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ENVIRODYNE INDUSTRIES, INC.
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FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION:
Nasdaq SmallCap - EDYN MEDIA: INVESTORS:
Roy Wiley Stephen M. Schuster or
(312) 255-3035 Gordon S. Donovan
(630) 575-2400
ENVIRODYNE CRITICAL OF ZAPATA CORPORATION FOR SEEKING
CONTROL OF THE COMPANY; CALLS MOVE "SELF-SERVING"
OAK BROOK, IL -- April 8, 1997 -- Envirodyne Industries, Inc.
(Nasdaq SmallCap: EDYN) Tuesday said it will vigorously oppose
efforts by Malcolm I. Glazer, through Zapata Corporation,
Envirodyne's largest shareholder, to replace the Company's board of
directors, calling Malcolm Glazer's actions "self-serving" and not
in the best interests of other shareholders.
F. Edward Gustafson, Envirodyne Chairman, President and Chief
Executive Officer, said Zapata is seeking to replace all of the
current directors because the Envirodyne board would not give
Zapata control of the Company without paying a fair price to all
shareholders.
"We believe that what you are attempting to do through this
blatantly self-interested and ill-advised action will be
detrimental to other shareholders," Gustafson wrote in a letter to
Malcolm Glazer, Zapata board chairman and its largest shareholder,
that was released by the Company today. "We will do everything we
can to prevent you from gaining control at their expense."
The Zapata slate includes Malcolm Glazer, three of Glazer's sons:
Avram, Bryan and Edward, and Robert Leffler, Jr., who handles
public relations activities for Glazer. Gustafson cited the
nominees' "lack of experience and independence" as reasons to
reject them as board members.
Malcolm and Avram Glazer currently serve as Envirodyne directors.
They were not slated for reelection after Malcolm Glazer refused to
agree not to seek control of the board for the next 12 months.
Gustafson said that the Envirodyne board is intent on running the
business for the benefit of all shareholders while the fear is that
Glazer wants to place his interests ahead of other shareholders.
Envirodyne has nominated its present slate of directors for
reelection, excluding Malcolm and Avram Glazer.
<PAGE>
Following is the full text of the letter:
Dear Malcolm:
I was deeply disappointed by your recent public disclosure
that you are seeking control of the Board of Directors of
Envirodyne in direct contradiction of your statements to our public
shareholders only a few weeks earlier in SEC filings that you were
not seeking control. Your lack of candor and affirmative
misstatements to our shareholders demonstrate why the Board of
Directors is unwilling to surrender control to you and your
nominees, except as part of an acquisition transaction that
provides a fair price to all shareholders.
Your attempt to gain control of Envirodyne without paying for
it is even more troublesome in light of your past history of
seeking control of companies and then attempting to engage in
various self-dealing transactions at the expense of other
shareholders. Quite frankly, you appear to have no other reason to
seek control of Envirodyne. What possible benefit does your
gaining control of our Board without paying for it provide to our
other shareholders who own nearly 60% of Envirodyne's outstanding
equity? You have clearly stated that you are in full agreement
with the direction management is taking the Company. You have
never proposed a different strategic goal or direction. As a
director, you are well aware that Envirodyne's cash flow continues
to grow; that the Company was recently awarded $102 million in
damages in a patent infringement suit; and that the Company is
paying down its debt as scheduled. Your control of the Board would
also cause us to prematurely repay up to approximately $380 million
principal amount of debt at an additional cost to the Company of up
to $18 million, or $1.23 per share. Given these circumstances, we
can only assume that your action is motivated by a desire for
personal gain through self-serving transactions at the expense of
the remaining shareholders.
We are also concerned that Envirodyne have the most
experienced and capable directors possible. The slate of directors
you propose consisting of yourself, your three sons and your hired
public relations advisor lacks experience and independence. We can
only assume that you are seeking control to duplicate your actions
at Zapata after you took control of its board namely to self-deal
with no independent directors to protect the company's public
shareholders.
Your request to have shareholders vote to remove the
Stockholder Rights Plan is also plainly not in the best interests
of our shareholders. This plan was adopted to protect our public
shareholders from coercive and abusive takeover tactics and to
ensure that any party attempting to acquire control of the Company
pay a fair price to all shareholders. Our shareholders deserve to
receive fair value for a change of control.
Finally, let me reiterate what I have said to you on several
prior occasions. If you or Zapata wish to make a bona fide
proposal to acquire the Company at a price that is fair to all our
---
shareholders, we are prepared to carefully consider it. However,
the Board of Directors intends to vigorously oppose your and
Zapata's efforts to gain control of the Company without paying for
it. The public owners of this Company deserve this level of
vigilance from their directors. We believe that what you are
attempting to do through this blatantly self-interested and ill-
advised action will be detrimental to our other shareholders. We
will do everything we can to prevent you from gaining control at
their expense.
Very truly yours,
On Behalf of the Board of Directors,
F. Edward Gustafson
Chairman of the Board, Chief Executive
Officer and President
Envirodyne has major interests in food packaging and the food
supplies industry, operating through three subsidiaries. The
Company recently reported operating income of $39.7 million for the
year ended December 26, 1996 on sales of $651.4 million.
Envirodyne operates through wholly-owned subsidiaries that are
industry segment leaders in food packaging and foodservice
supplies. Principal subsidiaries are: Viskase Corporation; Clear
Shield National, Inc.; and Sandusky Plastics, Inc.
Principal products manufactured are:
- cellulosic casings used in the preparation and
packaging of processed meat products;
- heat shrinkable plastic bags and specialty plastic
films for packaging and preserving fresh and
processed meat, poultry and cheese products;
- disposable plastic cutlery, drinking straws and
custom dining kits;
- thermoformed plastic containers for cultured dairy
products, delicatessen and foodservice and other uses.
Envirodyne Industries, Inc. and certain other persons named below
may be deemed to be "participants" in the solicitation of proxies
in connection with Envirodyne's 1997 Annual Meeting of
Stockholders. The participants in this solicitation may include
the directors of Envirodyne, Robert N. Dangremond, Avram A. Glazer,
Malcolm I. Glazer, F. Edward Gustafson, Michael E. Heisley, Gregory
R. Page, and Mark D. Senkpiel, and Gordon S. Donovan and Stephen M.
Schuster, executive officers of Envirodyne (collectively, the
"Envirodyne Participants"). As of the date of this press release,
the following Envirodyne Participants owned the number of shares of
common stock of Envirodyne following their names: Robert N.
Dangremond 11,663; Gordon S. Donovan, 42,739; Avram A. Glazer,
8,979; Malcolm I. Glazer, 5,886,283; F. Edward Gustafson,
1,264,419; Michael E. Heisley, 167,101; Gregory R. Page, 11,052;
Stephen M. Schuster, 89,275; Mark D. Senkpiel, 16,591. For a
further description of the interests of the foregoing persons,
please see Envirodyne's Preliminary Proxy Statement filed with the
Securities and Exchange Commission on April 8, 1997.
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