August 12, 1998
To the Shareholders of Real Silk Investments, Incorporated:
Real Silk Investments, Incorporated (the "Corporation") has recently
learned that certain of you may have received an Offer to Purchase Shares of
Common Stock (the "Offer") from Madison Liquidity Investors I ("Madison").
The Corporation was not officially informed of the Offer and, to the best
of our knowledge, no materials were filed with the United States Securities
and Exchange Commission (the "Commission"), although we have been informed
that under the particular circumstances of the Offer, such filing may not be
required by applicable law.
While the Corporation is making no recommendation in regard to the Offer,
and is not commenting on your investment decision, management believes that
you should consider, in addition to any other matters which you feel are
material, the following:
1. The purchase price specified in the Offer is $379.00 per share of
the Corporation;
2. According to information available to the Corporation, there is
currently a quote from a market maker for the Real Silk shares
pursuant to which the market maker is willing to pay $580.00 per
share for the Real Silk shares;
3. While the Corporation does not redeem its shares, at the present
time, the Corporation estimates that its shares have a net asset
value per share of approximately $758;
4. On March 20, 1998, the Board of Directors of the Corporation issued
a press release indicating that it intended to explore the options
for the future of the Corporation, including merging with another
investment company or liquidating;
5. The Board of Directors continues to explore those options, while
realizing that the potential built in gains tax liability will not
expire until January 1, 1999; and,
6. Significant and material information concerning the Corporation is
contained in the annual report and other documents which are filed
with the Commission and sent to shareholders and you are encouraged
to review those documents prior to making any decision with respect
to your shares of the Corporation.
Management recognizes that each shareholder's interests, circumstances,
investment objectives and needs are different. We would therefore encourage
each shareholder to seek advice from the shareholder's personal financial
advisor or consultant before making any decision to sell their shares
pursuant to the Offer.
Sincerely,
Daniel R. Efroymson
President
