatives. The problem is ISP's
determination to frustrate the Board's efforts on behalf of
stockholders, to seize control of Dexter as cheaply as possible and
to dispose of Life Technologies at a price which allows ISP to keep
Dexter's wholly-owned businesses at minimal cost. It is for these
reasons that the Dexter Board must be in charge of conducting the
auction process. ISP is not interested in paying fair value for the
Dexter wholly-owned businesses, nor is it interested in any bidder
willing to do so. Based on ISP's conduct during the course of the
last weekend, ISP's interest in a Life Technologies bidder only
extends to the price such party will pay ISP for that business, an
approach which we have previously illustrated to be tax
inefficient.
We will continue to move forward with our program to
maximize value in the short term for all Dexter stockholders, which
may result in the sale of the assets you are interested to acquire.
Sincerely,
/s/ K. Grahame Walker"
On May 2, 2000, Mr. Heyman sent the following letter to Mr. Walker:
"Dear Grahame:
While I believe your May 2nd letter is filled with
mischaracterizations, inaccuracies and irrelevancies, it is not
productive for you and I to engage in a debate about "who said or
did what to whom." Parenthetically, at Dexter's request, we had
agreed to keep discussions to which you refer "confidential" - an
agreement which we have honored and you have now chosen to ignore.
The simple fact of the matter is that we have made, in our
view, a fair and full offer for Dexter - which Dexter has seen fit
to reject. Notwithstanding Dexter's rhetoric and repeated
optimistic prognostications as to its progress with respect to the
bidding process, we believe that our offer is still the best offer
for Dexter, and if your company has a better one, we can only
assume that it would have been disclosed by now.
Your threats to dismember the company with the piecemeal
sale of one or more businesses smacks of scorched-earth tactics
which, while they may operate to entrench your management, may only
destroy shareholder value for Dexter shareholders.
Finally, whatever our differences, we believe that Dexter
has a legal and moral obligation to let its shareholders decide
what is in their best interests, and we trust that you will hold to
your previously announced commitment to present any transaction to
Dexter shareholders for their approval.
Sincerely,
/s/ Samuel J. Heyman"
On May 5, 2000, ISP filed revised proxy materials in which it
stated that the "ISP proposal still stands at $50 per share in cash." On
May 15, 2000, Mr. Heyman wrote a letter to Mr. Walker stating that "we have
been struggling for quite some time now to just keep our $50 per share
proposal in place," and on May 23, 2000, Mr. Heyman wrote "This is to
advise you that ISP is withdrawing herewith the increase in its proposal to
acquire Dexter from $45 to $50 per share."
On May 17, 2000, Mr. Walker sent the following letter to shareholders:
"Dear Fellow Shareholder:
I would like to update you on a number of important
developments that have occurred at Dexter Corporation over the last
few months.
As you know on February 25, 2000, the Dexter Board of
Directors authorized management and our financial advisors, Lehman
Brothers Inc., to explore all strategic alternatives available for
Dexter to maximize shareholder value in the short term. The Board
of Directors authorized this action in response to International
Specialty Products Inc.'s unilateral attempt to seize control of
your company by waging a proxy contest and proposing to acquire
your company in a negotiated merger transaction which at that time
was unfinanced and purported to offer $45.00 per share in cash. By
virtue of the sale process we have instituted, we have succeeded in
causing ISP to increase the price of its proposal to $50.00 per
share and to obtain a financing commitment from The Chase Manhattan
Bank to finance its proposal. Nonetheless, we continue to believe
that ISP's proposal is quite conditional and does not reflect the
full value inherent in Dexter Corporation including its 75%
ownership position in Life Technologies, Inc.
As a result, your Board of Directors has authorized management to
take the following important actions:
o CONTINUE OUR EFFORT TO SELL DEXTER CORPORATION IN A SINGLE
TRANSACTION. The parties that expressed interest in
acquiring all of Dexter are principally life sciences
companies that were interested in acquiring your company in
a tax-free stock merger transaction. Unfortunately, the
decline in the public equity markets since March has
adversely affected the trading prices of their equity
securities and, accordingly, the value of the consideration
they offered. Nonetheless, we believe there is strong
continuing interest in a transaction involving all of
Dexter, as well as in a separate and independent acquisition
of Life Technologies.
o PURSUE THE SALE OF THE INDIVIDUAL DEXTER BUSINESSES. At the
end of the initial stage of our sale process, we received a
number of significant indications of interest for Dexter's
wholly owned businesses -- Nonwoven Materials, Electronic
Materials and Adhesive & Coating Systems. We are engaging in
discussions with these bidders in order to firm up their
indications of interest. . . .
o PROVIDE ISP WITH ACCEPTABLE FORMS OF ACQUISITION AGREEMENTS
FOR BOTH DEXTER CORPORATION AND LIFE TECHNOLOGIES. On April
20, 2000, ISP, in connection with its proposal to acquire
Dexter at $50.00 per share plus one contingent value right
(which purports to allow Dexter's shareholders to
participate in the proceeds from a subsequent sale by ISP of
Dexter's shares in Life Technologies under certain
circumstances), submitted to us its proposed changes to our
form of acquisition agreement for Dexter. We had also
provided to ISP a form of agreement to acquire the remaining
publicly traded minority shares of Life Technologies. ISP
declined to submit a proposal to acquire the Life
Technologies minority. Our legal advisors, Skadden, Arps,
Slate, Meagher & Flom LLP, discussed with ISP's legal
advisors the changes to the proposed form of acquisition
agreement, focusing specifically on those changes that
created uncertainty for our shareholders that ISP's proposed
acquisition would close-- promptly and upon the terms agreed
by the parties. Similarly, they discussed the conditional
nature of the commitment letter from The Chase Manhattan
Bank.
We have sent to ISP a revised form of acquisition agreement
for Dexter Corporation and for Life Technologies taking into
account those changes from ISP that we believed reasonable under
the circumstances. More significantly, we have told ISP that we are
prepared to enter into an acquisition transaction with them,
largely on the terms and conditions they have requested, if they
insert into our forms of agreement a price for Dexter and a price
for Life Technologies that represents a full and fair value for the
shareholders of each company.
We are pursuing this three-pronged course of action at this
time because we believe that all opportunities should be explored
simultaneously. It is only at the end of this process that we can
ensure you will have received the best available transaction.
Please understand that we have no interest in delay and are
working expeditiously to create for you the very best transaction
available -- whether it's a transaction with ISP or with other
purchasers of the individual Dexter businesses. OUR ONLY INTEREST
IS ENSURING THAT YOU RECEIVE THE HIGHEST VALUE FOR YOUR SHARES AS
PROMPTLY AS POSSIBLE.
We appreciate the support you have shown us during this
difficult time.
Sincerely,
/s/ 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.' . . ."
ON MAY 30, 2000, THE FEDERAL DISTRICT COURT IN CONNECTICUT RULED
THAT ISP'S SHAREHOLDER PROPOSALS SEEKING TO INCREASE THE SIZE OF THE DEXTER
BOARD AND TO ELECT A MAJORITY OF THE MEMBERS OF THE DEXTER BOARD ARE
ILLEGAL UNDER DEXTER'S CERTIFICATE OF INCORPORATION AND CONNECTICUT LAW. On
June 14, 2000, the Court entered an order directing the entry of final
judgment dismissing the count of the complaint relating to the increase in
the size of the Dexter Board. On June 20, 2000, ISP filed a notice of
appeal to the United States Court of Appeals for the Second Circuit from
the Court's May 30, 2000 ruling.
From mid-May until early-June, various parties interested in
acquiring one or more of Dexter's wholly owned businesses conducted
comprehensive due diligence investigations, including meetings with
management representatives. In addition, during the first week of June,
counsel to Dexter circulated forms of asset acquisition agreements to such
prospective purchasers. Each interested party was requested to submit its
final bid prior to the close of business on June 9, 2000.
On June 10, 2000, the Dexter Board of Directors met telephonically
with members of management and its financial and legal advisors to review
and consider the bids received the prior evening. The Board authorized
management and its advisors to proceed as promptly as practicable to
negotiate definitive acquisition agreements for the sale of Dexter's wholly
owned businesses.
Between June 13, 2000 and June 19, 2000, representatives of the
purchasers and their financial and legal advisors completed their remaining
due diligence investigations and negotiated the terms of definitive
acquisition agreements with representatives of Dexter and its legal and
financial advisors.
On June 18, 2000, the Dexter Board met with its legal and financial
advisors to review the status of negotiations with the various prospective
purchasers of Dexter's wholly owned businesses. At such meeting Lehman
Brothers reviewed with the Board the financial terms of the transactions
currently being negotiated, and Dexter's legal advisors summarized the
terms of the agreements that were under negotiation.
On June 19, 2000, the Dexter Board met telephonically. Dexter's
legal advisors updated the Board on the status of negotiations with the
various potential buyers. In addition, Lehman Brothers delivered its oral
opinion, which was later confirmed in writing, to the effect that, from a
financial point of view and subject to the matters discussed in its
opinion, the consideration to be received by Dexter in connection with the
sale of Dexter's Nonwoven Materials business pursuant to the proposed form
of asset purchase agreement between Dexter and Ahlstrom Paper Group Oy was
fair to Dexter. Lehman Brothers also delivered its oral opinion, which was
later confirmed in writing, to the effect that, from a financial point of
view and subject to the matters discussed in its opinion, the consideration
to be received by Dexter in connection with the sale of its Electronic
Materials, Adhesives and Polymers Systems businesses pursuant to the
proposed agreement with Loctite Corporation was fair to Dexter. The Dexter
Board of Directors then authorized Dexter to enter into such transactions,
subject to the satisfactory finalization of definitive asset purchase
agreements.
During the evening of June 19, 2000 and the following day,
representatives of Dexter and representatives of each of the prospective
purchasers and their respective legal advisors finalized the terms of
definitive asset purchase agreements.
On June 20, 2000, ISP sent a letter to Dexter announcing its
intention to commence the ISP Offer. The Dexter Board of Directors
reconvened late in the afternoon of June 20. Dexter's legal advisors
reviewed with the members of the Board the terms of the Loctite and
Ahlstrom acquisition agreements. In addition, Lehman Brothers reconfirmed
its fairness opinions with respect to each of the proposed sales. Shortly
thereafter, each of the acquisition agreements was signed and delivered.
After Dexter signed the Loctite and Ahlstrom agreements, it issued
the following press release:
"Contact:
Kathleen Burdett
John Thompson Dexter Corporation
860.292.7675
or
Lawrence A. Rand
Michael Freitag
Kekst and Company
212.521.4800
FOR IMMEDIATE RELEASE
DEXTER SELLING ASSETS FOR $675 MILLION IN CASH
CONTINUES TO PURSUE PROGRAM TO REALIZE
FULL VALUE FOR LIFE TECHNOLOGIES
WINDSOR LOCKS, CONNECTICUT, June 20, 2000 - Dexter Corporation
(NYSE:DEX) today announced it has signed two definitive asset sale
agreements for a total of $675 million in cash - one covering its
Electronic Materials, Adhesives and Polymer Systems businesses and
the other covering its Nonwoven Materials business. In addition,
the Company said it is in active discussions regarding a potential
sale of its Coatings business, which would then complete the sale
of all the wholly owned businesses.
K. Grahame Walker, Chairman and Chief Executive Officer of Dexter,
said: "We are very pleased to be delivering on our commitment to
maximize the value of Dexter's wholly owned businesses for the
benefit of all the Company's shareholders. We are now moving
forward aggressively to achieve maximum value for the Company's
Life Technologies stake."
Dexter stated that net after-tax proceeds from the two sales are
expected to be approximately $530 million. The Company also owns
18.8 million shares of Life Technologies, Inc. (OTC BB:LTEK) which
equates to 0.811 shares of Life Technologies stock per outstanding
Dexter share. Life Technologies stock has recently traded in the
range of $48 to $50 per share. Dexter currently intends to use
approximately $260 million to repay debt. Dexter also said it
expects to distribute the net proceeds from all asset dispositions
either in connection with a Life Technologies transaction or
directly to its stockholders as promptly as possible.
Details of the proposed transactions are as follows:
o Loctite Corporation (a member of the Henkel Group) has
agreed to buy Dexter's Electronic Materials, Adhesives and
Polymer Systems businesses for $400 million in cash. The
agreement has been approved by Dexter's Board of Directors
and the Management Board of Loctite's parent, Henkel KGaA of
Germany. The agreement is subject to the approval of
Henkel's shareholder committee (Gesellschafterausschuss) at
its regularly scheduled meeting on June 29, 2000. Closing is
expected in July 2000, subject to customary regulatory
approvals including the Hart-Scott-Rodino Act and other
customary conditions. The transaction is not subject to
approval of Dexter's shareholders.
o Dexter's Electronic Materials, Adhesives and Polymer Systems
businesses had net sales of $236 million in 1999. Dexter's
Coatings business, which is the only part of Dexter's
Specialty Polymers segment not being sold to Loctite, had
net sales of $47 million in 1999.
o Ahlstrom Paper Group Oy has agreed to buy Dexter's Nonwoven
Materials business for $275 million in cash. The agreement
has been approved by the boards of directors of both
companies. Although Dexter does not believe shareholder
approval is required, at the request of the buyer and for
the avoidance of doubt and uncertainty concerning threatened
claims by International Specialty Products Inc. (NYSE:ISP),
the transaction will be subject to the approval of Dexter's
shareholders, which Dexter expects to obtain in the third
quarter of 2000. Closing is also subject to the
Hart-Scott-Rodino Act and other customary conditions.
Dexter's Nonwoven Materials business had net sales of $285
million in 1999.
Dexter also said that it is postponing its annual meeting of
shareholders for two weeks, from June 30 to July 14, 2000 to allow
adequate time for the dissemination of information and evaluation
of the proposed transactions by the Company's shareholders before
they are asked to vote for directors.
In 1999, Henkel generated sales of USD 11.0 billion and
employed more than 56,000 people in over 70 countries. Henkel is a
world leader in adhesives, surface technologies and oleochemicals.
It is also one of the biggest producers of detergents and household
cleaners worldwide, and occupies a leading position in cosmetics
and toiletries in Europe.
Ahlstrom Paper Group is a world leader in high value
specialty materials made from natural and man-made fibers for
labeling, packaging, medical, filtration, building, decorating and
many other industrial applications. With approximately 5,000 people
in nearly 40 production sites throughout Europe, the Americas and
Asia, Group net sales were USD 1.14 billion in 1999.
Dexter Corporation is a global specialty materials supplier
with three operating segments: life sciences, nonwovens, and
specialty polymers. The company supplies specialty materials to the
aerospace, electronics, food packaging, and medical markets.
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. . . ."
On June 22, 2000, at the request of ISP, the Federal District Court
of the District of Connecticut held a telephonic conference during which
the Court granted ISP permission to file a motion for a preliminary
injunction to seek to enjoin the consummation of Dexter's asset purchase
agreement with Loctite Corporation unless the transaction is submitted to a
vote of Dexter shareholders. It is ISP's position that this transaction
constitutes a sale of all or substantially all of Dexter's assets and thus
must be approved by a shareholder vote pursuant to Section 33-831 of the
Connecticut Business Corporation Act. Dexter believes ISP's motion is
devoid of merit and intends to oppose it vigorously.
On June 26, 2000, the Purchaser commenced the ISP Offer.
(ii) Recommendation and Reasons for the Recommendation
Recommendation
On June 30, 2000 the Dexter Board of Directors met with Dexter's
management and legal and financial advisors to consider the ISP Offer. AT
SUCH MEETING, THE DEXTER BOARD OF DIRECTORS UNANIMOUSLY (I) DETERMINED TO
REJECT THE ISP OFFER AS INADEQUATE AND NOT IN THE BEST INTERESTS OF DEXTER
AND ITS SHAREHOLDERS AND (II) DETERMINED TO RECOMMEND THAT ALL HOLDERS OF
DEXTER COMMON STOCK REJECT THE ISP OFFER AND NOT TENDER THEIR SHARES TO THE
PURCHASER.
Reasons for the Dexter Board's Recommendation
In reaching its conclusions and recommendation described above, the
Dexter Board of Directors considered a number of factors, including the
following:
1. The Offer Price is below current market price. The closing
price per share of the Dexter Common Stock on the New York
Stock Exchange on June 29, 2000, the last trading day prior
to the date of this Statement, was $47 3/8, which is higher
than ISP's $45 Offer Price.
2. Opinion of Lehman Brothers that the Offer Price is
inadequate. The Dexter Board of Directors has received the
written opinion, dated June 30, 2000, of Lehman Brothers to
the effect that, as of the date of such opinion and based on
and subject to the matters set forth therein, the Offer
Price provided for in the ISP Offer was inadequate, from a
financial point of view, to Dexter shareholders (other than
ISP and its affiliates). A copy of the opinion of Lehman
Brothers, which sets forth the matters considered,
assumptions made and limitations on the review undertaken by
Lehman Brothers, is attached hereto as Annex A. The opinion
of Lehman Brothers is addressed to the Dexter Board of
Directors, addresses only the inadequacy, from a financial
point of view, to the holders of Dexter Common Stock (other
than ISP and its affiliates) of the Offer Price provided for
in the ISP Offer and does not constitute a recommendation to
any shareholder as to whether such shareholder should tender
Dexter Common Stock pursuant to the ISP Offer or as to any
other matter relating to the ISP Offer. Shareholders are
urged to read the opinion of Lehman Brothers in its
entirety.
3. Dexter has entered into two definitive asset sale
agreements. On June 20, 2000, Dexter announced that it
signed two definitive asset sale agreements for a total of
$675 million in cash -- one covering the sale of Electronics
Materials, Adhesives and Polymer Systems businesses to
Loctite Corporation and the other covering the sale of its
Nonwoven Materials business to Ahlstrom Paper Group Oy.
4. Dexter is in active discussions regarding the sale of its
Coatings business. Dexter is in active discussions regarding
a potential sale of its Coatings business, which would then
complete the sale of all Dexter's wholly owned businesses.
5. Dexter is moving forward to achieve maximum value for Life
Technologies. Dexter is committed to moving forward
aggressively to achieve maximum value for Dexter's stake in
Life Technologies Inc. The Board of Directors believes that
the ISP Offer fails, among other things, to reflect an
appropriate valuation for Dexter's shares of Life
Technologies which have recently traded in the range of $48
to $50 per share.
6. The ISP Offer is highly conditional. Specifically, the ISP
Offer is subject to the following conditions, among others:
(a) Minimum Condition. At least 13,489,340 shares of
Dexter Common Stock (approximately 57.24% of the
total number currently outstanding) must be tendered.
(b) Rights Condition. The Rights must have been redeemed
by the Dexter Board of Directors or ISP must be
satisfied, in its sole discretion, that the Rights
have been invalidated or otherwise deemed
inapplicable to the ISP Offer or the Proposed Merger.
(c) Business Combination Condition. The acquisition of
shares of Dexter Common Stock pursuant to the ISP
Offer and the Proposed Merger must have been approved
by the Dexter Board of Directors for purposes of
Sections 33-841 and 33-844 of the Connecticut
Business Corporation Act (the "CBCA") so that the
Purchaser can consummate the Proposed Merger as soon
as practicable following consummation of the ISP
Offer, or ISP must be satisfied, in its sole
discretion, that the CBCA is invalid or otherwise
inapplicable to the ISP Offer and the Proposed
Merger.
(d) Asset Retention Condition. Dexter may not sell or
otherwise dispose of ANY assets of Dexter or its
subsidiaries outside the ordinary course of business,
including, without limitation, any shares of any
subsidiary of Dexter, such as Life Technologies, Inc.
In order for this condition to be satisfied, Dexter
would need to terminate both its agreement with
Loctite and its agreement with Ahlstrom Paper Group
(which are referred to in the paragraph numbered 3
above. Moreover, upon the termination of any
agreements that Dexter has entered into with respect
to the sale or disposition of such assets (including
the two mentioned), Dexter may not thereby have
incurred any termination fees or other liabilities
which, IN THE SOLE DETERMINATION OF ISP, are
material.
(e) Funding Condition. The Purchaser must have available
borrowings of $1.775 billion to, among other things,
purchase shares of Dexter Common Stock in the ISP
Offer, on the terms set forth in the senior credit
facilities commitment letter (the "Commitment
Letter") issued by The Chase Manhattan Bank and Chase
Securities Inc. (together, "Chase") to ISP Opco
Holdings Inc., a subsidiary of ISP. If the conditions
to funding under the Commitment Letter are not
satisfied, the Purchaser will not be able to or
obligated to purchase shares of Dexter Common Stock
pursuant to the ISP Offer. Conditions to funding
under the Commitment Letter include, among other
things, that there has been no material adverse
change in the business, operations or financial
condition of ISP or Dexter and that there has been no
material disruption of or material adverse change in
financial, banking or capital market conditions that,
in the judgment of Chase, could materially impair the
syndication of the loan.
(f) The Director Majority Condition. The Dexter Board of
Directors must agree to cause a majority of the Board
to be comprised of representatives of ISP immediately
following the consummation of the ISP Offer.
The foregoing discussion of the information and factors considered
by the Dexter Board of Directors is not intended to be exhaustive but
includes all material factors considered by the Board. The Dexter Board of
Directors did not assign relative weights to the foregoing factors or
determine that any factor was of particular importance, and individual
directors may have given differing weights to different factors. Rather,
the Board viewed its position and recommendation as being based on the
totality of the information presented to and considered by it.
THE DEXTER BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT ALL
HOLDERS OF DEXTER COMMON STOCK REJECT THE ISP OFFER AND NOT TENDER THEIR
SHARES TO THE PURCHASER.
(c) Intent to Tender. To the knowledge of Dexter, each executive
officer, director, affiliate or subsidiary of Dexter who or which owns
shares of Dexter Common Stock presently intends to hold any shares of
Dexter Common Stock that they own of record or beneficially and does not
intend to tender any such shares in the ISP Offer.
ITEM 5. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED.
Pursuant to a letter agreement dated December 23, 1999, as amended,
Dexter retained Lehman Brothers to render financial advisory services to
Dexter concerning the unsolicited proposal by ISP to acquire Dexter.
Pursuant to its engagement Lehman Brothers will receive customary
compensation for its services. In addition, Dexter will indemnify Lehman
Brothers and certain related persons against certain liabilities and
expenses in connection with its engagement, including certain liabilities
under the federal securities laws.
Except as set forth above, neither Dexter nor any person acting on
its behalf has employed, retained or compensated any other person to make
any solicitations or recommendations to shareholders on its behalf
concerning the ISP Offer.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
To the knowledge of Dexter, no transactions in Dexter Common Stock
have been effected during the past 60 days by Dexter or any executive
officer, director, affiliate or subsidiary of Dexter.
ITEM 7. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
Except as set forth in this Statement, Dexter is not currently
undertaking or engaging in any negotiations in response to the ISP Offer
that relate to (1) a tender offer or other acquisition of Dexter's
securities by Dexter, any of its subsidiaries or any other person; (2) an
extraordinary transaction, such as a merger, reorganization or liquidation,
involving Dexter or any subsidiary of Dexter; (3) a purchase, sale or
transfer of a material amount of assets of Dexter or any subsidiary of
Dexter; or (4) any material change in the present dividend rate or policy,
or indebtedness or capitalization of Dexter.
Notwithstanding the foregoing, the Dexter Board of Directors has
determined that Dexter could in the future engage in negotiations in
response to the ISP Offer that could have one of the effects specified in
the preceding sentence, and the Dexter Board of Directors of Dexter has
determined that disclosure with respect to the parties to, and the possible
terms of, any transactions or proposals of the type referred to in the
previous sentence might jeopardize any discussions or negotiations that
Dexter might conduct. Accordingly, the Dexter Board of Directors has
adopted a resolution instructing management not to disclose the possible
terms of any transactions or proposals, or the parties thereto, unless and
until an agreement in principle relating thereto has been reached or, upon
the advice of counsel, as may be required by law.
Except as set forth in this Statement, there are no transactions,
resolutions of the Dexter Board of Directors, agreements in principle or
signed contracts in response to the ISP Offer that relate to one or more
events referred to in the first paragraph of this Item 7.
ITEM 8. ADDITIONAL INFORMATION.
Litigation. On January 27, 2000, ISP commenced a lawsuit against
Dexter and certain members of Dexter's Board of Directors in the United
States District Court for the District of Connecticut entitled
INTERNATIONAL SPECIALTY PRODUCTS INC. AND ISP INVESTMENTS INC. V. DEXTER
CORPORATION, ET AL., Civil Action No. 3:00 CV 157 (JBA). ISP's second
amended complaint alleges, among other things, that Article X of Dexter's
Bylaws (insofar as it may provide for a two-thirds supermajority vote of
the shareholders to amend the bylaws) violates Section 33- 807 of the
Connecticut Business Corporation Act and is therefore invalid; that
Dexter's poison pill violates Section 33-665 of the Connecticut Business
Corporation Act and is therefore invalid; that shareholders have the right
to vote on the Nominee Election Proposals, Shareholder Rights Proposals and
Voting Rights Proposals, as such terms are defined therein, at the 2000
Annual Meeting; that Dexter is prohibited from postponing its 2000 annual
meeting of shareholders beyond June 30, 2000; that the sale of any of
Dexter's core businesses would constitute the sale of all or substantially
all of Dexter's assets pursuant to Section 33-831 of the Connecticut
Business Corporation Act and therefore require approval of Dexter's
shareholders; and that the directors have breached their fiduciary
obligations to Dexter and its shareholders. The complaint requests
declaratory and injunctive relief as well as money damages.
On March 10, 2000 Dexter filed a motion for summary judgment to
dismiss Count III of the complaint, in which ISP seeks a judicial
determination that Dexter's Bylaws can lawfully be amended to increase the
total number of directorships from 10 to 17 and to elect seven additional
nominees to fill the seven newly created seats. On May 30, 2000, the Court
issued an opinion granting Dexter's motion for summary judgment and
dismissing Count III of the Complaint, on the grounds that ISP's Nominee
Election Proposals violate (i) the terms of Dexter's certificate of
incorporation, which provides that "the number of directorships within each
class shall . . . be determined by the Board"; and (ii) Section 33-740(a)
of the Connecticut Business Corporation Act, which provides that each class
of directors on a classified board such as Dexter's "contain[ ]
approximately the same percentage of the total, as near as may be." On June
14, 2000, the Court entered an order directing the entry of final judgment
dismissing Count III of the complaint. On June 20, 2000, ISP filed a notice
of appeal to the United States Court of Appeals for the Second Circuit from
the Court's May 30, 2000 Memorandum of Decision dismissing Count III of the
complaint.
On June 22, 2000, at the request of ISP, the Court held a
telephonic conference during which the Court granted ISP permission to file
a motion for a preliminary injunction to seek to enjoin the consummation of
Dexter's Asset Purchase Agreement with Loctite Corporation unless the
transaction is submitted to a vote of Dexter shareholders. It is ISP's
position that this transaction constitutes a sale of all or substantially
all of Dexter's assets and thus must be approved by a shareholder vote
pursuant to Section 33-831 of the Connecticut Business Corporation Act.
Dexter believes ISP's motion is devoid of merit and intends to oppose it
vigorously.
Dexter and its General Counsel continue to believe that ISP's
lawsuit is wholly without merit and Dexter intends to defend vigorously
against it.
The Dexter Rights Plan. The Dexter Rights Plan provides for the
issuance of one Right for each outstanding share of Dexter Common Stock.
Each Right entitles the holder to purchase one two-hundredth of a share of
Series A Junior Participating Preferred Stock, without par value, at a
price of $90.00 per one two- hundredth of a share.
Initially, the Rights will be evidenced by certificates
representing shares of Dexter Common Stock and will be transferable only in
connection with the transfer of the underlying common stock. No separate
certificates representing the Rights will be distributed. The Rights will
separate from the shares of Dexter Common Stock and be represented by
separate certificates on the earlier of (i) the close of business on the
tenth business day after a public announcement by Dexter that a person is
the beneficial owner of 11% or more of the outstanding shares of Dexter
Common Stock or (ii) the close of business on the tenth business day
(unless the Dexter Board of Directors sets a later date) after a person
commences a tender or exchange offer which would result in such person
being the beneficial owner of 20% or more of the outstanding shares of
Dexter Common Stock (the earlier of (i) and (ii), the "Distribution Date").
After the Rights separate from the shares of Dexter Common Stock,
certificates representing the Rights (the "Rights Certificates") will be
mailed to record holders of Dexter Common Stock. Once distributed, the
Rights will be represented solely by the Rights Certificates.
All shares of Dexter Common Stock issued prior to the date the
Rights separate from the Dexter Common Stock will be issued with the Rights
attached. The Rights will not be exercisable until the date the Rights
separate from the Dexter Common Stock. The Rights will expire as of the
close of business on August 31, 2006, unless earlier redeemed by Dexter.
If an acquiror becomes the beneficial owner of 11% or more of the
outstanding shares of Dexter Common Stock (except pursuant to a tender or
exchange offer for all outstanding shares of Dexter Common Stock at a price
and on terms determined by at least a majority of the entire Dexter Board
of Directors to be in the best interests of Dexter and it shareholders or
pursuant to a tender or exchange offer for all outstanding shares of Dexter
Common Stock that meets the requirements outlined in the Dexter Rights
Plan), then the holder of each Right shall have the right to receive, upon
exercise thereof at the then-current purchase price of the Right, such
number of validly authorized and issued, fully paid, nonassessable and
freely tradeable shares of common stock of the surviving, resulting or
acquiring person, having a value equal to two (2) times the exercise price
of the Right, subject to adjustment.
If an acquiror becomes the beneficial owner of 11% or more of the
outstanding shares of Dexter Common Stock and either (i) Dexter merges into
another entity and is not the surviving corporation, (ii) another entity
merges into Dexter and all or part of the outstanding shares of Dexter
Common Stock are changed into or exchanged for securities of another entity
or cash or any other property or (iii) Dexter sells more than 50% of its
assets or earning power to another entity, then the holder of each Right
shall have the right to receive, upon exercise thereof at the then-current
purchase price of the Right, such number of validly authorized and issued,
fully paid, nonassessable and freely tradeable shares of common stock of
the surviving, resulting or acquiring person, having a value equal to two
(2) times the exercise price of the Right, subject to adjustment.
Under the Dexter Rights Plan, any Rights that are or were owned by
an acquiror of more than 20% of the outstanding shares of Dexter Common
Stock will be null and void.
The Board of Directors of Dexter may, at its option, redeem all but
not less than all of the outstanding Rights under the Dexter Rights Plan
prior to the earlier of (1) the tenth business day following the date at
which an acquiror obtains 11% or more of the outstanding shares of Dexter
Common Stock or (2) the final expiration date of the Dexter Rights Plan.
The redemption price under the Dexter Rights Plan will be $0.01 per Right,
subject to adjustment. The right to exercise the Rights will terminate upon
the action of the Board of Directors of Dexter ordering the redemption of
the Rights and the only right of the holders of the Rights will be to
receive the redemption price.
Holders of Rights have no rights as shareholders of Dexter,
including the right to vote or receive dividends, simply by virtue of
holding the Rights.
The Dexter Rights Plan provides that Dexter may amend the
provisions of the Dexter Rights Plan, except for those governing the
redemption price of the Rights, the final expiration date, the purchase
price or the number of one two-hundredths of a share of Preferred Stock for
which a Right is exercisable, without the approval of the holders of
certificates representing shares of Dexter Common Stock, prior to (i) the
close of business on the tenth business day after a public announcement by
Dexter that a person is the beneficial owner of 11% or more of the
outstanding shares of Dexter Common Stock or (ii) the close of business on
the tenth business day (unless the Dexter Board of Directors sets a later
date) after a person commences a tender or exchange offer which would
result in such person being the beneficial owner of 20% or more of the
outstanding shares of Dexter Common Stock.
On June 30, 2000, the Dexter Board of Directors determined to
postpone the occurrence of a Distribution Date as a result of the public
announcement of the ISP Offer until such later date as determined by the
Dexter Board of Directors.
Antitakeover Provisions. Section 33-844 of the CBCA provides that a
public Connecticut corporation may not engage in any "Business Combination"
(defined to include a variety of transactions, including mergers) with any
Interested Shareholder (defined generally as the beneficial owner of 10% or
more of the voting power of a corporation) for a period of five years
following the date that such shareholder became an Interested Shareholder
(the "Stock Acquisition Date"), unless, prior to the Stock Acquisition
Date, the board of directors of the corporation and a majority of the
non-employee directors (of which there shall be at least two) approved
either the Business Combination or the transaction which resulted in the
shareholder becoming an Interested Shareholder before the Stock Acquisition
Date. A corporation may opt out of the above provision through an amendment
to the corporation's certificate of incorporation or bylaws approved
through the affirmative vote of the holders of two- thirds of the voting
power of the outstanding voting stock excluding the voting stock of
Interested Shareholders and their affiliates and associates. However, no
such amendment shall be effective until 18 months after such shareholder
vote and shall not apply to any Business Combination with an Interested
Shareholder whose Stock Acquisition Date is on or prior to the effective
date of such amendment. Neither Dexter's Restated Certificate of
Incorporation nor its Bylaws exclude it from the restrictions imposed under
Section 33-844 of the CBCA.
In addition, Section 33-841 of the CBCA provides that any Business
Combination with an Interested Shareholder that was not approved by the
board of directors prior to the Stock Acquisition Date must be approved by
the board of directors, 80% of the voting power of the outstanding voting
stock and two-thirds of the voting power of the outstanding voting stock
not controlled by the Interested Shareholder or meet certain conditions
regarding minimum price and type of consideration.
Miscellaneous. Dexter has noted ISP's statement contained in its
Schedule TO directing shareholders' attention to the Schedule 14D-9 and
ISP's assumption that the Schedule 14D-9 will contain any additional
non-public information provided by Dexter to ISP that Dexter believes to be
material to a shareholder's decision whether to tender its shares in
response to the ISP offer. Dexter wishes to inform shareholders that Dexter
and ISP have entered into a confidentiality agreement which permits ISP to
disclose such confidential information provided by Dexter to ISP as, in the
opinion of ISP's counsel, is necessary to permit ISP to comply with its
obligations under the federal securities laws. Dexter assumes no
responsibility for any of the information contained in or omitted from
ISP's Schedule TO.
ITEM 9 EXHIBITS.
EXHIBIT NO.
-----------
Exhibit 1. Letter to Shareholders, dated June 30, 2000.*
Exhibit 2. Excerpted Sections of Dexter's Proxy Statement, dated June
2, 2000, relating to Dexter's Annual Meeting of
Shareholders.
Exhibit 3. Opinion of Lehman Brothers, Inc., dated June 30, 2000.*
-----------------------------------
* Included in the Schedule 14D-9 mailed to shareholders.
SIGNATURE
After reasonable inquiry and to the best of its knowledge and
belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
DEXTER CORPORATION
By /s/ K. Grahame Walker
-------------------------------
Name: K. Grahame Walker
Title: Chairman and Chief Executive
Officer
Dated: June 30, 2000
