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EXHIBIT A
BFMA HOLDING CORPORATION
50 EAST SAMPLE ROAD, SUITE 400
POMPANO BEACH, FL 33064
November 16, 2000
VIA FACSIMILE AND FEDERAL EXPRESS
Mr. Clifford W. Stanley
Chairman and Chief Executive Officer
Guest Supply, Inc.
4301 U.S. Highway One
Monmouth Junction, NJ 08852-0902
Dear Mr. Stanley:
BFMA Holding Corporation is currently the beneficial owner of 308,600
shares of Guest Supply, Inc.'s common stock (representing 4.7% of the issued and
outstanding shares, based on Guest Supply's most recent public filings). BFMA is
prepared to offer $21.00 per share in cash for each share of Guest Supply it
does not already own. This proposal represents a premium of approximately 25%
over the closing price of Guest Supply's common stock on November 16, 2000 and a
premium of approximately 29% over the average closing price of Guest Supply's
common stock over the last 20 trading days ending on November 16, 2000.
Since 1997, BFMA has consistently expressed its interest in combining
its operating subsidiary, Marietta Corporation, with Guest Supply. On a number
of occasions you communicated to representatives of BFMA that Guest Supply was
available for sale. However, each time we have approached you with a serious
expression of our interest, you dismissed our proposals as inadequate.
In early May 2000, representatives of BFMA discussed with you BFMA's
desire to acquire Guest Supply. You inquired at that time as to the price per
share that BFMA would be willing to pay and suggested that BFMA formally request
certain information to assist in that determination. We preliminarily indicated
to you our thoughts on the value of the company and in mid-May formally
requested information to assist in confirming such value. None of the requested
information was provided. On June 1, 2000, I wrote a letter to you and your
directors on behalf of BFMA, formally proposing to acquire the shares of Guest
Supply for $24.00 per share in cash. The closing stock price of Guest Supply's
common stock on May 31, 2000 was $17.56 per share. On June 16, 2000, we received
a letter from you indicating that you rejected our proposal as "inadequate."
Although discussions continued and correspondence was exchanged over the next
four months, very little progress was made. As you are well aware, we
communicated to you and your representatives on numerous occasions our growing
frustration with respect to the lack of such progress. On September 20, 2000,
you sent us a letter terminating discussions with BFMA and confirming our belief
that you never seriously intended to cooperate with us in exploring a
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transaction.
As a result of your dismissal of our prior proposal, we have officially
nominated two directors for election as Class C Directors of Guest Supply at
Guest Supply's 2001 Annual Meeting anticipated to be held on January 17, 2001.
The nominees for director are Logan D. Delany, Jr., an independent investor and
businessman, and Charles W. Miersch, the Senior Associate Dean of the Simon
School of Business at the University of Rochester. Messrs. Delany and Miersch
have consented to serve as directors and, if and when elected, have announced
their intention to form a special committee of directors and hire independent
financial and legal advisors to explore a prompt sale of Guest Supply to the
highest bidder.
Since our discussions earlier this year, the markets have been volatile
and valuations have deteriorated. Despite this deterioration, we remain
interested in pursuing a transaction with Guest Supply. We believe that the
combination of Marietta Corporation and Guest Supply is a strategic fit and will
allow the combined company to benefit from our complementary capabilities. From
publicly available information, we have identified a number of areas in which
cost savings can be implemented and operating efficiencies can be achieved. We
hope to be able to confirm such savings through due diligence. Moreover, we
would anticipate that the transaction would substantially increase the business
of the combined company at each of the current operating locations. Finally, we
believe that a transaction can be completed quickly, without regulatory issues,
and we will devote all necessary resources to accomplish this goal. We are
prepared to quickly negotiate a definitive agreement with respect to our
proposal.
We were hoping to negotiate a transaction on a cooperative basis;
however, we are now prepared, if necessary, to remove you from the decision
process and appeal directly to the Guest Supply shareholders.
If you would like to discuss this proposal further, please do not
hesitate to call me or Rick Bloom.
Sincerely,
BFMA HOLDING CORPORATION
/s/ Barry W. Florescue
Barry W. Florescue
Chairman of the Board and President
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50 East Sample Road, Suite 400, Pompano Beach, Florida 33064
