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Filed by Rainforest Cafe, Inc.
Pursuant to Rule 425 under Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Company: Rainforest Cafe, Inc.
Commission File No. 0-27366
THE FOLLOWING IS A LETTER TO SHAREHOLDERS DISSEMINATED BY RAINFOREST CAFE ON
APRIL 6, 2000:
RAINFOREST CAFE, INC.
720 South Fifth Street
Hopkins, Minnesota 55343
April 5, 2000
Dear Fellow Shareholders:
Your vote on the Rainforest/Landry's merger is extremely important. In
fact, it could be crucial to obtaining true value for your shares of Rainforest
stock. With your support - and your vote "FOR" the merger on the enclosed WHITE
proxy card - we can bring this transaction to a quick and successful conclusion
for the benefit of all shareholders. The Special Meeting, scheduled to be held
on April 18th, is rapidly approaching. We urge you to sign, date and mail your
WHITE proxy card today.
LEADING PROXY ADVISORY SERVICE
URGES SUPPORT FOR MERGER
The benefits of the merger to Rainforest shareholders have been
recognized by Institutional Shareholder Services (ISS), the nation's leading
independent proxy advisory firm. A few days ago, ISS published a report urging
its clients, which include more than 700 institutional investors, mutual funds
and other fiduciaries, to support the merger. In its report, ISS stated that
"...absent a higher offer THE LANDRY'S OFFER REPRESENTS THE BEST ALTERNATIVE TO
SHAREHOLDERS. The structure of the merger consideration also allows shareholders
to receive stock in the combined entity, which will allow shareholders to
participate in any potential synergies that may be generated."
ISS is a respected independent advisor, and we believe its
recommendation carries great weight.
JOIN WITH OTHER SHAREHOLDERS TO PROTECT YOUR INTERESTS:
VOTE FOR THE LANDRY'S MERGER NOW
I, together with other members of my family and related entities, own
approximately 11.5% of Rainforest's stock. Collectively, we hold more shares
than any other shareholder and, as shareholders, our interests are the same as
yours. I want you to know that I am voting all of my shares in favor of the
merger - and I am told that my family and related entities will do the same. If
the merger is not approved, we are at significant risk to suffer economically -
just as I believe all other shareholders are.
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In urging you to support the merger, we ask you to keep the following
in mind:
- - Landry's is Paying Fair Value. The Proxy Statement/Prospectus contained
an opinion dated as of February 8, 2000 of Rainforest's financial
advisor, U.S. Bancorp Piper Jaffray, which stated that "the Merger
Consideration is fair, from a financial point of view, to the
shareholders of Rainforest." In addition, based upon Rainforest's
recent earnings forecast for fiscal 2000, THE PROPOSED MERGER IS VALUED
AT MORE THAN 30 TIMES RAINFOREST'S FORECASTED 2000 EARNINGS, AND
REPRESENTS MORE THAN A 25% PREMIUM OVER RAINFOREST'S RECENT TRADING
PRICE.
- - Ownership of Landry's Stock. In the proposed merger, Rainforest
shareholders can elect to receive Landry's stock for up to 65% of
their outstanding Rainforest shares. We believe that Landry's stock is
currently undervalued and could provide a better shareholder return
than would Rainforest stock on a stand-alone basis.
- - Future Lease Obligations. Rainforest has entered into long-term lease
obligations to build its chain of restaurants, which represent a total
liability of approximately $175 million. These obligations must
ultimately be paid for and represent a significant liability to
Rainforest, with some becoming immediately due if Rainforest closes
restaurants. We presently anticipate that at least one restaurant will
be closed this year, with possibly five to seven more restaurants
closing thereafter.
- - Rainforest's Financial Condition. Rainforest recently announced
disappointing financial results in two press releases, copies of which
have been enclosed in this mailing. In addition, based on its current
obligations, Rainforest's cash position is anticipated to fall below
$10 million in fiscal 2000 from $35 million at the end of the last
fiscal year. Because of the difficult business trends Rainforest is
experiencing, Rainforest presently does not have access to third party
financing. As a result, our ability to further the development and
growth of Rainforest's business as an independent company is
significantly restricted.
- - Rainforest's Eroding Profit Margin. As described in the enclosed press
releases, continued decreases in comparable same store sales,
particularly in several of Rainforest's mall locations, are eroding
Rainforest's profit margins. These eroding profit margins have been
reflected in our recent decrease in forecasted earnings and can be
expected to adversely affect the value of Rainforest shares if
Rainforest remains as an independent company.
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THERE ARE NO BETTER OFFERS
Throughout 1999, Rainforest considered various strategic business
combinations to enhance shareholder value. Since we announced the Landry's
transaction approximately two months ago, only one party expressed a possible
interest in making an alternative acquisition proposal for Rainforest. However,
following a request by Rainforest that such party provide information regarding
its identity and background and details as to its ability to finance a
transaction, that party withdrew its interest.
TIME IS SHORT -- VOTE YOUR SHARES TODAY
YOUR BOARD OF DIRECTORS UNANIMOUSLY URGES ALL RAINFOREST SHAREHOLDERS
TO VOTE "FOR" THE MERGER. Given Rainforest's recent disappointing financial
results, we believe that the reasons for the proposed merger are more compelling
than ever.
You can help ensure that the merger is completed by voting "FOR" the
merger on the WHITE proxy card. Please sign, date and mail the enclosed WHITE
proxy card today in the enclosed postage-prepaid envelope. Your vote is
important no matter how many or how few shares you may own.
We thank you for your continued support.
Sincerely,
Lyle Berman
Chairman of the Board
Chief Executive Officer
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IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE IN VOTING YOUR SHARES,
PLEASE CONTACT RAINFOREST'S PROXY SOLICITOR:
INNISFREE M&A INCORPORATED
501 MADISON AVENUE, 20TH FLOOR
NEW YORK, NEW YORK 10022
TOLL FREE: (888) 750-5834
