<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(E)(1) OF THE SECURITIES EXCHANGE ACT OF 1934)
SAMSONITE CORPORATION
(NAME OF ISSUER)
SAMSONITE CORPORATION
(NAME OF PERSON(S) FILING STATEMENT)
COMMON STOCK, $.01 PAR VALUE PER SHARE
(TITLE OF CLASS OF SECURITIES)
79604V 10 5
(CUSIP NUMBER OF CLASS OF SECURITIES)
D. MICHAEL CLAYTON, ESQ.
VICE PRESIDENT AND GENERAL COUNSEL
SAMSONITE CORPORATION
11200 EAST 45TH AVENUE
DENVER, CO 80239-3018
(303) 373-6174
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES
AND
COMMUNICATIONS ON BEHALF OF THE PERSON(S) FILING STATEMENT)
COPIES TO:
LOU R. KLING, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
919 THIRD AVENUE
NEW YORK, NY 10022
(212) 735-3000
MAY 20, 1998
(DATE TENDER OFFER FIRST PUBLISHED, SENT OR GIVEN TO SECURITY HOLDERS)
CALCULATION OF FILING FEE
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Transaction Amount of Filing
Valuation*: $480,000,000.00 Fee: $96,000.00
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* Calculated solely for purposes of determining the filing fee, based upon
the purchase of 12,000,000 shares at the tender offer price per share of
$40.00.
[_]Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
Amount previous paid: ___________ Filing party: ___________________
Form or registration no.: _______ Date filed: _____________________
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<PAGE>
ITEM 1. SECURITY AND ISSUER.
(a) The issuer of the securities to which this Schedule 13E-4 relates is
Samsonite Corporation, a Delaware corporation (the "Company"), and the address
of its principal executive office is 11200 East 45th Avenue, Denver, Colorado,
80239-3018.
(b) This Schedule 13E-4 relates to the offer by the Company to purchase up
to 12,000,000 shares (constituting approximately 59% of the shares presently
outstanding) of its Common Stock, $.01 par value per share (the "Common
Stock"), and the associated preferred stock purchase rights (the "Rights")
(the Common Stock and the Rights, on and after the date of their distribution,
are herein referred to as the "Shares"), for a purchase price of $40.00 per
Share net to the Seller in cash upon the terms and subject to the conditions
set forth in the Offer to Purchase, dated May 20, 1998 (the "Offer to
Purchase"), and in the related Letter of Transmittal (which together
constitute the "Offer"), copies of which are attached as Exhibits (a)(1) and
(a)(2), respectively, and incorporated herein by reference. As of May 15,
1998, 20,420,902 Shares were issued and outstanding, of which 1,036,135 Shares
were beneficially owned by all directors and executive officers as a group.
The Company expects that each of the directors and officers of the Company
will tender all of their Shares in the Offer. In addition, Apollo Investment
Fund, L.P. and its affiliate, Lion Advisors, L.P. have agreed to tender all of
their Shares in the Offer. If substantially all of the Shares outstanding are
tendered pursuant to the Offer, the percentage of each stockholder's current
ownership will not change except by reason of the issuance of the Warrants. It
is expected therefore that any change resulting from the Recapitalization Plan
in the percentage ownership of any stockholder will be minimal. The
information set forth in "INTRODUCTION," "THE RECAPITALIZATION PLAN--Certain
Effects of the Recapitalization Plan" and "THE OFFER--Section 9" in the Offer
to Purchase is incorporated herein by reference.
(c) The information set forth in "Introduction" and "THE OFFER--Section 7"
in the Offer to Purchase is incorporated herein by reference.
(d) Not applicable. This Statement is being filed by the Issuer.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in "THE OFFER--Section 8" in the Offer to
Purchase is incorporated herein by reference.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
(a)-(j) The information set forth in "INTRODUCTION," "THE RECAPITALIZATION
PLAN," "THE OFFER--Section 8," "THE OFFER--Section 11," "THE OFFER--Section
12," and "THE OFFER--Section 14" in the Offer to Purchase is incorporated
herein by reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
The Company is not aware of any such transaction. The information set forth
in "THE OFFER--Section 11" in the Offer to Purchase is incorporated herein by
reference.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE ISSUER'S SECURITIES.
The information set forth in "INTRODUCTION," "THE RECAPITALIZATION PLAN" and
"THE OFFER--Section 11" in the Offer to Purchase is incorporated herein by
reference.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in "INTRODUCTION" and "THE OFFER--Section 15" in
the Offer to Purchase is incorporated herein by reference.
II-1
<PAGE>
ITEM 7. FINANCIAL INFORMATION.
(a)-(b) The information set forth in "THE OFFER--Section 10" in the Offer to
Purchase and the financial statements and notes related thereto contained in
the Company's Annual Report on Form 10-K for the years ended January 31, 1997
and January 31, 1998 are incorporated herein by reference.
ITEM 8. ADDITIONAL INFORMATION.
(a)-(e) Not Applicable.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<C> <S>
(a)(1) --Form of Offer to Purchase dated May 20, 1998.
(2) --Form of Letter of Transmittal (including Certification of
Taxpayer Identification Number on Substitute Form W-9).
(3) --Form of Notice of Guaranteed Delivery.
(4) --Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(5) --Form of Letter to Clients for Use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(6) --Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(7) --Text of Press Release issued by the Company dated May 20, 1998.
(8) --Form of Letter to Stockholders of the Company dated May 20, 1998
from Luc Van Nevel.
(b) --None.
(c)(1) --Letter Agreement, by and among Samsonite Corporation and Apollo
Investment Fund, L.P. and Lion Advisors, L.P. dated May 19, 1998.
(2) --Plan of Recapitalization of the Company dated May 12, 1998
(incorporated herein by reference to the Current Report on Form 8-
K filed with the Commission on May 13, 1998).
(d) --Not Applicable.
(e) --Not Applicable.
(f) --Not Applicable.
</TABLE>
II-2
<PAGE>
SIGNATURE
AFTER DUE INQUIRY AND TO THE BEST OF MY KNOWLEDGE AND BELIEF, I CERTIFY THAT
THE INFORMATION SET FORTH IN THIS STATEMENT IS TRUE, COMPLETE AND CORRECT.
Samsonite Corporation
By: /s/ Richard H. Wiley
------------------------------
Name: RICHARD H. WILEY
Title: Chief Financial Officer
Dated: May 20, 1998
II-3
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
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<C> <S>
(a)(1) -- Form of Offer to Purchase dated May 20, 1998.
(2) -- Form of Letter of Transmittal (including Certification of Taxpayer
Identification Number on Substitute Form W-9).
(3) -- Form of Notice of Guaranteed Delivery.
(4) -- Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(5) -- Form of Letter to Clients for Use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(6) -- Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(7) -- Text of Press Release issued by the Company dated May 20, 1998.
(8) -- Form of Letter to Stockholders of the Company dated May 20, 1998
from Luc Van Nevel.
(b) -- None.
(c)(1) -- Letter Agreement, by and among Samsonite Corporation and Apollo
Investment Fund, L.P. and Lion Advisors, L.P. dated May 19, 1998.
(2) -- Plan of Recapitalization of the Company dated May 12, 1998
(incorporated herein by reference to the Current Report on Form 8-K
filed with the Commission on May 13, 1998).
(d) -- Not Applicable.
(e) -- Not Applicable.
(f) -- Not Applicable.
</TABLE>
<PAGE>
EXHIBIT 99(A)(1)
OFFER BY
SAMSONITE CORPORATION
TO PURCHASE FOR CASH
12,000,000 SHARES OF ITS COMMON STOCK
AT
$40.00 NET PER SHARE
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THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON WEDNESDAY, JUNE 17, 1998, UNLESS THE OFFER IS
EXTENDED. TENDERING STOCKHOLDERS HAVE THE RIGHT TO WITHDRAW SHARES TENDERED
AT ANY TIME PRIOR TO THE EXPIRATION OF THE OFFER AND THEY MAY WITHDRAW
SHARES AFTER JULY 15, 1998 UNLESS ACCEPTED BY THE COMPANY PRIOR TO THAT
DATE.
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Samsonite Corporation, a Delaware corporation (the "Company"), hereby offers
to purchase from its stockholders up to 12,000,000 shares (constituting
approximately 59% of the shares presently outstanding) of its common stock,
$.01 par value per share (the "Common Stock"), and the associated preferred
stock purchase rights (the "Rights") (the Common Stock and the Rights, on and
after the date of their distribution, are herein referred to as the "Shares"),
at $40.00 per Share (the "Purchase Price"), net to the seller in cash, upon
the terms and conditions set forth herein and in the related Letter of
Transmittal (which together constitute the "Offer"). Tendering stockholders
will not be obligated to pay any brokerage commissions, solicitation fees or,
except as described herein or in the Letter of Transmittal, transfer taxes
with respect to the purchase of Shares by the Company pursuant to the Offer.
--------------
THE OFFER IS CONDITIONED UPON THERE BEING VALIDLY TENDERED AND NOT PROPERLY
WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER 8,750,000 SHARES, WHICH NUMBER
CONSTITUTES APPROXIMATELY 43% OF THE SHARES OUTSTANDING ON MAY 15, 1998. THE
OFFER IS ALSO CONDITIONED ON, AMONG OTHER THINGS, THE COMPANY'S HAVING
OBTAINED SUFFICIENT FINANCING TO PURCHASE SHARES PURSUANT TO THE OFFER, TO
REFINANCE EXISTING DEBT AND TO PAY RELATED FEES AND EXPENSES. SEE "THE OFFER--
SECTION 6."
THE COMPANY IS MAKING THE OFFER AS PART OF ITS PLAN OF RECAPITALIZATION
DESCRIBED HEREIN (THE "RECAPITALIZATION PLAN"). THE BOARD OF DIRECTORS OF THE
COMPANY CONSIDERED THE EFFECTS OF THE OFFER AND THE RECAPITALIZATION PLAN,
INCLUDING, AMONG OTHER THINGS, THE ABILITY OF THE COMPANY TO OPERATE ON A
GOING FORWARD BASIS WITH ADDITIONAL LEVERAGE, AND HAS UNANIMOUSLY DETERMINED
THAT THE OFFER IS FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF
THE COMPANY, HAS APPROVED THE MAKING OF THE OFFER AND THE TRANSACTIONS
CONTEMPLATED THEREBY AND RECOMMENDS THAT THE STOCKHOLDERS OF THE COMPANY
ACCEPT THE OFFER AND TENDER THEIR SHARES TO THE COMPANY.
STOCKHOLDERS SHOULD NOTE THAT THE PURCHASE PRICE ($40 PER SHARE) REPRESENTS
A SUBSTANTIAL PREMIUM OVER THE CLOSING SALE PRICE OF THE SHARES ($29 7/8 PER
SHARE) AS REPORTED ON THE NASDAQ NATIONAL MARKET SYSTEM ON MAY 14, 1998, THE
DAY FOLLOWING ANNOUNCEMENT OF THE RECAPITALIZATION PLAN AND THE OFFER. THE
MARKET PRICE OF THE SHARES FOLLOWING CONSUMMATION OF THE RECAPITALIZATION PLAN
AND THE OFFER IS EXPECTED TO BE SUBSTANTIALLY LOWER THAN THE PURCHASE PRICE
AND THE MARKET PRICE OF THE SHARES ON THE DATE HEREOF. ACCORDINGLY, ANY SHARES
NOT TENDERED PURSUANT TO THE OFFER AND ANY TENDERED SHARES NOT ACCEPTED FOR
PAYMENT BY REASON OF PRORATION OR OTHERWISE, ARE EXPECTED TO HAVE A MARKET
PRICE FOLLOWING CONSUMMATION OF THE OFFER THAT IS SUBSTANTIALLY LOWER THAN THE
PURCHASE PRICE AND THE MARKET PRICE OF THE SHARES ON THE DATE HEREOF. IF THE
MARKET PRICE FOR SHARES FOLLOWING CONSUMMATION OF THE OFFER IS BELOW THE
PURCHASE PRICE, AS EXPECTED, STOCKHOLDERS CAN BE ASSURED OF MAXIMIZING THE
VALUE OF THEIR HOLDINGS AFTER GIVING EFFECT TO CONSUMMATION OF THE OFFER (THE
SUM OF THE MARKET PRICE OF THEIR SHARES FOLLOWING THE OFFER PLUS THE AMOUNT
RECEIVED IN THE OFFER) ONLY BY TENDERING 100% OF THEIR SHARES.
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares, should either (1) complete and sign the Letter of Transmittal (or a
facsimile thereof) in accordance with the instructions in the Letter of
Transmittal and deliver it and any other required documents to BankBoston,
N.A. (the "Depositary") and either deliver the certificate(s) representing
such Shares to the Depositary along with the Letter of Transmittal or tender
such Shares pursuant to the procedure for book-entry transfer set forth in
"THE OFFER--Section 3" or (2) request such stockholder's broker, dealer,
commercial bank, trust company or other nominee to effect the transaction for
such stockholder. Any stockholder whose Shares are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee must contact
such broker, dealer, commercial bank, trust company or other nominee if such
stockholder desires to tender such Shares.
A stockholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available, or who cannot comply
with the procedure for book-entry transfer on a timely basis, may tender such
Shares by following the procedures for guaranteed delivery set forth in "THE
OFFER--Section 3."
Questions and requests for assistance or additional copies of this Offer to
Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may
be directed to the Dealer Managers or to Innisfree M&A Incorporated (the
"Information Agent") at their respective addresses and telephone numbers set
forth on the back cover of this Offer to Purchase. Additional copies of this
Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed
Delivery may be obtained from the Information Agent or from brokers, dealers,
commercial banks or trust companies.
--------------
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO. MERRILL LYNCH & CO.
--------------
The date of this Offer to Purchase is May 20, 1998.
<PAGE>
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
INTRODUCTION.............................................................. 1
RECOMMENDATION OF THE COMPANY'S BOARD OF DIRECTORS........................
THE RECAPITALIZATION PLAN................................................. 3
Background of the Recapitalization Plan................................. 3
Purpose of the Recapitalization Plan.................................... 5
Certain Effects of the Recapitalization Plan............................ 6
Position of the Board of Directors...................................... 10
Rights Agreement........................................................ 10
THE OFFER................................................................. 12
1. Number of Shares; Proration......................................... 12
2. Extension of Offer; Termination; Amendment.......................... 13
3. Procedures for Tendering Shares..................................... 15
4. Withdrawal Rights; Statutory Rights................................. 18
5. Acceptance for Payment and Payment for Shares....................... 18
6. Certain Conditions of the Offer..................................... 19
7. Price Range of Shares; Dividends.................................... 22
8. Source and Amount of Funds.......................................... 22
9. Certain Information Concerning Ownership of Shares.................. 25
10. Certain Information Concerning the Company.......................... 27
Certain Financial Information................................... 28
Recent Developments............................................. 32
Certain Estimates of Future Operations and Other Information.... 33
Additional Information.......................................... 35
11. Transactions and Arrangements Concerning Shares..................... 35
12. Effects of the Offer on the Market for Shares; Stock Listing; Margin
Regulations; Registration under the Exchange Act.................... 35
13. Certain Legal Matters; Regulatory Approvals......................... 36
14. Certain United States Federal Income Tax Consequences............... 37
15. Fees and Expenses................................................... 39
16. Miscellaneous....................................................... 40
</TABLE>
ii
<PAGE>
To the Stockholders of Samsonite Corporation:
INTRODUCTION
Samsonite Corporation, a Delaware corporation (the "Company"), hereby offers
to purchase from its stockholders up to 12,000,000 shares of its Common Stock,
$.01 par value per share (the "Common Stock"), and the associated preferred
stock purchase rights (the "Rights") (the Common Stock and the Rights, on and
after the date of their distribution, are herein referred to as the "Shares")
at $40.00 (the "Purchase Price") net to the seller in cash, upon the terms and
the conditions set forth herein and in the related Letter of Transmittal
(which together constitute the "Offer"). The Company expressly reserves the
right, in its sole discretion, to amend the Offer in any respect (including,
without limitation, by decreasing or increasing the Purchase Price and/or the
number of Shares being sought in the Offer). See "THE OFFER--Section 2." In
such event, the Company may be required to extend the period of time during
which the Offer is open. See "THE OFFER--Section 2." The Company has no
current intention to increase the number of Shares being sought in the Offer,
and its ability to do so may be limited. See "THE OFFER--Section 8,"
"--Section 10" and "--Section 11."
All Shares properly tendered prior to the Expiration Date and not withdrawn
will be purchased at the Purchase Price, subject to the terms and conditions
of the Offer, including the proration provisions described herein. The term
"Expiration Date" means 5:00 p.m., New York City time, on June 17, 1998,
unless the Company extends the period of time during which the Offer is open,
in which event the term "Expiration Date" shall refer to the latest time and
date to which the Offer has been extended. The Purchase Price will be paid,
net to the seller in cash, with respect to all Shares purchased. All Shares
not purchased pursuant to the Offer, including Shares not purchased because of
proration, will be returned. Tendering stockholders will not be obligated to
pay brokerage commissions, solicitation fees or, except as described herein or
in the Letter of Transmittal, transfer taxes with respect to the purchase of
Shares by the Company pursuant to the Offer. HOWEVER, ANY TENDERING
STOCKHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE, SIGN AND RETURN TO THE
DEPOSITARY THE SUBSTITUTE INTERNAL REVENUE SERVICE ("IRS") FORM W-9 THAT IS
INCLUDED IN THE LETTER OF TRANSMITTAL MAY BE SUBJECT TO A REQUIRED BACKUP
FEDERAL INCOME TAX WITHHOLDING OF 31% OF THE GROSS PROCEEDS PAYABLE TO SUCH
STOCKHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER. SEE "THE OFFER--SECTION 3."
The Company will pay all fees and expenses of Goldman, Sachs & Co. ("Goldman
Sachs") and Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill
Lynch" and, together with Goldman Sachs, the "Dealer Managers"), BankBoston,
N.A. (the "Depositary") and Innisfree M&A Incorporated (the "Information
Agent") incurred in connection with the Offer. See "THE OFFER--Section 2."
THE OFFER IS CONDITIONED (THE "MINIMUM CONDITION") UPON THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER
8,750,000 SHARES, WHICH NUMBER CONSTITUTES APPROXIMATELY 43% OF THE SHARES
OUTSTANDING ON MAY 15, 1998. THE OFFER IS ALSO CONDITIONED ON, AMONG OTHER
THINGS, THE COMPANY'S HAVING OBTAINED SUFFICIENT FINANCING TO PURCHASE SHARES
PURSUANT TO THE OFFER, TO REFINANCE EXISTING DEBT AND TO PAY RELATED FEES AND
EXPENSES. SEE "THE OFFER--SECTION 6."
As of May 15, 1998, the Company had issued and outstanding 20,420,902
Shares, and an additional 2,446,582 Shares were issuable upon exercise of
Options (as defined herein) outstanding on such date; Options to acquire
1,027,787 Shares were exercisable at prices less than or equal to $29 7/8, the
closing sales price per Share on May 14, 1998.
1
<PAGE>
The Shares are traded on the Nasdaq National Market System (the "NASDAQ")
under the symbol "SAMC." On May 12, 1998, the last full trading date prior to
the Company's announcement of the Recapitalization Plan, the last reported
sales price of the Shares as reported on NASDAQ was $28 15/16 per Share.
Stockholders are urged to obtain current market quotations. See "THE OFFER--
Section 7."
THE COMPANY IS MAKING THE OFFER AS PART OF ITS PLAN OF RECAPITALIZATION
DESCRIBED HEREIN (THE "RECAPITALIZATION PLAN"). THE BOARD OF DIRECTORS OF THE
COMPANY CONSIDERED THE EFFECTS OF THE OFFER AND THE RECAPITALIZATION PLAN,
INCLUDING, AMONG OTHER THINGS, THE ABILITY OF THE COMPANY TO OPERATE ON A
GOING FORWARD BASIS WITH ADDITIONAL LEVERAGE, AND HAS UNANIMOUSLY DETERMINED
THAT THE OFFER IS FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF
THE COMPANY, HAS APPROVED THE MAKING OF THE OFFER AND THE TRANSACTIONS
CONTEMPLATED THEREBY AND RECOMMENDS THAT THE STOCKHOLDERS OF THE COMPANY
ACCEPT THE OFFER AND TENDER THEIR SHARES TO THE COMPANY.
STOCKHOLDERS SHOULD NOTE THAT THE PURCHASE PRICE ($40 PER SHARE) REPRESENTS
A SUBSTANTIAL PREMIUM OVER THE CLOSING SALE PRICE OF THE SHARES ($29 7/8 PER
SHARE) AS REPORTED ON NASDAQ ON MAY 14, 1998, THE DAY FOLLOWING ANNOUNCEMENT
OF THE RECAPITALIZATION PLAN AND THE OFFER. THE MARKET PRICE OF THE SHARES
FOLLOWING CONSUMMATION OF THE RECAPITALIZATION PLAN AND THE OFFER IS EXPECTED
TO BE SUBSTANTIALLY LOWER THAN THE PURCHASE PRICE AND THE MARKET PRICE OF THE
SHARES ON THE DATE HEREOF. ACCORDINGLY, ANY SHARES NOT TENDERED PURSUANT TO
THE OFFER AND ANY TENDERED SHARES NOT ACCEPTED FOR PAYMENT BY REASON OF
PRORATION OR OTHERWISE, ARE EXPECTED TO HAVE A MARKET PRICE FOLLOWING
CONSUMMATION OF THE OFFER THAT IS SUBSTANTIALLY LOWER THAN THE PURCHASE PRICE
AND THE MARKET PRICE OF THE SHARES ON THE DATE HEREOF. IF THE MARKET PRICE FOR
SHARES FOLLOWING CONSUMMATION OF THE OFFER IS BELOW THE PURCHASE PRICE, AS
EXPECTED, STOCKHOLDERS CAN BE ASSURED OF MAXIMIZING THE VALUE OF THEIR
HOLDINGS AFTER GIVING EFFECT TO CONSUMMATION OF THE OFFER (THE SUM OF THE
MARKET PRICE OF THEIR SHARES FOLLOWING THE OFFER PLUS THE AMOUNT RECEIVED IN
THE OFFER) ONLY BY TENDERING 100% OF THEIR SHARES.
----------------
The Company is making the Offer as part of its Recapitalization Plan. The
Recapitalization Plan has been developed by the Company to provide
stockholders the opportunity to realize value on a significant portion of
their investment in the Company in the near term, while retaining a continuing
equity interest in the Company subject to limited dilution resulting from
issuance of the Warrants (as defined below). Although the Company will, on a
going forward basis, be more highly leveraged than has recently been the case,
the Board of Directors of the Company believes that the resulting level of
indebtedness is acceptable and that the Company will have sufficient
additional borrowing capacity, including availability under the New Credit
Facility, to execute its business strategy. The Recapitalization Plan
contemplates the implementation of a number of actions to accomplish these
objectives, including the making of the Offer, which will allow stockholders
to sell a significant portion of their Shares at a premium over current market
prices, the incurrence of the Financing (as defined herein) and the adoption
of a shareholder rights agreement to deter coercive and unfair takeover
tactics by third parties that may jeopardize stockholder realization of the
benefits of the Recapitalization Plan. See "THE RECAPITALIZATION PLAN--Purpose
of the Recapitalization Plan."
The Company intends to obtain funds for the purchase of Shares pursuant to
the Offer, for the refinancing of certain existing indebtedness of the Company
and its subsidiaries, and for the payment
2
<PAGE>
of related fees and expenses from (a) the private placement of $350 million of
senior subordinated notes due 2008 of the Company (the "Senior Subordinated
Notes") and the private placement of $175 million of Redeemable Exchangeable
Preferred Stock (the "Senior Preferred Stock") and detachable warrants to
purchase an aggregate of 1,959,000 Shares (the "Warrants" and, together with
the Senior Preferred Stock, "Senior Preferred Stock Units"), aggregating to
$525 million, in each case to "qualified institutional buyers" (as defined in
Rule 144A ("Rule 144A") under Securities Act of 1933 (the "Securities Act"))
in compliance with Rule 144A and pursuant to sales that occur outside the
United States within the meaning of Regulation S under the Securities Act
(such purchasers collectively, the "Private Placement Participants" and such
private placements, the "Rule 144A Financings") and (b) a new $300 million
credit facility from Bank of America National Trust and Savings Association,
as Administrative Agent ("B of A"), and BankBoston, N.A., as Syndication Agent
(together, the "Credit Facility Banks") (the financing to be provided pursuant
to clauses (a) and (b) is herein referred to collectively as the "Financing").
For a description of the terms and conditions of the Financing, see "THE
OFFER--Section 8." The private placement of $525 million of Senior
Subordinated Notes, Senior Preferred Stock and Warrants by the Company to the
Private Placement Participants is expected to be consummated immediately prior
to the expiration of the Offer. See "THE RECAPITALIZATION PLAN--Background of
the Recapitalization Plan." THE SENIOR SUBORDINATED NOTES AND THE SENIOR
PREFERRED STOCK UNITS WILL NOT BE REGISTERED UNDER THE SECURITIES ACT AND MAY
NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN
APPLICABLE EXEMPTION FROM REGISTRATION REQUIREMENTS. NOTHING CONTAINED HEREIN
CONSTITUTES AN OFFER TO PURCHASE OR A SOLICITATION OF AN OFFER TO BUY ANY SUCH
SECURITIES.
The Company expects that each of the directors and officers of the Company
will tender all of their Shares in the Offer. In addition, Apollo Investment
Fund, L.P. ("Apollo Investment") and its affiliate, Lion Advisors, L.P.
("Lion" and, together with Apollo Investment, the "Apollo Parties") have
agreed to tender all of their Shares in the Offer. If substantially all of the
Shares outstanding are tendered pursuant to the Offer, the percentage of each
stockholder's current ownership will not change by reason of the Offer. It is
expected therefore that any change resulting from the Recapitalization Plan in
the percentage ownership of any stockholder will be minimal, subject to
limited dilution resulting from issuance of the Warrants. See "THE
RECAPITALIZATION PLAN--Certain Effects of the Recapitalization Plan" and "THE
OFFER--Section 9."
THE RECAPITALIZATION PLAN
BACKGROUND OF THE RECAPITALIZATION PLAN
In the ongoing process of formulating the Company's business and financial
plans, members of the Company's Board of Directors and management regularly
reassess the Company's long-term prospects in light of anticipated general
economic and business conditions and management's forecasts for the Company's
business.
During the second half of calendar 1997, the Board of Directors of the
Company began discussing, internally and with Goldman Sachs, the Company's
financial advisors, the possibility of maximizing shareholder value through an
extraordinary transaction such as a recapitalization, business combination
with a third party or a sale of the Company. During the last quarter of
calendar 1997, Goldman Sachs commenced soliciting indications of interest from
a number of third parties whom the Company believed might be interested in
effecting a business combination with, or acquiring or participating in a
recapitalization of, the Company. On January 8, 1998, the Company announced
that it had previously engaged Goldman Sachs to explore various strategic
alternatives designed to enhance stockholder value, including a possible sale
or recapitalization of the Company.
3
<PAGE>
At a number of meetings held between January and late March of 1998, the
Board of Directors met and discussed the status of the solicitation process,
as well as various recapitalization alternatives that could be accomplished
either by the Company alone or involving a third party equity investor.
On March 6, 1998 and on March 20, 1998, Goldman Sachs and the Company's
management and legal advisors reviewed with the Board of Directors the results
of the process undertaken by Goldman Sachs to date. Although Goldman Sachs
received preliminary indications of interest in pursuing a transaction from
several parties, only one proposal for the acquisition of the Company was
ultimately received, at a price of $35 per Share, payable in the common stock
of the potential acquiror. The proposal was highly conditional, and was
subject to significant additional due diligence, as well as a number of other
uncertainties and issues. Although subsequent discussions continued between
the parties as to price, as well as such conditions, issues and uncertainties,
the parties were unable to reach agreement and the proposal was withdrawn and
discussions terminated. At the March 6 and 20 Board meetings, in addition to
the alternative of determining not to proceed with any transaction at the
current time, particular attention was focused on two types of transactions: a
recapitalization involving the payment of a special cash dividend to
stockholders of the Company of $12.50 per Share and an alternative transaction
(a "sponsored recapitalization") which would involve the purchase by one or
more third party financial investors of newly issued voting stock of the
Company, representing approximately 50% of the Company's equity after giving
effect to such investment. This sponsored recapitalizaton would permit the
Company to make cash payments to existing stockholders in the range of $30 per
Share, while allowing them to retain a substantial equity interest in the
Company. Following such discussion at the March 20, 1998 meeting, the Board of
Directors approved a recapitalization transaction which contemplated the
payment of a $12.50 dividend, but also provided that it could be abandoned by
the Board of Directors for any reason at any time, including if the Company
were to negotiate a sponsored recapitalization on acceptable terms.
Declaration and payment of the dividend was subject to a number of conditions,
including the satisfactory completion of a tender offer and consent
solicitation for the Company's 11 1/8% Series B Senior Subordinated Notes due
2005 (the "Old Notes") and the closing of a new bank credit facility.
On March 26, 1998, the Company commenced an offer to purchase and consent
solicitation with respect to all of the outstanding Old Notes in order to
provide the Company with additional financial and operational flexibility on a
going forward basis, including to facilitate the payment of the $12.50
dividend or the consummation of an alternative transaction, through
eliminating most of the covenants in the indenture governing the Old Notes.
Such offer to purchase and consent solicitation was consummated on April 23,
1998 and all but $532,000 principal amount of the Old Notes were purchased by
the Company.
Discussions continued through April between representatives of the Company
and third parties concerning a potential sponsored recapitalization. The
Company received a preliminary proposal from a financial investor relating to
a sponsored recapitalization which would have permitted the Company to make a
cash payment to stockholders in the range of $30 per Share. The cash payment
would have been financed by leveraging the Company with additional debt and
from the sale of new equity in the Company to the financial investor. The
proposal stated that the aggregate equity ownership of existing stockholders
following such transaction would be approximately 50% but was subject to a
number of adjustments which the Company believed could have had the effect of
reducing such ownership significantly. During the course of such discussions,
the Company also met with potential financing sources and began developing the
Recapitalization Plan.
At a meeting held on May 6, 1998, the Company's legal and financial advisors
and management discussed in detail with the Board of Directors the terms,
conditions, consequences and relative merits of the Recapitalization Plan, the
payment of a $12.50 dividend and the possibility of determining not to pursue
any transaction at this time, as well as the preliminary proposal relating to
a sponsored recapitalization and the status of discussions relating thereto.
The Board of Directors concluded that
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the sponsored recapitalization proposal that had been made by a third party,
which was preliminary and subject to a number of significant conditions, (i)
would have delivered total value of less than the Recapitalization Plan when
considering the proposed equity ownership adjustments discussed above and (ii)
was subject to negotiation of key economic and other material terms,
additional due diligence and other uncertainties and, in the opinion of the
Board of Directors, presented a substantially greater risk of nonconsummation
than the Recapitalization Plan.
At the May 6, 1998 meeting, the Board of Directors also discussed the terms
of the financing necessary to pursue the Recapitalization Plan, including the
terms of the Senior Preferred Stock and the Warrants. The Board of Directors
was advised that the Company expected to receive assurances with respect to
financing the Recapitalization Plan in the form of commitments from the Credit
Facility Banks, a highly confident letter with respect to the offering of the
Senior Subordinated Notes and a forward underwriting commitment with respect
to the offering of the Senior Preferred Stock Units, each from a certain
financial institution. See "--Certain Effects of the Plan; State Statutes" and
"THE OFFER--Section 8." Representatives of Goldman Sachs, present at the
meeting, discussed a number of aspects of the Recapitalization Plan,
including, among other things, various financial ratios giving effect to the
Recapitalization Plan and the Financing, the terms of the Senior Subordinated
Notes and the Senior Preferred Stock Units, variables that might affect
trading prices of the Shares following consummation of the Offer and the
Recapitalization Plan and data with respect to comparable public companies
suggesting a range of prices at which the Shares may possibly trade in the
near and longer term, based upon different sets of assumptions. In addition,
at such meeting, a representative of Valuation Research Corporation made a
presentation to the Board of Directors, which updated a presentation by
Valuation Research Corporation previously delivered to the Board of Directors
at the March 20 meeting (collectively, the "Valuation Research
Presentations"), supporting the conclusions that the Company, following
consummation of the Recapitalization Plan, will be able to pay its obligations
as they come due and that the Company's net assets are sufficiently in excess
of its capital so that the implementation of the Recapitalization Plan and the
purchase of the Shares pursuant to the Offer will not impair the Company's
capital. The Valuation Research Presentations support (based on the
assumptions stated therein) the conclusion that the value of the Company's
assets following the consummation of the Recapitalization Plan would exceed
its liabilities. The Valuation Research Presentations contained various
assumptions relating to valuation methodologies and contingent liabilities and
assume the accuracy of various projections concerning the Company's business
on a going forward basis. No assurances can be given that such assumptions and
projections will prove to be accurate. At the May 6 meeting, the terms of the
Rights Agreement, which had previously been discussed with the Board of
Directors, were also reviewed in light of the Recapitalization Plan. At the
conclusion of the May 6 meeting, the Board of Directors expressed general
support of the Recapitalization Plan without taking formal action with respect
thereto.
The Board of Directors held further meetings on May 7, May 11 and May 12 at
which, following additional discussion of the Recapitalization Plan and of the
status of the terms of the Financing (which continued to be negotiated during
such period) and the Rights Agreement, the Board of Directors unanimously
determined that the Recapitalization Plan and the Offer are fair to, and in
the best interests of, the Company and its stockholders and voted unanimously
to approve the Recapitalization Plan, the making of the Offer and the
transactions contemplated thereby. See "THE RECAPITALIZATION PLAN--Position of
the Board of Directors."
PURPOSE OF THE RECAPITALIZATION PLAN
The Company is making the Offer as part of its Recapitalization Plan. The
Recapitalization Plan has been developed by the Company to provide
stockholders the opportunity to realize value on a significant portion of
their investment in the Company in the near term, while retaining a continuing
equity interest in the Company subject to limited dilution resulting from
issuance of the Warrants. Although the Company will, on a going forward basis,
be more highly leveraged than has recently been the case, the Board of
Directors of the Company believes that the resulting level of indebtedness is
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acceptable and that the Company will have sufficient additional borrowing
capacity, including availability under the New Credit Facility, to execute its
business strategy. The Recapitalization Plan contemplates the implementation
of a number of actions to accomplish these objectives, including the making of
the Offer, which will allow stockholders to sell a significant portion of
their Shares at a premium over current market prices, the incurrence of the
Financing and the adoption of a shareholder rights agreement to deter coercive
and unfair takeover tactics by third parties that may jeopardize stockholder
realization of the benefits of the Recapitalization Plan. See "THE
RECAPITALIZATION PLAN--Purpose of the Recapitalization Plan." The
Recapitalization Plan may be amended, modified and supplemented in any and all
respects, by action of the Board of Directors at any time with respect to any
of the terms contained in the Recapitalization Plan including, without
limitation, to proceed with a sponsored recapitalization transaction or other
alternative transaction; provided that, if such amendment has an effect on the
Offer, the Recapitalization Plan can only be amended to the extent permitted
hereby. See "THE OFFER--Section 2."
The Offer. The purpose of the Offer is to provide stockholders with the
opportunity to sell a significant portion of their Shares to the Company at a
premium over current market prices while also permitting them the opportunity
to retain a continuing equity interest in the Company subject to limited
dilution resulting from issuance of the Warrants. The reduction in the number
of the Shares outstanding as a result of the consummation of the Offer will
proportionately increase the per Share interest represented by the remaining
Shares in the Company. Accordingly, stockholders should also be aware that,
after the consummation of the Offer, future increases and declines in earnings
will be greater on a per Share basis due to a smaller number of outstanding
Shares. See "THE RECAPITALIZATION PLAN--Certain Effects of the
Recapitalization Plan."
Stockholder Rights Agreement. The Recapitalization Plan and related
transactions are also designed to provide the Company with the stability
necessary to implement its long-term business plan while preserving its
flexibility to act in the interest of stockholders in response to any
potential acquisition proposals. Accordingly, as part of the Recapitalization
Plan, the Board of Directors, at its meeting on May 12, 1998, adopted a Rights
Agreement (the "Rights Agreement") between the Company and BankBoston, N.A.,
as Rights Agent, and declared a dividend distribution of one right (a "Right")
for each outstanding Share to stockholders of record at the close of business
on May 20, 1998 (the "Record Date"). The Rights Agreement is designed to deter
coercive and unfair takeover tactics employed by third party acquirors which
could otherwise deprive current stockholders of both the current and long-term
values which the Company seeks to achieve through the consummation of the
Recapitalization Plan. At the same time, the Rights Agreement is not intended
to prevent an acquisition of the Company nor does the Board of Directors
believe it will do so. The Company believes that the declaration of the Rights
dividend pursuant to the Rights Agreement should not affect any prospective
offeror willing to make an offer at a fair price to all stockholders or to
negotiate with the Board of Directors and will not interfere with a merger or
a business combination approved by the Board of Directors as fair to, and in
the best interests of, the Company and its stockholders. See "--Rights
Agreement."
CERTAIN EFFECTS OF THE RECAPITALIZATION PLAN
Implementation of the Recapitalization Plan will have a substantial impact
upon the Company, which may affect the value of an investment in the Shares
after the consummation of the Recapitalization Plan, including the effects
described below. The following discussion contains forward-looking statements
which involve risks and uncertainties. The Company's actual results may differ
materially from the results discussed in the forward-looking statements.
Factors that might cause such a difference include, but are not limited to,
the matters discussed below as well as the factors described in the Company's
Annual Report on Form 10-K for the fiscal year ended January 31, 1998.
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Amount of Leverage. As a result of the Recapitalization Plan, the Company
will be highly leveraged, with indebtedness that is very substantial in
relation to its stockholders' equity. After giving pro forma effect to the
Recapitalization, at January 31, 1998, the Company would have had total
indebtedness of $524.3 million and stockholders' equity would have been a
deficit of $279.3 million. The New Credit Facility and the Indenture (as
defined below) will permit the Company to incur or guarantee certain
additional indebtedness, subject to certain limitations. See "THE OFFER--
Section 8" and "--Section 10."
In addition, the substantial leverage will have a negative effect on the
Company's net income. For the fiscal year ended January 31, 1998, the
Company's net income on a pro forma basis as adjusted to give effect to the
Recapitalization Plan would have been $12.7 million, including non-recurring
gains, net of tax expense, of approximately $20.3 million, compared to the
historical net income of $40.7 million for such period. Pro forma net interest
expense would have been $49.2 million for the year ended January 31, 1998 as
compared to $17.3 million for the same period on an historical basis. Pro
forma net interest expense is based on Company estimates of interest rates at
the time that the Financing is expected to be consummated. See "THE OFFER--
Section 10."
The Company's high degree of leverage could have important consequences to
holders of Shares, including but not limited to the following: (i) the
Company's ability to obtain additional financing for working capital, capital
expenditures, acquisitions or general corporate purposes may be impaired in
the future; (ii) a substantial portion of the Company's cash flow from
operations must be dedicated to the payment of principal and interest on its
indebtedness, thereby reducing the funds available to the Company for its
operations and other purposes, including capital expenditures; (iii) the
Company may be substantially more leveraged than certain of its competitors,
which may place the Company at a competitive disadvantage; (iv) the Company
may be hindered in its ability to adjust rapidly to changing market
conditions; and (v) the Company's substantial degree of leverage could make it
more vulnerable in the event of a downturn in general economic conditions or
its business or changing market conditions. In addition, the Company's ability
to repay or to refinance its obligations with respect to its indebtedness will
depend on its future financial and operating performance, which, in turn, will
be subject to a number of factors, many of which are beyond the Company's
control, including, but not limited to, increased operating costs, product
pricing and competitive pressures, and delays in implementing strategic plans.
If the Company's cash flow and capital resources are insufficient to fund its
debt service obligations, the Company may be forced to reduce or delay capital
expenditures, sell assets, seek to obtain additional equity capital, or
refinance or restructure its debt. It is anticipated that no dividends will be
paid to stockholders in the foreseeable future. See "THE OFFER--Section 7."
These factors may have a material adverse effect on the marketability, price
and future value of the Shares.
As common equity securities of the Company, the Shares rank below all debt
claims and the liquidation preference of the Senior Preferred Stock in the
event of the insolvency or bankruptcy of the Company. Because of the
significantly increased leverage of the Company following the consummation of
the Recapitalization Plan and the issuance of the Senior Preferred Stock, such
senior claims will be substantially greater than those currently existing.
State Statutes. Under the Delaware General Corporation Law (the "DGCL"), a
corporation may not purchase its own shares of capital stock when the capital
of the corporation is impaired or when such purchase would cause any
impairment of its capital. The Board of Directors of the Company believes that
the purchase of Shares pursuant to this Offer is permissible under the DGCL,
on the basis of, among other things, the Valuation Research Presentations. See
"THE RECAPITALIZATION PLAN--Background of the Recapitalization Plan," "THE
OFFER--Section 6," "--Section 8" and "--Section 10."
If a court in a lawsuit by an unpaid creditor or representative of
creditors, such as a trustee in bankruptcy, were to find that, at the time the
Company purchased Shares pursuant to the Offer, (i) the Company incurred the
Financing or purchased the Shares with the intent of hindering, delaying or
defrauding current or future creditors or (ii)(a) the Company received less
than reasonably equivalent
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value or fair consideration in connection with the repurchase of Shares
pursuant to the Offer and (b) the Company (1) was insolvent or was rendered
insolvent by reason of the Recapitalization Plan and such repurchase,
including the incurrence of the indebtedness related thereto, (2) was engaged
in a business or transaction for which its assets constituted unreasonably
small capital, (3) intended to incur, or believed that it would incur
obligations beyond its ability to pay as such obligations matures (as the
foregoing terms are defined in or interpreted under the applicable fraudulent
conveyance statutes) or (4) was a defendant in an action for money damages, or
had a judgment for money damages docketed against it (if, in either case,
after final judgment the judgment is unsatisfied), such court could determine
to invalidate the Company's purchase of the Shares pursuant to the Offer and
require that such stockholders return the Purchase Price for their Shares to
the Company or that the Company establish a fund with such amounts for the
benefit of its creditors. The measure of insolvency for purposes of the
foregoing will vary depending upon the law of the jurisdiction which is being
applied. Generally, however, the Company would be considered insolvent if the
fair value of the Company's assets is less than the amount of the Company's
total debts and liabilities or if the Company has incurred debt beyond its
ability to repay such debt as it matures. The Board of Directors believes,
based in part on the Valuation Research Presentations, that the Company
following the consummation of the Recapitalization Plan will not be insolvent.
See "THE RECAPITALIZATION PLAN--Background of the Recapitalization Plan" and
"THE OFFER--Section 10."
Certain Business Risks. There are certain risks associated with the
Company's business, including, in particular, that a significant portion of
its sales and earnings is attributable to foreign operations, that currency
fluctuations could adversely affect the Company's operations and that the
market in which the Company operates is highly competitive. Following the
implementation of the Recapitalization Plan, the increased leverage on the
Company will render it more difficult for the Company to respond to these
risks. Moreover, the reduction in the number of the Shares outstanding will
proportionately increase the per Share interest represented by the remaining
Shares in the Company and accordingly, any future declines in earnings will be
greater on a per Share basis due to a smaller number of outstanding Shares.
Certain Anti-Takeover Effects. The Rights Agreement may have certain anti-
takeover effects. See "THE RECAPITALIZATION PLAN--Rights Agreement." In
addition, the Senior Subordinated Notes and the Senior Preferred Stock will
contain provisions that may have certain anti-takeover effects. See "THE
OFFER--Section 8." Moreover, the Apollo Parties currently beneficially own and
(assuming all outstanding Shares are tendered in the Offer) will, following
the Expiration Date, beneficially own, approximately 36% of the Shares and
have three representatives on the Board of Directors of the Company. Such
provisions, the Rights Agreement and the level of the Apollo Parties'
ownership may have the effect of discouraging certain persons from purchasing
Shares in circumstances that would provide stockholders an opportunity to sell
some or all of their Shares at a premium over prevailing market prices. In
addition, these factors would tend to insulate current management against the
possibility of removal in the event of a takeover bid. In its review and
approval of the Recapitalization Plan, the Board of Directors considered these
and other factors, including the Company's increased vulnerability to unfair
takeover tactics resulting from its reduced market capitalization following
the consummation of the Offer.
Notwithstanding the above, the Company believes that the consummation of the
Offer and implementation of the Recapitalization Plan will not restrict its
ability to negotiate and consummate any sale of all or part of the Company
which the Board of Directors considers to be fair and in the best interests of
stockholders. Additionally, the Company does not believe that the
Recapitalization Plan will deprive it of the flexibility to evaluate and
respond to any acquisition proposal.
Certain Effects of the Offer. The Offer provides stockholders with the
opportunity to sell a significant portion of their Shares to the Company at a
premium over current market prices while also permitting them the opportunity
to retain a continuing equity interest in the Company subject to limited
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dilution resulting from issuance of the Warrants. The reduction in the number
of the Shares outstanding as a result of the consummation of the Offer will
proportionately increase the per Share interest represented by the remaining
Shares in the Company. Accordingly, stockholders should also be aware that,
after the consummation of the Offer, future increases and declines in earnings
will be greater on a per Share basis due to a smaller number of outstanding
Shares. In addition, stockholders should note that the Purchase Price ($40 per
Share) represents a substantial premium over the closing sale price of the
Shares ($29 7/8 per Share) as reported on NASDAQ on May 14, 1998, the day
following announcement of the Recapitalization Plan and the Offer. The market
price of the Shares following consummation of the Recapitalization Plan and
the Offer is expected to be substantially lower than the Purchase Price and
the market price of the Shares on the date hereof. Accordingly, any Shares not
tendered pursuant to the Offer and any tendered Shares not accepted for
payment by reason of proration or otherwise, are expected to have a market
price following consummation of the Offer that is substantially lower than the
Purchase Price and the market price of the Shares on the date hereof. If the
market price for Shares following consummation of the Offer is below the
Purchase Price, as expected, stockholders can be assured of maximizing the
value of their holdings after giving effect to consummation of the Offer (the
sum of the market price of their Shares following the Offer plus the amount
received in the Offer) only by tendering 100% of their Shares.
The Company has no present intention of acquiring Shares in addition to the
Shares purchased pursuant to the Offer. However, the Company reserves the
right to purchase additional Shares on the open market in the future, through
public tenders or otherwise, in amounts and at times not now determinable and
at prices that could be higher or lower than the Purchase Price. Any possible
future purchases by the Company will depend on many factors, including the
market price of the Shares, the Company's business and financial position, the
results of the Offer, the terms of its outstanding debt and preferred stock,
and general economic and market conditions.
The Company presently intends to retain as treasury stock all Shares
purchased pursuant to the Offer. Authorized but unissued Shares would be
available for issuance by the Company upon authorization by its Board of
Directors, generally without the prior approval of the Company's stockholders,
except in connection with certain transactions for which stockholder approval
is required, under applicable general corporation law; retaining repurchased
Shares as treasury stock would render inapplicable any stockholder voting
requirements of the National Association of Securities Dealers, Inc. (the
"NASD") in connection with any future reissuances which would otherwise be
applicable. Except as described above and except for Shares reserved for
issuance upon any exercise of Warrants, the Company has no immediate plans to
reissue any Shares purchased in the Offer.
For a discussion of the effects of the Offer on the market for the Shares,
see "THE OFFER--Section 12."
Other Effects of the Recapitalization Plan. Following the Expiration Date,
the Company shall take such actions as are necessary and consistent with the
terms of the Company's 1995 Stock Option and Award Plan (as amended in 1996)
and the Company's 1996 Directors' Stock Plan (and any agreements relating to
such plans) (collectively, the "Company Option Plans"), to assure that
appropriate, equitable adjustments are provided for to fully take account of
the Offer. The Company will also take such actions as the Board of Directors
deems appropriate with respect to other stock-based benefit plans, awards and
bonuses.
The Company expects that each of the directors and officers of the Company
will tender all of his or her Shares in the Offer. In addition, the Apollo
Parties have agreed to tender all of their Shares in the Offer. If
substantially all of the Shares outstanding are tendered pursuant to the
Offer, the percentage of each stockholder's current ownership will not change
by reason of the Offer. It is expected therefore that any change resulting
from the Recapitalization Plan in the percentage ownership of any stockholder
will be minimal, subject to limited dilution resulting from issuance of the
Warrants. See "THE OFFER--Section 9."
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POSITION OF THE BOARD OF DIRECTORS
The Board of Directors, in reaching its determination that the
Recapitalization Plan and the Offer are fair to, and in the best interests of,
the Company and its stockholders and prior to voting unanimously to approve
the Recapitalization Plan, the making of the Offer and the transactions
contemplated thereby, considered, among other things, the purposes and
potential effects of the Recapitalization Plan, including the aggregate amount
payable to stockholders upon consummation of the Offer, the anticipated short-
term and long-term impact on the Company and, in particular, the ability of
the Company to finance its current and projected operating and capital
requirements and to implement its business plan going forward and the effect
of the Recapitalization Plan on the trading price of the Shares and in the
near and longer term. The Board of Directors also considered the available
alternatives to the Recapitalization Plan, including determining not to pursue
any transaction at this time. Particular attention was paid to the fact that
no acceptable alternative transaction was proposed as a result of the process
initiated by Goldman Sachs and publicly announced in January 1998 and that the
only proposals received were highly conditional and uncertain and, in the
Board of Directors' judgment, did not provide value as great as the
Recapitalization Plan. In reaching its conclusions, the Board of Directors
relied on the advice of Goldman Sachs with respect to certain financial
matters and the Valuation Research Presentations. However, in accordance with
the customary practice of Goldman Sachs in connection with transactions
similar to the Recapitalization Plan, Goldman Sachs did not provide an opinion
to the Company or the Board of Directors with respect to the fairness of the
Recapitalization Plan. The Board of Directors also took into account the
current availability of what it believed to be attractive terms for the
Financing in the capital markets at the present time. The Board of Directors
also considered that the Offer is being made available to all stockholders on
an equal basis and that stockholders will be able to retain their equity
interest in the Company subject to limited dilution resulting from issuance of
the Warrants. See "THE RECAPITALIZATION PLAN--Certain Effects of the
Recapitalization Plan."
STOCKHOLDERS SHOULD NOTE THAT THE PURCHASE PRICE ($40 PER SHARE) REPRESENTS
A SUBSTANTIAL PREMIUM OVER THE CLOSING SALE PRICE OF THE SHARES ($29 7/8 PER
SHARE) AS REPORTED ON NASDAQ ON MAY 14, 1998, THE DAY FOLLOWING ANNOUNCEMENT
OF THE RECAPITALIZATION PLAN AND THE OFFER. THE MARKET PRICE OF THE SHARES
FOLLOWING CONSUMMATION OF THE RECAPITALIZATION PLAN AND THE OFFER IS EXPECTED
TO BE SUBSTANTIALLY LOWER THAN THE PURCHASE PRICE AND THE MARKET PRICE OF THE
SHARES ON THE DATE HEREOF. ACCORDINGLY, ANY SHARES NOT TENDERED PURSUANT TO
THE OFFER AND ANY TENDERED SHARES NOT ACCEPTED FOR PAYMENT BY REASON OF
PRORATION OR OTHERWISE, ARE EXPECTED TO HAVE A MARKET PRICE FOLLOWING
CONSUMMATION OF THE OFFER THAT IS SUBSTANTIALLY LOWER THAN THE PURCHASE PRICE
AND THE MARKET PRICE OF THE SHARES ON THE DATE HEREOF. IF THE MARKET PRICE FOR
SHARES FOLLOWING CONSUMMATION OF THE OFFER IS BELOW THE PURCHASE PRICE, AS
EXPECTED, STOCKHOLDERS CAN BE ASSURED OF MAXIMIZING THE VALUE OF THEIR
HOLDINGS AFTER GIVING EFFECT TO CONSUMMATION OF THE OFFER (THE SUM OF THE
MARKET PRICE OF THEIR SHARES FOLLOWING THE OFFER PLUS THE AMOUNT RECEIVED IN
THE OFFER) ONLY BY TENDERING 100% OF THEIR SHARES.
RIGHTS AGREEMENT
On May 12, 1998, the Company declared a dividend distribution of one Right
for each outstanding Share to stockholders of record at the close of business
on the Record Date. Each Right entitles the registered holder to purchase from
the Company one one-thousandth of a share of Series A Junior Participating
Preferred Stock, par value $0.01 per share (the "Series B Preferred Stock"),
at a purchase price of $70, subject to adjustment. The description and terms
of the Rights are set forth in the Rights Agreement.
Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights Certificates will
be distributed. The Rights will separate from the
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Common Stock and a Distribution Date will occur upon the earlier of (i) ten
business days following a public announcement that a person has become an
Acquiring Person (the "Stock Acquisition Date"), or (ii) ten business days (or
such later date as the Board shall determine) following the commencement of a
tender offer or exchange offer that would result in a person or group becoming
an Acquiring Person. "Acquiring Person" means any person who or which,
together with all affiliates and associates of such person, shall be the
beneficial owner of fifteen percent (15%) or more of the Shares then
outstanding, but shall exclude (i) the Company, (ii) any subsidiary of the
Company, (iii) any employee benefit plan of the Company or of any subsidiary
of the Company, (iv) any person or entity organized, appointed or established
by the Company for or pursuant to the terms of any such plan, (v) any Exempted
Person (i.e., certain persons whose 15% ownership prior to the execution of
the Rights Agreement were "grandfathered"), (vi) any person, together with
such person's affiliates and associates, whose percentage beneficial ownership
is increased to more than fifteen percent (15%) of the outstanding Shares by
reason of any repurchase of Common Stock by the Company; provided that, in the
case of clause (vi), such person, together with such person's affiliates and
associates, (a) does not acquire any Common Stock after the public
announcement of the repurchase of Common Stock by the Company in connection
with the Offer, as the same may be amended or modified and (b) does not
acquire any shares of Common Stock following any repurchase of Common Stock by
the Company if such repurchase would result in such person, together with such
person's affiliates and
associates, owning in excess of fifteen percent (15%) of the outstanding
Common Stock.
Until the Distribution Date, (i) the Rights will be evidenced by the Common
Stock certificates and will be transferred with and only with such Common
Stock certificates, (ii) new Common Stock certificates issued after the Record
Date will contain a notation incorporating the Rights Agreement by reference
and (iii) the surrender for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Rights associated with
the Common Stock represented by such certificate. Pursuant to the Rights
Agreement, the Company reserves the right to require prior to the occurrence
of a Triggering Event (as defined below) that, upon any exercise of Rights, a
number of Rights be exercised so that only whole shares of Series B Preferred
Stock will be issued.
The Rights are not exercisable until the Distribution Date and will expire
at the 5:00 p.m. (New York City time) on May 31, 2000, unless earlier redeemed
or extended by the Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates will
be mailed to holders of record of the Common Stock as of the close of business
on the Distribution Date and, thereafter, the separate Rights Certificates
alone will represent the Rights. Except as otherwise determined by the Board,
only shares of Common Stock issued prior to the Distribution Date will be
issued with Rights.
In the event that a person becomes an Acquiring Person, each holder of a
Right will thereafter have the right to receive, upon exercise, Common Stock
(or, in certain circumstances, cash, property or other securities of the
Company) having a value equal to two times the exercise price of the Right.
Notwithstanding any of the foregoing, following the occurrence of the event
set forth in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by
any Acquiring Person will be null and void. However, Rights are not
exercisable following the occurrence of the event set forth above until such
time as the Rights are no longer redeemable by the Company as set forth below.
For example, at an exercise price of $70 per Right, each Right not owned by
an Acquiring Person (or by certain related parties) following an event set
forth in the preceding paragraph would entitle its holder to purchase $140
worth of Common Stock (or other consideration, as noted above) for $70.
Assuming that the Common Stock had a per share value of $35 at such time, the
holder of each valid Right would be entitled to purchase four shares of Common
Stock for $70.
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In the event that, at any time following the Stock Acquisition Date, (i) the
Company is acquired in a merger or other business combination transaction
(other than a merger which follows an offer described in the second
paragraph), or (ii) fifty percent (50%) or more of the Company's assets, cash
flow or earning power is sold or transferred, each holder of a Right (except
Rights which previously have been voided as set forth above) shall thereafter
have the right to receive, upon exercise, common stock of the acquiring
company having a value equal to two times the exercise price of the Right. The
events set forth in this paragraph and in the second paragraph are referred to
as the "Triggering Events."
At any time until ten business days following the Stock Acquisition Date,
the Company may redeem the Rights in whole, but not in part, at a price of
$.005 per Right (payable in cash, Common Stock or other consideration deemed
appropriate by the Board). Immediately upon the action of the Board ordering
redemption of the Rights, the Rights will terminate and the only right of the
holders of Rights will be to receive the $.005 redemption price.
Until a Right is exercised, the holder thereof, as such, will have no rights
as a stockholder of the Company, including, without limitation, the right to
vote or to receive dividends. While the distribution of the Rights will not be
taxable to stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights
become exercisable for Common Stock (or other consideration) of the Company or
for Common Stock of the Acquiring Person as set forth above.
Any of the provisions of the Rights Agreement may be amended by the Board
prior to the Distribution Date. After the Distribution Date, the provisions of
the Rights Agreement may be amended by the Board in order to cure any
ambiguity, to make changes which do not adversely affect the interests of
holders of Rights, or to shorten or lengthen any time period under the Rights
Agreement; provided, however, that no amendment to lengthen a time period
relating to when the Rights may be redeemed may be made at such time as the
Rights are not redeemable.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Company's Board of Directors. The Rights should
not interfere with any merger or other business combination approved by the
Board since the Rights may be redeemed by the Company at any time until ten
(10) business days following the Stock Acquisition Date.
THE OFFER
1. NUMBER OF SHARES; PRORATION. Upon the terms and the conditions of the
Offer (including, if the Offer is extended or amended, the terms and
conditions of any such extension or amendment), the Company will accept for
payment and pay for 12,000,000 Shares (approximately 59% of the total Shares
outstanding as of May 15, 1998) which are validly tendered (and not withdrawn
in accordance with Section 4) on or prior to the Expiration Date at a price of
$40.00 per Share. The term "Expiration Date" means 5:00 p.m., New York City
time, on Wednesday, June 17, 1998, unless and until the Company, in its sole
discretion, shall have extended the period during which the Offer is open, in
which event the term "Expiration Date" shall refer to the latest time and date
at which the Offer, as so extended by the Company, shall expire. For a
description of the Company's right to extend, delay, terminate or amend the
Offer, see Section 2. Subject to Section 3, in the event of an over-
subscription of the Offer as described below, Shares tendered prior to the
Expiration Date will be eligible for proration. The proration period also
expires on the Expiration Date.
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THE OFFER IS CONDITIONED UPON THE SATISFACTION OF THE MINIMUM CONDITION. THE
OFFER IS ALSO CONDITIONED ON, AMONG OTHER THINGS, THE COMPANY'S HAVING
OBTAINED SUFFICIENT FINANCING TO PURCHASE SHARES PURSUANT TO THE OFFER AND TO
PAY RELATED FEES AND EXPENSES. SEE SECTION 6.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if certificates are submitted for more Shares than are tendered,
certificates for such unpurchased or untendered Shares will be returned (or,
in the case of Shares tendered by book-entry transfer, such Shares will be
credited to an account maintained at one of the Book-Entry Transfer
Facilities), without expense to the tendering stockholder, as promptly as
practicable following the expiration or termination of the Offer.
Upon the terms and conditions of the Offer, if more than 12,000,000 Shares
have been properly tendered and not withdrawn prior to the Expiration Date,
the Company will purchase Shares properly tendered prior to the Expiration
Date, on a pro rata basis (with appropriate adjustments to avoid purchases of
fractional Shares). In the event that proration of tendered Shares is
required, because of the difficulty in determining the number of Shares
properly tendered (including Shares tendered by guaranteed delivery
procedures, as described in Section 3) and not withdrawn, the Company does not
expect that it will be able to announce the final proration factor or to
commence delivering to tendering stockholders payment for any Shares purchased
pursuant to the Offer until approximately ten (10) NASDAQ trading days after
the Expiration Date. The preliminary results of any proration will be publicly
announced as promptly as practicable after the Expiration Date. Stockholders
may obtain such preliminary information from the Information Agent or the
Dealer Managers and may be able to obtain such information from their brokers.
Payment for Shares accepted for payment pursuant to the Offer may be delayed
in the event of proration due to the difficulty of determining the number of
properly tendered Shares. See Section 3. THE PURCHASE OF SHARES PURSUANT TO
THE OFFER COULD BE DELAYED IN ORDER TO COMPLETE THE FINANCING DESCRIBED IN
SECTION 8. THE COMPANY EXPRESSLY RESERVES THE RIGHT TO EXTEND THE PERIOD OF
TIME DURING WHICH THE OFFER IS OPEN, IF NECESSARY, TO OBTAIN SUCH FINANCING.
This Offer to Purchase and the related Letter of Transmittal will be mailed
to record holders of Shares and will be furnished to brokers, banks and
similar persons whose names, or the names of whose nominees, appear on the
Company's stockholder list or, if applicable, who are listed as participants
in a clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares.
As of May 15, 1998, the Company had issued and outstanding 20,420,902
Shares, and an additional 2,446,582 Shares were issuable upon exercise of
Options outstanding on such date; Options to acquire 1,027,787 Shares were
exercisable at prices less than or equal to $29 7/8, the closing sales price
per Share on May 14, 1998. As of May 14, 1998, there were approximately 73
stockholders of record. Because of the large number of Shares held in the
names of brokers and nominees, the Company is unable to estimate the number of
beneficial owners of Shares. For further information concerning the ownership
of Shares by certain persons including directors and executive officers of the
Company who have indicated that they intend to tender Shares owned by them
pursuant to the Offer, see Section 9.
2. EXTENSION OF OFFER; TERMINATION; AMENDMENT.
The Company expressly reserves the right, in its sole discretion, at any
time or from time to time, and regardless of whether or not any of the events
set forth in Section 6 shall have occurred or shall be deemed by the Company
to have occurred, to extend the period of time during which the Offer is open
for any reason and thereby delay acceptance for payment of, and payment for,
any Shares by giving oral or written notice of such extension to the
Depositary. During any such extension, all Shares previously tendered and not
properly withdrawn will remain subject to the Offer, subject to the rights of
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a tendering stockholder to withdraw such stockholder's Shares. There can be no
assurance that the Company will exercise its right to extend the Offer.
The Company also expressly reserves the right, subject to applicable laws
(including applicable regulations of the Securities and Exchange Commission
(the "Commission")), in its sole discretion, at any time or from time to time,
to (i) delay acceptance for payment of or, regardless of whether such Shares
were theretofore accepted for payment, payment for any Shares in order to
comply, in while or in part, with any applicable law, government regulation or
any other condition contained in Sections 6 and 13, (ii) terminate the Offer
(whether or not any Shares have theretofore been accepted for payment) if any
of the conditions referred to in Section 6 have not been satisfied or upon the
occurrence of any of the events specified in Section 6 and (iii) subject to
certain exceptions set forth below, waive any condition or otherwise amend the
Offer in any respect; in each case by giving oral or written notice of such
delay, termination, waiver or amendment to the Depositary and by causing the
Depositary to provide as soon as practicable thereafter a copy of such notice
to all holders of Shares whose Shares have not been taken up prior to the
extension. The Company's reservation of the right to delay payment for Shares
which it has accepted for payment is limited by Rule 13e-4(f)(5) promulgated
under the Exchange Act, which requires that the Company must pay the
consideration offered or return the Shares tendered promptly after termination
or withdrawal of a tender offer. The Company acknowledges that the Commission
believes that (a) if the Company is delayed in accepting the Shares it must
either extend the Offer or terminate the Offer and promptly return the Shares
and (b) circumstances in which a delay in payment is permitted are limited and
do not include unsatisfied conditions of the Offer, except with respect to the
obtaining of certain required regulatory approvals.
Subject to compliance with applicable law, the Company further reserves the
right, in its sole discretion, and regardless of whether any of the events set
forth in Section 6 shall have occurred or shall be deemed by the Company to
have occurred, to amend the Offer in any respect (including, without
limitation, by decreasing or increasing the consideration offered in the Offer
to holders of Shares or by decreasing or increasing the number of Shares being
sought in the Offer).
If the Company makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, the Company will extend the Offer to the extent required by Rules 13e-
4(d)(2) and 13e-4(e)(2) promulgated under the Exchange Act. These rules
require that the minimum period during which an offer must remain open
following material changes in the terms of the Offer or information concerning
the Offer (other than a change in price or a change in percentage of
securities sought) will depend on the facts and circumstances, including the
relative materiality of such terms or information. With respect to a change in
price or a change in the percentage of securities sought (other than an
increase in the number of Shares sought of not more than 2%), a minimum ten
(10) business day period from the day of such change is generally required to
allow for adequate dissemination to stockholders. Accordingly, if prior to the
Expiration Date, (i) the Company increases or decreases the price to be paid
for the Shares, the number of Shares being sought in the Offer and, in the
event of an increase in the number of Shares being sought, such increase
exceeds 2% of the outstanding Shares, and (ii) the Offer is scheduled to
expire at any time earlier than the period ending on the tenth business day
from, and including, the date that such notice of an increase or decrease is
first published, sent or given to stockholders, the Offer will be extended, at
least until the expiration of such ten (10) business day period. Any extension
of the Offer will not constitute a waiver by the Company of any of the
conditions set forth in Section 6. For purposes of the Offer, a "business day"
means any day other than a Saturday, Sunday or federal holiday and consists of
the times period from 12:01 a.m. through midnight, New York City time. There
can be no assurance, however, that the Company will exercise its right to
extend the Offer.
Any such extension, delay, termination, waiver or amendment will be followed
as promptly as practicable by public announcement thereof, and such
announcement in the case of an extension will
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be made no later than 9:00 a.m., New York City time, on the next business day
after the last previously scheduled or announced Expiration Date. Any public
announcement made pursuant to the Offer will be disseminated promptly to
stockholders in a manner reasonably designated to inform stockholders of such
change. Without limiting the manner in which the Company may choose to make a
public announcement, except as required by applicable law, the Company shall
have no obligation to publish, advertise or otherwise communicate any such
public announcement other than by making a release to the Dow Jones News
Service or as otherwise may be required by law.
3. PROCEDURES FOR TENDERING SHARES.
Valid Tender of Shares. Except as set forth below, in order for Shares to be
validly tendered pursuant to the Offer, the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, together with any
required signature guarantees, or an Agent's Message (as defined below) in
connection with a book-entry delivery of Shares as described below, and any
other documents required by the Letter of Transmittal, must be received by the
Depositary at one of its addresses set forth on the back cover of this Offer
to the Company. In addition, either (i) certificates evidencing tendered
Shares must be received by the Depositary at any such address or such Shares
must be tendered pursuant to the procedure for book-entry transfer (and a
confirmation of receipt of such delivery must be received by the Depositary),
in each case, on or prior to the Expiration Date or (ii) the guaranteed
delivery procedures set forth below must be complied with. The term "Agent's
Message" means a message transmitted by The Depository Trust Company or the
Philadelphia Depository Trust Company (or any other "qualified" registered
securities depository to allow for the book entry movement of tendered Shares
between depository participants and the Depositary) (each, a "Book-Entry
Transfer Facility") to and received by the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility
has received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares which are the subject of such Book-
Entry Confirmation, that such participant has received and agrees to be bound
by the terms of the Letter of Transmittal and that the Company may enforce
such agreement against such participant.
Book-Entry Delivery. The Depositary will establish an account with respect
to the Shares at the Book-Entry Transfer Facilities within two business days
after the date of this Offer to Purchase. Any financial institution that is a
participant in the system of any Book-Entry Transfer Facility may make book-
entry delivery of the Shares by causing a Book-Entry Transfer Facility to
transfer such Shares into the Depositary's account in accordance with that
Book-Entry Transfer Facility's procedures for such transfer. Although delivery
of Shares may be effected through a book-entry transfer at a Book-Entry
Transfer Facility, the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, together with any required signature
guarantees, or an Agent's Message in connection with a book-entry transfer,
and any other required documents, must, in any case, be received by the
Depositary at its address set forth on the back cover of this Offer to
Purchase on or prior to the Expiration Date, or the guaranteed delivery
procedure described below must be followed.
DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH
SUCH BOOK-ENTRY FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
Signature Guarantees. Except as otherwise provided below, signatures on
Letters of Transmittal must be guaranteed by a member firm of a registered
national securities exchange, a member of the NASD or a commercial bank or
trust company having an office or correspondent in the United States (each of
the foregoing constituting an "Eligible Institution"). Signatures on Letters
of Transmittal need not be guaranteed if (i) the Letter of Transmittal is
signed by the registered holder of the Shares tendered and such holder has not
completed either the box entitled "Special Delivery Instructions" or
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the box entitled "Special Payment Instructions" on the Letter of Transmittal,
or (ii) such Shares are tendered for the account of an Eligible Institution.
See Instructions 1 and 5 of the Letter of Transmittal.
If the certificates representing Shares are registered in the name of a
person other than the signer of the Letter of Transmittal, or if payment is to
be made, or certificates representing Shares not accepted for payment or not
tendered are to be returned to a person other than the registered holder, then
the certificates must be endorsed or accompanied by appropriate stock powers,
in either case signed exactly as the name(s) of the registered holder(s)
appear(s) on the certificates with the signatures on the certificates or stock
powers guaranteed as described above. See Instructions 1 and 5 of the Letter
of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share certificates are not immediately
available, or such stockholder cannot deliver the certificates and all other
required documents to reach the Depositary on or prior to the Expiration Date,
or such stockholder cannot complete the procedure for book-entry transfer on a
timely basis, such Shares may nevertheless be tendered if the following
guaranteed delivery procedures are satisfied:
(a) such tender is made by or through an Eligible Institution;
(b) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form provided by the Company, is received by the
Depositary as provided below on or prior to the Expiration Date; and
(c) the certificates representing all tendered Shares, in proper form for
transfer, in each case together with the Letter of Transmittal (or a
facsimile thereof) properly completed and duly executed, with any required
signature guarantees (or, in the case of a book-entry transfer, an Agent's
Message) and any other documents required by the Letter of Transmittal are
received by the Depositary within three NASDAQ trading days after the date
of execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
telegram, telex, facsimile transmission or mail to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in such
Notice of Guaranteed Delivery.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of
certificates for such Shares (or a timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at a Book-Entry Transfer
Facility as described above), a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile thereof) and any other documents
required by the Letter of Transmittal. THE METHOD OF DELIVERY OF CERTIFICATES
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY
TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING SHAREHOLDER AND
THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
DEPOSITARY. IF THE DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO INSURE TIMELY DELIVERY.
Backup Federal Income Tax Withholding. To prevent backup federal income tax
withholding on payments made to stockholders with respect to the purchase
price of Shares purchased pursuant to the Offer, each such stockholder must
provide the Depositary with such stockholder's correct taxpayer identification
number ("TIN") and certify that such stockholder is not subject to backup
United States federal income tax withholding by completing the substitute IRS
Form W-9 included in the Letter of Transmittal. Certain stockholders
(including all corporations and certain foreign individuals) are exempt from
backup withholding. In order for a foreign stockholder to qualify as an exempt
recipient, that
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stockholder must submit an IRS Form W-8 signed under penalties of perjury,
attesting to that person's exempt status. See Instruction 8 of the Letter of
Transmittal.
TO PREVENT BACKUP FEDERAL INCOME TAX WITHHOLDING EQUAL TO 31% OF THE GROSS
PAYMENTS MADE TO STOCKHOLDERS FOR SHARES PURCHASED PURSUANT TO THE OFFER, EACH
STOCKHOLDER WHO DOES NOT OTHERWISE ESTABLISH AN EXEMPTION FROM SUCH
WITHHOLDING MUST PROVIDE THE DEPOSITARY WITH THE STOCKHOLDER'S CORRECT
TAXPAYER IDENTIFICATION NUMBER AND PROVIDE CERTAIN OTHER INFORMATION BY
COMPLETING THE SUBSTITUTE IRS FORM W-9 INCLUDED WITH THE LETTER OF
TRANSMITTAL.
For a discussion of certain federal income tax consequences to tendering
stockholders, see Section 14.
Withholding For Foreign Stockholders. Even if a foreign stockholder has
provided the required certification to avoid backup withholding, the
Depositary will withhold federal income taxes equal to 30% of the gross
payments attributable to the Company's deemed purchase of the Shares payable
to a foreign stockholder or its agent unless the Depositary determines that a
reduced rate of withholding is available pursuant to a tax treaty or that an
exemption from withholding is applicable because such gross proceeds are
effectively connected with the conduct of a trade or business by such
stockholder within the United States. For this purpose, a foreign stockholder
is any stockholder that is not a "United States person" as defined in Section
14. A foreign stockholder may be eligible to obtain a refund of all or a
portion of any tax withheld (i) to the extent such stockholder's shares are
deemed to be sold to the Company if such stockholder meets the "complete
termination," "substantially disproportionate" or "not essentially equivalent
to a dividend" test described in Section 14 or (ii) to the extent such
stockholder is otherwise able to establish that no tax or a reduced amount of
tax is due. Backup withholding will generally not apply to amounts subject to
the 30% or a treaty-reduced rate of withholding. Foreign stockholders are
urged to consult their tax advisors regarding the application of federal
income tax withholding, including eligibility for a withholding tax reduction
or exemption, and the refund procedure. See Instruction 9 of the Letter of
Transmittal.
Determination of Validity. All questions as to validity, form, eligibility,
(including time of receipt) and acceptance for payment of any tender of Shares
will be determined by the Company, in its sole discretion, which determination
shall be final and binding. The Company reserves the absolute right to reject
any and all tenders of Shares determined by it not to be in proper form or the
acceptance for payment of which may, in the opinion of Company's counsel, be
unlawful. The Company reserves the absolute right to waive any defect or
irregularity in any tender of Shares of any particular stockholder. The
Company's interpretation of the terms and conditions of the Offer (including
the Letter of Transmittal and the Instructions thereto) will be final and
binding. None of the Company, any of its affiliates or assigns, the Dealer
Managers, the Depositary, the Information Agent or any other person will be
under any duty to give notification of any defects or irregularities in
tenders or incur any liability for failure to give any such notification.
Tendering Stockholder's Representation and Warranty; Company's Acceptance
Constitutes an Agreement. A tender of Shares pursuant to any of the procedures
described above will constitute the tendering stockholder's representation and
warranty to the Company that (a) such stockholder has a net long position in
the Shares being tendered within the meaning of Rule 14e-4 promulgated by the
Commission under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and (b) the tender of such Shares complies with Rule 14e-4. It
is a violation of Rule 14e-4 for a person, directly or indirectly, to tender
Shares for such person's own account unless, at the time of tender and at the
end of the proration period or period during which Shares are accepted by lot
(including any extensions thereof), the person so tendering (i) has a net long
position equal to or greater than the amount of (x) Shares tendered or (y)
other securities convertible into or exchangeable or exercisable for the
Shares tendered and will acquire such Shares for tender by conversion,
exchange or exercise and (ii) will deliver or cause to be delivered such
Shares in accordance with the terms of the Offer. Rule 14e-4
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provides a similar restriction applicable to the tender or guarantee of a
tender on behalf of another person. The Company's acceptance for payment of
Shares tendered pursuant to the Offer will constitute a binding agreement
between the tendering stockholder and the Company upon the terms and
conditions of the Offer.
4. WITHDRAWAL RIGHTS; STATUTORY RIGHTS.
Tenders of Shares pursuant to the Offer may be withdrawn at any time on or
prior to the Expiration Date (including such later date as may apply in case
the Offer is extended). Thereafter, such tenders are irrevocable, except that
they may be withdrawn after July 15, 1998 unless theretofore accepted for
payment as provided in this Offer to Purchase. If the Company extends the
Offer, is delayed in accepting for payment or paying for Shares or is unable
to accept for payment or pay for Shares pursuant to the Offer for any reason,
then, without prejudice to the Company's rights under the Offer, the
Depositary may, on behalf of the Company, retain all Shares tendered, and such
Shares may not be withdrawn except to the extent that tendering stockholders
are entitled to withdrawal rights as set forth in this Section 4.
For a withdrawal to be effective, a written, telegraphic, telex or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase.
Any such notice of withdrawal must specify the name of the person who tendered
the Shares to be withdrawn and the name of the registered holder, if different
from that of the person who tendered such Shares. If certificates evidencing
Shares to be withdrawn have been delivered or otherwise identified to the
Depositary, then prior to the physical release of such certificates, the
serial numbers shown on such certificates must be submitted to the Depositary,
and the signatures on the notice of withdrawal must be guaranteed by an
Eligible Institution unless such Shares have been tendered for the account of
an Eligible Institution. If Shares have been tendered pursuant to the
procedure for book-entry transfer set forth in Section 3, the notice of
withdrawal must specify the name and number of the account at the Book-Entry
Transfer Facility to be credited with the withdrawn Shares.
Withdrawals may not be rescinded, and Shares withdrawn will thereafter be
deemed not validly tendered for purposes of the Offer. However, withdrawn
Shares may be retendered at any time prior to the Expiration Date by again
following one of the procedures described in Section 3.
All questions as to the form and validity (including time of receipt) of any
notice of withdrawal will be determined by the Company, in its sole
discretion, whose determination shall be final and binding. None of the
Company, any of its affiliates or assigns, the Dealer Managers, the
Depositary, the Information Agent or any other person will be under any duty
to give notification of any defects or irregularities in any notice of
withdrawal or incur any liability for failure to give such notification.
5. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Company will accept for payment and will pay for all Shares
validly tendered and not properly withdrawn on or prior to the Expiration Date
as soon as practicable after the later to occur of: (i) the Expiration Date
and (ii) the date of satisfaction or waiver of the conditions set forth in
Section 6. In addition, the Company reserves the right, in its sole discretion
and subject to applicable law, to delay acceptance for payment of or payment
for Shares in order to comply, in whole or in part, with any applicable law,
government regulation or any other condition contained herein. See Section 6.
For purposes of the Offer, the Company shall be deemed to have accepted for
payment and thereby purchased tendered Shares of the Company if, as and when
the Company gives oral or written notice to the Depositary of its acceptance
of such Shares for payment pursuant to the Offer. Payment
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for Shares of the Company accepted for payment pursuant to the Offer will be
made by deposit by the Company of the purchase price to be paid by it with the
Depositary, which will act as agent for the tendering stockholders for the
purpose of receiving payments from the Company and transmitting such payments
to tendering stockholders. Under no circumstances will interest be paid by the
Company on the consideration paid for the Shares pursuant to the Offer,
regardless of any delay in making such payment. The Company will pay all stock
transfer taxes, if any, payable on the transfer of Shares purchased by it
pursuant to the Offer, except as set forth in Instruction 6 of the Letter of
Transmittal.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of a
certificate(s) for such Shares or a timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at a Book-Entry Transfer
Facility, a Letter of Transmittal (or a facsimile thereof), properly completed
and duly executed, with any required signature guarantees or Agent's Message
and any other documents required by the Letter of Transmittal. For a
description of the procedure for tendering Shares of the Company pursuant to
the Offer, see Section 3.
In the event of proration, the Company will determine the proration factor
and pay for those tendered Shares accepted for payment as soon as practicable
after the Expiration Date; however, the Company does not expect to be able to
announce the final results of any proration and commence delivering to
tendering stockholders payment for Shares purchased until approximately ten
(10) NASDAQ trading days after the Expiration Date. If any tendered Shares are
not accepted for payment for any reason or if certificate(s) are submitted for
more Shares than are tendered, certificates evidencing unpurchased or
untendered Shares will be returned without expense to the tendering
stockholder (or, in the case of Shares tendered by book-entry transfer into
the Depositary's account at a Book-Entry Transfer Facility pursuant to the
procedures set forth in Section 3, such Shares will be credited to an account
maintained at such Book-Entry Transfer Facility) as promptly as practicable
following the expiration, termination or withdrawal of the Offer.
If the Company increases the consideration offered to stockholders pursuant
to the Offer, such increased consideration will be paid to all stockholders
whose Shares are purchased pursuant to the Offer, whether or not such shares
were tendered or accepted for payment prior to such increase in consideration.
During the pendency of the Offer, the Company will not purchase any Shares
whether in the open market or otherwise, except pursuant to the Offer.
The Company will pay all stock transfer taxes, if any, payable on the
transfer to it of Shares purchased pursuant to the Offer. If, however, payment
of the Purchase Price is to be made to, or (in the circumstances permitted by
the Offer) if unpurchased Shares are to be registered in the name of, any
person other than the registered holder, or if tendered certificates are
registered in the name of any person other than the person signing the Letter
of Transmittal, the amount of all stock transfer taxes, if any (whether
imposed on the registered holder or such other person), payable on account of
the transfer to such person will be deducted from the Purchase Price unless
satisfactory evidence on the payment of the stock transfer taxes, or exemption
therefrom, is submitted. See Instruction 6 of the Letter of Transmittal.
6. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provisions of the Offer, the Company shall not be
required to accept for payment, purchase or pay for any Shares tendered, and
may terminate or amend the Offer or may postpone the acceptance for payment
of, or the purchase of and the payment for Shares tendered, subject to Rule
13e-4(i) under the Exchange Act, if (i) the Minimum Condition shall not have
been satisfied; or (ii) at any time on or after May 13, 1998 and prior to the
time of payment for any such Shares (whether any Shares have theretofore been
accepted for payment, purchased or paid for
19
<PAGE>
pursuant to the Offer) any of the following events shall have occurred (or
shall have been determined by the Company to have occurred or the Company
shall have learned of the occurrence thereof) that, in the Company's sole
judgment in any such case and regardless of the circumstances giving rise
thereto (including any action or omission to act by the Company), makes it
inadvisable to proceed with the Offer or with such acceptance for payment or
payment:
(a) if the Company is unable to obtain the proceeds of the Financing on
terms and conditions satisfactory to the Company;
(b) there shall have been threatened, instituted or pending any
litigation or other proceeding by any government or governmental,
regulatory or administrative agency, authority or tribunal or any other
person, domestic or foreign, before any court, authority, agency,
regulatory or administrative authority or tribunal, domestic or foreign,
that directly or indirectly (i) challenges the making of the Offer, the
acquisition of some or all of the Shares pursuant to the Offer or otherwise
relates in any manner to the Offer, or (ii) in the sole judgment of the
Company, could materially and adversely affect the business, condition
(financial or other), stock ownership, income, operations or prospects of
the Company and its subsidiaries, taken as a whole, or otherwise materially
impair in any way the contemplated future condition of the business of the
Company or any of its subsidiaries or materially impair the contemplated
benefits of the Offer to the Company;
(c) there shall have been any litigation or other proceeding threatened,
pending or taken that seeks to prevent consummation of the Recapitalization
Plan or any constituent element thereof (including the Offer) or to obtain
damages or any other relief as a result of such consummation or in
connection with the Recapitalization Plan or the process leading thereto,
or approval withheld, or any statute, rule, regulation, judgment, order or
injunction threatened, proposed, sought, promulgated, enacted, entered,
amended, enforced or deemed to be applicable to the Offer or the Company or
any of its subsidiaries, by any court, authority, agency, regulatory or
administrative authority or tribunal, domestic or foreign that, in the sole
judgment of the Board of Directors of the Company, would or might directly
or indirectly (i) make the acceptance for payment of, or payment for, some
or all of the Shares illegal or otherwise restrict or prohibit consummation
of the Offer; (ii) delay or restrict the ability of the Company, or render
the Company unable, to accept for payment or pay for some or all of the
Shares; (iii) materially impair the contemplated benefits of the Offer to
the Company; or (iv) materially and adversely affect the business,
condition (financial or other), stock ownership, income, operations or
prospects of the Company and its subsidiaries, taken as a whole, or
otherwise materially impair in any way the contemplated future conduct of
the business of the Company or any of its subsidiaries;
(d) there shall have occurred any of the following events if any such
event would, in the sole judgment of the Board of Directors, make it
inadvisable to proceed with the Recapitalization Plan or the Offer: (i) any
event that has resulted, or that the Board of Directors of the Company
determines is reasonably likely to result, in an actual or threatened
material change in the business, condition (financial or other), stock
ownership, income, operations or prospects of the Company, (ii) any general
suspension of trading in, or limitation on prices for, securities on any
national securities exchange or in the over-the-counter market; (iii) the
declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States (whether or not mandatory); (iv) the
commencement of a war, armed hostilities or other international or national
calamity directly or indirectly involving the United States; (v) any
limitation (whether or not mandatory) by any governmental, regulatory or
administrative agency or authority on, or any other event that, in the
Company's sole judgment, has the reasonable likelihood of affecting, the
extension of credit by banks or other lending institutions in the United
States; (vi) any significant adverse change in the market price of the
Shares or any change in the general political, market, economic or
financial conditions in the United States or abroad that could, in the sole
judgment of the Company, have a material adverse effect on the Company's
business, operations or prospects or the trading in the Shares; (vii) in
the case of any of the foregoing existing at the time of the
20
<PAGE>
commencement of the Offer, a material acceleration or worsening thereof; or
(viii) any decline in either the Dow Jones Industrial Average or the
Standard and Poor's Index of 500 Industrial Companies by an amount in
excess of ten percent (10%) measured from the close of business on May 12,
1998;
(e) a tender or exchange offer with respect to some or all of the Shares
(other than the Offer), or a merger or acquisition proposal for the
Company, shall have been proposed, announced or made by another person or
shall have been publicly disclosed, or the Company shall have learned that
(i) any person or "group" (within the meaning of Section 13(d)(3) of the
Exchange Act) shall have acquired or proposed to acquire beneficial
ownership of more than five percent (5%) of the outstanding Shares, or any
new group shall have been formed that beneficially owns more than five
percent (5%) of the outstanding Shares; or
(f) (1) the Board of Directors of the Company shall have not received a
letter from Valuation Research Corporation (or from a firm similar to
Valuation Research Corporation that is satisfactory to the Company) in form
and substance satisfactory to it, dated on or about the Expiration Date to
the effect that (i) under Delaware law the amount of the Company's surplus
immediately prior to the payment by the Company under the Offer exceeds the
value of the cash that is to be distributed to stockholders of the Company
pursuant to the Offer; (ii) the present fair saleable value of the assets
of the Company is greater than the amount required to pay its probable
liabilities on its debts (including, without limitation, the Financing,
stated liabilities, and identified contingent liabilities) as such debts
become absolute and matured; (iii) the Company is and will be able to pay
its debts (including, without limitation, the Financing, stated
liabilities, and identified contingent liabilities) as such debts mature
and (iv) the Company will not have unreasonably small capital for the
business in which the Company is engaged, as management has indicated it is
now conducted and it is proposed to be conducted following the consummation
of the Recapitalization Plan and the Offer or (2) the Board of Directors of
the Company shall have determined that any of the conditions set forth in
clauses (i) through (iv) above is not satisfied.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances (including any action
or inaction by the Company) giving rise to any such condition, and may be
waived by the Company, in whole or in part, at any time and from time to time
in its sole discretion. The Company's failure at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right and each
such right shall be deemed an ongoing right which may be asserted at any time
and from time to time. Any determination by the Company concerning the events
described above will be final and binding.
A public announcement may be made of a material change in, or waiver of,
such conditions and the Offer may, in certain circumstances, be extended in
connection with any such change or waiver.
21
<PAGE>
7. PRICE RANGE OF SHARES; DIVIDENDS.
The Common Stock is presently traded on NASDAQ under the symbol "SAMC". The
table below sets forth the high and low sale prices for the Common Stock for
fiscal years 1997 and 1998 and through May 14, 1998 (as reported on NASDAQ).
On May 12, 1998, the last full trading date prior to the Company's
announcement of the Recapitalization Plan, the closing per Share sales price
as reported on NASDAQ was $28 15/16. On May 18, 1998, the second to last full
trading date prior to the commencement of the Offer, the closing per Share
sales price as reported on NASDAQ was $28 5/8.
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
FISCAL 1997
Fiscal quarter ended:
April 30, 1996............................................ 19 1/4 9 5/8
July 31, 1996............................................. 24 1/2 17 3/8
October 31, 1996.......................................... 40 3/4 18
January 31, 1997.......................................... 45 3/4 33 1/2
FISCAL 1998
Fiscal quarter ended:
April 30, 1997............................................ 50 7/8 37 1/4
July 31, 1997............................................. 51 1/4 40 3/4
October 31, 1997.......................................... 53 1/8 35 7/8
January 31, 1998.......................................... 46 3/4 25
FISCAL 1999
Fiscal quarter ended April 30, 1998....................... 37 7/8 26 9/16
May 1, 1998 through May 14, 1998.......................... 29 7/8 27
</TABLE>
As of May 14, 1998, the number of holders of record of the Common Stock was
73. Because of the large number of Shares held in the names of brokers and
nominees, the Company is unable to estimate the number of beneficial owners of
Shares. For further information concerning the ownership of Shares by certain
persons, including directors and executive officers of the Company who have
indicated that they intend to tender Shares owned by them pursuant to the
Offer, see Section 9.
The Company has not paid any dividends to its stockholders within the past
two fiscal years. Future dividend policy will depend upon the earnings and
financial condition of the Company, the Company's needs for funds and other
factors. The payment of dividends is restricted by the terms of the Financing.
See Section 8.
8. SOURCE AND AMOUNT OF FUNDS. The consummation of the Offer is expressly
conditioned upon, among other things, the Company having obtained the proceeds
of the Financing on terms and conditions satisfactory to the Company. See
Section 6. Assuming the Company purchases 12,000,000 Shares pursuant to the
Offer at the Purchase Price of $40.00, the funds required to consummate the
Recapitalization Plan, including the refinancing of certain existing
indebtedness and the payment of all related fees and expenses of the Offer,
will be approximately $693 million. Funds for the purchase of Shares pursuant
to the Offer, for the refinancing of certain existing indebtedness and for the
payment of related fees and expenses are expected to be obtained from (a) a
private placement of $350 million aggregate principal amount of Senior
Subordinated Notes and a private placement of $175 of the Senior Preferred
Stock Units, aggregating to $525 million, in each case to the Private
Placement Participants and (b) a new $300 million credit facility from the
Credit Facility Banks. See Section 6. The amount that will be required to be
borrowed to finance the Recapitalization Plan will be reduced to the extent
that Options are exercised in connection with the Offer. Options to purchase
an aggregate of 1,027,787 Shares at a weighted average exercise price of
approximately $16.47 per Share are currently exercisable at prices less than
or equal to $29 7/8, the closing sales price per Share on May 14, 1998.
The Company anticipates that the debt incurred in connection with the
purchase of Shares pursuant to the Offer will be repaid from general corporate
funds or other sources, which may include
22
<PAGE>
the proceeds of short-term or long-term borrowings, including the sale or debt
securities or the proceeds from the sale of equity securities or of assets.
Rule 144A Financings.
The private placement of $525 million of Senior Subordinated Notes and
Senior Preferred Stock Units by the Company is expected to be consummated
immediately prior to the Expiration Date. The Company has received a highly
confident letter with respect to the offering of the Senior Subordinated Notes
and a forward underwriting commitment with respect to the offering of the
Senior Preferred Stock Units, each from a certain financial institution, each
of which is subject to the satisfaction of various conditions, including
negotiation and execution of definitive documentation satisfactory to such
party (including the legal counsel thereof) and to the Company as well as
satisfactory due diligence.
The Senior Subordinated Notes and the Senior Preferred Stock Units will be
sold in private placement transactions that anticipate resales to "qualified
institutional buyers" in compliance with Rule 144A under the Securities Act
and outside the United States in compliance with Regulation S under the
Securities Act. Such securities will not be registered under the Securities
Act and may not be offered or sold in the United States absent registration or
an applicable exemption from registration requirements. Such securities shall
not be offered or sold in the United States absent a registration or an
applicable exemption from registration. Nothing contained herein constitutes
an offer to purchase or a solicitation of an offer to buy any such securities.
The proceeds from the placement of the Senior Subordinated Notes and the
Senior Preferred Stock Units, together with borrowings under the New Credit
Facility, will be used by the Company to purchase Shares pursuant to the
Offer, to refinance existing debt and to pay related fees and expenses. The
following summary of the principal terms of the Senior Subordinated Notes and
the Senior Preferred Stock Units is based on the highly confident letter and
the forward underwriting commitment referred to above. The summary does not
purport to be complete and is qualified in its entirety by reference to the
provisions of definitive documentation that will be finalized prior to
completion of the Recapitalization Plan.
Senior Subordinated Notes. The Company will issue and sell up to $350
million aggregate principal amount of Senior Subordinated Notes to the Private
Placement Participants pursuant to an indenture to be entered into between the
Company and at trustee (the "Indenture").
The interest rate on the Senior Subordinated Notes, and the other terms of
the Senior Subordinated Notes, will depend upon the interest rate and market
conditions at the time the Senior Subordinated Notes are placed. However, it
is anticipated that the interest rate on the Senior Subordinated Notes will be
approximately 9 1/4% per annum based on current market conditions. It is also
currently anticipated that the Senior Subordinated Notes will have the
following features: (i) a maturity of ten years from issue date, (ii) be
subordinated to all senior indebtedness of the Company (including the New
Credit Facility) and senior to any subordinated indebtedness of the Company,
(iii) have semi-annual interest payment dates, (iv) be redeemable after five
years at the option of the Company pursuant to the terms of the Indenture, (v)
have registration rights and (vi) have such other or different terms as the
Company agrees. The Senior Subordinated Notes will also contain affirmative
and negative covenants that are usual and customary for similar transactions
and financings, including restrictions on dividends, stock repurchases, liens,
indebtedness, affiliate transactions, assets sales and mergers. The Senior
Subordinated Notes will also provide for usual and customary events of
default. In addition, certain changes in control of the Company will require
the Company to purchase the Senior Subordinated Notes at 101% of the principal
amount thereof, plus accrued and unpaid interest to the purchase date. In
certain instances following a sale of assets, the Company will be obligated to
make an offer to purchase the Senior Subordinated Notes at a purchase price in
cash equal to 100% of the principal amount thereof, plus accrued and unpaid
interest to the purchase date with the proceeds of such asset sales.
Although the Company has received a highly confident letter from a certain
financial institution with respect to the offering of the Senior Subordinated
Notes, no assurances can be given that such offering will be consummated.
23
<PAGE>
Senior Preferred Stock Units. Concurrently with the consummation of the sale
of the Senior Subordinated Notes, the Company expects to issue and sell up to
$175 million aggregate liquidation preference of the Senior Preferred Stock
and Warrants to purchase an aggregate of 1,959,000 Shares at an exercise price
equal to a 110% of the closing market price of the Common Stock shortly
following the consummation of the Offer, subject to customary anti-dilution
adjustments. The dividend rate on the Senior Preferred Stock is anticipated to
be approximately 12 1/2% per annum (based on current market conditions), and
for five years after issuance, periodic dividends on the Senior Preferred
Stock will not be required to be paid in cash and, if not paid in cash, will
be paid in kind or added to the liquidation preference; thereafter, dividends
will be required to be paid in cash. It is expected that the Senior Preferred
Stock will be mandatorily redeemable on the twelfth anniversary of its
issuance at a redemption price equal to its liquidation preference plus
accumulated and unpaid dividends.
The Senior Preferred Stock is expected to be redeemable at the option of the
Company at a premium after the third anniversary of issuance and exchangeable
at the option of the Company at any time for junior subordinated indebtedness
of the Company with an interest rate equal to the dividend rate on the Senior
Preferred Stock, with other terms similar to the Senior Preferred Stock. The
Senior Preferred Stock is expected to be redeemable at the option of the
holders thereof upon a change of control of the Company at a redemption price
of 101% of liquidation preference plus accumulated and unpaid dividends.
Although the Company has received a forward underwriting commitment with
respect to the offering of the Senior Preferred Stock Units, such commitment
is conditioned upon the satisfaction of a number of conditions, including the
receipt of various professional opinions and other conditions which are usual
and customary in private placement transactions. Accordingly, no assurances
can be given that the offering of the Senior Preferred Stock Units will be
consummated.
New Credit Facility. The commitments dated May 8, 1998 from the Credit
Facility Banks (the "Credit Facility Commitment") contemplates the borrowing
of approximately $300 million by the Company pursuant to the New Credit
Facility. The commitments are subject, among other things, to negotiation and
execution of definitive financing agreements satisfactory to each such party
(including the legal counsel thereof) and to the Company. The Company
currently is negotiating definitive documentation for the New Credit Facility.
The following summary of the principal terms of the New Credit Facility is
based on the Credit Facility Commitment. The summary does not purport to be
complete and is qualified in its entirety by reference to the provisions of a
definitive credit agreement and other related documents that will be finalized
prior to completion of the Offering.
Pursuant to the Credit Facility Commitment, each of the Credit Facility
Banks have agreed to provide the Company and its subsidiaries with a new $300
million credit facility, which will consist of a $250 million revolving credit
facility (the "Revolving Credit Facility"), a portion of which initially will
be available to the Company in U.S. dollars and a portion of which initially
will be available in Belgian Francs and may be converted into other specified
currencies (including, but not limited to, U.S. dollars) to be borrowed by
Samsonite Europe N.V., a wholly owned subsidiary of the Company, and a $50
million term loan facility (the "Term Loan Facility") to be borrowed by
Samsonite Europe N.V. (the Revolving Credit Facility and the Term Loan
Facility are collectively referred to herein as the "New Credit Facility").
The Company and Samsonite Europe N.V. shall have the flexibility of
redesignating the amount of the Revolving Credit Facility which may be
borrowed by the Company and the amount which may be borrowed by Samsonite
Europe N.V.; provided that the sum does not exceed the U.S. dollar equivalent
of $250 million. A portion of the Revolving Credit Facility may be used to
issue domestic and foreign documentary and standby letters of credit. The
Revolving Credit Facility will have a final maturity of five years from the
closing date. The Term Loan Facility will mature five years after the closing
and will not have any scheduled principal payments prior to final maturity.
All loans made to the Company under the Revolving Credit Facility will bear
interest either at the higher of .50% per annum above the latest Federal Funds
Rate and the B of A reference rate (the "Base Rate") or the Eurodollar rate
(each to be defined in the definitive documentation), plus, in each
24
<PAGE>
case, the "Applicable Margin," which is initially anticipated to be in the
range of approximately 1.875% to 2.25% per annum with respect to the
Eurodollar rate loans and domestic standby letters of credit and 0.875% to
1.25% per annum with respect to the Base Rate. The Applicable Margin with
respect to the aggregate undrawn face amount of each domestic documentary
letter of credit is initially anticipated to be in the range of approximately
1.3875% to 1.6845%. All loans made to Samsonite Europe N.V. under the
Revolving Credit Facility (including foreign standby letters of credit) and
Term Loan Facility will bear interest at the Eurocurrency Rate plus the
"Applicable Margin." The Applicable Margin with respect to the aggregate
undrawn face amount of each foreign documentary letter of credit is initially
anticipated to be in the range of approximately 1.3875% to 1.6845%. The
Applicable Margin will rise or fall depending upon the financial performance
of the Company. The Company will pay a commitment fee which initially will be
.5% per annum on the unused portion of the Revolving Credit Facility. The fees
paid in respect of domestic and foreign standby and documentary letters of
credit will rise and fall depending on the financial performance of the
Company, but in any event will not exceed 1.6845% per annum of the aggregate
undrawn face amount of a foreign or domestic documentary letter of credit or
2.25% per annum of the aggregate maximum drawing amount of a foreign or
domestic standby letter of credit.
The obligations under the Revolving Credit Facility will be secured by a
pledge by the Company of 100% of the capital stock of its major domestic
subsidiaries and 66% of the capital stock of Samsonite Europe N.V. and other
major non-domestic subsidiaries. The Company and its major domestic
subsidiaries will guarantee the obligations under the Revolving Credit
Facility.
The definitive documentation governing the New Credit Facility will contain
customary financial and other covenants that will, among other things, limit
the ability of the Company (subject to customary and negotiated exceptions) to
(i) incur additional liens, (ii) incur additional indebtedness, (iii) make
certain kinds of investments, (iv) prepay subordinate indebtedness, (v) make
distributions and dividend payments to its stockholders, (vi) engage in
affiliate transactions, (vii) make certain asset dispositions, (viii) make
acquisitions and (ix) participate in certain mergers.
9. CERTAIN INFORMATION CONCERNING OWNERSHIP OF SHARES. The following table
sets forth certain information about persons known to the Company to be the
beneficial owner of more than 5% of the Common Stock, and as to the beneficial
ownership of the Common Stock by each of the Company's directors and executive
officers and all of the Company's directors and executive officers as a group,
as of March 31, 1998. Except as otherwise indicated, to the knowledge of the
Company, the persons identified below have sole voting and sole investment
power with respect to shares they own of record. The following table does not
give any effect to the possible effects of the results of the Offer or to the
issuance of the Warrants or any shares of Common Stock issuable upon exercise
thereof.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF NUMBER OF SHARES
BENEFICIAL OWNER BENEFICIALLY OWNED PERCENT
------------------- ------------------ -------
<S> <C> <C>
Apollo Investment Fund, L.P.
c/o Apollo Advisors, L.P.
2 Manhattan Road
Purchase, New York 10577
and
Lion Advisors, L.P............................... 7,334,859(a) 35.94%
1301 Avenue of the Americas, 38th Floor
New York, NY 10019
Richard R. Nicolosi.............................. 738,822(b) 3.55%
c/o Samsonite Corporation
11200 East 45th Avenue
Denver, Colorado 80239
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS OF NUMBER OF SHARES
BENEFICIAL OWNER BENEFICIALLY OWNED PERCENT
------------------- ------------------ -------
<S> <C> <C>
Mark H. Rachesky................................. 75,829 *
Mark Capital Partners
335 Madison Avenue, 26th Floor
New York, New York 10017
Luc Van Nevel.................................... 61,171(c) *
c/o Samsonite Europe N.V.
Westerring 17
B-9700 Oudenaarde, Belgium
Thomas R. Sandler................................ 62,314(d) *
c/o Samsonite Corporation
11200 East 45th Avenue
Denver, Colorado 80239
Karlheinz Tretter................................ 58,002(e) *
c/o Samsonite Europe N.V.
Westerring 17
B-9700 Oudenaarde, Belgium
Richard H. Wiley................................. 9,094(f) *
c/o Samsonite Corporation
11200 East 45th Avenue
Denver, Colorado 80239
D. Michael Clayton............................... 8,030(g) *
c/o Samsonite Corporation
11200 East 45th Avenue
Denver, Colorado 80239
Carlo Zezza...................................... 17,650(h) *
c/o Samsonite Corporation
11200 East 45th Avenue
Denver, Colorado 80239
Bernard Attal.................................... 943 *
1301 Avenue of the Americas, 38th Floor
New York, New York 10019
R. Theodore Ammon................................ 829 *
Big Flower Press Holdings, Inc.
3 E. 54th Street, 19th Floor
New York, New York 10022
Leon D. Black.................................... 829(i) *
1301 Avenue of the Americas, 38th Floor
New York, NY 10019
Robert H. Falk................................... 829(i) *
1301 Avenue of the Americas, 38th Floor
New York, NY 10019
Robert L. Rosen.................................. 829 *
RLR Partners, L.P.
825 Third Avenue, 40th Floor
New York, New York 10022
Marc J. Rowan.................................... 829(i) *
1301 Avenue of the Americas, 38th Floor
New York, NY 10019
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS OF NUMBER OF SHARES
BENEFICIAL OWNER BENEFICIALLY OWNED PERCENT
------------------- ------------------ -------
<S> <C> <C>
Stephen J. Solarz................................ 135 *
APCO Associates, Inc.
1615 L Street, N. W., Suite 900
Washington, DC 20036
All Directors and Executive Officers as a group.. 1,036,135(j) 4.92%
</TABLE>
- --------
* Less than 1.0%
(a) Includes 3,668,163 shares held by Apollo Investment and 3,666,696 shares
beneficially held by Lion on behalf of an investment account under
management over which Lion has exclusive investment, voting and
dispositive power. Lion is affiliated with Apollo Advisors, L.P., the
general partner of Apollo Investment.
(b) Includes 60,000 shares of restricted Common Stock issued to Mr. Nicolosi
in connection with his employment arrangement. Includes Options to
purchase 425,532 Shares presently exercisable or exercisable within 60
days of March 31, 1998.
(c) Includes Options to purchase 59,171 Shares exercisable as of March 31,
1998.
(d) Includes Options to purchase 60,814 Shares exercisable as of March 31,
1998.
(e) Includes Options to purchase 57,002 Shares exercisable as of March 31,
1998.
(f) Represents Options to purchase 9,094 Shares exercisable as of March 31,
1998.
(g) Includes Options to purchase 7,830 Shares exercisable as of March 31,
1998.
(h) Includes Options to purchase 16,000 Shares exercisable as of March 31,
1998.
(i) Includes Shares issued under the Company's 1996 Directors' Stock Plan.
Does not include Shares held by Apollo Investment or Lion. Each of Messrs.
Falk and Rowan, directors of the Company, together with Mr. Black, a
director of the Company, who is also a director of Apollo Capital
Management, Inc., the general partner of Apollo Advisors, L.P., and of
Lion Capital Management, Inc., the general partner of Lion, disclaims
beneficial ownership of the securities held by Apollo Investment and Lion.
(j) Excludes Shares listed above for Apollo Investment and Lion. If such
Shares were included, the aggregate number of Shares beneficially owned by
all directors and executive officers as a group would be 8,370,994,
representing 39.77%.
Based upon the Company's records, the Company believes that the officers of
the Company other than those included in the table above beneficially own an
aggregate of less than 0.1% of the Shares. Except as otherwise set forth
herein, the Company has no agreement, arrangement or understanding with any of
its directors, officers or affiliates concerning tenders of Shares by them
pursuant to the Offer.
10. CERTAIN INFORMATION CONCERNING THE COMPANY.
Samsonite is one of the world's largest manufacturers and distributors of
luggage. The Company markets its products primarily under the SAMSONITE(R),
AMERICAN TOURISTER(R) and LARK(R) brand names. The Samsonite brand enjoys
worldwide recognition and is the leading brand of luggage products in the
United States and Europe. American Tourister is the second most recognized
brand of luggage in the United States. American Tourister products are also
sold in Europe. The Lark brand is well-recognized in the United States and
competes in the premium segment of the luggage market. Samsonite and American
Tourister luggage products have been manufactured and sold continuously since
the 1930's.
With net sales of $736.9 million for fiscal 1998, the Company is a major
factor in the worldwide luggage market. Competition in the luggage market is
highly fragmented with the vast majority of individual competitors having less
than 10% of the Company's annual luggage sales. Samsonite offers the broadest
range of products in the luggage industry, including hardside suitcases,
softside
27
<PAGE>
suitcases, garment bags, casual bags, hardside and softside business cases and
other travel bags. Many of today's most successful luggage products and
features--such as suitcases on wheels, suitcases with a built-in luggage cart,
full-featured, structured garment bags, ultra-light softside suitcases and
innovative new wheel systems--were introduced or popularized by Samsonite.
The Company benefits from its large size through scale driven purchasing and
manufacturing economies. The Company's products are sourced through a global
network consisting of 14 Company-operated manufacturing facilities and various
third-party suppliers throughout the world. By operating its own facilities to
produce hardside luggage and more complex softside products, the Company is
better able to control manufacturing quality and to achieve shorter product
introduction lead times and lower delivery costs. In addition, the Company
takes advantage of its global sourcing capabilities by buying less complex
products from various countries when their product costs or currency exchange
rates are particularly favorable.
The Company's marketing and distribution strategy focuses on the broad
middle segment of the luggage market as opposed to the more commodity driven
low end of the market or the premium priced high end. In the United States,
the Samsonite brand has historically been positioned as high quality,
innovative luggage, targeted at frequent business travelers. The American
Tourister brand has been positioned as quality luggage at an affordable price
and the Lark brand has been positioned as premium luggage targeted at first
and business class travelers. In Europe, the Samsonite brand enjoys more of a
premium image than in the United States, and is targeted at first class and
frequent business travelers. The Company's marketing theme centers around the
Samsonite "Worldproof"(TM) brand image which represents strength, durability,
quality and style.
The Company's products are sold throughout the world in more than 100
countries through approximately 23,000 retail outlets, including department
and specialty stores, catalog showrooms, mass merchant retailers, warehouse
clubs and Company-owned retail stores located primarily in factory outlet
malls. In addition, Samsonite licenses its trademarks for use on non-luggage
products, such as travel accessories, personal leather goods, handbags and
furniture. These products are made and sold primarily by independent licensees
which pay royalties to Samsonite.
CERTAIN FINANCIAL INFORMATION
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION AND SUMMARY UNAUDITED
CONSOLIDATED PRO FORMA FINANCIAL INFORMATION
The summary historical consolidated financial information of the Company and
its subsidiaries presented below has been derived from the Company's audited
consolidated financial statements included in the Company's Annual Report on
Form 10-K for the year ended January 31, 1998 (the "Annual Report"), which is
hereby incorporated herein by reference, and other information and data
contained therein. More comprehensive financial information is included in the
Annual Report and the financial information which follows is qualified in its
entirety by reference to such report and to all of the financial statements
and related notes contained therein, copies of which may be obtained as set
forth below under the caption "--Additional Information." The summary
unaudited consolidated pro forma financial information set forth below gives
effect to the Recapitalization Plan, including the purchase of Shares pursuant
to the Offer, based on certain assumptions described in the accompanying
notes, and gives effect thereto as if it had occurred on February 1, 1997, in
the case of the statement of operations and other data, and on January 31,
1998, in the case of the balance sheet data. The summary unaudited
consolidated pro forma financial information should be read in conjunction
with the summary consolidated historical financial information and does not
purport to be indicative of the results that would actually have been obtained
had the Recapitalization Plan been completed at the dates indicated or that
may be obtained in the future.
28
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31,
--------------------------------
1997 1998
-------- --------------------
HISTORICAL PRO FORMA
(IN THOUSANDS, EXCEPT
PER SHARE AMOUNTS AND RATIOS)
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net Sales.................................. $741,138 $736,875 $736,875
Cost of Goods Sold......................... 449,333 424,349 424,349
-------- -------- --------
Gross Profit............................... 291,805 312,526 312,526
Selling, General and Administrative
Expenses.................................. 233,761(a) 234,257 237,485(b)
Amortization of Intangible Assets(c)....... 31,837 7,101 7,101
Provision for Restructuring Operations..... 10,670 1,866 1,866
Other Income--Net(d)....................... 18,821 28,294 28,294
Interest Expense--Net(e)................... 34,251 17,344 49,244(f)
Income Tax Expense......................... 10,389 23,088 9,739(g)
Minority Interest in Earnings in
Subsidiaries.............................. (1,041) (287) (287)
-------- -------- --------
Income (Loss) from Continuing Operations... (11,323) 56,877 35,098
Income (Loss) from Operations Discontinued
and Sold, Cumulative Effect of Change in
Accounting Principles and Extraordinary
Items..................................... -- (16,178) (22,354)
-------- -------- --------
Net Income (Loss).......................... $(11,323) $ 40,699 $ 12,744
======== ======== ========
Senior Preferred Stock Dividends(h)........ 22,383
--------
Net Income (Loss) Available to Common
Stockholders.............................. $ (9,639)
========
Income (Loss) per Share--Basic(h):
Continuing Operations..................... $ (.71) $ 2.81 $ 1.54
Net Income (Loss)......................... (.71) 2.01 (1.17)
Income (Loss) per Share--Assuming
Dilution(h):
Continuing Operations..................... (.71) 2.70 1.40
Net Income (Loss)......................... (.71) 1.93 (1.06)
OTHER DATA:
EBIT(i).................................... $ 34,358 $ 97,596 $ 97,596
Depreciation and Amortization.............. 53,889 28,594 28,594
-------- -------- --------
EBITDA(j).................................. 88,247 126,190 126,190
Items relating to Settlement of Contingent
Liabilities and Other Adjustments......... (3,368) (13,762) (13,762)
-------- -------- --------
Adjusted EBITDA(k)......................... $ 84,879 $112,428 $112,428
======== ======== ========
Ratio of Earnings to Fixed Charges(l)...... 1.00 4.39 1.30
Capital Expenditures....................... 31,093 36,313 36,313
BALANCE SHEET DATA (AS OF END OF PERIOD):
Property, Plant and Equipment, Net......... $143,959 $142,351 $142,351
Total Assets............................... 592,658 610,049 630,206
Long-Term Obligations (including current
installments)............................. 290,617 179,223 518,657
Stockholders' Equity (Deficit)............. 24,998 208,886 (279,291)
</TABLE>
- --------
(a) Selling, general and administrative expenses include $5.4 million of
expenses during the year ended January 31, 1997 for (i) consulting fees to
establish the restructuring plan ($0.8 million), (ii) the cessation of the
former chief executive officer's employment and the change in management
($4.1 million) and (iii) expenses in excess of the original provision in
fiscal 1996 for the consolidation of American Tourister manufacturing
facilities ($0.5 million).
(b) Pro forma selling, general and administrative expenses have been adjusted
to reflect a $2.8 million charge for estimated expenses associated with
the process of exploring alternatives to enhance stockholder value,
including the Recapitalization Plan, and a $0.4 million charge for
deferred financing costs related to the Company's existing credit
facility.
(c) Prior to July 14, 1995, the Company was a subsidiary of Astrum
International Corp. ("Astrum"). On July 14, 1995, Astrum merged with
Samsonite Corporation and changed its name to Samsonite Corporation.
(footnotes continue on following page)
29
<PAGE>
In June 1993, Astrum completed a financial restructuring pursuant to a plan
of reorganization under Chapter 11 of the United States Bankruptcy Code.
Effective June 30, 1993 and pursuant to the American Institute of Certified
Public Accountants Statement of Position 90-7 entitled "Financial Reporting
by Entities in Reorganization under the Bankruptcy Code" ("SOP-97"), the
Company was required to adjust its assets and liabilities to their fair
("fresh start") values and create a new entity for financial reporting
purposes. Since June 30, 1993, the Company's statements of operations
include amortization and depreciation related to these fresh start
adjustments. The most significant fresh start adjustment relates to
recording Reorganization Value in Excess of Identifiable Assets, which was
amortized over a three-year period which ended in June 1996. In addition,
fresh start amortization includes amortization of fresh start adjustments
to reflect the fair value of trademarks, licenses, patents and other
intangibles, which are being amortized over periods from one to forty
years. Fresh start amortization and depreciation also includes depreciation
of fresh start adjustments to reflect the fair value of property and
equipment, depreciated over their estimated useful lives ranging primarily
from two to six years.
Fresh Start Amortization and Depreciation consists of the following:
<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31,
-----------------------
1997 1998
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
FRESH START AMORTIZATION:
Amortization of Reorganization Value in Excess of
Identifiable Assets................................. $ 22,947 $ --
Amortization of Licenses, Patents and Other.......... 4,897 3,158
Amortization of Trademarks........................... 3,079 3,026
----------- ----------
Total Fresh Start Amortization Included in
Amortization of Intangibles....................... 30,923 6,184
----------- ----------
FRESH START DEPRECIATION--PROPERTY AND EQUIPMENT:
Included in Cost of Goods Sold....................... 2,914 2,093
Included in Selling, General and Administrative
Expenses............................................ 647 461
----------- ----------
Total Fresh Start Depreciation..................... 3,561 2,554
----------- ----------
Total Fresh Start Amortization and Depreciation...... $ 34,484 $ 8,738
=========== ==========
</TABLE>
(d) Other Income--Net for fiscal 1997 and 1998 consists of the following:
<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31,
------------------------
1997 1998
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
Net gains from foreign currency forward delivery
contracts....................................... $ 2,829 $ 6,463
Rental income.................................... 1,987 1,633
Equity in loss of unconsolidated affiliate....... (33) (547)
Pension expense related to merged plans.......... -- (706)
Foreign currency transaction losses, net......... (211) (1,834)
Loss on disposition of fixed assets, net......... (62) (377)
Other, net....................................... (1,120) (1,247)
Favorable settlement of claims................... 3,802 2,060
Adjustment of allowances relating to previous op-
erations........................................ 529 5,299
Adjustment of contingent tax accruals............ -- 12,700
Collection of loans to settlement trust.......... -- 4,850
Adjustment of liability for PBGC claims.......... 11,100 --
----------- -----------
$ 18,821 $ 28,294
=========== ===========
</TABLE>
(e) Interest expense--net consists of interest expense and amortization of
debt issuance costs and premium less interest income.
(f) Pro forma interest expense gives effect to the issuance of the Senior
Subordinated Notes, and additional borrowings under the New Credit
Facility, including the amortization of debt issuance
(footnotes continue on following page)
30
<PAGE>
costs. The foregoing increases interest expense-net by approximately $31.9
million, based on the Company's estimate of interest rates at the time the
Financing is expected to be consummated. Pro forma net interest expense
consists of the following (in millions):
<TABLE>
<S> <C>
Senior Subordinated Notes (9.25%)..................................... $32.4
New Credit Facility (7.775%).......................................... 14.3
Capital lease obligations and other foreign borrowings................ 3.9
Non-cash amortization of capitalized fees and expenses................ 1.2
Less interest income.................................................. (2.6)
-----
Net interest expense................................................ $49.2
=====
</TABLE>
(g) Pro forma income tax expense reflects the tax effect of the additional
interest expense described in note (f) above and the tax effect of certain
other expenses described in note (b) above (an aggregate decrease of $13.3
million in income tax expense).
(h) Pro forma income (loss) per share data reflects the deduction of dividends
(at an estimated rate of 12.5%) and amortization of issuance costs related
to the Senior Preferred Stock Units without allocating any value to the
Warrants. The value of the Warrants cannot be determined at this time and
will depend on the market value of the Common Stock based on the trading
price after consummation of the Recapitalization Plan. Such cost will be
amortized over the twelve-year term of the Senior Preferred Stock and will
be deducted from net income (loss) to determine income available to common
stockholders in the determination of net income (loss) per share.
(i) EBIT is defined as income (loss) from continuing operations plus net
interest expense and income tax expense plus minority interest plus, in the
case of pro forma EBIT, certain expenses described in note (b) above.
(j) EBITDA is defined as EBIT (as defined above) plus amortization and
depreciation.The Company believes that EBITDA provides useful information
regarding the Company's ability to service its indebtedness, but it should
not be considered in isolation or as a substitute for operating income or
cash flow from operations (in each case as determined in accordance with
generally accepted accounting principles) as an indicator of the Company's
operating performance or as a measure of the Company's liquidity. Other
companies may calculate EBITDA in a different manner than the Company.
EBITDA does not take into consideration substantial costs and cash flows of
doing business, such as interest expense, income taxes, depreciation and
amortization. EBITDA does not represent funds available for discretionary
use by the Company because those funds are required for debt service,
capital expenditures to replace fixed assets, working capital and other
commitments and contingencies. EBITDA is not an accounting term and is not
used in generally accepted accounting principles.
(k) Adjustments to EBITDA to arrive at Adjusted EBITDA include various income
and expense items included in EBIT and EBITDA which management believes
should be excluded in order to reflect recurring operating performance.
These items include (i) provisions for restructuring operations of $10,670
and $3,589 in fiscal 1997 and fiscal 1998, respectively, (ii) other income
primarily related to various items from the settlement of certain
contingent liabilities associated with previous operations, income and
expense from financing related activities, sale of assets and other
nonrecurring activities (which are reflected in the last eight line items
in note (d) above) and (iii) unfavorable production variances from the
Company's North American manufacturing operations during the second half of
fiscal 1998 totaling $4.1 million.
(l) For purposes of computing the ratio of earnings to fixed charges, fixed
charges consist of interest (including the interest component of rental
expenses), amortization of debt expense and dividends on preferred stock.
Earnings consist of earnings from continuing operations before taxes, plus
fixed charges. Earnings from continued operations before taxes include
significant nonrecurring amounts related to various items from the
settlement of certain continuing liabilities from previous operations.
31
<PAGE>
RECENT DEVELOPMENTS
The Company completed a tender offer on April 23, 1998 for $52.3 million out
of the $52.8 million outstanding principal amount of the Old Notes at a price
of $115.35 per $100 of principal. The Company's existing credit facility was
amended to allow for financing the retirement of the Old Notes from borrowings
thereunder. The Company will incur a pre-tax charge to earnings of
approximately $10 million during the first quarter of fiscal 1999 for the
premium paid to repurchase the Old Notes and other charges related to the
transaction.
On March 23, 1998, the Company announced a restructuring of its Torhout,
Belgium manufacturing operations. The Company will record a charge of
approximately $2.6 million pre-tax during the first quarter of fiscal 1999 in
connection with the restructuring. The restructuring provision is primarily
related to termination and severance costs for the elimination of
approximately 111 positions.
The Company expects U.S. wholesale sales to be depressed through at least
the first half of fiscal 1999 because of various factors which affected U.S.
wholesale sales in fiscal 1998, including the adverse impact of price
increases and pricing strategies, market disruptions and retailer discounting
issues associated with various forms of cross distribution channel sales, and
forecasting and production scheduling errors. Commencing in February 1998,
management began a detailed study and evaluation of the Company's U.S.
hardside production operations in light of declining U.S. hardside sales and
various marketing issues that the Company is encountering in the United
States. These issues, as well as the decision to source international hardside
products from other production facilities located closer to the Company's
international customers, instead of from its Denver plant, have resulted in an
inventory build-up and reduced hardside production requirements in the United
States. Based on management's evaluation, on May 14, 1998, the Company
approved a plan to further restructure its U.S. production operations to bring
the unit volume and workforce in the Denver plant into line with expected
sales and to achieve a better balance between fixed and variable costs with
respect to this facility. The restructuring plan calls for a substantial
reduction in workforce, as well as the disposal of molding and other equipment
that represents excess capacity. As a result, during the second quarter of
fiscal 1999, the Company will record a restructuring charge of approximately
$5.5 million (of which approximately $2.2 million is non-cash). The Company
also expects to incur additional cash costs of approximately $0.3 million in
connection with the restructuring plan that will be expensed as they are
incurred. The Company expects that the restructuring will be completed in
approximately 60 days, and that the annualized cost savings, from the
restructuring will be approximately $5.9 million.The foregoing estimate of
annual cost savings constitutes forward looking information and involves known
and unknown risks, uncertainties and other factors that may cause actual cost
savings to be materially different from the foregoing estimate. In addition to
the general factors discussed under "--Certain Estimates of Future Operations
and Other Information" below, such estimate of annual cost savings is based on
a variety of other factors and was derived utilizing numerous important
assumptions, including (i) achieving estimated reductions in headcount at
currently projected severance cost levels, while maintaining work flow, (ii)
achieving a sufficient level of sales necessary to yield planned production
efficiencies and absorption of fixed costs, (iii) eliminating certain
components of fixed overhead without affecting the Company's ability to manage
the downsized production facility efficiently, (iv) the willingness of the
affected employees to accept more flexible work rules and (v) no disruption to
planned production schedules. The failure of one or more of these assumptions
to be realized may cause the actual annual cost savings to differ materially
from the foregoing estimate.
The Company is also evaluating its investment in Chia Tai Samsonite (H.K.)
Ltd., a 50% owned joint venture formed to manufacture and distribute luggage
in China which is encountering difficulties in achieving an adequate level of
sales and distribution to support operational expenses and finding qualified
personnel to manage the joint venture. As a result of this evaluation, the
Company may incur a charge in fiscal 1999 related to the disposal or
liquidation of this investment. At January 31, 1998, the Company had a net
investment of approximately $2.4 million in this joint venture.
32
<PAGE>
For information concerning the Company's recent and contemplated changes in
operations, including those being implemented as part of the Recapitalization
Plan, see "THE RECAPITALIZATION PLAN."
CERTAIN ESTIMATES OF FUTURE OPERATIONS AND OTHER INFORMATION
The Company will be providing to prospective investors in the offering of
the Senior Preferred Stock Units certain nonpublic estimates as to the
possible future performance of the Company over a five-year period (the
"Forecasts"). The Forecasts, which are as of May 15, 1998, are summarized
below.
The Forecasts include an estimate of quarterly performance for fiscal 1999
and estimates of annual performance through fiscal 2003. For fiscal 1999, the
Company estimates that Adjusted EBITDA will be approximately $106 million, of
which approximately $30 million, or approximately 28%, will be from the
Company's U.S. wholesale business. The Forecasts assume that Adjusted EBITDA
from the Company's operations (excluding its U.S. wholesale business) will
increase in fiscal 1999 by approximately 11% over fiscal 1998 and that
Adjusted EBITDA from the Company's U.S. wholesale business will decline in
fiscal 1999 by 33% from fiscal 1998. As previously discussed under "--Recent
Developments," the Company expects the results of its U.S. wholesale business
to be depressed for at least the first two quarters of fiscal 1999 because of
various factors, including steps being taken to reduce excess working capital
in the U.S. wholesale business by approximately $45 million over the next 18
months. Although the Company's operations (excluding its U.S. wholesale
business) continue to perform well, with Adjusted EBITDA for the first quarter
of fiscal 1999 expected to be in line with plan, the negative impact of
reduced production levels and the disposal of excess inventory, among other
things, is expected to cause a sharp decline in the Adjusted EBITDA of the
Company's U.S. wholesale business from the same period of the prior fiscal
year. The Forecasts assume that the Company's U.S. wholesale business will
have negative Adjusted EBITDA of approximately $6 million in the first quarter
of fiscal 1999 and will have positive Adjusted EBITDA of approximately $3
million in the second quarter of fiscal 1999. On a quarterly basis for the
year ended January 31, 1999, the Company has projected net sales, EBIT and
Adjusted EBITDA as set forth below:
<TABLE>
<CAPTION>
FISCAL QUARTER ENDED
------------------------------------------
APRIL 30, JULY 31, OCTOBER 31, JANUARY 31,
1998 1998 1998 1999
--------- -------- ----------- -----------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Net Sales............................ $157 $187 $237 $215
EBIT................................. (3) 11 35 27
Adjusted EBITDA(a)................... 6 22 43 35
</TABLE>
- --------
(a) See "--Certain Financial Information" for a definition of Adjusted EBITDA.
The Company expects to announce financial results for the first quarter of
fiscal 1999 on or about June 15, 1998; based on currently available
information, the Company believes that actual results for the first quarter of
fiscal 1999 will be in line with the above Forecasts.
The Forecasts contain estimates of net sales, EBIT and Adjusted EBITDA
through the year ended January 31, 2003, as follows:
<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31,
------------------------------
1999 2000 2001 2002 2003
---- ---- ------ ------ ------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Net Sales........................................ $796 $908 $1,001 $1,101 $1,211
EBIT............................................. 70 104 125 146 170
Adjusted EBITDA.................................. 106 134 155 177 202
</TABLE>
The Forecasts assume that Adjusted EBITDA for the Company's U.S. wholesale
business will not exceed fiscal 1998 levels until fiscal 2001. In addition,
the Forecasts give effect to the restructuring of the Company's U.S. hardside
manufacturing operations described under "--Recent Developments" and assume
that approximately $45 million in excess working capital will be converted to
cash over the next 18 months and will be applied to reduce outstanding
borrowings under the New Credit Facility.
33
<PAGE>
The Forecasts are being publicly disclosed solely because such information
is being provided to prospective investors in connection with the Financing.
Neither the Company nor the Company's independent auditors assume any
responsibility for the accuracy of such information. Neither the Company's
independent auditors nor any other independent accountants have compiled,
examined or performed any procedures with respect to the Forecasts, nor have
they expressed any opinion or any other form of assurance on such information
or its achievability, and assume no responsibility for, and disclaim any
association with, the Forecasts.
THE FORECASTS, WHILE PRESENTED WITH NUMERICAL SPECIFICITY, ARE BASED UPON A
NUMBER OF ESTIMATES AND ASSUMPTIONS WHICH, THOUGH CONSIDERED REASONABLE BY THE
COMPANY AT THE TIME PRESENTED, ARE INHERENTLY SUBJECT TO MANY SIGNIFICANT
BUSINESS, ECONOMIC AND COMPETITIVE UNCERTAINTIES AND CONTINGENCIES, BEYOND THE
CONTROL OF THE COMPANY, AND UPON ASSUMPTIONS WITH RESPECT TO FUTURE BUSINESS
STRATEGIES AND DECISIONS WHICH ARE SUBJECT TO CHANGE AND MAY BE OUT OF THE
CONTROL OF THE CURRENT MANAGEMENT OF THE COMPANY. ACCORDINGLY, THERE CAN BE NO
ASSURANCE THAT THE FORECASTS WILL BE REALIZED. WHILE THE COMPANY BELIEVES THE
FORECASTS ARE BASED UPON REASONABLE ASSUMPTIONS AND ESTIMATES, ACTUAL RESULTS
WILL VARY AND SUCH VARIATIONS MAY BE MATERIAL. FORECASTS ARE NECESSARILY
SPECULATIVE IN NATURE, AND IT IS USUALLY THE CASE THAT ONE OR MORE OF THE
ASSUMPTIONS UNDERLYING ESTIMATES SUCH AS THE FORECASTS WILL NOT MATERIALIZE.
THE FORECASTS WERE NOT PREPARED WITH A VIEW TO PUBLIC DISCLOSURE OR COMPLIANCE
WITH PUBLISHED GUIDELINES ESTABLISHED BY THE SECURITIES AND EXCHANGE
COMMISSION, THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS, ANY
REGULATORY OR PROFESSIONAL AGENCY OR BODY OR GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES.
IN LIGHT OF THE FOREGOING, THE COMPANY DOES NOT UNDERTAKE, AND HEREBY
DISCLAIMS ANY OBLIGATION TO, UPDATE THE FORECASTS. THE FORECASTS CONSTITUTE
"FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995. SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN
AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE THE ACTUAL
RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT
FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY
SUCH FORWARD-LOOKING STATEMENTS. SUCH FACTORS INCLUDE, AMONG OTHERS, THE
FOLLOWING GENERAL ECONOMIC AND BUSINESS CONDITIONS, INCLUDING FOREIGN CURRENCY
FLUCTUATIONS; INDUSTRY CAPACITY; CHANGES IN CUSTOMER PREFERENCES; DEMOGRAPHIC
CHANGES; COMPETITION; CHANGES IN METHODS OF DISTRIBUTION AND TECHNOLOGY;
CHANGES IN POLITICAL, SOCIAL AND ECONOMIC CONDITIONS AND LOCAL REGULATIONS,
PARTICULARLY IN EUROPE AND ASIA; GENERAL LEVELS OF ECONOMIC GROWTH IN EMERGING
MARKET COUNTRIES SUCH AS INDIA, CHINA, BRAZIL, ARGENTINA, AND OTHER ASIAN AND
SOUTH AMERICAN COUNTRIES; THE LOSS OF ANY SIGNIFICANT CUSTOMERS; COMPLETION OF
NEW PRODUCT DEVELOPMENTS WITHIN ANTICIPATED TIME FRAMES; CHANGES IN INTEREST
RATES; AND VARIOUS OTHER FACTORS BEYOND THE COMPANY'S CONTROL.
In addition, the Forecasts are effected by the Company's ability to
implement its business strategy which includes plans to broaden products
offerings and channels of distribution, strengthen marketing and product
innovation, continue worldwide expansion, reduce excess working capital and
resolve U.S. wholesale issues. The Company's strategic plan should be
considered in light of the risks and expenses associated with implementing
these strategies. Successful implementation of these strategies will depend on
numerous factors, many of which are beyond the Company's control, including
economic, competitive and other conditions and uncertainties and the ability
to retain qualified management personnel. No assurance can be given that the
Company will be successful in implementing its business strategy.
34
<PAGE>
ADDITIONAL INFORMATION
Additional information concerning the Company is set forth in the Company's
Annual Report on Form 10-K for the fiscal year ended January 31, 1998, which
is incorporated herein by reference. The Company is subject to the
informational filing requirements of the Exchange Act and in accordance
therewith, the Company files periodic reports, proxy statements and other
information with the Commission under the Exchange Act relating to its
business, financial condition and other matters. The Company is required to
disclose in such proxy statements certain information, as of particular dates,
concerning the Company's directors and officers, their remuneration, stock
options granted to them, the principal holders of the Company's securities and
any material interest of such persons in transactions with the Company. Such
reports, proxy statements and other information may be inspected at the
Commission's office at 450 Fifth Street, N.W., Washington, D.C. 20549, and
also should be available for inspection and copying at the regional offices of
the Commission located at 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511; and 7 World Trade Center, 13th Floor, New York, New York
10048. Copies may be obtained by mail from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. The Commission also maintains a World Wide Website on the Internet at
http://www.sec.gov which site contains registration statements, reports, proxy
and information statements and other information regarding registrants that
file electronically with the Commission, including the Company. In addition,
such material should be available for inspection at the NASD, 1801 K Street,
N.W., Washington, D.C. 20006.
11. TRANSACTIONS AND ARRANGEMENTS CONCERNING SHARES. Except as described in
this Offer to Purchase, (i) none of the Company or any associate or majority
owned subsidiary of the Company, beneficially owns or has a right to acquire
any equity security of the Company and (ii) none of the Company or, to the
best knowledge of the Company, any of the other persons referred to above, or
any of the respective directors, executive officers or subsidiaries of any of
the foregoing, has effected any transaction involving the Shares of the
Company during the 40 business days prior to the date hereof. In connection
with the Recapitalization Plan, the Board of Directors of the Company adopted
a resolution exempting, to the fullest extent permitted by Rule 16b-3
promulgated under the Exchange Act, transactions with the Company in Shares
from Section 16(b) of the Exchange Act.
Except as described in this Offer to Purchase, (i) none of the Company or,
to the best knowledge of the Company, any executive officer or director of the
Company has any contract, arrangement, understanding or relationship (whether
or not legally enforceable) with any other person with respect to any
securities of the Company, including, but not limited to, any contract,
arrangement, securities, joint ventures, loan or option arrangements, puts or
calls, guarantees of loans, guarantees against loss, or the giving or
withholding of proxies, consents or authorizations; and (ii) there have been
no contacts, negotiations or transactions between the Company or any of its
subsidiaries or, to the best knowledge of the Company, any of its directors,
officers or affiliates, on the one hand and the Company on the other hand,
concerning a merger, consolidation or acquisition, tender offer or other
acquisition of securities, election of directors, a sale or other transfer of
a material amount of assets or concerning any other transactions with the
Company that are required to be disclosed pursuant to the rules and
regulations of the Commission.
12. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; STOCK LISTING; MARGIN
REGULATIONS; REGISTRATION UNDER THE EXCHANGE ACT.
Market for the Shares. The purchase of Shares by the Company pursuant to the
Offer will reduce the number of Shares that might otherwise trade publicly and
will reduce the number of outstanding Shares, which, depending upon the number
of Shares so purchased, could adversely affect the liquidity and market value
of the remaining Shares held by the public. The Company cannot predict whether
the reduction in the number of Shares that might otherwise trade publicly
would have an adverse or beneficial effect on the market price for, or
marketability of, the Shares. The Company believes, however, that in any event
the market price following consummation of the Offer will be lower
35
<PAGE>
by reason of the increased leverage on the Company and the payment made in the
Offer. Nonetheless, it is anticipated that there will be a sufficient number
of Shares outstanding and publicly traded following the Offer to insure a
liquid trading market for the Shares.
NASDAQ Quotation. The Common Stock is traded through NASDAQ. Depending upon
the number of Shares purchased pursuant to the Offer, the Shares may no longer
meet the requirements of the NASD for continued inclusion on the NASDAQ, which
requires that an issuer either (i) have at least 750,000 publicly held shares,
held by at least 400 stockholders, with a market value of at least $5,000,000,
capital and surplus (total stockholders' equity) of at least $4 million and
have a minimum bid price of $1 or (ii) have at least 1,000,000 publicly held
shares, held by at least 400 stockholders, with a market value of at least
$15,000,000, have a minimum bid price of $5 and have either (A) a market
capitalization of at least $50,000,000 or (B) total assets and revenues each
of at least $50,000,000. The Company does not believe that there is a
reasonable likelihood of causing the Shares not to be listed on NASDAQ and
anticipates that it will continue to satisfy the listing criteria set forth
above following the purchase of Shares pursuant to the Offer. If the
quantitative delisting criteria described above are not satisfied following
the Offer, the staff of the NASD may institute proceedings for the delisting
of the Shares. However, the Company does not expect the NASD to institute such
proceedings. If the NASDAQ was to cease to publish quotations for the Shares,
it is possible that the Shares would continue to trade in the over-the-counter
market and that price and other quotations would be reported by other sources.
The extent of the public market for such Shares and the availability of such
quotations would depend, however, upon such factors as the number of
stockholders and/or the aggregate market value of such securities remaining at
such time, the interest in maintaining a market in the Shares on the part of
securities firms, the possible termination of registration under the Exchange
Act as described below, and other factors. The Company cannot predict whether
the reduction in the number of Shares that might otherwise trade publicly
would have an adverse or beneficial effect on the market place for, or the
marketability or market price of, the Shares.
Margin Regulations. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which status has the effect, among other things, of
allowing brokers to extend credit on the collateral of such securities for the
purpose of buying, carrying or trading in securities. Depending on factors
similar to those described above regarding stock exchange listing and market
quotations, it is possible that, following the Offer, the Shares would no
longer constitute "margin securities" for the purposes of the margin
regulations of the Federal Reserve Board and therefore could no longer be used
as collateral for loans made by brokers for the purpose of buying, carrying or
trading in securities. In addition, if registration of the Shares under the
Exchange Act were terminated, the Shares would no longer constitute "margin
securities." The Company believes that, following the purchase of Shares
pursuant to the Offer, the Shares will continue to be "margin securities" for
purposes of the Federal Reserve Board's margin regulations.
Registration under the Exchange Act. The Shares are currently registered
under the Exchange Act, which requires, among other things, that the Company
furnish certain information to its stockholders and the Commission and comply
with the Commission's proxy rules in connection with meetings of the Company's
stockholders. Registration under the Exchange Act may be terminated upon
application of the Company to the Commission if the Shares are neither listed
on a national securities exchange nor held by 300 or more holders of record.
The Company believes that the purchase of Shares pursuant to the Offer will
not result in the Shares becoming eligible for deregistration under the
Exchange Act.
13. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS. The Company is not aware of
any license or regulatory permit that appears to be material to the Company's
business that might be adversely affected by the Company's acquisition of
Shares pursuant to the Offer or of any approval or other action by any
government or governmental, administrative or regulatory authority or agency,
domestic
36
<PAGE>
or foreign, that would be required for the acquisition or ownership of Shares
by the Company as contemplated herein. Should any such approval or other
action be required, the Company presently contemplates that such approval or
other action will be sought. The Company is unable to predict whether it may
determine that it is required to delay the acceptance for payment of or
payment for Shares tendered pursuant to the Offering pending the outcome of
any such matter. There can be no assurance that any such approval or other
action, if needed, would be obtained or would be obtained without substantial
conditions or that the failure to obtain any such approval or other action
might not result in adverse consequences to the Company's business. The
Company's obligations under the Offer to accept for payment and pay for Shares
is subject to certain conditions. See Section 7.
14. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES. The following
summary describes certain United States federal income tax consequences
relating to the Offer to holders of Shares ("Holders") that are United States
persons (as defined below). The discussion contained in this summary is based
upon the Internal Revenue Code of 1986, as amended (the "Code"), Treasury
regulations promulgated thereunder, administrative pronouncements and judicial
decisions, all as in effect as of the date hereof and all of which are subject
to change (possibly with retroactive effect) and differing interpretations.
This summary discusses only Shares held as capital assets (within the meaning
of Section 1221 of the Code) and does not address all of the tax consequences
that may be relevant to particular Holders in light of their particular
circumstances, or to certain types of Holders subject to special treatment
under the Code (including financial institutions, broker dealers, insurance
companies, tax-exempt organizations, persons who hold Shares as part of a
straddle, hedge or "conversion" transaction or persons who received their
Shares through the exercise of employee stock options or otherwise as
compensation). For purposes of this discussion, "United States person" means a
Holder which is, for United States federal income tax purposes, (i) a citizen
or resident of the United States, (ii) a corporation, partnership or other
entity created or organized in or under the laws of the United States or any
State or political subdivision thereof, (iii) an estate the income of which is
subject to United States federal income taxation regardless of source or (iv)
a trust if a United States court is able to exercise primary supervision over
the administration of such trust and one or more United States persons have
the authority to control all substantial decisions of such trust. Non-United
States persons should consult their tax advisors regarding the United States
federal income tax consequences and any applicable foreign tax consequences of
the Offer and should also see Section 3 for a discussion of the applicable
United States withholding rules and the potential for obtaining a refund of
all or a portion of any tax withheld. Each Holder should consult its tax
advisor as to the particular consequences of the Offer to such Holder.
Consequences to Tendering Holders of Exchange of Shares for Cash Pursuant to
the Offer. An exchange of Shares for cash in the Offer by a Holder will be a
taxable transaction for United States federal income tax purposes. The Company
intends to take the position that a Holder who receives cash in exchange for
Shares pursuant to the Offer will be treated as having sold a portion of its
Shares to the purchasers of the Senior Preferred Stock Units and having
received the balance of its cash from the Company in exchange for the
remainder of its Shares, with the tax consequences described below. There is
no authority directly addressing the method of allocating proceeds received by
a Holder between the portion treated as received from the purchasers of the
Senior Preferred Stock Units and the portion treated as received from the
Company. The Company intends to take the position that the percentage of a
Holder's Shares disposed of by the Holder which will be treated as if sold to
the purchasers of the Senior Preferred Stock Units will be a percentage of
their Shares equal to (i) the issue price of the Senior Preferred Stock Units
divided by (ii) the aggregate amount of cash paid to Holders in exchange for
their Shares pursuant to the Offer. The remainder of the Holder's Shares
disposed of in exchange for cash in the Offer will be treated by the Company
as redeemed by the Company. Holders should note that the United States federal
income tax consequences of the Offer are not free from doubt and alternative
characterizations are possible which could affect the character and amount of
any taxable income recognized as a result of receiving cash in exchange for
Shares
37
<PAGE>
in the Offer (including potential ordinary dividend income treatment). Holders
should consult their tax advisors regarding alternative tax characterizations
of the exchange of their Shares for cash in the Offer.
The United States federal income tax consequences of the Offer with respect
to a particular Holder will depend upon, among other things, (i) whether the
Holder receives cash for any of its Shares in the Offer, (ii) the extent to
which a Holder is deemed to have sold its Shares to the purchasers of the
Senior Preferred Stock Units or is deemed to have had its Shares purchased by
the Company and (iii) whether the deemed purchase of a Holder's Shares by the
Company will qualify as a sale or exchange under Section 302 of the Code.
First, to the extent a Holder is considered to have sold Shares to the
purchasers of the Senior Preferred Stock Units, such Holder should recognize
capital gain or loss equal to the difference between the amount realized on
its deemed sale of Shares to the purchasers of the Senior Preferred Stock
Units (i.e., the cash proceeds properly allocated to such sale) and the
Holder's adjusted tax basis in such Shares. Gain or loss must be determined
separately for each block of Shares (i.e., Shares acquired at the same cost in
a single transaction) that is exchanged for cash. The United States federal
income tax rate that will apply to such capital gain will depend on the
Holder's holding period for such Shares. In the case of Holders who are
individuals and certain trusts, capital gains will be subject to a maximum
regular United States federal income tax rate of (i) 20% if the Holder's
holding period in its Shares was more than 18 months at the time of exchange
and (ii) 28% if the Holder's holding period in its Shares was more than 12
months but not more than 18 months at such time.
In addition, to the extent a Holder's shares are deemed to be purchased by
the Company and such deemed purchase is treated as a sale or exchange under
Section 302 of the Code, a Holder should recognize capital gain or loss equal
to the difference between the cash proceeds allocable to such deemed purchase
and the Holder's adjusted tax basis in such Shares. Under Section 302 of the
Code, a Holder should recognize capital gain or loss on the deemed redemption
of the Holder's shares by the Company if such redemption, together with the
deemed sale of the Holder's Shares to the purchasers of the Senior Preferred
Stock Units, (i) results in a "substantially disproportionate" redemption with
respect to such Holder, (ii) results in a "complete termination" of all such
Holder's equity interest in the Company or (iii) is "not essentially
equivalent to a dividend" with respect to the Holder. In applying each of the
Section 302 tests, Holders must take into account not only Shares that they
actually own but also Shares they are deemed to own under the constructive
ownership rules of Section 318 of the Code. Pursuant to the constructive
ownership rules, a Holder is deemed to own any Shares that are owned (actually
and in some cases constructively) by certain related individuals and entities
as well as Shares that the Holder has the right to acquire by exercise of an
option or by conversion or exchange of a security. Because of the factual
nature of the Section 302 tests described below, Holders should consult their
tax advisors to determine whether the deemed redemption of Shares by the
Company qualifies for sale or exchange treatment in their particular
circumstances.
The deemed redemption of a Holder's Shares by the Company will be a
"substantially disproportionate" redemption with respect to a Holder if, among
other things, the percentage of Shares actually and constructively owned by
such Holder immediately after the exchange is less than 80% of the percentage
of the Shares actually and constructively owned by such Holder immediately
before the exchange.
The deemed redemption of a Holder's Shares by the Company will result in a
"complete termination" of the Holder's equity interest in the Company if (a)
all of the Shares actually owned by the Holder are sold for cash in the Offer
and (b) all of the Shares constructively owned by the Holder are sold for cash
in the Offer or, with respect to Shares owned by certain related individuals,
the Holder effectively waives, in accordance with Section 302(c) of the Code,
attribution of such Shares which otherwise would be considered to be
constructively owned by such Holder. Holders wishing to satisfy the "complete
termination" test through waiver of such constructive ownership rules should
consult their tax advisors.
38
<PAGE>
The deemed redemption of a Holder's Shares by the Company will be treated as
"not essentially equivalent to a dividend" if the reduction in the Holder's
proportionate interest in the Company constitutes a "meaningful reduction"
given such Holder's particular facts and circumstances. Depending on the
specific facts and circumstances related to a particular Holder, even a small
reduction in the Holder's proportionate equity interest may satisfy this test.
For example, the Internal Revenue Service has indicated in published rulings
that any reduction in the percentage interest of a stockholder whose relative
stock interest in a publicly held corporation is minimal (e.g., an interest of
less than 1%) and who exercises no control over corporate affairs should
constitute a "meaningful reduction."
If a Holder does not satisfy any of the three tests described above, the
deemed redemption of a Holder's Shares by the Company should not be treated as
a sale or exchange under Section 302 of the Code with respect to such Holder.
Instead, such Holder should be treated as having received a distribution with
respect to its Shares under Section 301 of the Code and the Holder's adjusted
tax basis in the exchanged Shares should be added to any Shares retained by
the Holder (and may be lost if such Holder does not actually retain any stock
ownership in the Company). Under Section 301 of the Code, a Holder should be
treated as having received a dividend (taxable at ordinary income tax rates)
to the extent of the Holder's share of the Company's current and accumulated
earnings and profits available to all Holders subject to Section 301
distribution treatment. To the extent that the amount of cash received by a
Holder with respect to the deemed redemption by the Company of such Holder's
Shares in the Offer exceeds the Holder's share of the Company's current and
accumulated earnings and profits, the excess should first be treated as a tax-
free return of capital to the extent of such Holder's adjusted tax basis in
its Shares (and such Holder's adjusted tax basis in its Shares will be reduced
to that extent), with any remainder treated as capital gain, subject to the
capital gains tax rates discussed above. Based on current estimates of
earnings and profits, the Company believes that a significant portion of any
cash received by most Holders in the deemed redemption by the Company of such
Holder's Shares should exceed such Holder's share of the Company's earnings
and profits (which generally must be determined at the end of the Company's
taxable year) and would be taxed in the manner described in the immediately
preceding sentence.
In the case of a corporate Holder, to the extent that any cash received in
the Offer is treated as a dividend (and taxable as ordinary income), such
dividend income may be eligible for the dividends-received deduction. The
dividends-received deduction is subject to certain limitations and may not be
available if the corporate Holder does not satisfy certain holding period
requirements with respect to the Shares or if the Shares are treated as "debt
financed portfolio stock" within the meaning of section 246A of the Code.
Additionally, if a dividends-received deduction is available, the dividend may
be treated as an "extraordinary dividend" within the meaning of Section 1059
of the Code. Corporate Holders should consult their tax advisors regarding the
tax consequences of dividend treatment in their particular circumstances.
Consequences to Holders who do not Exchange any Shares for Cash Pursuant to
the Offer. There will be no United States federal income tax consequence to
Holders who do not exchange any of their Shares for cash pursuant to the
Offer.
THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY.
EACH HOLDER IS URGED TO CONSULT ITS TAX ADVISOR TO DETERMINE THE PARTICULAR
TAX CONSEQUENCES TO SUCH HOLDER OF THE OFFER, INCLUDING THE APPLICABILITY AND
EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS.
15. FEES AND EXPENSES.
The Company has retained Goldman Sachs to act as its financial advisors, as
well as the Dealer Managers, in connection with the Offer. The Company has
agreed to pay Goldman Sachs a
39
<PAGE>
transaction fee of $2.0 million when the Offer is consummated. The Company has
also agreed to reimburse Goldman Sachs for all reasonable out-of-pocket
expenses incurred by it in connection with the Offer and to indemnify Goldman
Sachs against certain liabilities and expenses in connection with its
engagement, including certain liabilities under the federal securities laws.
Goldman Sachs has from time to time, and continues to, render various
investment banking services to the Company and its affiliates, for which it is
paid customary fees.
The Company has also retained Merrill Lynch to act as the Dealer Managers in
connection with the Offer. The Company has agreed to pay Merrill Lynch a
transaction fee of $500,000 when the Offer is consummated. The Company has
also agreed to reimburse Merrill Lynch for all reasonable out-of-pocket
expenses incurred by it in connection with the Offer and to indemnify Merrill
Lynch against certain liabilities and expenses in connection with its
engagement, including certain liabilities under the federal securities laws.
Merrill Lynch has from time to time, and continues to, render various
investment banking services to the Company and its affiliates, for which it is
paid customary fees.
The Company has also agreed to pay fees to the Initial Purchaser in
connection with the Rule 144A Financings, to the Credit Facility Banks under
the New Credit Facility and to indemnify such persons against certain
liabilities in connection with the Offer, including liabilities under the
federal securities laws.
The Company has retained Innisfree M&A Incorporated to act as Information
Agent and BankBoston, N.A. to act as Depositary in connection with the Offer.
The Information Agent may contact holders of Shares by mail, telephone, telex,
telegraph and personal interviews and may request brokers, dealers and other
nominee stockholders to forward the Offer materials to beneficial owners. Each
of the Information Agent and the Depositary will receive reasonable and
customary compensation for their respective services, will be reimbursed by
the Company for certain reasonable out-of-pocket expenses and will be
indemnified against certain liabilities and expenses in connection with the
Offer, including certain liabilities under the federal securities laws.
Except as set forth above, the Company will not pay any fees or commissions
to any broker or dealer or other person for soliciting tenders of Shares
pursuant to the Offer. Brokers, dealers, commercial banks and trust companies
will, upon request, be reimbursed by the Company for customary mailing and
handling expenses incurred by them in forwarding the Offer materials to their
customers.
16. MISCELLANEOUS.
The Offer is being made solely by this Offer to Purchase and the related
Letter of Transmittal and is being made to all holders of Shares. The Offer is
not being made to, nor will tenders be accepted from or on behalf of, holders
of Shares of the Company residing in any jurisdiction in which the making of
the Offer or the acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. However, the Company
may, in its discretion, take such action as it may deem necessary to make the
Offer in any jurisdiction and extend the Offer to holders of Shares in such
jurisdiction. In any jurisdiction where the securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer will be
deemed to be made on behalf of the Company by the Dealer Manager or one or
more registered brokers or dealers that are licensed under the laws of such
jurisdiction.
Pursuant to Rule 13e-4 of the General Rules and Regulations under the
Exchange Act, the Company has filed with the Commission an Issuer Tender Offer
Statement on Schedule 13E-4 which contains additional information with respect
to the offer. Such Schedule 13E-4, including the exhibits and any amendments
thereto, may be examined, and copies may be obtained, at the same places and
in the same manner as is set forth in Section 10 with respect to Information
concerning the Company.
40
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE COMPANY NOT CONTAINED IN THIS OFFER TO
PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
Samsonite Corporation
May 20, 1998
41
<PAGE>
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for Shares and any other
required documents should be sent or delivered by each stockholder of the
Company or his broker, dealer, commercial bank, trust company or other nominee
to the Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
BANKBOSTON, N.A.
By First Class Mail Only: By Facsimile By Registered, Certified
Boston EquiServe Transmission For & Overnight Courier
Corporate Reorganization Eligible Only:
P.O. Box 8029 Institutions Only:
Boston, Massachusetts Boston EquiServe
02266-8029 Boston EquiServe Corporate Reorganization
Corporate 150 Royall Street
Reorganization Canton, Massachusetts
(781) 575-2233/2232 02021
By Hand:
Securities Transfer &
Reporting Services, Inc.
1 Exchange Plaza/55 Broadway
New York, NY 10006
Confirm by Telephone:
(781) 575-3100
Any questions or requests for assistance or additional copies of this Offer
to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery
may be directed to the Information Agent or the Dealer Managers at their
respective telephone numbers and locations. You may also contact your broker,
dealer, commercial bank, trust company or other nominee for assistance
concerning the Offer.
The Information Agent for the Offer is:
INNISFREE M&A INCORPORATED
501 Madison Avenue
20th Floor
New York, New York 10022
Call Toll-Free: (888) 750-5834
Banks and Brokerage Firms Call Collect: (212) 750-5833
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO. MERRILL LYNCH & CO.
<PAGE>
EXHIBIT 99(A)(2)
LETTER OF TRANSMITTAL
TO TENDER COMMON SHARES
OF
SAMSONITE CORPORATION
PURSUANT TO THE OFFER TO PURCHASE
DATED MAY 20, 1998
- --------------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON WEDNESDAY, JUNE 17, 1998, UNLESS THE OFFER IS
EXTENDED. TENDERING STOCKHOLDERS HAVE THE RIGHT TO WITHDRAW SHARES TENDERED
AT ANY TIME PRIOR TO THE EXPIRATION OF THE OFFER AND THEY MAY WITHDRAW
SHARES AFTER JULY 15, 1998 UNLESS ACCEPTED BY THE COMPANY PRIOR TO THAT
DATE.
- -------------------------------------------------------------------------------
The Depositary for the Offer is:
BANKBOSTON, N.A.
<TABLE>
<CAPTION>
<S> <C> <C>
By First Class Mail Only: By Facsimile Transmission By Registered, Certified &
Boston EquiServe For Eligible Institutions Only Overnight Courier Only:
Corporate Reorganization Boston EquiServe Boston EquiServe
P.O. Box 8029 Corporate Reorganization Corporate Reorganization
Boston, Massachusetts (781) 575-2233/2232 150 Royall Street
02266-8029 Canton, Massachusetts 02021
</TABLE>
By Hand:
Securities Transfer & Reporting
Services, Inc.
1 Exchange Plaza/55 Broadway
New York, NY 10006
Confirm by Telephone:
(781) 575-3100
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) SHARES TENDERED
APPEAR(S) ON SHARE CERTIFICATES) (ATTACH ADDITIONAL LIST IF NECESSARY)
- ------------------------------------------------------------------------------------------------
TOTAL NUMBER OF NUMBER OF
CERTIFICATE SHARES REPRESENTED SHARES
NUMBER(S)* BY CERTIFICATE(S)* TENDERED**
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
Total shares
- ------------------------------------------------------------------------------------------------
* Need not be completed by stockholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented
by any certificates delivered to the Depository are being tendered. See
Instruction 4.
- ------------------------------------------------------------------------------------------------
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION
OF INSTRUCTIONS VIA FACSIMILE TO A NUMBER, OTHER THAN AS SET
FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.
</TABLE>
<PAGE>
THE INSTRUCTIONS CONTAINED WITHIN THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used by stockholders if certificates for
Shares (as defined below) are to be forwarded herewith or, unless an Agent's
Message (as defined in the Offer to Purchase filed by Samsonite Corporation, a
Delaware corporation (the "Company") with the Securities and Exchange
Commission on or about May 20, 1998 (the "Offer to Purchase") pursuant to Rule
13e-4 of the Securities Exchange Act of 1934, as amended) is utilized, if
delivery of Shares is to be made by book-entry transfer to the Depositary's
account at The Depository Trust Company or the Philadelphia Depository Trust
Company (or any other "qualified" registered securities depository to allow
for the book entry movement of tendered Shares between depository participants
and the Depositary, hereinafter collectively referred to as the "Book-Entry
Transfer Facilities") pursuant to the procedures set forth in "THE OFFER--
Section 3" in the Offer to Purchase.
Stockholders who cannot deliver their Shares and all other documents
required hereby to the Depositary on or prior to the Expiration Date (as
defined in the Offer to Purchase) or who cannot complete the procedures for
book-entry transfer on a timely basis, must tender their Shares pursuant to
the guaranteed delivery procedure set forth in "THE OFFER--Section 3" in the
Offer to Purchase. See Instruction 2. Delivery of documents to one of the
Book-Entry Transfer Facilities does not constitute delivery to the Depositary.
2
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, signatures
on Letters of Transmittal must be guaranteed by a firm that is a recognized
member of an Eligible Institution (as defined in the Offer to Purchase).
Signatures on this Letter of Transmittal need not be guaranteed if (i) this
Letter of Transmittal is signed by the registered holder(s) of the Shares
(which term, for purposes of this document, shall include any participant in a
Book-Entry Transfer Facility whose name appears on a security position listing
as the owner of the Shares) tendered herewith and such holder(s) has not
completed either the box entitled "Special Delivery Instructions" or the box
entitled "Special Payment Instructions" on this Letter of Transmittal or (ii)
such Shares are tendered for the account of an Eligible Institution. See
Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARE CERTIFICATES; GUARANTEED
DELIVERY PROCEDURES. To tender Shares validly pursuant to the Offer, either
(i) the certificates for such Shares (or confirmation of receipt of such
Shares pursuant to the procedures for book-entry transfer set forth below),
together with a properly completed and duly executed Letter of Transmittal or
photocopy thereof, with any required signatures guaranteed (or, in the case of
a book-entry transfer, an Agent's Message (as defined in the Offer to
Purchase) in lieu of the Letter of Transmittal) must be received by the
Depositary at one of its addresses set forth on the front page of this Letter
of Transmittal prior to the Expiration Date. If certificates are forwarded to
the Depositary in multiple deliveries, a properly completed and duly executed
Letter of Transmittal must accompany each such delivery.
Stockholders who cannot deliver their Shares and all other required
documents to the Depositary prior to the Expiration Date must tender their
Shares pursuant to the guaranteed delivery procedure set forth in "THE OFFER--
Section 3" in the Offer to Purchase. Pursuant to such procedure: (a) such
tender must be made by or through an Eligible Institution, (b) a properly
completed and duly executed Notice of Guaranteed Delivery substantially in the
form provided by the Company (with any required signature guarantees) must be
received by the Depositary on or prior to the Expiration Date, and (c) the
certificates for all physically delivered Shares in proper form for transfer
by delivery, or a confirmation of a book-entry transfer into the Depositary's
account at one of the Book-Entry Transfer Facilities of all Shares delivered
electronically, in each case together with a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) (or, in the case of a
book-entry transfer, an Agent's Message in lieu of the Letter of Transmittal)
and any other documents required by this Letter of Transmittal must be
received by the Depositary within three Nasdaq National Market trading days
after the date of execution of such Notice of Guaranteed Delivery, all as
provided in "THE OFFER--Section 3" in the Offer to Purchase.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
facsimile transmission or mail to the Depositary and must include a guarantee
by an Eligible Institution in the form set forth in such notice.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING SHARE CERTIFICATES, THE
LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS INCLUDING DELIVERY
THROUGH BOOK-ENTRY TRANSFER FACILITIES, IS AT THE ELECTION AND RISK OF THE
TENDERING STOCKHOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY
RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED, PROPERLY ISSUED, IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted. By
executing this Letter of Transmittal (or facsimile thereof), the tendering
shareholder waives any right to receive any notice of the acceptance for
payment of the Shares.
3
<PAGE>
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached to this Letter of Transmittal.
4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares represented by any certificate
delivered to the Depositary are to be tendered, fill in the number of Shares
which are to be tendered in the box entitled "Number of Shares Tendered." In
such case, a new certificate for the remainder of the Shares represented by
the old certificate will be sent to the person(s) signing this Letter of
Transmittal, unless otherwise provided in the "Special Payment Instructions"
or "Special Delivery Instructions" boxes on this Letter of Transmittal, as
promptly as practicable following the expiration or termination of the Offer.
All Shares represented by certificates delivered to the Depositary will be
deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written
on the face of the certificates without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby are held of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names on
different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal (or facsimiles thereof) as there are
different registrations of certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of certificates or separate stock
powers are required unless payment of the Purchase Price is to be made, or
Shares not tendered or not purchased are to be registered in the name of, any
person other than the registered holder(s), in which case the certificates
evidencing the Shares tendered hereby must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on such certificates. Signature(s) on any such
certificates or stock powers must be guaranteed by an Eligible Institution.
See Instruction 1.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, certificates evidencing
the Shares tendered hereby must be endorsed or accompanied by appropriate
stock powers, in either case, signed exactly as the name(s) of the registered
holder(s) appear(s) on the certificates for such Shares. Signature(s) on any
such certificates or stock powers must be guaranteed by an Eligible
Institution. See Instruction 1.
If this Letter of Transmittal or any certificate or stock power is signed by
a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory
to the Company of the authority of such person so to act must be submitted.
6. STOCK TRANSFER TAXES. The Company will pay or cause to be paid any stock
transfer taxes with respect to the sale and transfer of any Shares to it or
its order pursuant to the Offer. If, however, payment of the Purchase Price
(as defined in the Offer to Purchase) is to be made to, or Shares not tendered
or not purchased are to be registered in the name of, any person other than
the registered holder(s), or if tendered Shares are registered in the name of
any person other than the person(s) signing this Letter of Transmittal, the
amount of any stock transfer taxes (whether imposed on the registered
holder(s), such other person or otherwise) will be deducted from the Purchase
Price unless satisfactory evidence of the payment of such taxes, or exemption
therefrom, is submitted. See "THE OFFER--Section 5" in the Offer to Purchase.
Except as provided in this Instruction 6, it will not be necessary to affix
transfer tax stamps to the certificates representing Shares tendered hereby.
4
<PAGE>
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the Purchase
Price of any Shares tendered hereby is to be issued in the name of, and/or any
Shares not tendered or not purchased are to be returned to, a person other
than the person(s) signing this Letter of Transmittal, or if the check and/or
any certificates for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal or to the
person(s) signing this Letter of Transmittal or to an address other than that
shown above in the box captioned "Special Payment Instructions" and/or
"Special Delivery Instructions" on this Letter of Transmittal should be
completed. Stockholders tendering Shares by book-entry transfer will have any
Shares not accepted for payment returned by crediting the account maintained
by such stockholder at the Book-Entry Transfer Facility from which such
transfer was made.
8. BACKUP WITHHOLDING AND SUBSTITUTE IRS FORM W-9 AND IRS FORM W-8. To
prevent backup federal income tax withholding equal to 31% of the gross
payments made to stockholders for shares purchased pursuant to the Offer, each
stockholder who does not otherwise establish an exemption from such
withholding must provide the Depositary with the stockholder's correct
taxpayer identification number (or certify that such taxpayer is awaiting a
taxpayer identification number) and provide certain other information by
completing, under penalties of perjury, the Substitute Internal Revenue
Service ("IRS") Form W-9 included with this Letter of Transmittal. Certain
stockholders (including all corporations and certain foreign individuals) are
exempt from backup withholding. In order for a foreign stockholder to qualify
as an exempt recipient, that stockholder must submit an IRS Form W-8 signed
under penalties of perjury, attesting to that person's exempt status. An IRS
Form W-8 can be obtained from the Depositary.
9. WITHHOLDING FOR FOREIGN STOCKHOLDERS. Even if a foreign stockholder has
provided the required certification to avoid backup withholding, the
Depositary will withhold federal income taxes equal to 30% of the gross
payments attributable to the Company's deemed purchase of the Shares payable
to a foreign stockholder or its agent unless the Depositary determines that a
reduced rate of withholding is available pursuant to a tax treaty or that an
exemption from withholding is applicable because such gross proceeds are
effectively connected with the conduct of a trade or business by such
stockholder within the United States. For this purpose, a foreign stockholder
is any stockholder that is not (i) a citizen or resident of the United States,
(ii) a corporation, partnership or other entity created or organized in or
under the laws of the United States or any State or political subdivision
thereof, (iii) an estate the income of which is subject to United States
federal income taxation regardless of source or (iv) a trust if a United
States court is able to exercise primary supervision over the administration
of such trust and one or more United States persons have the authority to
control all substantial decisions of such trust. In order to obtain a reduced
rate of withholding pursuant to a tax treaty, a foreign stockholder must
deliver to the Depositary before the payment a properly completed and executed
IRS Form 1001. In order to obtain an exemption from withholding on the grounds
that the gross proceeds paid pursuant to the Offer are effectively connected
with the conduct of a trade or business within the United States, a foreign
stockholder must deliver to the Depositary before the payment a properly
completed and executed IRS Form 4224. The Company and the Depositary will
determine a stockholder's status as a foreign stockholder and eligibility for
a reduced rate of, or exemption from, withholding by reference to any
outstanding certificates or statements concerning eligibility for a reduced
rate of, or exemption from, withholding (e.g., IRS Form 1001 or IRS Form 4224)
unless facts and circumstances indicate that such reliance thereon is not
warranted. A foreign stockholder may be eligible to obtain a refund of all or
a portion of any tax withheld (i) to the extent such stockholder's shares are
deemed to be sold to the Company if such stockholder meets the "complete
termination," "substantially disproportionate" or "not essentially equivalent
to a dividend" test described in Section 14 in the Offer to Purchase or (ii)
to the extent such stockholder is otherwise able to establish that no tax or a
reduced amount of tax is due. Backup withholding will generally not apply to
amounts subject to the 30% or a treaty-reduced rate of withholding. Foreign
stockholders are urged to consult their tax advisors regarding the application
of federal income tax withholding, including eligibility for a withholding tax
reduction or exemption, and the refund procedure.
5
<PAGE>
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or requests
for assistance may be directed to the Information Agent or Dealer Managers at
their respective telephone numbers and addresses listed below. Requests for
additional copies of the Offer to Purchase, this Letter of Transmittal or
other tender offer materials may likewise be directed to the Information
Agent, and such copies will be furnished promptly at the Company's expense.
Stockholders may also contact their local broker, dealer, commercial bank or
trust company for documents relating to, or assistance concerning, the Offer.
11. IRREGULARITIES. All questions as to the Purchase Price, the form of
documents and the validity, eligibility (including time of receipt) and
acceptance for payment of any tender of Shares will be determined by the
Company, in its sole discretion, which determination shall be final and
binding on all parties. The Company reserves the absolute right to reject any
or all tenders of Shares that it determines are not in proper form or the
acceptance for payment of which or payment for which may, in the opinion of
the Company's counsel, be unlawful. The Company also reserves the absolute
right to waive any of the conditions of the Offer and any defect or
irregularity in the tender of any particular Shares or by any particular
stockholder, and the Company's interpretation of the terms of the Offer
(including these Instructions) will be final and binding on all parties. No
tender of Shares will be deemed to be validly made until all defects or
irregularities have been cured or waived. None of the Company, the Depositary,
the Information Agent or any other person is or will be under any duty to give
notice of any defects or irregularities in tenders, and none of them will
incur any liability for failure to give any such notice.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE THEREOF) TOGETHER WITH
SHARE CERTIFICATES, OR CONFIRMATION OF BOOK-ENTRY TRANSFER TOGETHER WITH THIS
LETTER OF TRANSMITTAL OR AN AGENT'S MESSAGE, AND ALL OTHER REQUIRED DOCUMENTS
MUST BE RECEIVED BY THE DEPOSITARY, OR THE NOTICE OF GUARANTEED DELIVERY MUST
BE RECEIVED BY THE DEPOSITARY, PRIOR TO THE EXPIRATION DATE. STOCKHOLDERS ARE
ENCOURAGED TO RETURN A COMPLETED SUBSTITUTE IRS FORM W-9 WITH THEIR LETTER OF
TRANSMITTAL.
6
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY
[_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER TO THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER
FACILITIES AND COMPLETE THE FOLLOWING:
Name of Tendering Institution Account No. at
[_]The Depository Trust Company
[_]Philadelphia Depository Trust Company
Transaction Code No.
[_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE
THE FOLLOWING:
Name(s) of Registered Shareholder(s)
Window Ticket Number (if any)
Date of Execution of Notice of Guaranteed Delivery
Name of Institution which Guaranteed Delivery
If delivery is by book entry transfer:
Name of tendering Institution
[_] DTC [_] PHILADEP (check one) Account No.
Transaction Code No.
7
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Samsonite Corporation, a Delaware
corporation (the "Company"), the above-described shares of common stock, $.01
par value per share (the "Common Stock"), and the associated preferred stock
purchase rights (the "Rights") (the Common Stock and the Rights, on and after
the date of their distribution, are herein referred to as the "Shares"), at a
price of $40.00 per share, net to the seller in cash, upon the terms and
conditions set forth in the Offer to Purchase dated May 20, 1998, receipt of
which is hereby acknowledged, and in this Letter of Transmittal (which
together constitute the "Offer").
Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith in accordance with the terms of the Offer, including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment, the undersigned hereby sells, assigns and transfers to, or upon
the order of, the Company all right, title and interest in and to all the
Shares that are being tendered hereby or orders the registration of such
Shares delivered by book-entry transfer that are purchased pursuant to the
Offer to, or upon order of, the Company and hereby irrevocably appoints the
Depositary the true and lawful agent and attorney-in-fact of the undersigned
with respect to such Shares, with full power of substitution (such power of
attorney being deemed to be an irrevocable power coupled with an interest), to
(a) deliver certificates for such Shares, or transfer ownership of such Shares
on the account books maintained by any of the Book-Entry Transfer Facilities,
together, in any such case, with all accompanying evidences of transfer and
authenticity, to or upon the order of the Company upon receipt by the
Depositary, as the undersigned's agent, of the purchase price with respect to
the Shares, (b) present certificates for such Shares for cancellation and
transfer on the books of the Company and (c) receive all benefits and
otherwise exercise all rights of beneficial ownership of such Shares, all in
accordance with the terms of the Offer.
The undersigned hereby represents and warrants to the Company that the
undersigned has full power and authority to tender, sell, assign and transfer
the Shares tendered hereby and that, when and to the extent the same are
accepted for payment by the Company, the Company will acquire good and
marketable title and unencumbered ownership thereto, free and clear of all
liens, restrictions, charges, security interests, and encumbrances and not
subject to any adverse claims. The undersigned will, upon request, execute and
deliver any additional documents deemed by the Depositary or the Company to be
necessary or desirable to complete the sale, assignment and transfer of the
Shares tendered hereby.
The undersigned represents and warrants to the Company that the undersigned
has read and agrees to all of the terms of the Offer. All authority herein
conferred or agreed to be conferred shall survive the death or incapacity of
the undersigned, and any obligation of the undersigned hereunder shall be
binding upon the heirs, personal representatives, successors and assigns of
the undersigned. Except as stated in the Offer, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in "THE OFFER--Section 3" in the Offer to Purchase
and in the instructions hereto will constitute the undersigned's
representation and warranty to the Company that (i) the undersigned has a net
long position in the Shares being tendered with the meaning of Rule 14e-4
promulgated under the Securities Exchange Act of 1934, as amended, and (ii)
the tender of such Shares complies with Rule 14e-4. The Company's acceptance
for payment for Shares tendered pursuant to the Offer will constitute a
binding agreement between the undersigned and the Company upon the terms and
subject to the conditions of the Offer.
The names and addresses of the registered holders should be printed, if they
are not already printed above, exactly as they appear on the certificates
representing Shares tendered hereby. The certificate numbers, the number of
Shares represented by such certificates and the number of Shares
8
<PAGE>
that the undersigned wishes to tender should be indicated in the appropriate
boxes on this Letter of Transmittal.
The undersigned understands that upon the terms and conditions of the Offer,
the Company will pay $40.00 per Share (the "Purchase Price") for Shares
validly tendered and not withdrawn pursuant to the Offer, taking into account
the number of Shares so tendered. The undersigned understands that all Shares
validly tendered and not withdrawn will be purchased at the Purchase Price
upon the terms and subject to the conditions of the Offer, including its
proration provisions, and that the Company will return all other Shares,
including Shares not purchased because of proration.
The undersigned recognizes that, under certain circumstances set forth in
the Offer to Purchase, the Company may terminate or amend the Offer or may not
be required to accept for payment any of the Shares tendered hereby or may
accept for payment fewer than all of the Shares tendered hereby.
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the Purchase Price of any Shares purchased and/or return
any Shares not tendered or accepted for payment in the name(s) of the
undersigned (or, in the case of Shares tendered by book-entry transfer, by
credit to the account at the applicable Book-Entry Transfer Facility).
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please mail the check for the Purchase Price and/or return any Share
certificates not tendered or accepted for payment (and accompanying documents,
as appropriate) to the undersigned at the address shown below the
undersigned's signature(s). In the event that both "Special Payment
Instructions" and "Special Delivery Instructions" are completed, please issue
the check for the Purchase Price and/or return any Shares not tendered or
accepted for payment in the name(s) of, and deliver said check and/or return
certificates to, the person or persons so indicated. The undersigned
recognizes that the Company has no obligation pursuant to the "Special Payment
Instructions" to transfer any Shares from the name of the registered holder
thereof or to order the registration or transfer of such Shares tendered by
book-entry transfer if the Company does not accept for payment any of such
Shares.
SPECIAL PAYMENT INSTRUCTIONS (SEE SPECIAL DELIVERY INSTRUCTIONS (SEE
INSTRUCTIONS 1, 5, 6 AND 7) INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check To be completed ONLY if the check
for the Purchase Price of Shares for the Purchase Price of Shares
purchased or stock certificates purchased or stock certificates
for Shares not tendered or not for Shares not tendered or not
purchased are to be issued in the purchased are to be mailed to
name of someone other than the un- someone other than the undersigned
dersigned. or to the undersigned at an ad-
dress other than that shown below
the undersigned's signature(s).
Issue check and/or certificates
to:
Mail check and/or certificates to:
Name ______________________________
(PLEASE PRINT) Name_______________________________
Address ___________________________ (PLEASE PRINT)
___________________________________ Address ___________________________
(ZIP CODE) ___________________________________
___________________________________ (ZIP CODE)
(TAXPAYER IDENTIFICATION NO. OR
SOCIAL SECURITY NO.) (COMPLETE
SUBSTITUTE IRS FORM W-9)
9
<PAGE>
SIGN HERE
(PLEASE COMPLETE SUBSTITUTE IRS FORM W-9 BELOW)
X _________________________________________________________________________
SIGNATURE(S) OF OWNER(S)
X _________________________________________________________________________
Dated ______________________________________________________________ , 1998
Name(s) ___________________________________________________________________
(PLEASE PRINT)
Capacity (full title) _____________________________________________________
Address ___________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone No. _______________________________________________
Tax Identification or Social Security No. _________________________________
(COMPLETE SUBSTITUTE IRS FORM W-9 ON REVERSE SIDE)
(Must be signed by registered holder(s) exactly as name(s) appear on stock
certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation or
other person acting in a fiduciary or representative capacity, please set
forth full title and see Instruction 5.)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Name of Firm ______________________________________________________________
Authorized Signature ______________________________________________________
Name ______________________________________________________________________
Address ___________________________________________________________________
Area Code and Telephone Number ____________________________________________
Dated ______________________________________________________________ , 1998
10
<PAGE>
TO BE COMPLETED BY ALL TENDERING STOCKHOLDERS
(SEE INSTRUCTION 8)
PAYER'S NAME: BANKBOSTON, N.A.
PART 1--PLEASE PROVIDE YOUR Social Security Number
TIN IN THE BOX AT THE RIGHT or Employer
AND CERTIFY BY SIGNING AND Identification Number
DATING BELOW.
SUBSTITUTE
FORM W-9
DEPARTMENT OF ----------------------
THE TREASURY --------------------------------------------------------
INTERNAL CERTIFICATION.--Under penalties of perjury, I certify
REVENUE that:
SERVICE
(1) The number shown on this form is my correct
taxpayer identification number (or I am waiting for a
number to be issued to me);
PAYER'S REQUEST (2) I am not subject to backup withholding because
FOR TAXPAYER (a) I am exempt from backup withholding, or (b) I
IDENTIFICATION have not been notified by the Internal Revenue
NUMBER (TIN) Service ("IRS") that I am subject to backup
withholding as a result of a failure to report all
interest or dividends, or (c) the IRS has notified me
that I am no longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS--You must cross out item
(2) above if you have been notified by the IRS that
you are currently subject to backup withholding
because of underreporting or dividends on your tax
return. However, if after being notified by the IRS
that you were subject to backup withholding you
received another notification from the IRS that you
are no longer subject to backup withholding, do not
cross out such item (2).
SIGNATURE ____________________________ DATE ____, 1998
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING A TAX
IDENTIFICATION NUMBER.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(2) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number by the
time of payment, 31% of all reportable payments made to me will be
withheld, but that such amounts will be refunded to me if I then provide a
Taxpayer Identification Number within sixty (60) days.
SIGNATURE _______________________________________________ DATE ___________
11
<PAGE>
The Information Agent for the Offer is:
INNISFREE M&A INCORPORATED
501 Madison Avenue
20th Floor
New York, New York 10022
Call Toll-Free: (888) 750-5834
Banks and Brokerage Firms Call Collect: (212) 750-5833
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO. MERRILL LYNCH & CO.
<PAGE>
EXHIBIT 99(A)(3)
SAMSONITE CORPORATION
NOTICE OF GUARANTEED DELIVERY
OF SHARES OF COMMON STOCK
PURSUANT TO THE OFFER TO PURCHASE
DATED MAY 20, 1998
- --------------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON WEDNESDAY, JUNE 17, 1998, UNLESS THE OFFER IS
EXTENDED. TENDERING STOCKHOLDERS HAVE THE RIGHT TO WITHDRAW SHARES TENDERED
AT ANY TIME PRIOR TO THE EXPIRATION OF THE OFFER AND THEY MAY WITHDRAW
SHARES AFTER JULY 15, 1998 UNLESS ACCEPTED BY THE COMPANY PRIOR TO THAT
DATE.
- -------------------------------------------------------------------------------
This form, or a form substantially equivalent to this form, must be used to
accept the Offer (as defined below) if certificates for the shares of Common
Stock, par value $.01 per share, of Samsonite Corporation are not immediately
available, if the procedure for book-entry transfer cannot be completed on a
timely basis, or if time will not permit all other documents required by the
Letter of Transmittal to be delivered to the Depositary (as defined below)
prior to the Expiration Date (as defined in "THE OFFER--Section 1" of the
Offer to Purchase defined below). Such form may be delivered by hand or
transmitted by mail or overnight courier, or (for Eligible Institutions (as
defined in the Offer to Purchase) only) by facsimile transmission, to the
Depositary. See "THE OFFER--Section 3" of the Offer to Purchase. THE ELIGIBLE
INSTITUTION WHICH COMPLETES THIS FORM MUST COMMUNICATE THE GUARANTEE TO THE
DEPOSITARY AND MUST DELIVER THE LETTER OF TRANSMITTAL AND CERTIFICATES FOR
SHARES TO THE DEPOSITARY WITHIN THE TIME SHOWN HEREIN. FAILURE TO DO SO COULD
RESULT IN A FINANCIAL LOSS TO SUCH ELIGIBLE INSTITUTION.
The Depositary for the Offer is:
BANKBOSTON, N.A.
By First Class Mail By Facsimile Transmission By Registered, Certified
Only: For Eligible Institutions Only & Overnight Courier
Only:
Boston EquiServe Boston EquiServe Boston EquiServe
Corporate Reorganization Corporate Reorganization Corporate Reorganization
P.O. Box 8029 (781) 575-2233/2232 150 Royall Street
Boston, Massachusetts Canton, Massachusetts
02266-8029 02021
By Hand:
Securities Transfer &
Reporting Services Inc.
1 Exchange Plaza/55 Broadway
New York, NY 10006
Confirm by Telephone:
(781) 575-3100
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A
LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN ELIGIBLE INSTITUTION
UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE
APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Samsonite Corporation, a Delaware
Corporation (the "Company"), upon the terms and conditions set forth in the
Offer to Purchase dated May 20, 1998 (the "Offer to Purchase") and the related
Letter of Transmittal (which together constitute the "Offer"), receipt of
which is hereby acknowledged, the number of shares set forth below of common
stock, par value $.01 per share (the "Shares"), of the Company, pursuant to
the guaranteed delivery procedures set forth in "THE OFFER--Section 3" in the
Offer to Purchase.
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
The undersigned, a firm that is a member of a registered national securities
or the National Association of Securities Dealers, Inc. or a commercial bank
or trust company having an office or correspondent in the United States which
is a participant in an approved Signature Guarantee Medallion Program, hereby
guarantees the delivery to the Depositary at one of its addresses set forth
above certificates for the Shares tendered hereby, in proper form for transfer
(or a confirmation of a book-entry transfer of the Shares delivered
electronically) together with a properly completed and duly executed Letter(s)
of Transmittal (or facsimile thereof), with any required signature guarantees
and any other required documents, all within three business days (as defined
in the Offer to Purchase) after the date hereof.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in a financial loss to such Eligible
Institution.
Name of Firm: ________________________ ______________________________________
(Authorized Signature)
Address: _____________________________ Name: ________________________________
(Please Type or Print)
______________________________________
(City, State, Zip Code)
Title: _______________________________
Area Code and
Telephone No.: _______________________ Date: __________________________, 199
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES
SHOULD BE SENT ONLY WITH YOUR LETTER OF TRANSMITTAL.
<PAGE>
EXHIBIT 99(A)(4)
SAMSONITE CORPORATION
OFFER TO PURCHASE FOR CASH
12,000,000 SHARES OF ITS COMMON STOCK
AT
$40.00 NET PER SHARE
- --------------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD, AND WITHDRAWAL RIGHTS WILL EXPIRE AT
5:00 P.M., NEW YORK CITY TIME, ON WEDNESDAY, JUNE 17, 1998, UNLESS THE
OFFER IS EXTENDED. TENDERING STOCKHOLDERS HAVE THE RIGHT TO WITHDRAW
SHARES TENDERED AT ANY TIME PRIOR TO THE EXPIRATION OF THE OFFER AND THEY
MAY WITHDRAW SHARES AFTER JULY 15, 1998 UNLESS ACCEPTED BY THE COMPANY
PRIOR TO THAT DATE.
- --------------------------------------------------------------------------------
May 20, 1998
To: Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by Samsonite Corporation, a Delaware corporation (the
"Company"), to act as Information Agent in connection with the Company's offer
to purchase up to 12,000,000 shares of its common stock, par value $.01 per
share (the "Common Stock"), and the associated preferred stock purchase rights
(the "Rights") (the Common Stock and the Rights, on and after the date of
their distribution, are herein referred to as the "Shares"), at $40.00 per
Share, net to the seller in cash, upon the terms and conditions set forth in
the Offer to Purchase dated May 20, 1998 (the "Offer to Purchase") and in the
related Letter of Transmittal (which together constitute the "Offer") enclosed
herewith. Please furnish copies of the enclosed materials to those of your
clients for whose accounts you hold Shares registered in your name or in the
name of your nominee.
THE OFFER IS CONDITIONED UPON THERE BEING VALIDLY TENDERED AND NOT PROPERLY
WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER 8,750,000 SHARES, WHICH NUMBER
CONSTITUTES APPROXIMATELY 43% OF THE SHARES OUTSTANDING ON MAY 15, 1998. THE
OFFER IS ALSO CONDITIONED ON, AMONG OTHER THINGS, THE COMPANY'S HAVING
OBTAINED SUFFICIENT FINANCING TO PURCHASE SHARES PURSUANT TO THE OFFER, TO
REFINANCE CERTAIN EXISTING DEBT AND TO PAY RELATED FEES AND EXPENSES.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are
enclosing the following documents:
1. The Offer to Purchase dated May 20, 1998;
2. The Letter of Transmittal for your use in accepting the Offer and
tendering Shares and for the information of your clients;
3. The Notice of Guaranteed Delivery to be used to accept the Offer if
certificates for Shares and all other required documents cannot be
delivered to the Depositary, or if the procedures for book-entry transfer
cannot be completed, by the Expiration Date (as defined in the Offer to
Purchase);
4. A letter which may be sent to your clients for whose accounts you hold
Shares registered in your name or in the name of your nominee, with space
provided for obtaining such clients' instructions with regard to the Offer;
5. A letter to stockholders of the Company from Luc Van Nevel, President
and Chief Executive Officer of the Company;
<PAGE>
6. Press release issued by the Company, dated May 20, 1998;
7. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 providing information relating to backup federal income
tax withholding; and
8. A return envelope addressed to Boston EquiServe (BankBoston, N.A., the
Depositary).
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON WEDNESDAY, JUNE 17, 1998, UNLESS THE OFFER IS EXTENDED.
TENDERING STOCKHOLDERS HAVE THE RIGHT TO WITHDRAW SHARES TENDERED AT ANY TIME
PRIOR TO THE EXPIRATION OF THE OFFER AND THEY MAY WITHDRAW SHARES AFTER JULY
15, 1998 UNLESS ACCEPTED BY THE COMPANY PRIOR TO THAT DATE.
The Company will not pay any fees or commissions to any broker or dealer or
other person (other than the Dealer Managers, the Depositary and the
Information Agent as described in the Offer to Purchase) for soliciting
tenders of Shares pursuant to the Offer. The Company will, however, upon
request, reimburse brokers, dealers, commercial banks and trust companies for
reasonable and necessary mailing and handling costs incurred by them in
forwarding the enclosed materials to their customers.
The Company will pay or cause to be paid all stock transfer taxes applicable
to its purchase of Shares pursuant to the Offer, subject to Instruction 6 of
the Letter of Transmittal.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees, or an Agent's Message (as defined in the Offer to
Purchase) in connection with a book-entry transfer of Shares, and any other
required documents, should be sent to the Depositary, and certificates
representing the tendered Shares should be delivered or such Shares should be
tendered by book-entry transfer, all in accordance with the Instructions set
forth in the Letter of Transmittal and in the Offer to Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their certificates or other required documents or to complete the
procedures for delivery by book-entry transfer prior to the expiration of the
Offer, a tender may be effected by following the guaranteed delivery
procedures specified in "THE OFFER--Section 3" in the Offer to Purchase.
Any inquiries you may have with respect to the Offer should be addressed to,
and additional copies of the enclosed materials may be obtained from, the
Information Agent or the Dealer Managers at their respective addresses and
telephone numbers set forth on the back cover of the Offer to Purchase.
Very truly yours,
INNISFREE M&A INCORPORATED
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
THE AGENT OF THE COMPANY, THE INFORMATION AGENT, THE DEPOSITARY, THE DEALER
MANAGERS OR ANY AFFILIATE OF ANY OF THE FOREGOING, OR AUTHORIZE YOU OR ANY
OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF
THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH
AND THE STATEMENTS CONTAINED THEREIN.
2
<PAGE>
EXHIBIT 99(A)(5)
SAMSONITE CORPORATION
OFFER TO PURCHASE FOR CASH
12,000,000 SHARES OF ITS COMMON STOCK
AT
$40 NET PER SHARE IN CASH
- --------------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT
5:00 P.M., NEW YORK CITY TIME, ON WEDNESDAY, JUNE 17, 1998, UNLESS THE
OFFER IS EXTENDED. TENDERING STOCKHOLDERS HAVE THE RIGHT TO WITHDRAW
SHARES TENDERED AT ANY TIME PRIOR TO THE EXPIRATION OF THE OFFER AND THEY
MAY WITHDRAW SHARES AFTER JULY 15, 1998 UNLESS ACCEPTED BY THE COMPANY
PRIOR TO THAT DATE.
- --------------------------------------------------------------------------------
To Our Clients:
Enclosed for your consideration are the Offer to Purchase dated May 20, 1998
(the "Offer to Purchase") and the related Letter of Transmittal (which
together constitute the "Offer"), setting forth an offer by Samsonite
Corporation, a Delaware corporation (the "Company"), to purchase up to
12,000,000 shares of its common stock, par value $.01 per share (the "Common
Stock"), and the associated preferred stock purchase rights (the "Rights")
(the Common Stock and the Rights, on and after the date of their distribution,
are herein referred to as the "Shares"), at $40.00 per Share, net to the
seller in cash, upon the terms and conditions of the Offer. Also enclosed
herewith is certain other material related to the Offer, including a letter
from Luc Van Nevel, President and Chief Executive Officer of the Company, to
stockholders. This material is being forwarded to you as the beneficial owner
of Shares carried by us in your account but not registered in your name.
The Company will pay $40.00 per Share (the "Purchase Price") for all Shares
validly tendered pursuant to the Offer and not withdrawn, upon the terms and
conditions of the Offer, including the provisions relating to proration
described in "THE OFFER--Section 1" of the Offer to Purchase. The Purchase
Price will be paid in cash, net to the seller, with respect to all Shares
purchased. Shares tendered and not purchased because of proration or invalid
tender will be returned to stockholders.
WE ARE THE HOLDER OF RECORD OF SHARES HELD FOR YOUR ACCOUNT. AS SUCH, A
TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND
PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU
FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY
US FOR YOUR ACCOUNT.
We request instructions as to whether you wish us to tender any or all of
the Shares held by us for your account, upon the terms and the conditions set
forth in the Offer.
Your attention is directed to the following:
1. The offer price is $40 per Share, net to you in cash.
2. The Offer is extended for up to 12,000,000 Shares (constituting
approximately 59% of the shares presently outstanding). The Offer is
conditioned upon there being validly tendered and not properly withdrawn
prior to the expiration of the offer 8,750,000 shares, which number
constitutes approximately 43% of the Shares outstanding on May 15, 1998.
The Offer is also conditioned on, among other things the Company's having
obtained sufficient financing to purchase Shares pursuant to the Offer, to
refinance existing debt and to pay related fees and expenses.
<PAGE>
3. The Company is making the Offer as part of its plan of
recapitalization (the "Recapitalization Plan"). The Board of Directors of
the Company considered the effects of the Offer and the Recapitalization
Plan, including among other things, the ability of the Company to operate
on a going forward basis with additional leverage, and has unanimously
determined that the Offer is fair to, and in the best interests of, the
stockholders of the Company, has approved the making of the Offer and the
transactions contemplated thereby and recommends that the stockholders of
the Company accept the Offer and tender their Shares to the Company.
4. The Purchase Price ($40 per Share) represents a substantial premium
over the closing sale price of the shares ($29 7/8 per Share) as reported
on the Nasdaq National Market on May 14, 1998, the day following
announcement of the Recapitalization Plan and the Offer. The market price
of the Shares following the consummation of the Recapitalization Plan and
the Offer is expected to be substantially lower than the Purchase Price and
the market price of the Shares on the date of the Offer to Purchase.
Accordingly, any Shares not tendered pursuant to the Offer and any tendered
Shares not accepted for payment by reason of proration or otherwise, are
expected to have a market price following the consummation of the Offer
that is substantially lower than the Purchase Price and the market price of
the Shares on the date of the Offer to Purchase. If the market price for
Shares following the consummation of the Offer is below the Purchase Price,
as expected, stockholders can be assured of maximizing the value of their
holdings after giving effect to consummation of the Offer (the sum of the
market price of their Shares following the Offer plus the amount received
in the Offer) only by tendering 100% of their Shares.
5. The Offer, proration period and withdrawal rights will expire at 5:00
P.M., New York City time, on Wednesday, June 17, 1998, unless the Offer is
extended. Your instructions to us should be forwarded to us in ample time
to permit us to submit a tender on your behalf.
6. Tendering stockholders will not be obligated to pay any brokerage
commissions or solicitation fees on the Company's purchase of Shares in the
Offer. Any stock transfer taxes applicable to the sale of Shares to Company
pursuant to the Offer will be paid by Company, except as otherwise provided
in Instruction 6 of the Letter of Transmittal.
Except as disclosed in the Offer to Purchase, Company is not aware of any
state in which the making of the Offer is prohibited by administrative or
judicial action pursuant to any valid state statute. In any jurisdiction in
which the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer will be deemed to be made on behalf of
Company by one or more registered brokers or dealers licensed under the laws
of such jurisdiction.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the instruction form set forth
on the reverse side of this letter. An envelope to return your instructions to
us is enclosed. If you authorize the tender of your Shares, all such Shares
will be tendered unless otherwise specified on the reverse side of this
letter. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US
TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
The Offer is being made solely by the Offer to Purchase dated May 20, 1998
and the related Letter of Transmittal. The Offer is not being made to, nor
will tenders be accepted from or on behalf of holders of Shares in any
jurisdiction in which the making of the Offer or the acceptance thereof would
violate the laws of such jurisdiction. In any jurisdiction the securities laws
of which require the Offer to be made by a licensed broker or dealer, the
Offer shall be deemed to be made on the Company's behalf by one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
2
<PAGE>
INSTRUCTION FORM WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH
12,000,000 SHARES OF COMMON STOCK
OF
SAMSONITE CORPORATION
AT A PURCHASE PRICE OF $40.00 NET PER SHARE
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase dated May 20, 1998 and the related Letter of Transmittal (which
together constitute the "Offer") in connection with the offer by Samsonite
Corporation, a Delaware corporation, to purchase up to 12,000,000 shares of
its common stock, par value $.01 per share (the "Common Stock"), and the
associated preferred stock purchase rights (the "Rights") (the Common Stock
and the Rights, on and after the date of their distribution, are herein
referred to as the "Shares"), at a price of $40.00 per Share, net to the
undersigned in cash upon the terms and conditions of the Offer.
This will instruct you to tender the number of Shares indicated below (or if
no number is indicated below, all Shares) held by you for the account of the
undersigned, upon the terms and subject to the conditions set forth in the
Offer.
- ----------------------------------
Number of Shares to be Tendered:*
Shares
- -----------------------------------
THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE ELECTION AND RISK OF THE
TENDERING STOCKHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
Dated: ____________________, 1998
_____________________________________
Signature(s)
_____________________________________
Print Name(s)
_____________________________________
_____________________________________
Address(es)
_____________________________________
Area Code and Telephone Number
_____________________________________
Tax ID or Social Security Number
- --------
* Unless otherwise indicated, it will be assumed that all Shares held by us
for your account are to be tendered.
3
<PAGE>
EXHIBIT 99(A)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.-- Social Security numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers have nine digits separated
by only one hyphen: i.e. 00-0000000. The table below will help determine the
number to give the payer.
- ----------------------------------------------
<TABLE>
<CAPTION>
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ------------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals The actual owner
(joint account) of the account
or, if combined
funds, any one
of the
individuals(2)
3. Husband and wife (joint The actual owner
account) of the account
or, if joint
funds, either
person(2)
4. Custodian account of a The minor(3)
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult or, if
account) the minor is the
only contributor,
the minor(1)
6. Account in the name of The ward, minor,
guardian or committee for a or incompetent
designated ward, minor, or person(4)
incompetent person
7.a. The usual revocable The grantor-
savings trust account trustee(1)
(grantor is also trustee)
b. So-called trust account The actual
that is not a legal or owner(1)
valid trust under State
law
8. Sole proprietorship account The owner(5)
- ------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ------------------------------------------------
<S> <C>
9. A valid trust, estate, or The legal entity
pension trust (Do not furnish
the identifying
number of the
personal
representative
or trustee
unless the legal
entity itself is
not designated
in the account
title.)(1)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization
account
12. Partnership account held The partnership
in the name of the
business
13. Association, club, or The organization
other tax-exempt
organization
14. A broker or registered The broker or
nominee nominee
15. Account with the The public
Department of Agriculture entity
in the name of a public
entity (such as a State
or local government,
school district, or
prison) that receives
agricultural program
payments
- ------------------------------------------------
</TABLE>
(1) List first and circle the name of the legal trust, estate, or pension
trust.
(2) List first and circle the name of the person whose number you furnish.
(3) Circle the minor's name and furnish the minor's social security number.
(4) Circle the ward, minor's or incompetent person's name and furnish such
person's social security number.
(5) Show the name of the owner.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a TIN or you don't know your number, obtain Internal Revenue
Service Form SS-5, Application for Social Security Number Card or Form SS-4,
Application for Employer Identification Number at your local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include
the following:
. A corporation.
. A financial institution.
. An organization exempt from tax under section 501(a) or an individual
retirement plan.
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States or
any subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
. An international organization or any agency or instrumentality thereof.
. A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a).
. An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
. An entity registered at all times under the Investment Company Act of
1940.
. A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals. Note: You may
be subject to backup withholding if this interest is $600 or more and is
paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.
. Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
. Payments described in section 6049(b)(5) to nonresident aliens.
. Payments on tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Exempt payees described above should file Substitute Form W-9 to avoid
possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER. FURNISH
YOUR TAXPAYER IDENTIFICATION NUMBER. WRITE "EXEMPT" ON THE FACE OF THE FORM
AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR
PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends that
are not subject to information reporting are also not subject to backup
withholding. For details, see sections 6041, 6041A(a), 6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest or other payments to give taxpayer identification numbers to payers
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Payers must be given the numbers whether or not
recipients are required to file tax returns. Payers must generally withhold
31% of taxable interest, dividend, and certain other payments to a payee who
does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you
fail to furnish your taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due
to reasonable cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of an
under-payment attributable to that failure unless there is clear and
convincing evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
EXHIBIT 99(A)(7)
FOR IMMEDIATE RELEASE Contact: Richard Wiley
Samsonite Corporation
(303) 373-6373
SAMSONITE CORPORATION ANNOUNCES
THE COMMENCEMENT OF A SELF TENDER OFFER TO PURCHASE UP TO
12 MILLION SHARES OF ITS COMMON STOCK AT $40.00 PER SHARE
DENVER, Colorado, May 20, 1998--SAMSONITE CORPORATION (NASDAQ: SAMC)
announced that it today commenced a self tender offer to purchase up to 12
million shares (or approximately 59%) of its outstanding common stock at a
price of $40.00 per share. The offer, proration period and withdrawal rights
will expire on June 17, 1998, unless extended. The Company's obligations under
the offer are subject to a number of conditions, including, among others, the
Company's having obtained the financing required to purchase shares pursuant
to the offer, to refinance certain existing debt and to pay related fees and
expenses. The self tender offer is being made as part of the Company's
recapitalization plan previously announced on May 13, 1998.
Samsonite is one of the world's largest manufacturers and distributors of
luggage and markets its products primarily under the SAMSONITE(TM), AMERICAN
TOURISTER(TM) and LARK(TM) brand names.
1
<PAGE>
EXHIBIT 99(A)(8)
SAMSONITE CORPORATION
May 20, 1998
Dear Stockholder:
On behalf of the Board of Directors of Samsonite Corporation (the
"Company"), I am pleased to inform you that the Company has adopted a plan of
recapitalization (the "Recapitalization Plan") pursuant to which the Company
has commenced a tender offer (the "Offer") to purchase up to 12,000,000 shares
(constituting approximately 59% of the shares presently outstanding) of its
common stock at $40.00 per share (the "Purchase Price"), net to the seller in
cash, upon the terms and conditions set forth in the enclosed Offer to
Purchase and related Letter of Transmittal.
In arriving at its decision, the Board of Directors gave careful
consideration to a number of factors described in the enclosed Offer to
Purchase, which is an exhibit to the Company's Tender Offer Statement on
Schedule 13E-4 being filed today with the Securities and Exchange Commission.
The enclosed Offer to Purchase describes the Board of Directors' decision and
contains other important information relating to such decision.
Stockholders should note that the Purchase Price ($40 per share of Company
common stock outstanding (the "Shares")) represents a substantial premium over
the closing sale price of the Shares ($29 7/8 per Share) as reported on the
NASDAQ National Market on May 14, 1998, the day following announcement of the
Recapitalization Plan and the Offer. The market price of the Shares following
consummation of the Recapitalization Plan and the Offer is expected to be
substantially lower than the Purchase Price and the market price of the Shares
on the date hereof. Accordingly, any Shares not tendered pursuant to the Offer
and any tendered Shares not accepted for payment by reason of proration or
otherwise, are expected to have a market price following consummation of the
Offer that is substantially lower than the Purchase Price and the market price
of the Shares on the date hereof. If the market price for Shares following
consummation of the Offer is below the Purchase Price, as expected,
stockholders can be assured of maximizing the value of their holdings after
giving effect to consummation of the Offer (the sum of the market price of
their Shares following the Offer plus the amount received in the Offer) only
by tendering 100% of their Shares.
Also accompanying this letter is a Letter of Transmittal to be used for
tendering your Shares. The Offer to Purchase and Letter of Transmittal set
forth the terms and conditions of the Offer and provide instructions as to how
to tender your Shares. We urge you to read the enclosed materials carefully
and consider all factors set forth therein before making your decision with
respect to the Offer.
On behalf of the Board of Directors, management and employees of Samsonite,
I thank you for the support you have given Samsonite.
Very truly yours,
/s/ Luc Van Nevel
Luc Van Nevel
President and Chief Executive Officer
<PAGE>
EXHIBIT 99(C)(1)
May 19, 1998
Samsonite Corporation
11200 East 45th Street
Denver, CO 80239
AGREEMENT
Each of the undersigned agrees to tender all of the shares of Samsonite
Corporation common stock, $.01 par value per share (the "Common Stock"), and
the associated preferred stock purchase rights (the "Rights") (the Common
Stock and the Rights, on and after the date of their distribution, are
referred to as the "Shares"), owned by it into the offer made by Samsonite
Corporation pursuant to the Offer to Purchase dated May 20, 1998, so long as
such offer is for $40.00 per Share and for approximately 59% of the Shares.
APOLLO INVESTMENT FUND, L.P.
By Apollo Advisors, L.P., its general partner
By Apollo Capital Management, Inc., its general
partner
By: /s/ Robert H. Falk
---------------------------------
Title: Vice President
LION ADVISORS, L.P.
By Lion Advisors, L.P., its general partner
By Lion Capital Management, Inc., its general partner
By: /s/ Robert H. Falk
---------------------------------
Title: Vice President
Accepted and agreed to as of
the date first set forth above:
SAMSONITE CORPORATION
By: /s/ Richard H. Wiley
- ------------------------
Title: Chief Financial Officer
EXC-1
