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Exhibit 2
CRAIG ENTERPRISES, INC.
June 2, 2000
Board of Directors of Jenny Craig, Inc.
Jenny Craig, Inc.
11355 N. Torrey Pines Road
La Jolla, California 92038-7910
Gentlemen and Madam:
Craig Enterprises, Inc. ("CEI"), through its subsidiary, SJF Enterprises,
Inc. ("SJF"), hereby proposes to acquire all of the outstanding shares of common
stock of Jenny Craig, Inc. ("JCI" or the "Company") not already owned directly
or indirectly by SJF for a cash price of $3.75 per share (the "Cash Price"). We
propose that the transaction be completed through a tender offer by SJF followed
by a merger of SJF into JCI, each at the Cash Price. As a result of the proposed
transaction, the Company would become a wholly-owned subsidiary of CEI.
Completion of the transaction would be conditioned upon (i) the approval by
the Board of Directors of JCI, (ii) negotiation and execution of definitive
acquisition documents, and (iii) satisfaction of all applicable regulatory and
governmental requirements, as well as certain other conditions customarily
contained in transactions of this type.
Financing for the transaction would be provided by loans to SJF from CEI or
others. Our proposal is not conditioned on financing.
CEI expects that the transaction would occur before the end of the first
fiscal quarter of 2001, i.e. prior to September 30, 2000. Upon completion of the
transaction, JCI would seek to cause its shares of common stock to be delisted
from trading on the New York Stock Exchange and to be deregistered under the
Securities Exchange Act of 1934, as amended.
CEI believes that this proposal is fair and will benefit the public
shareholders of JCI. The all cash price of $3.75 per share to be paid represents
a 150% premium over the closing price on June 1, 2000 of $1.50 per share and a
53% premium over the average closing price of JCI common shares ($2.45) on the
New York Stock Exchange for the one year period prior to the date of this
letter.
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Board of Directors of Jenny Craig, Inc.
June 2, 2000
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After the transaction, if it occurs, JCI would realize savings of time,
expense and personnel resources resulting from the elimination of proxy
statements, annual and quarterly reports and compliance with United States
securities laws for public companies. The public market has not provided
meaningful advantages for JCI and its stockholders, and JCI was recently advised
that it was not in compliance with continued listing standards of the New York
Stock Exchange. In addition, after the proposed transaction we expect CEI to be
able to make an S election under the Internal Revenue Code, and "Qualified
Subchapter S Subsidiary" elections for JCI and certain affiliates, which could
offer CEI and its subsidiaries and shareholders more favorable tax treatment
than that presently enjoyed.
CEI desires to proceed on an expedited basis and urges the Board of
Directors of JCI to act as quickly as possible in considering the proposal. CEI
anticipates that the Board would consider appointment of a special committee
composed of directors who are not affiliated with SJF or CEI to consider the
proposal and that such committee would be authorized to engage independent
financial advisors and legal counsel to assist it in its deliberations. CEI has
engaged Koffler & Company as its financial advisor and invites the special
committee's representatives to contact its advisors to discuss this proposal at
the special committee's earliest convenience.
Please be advised that CEI has no intention of selling its holdings of JCI
stock.
CEI and SJF have been advised that they must promptly file an amendment to
the Statement on Schedule 13D with respect to JCI, which will disclose the
substance of this letter. Accordingly, the Company should consider making its
own public announcement relating to this matter.
CEI reserves the right to amend or withdraw this proposal at its sole
discretion at any time.
Sincerely yours,
Craig Enterprises, Inc.
By: /s/ Sidney Craig
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Name: Sid Craig
Title: President
