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
1.
2. June 5, 2000 Jim Martinelli
Treasurer & Chief Financial
Officer
(724) 352-4455
[email protected]
II-VI Homepage: www.ii-vi.com
II-VI Incorporated Makes Offer to Laser Power Corporation's
Board;
Offers .052 Shares of II-VI Stock Plus $2.32 Cash for each Share
of Laser Power Stock;
Transaction Valued at $4.25 per Share, with Minimum Price of
$4.05 per Share
Pittsburgh--June 5, 2000--II-VI Incorporated (NASDAQ NMS: IIVI)
announced today that it has made an offer to the Board of
Directors of Laser Power Corporation (NASDAQ NMS: LPWR) to
acquire, in a consensual transaction, all of Laser Power's
outstanding stock. Under II-VI's proposal, each share of Laser
Power stock will receive .052 shares of II-VI common stock and
$2.32 in cash. Based on the closing market price of II-VI common
stock on June 2, 2000, the value of this offer to Laser Power's
stockholders is $4.25 per share. This represents a premium over
the offer made by Union Miniere.
Laser Power's stockholders will be guaranteed a "floor" of $4.05
per share. II-VI will pay this guaranteed price 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 $33.27 per share for the 20 trading days prior to the
closing of the exchange offer. The offer also contains a ceiling
of $5.00 per share.
Fran Kramer, President and Chief Operating Officer of II-VI, said
"Our offer represents substantially greater value for Laser
Power's stockholders than Union Miniere's current proposal with
appropriate downside protection. Our transaction is in the best
interests of both Laser Power's and II-VI's stockholders. We
think the potential synergies of the transaction are significant.
We believe that the transaction will result in increased
operating efficiencies and productivity. There also will be
significant cost savings resulting from the supply of raw
materials internally produced by II-VI which Laser Power
currently purchases from third parties. With these cost savings
and the resulting improved margins, and by leveraging our sales
efforts, we believe that the transaction will be accretive in our
fiscal year beginning July 1, 2000. Our proposal would allow
Laser Power's stockholders to participate in this upside
potential."
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.
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June 5, 2000
Page 2 of 5
You are invited to participate in a II-VI Incorporated CONFERENCE
CALL on TUESDAY, JUNE 6, 2000 AT 10:00 A.M. EASTERN TIME. On the
call, the senior management of II-VI will discuss II-VI's offer
to Laser Power's Board of Directors. A question and answer
session will follow the formal presentation.
The call will begin promptly at 10 a.m. To ensure your
participation on the call, please call 1-888-469-0791 (outside
the United States, dial, 773-756-4810) before 10:00 a.m. The
passcode for the call is Two-Six. The call will be recorded and
will be available for playback until 5:00 p.m. Eastern Time on
Friday, June 9, 2000 by dialing 1-800-756-0542 (outside the
United States, dial, 402-998-0773).
The full text of the offer letter to Laser Power is as follows:
II-VI Incorporated
375 Saxonburg Boulevard
Saxonburg, PA 16056
June 5, 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, we hereby make the following
offer:
* Exchange Consideration per .052 shares of II-VI common
Share of Laser Power Stock stock plus $2.32 in cash.
(assuming 9,678,001 shares
outstanding, plus existing
stock options for no more
than 367,977 shares)
* Minimum Price $4.05 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 $4.05 per share,
based on the volume weighted
average trading price of
II-VI stock during the 20
trading days prior to the
closing of the exchange
offer.
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June 5, 2000
Page 3 of 5
* Ceiling $5.00 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 $5.00 per share,
based on the volume weighted
average trading price of
II-VI stock during the 20
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 We are prepared to enter into
an agreement providing for
the transaction on the same
terms as set forth in your
agreement with Union Miniere
USA Inc., with appropriate
changes to reflect the terms
of our offer and to reflect
the conditions below.
Based on the closing market price of II-VI stock on June 2, 2000,
our offer has an implied value of $4.25 per share of Laser Power
stock. This 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 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.
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June 5, 2000
Page 4
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 will be 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 not to exceed $2 million, (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.
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 Noon, Eastern Time,
on June 11, 2000, it will automatically terminate and we will be
forced to consider our other alternatives.
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
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June 5, 2000
Page 5 of 5
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, or e-mail, [email protected]/
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