<PAGE> 1
Exhibit 99(a)(1)(A)
OFFER TO PURCHASE FOR CASH
UP TO 3,333,333 SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
THE ELDER-BEERMAN STORES CORP.
AT
A PURCHASE PRICE NOT GREATER THAN $6.00
NOR LESS THAN $4.50 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON OCTOBER 5, 2000, UNLESS
THE OFFER IS EXTENDED.
The Elder-Beerman Stores Corp., an Ohio corporation, is offering to
purchase up to 3,333,333 shares of Elder-Beerman's common stock, without par
value (including the associated preferred share purchase rights), at prices not
greater than $6.00 nor less than $4.50 per share, net to the seller in cash,
without interest, as specified by tendering shareholders, upon the terms and
subject to the conditions set forth in this Offer to Purchase and in the related
letter of transmittal, which, as supplemented from time to time, together
constitute the offer.
Elder-Beerman will determine a single per share purchase price, net to the
seller in cash, without interest, that it will pay for validly tendered shares,
taking into account the number of shares tendered and the prices specified by
tendering shareholders. Elder-Beerman will select the lowest purchase price that
will allow it to purchase 3,333,333 shares or, if a lesser number of shares are
validly tendered, all shares that are validly tendered and not withdrawn.
Elder-Beerman will pay the purchase price for all shares validly tendered at
prices at or below the purchase price and not withdrawn. However, because of the
proration provisions described in the offer, all shares tendered at or below the
purchase price (other than odd lots described in the offer) will not be
purchased if the offer is oversubscribed. Elder-Beerman reserves the right, in
its sole discretion, to purchase more than 3,333,333 shares pursuant to the
offer.
The offer is not conditioned upon any minimum number of shares being
tendered. The offer is, however, subject to the conditions contained in this
Offer to Purchase. See the Introduction and Sections 7 and 13 of this Offer to
Purchase.
THE BOARD OF DIRECTORS OF ELDER-BEERMAN HAS UNANIMOUSLY APPROVED THE OFFER.
However, you must make your own decision whether to tender your shares and, if
so, how many shares to tender and the price or prices at which you will tender
them. Neither Elder-Beerman nor its Board of Directors makes any recommendation
to any shareholder as to whether to tender or refrain from tendering shares or
as to the price at which you may tender your shares. Except with respect to Mr.
John A. Muskovich (Elder-Beerman's former President and Chief Operating Officer,
who was terminated by Elder-Beerman on June 30, 2000 but will serve as a
director until the annual meeting of Elder-Beerman shareholders on September 21,
2000), Elder-Beerman has been advised that none of its directors or executive
officers intends to tender any shares pursuant to the offer.
------------------------
IMPORTANT
Any shareholder desiring to tender all or a portion of its shares should
either (1) complete and sign the letter of transmittal (or a manually signed
facsimile thereof) in accordance with the instructions in the letter of
transmittal, mail or deliver such letter(s) of transmittal and any other
required documents to Wells Fargo Bank Minnesota, N.A. and either deliver the
certificates for those shares to Wells Fargo Bank Minnesota, N.A. along with
such letter(s) of transmittal or tender those shares pursuant to the procedures
for book-entry transfer set forth in Section 3 hereof or (2) request its broker,
dealer, commercial bank, trust company or other nominee to effect the tender on
its behalf. Any shareholder whose shares are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee must contact that
broker, dealer, commercial bank, trust company or other nominee if the
shareholder desires to tender such shares. To properly tender shares,
shareholders must validly complete the letter of transmittal, including the
section relating to the price(s) at which the shareholder is tendering its
shares.
Any shareholder that desires to tender shares and whose certificate(s)
representing those shares are not immediately available or who cannot comply
with the procedures for book-entry transfer on a timely basis must tender those
shares by following the procedures for guaranteed delivery set forth in Section
3.
Questions and requests for assistance may be directed to Morrow & Co. or
Wasserstein Perella & Co. at their respective addresses and telephone numbers on
the back cover of this Offer to Purchase. Requests for additional copies of this
Offer to Purchase, the letter of transmittal and other related materials may be
directed to Morrow & Co. or to brokers, dealers, commercial banks or trust
companies.
The Dealer-Manager for the Offer is:
[WASSERSTEIN PERELLA LOGO]
September 8, 2000
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
FORWARD-LOOKING STATEMENTS.................................. i
SUMMARY TERM SHEET.......................................... ii
INTRODUCTION................................................ 1
THE OFFER................................................... 2
1. Terms of the Offer................................... 2
2. Background and Purpose of the Offer; Certain Effects
of the Offer........................................... 4
3. Acceptance for Payment and Payment for Shares........ 7
4. Procedures for Tendering Shares...................... 9
5. Withdrawal Rights.................................... 13
6. Certain U.S. Federal Income Tax Consequences of the
Offer.................................................. 14
7. Certain Conditions of the Offer...................... 15
8. Source and Amount of Funds........................... 17
9. Price Range of the Shares; Dividends on the Shares... 17
10. Interests of Directors and Executive Officers;
Transactions and Arrangements Concerning the
Shares............................................... 18
11. Effect of the Offer on the Market for Shares, Stock
Exchange Listing and Exchange Act Registration, and
Margin Securities.................................... 19
12. Certain Information Concerning Elder-Beerman......... 20
13. Certain Legal Matters and Regulatory Approvals....... 20
14. Extension of the Offer; Termination; Amendments...... 21
15. Fees and Expenses.................................... 22
16. Miscellaneous........................................ 22
</TABLE>
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FORWARD-LOOKING STATEMENTS
This Offer to Purchase contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 that are based on management's current beliefs,
estimates and assumptions concerning the operations, future results and
prospects of Elder-Beerman and the retail industry in general. Forward-looking
statements are statements other than historical information or statements of
current condition. Some forward-looking statements may be identified by the
words "believe," "anticipated," "expected" or similar expressions. These
statements are subject to certain risks and uncertainties which could cause
actual circumstances to differ materially from those mentioned in this
discussion, including, but not limited to increasing price and product
competition; fluctuations in consumer demand and confidence; the availability
and mix of inventory; fluctuations in costs and expenses; the effectiveness of
merchandising, advertising, marketing and promotional strategies, expense
reduction initiatives and other initiatives designed to increase revenue, such
as Elder-Beerman's ability to carry out its strategic business plan; the timing
and effectiveness of new store openings; the growing impact of electronic
commerce; weather conditions that affect consumer traffic in stores; the
continued availability and terms of financing; the outcome of pending and future
litigation; the ability of third parties to meet their liabilities and
obligations; and general economic conditions, such as the rate of employment,
inflation and interest rates and the condition of the capital markets.
Many of these factors are beyond our ability to control or predict.
Shareholders are cautioned not to place undue reliance on these forward-looking
statements. Elder-Beerman undertakes no obligation to publish revised
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.
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SUMMARY TERM SHEET
The Elder-Beerman Stores Corp. is offering to purchase up to 3,333,333
shares of its outstanding common stock, together with the associated preferred
share purchase rights, within a price range of $4.50 to $6.00 per share in cash.
The following are some of the questions you, as a shareholder of Elder-Beerman,
may have and answers to those questions. We urge you to read carefully the
remainder of this Offer to Purchase and the letter of transmittal because the
information in this summary term sheet is not complete. Additional important
information is contained in the remainder of this Offer to Purchase and the
letter of transmittal.
WHAT ARE THE CLASSES AND AMOUNTS OF SHARES THAT ELDER-BEERMAN IS OFFERING
TO PURCHASE?
We are seeking to purchase up to 3,333,333 shares of our outstanding common
stock, together with the associated preferred share purchase rights. If more
than 3,333,333 shares are tendered at or below the selected purchase price, we
will purchase shares based on the following order of priority:
- FIRST, we will purchase shares from all holders of "odd lots" of less
than 100 shares (including any shares held in our employee stock
purchase plan, but not including any shares held in The Elder-Beerman
Stores Corp. Financial Partnership Plan) who properly tender all of
their shares at prices equal to or below the selected price.
- SECOND, we will purchase shares from all other shareholders who properly
tender shares at prices equal to or below the selected price, on a pro
rata basis. As a result, we will purchase the same percentage of shares
from each tendering shareholder in this second category. We will
announce this proration percentage, if it is necessary, after our offer
expires. Consequently, all of the shares that you tender in the offer
may not be purchased even if they are tendered at or below the purchase
price. See the Introduction. As we noted above, we may also choose to
purchase an additional 2% of the outstanding shares, subject to
applicable legal rules. See Section 1.
HOW MUCH IS ELDER-BEERMAN OFFERING TO PAY AND WHAT IS THE FORM OF PAYMENT?
- Elder-Beerman is conducting the offer through a procedure that allows
you to select the price within a specified range at which you are
willing to sell your shares. The price range for this offer is $4.50 to
$6.00 per share.
- Elder-Beerman will determine the lowest single per share price within
the price range that will allow it to purchase 3,333,333 shares, or if
fewer shares are tendered, all shares tendered.
- All shares purchased will be purchased at the same price, even if you
have selected a lower price, but no shares will be purchased above the
purchase price determined by Elder-Beerman.
- If you wish to maximize the chance that your shares will be purchased,
you should check the box in the section on the letter of transmittal
indicating that you will accept the purchase price determined by
Elder-Beerman under the terms of the offer. Please note that this
election could result in your shares being purchased at the minimum
price of $4.50 per share.
- Shareholders whose shares are purchased in the offer will be paid the
purchase price, net in cash, without interest, as soon as practicable
after the expiration of the offer. Under no circumstances will
Elder-Beerman pay interest on the purchase price.
WILL I HAVE TO PAY ANY FEES OR COMMISSIONS?
If you are the record owner of your shares and you tender your shares to us
in the offer, you will not have to pay brokerage fees or similar expenses. If
you own your shares through a broker or other nominee, and your broker tenders
your shares on your behalf, your broker or nominee may charge you a fee for
doing so. You should consult your broker or nominee to determine whether any
charges will apply. See the Introduction.
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DOES ELDER-BEERMAN HAVE THE FINANCIAL RESOURCES TO PAY FOR MY SHARES?
We anticipate that we will use funds from existing resources to purchase
all shares validly tendered and not withdrawn in the offer. Our offer is not
conditioned upon any financing arrangements. See Section 8.
HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
You will have at least until 12:00 midnight, New York City time, on October
5, 2000 to decide whether to tender your shares into the offer. If you cannot
deliver everything that is required in order to make a valid tender by that
time, you may be able to use a guaranteed delivery procedure, which is described
later in this Offer to Purchase. See Sections 1 and 4.
CAN THE OFFER BE EXTENDED AND, IF IT IS EXTENDED, HOW WILL I BE NOTIFIED?
Yes, we may elect to extend the offer at any time before 9:00 a.m., New
York City time, on the next business day after the previously scheduled
expiration date. If we extend the offer, we will make a public announcement of
the extension by issuing a press release through Business Wire. We may elect to
provide a "subsequent offering period" for the offer. A subsequent offering
period, if one is included, will be an additional period of time beginning after
we have purchased shares tendered during the offer, during which shareholders
may tender their shares and receive the offer consideration. We do not currently
intend to have a subsequent offering period, although we reserve the right to do
so. See Sections 1 and 5.
WHAT IS THE PURPOSE OF THE OFFER?
We are making the offer to afford shareholders an opportunity to sell all
or a portion of their shares without the usual transaction costs associated with
open market sales. The offer also gives shareholders an opportunity to sell
their shares at a price greater than the prevailing market price of the shares
immediately prior to the announcement of the offer. Shareholders who do not
tender their shares may also benefit from the offer. Non-tendering shareholders
will own a larger proportionate interest in Elder-Beerman and its future
earnings and assets, subject to Elder-Beerman's right to issue additional Shares
and other equity securities in the future. See Section 2.
WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER?
We are not obligated to purchase any shares in the offer if the completion
of the offer would reduce the number of publicly held shares to less than
500,000, reduce the number of record holders of our common shares below 400
holders or reduce the aggregate market value of such publicly held shares below
$3,000,000.
Our obligation to complete the offer is also subject to other conditions.
See Sections 1, 7 and 13.
HOW DO I TENDER MY SHARES?
If you wish to accept our offer, this is what you must do:
- If you are a record holder and have your stock certificate, you must
complete and sign the enclosed letter of transmittal and send it with
your stock certificate to the Depositary for the offer. If you are a
record holder and do not have your stock certificate, you must complete
and sign the enclosed letter of transmittal and send it to the
Depositary for the offer and follow the procedures described in the
offer for book-entry transfer. These materials must reach the Depositary
before the offer expires. Detailed instructions are contained in the
letter of transmittal and Section 4 of this Offer to Purchase.
- If you hold your shares through a broker, dealer, commercial bank, trust
company or other nominee, you should contact that institution and give
instructions that your shares be tendered.
iii
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- If you are a record holder but your stock certificate is not available
or you cannot deliver it or a required document to the Depositary before
the offer expires, you may be able to tender your shares using the
enclosed Notice of Guaranteed Delivery.
See Section 3.
UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SHARES?
You can withdraw your shares at any time until the offer has expired and,
if we have not agreed to accept your shares for payment by October 5, 2000, you
can withdraw them at any time thereafter as long as we have not yet accepted
shares for payment. See Section 5.
HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES?
To withdraw shares, you must deliver a written notice of withdrawal, or a
facsimile of one, with the required information to the Depositary while you
still have the right to withdraw the shares. If you tendered your shares by
giving instructions to a broker or nominee, you must instruct your broker or
nominee to arrange for the withdrawal of your shares. See Section 5.
WHAT DO ELDER-BEERMAN AND ITS BOARD OF DIRECTORS THINK OF THE OFFER?
Neither Elder-Beerman nor its Board of Directors makes any recommendation
to you as to whether to tender or refrain from tendering your shares or as to
the purchase price at which you may choose to tender your shares. You must
decide whether to tender your shares and, if so, how many shares to tender and
the price or prices at which you will tender them. Except with respect to Mr.
Muskovich (Elder-Beerman's former President and Chief Operating Officer, who was
terminated by Elder-Beerman on June 30, 2000 but will serve as a director until
the annual meeting of Elder-Beerman shareholders on September 21, 2000), our
directors and executive officers have advised us that they do not intend to
tender any shares in the offer. See Section 2.
WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
On August 28, 2000, the last full trading day before we initially announced
the tender offer, the closing per share sales price of the shares as reported on
the Nasdaq National Market was $3.188 per share. On September 5, 2000, the most
recent practicable trading day prior to the date of this Offer to Purchase, the
closing per share sales price of the shares as reported on the Nasdaq National
Market was $4.563 per share. We advise you to obtain a current market quotation
for your shares in deciding whether to tender your shares. See Section 9.
WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE OFFER?
You can call:
- Morrow & Co. at (800) 566-9061 (toll free)
- Wasserstein Perella & Co. at (212) 969-2700.
Morrow & Co. is acting as the information agent, and Wasserstein Perella &
Co. is acting as the dealer-manager for our tender offer. See the back cover of
this Offer to Purchase.
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To the Holders of Common Stock of
The Elder-Beerman Stores Corp.:
INTRODUCTION
The Elder-Beerman Stores Corp., an Ohio corporation ("Elder-Beerman"),
hereby offers to purchase up to 3,333,333 shares of its common stock, without
par value, together with the associated preferred share purchase rights (the
"Shares"), at prices not greater than $6.00 nor less than $4.50 per share, net
to the seller in cash, without interest, as specified by tendering shareholders,
on the terms and subject to the conditions set forth in this Offer to Purchase
and in the related letter of transmittal (which, as amended or supplemented from
time to time, together constitute the "Offer").
Elder-Beerman will determine a single per share purchase price, net to the
seller in cash, without interest, that it will pay for validly tendered Shares,
taking into account the number of Shares tendered and the prices specified by
tendering shareholders. Elder-Beerman will select the lowest purchase price that
will allow it to buy 3,333,333 Shares or, if a lesser number of Shares are
validly tendered, all Shares that are validly tendered. Elder-Beerman will pay
the purchase price for all Shares validly tendered prior to the Expiration Date
(as defined in Section 1) at prices at or below the purchase price and not
withdrawn. However, because of the proration provisions described in the Offer,
all Shares tendered at or below the purchase price will not be purchased if the
Offer is oversubscribed. Elder-Beerman reserves the right, in its sole
discretion, to purchase more than 3,333,333 Shares pursuant to the Offer.
The Offer is not conditioned upon any minimum number of Shares being
tendered. The Offer is, however, subject to certain other conditions contained
in this Offer To Purchase. See Sections 1, 7, and 13.
If before the Expiration Date (as defined in Section 1), more than
3,333,333 Shares are validly tendered at or below the purchase price and not
withdrawn, Elder-Beerman will purchase Shares on a pro rata basis from all
shareholders who validly tender their Shares at prices at or below the purchase
price. Elder-Beerman will return at its own expense all Shares not purchased
pursuant to the Offer, including Shares tendered at prices greater than the
purchase price and Shares not purchased because of proration.
The purchase price will be paid net to the tendering shareholder in cash
without interest for all Shares purchased. Tendering shareholders that hold
Shares registered in their own name and that tender their Shares directly to the
Depositary will not be obligated to pay brokerage fees or commissions,
solicitation fees or, subject to Instruction 7 of the letter of transmittal,
stock transfer taxes on the purchase of Shares by Elder-Beerman in the Offer.
Shareholders holding Shares through brokers or banks are urged to consult the
brokers or banks to determine whether transaction costs may apply if
shareholders tender Shares through the brokers or banks and not directly to the
Depositary. However, any tendering shareholder or other payee who fails to
complete, sign and return to the Depositary the substitute form W-9 that is
included with the letter of transmittal may be subject to required backup
federal income tax withholding of 31% of the gross proceeds payable to the
shareholder or other payee pursuant to the Offer. See Section 6. Elder-Beerman
will pay all charges and expenses of Wasserstein Perella & Co., as the Dealer
Manager, Wells Fargo Bank Minnesota, N.A., as the Depositary, and Morrow & Co.,
as the Information Agent, in connection with the Offer. See Section 15.
The Board of Directors of Elder-Beerman has unanimously approved the Offer.
However, you must make your own decision whether to tender your Shares and, if
so, how many Shares to tender and prices at which you will tender them. Neither
Elder-Beerman nor its Board of Directors makes any recommendation to any
shareholder as to whether to tender or refrain from tendering your Shares or as
to the price at which you may tender your Shares. Except with respect to Mr.
Muskovich (Elder-Beerman's former President and Chief Operating Officer, who was
terminated by Elder-Beerman on June 30, 2000 but will serve as a director until
the annual meeting of Elder-Beerman shareholders on September 21, 2000),
Elder-Beerman has been advised that none of its directors or executive officers
intends to tender any Shares pursuant to the Offer.
Elder-Beerman is making the Offer to afford to those shareholders who
desire liquidity an opportunity to sell all or a portion of their Shares without
the usual transaction costs associated with open market sales. The
<PAGE> 8
Offer also gives shareholders an opportunity to sell their Shares at a price
greater than the prevailing market price of the Shares immediately prior to the
announcement of the Offer. After the Offer is completed, Elder-Beerman expects
to have sufficient cash flow and access to other sources of capital to fund debt
service, make capital expenditures and finance working capital.
As of the close of business on September 1, 2000, there were 14,893,114
Shares outstanding held by 2,094 record holders. The 3,333,333 Shares that
Elder-Beerman is offering to purchase represent approximately 22.38% of the
outstanding Shares.
A tender of Shares pursuant to the Offer will include a tender of the
associated preferred share purchase rights issued pursuant to the Rights
Agreement, dated as of December 30, 1997, as amended as of November 17, 1998,
between Elder-Beerman and Norwest Bank Minnesota, N.A. (now known as Wells Fargo
Bank Minnesota, N.A.), as rights agent. No separate consideration will be paid
for the rights. Unless the context otherwise requires, all references in this
Offer to Purchase to the Shares includes the associated preferred stock purchase
rights. For a description of the rights, see Section 9.
The Shares have trading privileges on the Nasdaq National Market under the
symbol "EBSC." On August 28, 2000, the last full trading day before the initial
public announcement of the Offer, the closing per share sales price for the
Shares as reported on the Nasdaq National Market was $3.188 per share. On
September 5, 2000, the most recent practicable trading day prior to the
announcement of the Offer, the closing per share sales price for the Shares as
reported on the Nasdaq National Market was $4.563. ELDER-BEERMAN URGES
SHAREHOLDERS TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES IN DECIDING
WHETHER TO TENDER YOUR SHARES.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION THAT SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
THE OFFER
1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer, Elder-Beerman
will purchase up to 3,333,333 Shares or such lesser number of Shares as are
validly tendered and not withdrawn in accordance with Section 5 prior to the
Expiration Date at a net cash price, without interest (determined in the manner
described below), not greater than $6.00 nor less than $4.50 per share.
The term "Expiration Date" means 12:00 midnight, New York City time, on
October 5, 2000, unless and until Elder-Beerman, in accordance with the terms of
the Offer, extends the period of time during which the Offer is open, in which
event the term "Expiration Date" means the latest time and date on which the
Offer, as so extended, expires. If the Offer is oversubscribed, Shares (other
than odd lots) tendered at or below the purchase price before the Expiration
Date will be subject to proration. The proration period also expires on the
Expiration Date.
Elder-Beerman reserves the right, in its sole discretion, to purchase more
than 3,333,333 Shares pursuant to the Offer. See Section 14. In accordance with
applicable regulations of the Securities and Exchange Commission (the
"Commission"), Elder-Beerman may, and we reserve the right to, purchase pursuant
to the Offer an additional amount of Shares not to exceed 2% of the outstanding
Shares without amending or extending the Offer. If (1) Elder-Beerman increases
or decreases the price to be paid for Shares, increases or decreases the Dealer
Manager's fee, increases the number of Shares it may purchase in the Offer by
more than 2% of the outstanding Shares, or decreases the number of Shares it may
purchase in the Offer and (2) the Offer is scheduled to expire at any time
earlier than the expiration of a period ending on the tenth business day from,
and including, the date that notice of the increase or decrease is first
published, sent or given in the manner specified in the Offer, the Offer will be
extended until the expiration of the ten-business day period. For purposes of
the Offer, a "business day" means any day other than a Saturday, Sunday or
federal holiday and consists of the time period from 12:01 a.m. through 12:00
midnight, New York City time.
2
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The Offer is not conditioned upon any minimum number of Shares being
tendered. The Offer is, however, subject to certain other conditions contained
in this Offer To Purchase. See Sections 1, 7 and 13. Assuming the prior
satisfaction or waiver of the conditions to the Offer, Elder-Beerman will accept
for payment, and pay for, in accordance with the terms of the Offer, all Shares
validly tendered and not withdrawn pursuant to the Offer as soon as practicable
after the Expiration Date.
In accordance with Instruction 5 of the letter of transmittal, each
shareholder desiring to tender Shares must either (1) specify the price (not
greater than $6.00 nor less than $4.50 per share) at which he or she is willing
to have Elder-Beerman purchase his or her Shares or (2) specify that he or she
is willing to sell his or her Shares at the price determined by Elder-Beerman in
accordance with the terms of the Offer, which could result in the Shares being
sold at the minimum price of $4.50. Promptly following the Expiration Date,
Elder-Beerman will, in its sole discretion, determine the purchase price (not
greater than $6.00 nor less than $4.50 per share) that it will pay for Shares
validly tendered pursuant to the Offer, taking into account the number of Shares
tendered and the prices specified by tendering shareholders. Elder-Beerman will
select the lowest purchase price that will allow it to purchase 3,333,333 Shares
or, if a lesser number of Shares are validly tendered, all Shares that are
validly tendered and not withdrawn. Elder-Beerman will pay the purchase price
for all Shares validly tendered prior to the Expiration Date at prices at or
below the purchase price and not withdrawn, upon the terms and subject to the
conditions of the Offer. All Shares not purchased pursuant to the Offer,
including Shares tendered at prices greater than the purchase price and Shares
not purchased because of proration, will be returned to the tendering
shareholders at Elder-Beerman's expense as promptly as practicable following the
Expiration Date.
Subject to the rights of tendering shareholders to withdraw their Shares,
Elder-Beerman will retain all tendered Shares until the Expiration Date.
If before the Expiration Date more than 3,333,333 Shares (or a greater
number of Shares as Elder-Beerman may elect to purchase pursuant to the Offer)
are validly tendered at or below the purchase price and not withdrawn,
Elder-Beerman will purchase Shares from all shareholders who validly tender
their Shares at or below the purchase price and not withdrawn prior to the
Expiration Date on a pro rata basis, subject to the "odd lot" priority described
below. Consequently, all of the Shares that a shareholder tenders in the Offer
may not be purchased even if they are tendered at a price less than or equal to
the purchase price.
PRIORITY OF PURCHASES. Upon the terms and conditions of the Offer, if
3,333,333 or fewer Shares are properly tendered at prices equal to or below the
purchase price and not properly withdrawn, we will purchase all properly
tendered Shares at the purchase price. Upon the terms and conditions of the
Offer, if more than 3,333,333 Shares are properly tendered at prices equal to or
below the purchase price and not properly withdrawn, we will purchase the
properly tendered Shares in the following order:
- FIRST, all Shares properly tendered and not properly withdrawn by any
"odd lot holder" (as defined below) who (1) tenders all Shares owned
(beneficially or of record) by the odd lot holder at a price equal to or
below the purchase price (tenders of fewer than all the Shares owned will
not qualify for this preference); and (2) completes the section entitled
"Odd Lots" in the letter of transmittal and, if applicable, in the Notice
of Guaranteed Delivery; and
- SECOND, after the purchase of all the Shares properly tendered by odd lot
holders, all other Shares properly tendered at prices equal to or below
the purchase price, on a pro rata basis. As a result, all Shares tendered
in the Offer may not be purchased, even if they are tendered at prices
equal to or below the purchase price. This will occur if we receive more
than 3,333,333 properly tendered Shares at prices equal to or below the
purchase price. As we noted above, we may elect to purchase more than
3,333,333 Shares in the Offer, subject to applicable law. If we do so,
the preceding provisions will apply to the greater number of Shares.
ODD LOTS. For purposes of the Offer, the term "odd lots" means all Shares
properly tendered before the Expiration Date at prices equal to or below the
purchase price and not properly withdrawn by any person, referred to as an "odd
lot holder," who owns, beneficially or of record, fewer than 100 Shares
(including any Shares held in the employee stock purchase plan, but not
including any Shares held in The Elder-Beerman
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Stores Corp. Financial Partnership Plan) and certifies to that fact in the "Odd
Lots" box on the letter of transmittal and, if applicable, on the Notice of
Guaranteed Delivery. As set forth above, odd lots will be accepted for payment
before proration, if any, of the purchase of other tendered Shares. To qualify
for this preference, an odd lot holder must tender all Shares owned,
beneficially or of record, by the odd lot holder in accordance with the
procedures described in Section 3. This preference is not available to partial
tenders or to beneficial or record holders of a total of 100 or more Shares,
even if these holders have separate accounts or certificates representing fewer
than 100 Shares. This preference is also not available to any Shares held in The
Elder-Beerman Stores Corp. Financial Partnership Plan. Any odd lot holder
wishing to tender all of its Shares pursuant to the Offer should complete the
section entitled "Odd Lots" in the letter of transmittal and, if applicable, in
the Notice of Guaranteed Delivery. We also reserve the right, but will not be
obligated, to purchase all Shares properly tendered by any shareholder who
tenders all Shares owned beneficially or of record at or below the purchase
price and who, as a result of proration, would then own a total of fewer than
100 Shares. If we exercise this right, it will increase the number of Shares
that we are offering to purchase in the Offer by the number of Shares purchased
through the exercise of this right, subject to applicable law.
PRORATION. If proration is required, Elder-Beerman will determine the
final proration factor as promptly as practicable after the Expiration Date.
Proration for each shareholder tendering Shares will be based on the ratio of
the number of Shares tendered by the shareholder at or below the purchase price
to the total number of Shares tendered by all shareholders at or below the
purchase price. This ratio will be applied to shareholders tendering Shares to
determine the number of Shares that will be purchased from each shareholder
pursuant to the Offer. Although Elder-Beerman does not expect to be able to
announce the final results of such proration until approximately seven business
days after the Expiration Date, it will announce preliminary results of
proration by press release through Business Wire promptly after the Expiration
Date. Shareholders may obtain preliminary proration information from the
Information Agent and may also be able to obtain the information from their
brokers.
As described in Section 6, the number of Shares that Elder-Beerman will
purchase from a shareholder may affect the United States federal income tax
consequences to the shareholder of the purchase and therefore may be relevant to
a shareholder's decision whether to tender Shares. The letter of transmittal
affords each tendering shareholder the opportunity to designate the order of
priority in which Shares tendered are to be purchased in the event of proration.
This Offer to Purchase and the related letter of transmittal will be mailed
to record holders of Shares as of September 1, 2000 and will be furnished to
brokers, banks, and similar institutions whose names, or the names of whose
nominees, appear on Elder-Beerman's shareholder list or, if applicable, who are
listed as participants in a clearing agency's security position listing for
subsequent transmittal to beneficial owners of Shares.
2. BACKGROUND AND PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER
Elder-Beerman is making the Offer to afford shareholders that desire
liquidity an opportunity to sell all or a portion of their Shares without the
usual transaction costs associated with open market sales. After the Offer is
completed, Elder-Beerman expects to have sufficient cash flow and access to
other sources of capital to fund debt service, make capital expenditures and
finance working capital.
The Board of Directors believes that, given Elder-Beerman's businesses,
assets and prospects, the purchase of the Shares pursuant to the Offer is an
attractive investment that will benefit Elder-Beerman and its remaining
shareholders. However, neither Elder-Beerman nor its Board of Directors makes
any recommendation to any shareholder regarding whether or not shareholders
should tender their Shares and if so, at what prices the Shares should be
tendered. The Offer provides shareholders who are considering a sale of all or a
portion of their Shares the opportunity to sell those Shares for cash to
Elder-Beerman without the usual costs associated with a market sale. The Offer
gives shareholders an opportunity to sell their Shares at a price greater than
the prevailing market prices of the Shares immediately prior to the announcement
of the Offer. To the extent the purchase of Shares in the Offer results in a
reduction in the number of shareholders of record, the costs to Elder-Beerman
for services to shareholders should be reduced. Shareholders that determine not
to accept the Offer will increase their proportionate interest in
Elder-Beerman's equity, and
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therefore in Elder-Beerman's future earnings and assets, subject to
Elder-Beerman's right to issue additional Shares and other equity securities in
the future.
At a meeting of the Board of Directors on August 23, 2000, the Board of
Directors determined that a repurchase of an amount of Elder-Beerman's
outstanding Shares is in the best interests of the Company and its shareholders.
As described below, Elder-Beerman considered and has been involved in a number
of initiatives to increase shareholder value.
SETTLEMENT AGREEMENT
PPM America, Inc. ("PPM"), who, together with certain of its affiliates,
beneficially owns about 13% of Elder-Beerman's outstanding Shares, filed a
preliminary proxy statement on June 7, 2000, in which PPM nominated three
candidates for election to Elder-Beerman's Board of Directors and proposed
twelve additional matters to be acted upon at Elder-Beerman's annual meeting of
shareholders. Since the filing of the preliminary proxy statement by PPM,
members of the Board of Directors and management of Elder-Beerman met with
representatives of PPM to discuss the proposals that PPM intended to bring
before Elder-Beerman's annual meeting. Based on an agreement reached at a
meeting on July 6, 2000 between designated members of the Board of the Directors
and representatives of PPM and Snyder Capital Management, Inc. ("Snyder"),
Elder-Beerman's largest shareholder (who beneficially owns about 20% of
Elder-Beerman's outstanding Shares), Elder-Beerman, PPM, Snyder and all but one
of the members of Elder-Beerman's Board of Directors entered into a Settlement
Agreement (the "Settlement Agreement") on July 19, 2000 to end PPM's proposed
proxy contest. Pursuant to the terms of the Settlement Agreement, the Board of
Directors will support four nominees for election to the Board of Directors
designated by Snyder and PPM and several amendments to Elder-Beerman's Articles
of Incorporation and Code of Regulations, all of which will be voted on at
Elder-Beerman's annual meeting of shareholders to be held on September 21, 2000.
The terms of the Settlement Agreement are set forth in Elder-Beerman's
definitive proxy statement, which was filed with the Securities and Exchange
Commission on August 21, 2000 and mailed to shareholders on or about August 21,
2000.
EXPLORATION OF STRATEGIC ALTERNATIVES
After Elder-Beerman's announcement on February 28, 2000 that it had engaged
Wasserstein Perella & Co. to explore strategic alternatives (including a sale of
Elder-Beerman, a merger with another retailer or a divestiture of stores),
members of management and the Board of Directors and Elder-Beerman's advisors
discussed a variety of potential third party transactions with parties that had
indicated interest in a potential transaction with Elder-Beerman. Elder-Beerman
entered into confidentiality agreements with eight parties and sent information
regarding Elder-Beerman to those parties. Elder-Beerman received indications of
interest to purchase all of its outstanding common stock from two parties. One
of the potential buyers did not make an offer because it was not able to obtain
bank financing. Elder-Beerman received a non-binding offer from the other party
to purchase all of Elder-Beerman's outstanding common stock at a price of $5.25
per share.
Members of Elder-Beerman's management and Elder-Beerman's advisors engaged
in further conversations with the party that had made the non-binding offer. In
light of those conversations, the Board of Directors determined that it would be
prudent to evaluate the likelihood of the proposed transaction being approved by
Elder-Beerman's shareholders by approaching Elder-Beerman's two largest
shareholders regarding their views on the proposed transaction. Shortly after
Elder-Beerman entered into the Settlement Agreement and upon recommendation by
the Board of Directors, members of Elder-Beerman's Board of Directors met with
representatives of Snyder and PPM about the status of the sale process. The
Snyder and PPM representatives acknowledged that they would be in possession of
material inside information and would not trade on the basis of such
information. They also agreed to keep the information disclosed to them
confidential. Elder-Beerman disclosed the terms of the $5.25 non-binding offer
and asked PPM and Snyder if they would vote their Shares in favor of the
proposed transaction. Both Snyder and PPM indicated that they would not be
interested in a sale transaction at a price of $5.25 per share. Snyder and PPM
both indicated that they would be in favor of a self-tender offer by
Elder-Beerman or a share repurchase program. Snyder
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indicated that it would participate in a self-tender offer, and PPM indicated
that it would likely participate in a self-tender offer.
After reviewing the non-binding offer received from the potential buyer,
the results of the discussions between management and Elder-Beerman's advisors
and the interested party and the results of the discussions among members of the
Board of Directors, PPM and Snyder, the Board of Directors determined that the
terms of the proposed transaction were not in the best interests of
Elder-Beerman's shareholders because, among other things, the price to be paid
to the shareholders for a sale of Elder-Beerman was inadequate. On August 11,
2000, the Board of Directors decided that Elder-Beerman should cease its
exploration of strategic alternatives and focus its efforts on the strategic
business plan, which was announced on August 11, 2000. On August 23, 2000, the
Board of Directors determined to commence the Offer on September 8, 2000.
SHARE REPURCHASE PROGRAM
In August, 1999, the Board of Directors authorized the repurchase of up to
$24 million in Shares over a two-year period. The share repurchase program
provides for the purchase of Shares through open market purchases and privately
negotiated transactions. Between August 30, 1999 and November 23, 1999, Elder-
Beerman repurchased 1.1 million of the Shares for an aggregate purchase price of
$7 million. The Company suspended the share repurchase program during its
exploration of strategic alternatives. Elder-Beerman will not make any purchases
of Shares until at least ten business days after the Expiration Date, other than
pursuant to the Offer. Any future repurchases under the share repurchase program
will depend on numerous factors, including the market price of the Shares, the
results of the Offer, Elder-Beerman's business and financial condition and
general economic and market conditions. Shares purchased in the Offer will not
be counted in the aggregate number of Shares to be purchased pursuant to the
repurchase program.
SECONDARY OFFERING
In August, 1998, Elder-Beerman issued 3,220,000 Shares in a secondary
offering at a price of $22 per share. The net proceeds of approximately
$65,400,000 provided by the offering were used primarily to reduce debt levels
associated with Elder-Beerman's expansion and acquisition strategies.
THE OFFER
The Board of Directors of Elder-Beerman has unanimously approved the Offer,
which formally commenced on the date of this Offer to Purchase. However, you
must make your own decision whether to tender your Shares and, if so, how many
Shares to tender and at what prices. Neither Elder-Beerman nor its Board of
Directors makes any recommendation to any shareholder as to whether to tender or
refrain from tendering Shares. Except with respect to Mr. Muskovich
(Elder-Beerman's former President and Chief Operating Officer, who was
terminated by Elder-Beerman on June 30, 2000 but will serve as a director until
the annual meeting of Elder-Beerman shareholders on September 21, 2000),
Elder-Beerman has been advised that none of its directors or executive officers
intends to tender any Shares pursuant to the Offer.
As of August 21, 2000, no person was known by Elder-Beerman to be the
beneficial owner of more than 5% of the outstanding Shares, except that pursuant
to Schedule 13D filings made with the Commission, (i) Snyder may be deemed to
own 3,118,150 Shares or approximately 20.94% of the outstanding Shares; (ii) PPM
may be deemed to own 1,966,868 Shares or approximately 13.21% of the outstanding
Shares; (iii) James D. Bennett ("Bennett") may be deemed to own 1,126,323 Shares
or 7.56% of the outstanding Shares; and (iv) The D3 Family Fund ("D3") may be
deemed to own 900,000 Shares or 6.04% of the outstanding Shares. If
Elder-Beerman purchases 3,333,333 Shares pursuant to the Offer, assuming no
Shares beneficially owned by Snyder, PPM, Bennett or D3 are tendered in the
Offer, Snyder might be deemed to own approximately 26.98% of the outstanding
Shares, PPM might be deemed to own approximately 17.02% of the outstanding
Shares, Bennett might be deemed to own approximately 9.75% of the outstanding
Shares and D3 might be deemed to approximately 7.79% of the outstanding Shares.
Shares that Elder-Beerman acquires pursuant to the Offer will be retained
as treasury stock (unless Elder-Beerman determines to retire the Shares) and be
available for issue without further shareholder action
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(except as required by applicable law or, if retired, the rules of any
securities exchange on which Shares are traded) for purposes including, but not
limited to, the acquisition of other businesses, raising of additional capital
for use in Elder-Beerman's businesses, and satisfaction of obligations under
employee benefit plans. Elder-Beerman has no current plan for issuance of Shares
repurchased pursuant to the Offer.
Except as disclosed below or in Elder-Beerman's definitive proxy statement
filed with the Commission on August 21, 2000, Elder-Beerman currently has no
plans or proposals that relate to or would result in:
- the acquisition by any person of additional securities of Elder-Beerman
or the disposition of securities of Elder-Beerman;
- an extraordinary corporate transaction, such as a merger, reorganization
or liquidation, involving Elder-Beerman or any or all of its
subsidiaries;
- a sale or transfer of a material amount of assets of Elder-Beerman or
any of its subsidiaries;
- any change in the present Board of Directors or management of
Elder-Beerman, except that after Elder-Beerman's annual meeting of
shareholders to be held on September 21, 2000, the Board of Directors
believes that one of its current directors may resign. Pursuant to
Elder-Beerman's Code of Regulations, if a director resigns, the
remaining directors can designate a replacement;
- any material change in the present dividend rate or policy, or
indebtedness or capitalization of Elder-Beerman;
- any other material change in Elder-Beerman's corporate structure or
business;
- any change in Elder-Beerman's Articles of Incorporation or Code of
Regulations or any actions which may impede the acquisition of control
of Elder-Beerman by any person;
- a class of equity security of Elder-Beerman ceasing to be listed on a
national securities exchange or authorized to be quoted in an automated
quotation system operated by a national securities association;
- a class of equity security of Elder-Beerman becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the
Securities Exchange Act of 1934 (the "Exchange Act"); or
- the suspension of Elder-Beerman's obligation to file reports pursuant to
Section 15(d) of the Exchange Act.
3. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES
Elder-Beerman will, upon the terms and subject to the conditions of the
Offer (including, if the Offer is extended or amended, the terms and conditions
of any such extension or amendment), determine a single price that it will pay
for Shares validly tendered and not withdrawn pursuant to the Offer, taking into
account the number of Shares tendered and the prices specified by tendering
shareholders, and will purchase Shares validly tendered at or below the purchase
price and not properly withdrawn prior to the Expiration Date, as soon as
practicable after the Expiration Date. Elder-Beerman will be deemed to have
purchased, subject to the proration provisions, Shares that are validly tendered
at or below the purchase price and not withdrawn only when, as and if it gives
oral or written notice to Wells Fargo Bank Minnesota, N.A. (the "Depositary") of
its acceptance of the Shares for payment pursuant to the Offer.
Subject to the applicable rules of the Commission, Elder-Beerman expressly
reserves the right to delay acceptance for payment of, or payment for, Shares in
order to comply, in whole or in part, with any other applicable law, government
regulation or condition contained therein. See Section 13.
Elder-Beerman will purchase all of the Shares accepted for payment pursuant
to the Offer as soon as practicable after the Expiration Date. In all cases,
payment for Shares purchased pursuant to the Offer will be
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made promptly, subject to possible delay to calculate proration, but only after
timely receipt by the Depositary of:
- certificates for the Shares (or a timely Book-Entry Confirmation (as
defined in this Section 3) of the Shares into the Depositary's account
at the Book-Entry Transfer Facility);
- a properly completed and duly executed letter of transmittal or manually
signed facsimile of the letter of transmittal, or an Agent's Message in
the case of a book-entry transfer; and
- all other documents required by the letter of transmittal. See Section 3
below.
The term "Agent's Message" means a message, transmitted by The Depository
Trust Company (the "Book-Entry Transfer Facility") to and received by the
Depositary and forming part of a Book-Entry Confirmation, which states that:
- the Book-Entry Transfer Facility has received an express acknowledgment
from the participant in the Book-Entry Transfer Facility tendering the
Shares that are the subject of such Book-Entry Confirmation;
- such participant has received and agrees to be bound by the terms of the
letter of transmittal; and
- Elder-Beerman may enforce such agreement against such participant.
For purposes of the Offer, Elder-Beerman will be deemed to have accepted
for payment (and thereby purchased) tendered Shares if, as and when
Elder-Beerman gives oral or written notice to the Depositary of Elder-Beerman's
acceptance of such Shares for payment. In all cases, payment for Shares
purchased pursuant to the Offer will be made by deposit of the aggregate
purchase price with the Depositary, which will act as agent for the tendering
shareholders for the purpose of receiving payment from Elder-Beerman and
transmitting payment to the tendering shareholders whose Shares have been
accepted for payment. If, for any reason, acceptance for payment of any Shares
tendered pursuant to the Offer is delayed, or Elder-Beerman is unable to accept
for payment Shares tendered pursuant to the Offer, then, the Depositary may,
nevertheless, on behalf of Elder-Beerman, retain the tendered Shares, and such
Shares may not be withdrawn, except to the extent that the tendering
shareholders are entitled to withdrawal rights as described in Section 5 and as
otherwise required by Rule 13e-4(f) under the Exchange Act.
In the event of proration, Elder-Beerman will determine the proration
factor and pay for those tendered Shares accepted for payment as soon as
practicable after the Expiration Date. However, Elder-Beerman does not expect to
be able to announce the final results of any proration until approximately seven
business days after the Expiration Date. Under no circumstances will interest
accrue on the consideration to be paid for the Shares by Elder-Beerman,
regardless of any delay in making such payment. Certificates for all Shares not
purchased, including all Shares tendered at prices greater than the purchase
price and Shares not purchased due to proration, will be returned pursuant to
the instructions of the tendering shareholder or, in the case of Shares tendered
by book-entry transfer into the Depositary's account at a Book-Entry Transfer
Facility pursuant to the procedures set forth in this Section 3, Shares will be
credited to an account maintained at the appropriate Book-Entry Transfer
Facility as promptly as practicable following the Expiration Date or termination
or withdrawal of the Offer without expense to the tendering shareholder. If
certain events occur, Elder Beerman may not be obligated to purchase Shares
pursuant to the Offer. See Section 7.
Elder-Beerman will pay all stock transfer taxes, if any, payable on the
transfer of Shares purchased pursuant to the Offer. If, however, payment of the
purchase price is to be made to, or (in the circumstances permitted by the
Offer) if unpurchased Shares are to be registered in the name of, any person
other than the registered holder, or if tendered certificates are registered in
the name of any person other than the person signing the letter of transmittal,
the amount of all stock transfer taxes, if any (whether imposed on the
registered holder or other person), payable on account of the transfer to the
person will be deducted from the purchase price unless evidence satisfactory to
Elder-Beerman of the payment of the taxes or exemption from the taxes is
submitted. See Instruction 7 of the letter of transmittal.
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Any tendering shareholder or other payee that fails to complete, sign and
return to the Depositary the Substitute Form W-9 included with the letter of
transmittal may be subject to required backup federal income tax withholding of
31% of the gross proceeds paid to the shareholder or other payee pursuant to the
Offer.
If, prior to the Expiration Date, Elder-Beerman increases the consideration
to be paid per share pursuant to the Offer, Elder-Beerman will pay the increased
consideration for all Shares purchased pursuant to the Offer, whether or not the
Shares were tendered prior to the increase in consideration.
4. PROCEDURES FOR TENDERING SHARES
VALID TENDERS. For Shares to be validly tendered pursuant to the Offer,
either:
- the certificates representing tendered Shares, or a Book-Entry
Confirmation for Shares delivered pursuant to the procedures for
book-entry transfer set forth below, together with the letter of
transmittal (or a manually signed facsimile thereof), properly completed
and duly executed, with any required signature guarantees (or, in the
case of a book-entry transfer of Shares, an Agent's Message), and any
other documents required by the letter of transmittal, must be received
prior to 12:00 midnight, New York City time, on the Expiration Date by
the Depositary at one of its addresses set forth on the back cover of
this Offer to Purchase; or
- the tendering shareholder must comply with the guaranteed delivery
procedures set forth below.
If certificates for Shares are forwarded separately to the Depositary, a
properly completed and duly executed letter of transmittal (or facsimile
thereof) must accompany each such delivery. No alternative, conditional or
contingent tenders will be accepted.
As specified in Instruction 5 of the letter of transmittal, each
shareholder who desires to tender Shares pursuant to the Offer must either (1)
check the box in the section of the letter of transmittal captioned "Shares
Tendered at Price Determined Pursuant to the Offer" or (2) check one of the
boxes in the section of the letter of transmittal captioned "Shares Tendered at
Price Determined by Shareholder" indicating the price at which Shares are being
tendered. A tender of Shares will be proper if and only if one of these boxes is
checked on the letter of transmittal.
If you wish to maximize the chance that your Shares will be purchased, you
should check the box on the letter of transmittal marked "Shares Tendered at
Price Determined Pursuant to the Offer." Note that this election could result in
your Shares being purchased at the minimum price of $4.50 per share.
If you wish to indicate a specific price (in multiples of $.25) at which
you are tendering your Shares, you must check a box under the section captioned
"Shares Tendered at Price Determined by Shareholder" of the letter of
transmittal in the table labeled "Price (in dollars) per share at which Shares
are being tendered." If you wish to tender your Shares at more than one price,
you must complete separate letters of transmittal for each price at which you
are tendering Shares. The same Shares cannot be tendered at more than one price.
In addition, odd lot holders who tender all Shares must complete the box
captioned "Odd Lots" in the letter of transmittal and, if applicable, in the
Notice of Guaranteed Delivery, to qualify for the preferential treatment
available to odd lot holders as set forth in Section 1.
Any determination by Elder-Beerman to make payment for Shares in reliance
upon the letter of transmittal and the guaranteed delivery procedures or to
reject a tender as invalid will be made in the sole and absolute discretion of
Elder-Beerman.
The method of delivery of certificates for Shares, the letter of
transmittal and any other required documents is at the option and sole risk of
the tendering shareholder and delivery will be deemed made only when actually
received by the Depositary. If delivery is made by mail, registered mail with
return receipt requested, properly insured, is recommended. In all cases,
sufficient time should be allowed to ensure timely delivery.
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Shareholders who hold Shares through brokers or banks are urged to consult
the brokers or banks to determine whether transaction costs may apply if
shareholders tender Shares through the brokers or banks and directly to the
Depositary.
BOOK-ENTRY TRANSFER. The Depositary will establish an account with respect
to the Shares at the Book-Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer to Purchase. Any financial
institution that is a participant in the Book-Entry Transfer Facility system may
make book-entry delivery of Shares by causing the Book-Entry Transfer Facility
to transfer the Shares into the Depositary's account at the Book-Entry Transfer
Facility in accordance with the Book-Entry Transfer Facility's procedures for
such transfer. Although delivery of the Shares may be effected through
book-entry transfer into the Depositary's account at the Book-Entry Transfer
Facility, the letter of transmittal (or a manually signed facsimile thereof),
properly completed and duly executed with any required signature guarantees, or
an Agent's Message, and any other required documents must, in any case, be
transmitted to and received by, the Depositary at one of its addresses set forth
on the back cover of this Offer to Purchase prior to the Expiration Date, or the
tendering shareholder must comply with the guaranteed delivery procedures
described below. The confirmation of a book-entry transfer of Shares into the
Depositary's account at the Book-Entry Transfer Facility as described above is
referred to as a "Book-Entry Confirmation."
Delivery of the letter of transmittal or other documents to the Book-Entry
Transfer Facility does not constitute delivery of the letter of transmittal or
such other documents to the Depositary.
SIGNATURE GUARANTEES. No signature guarantee is required on the letter of
transmittal if:
- the letter of transmittal is signed by the registered holder of Shares
tendered therewith (which term, for purposes of this Section 3, includes
any participant in the Book-Entry Transfer Facility system whose name
appears on a security position listing as the owner of the Shares) and
such registered shareholder has not completed either the box entitled
"Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the letter of transmittal; or
- such Shares are tendered for the account of (1) a bank (as defined in
Section 3(a) of the Federal Deposit Insurance Act), (2) a broker,
dealer, municipal securities dealer, municipal securities broker,
government securities dealer or government securities broker (each as
defined in the Exchange Act), (3) a credit union (as defined in Section
198(1)(A) of the Federal Reserve Act), (4) a national securities
exchange, registered securities association or clearing agency (each as
defined in the Exchange Act) or (5) a savings association (as defined in
Section 3(b) of the Federal Deposit Insurance Act), which, in each case,
is a participant in an approved Signature Medallion Program (any of the
foregoing, an "Eligible Institution").
In all other cases, all signatures on the letter of transmittal must be
guaranteed by an Eligible Institution. See Instruction 1 of the letter of
transmittal.
If the certificates representing Shares are registered in the name of a
person other than the signer of the letter of transmittal, or if payment is to
be made, or if certificates for Shares not tendered or not accepted for payment
are to be returned, to any person other than the registered holder of the
certificates surrendered, then the tendered certificates representing Shares
must be endorsed or accompanied by appropriate stock powers, in each case signed
exactly as the name or names of the registered shareholder or owner appears on
the certificates, with the signatures on the certificates or stock powers
guaranteed by an Eligible Institution as described above and as provided in the
letter of transmittal. See Instructions 1 and 5 of the letter of transmittal.
GUARANTEED DELIVERY. If a shareholder wishes to tender Shares pursuant to
the Offer and the shareholder's certificates are not immediately available or
the procedures for book-entry transfer cannot be completed on a timely basis or
time will not permit all required documents to be received by the Depositary
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prior to the Expiration Date, the Shares may nevertheless be tendered if all of
the following guaranteed delivery procedures are complied with:
- the tender is made by or through an Eligible Institution;
- a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form provided by Elder-Beerman with this Offer to
Purchase, is received by the Depositary as provided below prior to the
Expiration Date; and
- the certificates for all tendered Shares in proper form for transfer or
a Book-Entry Confirmation with respect to all tendered Shares, together
with a properly completed and duly executed letter of transmittal (or a
manually signed facsimile thereof) and any required signature guarantees
(or, in the case of a book-entry transfer of Shares, an Agent's Message)
in connection with a book-entry transfer of Shares, and any other
documents required by the letter of transmittal, are received by the
Depositary within three Nasdaq National Market trading days after the
date of execution of the Notice of Guaranteed Delivery. A Nasdaq trading
day is any day on which the Nasdaq Stock Market, Inc.'s ("Nasdaq")
National Market is open for business.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, facsimile transmission or mailed to the Depositary and must include
an endorsement by an Eligible Institution in the form set forth in the Notice of
Guaranteed Delivery and a representation that the shareholder on whose behalf
the tender is being made is deemed to own the Shares being tendered within the
meaning of Rule 14e-4 under the Exchange Act.
Notwithstanding any other provision of this Offer to Purchase, payment for
Shares accepted for payment pursuant to the Offer in all cases will be made only
after timely receipt by the Depositary of certificates for (or Book-Entry
Confirmation with respect to) the Shares, a letter of transmittal (or a manually
signed facsimile thereof), properly completed and duly executed with all
required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message) and all other documents required by the letter of transmittal.
Accordingly, payment may not be made to all tendering shareholders at the same
time, and will depend upon when share certificates are received by the
Depositary or Book-Entry Confirmations of such Shares are received into the
Depositary's account at the Book-Entry Transfer Facility.
401(k) SAVINGS PLAN. If you are a participant in The Elder-Beerman Stores
Corp. Financial Partnership Plan, you may instruct the trustee of the plan to
tender some or all of the Shares allocated to your account by following the
procedures in the "Letter to Participants in The Elder-Beerman Stores Corp.
Financial Partnership Plan" and returning it to the trustee. This letter will be
furnished to you separately. In addition, all documents furnished to
shareholders generally in connection with the Offer will be made available to
participants whose accounts under the 401(k) savings plan are credited with
Shares. Participants in the 401(k) savings plan cannot use the letter of
transmittal to direct the tender of Shares allocated to their account but must
use the separate instruction letter sent to them.
The 401(k) savings plan is prohibited from selling Shares to Elder-Beerman
for a price that is less than the prevailing market price. Accordingly, if a
participant in the plan elects to tender Shares at a price that is lower than
the prevailing market price of the Shares at the Expiration Date, the tender
price elected by the participant will be deemed to have been increased to the
closest tender price that is not less than the closing price of our Shares on
Nasdaq on the Expiration Date. In addition, our Compensation Committee, as a
fiduciary for the 401(k) savings plan, has the authority to revoke tender
directions if it determines that sale of the Shares may not meet the standards
of the Employee Retirement Income Security Act of 1974.
DELIVERY OF A LETTER OF TRANSMITTAL BY A 401(K) SAVINGS PLAN PARTICIPANT
DOES NOT CONSTITUTE PROPER TENDER OF HIS OR HER 401(K) SAVINGS PLAN SHARES.
PROPER TENDER CAN ONLY BE MADE BY THE TRUSTEE, WHO IS THE RECORD OWNER OF THE
SHARES HELD IN THE 401(K) SAVINGS PLAN. PLEASE NOTE THAT INSTRUCTION LETTERS
MUST BE SUBMITTED TO THE TRUSTEE AT LEAST FIVE BUSINESS DAYS BEFORE THE
EXPIRATION DATE. WE HAVE BEEN ADVISED THAT IF THE TRUSTEE HAS NOT RECEIVED A
PARTICIPANT'S INSTRUCTIONS AT LEAST FIVE BUSI-
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<PAGE> 18
NESS DAYS BEFORE THE EXPIRATION DATE, THE TRUSTEE WILL NOT TENDER ANY SHARES
HELD ON BEHALF OF THE PARTICIPANT IN THE 401(K) SAVINGS PLAN.
The proceeds received from any tender of Shares from a participant's 401(k)
savings plan account will be reinvested pro rata in accordance with the
participant's current investment directions for new contributions to the plan.
However, if the participant's current investment direction for new contributions
provide that some or all of the contributions are to be invested in the Shares,
then that portion of the tender proceeds will be invested in a money market
fund. Once the tender proceeds have been credited to the participant's 401(k)
savings plan account, the participant may reallocate his or her investments
among the various investment funds under the 401(k) savings plan in the usual
manner. Participants in the 401(k) savings plan are urged to read their separate
instruction letter and related materials carefully.
EMPLOYEE STOCK PURCHASE PLAN. If you are a participant in our employee
stock purchase plan and you wish to tender Shares held in your account, you must
complete the box in the letter of transmittal entitled "Tender of Shares Held in
Elder-Beerman Employee Stock Purchase Plan." Shares credited to your account
under the employee stock purchase plan will be tendered by the administrator of
the plan, according to the instructions provided in the appropriate places in
the letter of transmittal. As with the tender of the other Shares, Shares in the
plan accounts for which the plan administrator has not received timely
instructions prior to the Expiration Date of the Offer will not be tendered. You
may direct that all or a portion of the Shares held in your plan account be
tendered by the plan administrator.
The employee stock purchase plan is available only to shareholders of
record. Accordingly, the participants in the employee stock purchase plan will
receive all documents furnished to shareholders generally in connection with the
Offer. No additional documents will be delivered. You are urged to read the
letter of transmittal carefully.
BACKUP FEDERAL INCOME TAX WITHHOLDING. To prevent backup federal income
tax withholding of 31% of the payments made to shareholders with respect to the
purchase price of Shares purchased pursuant to the Offer, a shareholder must
provide the Depositary with its correct taxpayer identification number and
certify that it is not subject to backup federal income tax withholding by
completing the substitute Form W-9 included in the letter of transmittal. See
Section 5 below and Instruction 10 of the letter of transmittal.
TENDERING SHAREHOLDER'S REPRESENTATION AND WARRANTY. A tender of Shares
under any of the procedures described in this Section 4 will constitute the
tendering shareholder's acceptance of the terms and conditions of the Offer, as
well as the tendering shareholder's representation and warranty to Elder-Beerman
that: such shareholder has a "net long position" in the Shares or equivalent
securities at least equal to the Shares tendered within the meaning of Rule
14e-4 under the Exchange Act, and the tender of Shares complies with Rule 14e-4.
It is a violation of Rule 14e-4 for a person, directly or indirectly, to tender
Shares for that person's own account unless, at the time of tender and at the
end of the proration period or period during which Shares are accepted
(including any extensions of any period), the person so tendering has a net long
position equal to or greater than the amount tendered in the subject securities
or securities immediately convertible into, or exchangeable or exercisable for,
the subject securities, and will deliver or cause to be delivered the Shares in
accordance with the terms of the Offer. Rule 14e-4 provides a similar
restriction applicable to the tender or guarantee of a tender on behalf of
another person. Elder-Beerman's acceptance for payment of Shares tendered under
the Offer will constitute a binding agreement between the tendering shareholder
and Elder-Beerman upon the terms and conditions of the Offer described in this
Offer to Purchase.
DETERMINATION OF VALIDITY. All questions as to the number of Shares to be
accepted, the price to be paid for Shares, the form of documents, and the
validity, eligibility (including time of receipt) and acceptance for payment of
any tender of Shares pursuant to any of the procedures described above will be
determined by Elder-Beerman in its sole discretion, which determination will be
final and binding on all parties. Elder-Beerman reserves the absolute right to
reject any or all tenders of Shares determined not to be in proper form or the
acceptance of or payment for which may, in the opinion of counsel, be unlawful
and reserves the absolute right to waive any defect or irregularity in any
tender of Shares. Elder-Beerman also reserves the absolute right to waive or
amend any or all of the Offer conditions.
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<PAGE> 19
Elder-Beerman's interpretation of the terms and conditions of the Offer
(including the letter(s) of transmittal and the instructions thereto) will be
final and binding on all parties. No tender of Shares will be deemed to have
been validly made until all defects and irregularities have been cured or
waived. None of Elder-Beerman, Wasserstein Perella & Co., Morrow & Co., Wells
Fargo Bank Minnesota, N.A. or any other person will be under any duty to give
notification of any defects or irregularities in tenders or incur any liability
for failure to give any such notification.
Elder-Beerman reserves the absolute right to require that, in order for
Shares to be validly tendered, immediately upon Elder-Beerman's acceptance for
payment of the Shares, Elder-Beerman must be able to exercise full voting and
other rights with respect to the Shares, including voting at any meeting of
shareholders then scheduled.
Elder-Beerman's acceptance for payment of Shares tendered pursuant to any
of the procedures described above will constitute a binding agreement between
the tendering shareholder and Elder-Beerman upon the terms and subject to the
conditions of the Offer.
LOST OR DESTROYED CERTIFICATES. If any certificate representing Shares has
been lost, stolen or destroyed, you should notify Elder-Beerman's transfer
agent, Wells Fargo Bank Minnesota, N.A., by checking the box at the bottom of
the "Description of Shares Tendered" box on the cover page of the letter of
transmittal. You will then be instructed regarding the procedures to be followed
to replace the certificate. SHAREHOLDERS THAT NEED REPLACEMENT CERTIFICATES ARE
REQUESTED TO CONTACT WELLS FARGO BANK MINNESOTA, N.A. IMMEDIATELY IN ORDER TO
PERMIT TIMELY PROCESSING OF THIS DOCUMENTATION.
Certificates for Shares (or a timely Book-Entry Confirmation), together
with a properly completed letter of transmittal and any other documents required
by the letter of transmittal (or an Agent's Message for a book-entry transfer),
must be delivered to the Depositary and not to Elder-Beerman. Any documents
delivered to Elder-Beerman will not be forwarded to the Depositary and will not
be deemed to be validly tendered.
5. WITHDRAWAL RIGHTS
Tenders of Shares made pursuant to the Offer are irrevocable, except as
otherwise provided in this Section 5. Shares tendered pursuant to the Offer may
be withdrawn at any time prior to the Expiration Date and, unless previously
accepted for payment by Elder-Beerman as provided in this Offer to Purchase, may
also be withdrawn at any time after 40 business days after commencement (or such
later date as may be applicable if the Offer is extended).
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase. Any
such notice of withdrawal must specify the name of the person(s) that tendered
the Shares to be withdrawn, the number of Shares to be withdrawn and the name of
the registered shareholder, if different from that of the person who tendered
the Shares. If certificates evidencing Shares have been delivered or otherwise
identified to the Depositary then, prior to the release of the certificates, the
tendering shareholder must also submit the serial numbers shown on the
particular certificates evidencing the Shares to be withdrawn, and the signature
on the notice of withdrawal must be guaranteed by an Eligible Institution
(except in the case of Shares tendered for the account of an Eligible
Institution). If Shares have been tendered pursuant to the procedure for
book-entry transfer set forth in Section 4, the notice of withdrawal must
specify the name and number of the account at the applicable Book-Entry Transfer
Facility to be credited with the withdrawn Shares.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by Elder-Beerman, in its sole
discretion, which determination will be final and binding on all parties. No
withdrawal of Shares will be deemed to have been made properly until all defects
and irregularities have been cured or waived. None of Elder-Beerman, Wasserstein
Perella & Co., the Depositary, Morrow & Co. or any other person will be under
any duty to give notification of any defects or irregularities in any notice of
withdrawal or incur any liability for failing to give such notification.
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<PAGE> 20
Any Shares properly withdrawn will be deemed not validly tendered for
purposes of the Offer, but may be tendered at any subsequent time prior to the
Expiration Date by following any of the procedures described in Section 4 above.
If Elder-Beerman extends the Offer, is delayed in its purchase of or
payment for Shares (whether before or after its acceptance for payment of
Shares), or is unable to purchase or pay for Shares for any reason, then,
without prejudice to the rights of Elder-Beerman under the Offer, the Depositary
may, subject to applicable law, retain tendered Shares on behalf of
Elder-Beerman, and such Shares may not be withdrawn except to the extent
tendering shareholders are entitled to withdrawal rights as set forth in this
Section 5.
The ability of Elder-Beerman to delay the payment for Shares that
Elder-Beerman has accepted for payment is subject to the provisions of Rule
13e-4(f)(5) under the Exchange Act, which requires that Elder-Beerman pay the
consideration offered or return the Shares deposited by or on behalf of
shareholders promptly after the termination or withdrawal of the Offer.
6. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE OFFER
The following is a summary of certain U.S. federal income tax consequences
of the Offer to shareholders whose Shares are purchased pursuant to the Offer.
This discussion is based upon the provisions of the Internal Revenue Code of
1986, as amended (the "Code"), the applicable Treasury Regulations promulgated
and proposed thereunder, and published judicial authority and administrative
rulings and practice. Legislative, judicial or administrative authorities or
interpretations are subject to change, possibly on a retroactive basis, at any
time and a change could alter or modify the statements and conclusions set forth
below. It is assumed for purposes of this discussion that the Shares are held as
"capital assets" within the meaning of Section 1221 of the Code. This discussion
does not address all aspects of federal income taxation that may be relevant to
a particular shareholder in light of such shareholder's personal investment
circumstances, or those shareholders subject to special treatment under the
federal income tax laws (for example, life insurance companies, tax-exempt
organizations, foreign corporations and nonresident alien individuals) or to
shareholders who acquired their Shares through the exercise of employee stock
options or other compensation arrangements. In addition, the discussion does not
address any aspect of foreign, state or local income taxation or any other form
of taxation that may be applicable to a shareholder.
CONSEQUENCES OF THE OFFER
The receipt of the consideration in the Offer will be a taxable transaction
to the shareholders for federal income tax purposes (and also may be a taxable
transaction under applicable state, local and other income tax laws). In
general, for federal income tax purposes, a shareholder will recognize gain or
loss equal to the difference between its adjusted tax basis in the Shares sold
pursuant to the Offer and the amount of cash received therefor. Such gain or
loss will be capital gain or loss and will be long-term gain or loss, if, on the
date of sale, the Shares were held for more than one year.
BACKUP TAX WITHHOLDING
Under the Code, a shareholder may be subject, under certain circumstances,
to "backup withholding" at a 31% rate with respect to payments made in
connection with the Offer. Backup withholding generally applies if the
shareholder:
- fails to furnish his or her social security number or other taxpayer
identification number ("TIN");
- furnishes an incorrect TIN;
- fails properly to report interest or dividends; or
- under certain circumstances, fails to provide a certified statement,
signed under penalties of perjury, that the TIN provided is his or her
correct number and that he or she is not subject to backup withholding.
Backup withholding is not an additional tax but merely an advance
payment, which may
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<PAGE> 21
be refunded to the extent it results in an overpayment of tax. Certain
persons generally are exempt from backup withholding, including
corporations and financial institutions.
Certain penalties apply for failure to furnish correct information and for
failure to include the reportable payments in income. Each shareholder should
consult with its own tax advisor as to its qualifications for exemption from
withholding and the procedure for obtaining such exemption.
The federal income tax discussion set forth above is included for general
information purposes only. Shareholders should consult their own tax advisors to
determine the federal, state, local and foreign tax consequences of the Offer to
them in view of their own particular circumstances.
7. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, Elder-Beerman will not be
required to accept for payment, purchase or pay for any Shares tendered, and may
terminate or amend the Offer or may postpone the acceptance for payment of, or
the purchase of and the payment for Shares tendered, subject to Rule 13e-4(f)
under the Exchange Act, if, at any time on or after September 8, 2000 and prior
to the time of payment for any Shares (whether any Shares have been accepted for
payment, purchased or paid for pursuant to the Offer), any of the following
events have occurred (or have been determined by Elder-Beerman to have occurred)
that, in Elder-Beerman's sole judgment and regardless of the circumstances
giving rise to the event or events (including any action or omission to act by
Elder-Beerman), makes it inadvisable to proceed with the Offer or with the
acceptance for payment or payment:
- there has been threatened, or is instituted or pending before any court,
agency, authority or other tribunal, any action, suit or proceeding by
any government or governmental, regulatory or administrative agency or
authority or by any other person, domestic or foreign, or any judgment,
order or injunction entered, enforced or deemed applicable by any such
court, authority, agency or tribunal, which:
(1) challenges or seeks to make illegal, or to delay or otherwise
directly or indirectly to restrain, prohibit or otherwise affect
the making of the Offer, the acquisition of Shares pursuant to the
Offer or otherwise relates in any manner to the Offer; or
(2) could, in Elder-Beerman's sole judgment, materially affect the
business, condition (financial or other), income, operations or
prospects of Elder-Beerman and its subsidiaries, taken as a whole,
or otherwise materially impair in any way the contemplated future
conduct of the business of Elder-Beerman and its subsidiaries,
taken as a whole, or materially impair the Offer's contemplated
benefits to Elder-Beerman; or
- there has been any action threatened or taken, or any approval withheld,
or any statute, rule or regulation invoked, proposed, sought,
promulgated, enacted, entered, amended, enforced or deemed to be
applicable to the Offer or Elder-Beerman or any of its subsidiaries, by
any government or governmental, regulatory or administrative authority or
agency or tribunal, domestic or foreign, that, in Elder-Beerman's sole
judgment, would or might directly or indirectly result in any of the
consequences referred to in clause (1) or (2) above; or
- there has occurred any of the following:
(1) the declaration of any banking moratorium or any suspension of
payments in respect of banks in the United States, whether or not
mandatory;
(2) any general suspension of trading in, or limitation on prices for,
securities on any United States national securities exchange or in
the over-the-counter market;
(3) the commencement of a war, armed hostilities or any other national
or international crisis directly or indirectly involving the United
States;
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<PAGE> 22
(4) any limitation, whether or not mandatory, by any governmental,
regulatory or administrative agency or authority on, or any event
which, in Elder-Beerman's sole judgment, might materially affect,
the extension of credit by banks or other lending institutions in
the United States;
(5) any significant decrease in the market price of the Shares or in
the market prices of equity securities generally in the United
States or change in the general political, market, economic or
financial conditions in the United States or abroad that could have
in Elder-Beerman's sole judgment a material adverse effect on the
business, condition (financial or otherwise), income, operations or
prospects of Elder-Beerman and its subsidiaries, taken as a whole,
or on the trading in the Shares or on the proposed financing of the
Offer;
(6) a material acceleration or worsening of any of the foregoing
existing at the time of the announcement of the Offer; or
(7) any decline in either the Dow Jones Industrial Average, the S&P 500
Composite Index or the Nasdaq National Market by an amount in
excess of 20% measured from the close of business on September 7,
2000; or
- any change shall occur or be threatened in the business, condition
(financial or other), income, operations or prospects of Elder-Beerman
and its subsidiaries, taken as a whole, which in Elder-Beerman's sole
judgment is or may be material to Elder-Beerman and its subsidiaries
taken as a whole; or
- it has been publicly disclosed or Elder-Beerman has learned that:
(1) any person or "group" (within the meaning of Section 13(d)(3) of
the Exchange Act) has acquired or proposes to acquire beneficial
ownership of more than 5% of the outstanding Shares, whether
through the acquisition of stock, the formation of a group, the
grant of any option or right, or otherwise (other than as disclosed
in a Schedule 13D or 13G on file with the Commission on September
7, 2000); or
(2) any person or group that has filed a Schedule 13D or 13G on or
prior to September 7, 2000 shall have acquired or shall propose to
acquire whether through the acquisition of stock, the formation of
a group, the grant of any option or right, or otherwise, of
beneficial ownership of additional Shares representing 2% or more
of the outstanding Shares; or
- any person or group shall have filed a Notification and Report Form
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the regulations (the "HSR Act") thereunder reflecting an
intent to acquire Elder-Beerman or any of its Shares; or
- as of the Expiration Date, and after giving effect to the acceptance of
Shares validly tendered, Elder-Beerman will not continue to have at
least 400 shareholders of record and the Shares will not remain eligible
for trading on the Nasdaq National Market.
The conditions referred to above are for Elder-Beerman's sole benefit and
may be asserted by Elder-Beerman regardless of the circumstances giving rise to
any such condition (including any action or inaction by Elder-Beerman) or may be
waived by Elder-Beerman in whole or in part; provided, however, that the
condition regarding the minimum number of record holders and eligibility for
trading on the Nasdaq National Market may not be waived by Elder-Beerman.
Elder-Beerman's failure at any time to exercise any of the rights referred to
above shall not be deemed a waiver of any such right, and each such right shall
be deemed an ongoing right that may be asserted at any time and from time to
time. In certain circumstances, if Elder-Beerman waives any of the conditions
described above, it may be required to extend the Expiration Date of the Offer.
Any determination by Elder-Beerman concerning the events described above and any
related judgment or decision by Elder-Beerman regarding the inadvisability of
proceeding with the purchase of or payment for any Shares tendered will be final
and binding on all parties.
The Exchange Act requires that all conditions to the Offer must be
satisfied or waived before the Expiration Date.
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<PAGE> 23
8. SOURCE AND AMOUNT OF FUNDS
Assuming that Elder-Beerman purchases 3,333,333 Shares pursuant to the
Offer at a determined purchase price of between $4.50 and $6.00 per share,
Elder-Beerman expects the maximum aggregate cost, including all fees and
expenses applicable to the Offer, to be approximately $21 million. The Offer is
not subject to Elder-Beerman's receipt of financing. Elder-Beerman anticipates
that substantially all of the funds necessary to pay these amounts will be
provided through cash flow from existing operations and its existing credit
facility. On May 19, 2000, Elder-Beerman entered into its existing three-year
revolving credit facility with a group of lenders led by Citibank. The credit
facility provides for borrowings and letters of credit in an aggregate amount up
to $150 million, subject to a borrowing base formula based primarily on
merchandise inventories. Elder-Beerman has the option to finance borrowings at
either the prime rate of interest, plus 25 basis points or LIBOR, plus 175 basis
points through January 19, 2001, after which borrowing rates are subject to a
leverage ratio.
Elder-Beerman expects to repay indebtedness incurred as a result of the
Offer through cash flow from operations or future borrowings.
9. PRICE RANGE OF THE SHARES; DIVIDENDS ON THE SHARES
Elder-Beerman's Shares are traded on the Nasdaq National Market under the
symbol "EBSC." The following table sets forth, for the periods indicated, the
reported high and low sale prices for the Shares on the Nasdaq National Market
as reported thereafter by published financial sources. No dividends have been
paid on the Shares.
<TABLE>
<CAPTION>
1998 HIGH LOW
---- ---- ---
<S> <C> <C>
First Quarter............................................... $27.375 $14.000
Second Quarter.............................................. $29.375 $21.750
Third Quarter............................................... $23.813 $ 8.250
Fourth Quarter.............................................. $15.375 $ 8.250
</TABLE>
<TABLE>
<CAPTION>
1999
----
<S> <C> <C>
First Quarter............................................... $10.125 $ 7.000
Second Quarter.............................................. $ 9.000 $ 6.000
Third Quarter............................................... $ 8.500 $ 4.125
Fourth Quarter.............................................. $ 7.125 $ 4.875
</TABLE>
<TABLE>
<CAPTION>
2000
----
<S> <C> <C>
First Quarter............................................... $ 6.500 $ 4.188
Second Quarter.............................................. $ 5.250 $ 4.285
Third Quarter (through September 5, 2000)................... $ 4.625 $ 3.094
</TABLE>
On August 28, 2000, the last full trading day before the initial public
announcement of the Offer, the closing per share sales price for the Shares as
reported on the Nasdaq National Market was $3.188 per share. On September 5,
2000, the most recent practicable trading day before the commencement of the
Offer, the closing per share sales price for the Shares as reported on the
Nasdaq National Market was $4.563 per share. SHAREHOLDERS ARE URGED TO OBTAIN
CURRENT MARKET QUOTATIONS FOR THE SHARES.
RIGHTS AGREEMENT
Effective December 30, 1997, the Board of Directors of Elder-Beerman
adopted a Rights Agreement, dated as of December 30, 1997, by and between
Elder-Beerman and Norwest Bank Minnesota, N.A. (now known as Wells Fargo Bank
Minnesota, N.A.), as rights agent. Pursuant to the rights agreement, preferred
stock purchase rights were distributed to shareholders on the basis of one right
for each Share outstanding. In
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<PAGE> 24
general, the rights will become exercisable or transferable only upon the
occurrence of certain events relating to the acquisition by any person or group
of beneficial ownership of 20% or more of Elder-Beerman's outstanding securities
or the commencement of a tender offer to acquire such beneficial ownership.
Under the rights agreement, as it has been amended from time to time, once
exercisable, each right entitles its holder to purchase from Elder-Beerman
1/100(th) of one share of Series A Preferred Stock at a purchase price of $60,
subject to adjustment. The rights will expire on January 9, 2008 unless earlier
redeemed or exchanged by the Board of Directors of Elder-Beerman.
The rights currently trade together with the Shares and are not currently
exercisable. Absent circumstances causing the rights to become exercisable or
separately tradable prior to September 8, 2000, the tender of any Shares
pursuant to the Offer will include the tender of the associated rights. No
separate consideration will be paid for the rights. Upon the purchase of the
Shares by Elder-Beerman pursuant to the Offer, the sellers of the Shares will no
longer own the rights associated with the purchased Shares. Prior to the Offer,
one of Elder-Beerman's shareholders (Snyder) owned more than 20% of the
outstanding Shares. It is possible that following the completion of the Offer
and the resulting reduction in the number of outstanding Shares, Snyder will
continue to beneficially own more than 20% of the then-outstanding Shares and
other shareholders will beneficially own 20% or more of the then-outstanding
Shares. The rights agreement provides that those shareholders will not be deemed
to become an Acquiring Person (as defined in the rights agreement) or to cause
the rights to become exercisable unless and until (i) such shareholder or any of
its affiliates or associates (each as defined in the rights agreement)
thereafter becomes the beneficial owner of additional Shares representing 1% or
more of the then-outstanding Shares, other than as a result of a stock dividend,
stock split or similar transaction effected by Elder-Beerman in which all
holders of Shares are treated equally, or (ii) any other person who is the
beneficial owner of Shares representing 1% or more of the then-outstanding
Shares thereafter becomes an affiliate or associate of such shareholder.
The description above of the rights is qualified in its entirety by
reference to the rights agreement, a form of which has been included as an
exhibit to Elder-Beerman's Registration Statement on Form 8-A filed with the
Commission on November 17, 1998. The Form 8-A and its exhibits may be obtained
from the Commission in the manner provided in Section 12.
10. INTERESTS OF DIRECTORS AND EXECUTIVE OFFICERS; TRANSACTIONS AND
ARRANGEMENTS CONCERNING THE SHARES
As of September 1, 2000, there were 14,893,114 Shares outstanding. The
3,333,333 Shares that Elder-Beerman is offering to purchase represent
approximately 22.38% of the Shares outstanding as of September 1, 2000.
As of September 7, 2000, Elder-Beerman's directors and executive officers
as a group (15 total persons) beneficially owned 803,450 Shares, which
constituted approximately 5.39% of the issued and outstanding Shares. Except
with respect to Mr. Muskovich (Elder-Beerman's former President and Chief
Operating Officer, who was terminated by Elder-Beerman on June 30, 2000 but will
serve as a director until the annual meeting of Elder-Beerman shareholders on
September 21, 2000), each of Elder-Beerman's directors and executive officers
has advised Elder-Beerman that he or she does not intend to tender any Shares
pursuant to the Offer. If Elder-Beerman purchases 3,333,333 Shares pursuant to
the Offer and no director or executive officer tenders Shares pursuant to the
Offer, then after the purchase of Shares pursuant to the Offer, Elder-Beerman's
directors and executive offers as a group would beneficially own approximately
6.95% of the outstanding Shares. However, after September 21, 2000, Mr.
Muskovich (who beneficially owns 1.11% of the outstanding Shares), will no
longer be a director. Additionally, Mr. Muskovich has indicated that he will
tender some or all of his Shares.
As of September 8, 2000, no director or executive officer had beneficial
ownership of more than 1% of the outstanding Shares, except Frederick J.
Mershad, Chairman of the Board, President and Chief Executive Officer and Mr.
Muskovich (Elder-Beerman's former President and Chief Operating Officer, who was
terminated by Elder-Beerman on June 30, 2000 but will serve as a director until
the annual meeting of Elder-Beerman shareholders on September 21, 2000), whose
beneficial ownership was approximately 2.69% and 1.11%, respectively, of the
outstanding Shares. If Elder-Beerman purchases 3,333,333 Shares pursuant to the
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<PAGE> 25
Offer, assuming no Shares beneficially owned by Mr. Mershad or Mr. Muskovich,
are tendered in the Offer (as is intended by Mr. Mershad), Shares beneficially
owned by Mr. Mershad and Mr. Muskovich would represent approximately 3.47% and
1.43%, respectively, of the outstanding Shares. However, after September 21,
2000, Mr. Muskovich (who beneficially owns 1.11% of the outstanding Shares),
will no longer be a director. Additionally, Mr. Muskovich has indicated that he
will tender some or all of his Shares.
Based on Elder-Beerman's records and information provided to Elder-Beerman
by its directors, executive officers, associates and subsidiaries, neither
Elder-Beerman nor any of its associates or subsidiaries nor, to the best of
Elder-Beerman's knowledge, any of the directors or executive officers of
Elder-Beerman or any of its subsidiaries, nor any associates or subsidiaries of
any of the foregoing, has effected any transactions in the Shares during the 60
days prior to September 8, 2000.
Except as set forth in this Offer to Purchase or Elder-Beerman's definitive
proxy statement, filed with the Commission on August 21, 2000, neither
Elder-Beerman nor, to Elder-Beerman's knowledge, any of its affiliates,
directors or executive officers, is a party to any contract, arrangement,
understanding or relationship with any other person relating, directly or
indirectly, to the Offer or with respect to any securities of Elder-Beerman,
including, but not limited to, any contract, arrangement, understanding or
relationship concerning the transfer or the voting of any such securities, joint
ventures, loan or option arrangements, puts or calls, guarantees of loans,
guarantees against loss or the giving or withholding of proxies, consents or
authorizations.
11. EFFECT OF THE OFFER ON THE MARKET FOR SHARES, STOCK EXCHANGE LISTING AND
EXCHANGE ACT REGISTRATION, AND MARGIN SECURITIES
The purchase of Shares pursuant to the Offer will reduce the number of
Shares that might otherwise trade publicly and may reduce the number of holders
of Shares, which could adversely affect the liquidity and market value of the
remaining Shares held by shareholders other than Elder-Beerman. Elder-Beerman
cannot predict whether the reduction in the number of Shares that might
otherwise trade publicly would have an adverse or beneficial effect on the
market price for or marketability of the Shares or whether it would cause future
market prices to be greater or less than the amount paid per share in the Offer.
NASDAQ QUOTATION. Depending upon the number of Shares purchased pursuant
to the Offer, the Shares may no longer meet the standards for continued
inclusion in Nasdaq. According to Nasdaq's published guidelines, the Shares
would not be eligible to be included for quotation if, among other things, the
number of publicly held Shares falls below 500,000, the number of holders of
Shares falls below 400 or the aggregate market value of such publicly held
Shares falls below $3,000,000. If these standards are not met, the Shares might
continue to be quoted on The Nasdaq SmallCap Market, Inc., but if the number of
holders of the Shares falls below 300, or if the number of publicly held Shares
falls below 100,000, or if the aggregate market value of such publicly held
Shares falls below $200,000 or there are not at least two registered and active
market makers (one of which may be a market maker entering a stability bid),
Nasdaq rules provide that the securities would no longer qualify for inclusion
in Nasdaq and Nasdaq would cease to provide any quotations. Shares held directly
or indirectly by an officer or director of Elder-Beerman or by a beneficial
owner of more than 10% of the Shares will ordinarily not be considered as being
publicly held for purposes of these standards. In the event the Shares are no
longer eligible for Nasdaq quotation, quotations might still be available from
other sources. The extent of the public market for the Shares and the
availability of such quotations would, however, depend upon the number of
holders of such Shares remaining at such time, the interest in maintaining a
market in such Shares on the part of securities firms, the possible termination
of registration of such Shares under the Exchange Act as described below and
other factors.
As of September 1, 2000, there were approximately 2,094 holders of record
of the Shares.
EXCHANGE ACT REGISTRATION. The Shares are currently registered under the
Exchange Act. Such registration may be terminated upon application of
Elder-Beerman to the Commission if the Shares are not listed on a national
securities exchange and there are fewer than 300 record holders of the Shares.
The termination of registration of the Shares under the Exchange Act would
substantially reduce the information required to be furnished by Elder-Beerman
to holders of Shares and to the Commission and would make certain provisions of
the Exchange Act, such as the short-swing profit recovery provisions of Section
16(b),
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and the requirement of furnishing a proxy statement in connection with
shareholders' meetings pursuant to Section 14(a), no longer applicable to the
Shares. Furthermore, if the Shares are no longer registered under the Exchange
Act, the requirements of Rule 13e-3 under the Exchange Act with respect to
"going private" transactions would no longer be applicable to Elder-Beerman. In
addition, "affiliates" of Elder-Beerman and persons holding "restricted
securities" of Elder-Beerman may be deprived of the ability to dispose of such
securities pursuant to Rule 144 promulgated under the Securities Act of 1933, as
amended.
MARGIN REGULATIONS. The Shares are currently "margin securities," as such
term is defined under the rules of the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board"), which has the effect, among other things,
of allowing brokers to extend credit on the collateral of such securities.
Depending upon factors similar to those described above regarding listing and
market quotations, following the Offer, it is possible that the Shares might no
longer constitute "margin securities" for purposes of the margin regulations of
the Federal Reserve Board, in which event such Shares could no longer be used as
collateral for loans made by brokers.
If registration of the Shares under the Exchange Act were terminated, the
Shares would no longer be "margin securities" or be eligible for Nasdaq
reporting.
12. CERTAIN INFORMATION CONCERNING ELDER-BEERMAN
GENERAL INFORMATION. Elder-Beerman is an Ohio corporation with its
principal executive offices located at 3155 El-Bee Road, Dayton, Ohio 45439. Its
telephone number is (937) 296-2700. The following description of Elder-Beerman's
business has been derived in part from Elder-Beerman's Annual Report on Form
10-K for the fiscal year ended January 29, 2000 (the "Form 10-K") and is
qualified in its entirety by reference to the Form 10-K.
Elder-Beerman has been operating department stores since 1847.
Elder-Beerman operates department stores that sell a wide range of
moderate-to better-branded merchandise, including women's, men's, and
children's apparel and accessories, cosmetics, home furnishings, and other
consumer goods. In addition, Elder-Beerman operates its private label
credit card program through its wholly owned subsidiary, The El-Bee Chargit
Corp. As of fiscal year end 1999, Elder-Beerman operated 62 department
stores and two furniture stores, principally in smaller Midwestern markets
in Ohio, West Virginia, Indiana, Illinois, Michigan, Wisconsin, Kentucky
and Pennsylvania. Elder-Beerman's operations are diversified by size of
store, merchandising character and character of the community served.
Elder-Beerman seeks to satisfy the merchandising needs of its geographic
markets, serving customers of all ages with varied tastes and incomes.
AVAILABLE INFORMATION. Elder-Beerman is subject to the informational
filing requirements of the Exchange Act. In accordance with the Exchange Act,
Elder Beerman files periodic reports, proxy statements and other information
with the Commission relating to its business, financial condition and other
matters. Elder-Beerman is required to disclose in such proxy statements certain
information, as of particular dates, concerning Elder-Beerman's directors and
officers, their remuneration, stock options granted to them, the principal
holders of Elder-Beerman's securities and any material interest of those persons
in transactions with Elder-Beerman. Elder-Beerman has also filed an Issuer
Tender Offer Statement on Schedule TO with the Commission which includes
additional information relating to the Offer. These reports, proxy statements
and other information may be inspected and copied at the Commission's office at
450 Fifth Street, N.W., Washington, D.C. 20549, and also should be available for
inspection and copying at the regional offices of the Commission located at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511; and 7 World Trade Center, Suite 1300, New York, New York 10048.
Copies may be obtained upon payment of the Commission's prescribed fees by
writing to its principal office at 450 Fifth Street, N.W., Washington, D.C.
20549, or through the Commission's website (http://www.sec.gov).
13. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS
Elder-Beerman is not aware of any license or regulatory permit material to
its business that might be adversely affected by its acquisition of Shares as
contemplated by the Offer or of any approval or other action
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by any government or governmental, administrative or regulatory authority or
agency that would be required for Elder-Beerman's acquisition or ownership of
Shares as contemplated by the Offer. Should any such approval or other action be
required, Elder-Beerman presently contemplates that it will seek such approval
or other action. Elder-Beerman cannot predict whether it may determine that it
is required to delay the acceptance for payment of, or payment for, Shares
tendered pursuant to the Offer pending the outcome of any such matter. There can
be no assurance that any such approval or other action, if needed, would be
obtained or would be obtained without substantial conditions or that failure to
obtain any such approval or other action might not result in consequences
adverse to Elder-Beerman's business. Elder-Beerman's obligation under the Offer
to accept for payment and pay for Shares is subject to certain conditions. See
Section 7 and 13.
ANTITRUST. Under the provisions of the HSR Act applicable to the Offer,
the purchase of Shares under the Offer may be consummated without any required
filings.
While Elder-Beerman believes that the Offer does not involve a violation of
antitrust laws, there can be no assurance that a challenge to the Offer on
antitrust grounds will not be made or, if such a challenge is made, of the
result of that challenge.
14. EXTENSION OF THE OFFER; TERMINATION; AMENDMENTS
Subject to the applicable regulations of the Commission, Elder-Beerman
expressly reserves the right, in its sole discretion, at any time or from time
to time, to:
- delay acceptance for payment of, or regardless of whether such Shares
were previously accepted for payment, payment for, such Shares pending
receipt of any regulatory or governmental approvals specified in Section
13;
- terminate the Offer;
- waive any condition;
- increase the Shares to be purchased pursuant to the Offer by an
additional 2% of the outstanding Shares; or
- otherwise amend the Offer in any respect, in each case, by giving oral or
written notice of such termination, waiver or amendment to the
Depositary.
The rights reserved by Elder-Beerman in the immediately preceding paragraph
are in addition to Elder-Beerman's rights described in Section 7. Any extension,
termination or amendment of the Offer will be followed as promptly as
practicable by public announcement thereof, and such announcement in the case of
an extension will be made no later than 9:00 a.m., New York City time, on the
next business day after the previously scheduled Expiration Date. Without
limiting the manner in which Elder-Beerman may choose to make any public
announcement, subject to applicable law (including Rule 13e-4(e)(3) under the
Exchange Act, which require that material changes be promptly disseminated to
holders of Shares), Elder-Beerman will have no obligation to publish, advertise
or otherwise communicate any such public announcement other than by issuing a
press release through Business Wire.
If Elder-Beerman makes a material change in the terms of the Offer, or if
it waives a material condition to the Offer, Elder-Beerman will extend the Offer
and disseminate additional materials to the extent required by Rules 13e-4(d)(2)
and 13e-4(e)(3) under the Exchange Act. The minimum period during which an offer
must remain open following material changes in the terms of the offer, other
than a change in price or a change in percentage of securities sought, will
depend upon the facts and circumstances, including the materiality of the
changes. In the Commission's view, an offer should remain open for a minimum of
five business days from the date the material change is first published, sent or
given to shareholders, and, if material changes are made with respect to
information that approaches the significance of price and the percentage of
securities sought, a minimum of ten business days may be required to allow for
adequate dissemination and investor response. The requirement to extend the
Offer will not apply to the extent that the number of business days remaining
between the occurrence of the change and the then-scheduled Expiration Date
equals or exceeds the minimum extension period that would be required because of
such amendment.
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If Elder-Beerman extends the Offer, is delayed in its purchase of or
payment for Shares (whether before or after its acceptance for payment of
Shares) or is unable to purchase or pay for Shares for any reason, then, without
prejudice to the rights of Elder-Beerman under the Offer, the Depositary may
retain tendered Shares on behalf of Elder-Beerman and such Shares may not be
withdrawn, except to the extent that tendering shareholders are entitled to
withdrawal rights as set forth in Section 5. The ability of Elder-Beerman to
delay the payment for Shares that Elder-Beerman has accepted for payment is
limited, however, by Rule 13e-4(f)(5) under the Exchange Act, which requires
that a bidder pay the consideration offered or return the Shares deposited by or
on behalf of shareholders promptly after the termination or withdrawal of such
bidder's offer.
This Offer to Purchase, the related letter of transmittal and other
relevant materials will be mailed to record holders of Shares and will be
furnished to brokers, dealers, commercial banks, trust companies and similar
persons whose names, or the names of whose nominees, appear on Elder-Beerman's
shareholder list or, if applicable, who are listed as participants in a clearing
agency's security position listing for subsequent transmittal to beneficial
owners of Shares.
15. FEES AND EXPENSES
Wasserstein Perella & Co. is acting as Dealer Manager in connection with
the Offer and as financial advisor to Elder-Beerman, for which services
Wasserstein Perella & Co. will receive customary compensation. In addition,
Elder-Beerman has agreed to reimburse Wasserstein Perella & Co. for its
reasonable expenses incurred in rendering its services (including reasonable
legal expenses) under its engagement agreement with Elder-Beerman and has agreed
to indemnify Wasserstein Perella & Co. against certain liabilities and expenses
in connection with the Offer, including certain liabilities under the federal
securities laws. Wasserstein Perella & Co. from time to time renders various
investment banking services to Elder-Beerman and its affiliates for which it is
paid customary fees.
In the ordinary course of its business, Wasserstein Perella & Co. engages
in securities trading, market-making and brokerage activities and may, at any
time, hold long or short positions and may trade or otherwise effect
transactions in securities of Elder-Beerman.
Morrow & Co. has been retained by Elder-Beerman as Information Agent in
connection with the Offer. Morrow & Co. may contact holders of Shares by mail,
telephone, facsimile, telegraph and personal interview and may request brokers,
dealers and other nominee shareholders to forward material relating to the Offer
to beneficial owners of Shares. Elder-Beerman will pay Morrow & Co. reasonable
and customary compensation for all such services in addition to reimbursing
Morrow & Co. for reasonable out-of-pocket expenses in connection therewith.
In addition, Wells Fargo Bank Minnesota, N.A. has been retained as the
Depositary. Elder-Beerman will pay Wells Fargo Bank Minnesota, N.A. reasonable
and customary compensation for its services in connection with the Offer, will
reimburse Wells Fargo Bank Minnesota, N.A. for its reasonable out-of-pocket
expenses in connection therewith and will indemnify Wells Fargo Bank Minnesota,
N.A. against certain liabilities and expenses in connection therewith, including
certain liabilities under the federal securities laws.
Except as set forth above, Elder Beerman will not pay any fees or
commissions to any broker dealer or other person for soliciting tenders of
Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust
companies and other nominees will, upon request, be reimbursed by Elder-Beerman
for customary clerical and mailing expenses incurred by them in forwarding
offering materials to their customers.
16. MISCELLANEOUS
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) shareholders residing in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the securities,
blue sky or other laws of the jurisdiction. However, Elder-Beerman may, in its
discretion, take such action as it may deem necessary to make the Offer in any
jurisdiction and extend the Offer to shareholders in that jurisdiction. In any
jurisdiction where the securities, blue sky or other laws require the
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Offer to be made by a licensed broker or dealer, the Offer will be deemed to be
made on behalf of Elder-Beerman by one or more registered brokers or dealers
that are licensed under the laws of the jurisdiction.
Elder-Beerman has filed with the Commission a Tender Offer Statement on
Schedule TO pursuant to Section 13(e)(1) of the Exchange Act and Rule 13e-4
thereunder, containing certain additional information with respect to the Offer.
The Schedule TO and any amendments to the Schedule TO, including exhibits, may
be examined and copies may be obtained from the principal office of the
Commission in the manner set forth in Section 12 above (except that they will
not be available at the regional offices of the Commission).
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF ELDER-BEERMAN NOT CONTAINED IN THIS OFFER TO
PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, THE INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
Neither the delivery of this Offer to Purchase nor any purchase pursuant to
the Offer will under any circumstances create any implication that there has
been no change in the affairs of Elder-Beerman or any of its respective
subsidiaries since the date as of which information is furnished or the date of
this Offer to Purchase.
THE ELDER-BEERMAN STORES CORP.
September 8, 2000
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Manually signed facsimile copies of the letter of transmittal, properly
completed and duly signed, will be accepted. The letter of transmittal,
certificates for Shares and any other required documents should be sent or
delivered by each shareholder of Elder-Beerman or his or her broker dealer,
commercial bank, trust company or other nominee to the Depositary, at one of the
addresses set forth below:
The Depositary for the Offer is:
Wells Fargo Bank Minnesota, N.A.
<TABLE>
<S> <C> <C>
By Mail: By Hand or Overnight Carrier: By Hand NewYork Drop:
Wells Fargo Bank Minnesota, N.A. Wells Fargo Bank Minnesota, N.A. The Depository Trust Company
P.O. Box 64858 161 North Concord Exchange 55 Water Street, 1st Floor
St. Paul, Minnesota 55164-0858 So. St. Paul, Minnesota 55075-1139 New York, New York 10041-0099
Attention: Reorganization Department Attention: Reorganization Department
By Facsimile Transmission:
(651) 450-4163
</TABLE>
Questions and requests for assistance may be directed to Morrow & Co. or
Wasserstein Perella & Co. at their respective addresses and telephone numbers
listed below. Additional copies of this Offer to Purchase, the letter of
transmittal and other tender offer materials may be obtained from Morrow & Co.
and Wasserstein Perella & Co. as set forth below and will be furnished promptly
at Elder-Beerman's expense. You may also contact your broker, dealer, commercial
bank, trust company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
Morrow & Co., Inc.
445 Park Avenue, 5th Floor
New York, New York 10022
Call Collect (212) 754-8000 or
Toll Free (800) 662-5200
Banks and Brokerage Firms, Please Call:
(800) 662-5200
The Dealer Manager for the Offer is:
[WASSERSTEIN PERELLA LOGO]
Wasserstein Perella & Co.
31 West 52nd Street
New York, New York 10019-6163
(212) 969-2700
