Filed by II-VI Incorporated
pursuant to Rule 425 under the
Securities Act of 1933 and deemed
to be filed pursuant to Rule 14d-2
of the Securities and Exchange Act
of 1934
Subject Company:
Laser Power Corporation
Commission File
No.: 000-22625
June 20, 2000
Jim Martinelli
Treasurer & Chief Financial Officer
(724) 352-4455
[email protected]
II-VI Homepage: www.ii-vi.com
II-VI Incorporated Makes Revised Offer to Acquire Laser Power Corporation;
Increases Cash Component of Offer to $2.89 per Share;
Raises Floor Price to $5.15 per Share and Ceiling to $5.65 per Share;
Transaction Valued at $5.36 per Share
Pittsburgh - June 20, 2000 - II-VI Incorporated (Nasdaq: IIVI) announced
today that it has revised its offer to acquire Laser Power Corporation
(Nasdaq: LPWR), increasing the cash component of its offer to $2.89 per
share and raising the guaranteed "floor" price to $5.15 per share. Under
II-VI's revised proposal, each share of Laser Power stock will receive
.052 shares of II-VI common stock and $2.89 in cash. Based on the closing
market price of II-VI common stock on June 19, 2000, the value of this
offer to Laser Power's stockholders is $5.36 per share and represents a
significant premium over the $4.40 per share offer made by Union Miniere.
The guaranteed price will be paid with a combination of cash and/or
II-VI stock, at its election, if the volume weighted average trading
price of II-VI common stock is less than $43.46 per share for the 12
trading days prior to the closing of the exchange offer. II-VI has also
provided a $5.65 ceiling on its offer.
Fran Kramer, President and Chief Operating Officer of II-VI, said "We
were surprised that Laser Power's Board so quickly concluded that Union
Miniere's offer of $4.40 per share was superior to our prior offer,
which had a value of $4.61 per share based on the closing market price
of II-VI common stock as of last Friday. There can be no question that
our revised offer is superior to Union Miniere's current proposal. Not
only does our offer represent substantially greater value on its face
than Union Miniere's proposal, it has a guaranteed floor which is
greater than the value of Union Miniere's offer. Our proposed transaction
is in the best interests of both Laser Power's and II-VI's stockholders.
With our revised offer, we continue to believe that the transaction
will be accretive in our fiscal year beginning July 1, 2000."
The offer contemplates that the transaction will be structured
as an exchange offer for Laser Power shares. Following the exchange
offer, II-VI and Laser Power would consummate a merger in which each
share of Laser Power common stock not tendered into the exchange offer
would be exchanged for the same consideration paid in the exchange offer.
The full text of the offer letter to Laser Power is as follows:
II-VI Incorporated
375 Saxonburg Boulevard
Saxonburg, PA 16056
June 20, 2000
Dick Sharman, Chairman
Laser Power Corporation
36570 Briggs Road
Murrieta, CA 92563-2347
Dear Dick:
II-VI Incorporated continues to be interested in acquiring Laser Power
Corporation. To that end, and in response to the revised agreement
with Union Miniere announced on June 19, 2000, we hereby make the
following offer:
* Exchange Consideration per .052 shares of II-VI common
Share of Laser Power Stock stock plus $2.89 in cash.
(assuming 9,678,001 shares
outstanding, plus existing
stock options for no more than
367,977 shares)
* Minimum Price $5.15 per share--if necessary,
II-VI will pay a combination
of cash and/or stock, at its
election, so that the
consideration paid for each share
of Laser Power stock has a value
of at least $5.15 per share,
based on the volume weighted
average trading price of II-VI
stock during the 12 trading days
prior to the closing of the
exchange offer.
* Maximum Price $5.65 per share---if necessary,
the number of II-VI shares to be
issued will be reduced so that
the consideration paid for each
share of Laser Power stock will
not have a value of more than
$5.65 per share, based on the
volume weighted average trading
price of II-VI stock during the
12 trading days prior to the
closing of the exchange offer.
* Structure The transaction will be structured
as an exchange offer, followed by
a merger in which those Laser Power
stockholders not tendering into the
exchange offer receive the same
consideration that was paid in the
exchange offer.
* Other Terms A copy of a proposed merger
agreement that we are prepared to
execute is attached.
Based on the closing market price of II-VI stock on June 19, 2000, our
offer has an implied value of $5.36 per share of Laser Power stock.
This reflects a premium of $0.96 per share over the Union Miniere offer
and makes our offer clearly superior to the terms of the Union Miniere
transaction. Not only does our offer have a higher indicated value
than the Union Miniere transaction, it gives Laser Power stockholders
the opportunity to participate in the upside opportunity created by the
combination of II-VI and Laser Power. This makes our offer compelling
from the point of view of Laser Power's stockholders.
As you well know, II-VI has been enthusiastic about acquiring Laser Power
for several years now. II-VI is a growing company and we think that Laser
Power can be an important component of our future. Our intentions with
respect to Laser Power remain the same under our revised proposal. Our
plans are to combine our businesses in a way that maintains the Laser
Power brand name and its role in the market place. We intend to maintain
and even grow Laser Power's Temecula, Mexican and Belgium manufacturing
facilities. These facilities fit well into our worldwide manufacturing
strategy. We intend to make your San Diego office our West Coast sales
and marketing headquarters and your office in Belgium will nicely
complement our global sales and marketing efforts. For these reasons, it
is important to us to retain all of Laser Power's key employees and we
intend to offer them an extremely competitive compensation package,
including II-VI stock options, to accomplish that.
Your Board's fiduciary duties under Delaware law require you to consider
this offer. We believe that if you evaluate this offer in accordance
with those duties you will conclude that it is superior to the terms of
your agreement with Union Miniere.
Our proposed transaction is conditioned upon, among other things, (i)
the tender into our exchange offer of not less than a majority of the
shares of Laser Power Corporation common stock outstanding (including
the shares of Laser Power stock owned by II-VI), (ii) the valid
termination of the merger agreement between Laser Power and Union
Miniere, with the payment by Laser Power to Union Miniere of any fees
or expenses in connection with such termination, (iii) the approval of
II-VI's exchange offer and its proposed merger by Laser Power's Board
of Directors, (iv) receipt of all required regulatory approvals, (v)
the redemption of the outstanding preferred stock purchase rights under
Laser Power's preferred stock purchase rights plan or the amendment of
the plan to make it inapplicable to II-VI's offer, and (vi) Laser Power
not taking any action that would impair II-VI's ability to acquire Laser
Power or otherwise diminish the value of Laser Power to II-VI.
Please note that our offer does not contain a financing condition. Our
funds will be obtained through a new $25 million credit facility with
our bank, PNC Bank, along with cash on hand and the current availability
of over $10 million under our existing credit facility.
This offer has been approved by II-VI's Board of Directors. As you can
appreciate, time is of the essence. Accordingly, if you do not respond
favorably to our proposal by 11:59 p.m., Eastern Time, on June 21, 2000,
it will automatically terminate and we will be forced to consider our
other alternatives. If, prior to its expiration, you determine this
offer to be superior to Union Miniere's offer, this offer will
automatically be extended for two business days.
Considering the extremely short time it took Laser Power to evaluate
Union Miniere's revised offer, I look forward to hearing from you
shortly and to working with you so that we may bring our clearly
premium proposal to a vote of your stockholders.
Sincerely,
/s/ Carl J. Johnson
Carl J. Johnson,
Chairman and CEO
****
If our offer is accepted by the Board of Directors of Laser Power,
we will prepare and file a registration statement with the Securities
and Exchange Commission. Laser Power stockholders would then be able
to obtain such materials for free at the Commission's Web site at
www.sec.gov. Laser Power stockholders are urged to carefully read
the complete terms and conditions of those materials prior to
making any decisions with respect to an actual offer.
This document contains forward-looking statements concerning the
financial condition, results of operations and business of II-VI
and its proposed acquisition of Laser Power, the anticipated
financial and other benefits of such proposed acquisition and the
plans and objectives of II-VI's management following such proposed
acquisition, including, without limitation, statements relating to:
(A) the likelihood of consummating the proposed acquisition, (B)
the cost savings expected to result from the proposed acquisition,
(C) anticipated results of operations of the combined company
following the proposed acquisition, (D) projected earnings per
share of the combined company following the proposed acquisition,
and (E) the restructuring charges estimated to be incurred in
connection with the proposed acquisition. Generally, the words
"will," "may," "should," "continue," "believes," "expects,"
"anticipates" or similar expressions identify forward-looking
statements. These forward-looking statements involve certain
risks and uncertainties. Factors that could cause actual results
to differ materially from those contemplated by the forward-
looking statements include, among others, the following factors:
(1) the proposed acquisition may not be consummated on the terms
being offered or at all, (2) cost savings expected to results from
the proposed acquisition may not be fully realized or realized
within the expected time frame; (3) operating results following
the proposed acquisition may be lower than expected; (4) competitive
pressures may increase significantly; (5) costs or difficulties
related to the integration of the businesses of II-VI and Laser
Power may be greater than expected; (6) general economic conditions,
whether nationally or in the markets in which II-VI and Laser
Power conduct business, may be less favorable than expected; (7)
legislation or regulatory changes may adversely affect the
businesses in which II-VI and Laser Power are engaged; or (8)
adverse changes may occur in the securities markets.
CONTACT: Jim Martinelli, Treasurer & Chief Financial Officer of
II-VI Incorporated, 724-352-4455,
