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SCHEDULE 14D-9
---------------------------
SOLICITATION/RECOMMENDATION STATEMENT
UNDER SECTION 14(D)(4) OF
THE SECURITIES EXCHANGE ACT OF 1934
---------------------------
WAVE TECHNOLOGIES INTERNATIONAL, INC.
(Name of Subject Company)
WAVE TECHNOLOGIES INTERNATIONAL, INC.
(Names of Person Filing Statement)
COMMON STOCK, PAR VALUE $0.50
(INCLUDING THE ASSOCIATED PREFERRED
STOCK PURCHASE RIGHTS)
(Title of Class of Securities)
94352Q109
(CUSIP Number of Class of Securities)
---------------------------
KENNETH W. KOUSKY
CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER
WAVE TECHNOLOGIES INTERNATIONAL, INC.
10845 OLIVE BOULEVARD, SUITE 250
SAINT LOUIS, MISSOURI 63141
(314) 995-5767
(Name, address, and telephone numbers of person authorized to
receive notices and communications on behalf of the persons filing statement)
---------------------------
WITH A COPY TO:
JOHN L. GILLIS, JR., ESQ.
ARMSTRONG TEASDALE LLP
ONE METROPOLITAN SQUARE, SUITE 2600
SAINT LOUIS, MISSOURI 63102-2740
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
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ITEM 1. SUBJECT COMPANY INFORMATION
(a) NAME AND ADDRESS. The name of the subject company is Wave Technologies
International, Inc., a Missouri corporation (the "Company"). The address of the
principal executive offices of the Company is 10845 Olive Boulevard, Suite 250,
Saint Louis, Missouri 63141 and the telephone number is (314) 995-5767.
(b) SECURITIES. The title of the class of equity securities to which this
Statement relates is common stock, par value $0.50 per share, of the Company
(the "Company Common Stock" or the "Shares"). As of March 10, 2000, there were
4,265,845 shares of the Company Common Stock outstanding. There were also
outstanding employee stock options to purchase an additional 596,392 shares of
Company Common Stock.
ITEM 2. IDENTITY AND BACKGROUND OF FILING PERSON
(a) NAME AND ADDRESS. This Solicitation/Recommendation Statement (this
"Statement") is being filed by the Company. The address of the principal
executive offices of the Company is 10845 Olive Boulevard, Suite 250, Saint
Louis, Missouri 63141 and the telephone number is (314) 995-5767.
(b) TENDER OFFER. This Statement relates to the tender offer by WTI
Acquisition Corporation (the "Purchaser"), a Delaware corporation and a
wholly-owned subsidiary of Thomson US Holdings Inc. ("Parent"), a Delaware
corporation, and Parent disclosed in a Tender Offer Statement on Schedule TO
(the "Schedule TO"), dated March 22, 2000, offering to purchase all of the
outstanding Shares at a price of $9.75 per Share, net to the seller in cash (the
"Offer Price"), upon the terms and subject to the conditions set forth in the
Offer to Purchase (the "Offer to Purchase"), dated March 22, 2000 and the
related Letter of Transmittal (which, together with the Offer to Purchase,
constitute the "Offer"). The address of the Purchaser as set forth in the
Schedule TO is Metro Center at One Station Plaza, Stamford, Connecticut 06902.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of March 10, 2000 (the "Merger Agreement"), by and among the Parent, the
Purchaser and the Company. The Merger Agreement provides, among other things,
that following satisfaction or waiver of the conditions set forth in the Merger
Agreement and consummation of the Offer, the Purchaser will be merged with and
into the Company (the "Merger"), the separate corporate existence of the
Purchaser will cease and the Company will continue as the surviving corporation
(the "Surviving Corporation") and a wholly-owned subsidiary of the Parent. A
copy of the Merger Agreement is included as Exhibit (d)(1) to the Schedule TO
and is incorporated herein by reference.
At a meeting held on March 10, 2000 all members of the Board of Directors
of the Company (the "Company Board"), approved the Merger Agreement and the
transactions contemplated thereby, including the Offer and the Merger and
determined that the transactions contemplated by the Merger Agreement, including
the Offer and the Merger are fair to and in the best interests of the Company's
shareholders.
ITEM 3. PAST CONTACT, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS
(a) CONFLICTS OF INTERESTS. Except as set forth in this Item 3, to the
knowledge of the Company, there are no material agreements, arrangements or
understandings and no actual or potential conflicts of interest between the
Company or its affiliates and (i) the Company's executive officers, directors or
affiliates or (ii) Parent or Purchaser or their respective executive officers,
directors or affiliates.
The Merger Agreement provides that the By-laws of the Surviving Corporation
will contain provisions no less favorable with respect to indemnification than
are set forth in Article VII of the By-laws of the Company, which provisions
shall not be amended, repealed or otherwise modified for a period of six years
from the effective time of the Merger (the "Effective Time") in any manner that
would affect adversely the rights thereunder of individuals who, at the
Effective Time, were directors, officers, employees, fiduciaries or agents of
the Company, unless such modification shall be required by law.
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The Merger Agreement also provides that the Surviving Corporation will use
its reasonable best efforts to maintain in effect for three years from the
Effective Time, if available, the current directors' and officers' liability
insurance policies maintained by the Company (provided that the Surviving
Corporation may substitute therefor policies of a least the same coverage
containing terms and conditions that are not materially less favorable) with
respect to matters occurring prior to the Effective Time; provided, however,
that in no event shall the Surviving Corporation be required to expend more than
an amount per year equal to 200% of current annual premiums paid by the Company
for such insurance (which premiums the Company has represented to Parent and
Purchaser to be $35,000 in the aggregate).
Parent, Purchaser and the Company have also agreed that in the event the
Company or the Surviving Corporation or any of their respective successors or
assigns (i) consolidates with or merges into any other person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger or (ii) transfers all or substantially all of its properties and assets
to any person, then and in each such case, proper provision shall be made so
that the successors and assigns of the Company or the Surviving Corporation, as
the case may be, or at Parent's option, Parent, shall assume the foregoing
indemnity obligations.
(b) AGREEMENTS WITH PARENT AND PURCHASER. A summary of the material
provisions of the Merger Agreement is included in the Offer to Purchase under
Section 10 "Background of the Offer; Contacts with the Company; the Merger
Agreement; Interests of Certain Persons in the Merger" of the Offer to Purchase,
a copy of which is included as Exhibit (a)(1) to the Schedule TO and is
incorporated herein by this reference. Such summary does not purport to be
complete and is qualified in its entirety by reference to the complete text of
the Merger Agreement, a copy of which is included as Exhibit (d)(1) to the
Schedule TO and is incorporated herein by reference.
On January 13, 1999, the Company and Course Technology, an affiliate of
Parent, executed a Confidentiality Agreement. The Confidentiality Agreement was
amended by a letter agreement executed on January 22, 1999. The Confidentiality
Agreement as so amended is referred to herein as the "Confidentiality
Agreement." Pursuant to the terms of the Confidentiality Agreement, the Company
agreed to provide to Course Technology or an affiliate certain confidential and
proprietary information concerning the Company and Course Technology, on behalf
of itself and any of its affiliates which received any of the confidential
information, agreed among other things: (1) to keep the confidential information
confidential, (2) not to use the confidential information for any purpose other
than to evaluate a possible acquisition transaction with the Company, (3) not to
disclose the fact that the confidential information had been made available to
Course and (4) that neither Course nor any of its affiliates would in any
manner, directly or indirectly, except at the specific invitation of the
Company, effect or seek, offer or propose to effect, or cause or participate in
or in any way assist any other person to effect or seek, offer or propose
(whether publicly or otherwise) to effect or participate in (i) any acquisition
of any securities or assets of the Company or any of its subsidiaries, (ii) make
any tender or exchange offer, merger or other business combination involving the
Company or any of its subsidiaries, any recapitalization, restructuring,
liquidation, dissolution or other extraordinary transaction with respect to the
Company or any of its subsidiaries, or (iii) make any solicitation of proxies or
consents to vote any voting securities of the Company, or (iv) take certain
other similar actions or (v) take any action which might force the Company to
make a public announcement regarding any of the types of matters set forth
above. This description is a summary, and is qualified in its entirety by
reference to the Confidentiality Agreement, which is incorporated herein by this
reference to Exhibit (d)(2) to the Schedule TO.
Parent has requested that Kenneth Kousky, the Chairman of the Board,
President and Chief Executive Officer of the Company, remain as the President of
the Company following the Merger at a base salary of $225,000 per year, subject
to review on March 1, 2001. Under the terms of Parent's proposal to Mr. Kousky,
he would participate in (1) a short term incentive plan that would allow him to
earn an incentive bonus of between 50% and 100% of his base salary if the
Company meets certain financial targets to be established by the parties and (2)
a three year long term incentive plan that would allow Mr. Kousky to earn an
additional incentive bonus of up to 50% of his base salary in the first two
years and 100% of his base salary in the third year if the Company meets certain
financial targets to be established by the parties, including in each case a
guaranteed portion for the remainder of fiscal year 2000. Parent's offer
provides that if Mr. Kousky's
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employment were terminated, he would receive severance in the form of salary
continuation for 12 months, provided that he executes a separation letter, which
would include an agreement by Mr. Kousky not to compete with the Company for a
period of one year from the date of termination of his employment. Mr. Kousky
would also participate in other benefit plans available to similarly situated
employees of Thomson Learning, a division of Parent ("Thomson Learning"). Parent
and Mr. Kousky and his counsel are negotiating the terms of an employment
agreement, but no agreement has been reached to date. The foregoing is a summary
of Parent's proposal to Mr. Kousky. The Offer and the Merger are not conditioned
on Mr. Kousky accepting these or any other terms of employment.
ITEM 4. THE SOLICITATION OR RECOMMENDATION
(a) RECOMMENDATION OF THE COMPANY BOARD. At a meeting held on March 10,
2000, the Company Board, by unanimous vote of all directors, approved the Merger
Agreement and the transactions contemplated thereby, including the Offer and the
Merger, and determined that the transactions contemplated by the Merger
Agreement, including the Offer and the Merger, are advisable, fair to and in the
best interests of the Company and its stockholders.
The Company Board recommends that the stockholders accept the Offer and
tender their Shares pursuant to the Offer.
A letter to the stockholders communicating the Company Board's
recommendation is attached hereto as Exhibit (a)(2) and incorporated herein by
reference. A press release announcing the commencement of the Offer is included
as Exhibit (a)(9) to the Schedule TO and is incorporated herein by reference.
(b) REASONS FOR THE RECOMMENDATION OF THE COMPANY BOARD.
From time to time for a number of years, the Company has been contacted by
and held informal discussions and meetings with a number of entities which have
inquired as to the Company's interest in an acquisition transaction. While none
of these contacts (other than the contacts with Parent described below) resulted
in a formal proposal, the Company Board has considered whether a combination
with any of these entities would be strategically advantageous to the Company
and in the best interest of the Company stockholders and has considered other
strategic alternatives available to the Company.
During the fourth quarter of 1998 and at various times during 1999,
executives of Thomson Learning met with executives of the Company to discuss
ways that the two companies could work together to pursue common business
interests. In connection with these discussions, on January 13, 1999, Course
Technology and the Company entered into a Confidentiality Agreement and the
Company provided Parent with information on the Company's product lines and
business strategies. The Confidentiality Agreement was subsequently amended on
January 22, 1999. On several occasions during the Spring of 1999, as part of
these discussions, executives of Thomson Learning expressed to executives of the
Company Parent's interest in a possible acquisition of the Company.
While the Company Board had not determined to seek an acquisition
transaction for the Company, the Board believed it advisable to retain a
financial advisor to assist it in evaluating and responding to inquiries
received by the Company. Accordingly, on March 1, 1999, the Company retained
U.S. Bancorp Piper Jaffray to serve as the Company's exclusive representative
and financial advisor for the purpose of advising the Company concerning a
potential acquisition of the Company.
At a meeting on May 25, 1999, U.S. Bancorp Piper Jaffray had discussions
with the Company Board concerning various potential strategic transactions,
including the possibility of selling the Company.
In June and July 1999, U.S. Bancorp Piper Jaffray and representatives of
the Company contacted a number of entities, most of which had theretofore
advised the Company that they had a potential interest in a transaction with the
Company. Between June and October of 1999, certain of these entities executed
confidentiality agreements with the Company, were given additional information
concerning the Company and held further discussions with U.S. Bancorp Piper
Jaffray and with other representatives of the Company. None of these entities
submitted a formal proposal to acquire the Company. In addition, the Company had
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discussions in the fall of 1999 through early March 2000 with additional parties
which expressed an interest in a potential transaction or strategic relationship
with the Company.
On September 29, 1999, Eric Shuman, Senior Vice President and Chief
Financial Officer of Thomson Learning and Tim McEwen and Susan Chrein-Yules, the
Chief Executive Officer and Chief Financial Officer of the Life Long Learning
Group of Thomson Learning, respectively, and representatives of Scott-Macon,
Ltd., Parent's financial adviser, met with Kenneth W. Kousky, the Chairman of
the Board, President and Chief Executive Officer of the Company and a
representative of U.S. Bancorp Piper Jaffray in St. Louis, Missouri to again
discuss ways in which the two companies could work together, including the
possible acquisition of the Company by Parent. On November 30, 1999, Messrs.
Shuman and McEwen called Mr. Kousky and suggested the possible acquisition of
the Company by Parent. On December 1, 1999, Messrs. Shuman and McEwen met with
Mr. Kousky to further discuss a possible acquisition and a range of values for
the Company. Messrs. Shuman, McEwen and Kousky had several additional
discussions by telephone in December 1999 and January 2000 regarding a possible
acquisition, but were unable to reach agreement on a value for the Company.
On February 4, 2000, Parent submitted a written proposal to acquire the
Company for $9.00 cash per Share. Between February 4 and February 14, 2000,
Messrs. Shuman and McEwen discussed a possible range of values for the Company
with Raymond Kalinowsky, a member of the Company Board, and representatives of
U.S. Bancorp Piper Jaffray. At a meeting on February 10, 2000, the Company Board
authorized Mr. Kalinowsky and representatives of U.S. Bancorp Piper Jaffray to
continue negotiations with Parent. In a telephone conversation on February 14,
2000 among Mr. Kalinowsky, Mr. Shuman and a representative of U.S. Bancorp Piper
Jaffray, the parties continued to negotiate terms of a potential acquisition
transaction.
At a meeting on February 15, 2000, the Company Board authorized management
to negotiate a definitive agreement and to execute a letter agreement with
Thomson Learning giving Parent an exclusive negotiating period through March 1,
2000. A copy of the letter agreement is attached hereto as Exhibit (e)(3) and is
incorporated by reference herein. On March 1, 2000, the parties orally extended
the exclusive negotiating period until March 7, 2000.
On February 22 and 23, 2000, Mr. Kousky and J. Michael Bowles, the
Company's Chief Financial Officer, a representative of U.S. Bancorp Piper
Jaffray and counsel for the Company met with executives of Thomson Learning,
including Mr. McEwen, and counsel for Parent in St. Louis, Missouri to discuss
the Company's business strategies and the terms of a possible acquisition of the
Company by Parent and to begin a due diligence review of the Company by Parent
and its counsel.
On February 25, 2000, counsel for Parent provided a draft Merger Agreement
to counsel for the Company. During the period from February 22 through March 9,
2000, a number of meetings, on-site visits to the Company facilities, calls and
other activities took place between representatives of Parent and the Company
and their respective counsel in furtherance of Parent's due diligence efforts.
During this period, counsel for Parent and the Company also negotiated the terms
of the Merger Agreement.
At a special meeting held on March 10, 2000, the Company Board approved the
Merger Agreement, the Offer and the Merger, and determined that the transactions
contemplated by the Merger Agreement, including the Offer and the Merger, are
advisable, fair to and in the best interests of the Company's stockholders. At
the meeting, the Company Board considered the opinion of U.S. Bancorp Piper
Jaffray delivered orally at the meeting and subsequently confirmed in writing to
the effect that as of that date, based upon and subject to certain assumptions
and matters stated therein, the cash consideration to be paid for the Company
Common Stock in the Offer and the Merger was fair, from a financial point of
view, to the holders of Company Common Stock (other than Parent and its
affiliates). (See Item 5). The Company Board also considered (i) economic
conditions and prospects for the markets in which the Company operates and
competitive pressures in the IT training industry, (ii) the rapid pace of
technological change in the Company's industry and the anticipated need of the
Company for substantial cash in order to adapt to such change, (iii) the fact
that Parent has substantially greater financial resources than the Company, and
will be able to enhance the Company's ability to compete in and adapt to its
changing markets, (iv) the business fit of the Company and Parent and the
complimentary nature of their respective businesses, (v) the terms and
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conditions of the Merger Agreement, (vi) the likelihood of the Merger being
approved by the appropriate regulatory authorities and (vii) the expectation of
the Company Board that the Offer and the Merger are likely to be consummated
expeditiously.
On March 10, 2000, Parent, Purchaser and the Company signed the Merger
Agreement and issued a press release announcing the Merger.
(c) INTENT TO TENDER. To the best knowledge of the Company after reasonable
inquiry, all of its executive officers and directors currently intend to tender
pursuant to the Offer all Shares held of record or beneficially owned by such
persons, subject to and consistent with any fiduciary obligations of such
persons.
ITEM 5. PERSONS/ASSETS, RETAINED, EMPLOYED COMPENSATED OR USED
Pursuant to the terms of an engagement letter, dated as of March 1, 1999,
the Company engaged U.S. Bancorp Piper Jaffray to act as its financial advisor
in connection with the potential acquisition of the Company. As part of its role
as financial advisor, U.S. Bancorp Piper Jaffray delivered a fairness opinion
(the "Fairness Opinion") to the Company Board. Pursuant to the engagement
letter, U.S. Bancorp Piper Jaffray received or will receive from the Company:
(i) a retainer fee of $50,000, (ii) a fee for delivery of its Fairness Opinion
of $250,000 and (iii) if the Offer and the Merger are consummated, a transaction
fee equal to 2% of the aggregate purchase price paid for the Company Common
Stock (a minimum of $650,000) less $275,000. The Company has also agreed to
reimburse U.S. Bancorp Piper Jaffray for reasonable out-of-pocket expenses,
including, without limitation, the reasonable fees and disbursements of its
legal counsel, and to indemnify U.S. Bancorp Piper Jaffray and related parties
against certain liabilities arising out of U.S. Bancorp Piper Jaffray's
engagement. The opinion of U.S. Bancorp Piper Jaffray, dated March 10, 2000, to
the Company Board, is to the effect that, based upon and subject to the matters
described in such opinion, the $9.75 per share cash consideration to be paid for
the shares of Common Stock of the Company in the proposed Offer and the Merger
pursuant to the Merger Agreement was fair, from a financial point of view, to
the holders of Common Stock of the Company (other than Parent and its
affiliates) as of that date. The full text of U.S. Bancorp Piper Jaffray's
written opinion dated March 10, 2000, which sets forth the assumptions made,
procedures followed, matters considered and limitations on the review undertaken
by U.S. Bancorp Piper Jaffray, is attached hereto as Exhibit (e)(4) and
incorporated herein by reference. U.S. Bancorp Piper Jaffray's opinion is
directed only to the fairness, from a financial point of view, of the $9.75 per
share cash consideration to be paid for the shares of Common Stock of the
Company in the proposed Offer and the Merger pursuant to the Merger Agreement to
the holders of shares of Common Stock of the Company (other than Parent and its
affiliates) and is not intended to constitute, and does not constitute, a
recommendation as to whether any stockholder should tender shares pursuant to
the Offer, vote in favor of the Merger, or as to any other matter relating to
the Offer of the Merger. HOLDERS OF SHARES ARE URGED TO READ SUCH OPINION
CAREFULLY IN ITS ENTIRETY.
U.S. Bancorp Piper Jaffray has rendered various investment banking and
other advisory services to the Company and its affiliates in the past for which
U.S. Bancorp Piper Jaffray received customary compensation. In the ordinary
course of business, U.S. Bancorp Piper Jaffray and its affiliates may actively
trade securities of the Company and Thomson Corp., an affiliate of Parent, for
its own account and for the accounts of customers and, accordingly, may at any
time hold a long or short position in such securities.
Except as disclosed herein and in the Offer to Purchase, a copy of which is
attached as Exhibit (a)(1) to the Schedule TO and portions of which are
incorporated herein by reference, neither the Company nor any person acting on
its behalf has employed, retained or agreed to compensate any person to make
solicitations or recommendations to the shareholders concerning the Offer or the
Merger.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY
To the Company's knowledge after reasonable inquiry, no transactions in the
Shares, other than ordinary course purchases under the Company's 401(k) savings
plan, have been effected during the past 60 days by the Company or any of its
executive officers, directors, affiliates or subsidiaries.
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ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY
(a) Except as set forth in this Schedule 14D-9, the Company is not engaged
in any negotiation in response to the Offer that relates to or would result in
(i) an extraordinary transaction, such as a merger, reorganization or
liquidation, involving the Company or any subsidiary of the Company, (ii) a
purchase, sale or transfer of a material amount of assets by the Company or any
subsidiary of the Company, (iii) a tender offer for or other acquisition of
securities by or of the Company or (iv) any material change in the present
dividend policy or indebtedness or capitalization of the Company.
(b) Except as described in Item 3 above (the provisions of which are hereby
incorporated by reference), there are no transactions, Company Board
resolutions, agreements in principle or signed contracts in response to the
Offer that relate to or would result in one or more of the events referred to in
Item 7(a) above.
ITEM 8. ADDITIONAL INFORMATION
(a) As a Missouri corporation, the anti-takeover provisions of Section
351.459 of The General and Business Corporation Law of Missouri ("Missouri Law")
by their terms apply to the Company. A description of these provisions and their
applicability to the Company is contained in Section 15 "Certain Legal Matters
and Regulatory Approvals" of the Offer to Purchase which is attached as Exhibit
(a)(1) to the Schedule TO and is incorporated herein by this reference. At its
meeting held on March 10, 2000, the Company Board approved the Merger Agreement
and the transactions contemplated thereby, which approval rendered Section
351.459 of the Missouri Law inapplicable to the Merger Agreement and the
transactions contemplated thereby including the Offer and the Merger.
ITEM 9. EXHIBITS
EXHIBIT INDEX
<TABLE>
<C> <S>
(a)(1) Offer to Purchase dated March 22, 2000 (incorporated herein
by reference to Exhibit (a)(1) to the Schedule TO).
(a)(2) Letter to Shareholders dated March 22, 2000.
(a)(3) Press Release of the Parent and Company dated March 10, 2000
(incorporated herein by reference to Exhibit (a)(9) to the
Schedule TO).
(e)(1) Agreement and Plan of Merger, dated as of March 10, 2000, by
and among Wave Technologies International, Inc., WTI
Acquisition Corporation and Thomson US Holdings Inc.
(incorporated herein by reference to Exhibit (d)(1) to the
Schedule TO).
(e)(2) Confidentiality Agreement dated January 13, 1999, between
Parent and the Company, as amended on January 22, 1999
(incorporated herein by reference to Exhibit (d)(2) to the
Schedule TO).
(e)(3) Letter Agreement between Thomson Learning and Company dated
February 16, 2000.
(e)(4) Opinion of U.S. Bancorp Piper Jaffray Inc. dated March 10,
2000.
</TABLE>
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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.
Date: March 22, 2000
WAVE TECHNOLOGIES INTERNATIONAL, INC.
/s/ KENNETH W. KOUSKY
By:
--------------------------------------
Name: Kenneth W. Kousky
Title: Chairman of the Board,
President and Chief
Executive Officer
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EXHIBIT (a)(2)
[WAVE TECHNOLOGIES INTERNATIONAL LOGO]
March 22, 2000
Dear Shareholder:
I am pleased to inform you that on March 10, 2000, Wave Technologies
International, Inc. entered into an Agreement and Plan of Merger (the "Merger
Agreement") with Thomson US Holdings Inc. and its newly-formed subsidiary WTI
Acquisition Corporation, which provides for the acquisition of the Company by
Thomson US Holdings. WTI Acquisition has commenced a tender offer for all
outstanding shares of Common Stock of the Company at a price of $9.75 per share
payable all in cash. Thomson US Holdings will, if it successfully completes the
tender offer, effect a merger of the Company with WTI Acquisition in order to
make the Company a wholly-owned subsidiary. Any shares not tendered in the offer
will be converted into the right to receive $9.75 in cash, or any higher price
that may be paid in the offer.
The Company's Board of Directors unanimously (i) determined that the terms
of the offer and the merger are fair to and in the best interests of the
Company's shareholders, (ii) approved the Merger Agreement and the transactions
contemplated thereby, and (iii) recommended that shareholders accept the offer
and tender their shares. In arriving at its recommendation, the Board considered
the factors described in the accompanying Offer to Purchase, which is being sent
to you by WTI Acquisition. Additional information with respect to the offer and
the merger accompany this letter. These documents set forth all of the terms of
the offer and provide instructions as to how to tender your shares. Also
included is a Schedule 14D-9 prepared by the Company which contains a discussion
of the background and the Board's reasons for the approval of the Offer and the
Merger. I urge you to read all these materials carefully and in their entirety.
On behalf of myself, the other members of management and directors of the
Company, I want to sincerely thank you for the support you have given us over
the years. If you have any questions about the offer, please feel free to call
Innisfree M&A Incorporated, the Information Agent, at (888) 750-5834.
Very truly yours,
/s/ Kenneth W. Kousky
Kenneth W. Kousky
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
- ------------------------------------
WAVE TECHNOLOGIES
INTERNATIONAL, INC.
10845 OLIVE BOULEVARD
ST. LOUIS, MO 63141
Corporate (800) 994-5767
Corporate Fax (314)
995-3894
Sales (800) 828-2050
Sales Fax (314) 995-9726
www.wavetech.com
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EXHIBIT (e)(3)
[LETTERHEAD]
CONFIDENTIAL
February 16, 2000
VIA FAX:
Mr. Ray Kalinowski
Wave Technologies International
10845 Olive Blvd. - Suite 250
St. Louis, MO 63141
Dear Mr. Kalinowski:
We are delighted to have the opportunity to acquire Wave Technologies
International.
In order to move forward toward reaching a definitive agreement, which we
believe could be reached during the next couple of weeks, we require an
exclusive negotiating period through March 1, 2000, during which time Marathon
would not initiate or proceed with discussions with any third party or consider
any other acquisition proposal. During that time, we would be prepared to
negotiate all aspects of the proposal set forth in this letter.
As discussed we would encourage senior management of Marathon to remain
with the company, and believe that we could offer very competitive compensation,
benefits and rewards, and an attractive work environment for key employees.
Specifically, the employment terms we are prepared to offer key employees are
set forth in a separate letter being sent simultaneously herewith.
We are prepared to conduct due diligence during the early part of next week
and will send a due diligence checklist under separate cover so that you can set
up a data room.
Further, this letter is provided to you on a strictly confidential basis.
Neither Thomson's interest in Marathon nor the contents of this letter may be
disclosed to any other person other than your and our professional advisors
without our prior written consent. In particular, we will withdraw our proposal
immediately in the event that such confidentiality is breached.
We believe that Marathon would complement our existing business interests
and that our offer is in the best interests of your shareholders. We are firmly
committed to moving forward quickly to reach a mutually acceptable agreement and
we look forward to completing our due diligence.
If you have any questions contact me at .
Very truly yours,
Eric L. Shuman
cc: Eric Nicholson, Piper Jaffray -- VIA FAX:
John Gillis, Armstrong Teasdale LLP -- VIA FAX:
Robert Christie
Timothy McEwen
Accepted and approved by:
/s/ RAY KALINOWSKI
--------------------------------------
Ray Kalinowski
Wave Technologies International
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EXHIBIT (e)(4)
March 10, 2000
PERSONAL & CONFIDENTIAL
Board of Directors
Wave Technologies International, Inc.
10845 Olive Boulevard, Suite 250
St. Louis, MO 63141
Members of the Board:
You have requested our opinion as to the fairness, from a financial point
of view, to the holders of common stock (the "Common Stock") of Wave
Technologies International, Inc. (the "Company") (other than Parent (as defined
below) and its affiliates) of the cash consideration to be received by holders
of Common Stock, pursuant to an Agreement and Plan of Merger to be dated as of
March 10, 2000 (the "Agreement") among the Company, Thomson US Holdings, Inc.
(the "Parent") and WTI Acquisition Corporation (the "Purchaser"), a wholly owned
subsidiary of the Parent. The Agreement provides for (i) the commencement by
Purchaser of a tender offer (the "Tender Offer") to purchase shares of Common
Stock at a price of $9.75 per share, net to seller in cash (the "Offer Price"),
and (ii) the subsequent merger (the "Merger") of the Purchaser into the Company
in which each remaining share of Common Stock will be converted into the right
to receive the Offer Price in cash. The Tender Offer and the Merger are
collectively referred to as the "Transaction." The terms and conditions of the
Transaction are more fully set forth in the Agreement.
U.S. Bancorp Piper Jaffray, Inc. ("USB Piper Jaffray"), as a customary part
of its investment banking business, is engaged in the valuation of businesses
and their securities in connection with mergers and acquisitions, underwriting
and secondary distributions of securities, private placements and valuations for
estate, corporate and other purposes. We have acted as financial advisor to the
Company in connection with the Transaction and will receive a fee for services
which is contingent upon consummation of the Transaction. We will also receive a
fee for providing this opinion. This opinion fee is not contingent upon the
consummation of the Transaction. The Company has also agreed to indemnify us
against certain liabilities in connection with our services. In the ordinary
course of our business, we and our affiliates may actively trade securities of
the Company and Thomson Corp., an affiliate of Parent, for our own account or
the account of our customers and, accordingly, may at any time hold a long or
short position in such securities. We have performed for a fee various
investment banking services for the Company in the past.
In arriving at our opinion, we have undertaken such review, analyses and
inquiries as we deemed necessary and appropriate under the circumstances. We
have reviewed the draft received March 8, 2000 of the Agreement. We also have
reviewed financial and other information that was publicly available or
furnished to us by the Company, including information provided during
discussions with the management of the Company. In addition, we have compared
certain financial data of the Company with various other companies whose
securities are traded in public markets, reviewed prices and premiums paid in
certain other business combinations and conducted other financial studies,
analyses and investigations as we deemed appropriate for purposes of this
opinion.
We have relied upon and assumed the accuracy and completeness of the
financial statements and other information provided to us or otherwise made
available to us and have not assumed responsibility independently to verify such
information. The Company does not publicly disclose internal financial
information of the type provided to us in connection with the Transaction. Such
information was prepared for financial planning purposes and was not prepared
with the expectation of public disclosure. We have relied upon the assurances of
the Company's management that the information provided has been prepared on a
reasonable basis in accordance with industry practice, and, with respect to
financial planning data, reflects the best currently
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March 10, 2000
Page 2
available estimates and judgment of the Company's management and that they are
not aware of any information or facts that would make the information provided
to us incomplete or misleading. Without limiting the generality of the
foregoing, for the purpose of this opinion, we have assumed that neither the
Company nor the Parent are party to any pending transaction, including external
financing, recapitalizations, acquisitions or merger discussions, other than the
Transaction or in the ordinary course of business. We have also assumed that the
Transaction will be taxable for federal tax purposes to the holders of Common
Stock. In arriving at our opinion, we have assumed that all the necessary
regulatory approvals and consents required for the Transaction will be obtained
in a manner that will not change the per share Offer Price.
In arriving at our opinion, we have not performed any appraisals or
valuations of any specific assets or liabilities of the Company, and have not
been furnished with any such appraisals or valuations. We express no opinion
regarding the liquidation value of the Company. Without limiting the generality
of the foregoing, we have undertaken no independent analysis of any pending or
threatened litigation, possible unasserted claims or other contingent
liabilities, to which the Company or any of its affiliates is a party or may be
subject and, at the Company's direction and with its consent, our opinion makes
no assumption concerning, and therefore does not consider, the possible
assertion of claims, outcomes or damages arising out of any such matters.
This opinion is necessarily based upon the information available to us and
facts and circumstances as they exist and are subject to evaluation on the date
hereof; events occurring after the date hereof could materially affect the
assumptions used in preparing this opinion. We are not expressing any opinion
herein as to the price at which shares of Common Stock have traded or may trade
at any future time. We have not undertaken to reaffirm or revise this opinion or
otherwise comment upon any events occurring after the date hereof and do not
have any obligation to update, revise or reaffirm this opinion.
This opinion is directed to the Board of Directors of the Company and is
not intended to be and does not constitute a recommendation to any stockholder
of the Company as to how such stockholder should vote on the proposed Merger or
whether such stockholder should tender its shares of Common Stock into the
Tender Offer. We were not requested to opine as to, and this opinion does not
address, the basic business decision to proceed with or effect the Transaction.
Except with respect to the use of this opinion in connection with the Schedule
14D-9 relating to the Tender Offer, this opinion shall not be published or
otherwise used, nor shall any public references to us be made, without our prior
written approval.
Based upon and subject to the foregoing and based upon such other factors
as we consider relevant, it is our opinion that the cash consideration to be
paid for the shares of Common Stock of the Company in the proposed Transaction
pursuant to the Agreement is fair, from a financial point of view, to the
holders of Common Stock of the Company (other than Parent and its affiliates) as
of the date hereof.
Sincerely,
/s/ U.S. Bancorp Piper Jaffray Inc.
U.S. Bancorp Piper Jaffray Inc.
