<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 4, 1997
SECURITIES ACT FILE NO. 333-19479
INVESTMENT COMPANY ACT FILE NO. 811-07203
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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)
AMENDMENT NO. 1
MERRILL LYNCH MUNICIPAL STRATEGY FUND, INC.
(Name of Issuer)
MERRILL LYNCH MUNICIPAL STRATEGY FUND, INC.
(Name of Person(s) Filing Statement)
SHARES OF COMMON STOCK, PAR VALUE $.10 PER SHARE
(Title of Class of Securities)
59020H 10 4
(CUSIP Number of Class of Securities)
ARTHUR ZEIKEL
MERRILL LYNCH MUNICIPAL STRATEGY FUND, INC.
800 SCUDDERS MILL ROAD
PLAINSBORO, NEW JERSEY 08536
(609) 282-2800
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Person(s) Filing Statement)
COPIES TO:
<TABLE>
<S> <C>
THOMAS R. SMITH, JR., ESQ. PATRICK D. SWEENEY, ESQ.
BROWN & WOOD LLP MERRILL LYNCH ASSET MANAGEMENT, L.P.
ONE WORLD TRADE CENTER P.O. BOX 9011
NEW YORK, NEW YORK 10048-0557 PRINCETON, NEW JERSEY 08543-9011
OCTOBER 21, 1997
(Date Tender Offer First Published,
Sent or Given to Security Holders)
</TABLE>
CALCULATION OF FILING FEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TRANSACTION VALUATION: $21,620,000 (a) AMOUNT OF FILING FEE: $4,324 (b)(c)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(a) Calculated as the aggregate estimated maximum purchase price to be paid for
(i) 1,000,000 shares in the original offer, based upon the net asset value
per share ($10.76) at October 16, 1997 and (ii) 1,000,000 additional shares
in the amended offer, based upon the net asset value per share ($10.86) at
October 30, 1997.
(b) Calculated as 1/50th of 1% of the Transaction Valuation.
(c) $2,152 was previously paid with the initial filing of the Schedule 13E-4 on
October 21, 1997.
/ /
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 Previously Paid: _____________________________________________________
Form or Registration No.: ___________________________________________________
Filing Party: _______________________________________________________________
Filing Date: ________________________________________________________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
This Amendment No. 1 amends the Issuer Tender Offer Statement on Schedule
13E-4 (the "Tender Offer Statement") of Merrill Lynch Municipal Strategy Fund,
Inc. (the "Fund") filed on October 21, 1997 with the Securities and Exchange
Commission with respect to the Fund's Offer to Purchase, dated October 21, 1997
(the "Offer to Purchase"), up to 1,000,000 shares of common stock, par value
$0.10 per share (the "Shares"). The Offer to Purchase has been incorporated by
reference into Items 1, 2, 3, 7 and 8 of the Tender Offer Statement. The
amendment will be disseminated to security holders by means of an advertisement
to be published on November 4, 1997 in THE WALL STREET JOURNAL and included as
Exhibit (a)(1)(i) to this Amendment No l. A Supplement, dated November 4, 1997,
to the Offer to Purchase (the "Supplement") is included as Exhibit (a)(1)(ii) to
this Amendment No. 1.
AMENDMENTS TO SCHEDULE 13E-4
ITEM 1. SECURITY AND ISSUER.
The Supplement, which is incorporated herein by reference in its entirety,
amends the Offer to Purchase to reflect that on November 4, 1997 the Offer is
increased from up to 1,000,000 Shares to up to 2,000,000 Shares.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The Supplement, the third full paragraph of which is incorporated herein by
reference, amends Section 9 of the Offer to Purchase to reflect that the maximum
aggregate purchase price if 2,000,000 Shares are tendered and accepted for
payment pursuant to the Offer will be approximately $21,620,000.
ITEM 8. ADDITIONAL INFORMATION
(e) The Supplement is incorporated herein by reference in its entirety.
ITEM 9. MATERIALS TO BE FILED AS EXHIBITS.
<TABLE>
<S> <C> <C>
(a)(1) (i) Advertisement to be printed in THE WALL STREET JOURNAL.
(ii) Supplement, dated November 4, 1997, to the Offer to Purchase, dated October 21, 1997.
(a)(2) Amended Form of Letter of Transmittal.
(a)(3) Amended Letter to Stockholders.
</TABLE>
i
<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.
MERRILL LYNCH MUNICIPAL
STRATEGY FUND, INC.
By /s/ TERRY K. GLENN
...................................
Terry K. Glenn,
EXECUTIVE VICE PRESIDENT
Date: November 4, 1997
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
- -----------
<S> <C> <C>
(a)(1)(i) Advertisement to be printed in THE WALL STREET JOURNAL.
(a)(1)(ii) Supplement dated November 4, 1997, to Offer to Purchase dated October 21, 1997.
(a)(2) Amended Form of Letter of Transmittal.
(a)(3) Amended Letter to Stockholders.
</TABLE>
<PAGE>
EXHIBIT (a)(1)(i)
<PAGE>
THIS ANNOUNCEMENT IS NOT AN OFFER TO PURCHASE OR A SOLICITATION OF
AN OFFER TO SELL SHARES. THE OFFER IS
MADE ONLY BY THE OFFER TO PURCHASE DATED OCTOBER 21, 1997, AS
SUPPLEMENTED ON NOVEMBER 4, 1997,
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
MAKING OR ACCEPTING THE
OFFER WOULD VIOLATE THAT JURISDICTION'S
LAWS.
----------------------------------------------
MERRILL LYNCH MUNICIPAL STRATEGY FUND, INC.
NOTICE OF AMENDED OFFER TO PURCHASE FOR CASH 2,000,000 OF ITS
ISSUED AND OUTSTANDING SHARES AT NET ASSET VALUE PER SHARE
THE EXPIRATION DATE AND THE WITHDRAWAL DEADLINE ARE 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, NOVEMBER 18, 1997, UNLESS EXTENDED.
Merrill Lynch Municipal Strategy Fund, Inc. (the "Fund") hereby amends an
offer to purchase 1,000,000 of its issued and outstanding shares of common stock
par value $.10 per share (the "Shares") by increasing to 2,000,000 the number of
Shares subject to the offer, at a price equal to their net asset value ("NAV")
less any applicable early withdrawal charge as of the close of the New York
Stock Exchange on the Expiration Date, November 18, 1997 unless extended upon
the terms and conditions set forth in the Offer to Purchase dated October 21,
1997 as supplemented on November 4, 1997 (the "Offer"). The NAV on October 30,
1997, was $10.86 per Share. The purpose of the Offer is to provide liquidity to
stockholders since the Fund is unaware of any secondary market which exists for
the Shares. The Offer is not conditioned upon the tender of any minimum number
of Shares. Approximately 316,000 Shares have been tendered and not withdrawn on
October 30, 1997.
If more than 2,000,000 Shares are duly tendered prior to the expiration of
the Offer, assuming no changes in the factors originally considered by the Board
of Directors when it determined to make the Offer, the Fund will either extend
the Offer period, if necessary, and increase the number of Shares that the Fund
is offering to purchase to an amount which it believes will be sufficient to
accommodate the excess Shares tendered, as well as any Shares tendered during
the extended Offer period, or purchase 2,000,000 Shares (or such larger number
of Shares sought) on a pro rata basis.
Shares tendered pursuant to the Offer may be withdrawn at any time prior to
12:00 midnight, New York City time, on Tuesday, November 18, 1997, unless the
Offer is extended, and, if not yet accepted for payment by the Fund, Shares may
also be withdrawn after December 17, 1997.
The information required to be disclosed by paragraph (d)(1) of Rule 13e-4
under the Securities Exchange Act of 1934, as amended, is contained in the Offer
to Purchase and is incorporated herein by reference.
The Offer to Purchase and the related Letter of Transmittal contain
important information that should be read carefully before any decision is made
with respect to the Offer.
Questions and requests for assistance, for current NAV quotations or for
copies of the Offer to Purchase, Letter of Transmittal, and any other tender
offer documents, may be directed to the Merrill Lynch Response Center at the
address and telephone number below. Copies will be furnished promptly at no
expense to you and also may be obtained by completing and returning the coupon
below to the Merrill Lynch Response Center. Stockholders who do not own Shares
directly should effect a tender through their broker, dealer, or nominee. For
example, stockholders who purchased shares through Merrill Lynch, Pierce, Fenner
& Smith Incorporated should effect tenders through their Financial Consultant.
1-800-MERRILL, EXT. 2789
1-800-637-7455
- -----------------------------------
MAIL TO: MERRILL LYNCH
RESPONSE CENTER
P.O. BOX 30200, NEW
BRUNSWICK, NJ 08989-0200
/ / PLEASE SEND ME MERRILL
LYNCH MUNICIPAL STRATEGY FUND,
INC. TENDER OFFER MATERIALS.
<TABLE>
<S> <C>
NAME _____________ ADDRESS ___________
BUSINESS PHONE __________ CITY _____________
HOME PHONE ______________ STATE ___ ZIP ___
MERRILL LYNCH CLIENTS, PLEASE GIVE THE NAME AND OFFICE
ADDRESS OF YOUR FINANCIAL CONSULTANT:
_____________________________________________________________
1354
November 4, 1997
</TABLE>
[LOGO]
<PAGE>
EXHIBIT (a)(1)(ii)
<PAGE>
MERRILL LYNCH MUNICIPAL STRATEGY FUND, INC.
800 SCUDDERS MILL ROAD
PLAINSBORO, NEW JERSEY 08536
SUPPLEMENT, DATED NOVEMBER 4, 1997, TO OFFER TO PURCHASE,
DATED OCTOBER 21, 1997, INCREASING TO 2,000,000
FROM 1,000,000 THE NUMBER OF SHARES SUBJECT TO OFFER
TO PURCHASE FOR CASH OF ITS ISSUED AND OUTSTANDING SHARES
AT NET ASSET VALUE PER SHARE
THE EXPIRATION DATE AND THE WITHDRAWAL DEADLINE IS 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON NOVEMBER 18, 1997, UNLESS EXTENDED.
To the Holders of Shares of
MERRILL LYNCH MUNICIPAL STRATEGY FUND, INC.:
The Fund hereby amends the offer to purchase up to 1,000,000 of its shares
of common stock, par value $.10 per share (the "Shares"), set forth in the
attached Offer to Purchase, dated October 21, 1997 (the "Offer"), for cash at a
price equal to their net asset value ("NAV"), less any applicable Early
Withdrawal Charge, as of the close of the New York Stock Exchange on November
18, 1997, the Expiration Date, unless extended, upon the terms and conditions
set forth in the Offer, as expressly varied hereby, and the related Letter of
Transmittal.
The Offer is hereby amended to increase to up to 2,000,000 the number of
Shares subject thereto. Accordingly, references in the Offer to Purchase to
1,000,000 Shares are hereby changed to 2,000,000 Shares to reflect such
increase. In addition, the maximum aggregate purchase price of $10,760,000
referred to in Section 9 of the Offer to Purchase is increased to $21,620,000
The NAV on October 30, 1997 was $10.86 per share. Approximately 316,000
Shares had been tendered and not withdrawn at such date.
If more than 2,000,000 Shares are duly tendered prior to the expiration of
the Offer, assuming no changes in the factors originally considered by the Board
of Directors when it determined to make the Offer, the Fund will either (i)
extend the Offer period, if necessary, and increase the number of Shares that
the Fund is offering to purchase to an amount that it believes will be
sufficient to accommodate the excess Shares tendered as well as any Shares
tendered during the extended Offer period or (ii) purchase 2,000,000 Shares (or
such larger number of Shares sought) on a pro rata basis.
THIS OFFER IS BEING MADE TO ALL STOCKHOLDERS OF THE FUND AND IS NOT
CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
THIS SUPPLEMENT IS AUTHORIZED FOR USE ONLY IF ACCOMPANIED BY THE OFFER TO
PURCHASE, DATED OCTOBER 21, 1997 OF THE FUND. THE INFORMATION CONTAINED HEREIN
IS QUALIFIED IN ITS ENTIRETY BY THE INFORMATION SET FORTH IN THE OFFER TO
PURCHASE, WHICH COVERS THE OFFER EXCEPT AS EXPRESSLY VARIED HEREIN.
IMPORTANT
If you desire to tender all or any portion of your Shares, you should either
(1) request your broker, dealer, commercial bank, trust company or other nominee
to effect the transaction for you or (2) if you own your Shares directly,
complete and sign the Letter of Transmittal and mail or deliver it along with
any Share certificate(s) and any other required documents to the Fund's transfer
agent, Merrill Lynch Financial Data Services, Inc. (the "Transfer Agent"). If
your Shares are registered in the name of a broker, dealer, commercial bank,
trust company or other nominee, you must contact such broker, dealer, commercial
bank, trust company or other nominee if you desire to tender your Shares. Shares
held in your Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill
Lynch") brokerage account are registered in the name of Merrill Lynch and are
not held by you directly. Merrill Lynch may charge its customers a $5.35
processing fee to confirm a repurchase of Shares from such customers pursuant to
the Offer.
NEITHER THE FUND NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY
STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. EACH
STOCKHOLDER MUST MAKE HIS OWN DECISION WHETHER TO TENDER SHARES, AND IF SO, HOW
MANY SHARES TO TENDER.
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
FUND AS TO WHETHER STOCKHOLDERS SHOULD TENDER SHARES PURSUANT TO THE OFFER. NO
PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN
OR IN THE LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH RECOMMENDATION AND SUCH
INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE FUND.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE FAIRNESS OR MERITS OF SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF
THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY
IS UNLAWFUL.
Questions and requests for assistance may be directed to your Merrill Lynch
Financial Consultant or other nominee, or to the Transfer Agent at the address
and telephone number set forth below. Requests for additional copies of this
Offer to Purchase and the Letter of Transmittal should be directed to the
Merrill Lynch Response Center.
November 4, 1997 MERRILL LYNCH MUNICIPAL
STRATEGY FUND, INC.
<TABLE>
<S> <C>
Transfer Agent: Merrill Lynch Financial Data
Merrill Lynch Response Center Services, Inc.
P.O. Box 30200 Attn: Merrill Lynch Municipal
New Brunswick, New Jersey 08989-0200 Strategy Fund, Inc.
Attn: Merrill Lynch Municipal P.O. Box 45289
Strategy Fund, Inc. Jacksonville, Florida 32232-5289
(800) 637-7455, ext. 2789 (800) 637-3863
</TABLE>
------------------------
<PAGE>
EXHIBIT (a)(2)
<PAGE>
LETTER OF TRANSMITTAL
TO BE USED TO TENDER SHARES OF
MERRILL LYNCH MUNICIPAL STRATEGY FUND, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED OCTOBER 21, 1997
AS SUPPLEMENTED NOVEMBER 4, 1997
-------------------
THE EXPIRATION DATE AND THE WITHDRAWAL DEADLINE IS 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, NOVEMBER 18, 1997, UNLESS EXTENDED
-------------------
TRANSFER AGENT:
MERRILL LYNCH FINANCIAL DATA SERVICES, INC.
ATTENTION: MERRILL LYNCH MUNICIPAL STRATEGY FUND, INC.
P.O. BOX 45289
JACKSONVILLE, FLORIDA 32232-5289
TELEPHONE INFORMATION NUMBER: (800) 637-3863
DELIVERY TO AN ADDRESS OTHER THAN THAT SHOWN ABOVE DOES NOT CONSTITUTE VALID
DELIVERY.
THIS LETTER OF TRANSMITTAL IS TO BE USED ONLY IF THE STOCKHOLDER IS A RECORD
OWNER OF SHARES WHO DESIRES TO EFFECT THE TENDER OFFER TRANSACTION HIMSELF BY
TRANSMITTING THE NECESSARY DOCUMENTS TO THE FUND'S TRANSFER AGENT AND DOES NOT
INTEND TO REQUEST HIS BROKER OR DEALER TO EFFECT THE TRANSACTION FOR HIM. A
STOCKHOLDER WHO HOLDS SHARES IN A MERRILL LYNCH ACCOUNT OR THROUGH ANOTHER
BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE IS NOT THE
RECORD OWNER AND SHOULD INSTRUCT HIS FINANCIAL CONSULTANT OR SUCH OTHER NOMINEE
TO EFFECT THE TENDER ON HIS BEHALF.
<PAGE>
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Gentlemen:
The undersigned hereby tenders to the Merrill Lynch Municipal Strategy Fund,
Inc., a closed-end investment company incorporated under the laws of the State
of Maryland (the "Fund"), the shares described below of its common stock, par
value $.10 per share (the "Shares"), at a price equal to the net asset value per
Share ("NAV") calculated on the Expiration Date (as defined in the Offer to
Purchase), in cash, less any applicable Early Withdrawal Charge, upon the terms
and conditions set forth in the Offer to Purchase dated October 21, 1997, as
supplemented November 4, 1997, receipt of which is hereby acknowledged, and in
this Letter of Transmittal (which together constitute the "Offer").
The undersigned hereby sells to the Fund all Shares tendered hereby that are
purchased pursuant to the Offer and hereby irrevocably constitutes and appoints
the Transfer Agent as attorney in fact of the undersigned, with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to present such Shares and any Share certificates for
cancellation of such Shares on the Fund's books. The undersigned hereby warrants
that the undersigned has full authority to sell the Shares tendered hereby and
that the Fund will acquire good title thereto, free and clear of all liens,
charges, encumbrances, conditional sales agreements or other obligations
relating to the sale thereof, and not subject to any adverse claim, when and to
the extent the same are purchased by it. Upon request, the undersigned will
execute and deliver any additional documents necessary to complete the sale in
accordance with the terms of the Offer.
The undersigned recognizes that under certain circumstances set forth in the
Offer to Purchase, the Fund may not be required to purchase any or all of the
Shares tendered hereby. In that event, the undersigned understands that, in the
case of Shares evidenced by certificates, the certificate(s) for any Shares not
purchased will be returned to the undersigned at the address indicated below. In
the case of Shares not evidenced by certificates and held in an Investment
Account, the Transfer Agent will cancel the tender order for any Shares not
purchased and only the purchased Shares will be withdrawn from the Account.
The check for the purchase price for the tendered Shares purchased will be
issued to the order of the undersigned and mailed to the address indicated in
the "Description of Shares Tendered" table below.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned and the 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.
<PAGE>
DESCRIPTION OF SHARES TENDERED
(SEE INSTRUCTIONS 3 AND 4)
<TABLE>
<CAPTION>
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN EXACTLY THE NAME(S) IN WHICH SHARES ARE SHARES TENDERED
REGISTERED) (ATTACH ADDITIONAL SCHEDULE IF NECESSARY)
NO. OF SHARES
CERTIFICATE LISTED NO. OF SHARES
NO.(S)* ON CERTIFICATE* TENDERED**
<S> <C> <C> <C>
Account No. Total Shares Tendered...........
</TABLE>
* Need not be completed by stockholders whose Shares are not evidenced by
certificates.
** To be completed by all tendering stockholders, whether or not your Shares
are evidenced by certificates. If you desire to tender fewer than all
Shares held in your account or evidenced by a certificate listed above,
please indicate in this column the number you wish to tender. Otherwise all
Shares evidenced by such certificate or held in your account will be deemed
to have been tendered.
SIGNATURE FORM
--SIGN HERE--
(SEE INSTRUCTIONS 1, 5 AND 8)
Social Security No.
or Taxpayer Identification No. ................
Under penalty of perjury, I certify (1) that the number set forth above is
my correct Social Security No. or Taxpayer Identification No. and (2) either
(A) that I am exempt from backup withholding or (B) that I am not subject to
backup withholding either because I have not been notified that I am subject
thereto as a result of failure to report all interest or dividends, or the
Internal Revenue Service ("IRS") has notified me that I am no longer subject
thereto. INSTRUCTION: You must strike out the language in (2) above if you
have been notified that you are subject to backup withholding due to
underreporting and you have not received a notice from the IRS that backup
withholding has been terminated.
...........................................................................
...........................................................................
(SIGNATURE(S) OF OWNER(S) EXACTLY AS REGISTERED)
Date ................ , 1997
Name(s) and Address(es) ....................................................
...........................................................................
(PLEASE PRINT)
Telephone Number ( ) ................
Signature(s) Guaranteed ....................................................
....................................................
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. All signatures on this Letter of Transmittal
must be guaranteed by a member firm of a registered national securities
exchange, or a commercial bank or trust company having an office, branch or
agency in the United States. This Letter of Transmittal is to be used only if
you may effect the tender offer transaction yourself and do not intend to
request your broker or dealer to effect the transaction for you.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. Certificates for all
tendered Shares, together with a properly completed and duly executed Letter of
Transmittal, should be mailed or delivered to the Transfer Agent on or prior to
the Expiration Date at the appropriate address set forth herein and must be
received by the Transfer Agent prior to the Expiration Date.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES,
IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER.
3. INADEQUATE SPACE. If the space provided is inadequate, the certificate
numbers and number of Shares should be listed on a separate signed schedule
attached hereto.
4. PARTIAL TENDERS. If fewer than all of the Shares in your Investment
Account are evidenced by any certificate submitted are to be tendered, fill in
the number of Shares which are to be tendered in the column entitled "No. of
Shares Tendered." If applicable, a new certificate for the remainder of the
Shares evidenced by your old certificate(s) will be sent to you as soon as
practicable after the Expiration Date of the Offer. All Shares represented by
each certificate listed or in your Investment Account are deemed to have been
tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, AUTHORIZATION AND ENDORSEMENTS.
(a) If the Letter of Transmittal is signed by the registered holder(s) of
the Shares tendered hereby, the signature(s) must correspond with the name(s) in
which the Shares are registered.
(b) If the Shares are held of record by two or more joint holders, all such
holders must sign this Letter of Transmittal.
(c) If any tendered Shares are registered in different names it will be
necessary to complete, sign and submit as many separate Letters of Transmittal
as there are different registrations of Shares.
(d) When this Letter of Transmittal is signed by the registered holder(s) of
the Shares listed and, if applicable, of the certificates transmitted hereby, no
endorsements of certificates or separate authorizations are required.
(e) If this Letter of Transmittal or any certificates or authorizations are
signed by trustees, executors, administrators, guardians, attorneys in fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and must submit proper
evidence satisfactory to the Fund of their authority so to act.
6. TRANSFER TAXES. The Fund will pay all the taxes, if any, payable on the
transfer to it of Shares purchased pursuant to the Offer. If tendered
certificates are registered in the name of any person other than the person(s)
signing this Letter of Transmittal, the amount of any transfer taxes (whether
imposed on the registered holder or such other person) payable on account of the
transfer to such person of such Shares will be deducted from the purchase price
unless satisfactory evidence of the payment of such taxes, or exemption
therefrom, is submitted.
7. IRREGULARITIES. All questions as to the validity, form, eligibility
(including time of receipt) and acceptance of any tender of Shares will be
determined by the Fund, whose determinations shall be final and binding. The
Fund reserves the absolute right to reject any or all tenders determined by it
not to be in appropriate form or the acceptance of or payment for which would,
in the opinion of counsel for the Fund, be unlawful. The Fund also reserves the
absolute right to waive any of the conditions of the Offer or any defect in any
tender with respect to any particular Shares or any particular stockholder, and
the Fund's interpretations of the terms and conditions of the Offer (including
these instructions) will be final and binding. Unless waived, any defects or
irregularities in connection with tenders must be cured within such time as the
Fund shall determine. Tenders will not be deemed to have been made until all
defects and irregularities have been cured or waived. Neither the Fund, Fund
Asset Management, L.P. nor the Transfer Agent, nor any other person shall be
obligated to give notice of defects or irregularities in tenders, nor shall any
of them incur any liability for failure to give any such notice.
8. IMPORTANT TAX INFORMATION. Under Federal income tax law, a stockholder
whose tendered Shares are accepted for payment generally is required by law to
provide the Transfer Agent (as payer) with his correct taxpayer identification
number, which is accomplished by completing and signing the Signature Form.
<PAGE>
EXHIBIT (a)(3)
<PAGE>
[LOGO]
Dear Stockholder:
As you requested, we are enclosing a copy of the Merrill Lynch Municipal
Strategy Fund, Inc. (the "Fund") Offer to Purchase dated October 21, 1997, as
supplemented on November 4, 1997, (the "Supplemented Offer to Purchase")
2,000,000 issued and outstanding shares (the "Shares"). The Supplemented Offer
to Purchase is for cash at Net Asset Value ("NAV") per Share as of the
expiration date of the Offer, less any Early Withdrawal Charge. Together with
the Offer to Purchase we are sending you a Letter of Transmittal (the "Letter")
for use by holders of record of Shares, which you should read carefully. Certain
selected financial information with respect to the Fund is set forth in the
Offer to Purchase.
If, after reviewing the information set forth in the Supplemented Offer to
Purchase and Letter, you wish to tender Shares for purchase by the Fund, please
either contact your Merrill Lynch Financial Consultant or other broker, dealer
or nominee to effect the tender for you or, if you are the record owner of the
Shares, you may follow the instructions contained in the Supplemented Offer to
Purchase and Letter.
Neither the Fund nor its Board of Directors is making any recommendation to
any holder of Shares as to whether to tender Shares. Each stockholder is urged
to consult his or her broker or tax adviser before deciding whether to tender
any Shares.
The Fund's annualized distribution rate for the period September 19, 1997
through October 23, 1997 based on the amounts actually distributed by the Fund,
was 5.32%. The Fund's NAV on October 30, 1997 was $10.86 per share. The Fund
publishes its NAV each week in BARRON'S. It appears in the "Investment Company
Institute List" under the sub-heading "Closed-End Bond Funds" within the
listings of mutual funds and closed-end funds.
Requests for current NAV quotations or for additional copies of the
Supplemented Offer to Purchase, the Letter and any other tender offer documents
may be directed to the Merrill Lynch Response Center at (800) 637-7455, ext.
2789.
Should you have any other questions on the enclosed material, please do not
hesitate to contact your Merrill Lynch Financial Consultant or other broker or
dealer or call the Fund's Transfer Agent, Merrill Lynch Financial Data Services,
Inc., at (800) 637-3863. We appreciate your continued interest in Merrill Lynch
Municipal Strategy Fund, Inc.
Yours truly,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
