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RAINFOREST CAFE, INC.
720 SOUTH FIFTH STREET
HOPKINS, MINNESOTA 55343
September 29, 2000
To our Shareholders:
On behalf of the Board of Directors of Rainforest Cafe, I am pleased to
inform you that on September 26, 2000, Rainforest Cafe entered into an Agreement
and Plan of Merger with Landry's Seafood Restaurants pursuant to which Landry's
today commenced a cash tender offer to purchase all of the issued and
outstanding shares of Rainforest Cafe common stock at a price of $3.25 per
share. The offer is currently scheduled to expire at 5:00 p.m., New York City
time, on Friday, October 27, 2000. No shares will be purchased by Landry's
pursuant to the tender offer unless shares tendered by the Company's
shareholders, together with the shares held by Landry's, constitute at least a
majority of the then outstanding shares of Rainforest common stock. Following
the successful completion of the tender offer, Landry's will own at least a
majority of the shares and will have acquired control of the Company.
A COMMITTEE OF DISINTERESTED DIRECTORS OF THE BOARD AND THE BOARD HAVE
DETERMINED THAT THE OFFER AND THE MERGER AGREEMENT ARE FAIR TO, AND IN THE BEST
INTERESTS OF, RAINFOREST CAFE AND ITS SHAREHOLDERS, HAVE APPROVED THE OFFER AND
THE MERGER AGREEMENT AND RECOMMEND THAT RAINFOREST CAFE'S SHAREHOLDERS ACCEPT
THE OFFER AND TENDER THEIR SHARES.
In arriving at its recommendation, the Committee gave careful consideration
to the factors described in the attached Solicitation/Recommendation Statement
on Schedule 14D-9 (the "Company Statement") that is being filed today with the
Securities and Exchange Commission. Among other things, the Committee considered
the opinion of its financial advisor, U.S. Bancorp Piper Jaffray, that the terms
of the offer are fair, from a financial point of view, to the shareholders of
the Company.
Given the current challenges faced by Rainforest Cafe, most significantly
the trend of continued declines in same store sales, we view this offer to
purchase Rainforest Cafe shares for cash as an alternative that best mitigates a
future full of uncertainties for Rainforest Cafe shareholders. The performance
of the Rainforest Cafe business, particularly at the top line, has continued to
erode and has continued to fall short of management's expectations. Very simply,
as sales continue to decline, many of the units are approaching levels where
cash flow is negative and costly exit strategies must be assessed. Absent a
successful turnaround effort, our analysis indicates that it may be necessary to
close as many as 20 stores.
Our Board of Directors felt it was important to deliver this all cash
tender offer to all Rainforest Cafe shareholders. The offer price represents
approximately a 60% premium over the closing stock price of $2.03 on the day
prior to the announcement of the tender offer.
In addition to the attached Company Statement, you will also find enclosed
the Offer to Purchase dated September 29, 2000, together with related materials,
including a Letter of Transmittal, to be used for tendering your shares in the
offer. These documents state the terms and conditions of the tender offer and
provide instructions as to how to tender your shares. We urge you to read these
documents carefully in making your decision with respect to tendering your
shares pursuant to the offer.
On behalf of the Board of Directors,
Lyle Berman
Chairman of the Board
