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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)
(AMENDMENT NO. ___)
TOYS "R" US, INC.
(Name of Issuer)
BABY SUPERSTORE, INC.
(Name of Person(s) Filing Statement)
4-7/8% CONVERTIBLE SUBORDINATED NOTES
DUE 2000 OF
BABY SUPERSTORE, INC.
(Title of Class of Securities) (CUSIP Number of Class of Securities)
LOUIS LIPSCHITZ
461 FROM ROAD
PARAMUS, NEW JERSEY 07652
(201) 368-5548
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications of Behalf of Person(s) Filing Statement)
Copies to:
DENNIS J. BLOCK
WEIL, GOTSHAL & MANGES LLP
767 FIFTH AVENUE
NEW YORK, NEW YORK 10153
(212) 310-8000
CALCULATION OF FILING FEE
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TRANSACTION VALUATION* AMOUNT OF FILING FEE
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$115,218,020.84 $23,044.00
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* The transaction value shown is only for the purpose of calculating the filing
fee. The amount shown reflects the cost of purchasing $115,000,000.00 principal
amount of Notes at the repurchase price (100% of the principal amount of the
Notes, plus accrued interest to the date of repurchase) as of April 15, 1997
(the initial expiration date of the Offer). The amount of the filing fee is
calculated in accordance with Section 13(e)(3) of the Securities Exchange Act of
1934, as amended.
[_] 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: Filing party:
Form or registration no.: Date filed:
Instruction. When submitting this statement in paper format, ten copies of this
statement, including all exhibits, shall be filed with the Commission.
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INTRODUCTORY STATEMENT
This Schedule 13E-4 relates to a change of control offer (the "Offer") by
Baby Superstore, Inc., a South Carolina corporation ("Baby Superstore"), to
purchase for cash, on the terms and subject to the conditions set forth in the
attached Change of Control Notice and Offer to Purchase dated February 14, 1997
(the "Offer to Purchase") and the related Letter of Transmittal (the "Letter of
Transmittal"), all of the outstanding 4-7/8% Convertible Subordinated Notes Due
2000 of Baby Superstore (the "Notes"). The Notes are convertible into shares of
Common Stock, par value $.10 per share ("Toys "R" Us Common Stock"), of Toys "R"
Us, Inc. ("Toys "R" Us") at a conversion price of $66.34 per share of Toys "R"
Us Common Stock. Copies of the Offer to Purchase and the related Letters of
Transmittal are filed as exhibits (a)(1) and (a)(2) hereto.
ITEM 1. SECURITY AND ISSUER.
(a) The issuer of the Notes is Baby Superstore, a wholly owned subsidiary of
Toys "R" Us. The address of Baby Superstore's principal executive office
is 461 From Road, Paramus, New Jersey 07652. The Notes are convertible
into Toys "R" Us Common Stock. The address of Toys "R" Us' principal
executive office is 461 From Road, Paramus, New Jersey 07652.
(b) The securities which are the subject of the Offer are the 4-7/8%
Convertible Subordinated Notes Due 2000 issued by Baby Superstore. The
Notes are convertible into shares of Toys "R" Us Common Stock at a
conversion price of $66.34 per share of Toys "R" Us Common Stock. Toys "R"
Us is a joint and several obligor with Baby Superstore with respect to the
Notes. As of February 12, 1997, there was $115,000,000.00 aggregate
principal amount of Notes outstanding. The Offer is for any and all Notes,
in denominations of $1,000 or integral multiples thereof, at 100% of the
principal amount of the Notes, plus accrued interest to but excluding the
date of repurchase. To the best knowledge of Baby Superstore, no Notes are
being purchased from any officer, director or affiliate of Baby Superstore
or Toys "R" Us.
(c) The information set forth in the section of the Offer to Purchase entitled
"Market Price Information" is incorporated herein by reference.
(d) Baby Superstore is filing this statement. The address of Baby Superstore
is set forth in Item 1(a). Baby Superstore is a wholly owned subsidiary of
Toys "R" Us.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth in the section of the Offer to Purchase entitled
"Sources and Amount of Funds" is incorporated herein by reference.
(b) Not applicable.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
The information set forth in the section of the Offer to Purchase entitled
"The Offer-Purpose and Effects of the Offer" is incorporated herein by
reference. Upon repurchase, the Notes will cease to be outstanding and
will be delivered to The Bank of New York, as successor in interest to
Nationsbank of Georgia, National Association, as Trustee, for cancellation
immediately after such repurchase.
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(a) The information set forth in the section of the Offer to Purchase
entitled "The Offer-General" is incorporated herein by reference.
(b) The information set forth in the section of the Offer to Purchase
entitled "Recent Developments-The Merger" is incorporated herein by
reference.
(c) The information set forth in the section of the Offer to Purchase
entitled "Recent Developments-The Merger" is incorporated herein by
reference.
(d) None.
(e) None.
(f) None.
(g) None.
(h) Not applicable.
(i) Not applicable.
(j) The information set forth in the section of the Offer to Purchase
entitled "Available Information" is incorporated by reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
Not applicable.
ITEM 5. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO THE ISSUER'S SECURITIES.
The information set forth in the cover page to the Offer to Purchase
and the sections of the Offer to Purchase entitled "The Offer-General,"
"The Offer-Purpose and Effects of the Offer" and "Recent Developments"
is incorporated herein by reference.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the section of the Offer to Purchase
entitled "The Depositary" is incorporated herein by reference.
ITEM 7. FINANCIAL INFORMATION.
(a) The following documents, which have been filed by Baby Superstore (File
No. 0- 24614) with the Securities and Exchange Commission (the
"Commission") under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), are incorporated herein by reference:
(1)Baby Superstore's Annual Report on Form 10-K for the fiscal year
ended January 31, 1996, as amended by the Form 10-K/A filed on
September 11, 1996.
(2)Baby Superstore's Quarterly Report on Form 10-Q for the fiscal
quarter ended May 1, 1996, as amended by the Form 10-Q/A filed on
September 11, 1996.
(3)Baby Superstore's Quarterly Report on Form 10-Q for the fiscal
quarter ended July 31, 1996.
(4)Baby Superstore's Quarterly Report on Form 10-Q for the fiscal
quarter ended October 30, 1996.
(5)Baby Superstore's Current Reports on Form 8-K dated October 2, 1996
and February 3, 1997.
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The following documents, which have been filed by Toys "R" Us (File No.
1-11609) with the Commission under the Exchange Act, are incorporated
herein by reference:
(1)Toys "R" Us' Annual Report on Form 10-K for the fiscal year ended
February 3, 1996.
(2)Toys "R" Us' Quarterly Report on Form 10-Q for the fiscal quarter
ended May 4, 1996.
(3)Toys "R" Us' Quarterly Report on Form 10-Q for the fiscal quarter
ended August 3, 1996.
(4)Toys "R" Us' Quarterly Report on Form 10-Q for the fiscal quarter
ended November 2, 1996.
(5)Toys "R" Us' Current Reports on Form 8-K dated July 15, 1996,
October 2, 1996, January 7, 1997 and February 3, 1997.
All documents filed with the Commission by Baby Superstore or Toys "R"
Us pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date hereof shall be deemed to be incorporated by
reference herein and to be a part hereof from the date any such
document is filed.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for purposes hereof to the extent that a statement contained
herein (or in any other subsequently filed document that also is or is
deemed to be incorporated by reference herein) modifies or supersedes
such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part
hereof.
(b) Not applicable.
ITEM 8. ADDITIONAL INFORMATION.
(a) None.
(b) None, except for compliance with the Exchange Act and the rules and
regulations promulgated thereunder and compliance with applicable
requirements of state securities or "blue sky" laws.
(c) None.
(d) None.
(e) Reference is hereby made to the exhibits hereto which are incorporated
in their entirety herein by reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
(a) Exhibit (a)(1) Change of Control Notice and Offer to Purchase, dated
February 14, 1997.
Exhibit (a)(2) Letter of Transmittal.
Exhibit (a)(3) Notice of Guaranteed Delivery.
Exhibit (a)(4) Letter to clients.
Exhibit (a)(5) Letter to brokers, dealers, commercial banks,
trust companies and other nominees.
Exhibit (a)(6) Notice published in The Wall Street Journal on
February 14, 1997.
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(b) Not applicable.
(c)(1) Indenture, dated as of October 3, 1995, between Baby Superstore, as
issuer, and Nationsbank of Georgia, National Association, as Trustee
(incorporated by reference to Exhibit 4.2 to Baby Superstore's Form
10-Q quarterly report filed with the Commission for the quarter ended
October 25, 1995).
(c)(2) First Supplemental Indenture, dated as of February 3, 1997, between
Baby Superstore, as issuer, and The Bank of New York, as successor in
interest to Nationsbank of Georgia, National Association, as Trustee.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
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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.
BABY SUPERSTORE, INC.
By: /s/ Louis Lipschitz
-----------------------
Name: Louis Lipschitz
Title: Executive Vice President
and Chief Financial Officer
Dated: February 14, 1997
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
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(a)(1) - Change of Control Notice and Offer to Purchase, dated February 14,
1997.
(a)(2) - Letter of Transmittal.
(a)(3) - Notice of Guaranteed Delivery.
(a)(4) - Letter to clients
(a)(5) - Letter to brokers, dealers, commercial banks, trust companies and
other nominees
(a)(6) - Notice published in The Wall Street Journal on February 14, 1997.
(c)(1) - Indenture, dated as of October 3, 1995, between Baby Superstore, as
issuer, and Nationsbank of Georgia, National Association, as Trustee
(incorporated by reference to Exhibit 4.2 to Baby Superstore's Form
10-Q quarterly report filed with the Commission for the quarter ended
October 25, 1995).
(c)(2) - First Supplemental Indenture, dated as of February 3, 1997, between
Baby Superstore, as issuer, and The Bank of New York, as successor in
interest to Nationsbank of Georgia, National Association, as Trustee.
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Exhibit (a)(1)
CHANGE OF CONTROL NOTICE
AND OFFER TO PURCHASE
BABY SUPERSTORE, INC.
OFFER TO PURCHASE
FOR CASH ANY AND ALL OF THE OUTSTANDING
4-7/8% CONVERTIBLE SUBORDINATED NOTES DUE 2000
OF BABY SUPERSTORE, INC.
Baby Superstore, Inc. ("Baby Superstore"), a wholly owned subsidiary of
Toys "R" Us, Inc. ("Toys "R" Us") hereby offers (the "Offer") to purchase for
cash at the Repurchase Price (as defined herein), upon the terms and subject to
the conditions set forth in this Change of Control Notice and Offer to Purchase
(this "Offer to Purchase") and in the accompanying Letter of Transmittal (the
"Letter of Transmittal"), any and all of the outstanding 4-7/8% Convertible
Subordinated Notes due 2000 of Baby Superstore (the "Notes"). The "Repurchase
Price" is 100% of the principal amount of the Notes, plus accrued interest to
but excluding the date of repurchase.
The Offer is being made pursuant to the Indenture, dated as of October 3,
1995, as amended by a First Supplemental Indenture, dated as of February 3, 1997
(as amended, the "Indenture"), among Baby Superstore, Toys "R" Us and The Bank
of New York, as successor in interest to Nationsbank of Georgia, National
Association, as Trustee (the "Trustee"), which provides that, following a Change
of Control (as defined herein), each holder of Notes will have the right, at
such holder's option, to require Baby Superstore to repurchase all or a portion
of such holder's Notes at the Repurchase Price (a "Change of Control Right"). A
Change of Control occurred on February 3, 1997, as a result of the consummation
of the merger of BSST Acquisition Corp., a wholly owned subsidiary of Toys "R"
Us ("Sub"), with and into Baby Superstore, with Baby Superstore continuing as
the surviving corporation and becoming a wholly owned subsidiary of Toys "R" Us
(the "Merger").
As of February 12, 1997, there was $115,000,000.00 aggregate principal
amount of Notes outstanding. Prior to the consummation of the Merger, the Notes
were convertible into shares of Common Stock, without par value, of Baby
Superstore ("Baby Superstore Common Stock") at a conversion price of $53.875 per
share of Baby Superstore Common Stock. Upon consummation of the Merger, pursuant
to adjustment mechanisms contained in the Indenture, the Notes became, and are
currently, convertible into shares of Common Stock, par value $.10 per share, of
Toys "R" Us ("Toys "R" Us Common Stock") at a conversion price of $66.34 per
share of Toys "R" Us Common Stock. In connection with the Merger, Toys "R" Us
agreed to be jointly and severally liable with Baby Superstore for all of the
payment obligations of Baby Superstore under the Notes and the Indenture.
(text continued on next page)
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SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THE OFFER TO PURCHASE, THE
OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
APRIL 15, 1997, UNLESS THE OFFER IS EXTENDED (SUCH TIME AND DATE OR THE LATEST
EXTENSION THEREOF, IF EXTENDED, THE "EXPIRATION DATE"). NOTES TENDERED IN THE
OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.
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The date of this Change of Control Notice and Offer to Purchase is February 14,
1997.
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(text continued from prior page)
On February 12, 1997, the closing price per $1,000 principal amount of
Notes, as reported on the Nasdaq SmallCap Market, was $995, and the closing
price per share of Toys "R" Us Common Stock, as reported on the New York Stock
Exchange, Inc. (the "NYSE") Composite Tape, was $25. A holder may convert Notes
into shares of Toys "R" Us Common Stock until, but not after, such Note is
properly tendered to The Bank of New York, as Depositary (the "Depositary"),
unless the tender of such Note is properly withdrawn, there is a default in
payment of the Repurchase Price or the Offer is terminated without the purchase
of Notes. Any Notes which remain outstanding after consummation of the Offer
will continue to be obligations of Baby Superstore and will continue to be
convertible at the option of the holder thereof into shares of Toys "R" Us
Common Stock.
Tenders of Notes may be withdrawn at any time prior to the Expiration
Date. In the event of a termination of the Offer, the Notes tendered pursuant to
the Offer will be returned to the tendering holders promptly.
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) and applicable law, Baby Superstore will purchase, by accepting
for payment, and will pay for all Notes validly tendered (and not properly
withdrawn) pursuant to the Offer, promptly after the Expiration Date, such
payment to be made by the deposit of immediately available funds by Baby
Superstore with the Depositary, which will act as agent for tendering holders
for the purpose of receiving payment from Baby Superstore and transmitting such
payment to tendering holders.
No person has been authorized to give any information or to make any
representations other than those contained in this Offer to Purchase and, if
given or made, such information or representations must not be relied upon as
having been authorized. This Offer to Purchase and related documents do not
constitute an offer to buy or the solicitation of an offer to sell securities in
any circumstances in which such offer or solicitation is unlawful. The delivery
of this Offer to Purchase shall not, under any circumstances, create any
implication that the information contained herein is current as of any time
subsequent to the date of such information.
Neither Baby Superstore nor Toys "R" Us makes any recommendation as to
whether or not holders should exercise their Change of Control Right and tender
Notes pursuant to the Offer.
Any questions or requests for assistance or for additional copies of this
Offer to Purchase or related documents may be directed to the Depositary at one
of its telephone numbers set forth on the back cover page hereof. Any beneficial
owner owning interests in Notes may contact such beneficial owner's broker,
dealer, commercial bank, trust company or other nominee for assistance
concerning the Offer.
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AVAILABLE INFORMATION
Baby Superstore and Toys "R" Us are each subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith file reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information concerning Baby Superstore and
Toys "R" Us can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, and at the Commission's Regional Office at Seven World Trade Center,
Suite 1300, New York, New York 10048 and Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such material also
can be obtained, at prescribed rates, from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission
maintains a site on the Internet's World Wide Web at http://www.sec.gov. that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission, including
Baby Superstore and Toys "R" Us. The Notes are listed and traded on the Nasdaq
SmallCap Market and such reports, proxy statements and other information
concerning Baby Superstore may be inspected at the offices of the Nasdaq
SmallCap Market, 1735 K Street, N.W., Washington, D.C. 20006. The Toys "R" Us
Common Stock is listed and traded on the NYSE and such reports, proxy statements
and other information concerning Toys "R" Us may also be inspected at the
offices of the NYSE, 20 Broad Street, New York, New York 10005.
Because Baby Superstore is a wholly owned subsidiary of Toys "R" Us and
Toys "R" Us is jointly and severally liable with Baby Superstore for all payment
obligations under the Notes and the Indenture, Toys "R" Us and Baby Superstore
intend to submit an application to the Commission to exempt Baby Superstore from
the informational requirements of the Exchange Act. Should such application be
granted, Baby Superstore will no longer separately file reports, proxy
statements and other information with the Commission pursuant to the Exchange
Act. In accordance with regulations of the Commission, however, Toys "R" Us will
include "summarized financial information" regarding Baby Superstore in the
reports filed by Toys "R" Us with the Commission pursuant to the Exchange Act.
This Offer to Purchase constitutes a part of an Issuer Tender Offer
Statement on Schedule 13E-4 (the "Schedule 13E-4") filed with the Commission by
Toys "R" Us and Baby Superstore pursuant to Section 13(e) of the Exchange Act
and the rules and regulations promulgated thereunder. The Schedule 13E-4 and all
exhibits thereto are incorporated in this Offer to Purchase by reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by Baby Superstore (File
No. 0-24614) with the Commission under the Exchange Act, are incorporated herein
by reference:
(a) Baby Superstore's Annual Report on Form 10-K for the fiscal year
ended January 31, 1996, as amended by the Form 10-K/A filed on
September 11, 1996.
(b) Baby Superstore's Quarterly Report on Form 10-Q for the fiscal
quarter ended May 1, 1996, as amended by the Form 10-Q/A filed on
September 11, 1996.
(c) Baby Superstore's Quarterly Report on Form 10-Q for the fiscal
quarter ended July 31, 1996.
(d) Baby Superstore's Quarterly Report on Form 10-Q for the fiscal
quarter ended October 30, 1996.
(e) Baby Superstore's Current Reports on Form 8-K dated October 2, 1996
and February 3, 1997.
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The following documents, which have been filed by Toys "R" Us (File No.
1-11609) with the Commission under the Exchange Act, are incorporated herein by
reference:
(a) Toys "R" Us' Annual Report on Form 10-K for the fiscal year ended
February 3, 1996.
(b) Toys "R" Us' Quarterly Report on Form 10-Q for the fiscal quarter
ended May 4, 1996.
(c) Toys "R" Us' Quarterly Report on Form 10-Q for the fiscal quarter
ended August 3, 1996.
(d) Toys "R" Us' Quarterly Report on Form 10-Q for the fiscal quarter
ended November 2, 1996.
(e) Toys "R" Us' Current Reports on Form 8-K dated July 15, 1996,
October 2, 1996, January 7, 1997 and February 3, 1997.
All documents filed with the Commission by Baby Superstore or Toys "R" Us
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to
the date hereof shall be deemed to be incorporated by reference herein and to be
a part hereof from the date any such document is filed.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes hereof to the extent that a statement contained herein (or in any
other subsequently filed document that also is or is deemed to be incorporated
by reference herein) modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part hereof.
THE DOCUMENTS INCORPORATED BY REFERENCE HEREIN (OTHER THAN EXHIBITS TO
SUCH DOCUMENTS THAT ARE NOT SPECIFICALLY INCORPORATED BY REFERENCE HEREIN) ARE
AVAILABLE WITHOUT CHARGE TO ANY PERSON TO WHOM THIS OFFER TO PURCHASE HAS BEEN
DELIVERED, UPON WRITTEN OR ORAL REQUEST, TO TOYS "R" US, INC., 461 FROM ROAD,
PARAMUS, NEW JERSEY 07652, ATTENTION: EXECUTIVE VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER, TELEPHONE:
(201) 262-7800.
DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS
This Offer to Purchase, including the information incorporated by
reference herein, contains certain forward looking statements with respect to
the financial condition, results of operations and businesses of the Company and
Toys "R" Us. See "Certain Information Concerning Baby Superstore and Toys "R"
Us" and "Incorporation of Certain Documents By Reference." These forward looking
statements involve certain risks and uncertainties. Factors that may cause
actual results to differ materially from those contemplated by such forward
looking statements include, among others, the following possibilities: (1) that
rates of expansion could be different than currently anticipated, (2) that
pressures on margins would be greater than anticipated, (3) that increases in
higher margin product sales could not be achieved, (4) that inventory imbalances
could occur caused by unanticipated fluctuations in consumer demand, (5) that
competition in the infant-through-toddler industry could intensify, (6) that
financial performance and results of operations could be affected by trends in
the economy which affect consumer confidence and consumer demand for retail
goods, and (7) that the effects of the Merger could be different than
anticipated.
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TABLE OF CONTENTS
Page
Available Information...................................................... 3
Incorporation of Certain Documents by Reference............................ 3
Disclosure Regarding Forward Looking Statements............................ 4
The Offer.................................................................. 6
General................................................................ 6
Purpose and Effects of the Offer....................................... 6
Expiration Date; Extensions; Amendments; Termination................... 7
Acceptance for Payment................................................. 8
Procedures For Tendering Notes............................................. 8
Tendering Notes........................................................ 8
Guaranteed Delivery Procedures......................................... 11
Withdrawal Rights...................................................... 11
Certain Information Concerning Baby Superstore and Toys "R" Us............. 12
Baby Superstore........................................................ 12
Toys "R" Us............................................................ 13
Recent Developments........................................................ 13
The Merger............................................................. 13
Adjustment to Conversion Price; Joint and Several Obligation........... 13
Sources and Amount of Funds................................................ 14
Market Price Information................................................... 14
The Notes.............................................................. 14
The Toys "R" Us Common Stock........................................... 15
Selected Financial Data.................................................... 16
Toys "R" Us............................................................ 16
Baby Superstore........................................................ 17
Certain Federal Income Tax Consequences.................................... 18
Sale of Notes Pursuant to the Offer.................................... 18
Retention of Notes..................................................... 18
The Depositary............................................................. 19
Miscellaneous.............................................................. 19
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THE OFFER
GENERAL
Baby Superstore hereby offers, upon the terms and subject to the
conditions set forth in this Offer to Purchase, to purchase for cash at the
Repurchase Price any and all Notes that are properly tendered (and not properly
withdrawn), pursuant to the terms and conditions set forth herein, prior to the
Expiration Date. Baby Superstore will accept only tenders of Notes or a portion
thereof which are in an amount equal to $1,000 principal amount of Notes or
integral multiples thereof. Tenders of Notes may be withdrawn at any time prior
to the Expiration Date. In the event of a termination of the Offer, the Notes
tendered pursuant to the Offer will be returned to the tendering holders
promptly.
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) and applicable law, Baby Superstore will purchase, by accepting
for payment, and will pay for, all Notes validly tendered (and not properly
withdrawn) pursuant to the Offer promptly after the Expiration Date. Such
payment will be made by the deposit of immediately available funds by Baby
Superstore with the Depositary, which will act as agent for tendering holders
for the purpose of receiving payment from Baby Superstore and transmitting such
payment to tendering holders. Subject to the requirements of Article Fourteen of
the Indenture, Baby Superstore expressly reserves the right, in its sole
discretion and subject to Rule 13e-4(f)(5) under the Exchange Act, to delay
acceptance for payment of or payment for Notes in order to comply, in whole or
in part, with any applicable law.
If less than all the principal amount of Notes held by a holder is
tendered and accepted pursuant to the Offer, Baby Superstore shall issue, and
the Trustee shall authenticate and deliver to or on the order of the holder
thereof, at the expense of Baby Superstore, new Notes of authorized
denominations, in a principal amount equal to the portion of the Notes not
tendered or not accepted, as the case may be, as promptly as practicable after
the Expiration Date.
A Note may be converted into shares of Toys "R" Us Common Stock until,
but not after, such Note is properly tendered to the Depositary unless the
tender of such Note is properly withdrawn, there is a default in payment of the
Repurchase Price or the Offer is terminated without the purchase of Notes.
After the Expiration Date, Baby Superstore may purchase additional Notes
in the open market, in privately negotiated transactions, through subsequent
tender or exchange offers or otherwise, subject to compliance with applicable
law. Any future purchases may be on the same terms or on terms that may be more
or less favorable to Holders than the terms of the Offer. Any future purchases
will depend on various factors at that time.
PURPOSE AND EFFECTS OF THE OFFER
The Offer is being made pursuant to the Indenture, which provides that,
upon the occurrence of a Change of Control (as defined below), each holder of
Notes will have the right, at such holder's option, to require Baby Superstore
to repurchase all or a portion of such holder's Notes, in denominations of
$1,000 or integral multiples thereof, at a purchase price equal to 100% of the
principal amount thereof plus accrued interest to the date of repurchase. A
"Change of Control" is defined in the Indenture as such time as any "person" (as
such term is used in Section 13(d) and 14(d) of the Exchange Act in effect on
the date of the Indenture), other than Jack P. Tate or any employee benefit plan
or stock plan sponsored by Baby Superstore, is or becomes the "beneficial owner"
(as such terms in used in Rule 13d-3 under the Exchange Act in effect on the
date of the Indenture) of shares of capital stock of Baby Superstore entitling
such person to exercise more than 50% of the total voting power of all shares of
capital stock of Baby Superstore entitled to vote in ordinary circumstances in
an election of directors. A
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"Change of Control" occurred on February 3, 1997 as a result of the consummation
of the Merger, pursuant to which Sub was merged with and into Baby Superstore,
with Baby Superstore continuing as the surviving corporation and becoming a
wholly owned subsidiary of Toys "R" Us. This Offer to Purchase serves as the
"Change of Control Notice" required by the Indenture.
The Notes purchased in the Offer will cease to be outstanding and will be
delivered to the Trustee for cancellation immediately after such purchase. Any
Notes which remain outstanding after consummation of the Offer will continue to
be obligations of Baby Superstore, and will continue to be convertible at the
option of the holder thereof into shares of Toys "R" Us Common Stock. The
Indenture does not contain any limitations on the ability of Baby Superstore to
incur additional indebtedness.
Holders of Notes that are not tendered pursuant to the Offer will not
have the right after the Expiration Date to exercise their Change of Control
Rights in respect of such Notes in connection with the Merger. Depending upon,
among other things, the amount of Notes outstanding after the consummation of
the Offer, the liquidity of untendered Notes may be adversely affected by the
Offer. If there is a market for such Notes following the Offer, such Notes may
trade at a discount compared to present trading prices depending on prevailing
interest rates, the market for securities with similar credit features, the
performance of Baby Superstore and Toys "R" Us and other factors. In addition,
if substantially all of the Notes are tendered pursuant to the Offer, Baby
Superstore intends to delist the Notes from the Nasdaq SmallCap Market.
Accordingly, there is no assurance that an active market in such Notes following
consummation of the Offer will exist and no assurance as to the prices at which
such Notes may trade.
As of the date of this Change of Control Notice and Offer to Purchase,
the Company has no "Senior Indebtedness" of the type referred to in Section
1401(a) of the Indenture. Accordingly, no action by the Company with respect to
holders of Senior Indebtedness pursuant to Section 1401(a) of the Indenture is
required.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS; TERMINATION
The Offer will expire on the Expiration Date, unless extended pursuant to
the procedures set forth herein. Subject to the requirements of Article Fourteen
of the Indenture, Baby Superstore expressly reserves the right to extend the
Offer by giving oral or written notice of such extension to the Depositary.
During any extension of the Offer, all Notes previously tendered pursuant to the
Offer (and not properly withdrawn) will remain subject to the Offer and may be
accepted for payment by Baby Superstore, subject to the withdrawal rights of
Holders.
Baby Superstore also expressly reserves the right, subject to the
requirements of Article Fourteen of the Indenture and Rule 13e-4(f)(5) under the
Exchange Act and other applicable law: (i) to delay acceptance for payment of or
payment for any Notes tendered pursuant to the Offer; and (ii) at any time, or
from time to time, to amend the terms of the Offer in any respect.
Any extension, termination or amendment of the Offer will be followed as
promptly as practicable by a public announcement thereof. Without limiting the
manner in which Baby Superstore may choose to make a public announcement of any
extension, termination or amendment of the Offer, Baby Superstore shall have no
obligation to publish, advertise or otherwise communicate any such public
announcement, other than by issuing a release to the Dow Jones News Service,
except in the case of an announcement of an extension of the Offer, in which
case Baby Superstore shall have no obligation to publish, advertise or otherwise
communicate such announcement other than by issuing a notice of such extension
by press release or other public announcement, which notice shall be issued no
later than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date.
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ACCEPTANCE FOR PAYMENT
Upon the terms and subject to the conditions to the Offer (including if
the Offer is extended or amended, the terms of such extension or amendment) and
applicable law, Baby Superstore will purchase, by accepting for payment, and
will pay for all Notes properly tendered (and not properly withdrawn) pursuant
to the Offer, promptly after the Expiration Date. In all cases, payment by the
Depositary to tendering holders will be made only after timely receipt by the
Depositary of the documentation described under "Procedures for Tendering and
Withdrawing Notes - Tendering Notes."
For purposes of the Offer, Baby Superstore shall be deemed to have
accepted for payment (and thereby to have purchased) tendered Notes as, if and
when Baby Superstore gives oral or written notice to the Depositary of Baby
Superstore's acceptance of such Notes for payment. Subject to the terms and
conditions of the Offer, payment for Notes so accepted will be made by deposit
of the consideration therefor with the Depositary. The Depositary will act as
agent for tendering holders for the purpose of receiving payment from Baby
Superstore and then transmitting payment to such tendering holders.
PROCEDURES FOR TENDERING NOTES
TENDERING NOTES
The tender of Notes pursuant to any of the procedures set forth in this
Offer to Purchase and in the Letter of Transmittal will constitute a binding
agreement between the tendering holder and Baby Superstore upon the terms and
subject to the conditions of the Offer. The tender of Notes will constitute an
agreement to deliver good and marketable title to all tendered Notes prior to
the Expiration Date free and clear of all liens, charges, claims, encumbrances,
interests and restrictions of any kind.
EXCEPT AS PROVIDED IN "-GUARANTEED DELIVERY PROCEDURES", UNLESS THE NOTES
BEING TENDERED ARE DEPOSITED BY THE HOLDER WITH THE DEPOSITARY PRIOR TO THE
EXPIRATION DATE (ACCOMPANIED BY A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF
TRANSMITTAL), BABY SUPERSTORE MAY, AT ITS OPTION, REJECT SUCH TENDER. PAYMENT
FOR NOTES WILL BE MADE ONLY AGAINST DEPOSIT OF TENDERED NOTES AND DELIVERY OF
ALL OTHER REQUIRED DOCUMENTS.
Only record holders of Notes are authorized to exercise a Change of
Control Right and tender their Notes pursuant to the Offer. Accordingly, to
properly exercise a Change of Control Right and tender Notes or cause Notes to
be tendered, the following procedures must be followed:
Notes held through DTC. Each beneficial owner of Notes held through a
participant (a "DTC Participant") of the Depository Trust Company ("DTC") (i.e.,
a custodian bank, depositary, broker, trust company or other nominee) must
instruct such DTC Participant to cause its Notes to be tendered in accordance
with the procedures set forth in this Offer to Purchase.
Pursuant to an authorization given by DTC to the DTC Participants, each
DTC Participant that holds Notes through DTC must (i) transmit its acceptance
through the DTC Automated Tender Offer Program ("ATOP") (for which the
transaction will be eligible), and DTC will then edit and verify the acceptance,
execute a book-entry delivery to the Depositary's account at DTC and send an
Agent's Message (as defined herein) to the Depositary for its acceptance, or
(ii) comply with the guaranteed delivery procedures set forth in this Offer to
Purchase. The Depositary will (promptly after the date of this Offer to
Purchase) establish accounts at DTC for purposes of the Offer with respect to
Notes held through DTC, and any financial institution that is a DTC Participant
may make book-entry delivery of interests in Notes into the Depositary's account
through ATOP.
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However, although delivery of interests in the Notes may be effected through
book-entry transfer into the Depositary's account through ATOP, an Agent's
Message in connection with such book-entry transfer, and any other required
documents, must be, in any case, transmitted to and received by the Depositary
at its address set forth on the back cover of this Offer to Purchase, or the
guaranteed delivery procedures set forth below must be complied with, in each
case, prior to the Expiration Date. Delivery of documents to DTC does not
constitute delivery to the Depositary. The confirmation of a book-entry transfer
into the Depositary's account at DTC as described above is referred to herein as
a "Book-Entry Confirmation".
The term "Agent's Message" means a message transmitted by DTC to, and
received by, the Depositary and forming a part of the Book-Entry Confirmation,
which states that DTC has received an express acknowledgment from each DTC
Participant tendering through ATOP that such DTC Participants have received a
Letter of Transmittal and agree to be bound by the terms of the Letter of
Transmittal and Baby Superstore may enforce such agreement against such DTC
Participants.
All of the Notes currently held through DTC have been issued in the form
of a global note registered in the name of Cede & Co., DTC's nominee (the
"Global Note"). At or as of the Expiration Date, DTC will deliver to the
Depositary a properly completed and duly executed Letter of Transmittal in
respect of the aggregate principal amount of Notes as to which it has delivered
to DTC Agent's Messages and Cede & Co. will deliver to the Depositary the Global
Note. At or as of the close of business on the third business day after the
Expiration Date, DTC will deliver to the Depositary a properly completed and
duly executed Letter of Transmittal in respect of the aggregate principal amount
of Notes as to which it has delivered to DTC Agent's Messages in respect of
Notices of Guaranteed Delivery as described under "-Guaranteed Delivery
Procedures." Thereafter, the aggregate principal amount of the Global Note will
be reduced to represent the aggregate principal amount of Notes held through DTC
and not tendered pursuant to the Offer and the Global Note will be returned to
Cede & Co.
Notes held by Record Holders. Each record holder must complete and sign a
Letter of Transmittal, and mail or deliver such Letter of Transmittal, and any
other documents required by the Letter of Transmittal, together with
certificate(s) representing all tendered Notes, to the Depositary at its address
set forth on the back cover page of this Offer to Purchase, or the Holder must
comply with the guaranteed delivery procedures set forth in this Offer to
Purchase.
All signatures on a Letter of Transmittal must be guaranteed by a
recognized participant in the Securities Transfer Agents Medallion Program, the
NYSE Medallion Signature Program or the Stock Exchange Medallion Program;
provided, however, that signatures on a Letter of Transmittal need not be
guaranteed if such Notes are tendered for the account of an Eligible
Institution. If a Letter of Transmittal or any Note is signed by a trustee,
executor, administrator, guardian, attorney-in-fact, agent, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person must so indicate when signing, and proper evidence satisfactory to
Baby Superstore of the authority of such person so to act must be submitted.
No alternative, conditional, irregular or contingent tenders will be
accepted (unless waived). By executing a Letter of Transmittal or transmitting
an acceptance through ATOP, each tendering holder waives any right to receive
any notice of the acceptance for purchase of its Notes.
Lost or Missing Certificates. If a record holder desires to tender Notes
pursuant to the Offer, but the certificates representing such Notes have been
mutilated, lost, stolen or destroyed, such holder should write to or telephone
the Trustee about procedures for obtaining replacement certificates representing
such Notes, arranging for indemnification or about any other matter which
requires handling by such Trustee.
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Backup Federal Income Tax Withholding. Under the "backup withholding"
provisions of Federal income tax law, unless a tendering holder, or his or her
assignee (in either case, the "Payee"), satisfies the conditions described in
Instruction 5 of the Letter of Transmittal or is otherwise exempt, the aggregate
purchase price may be subject to backup withholding tax at a rate of 31%. To
prevent backup withholding, each Payee should complete and sign the Substitute
Form W-9 provided in the Letter of Transmittal. See Instruction 5 of the Letter
of Transmittal.
Effect of Letter of Transmittal. Subject to and effective upon the
acceptance for purchase of and payment for Notes tendered thereby, by executing
and delivering a Letter of Transmittal a tendering holder of Notes (i)
irrevocably sells, assigns and transfers to Baby Superstore, all right, title
and interest in and to all the Notes tendered thereby and (ii) waives any and
all rights with respect to the Notes (including without limitation any existing
or past defaults and their consequences in respect of the Note and the Indenture
under which the Notes were issued), (iii) releases and discharges Baby
Superstore from any and all claims such holder may have now, or may have in the
future arising out of, or related to, the Notes including without limitation any
claims that such holder is entitled to receive additional principal or interest
payments with respect to the Notes or to participate in any redemption or
defeasance of the Notes and (iv) irrevocably constitutes and appoints the
Depositary the true and lawful agent and attorney-in-fact of such holder with
respect to any such tendered Notes, will full power of substitution and
resubstitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest) to (a) deliver certificates representing such Notes,
or transfer ownership of such Notes, on the account books maintained by DTC,
together, in any such case, with all accompanying evidences of transfer and
authenticity, to Baby Superstore, (b) present such Notes for transfer on the
relevant security register and (c) receive all benefits or otherwise exercise
all rights of beneficial ownership of such Notes (except that the Depositary
will have no rights to, or control over, funds from Baby Superstore, except as
agent for Baby Superstore, for the purchase price for any tendered Notes that
are purchased by Baby Superstore), all in accordance with the terms of the
Offer.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of tendered Notes will be resolved by Baby Superstore,
whose determination will be final and binding. Baby Superstore reserves the
absolute right to reject any or all tenders that are not in proper form or the
acceptance of which may, in the opinion of counsel for Baby Superstore, be
unlawful. Baby Superstore also reserves the absolute right to waive any
condition to the Offer and any irregularities or conditions of tender as to
particular Notes. Baby Superstore's interpretation of the terms and conditions
of the Offer (including the instructions in the Letter of Transmittal) will be
final and binding. Unless waived, any irregularities in connection with tenders
must be cured within such time as Baby Superstore shall determine. Baby
Superstore and the Depositary shall not be under any duty to give notification
of defects in such tenders and shall not incur liabilities for failure to give
such notification. Tenders of Notes will not be deemed to have been made until
such irregularities have been cured or waived. Any Notes received by the
Depositary that are not properly tendered and as to which the irregularities
have not been cured or waived will be returned by the Depositary to the
tendering holder, unless otherwise provided in the Letter of Transmittal, as
soon as practicable following the Expiration Date.
LETTERS OF TRANSMITTAL AND NOTES MUST BE SENT ONLY TO THE DEPOSITARY.
DO NOT SEND LETTERS OF TRANSMITTAL OR NOTES TO BABY SUPERSTORE OR
TOYS "R" US.
THE METHOD OF DELIVERY OF NOTES AND LETTERS OF TRANSMITTAL, ANY REQUIRED
SIGNATURE GUARANTEES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY
THROUGH DTC AND ANY ACCEPTANCE THROUGH ATOP, IS AT THE ELECTION AND RISK OF THE
PERSONS TENDERING AND DELIVERING ACCEPTANCES OR LETTERS OF TRANSMITTAL AND,
EXCEPT AS OTHERWISE PROVIDED IN THE LETTER OF TRANSMITTAL, DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY
MAIL, IT IS SUGGESTED THAT THE HOLDER USE PROPERLY INSURED, REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED, AND THAT THE MAILING BE MADE SUFFICIENTLY IN ADVANCE
OF THE EXPIRATION DATE TO PERMIT DELIVERY TO THE DEPOSITARY PRIOR TO THE
EXPIRATION DATE.
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GUARANTEED DELIVERY PROCEDURES
DTC Participants. A DTC Participant who wishes to cause its Notes to be
tendered, but who cannot transmit its acceptance through ATOP prior to the
Expiration Date, may cause a tender to be effected if:
(a) guaranteed delivery is made by or through a firm or other entity
identified in Rule 17Ad-15 under the Exchange Act (an "Eligible
Institution"), including (as such terms are defined therein): (i) a bank;
(ii) a broker, dealer, municipal securities dealer, municipal securities
broker, government securities dealer or government securities broker;
(iii) a credit union; (iv) a national securities exchange, registered
securities association or clearing agency; or (v) a savings institution
that is a participant in a Securities Transfer Association recognized
program; and
(b) prior to 12:00 a.m., New York City time, on the Expiration Date,
the Depositary receives from such Eligible Institution a properly
completed and duly executed Notice of Guaranteed Delivery (by mail, hand
delivery, facsimile transmission or overnight courier) substantially in
the form provided herewith; and
(c) Book-Entry Confirmation of the transfer into the Depositary's
account at DTC, and all other documents required by the Letter of
Transmittal, are received by the Depositary within three New York Stock
Exchange trading days after the date of receipt by the Depositary of such
Notice of Guaranteed Delivery.
Record Holders. A record holder who wishes to tender its Notes but (x)
whose Notes are not immediately available and will not be available for
tendering prior to the Expiration Date, or (y) who cannot deliver its Notes, the
Letter of Transmittal, or any other required documents, to the Depositary prior
to the Expiration Date, may effect a tender if:
(a) the tender is made by or through an Eligible Institution; and
(b) prior to 12:00 a.m., New York City time, on the Expiration Date,
the Depositary receives from such Eligible Institution a properly
completed and duly executed Notice of Guaranteed Delivery (by mail, hand
delivery, facsimile transmission or overnight courier) substantially in
the form provided herewith; and
(c) a properly completed and executed Letter of Transmittal, as well
as the certificate(s) representing all tendered Notes in proper form for
transfer, and all other documents required by the Letter of Transmittal,
are received by the Depositary within three New York Stock Exchange
trading days after the date of receipt by the Depositary of such Notice
of Guaranteed Delivery.
Under no circumstances will interest be paid by Baby Superstore by reason
of any delay in making payment to any person using the guaranteed delivery
procedures described above.
WITHDRAWAL RIGHTS
Tenders of Notes (or any portion of such Notes in integral multiples of
$1,000) may be withdrawn at any time prior to the Expiration Date.
Notes held through DTC. A DTC Participant who has transmitted its
acceptance through ATOP in respect of Notes held through DTC may, prior to the
Expiration Date, withdraw the instruction given thereby by (i) withdrawing its
acceptance through ATOP, or (ii) delivering to the Depositary by mail, hand
delivery or
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<PAGE>
facsimile transmission of notice of withdrawal of such instruction. Such notice
of withdrawal must contain the name and number of the DTC Participant, the
principal amount of Notes to which such withdrawal relates and the signature of
the DTC Participant. Withdrawal of such an instruction will be effective upon
receipt of such notice of withdrawal by the Depositary.
Notes held by Record Holders. A holder may withdraw its tender of Notes,
prior to the Expiration Date, by delivering to the Depositary by mail, hand
delivery or facsimile transmission of notice of withdrawal. Any such notice of
withdrawal must (i) specify the name of the person who tendered the Notes to be
withdrawn, (ii) contain a description of the Notes to be withdrawn and identify
the certificate number or numbers shown on the particular certificates
evidencing such Notes and the aggregate principal amount represented by such
Notes and (iii) be signed by the holder of such Notes in the same manner as the
original signature on the Letter of Transmittal by which such Notes were
tendered (including any required signature guarantees), or be accompanied by (x)
documents of transfer in a form acceptable to Baby Superstore, in its sole
discretion and (y) a properly completed irrevocable proxy that authorized such
person to effect such revocation on behalf of such holder. If the Notes to be
withdrawn have been delivered or otherwise identified to the Depositary, a
signed notice of withdrawal is effective immediately upon receipt by the
Depositary even if physical release is not yet effected. Any Notes properly
withdrawn will be deemed to be not validly tendered for purposes of the Offer.
All signatures on a notice of withdrawal must be guaranteed by a
recognized participant in the Securities Transfer Agents Medallion Program, the
NYSE Medallion Signature Program or the Stock Exchange Medallion Program;
provided, however, that signatures on the notice of withdrawal need not be
guaranteed if the Notes being withdrawn are held for the account of an Eligible
Institution.
A withdrawal of an instruction or a withdrawal of a tender must be
executed by a DTC Participant or a holder, as the case may be, in the same
manner as the person's name appears on its transmission through ATOP or Letter
of Transmittal, as the case may be, to which such withdrawal relates. If a
notice of withdrawal is signed by a trustee, partner, executor, administrator,
guardian, attorney-in-fact, agent, officer of a corporation or other person
acting in a fiduciary or representative capacity, such person must so indicate
when signing and must submit with the revocation appropriate evidence of
authority to execute the notice of withdrawal. A holder or DTC Participant may
withdraw a tender only if such withdrawal complies with the provisions of this
Offer to Purchase.
A withdrawal of an instruction previously given pursuant to the
transmission of an acceptance through ATOP or a withdrawal of a tender by a
holder may be rescinded only by (i) a new transmission of acceptance through
ATOP, or (ii) execution and delivery of a new Letter of Transmittal, as the case
may be, in accordance with the procedures described herein.
CERTAIN INFORMATION CONCERNING BABY SUPERSTORE AND TOYS "R" US
BABY SUPERSTORE
Baby Superstore is a leading large format retailer of baby and young
children's products in the United States. Baby Superstore was incorporated in
1970 and opened its first superstore in March 1971 in Greenville, South Carolina
and currently operates 77 stores in 23 states, primarily in the southeast and
midwest. Substantially all of the products sold by Baby Superstore are directed
toward newborns and children up to three years old. As a result of the Merger,
Baby Superstore became a wholly owned subsidiary of Toys "R" Us on February 3,
1997. Baby Superstore's principal offices are located at 461 From Road, Paramus,
New Jersey 07652, and its telephone number is (201) 262-7800.
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TOYS "R" US
Toys "R" Us is engaged in the operation of 1,373 children's specialty
retail stores consisting of 680 United States and 396 international toy stores,
including franchise stores, under the name "Toys "R" Us," 212 children's
clothing stores under the name "Kids "R" Us," six infant-toddler stores under
the name "Babies "R" Us", seventy-seven infant-toddler stores under the name
"Baby Superstore" and two superstores combining all of the "R" Us formats
mentioned above under the name "Toys "R" Us KidsWorld." Toys "R" Us' executive
offices are located at 461 From Road, Paramus, New Jersey 07652, and its
telephone number is (201) 262-7800.
RECENT DEVELOPMENTS
THE MERGER
On February 3, 1997, pursuant to the terms of an Agreement and Plan or
Merger, dated as of October 1, 1996, and as amended and restated as of December
26, 1996, among Toys "R" Us, Sub, Baby Superstore and Mr. Tate, the Merger was
consummated, pursuant to which Sub was merged with and into Baby Superstore,
with Baby Superstore continuing as the surviving corporation and becoming a
wholly owned subsidiary of Toys "R" Us. In connection with the Merger, (i) each
outstanding share of Baby Superstore Common Stock (other than shares held by Mr.
Tate, shares held by Baby Superstore and shares held by Toys "R" Us or any
direct or indirect wholly owned subsidiary of Toys "R" Us) was converted into
0.8121 of a share of Toys "R" Us Common Stock and (ii) each share of Baby
Superstore Common Stock held by Mr. Tate was converted into 0.5150 of a share of
Toys "R" Us Common Stock.
ADJUSTMENT TO CONVERSION PRICE; JOINT AND SEVERAL OBLIGATION
Prior to the consummation of the Merger, the Notes were convertible into
shares of Baby Superstore Common Stock at a conversion price of $53.875. Upon
consummation of the Merger, pursuant to adjustment mechanisms contained in the
Indenture, the Notes became, and are currently, convertible into shares of Toys
"R" Us Common Stock at a conversion price of $66.34. In connection with the
Merger, Toys "R" Us agreed to be jointly and severally liable with Baby
Superstore for the due and punctual payment of the principal of and interest on
the Notes when and as the same become due and payable, whether at the stated
maturity or by declaration of acceleration, call for redemption or otherwise, in
accordance with the Notes and the Indenture as if Toys "R" Us had been the
original issuer of the Notes. The obligations of Toys "R" Us in respect of the
Notes shall be subordinate and junior in right of payment to the senior
indebtedness of Toys "R" Us to the same extent and in the same manner that the
Notes are subordinate and junior in right of payment to the senior indebtedness
of Baby Superstore pursuant to the Indenture. Senior indebtedness of Toys "R" Us
means the principal of and premium, if any, and unpaid interest on, and any
other reasonable fees or costs related to indebtedness (and renewals,
extensions, modifications and refundings of any such indebtedness) of Toys "R"
Us, other than the obligations in respect of the Notes, whether outstanding on
the date hereof or hereafter created, incurred, assumed or guaranteed, (i) for
money owing to banks or their subsidiaries or affiliates, (ii) for money
borrowed other than from banks evidenced by notes, bonds, debentures or other
similar instruments or (iii) arising under a lease of property, equipment or
other assets, unless, in each case, the instrument creating or evidencing the
same or pursuant to which the same is outstanding provides that such
indebtedness is not superior in right of payment to the obligations of Toys "R"
Us in respect of the Notes. The assumption by Toys "R" Us of payment obligations
in respect of the Notes will be deemed to be a third-party beneficiary agreement
for the benefit of the holders of the Notes.
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SOURCES AND AMOUNT OF FUNDS
The precise amount of funds required by Baby Superstore to purchase Notes
tendered pursuant to the Offer and to pay the fees and expenses related to the
Offer will not be known until the Expiration Date. If all outstanding Notes were
tendered and purchased, the aggregate amount of funds required to pay the
Repurchase Price would be $115,233,593.75. Such funds are expected to be
provided by working capital of Baby Superstore.
MARKET PRICE INFORMATION
THE NOTES
The Notes are listed and traded on the Nasdaq SmallCap Market under the
symbol "BSSTG." The following tables set forth the high and low sales prices per
$1,000 principal amount of the Notes, as reported by the Nasdaq SmallCap Market,
for the periods indicated. Prior to October 3, 1995, the Notes were not publicly
traded.
HIGH LOW
FISCAL YEAR ENDED JANUARY 31, 1996
Third Quarter (from October 3, 1995)................. $ 1,027.5 $ 971.25
Fourth Quarter....................................... 1,185 972.5
FISCAL YEAR ENDED JANUARY 29, 1997
First Quarter........................................ $ 1,065 $ 845
Second Quarter....................................... 995 740
Third Quarter........................................ 980 742.5
Fourth Quarter....................................... 992.5 978.75
FISCAL YEAR ENDED JANUARY 31, 1998
First Quarter (to February 12, 1997)................. $ 995 $ 991.25
On February 12, 1997, the closing sales price per $1,000 principal amount
of Notes, as reported by the Nasdaq SmallCap Market, was $995.
HOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE NOTES PRIOR
TO MAKING ANY DECISION WITH RESPECT TO THE OFFER.
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THE TOYS "R" US COMMON STOCK
The Toys "R" Us Common Stock is listed and traded on the NYSE under the
symbol "TOY". The following table sets forth the high and low sales prices per
share of Toys "R" Us Common Stock, as reported on the NYSE Composite Tape, for
the periods indicated.
HIGH LOW
FISCAL YEAR ENDED JANUARY 28, 1995
First Quarter........................................ $ 37-3/8 $ 32-3/8
Second Quarter....................................... 36-3/4 32-1/4
Third Quarter........................................ 38-3/4 33
Fourth Quarter....................................... 39 28-1/4
FISCAL YEAR ENDED FEBRUARY 3, 1996
First Quarter........................................ $ 30-7/8 $ 23-3/4
Second Quarter....................................... 29-1/2 24-1/4
Third Quarter........................................ 28-3/4 21-5/8
Fourth Quarter....................................... 24-3/8 20-1/2
FISCAL YEAR ENDED FEBRUARY 1, 1997
First Quarter........................................ $ 29-7/8 $ 21-7/8
Second Quarter....................................... 30-7/8 23-3/4
Third Quarter........................................ 34-1/16 25-7/8
Fourth Quarter....................................... 37-5/8 24-3/8
FISCAL YEAR ENDED JANUARY 31, 1998
First Quarter (to February 12, 1997)................. $ 25-5/8 $ 24-5/8
On February 12, 1997, the closing sales price of the Toys "R" Us Common
Stock, as reported on the NYSE Composite Tape, was $25 per share.
HOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE TOYS "R" US
COMMON STOCK PRIOR TO MAKING ANY DECISION WITH RESPECT TO THE OFFER.
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SELECTED FINANCIAL DATA
TOYS "R" US
The following table presents selected historical financial data for Toys
"R" Us for the periods indicated. The financial data for each of the five fiscal
years in the period ended February 3, 1996 have been derived from the audited
consolidated financial statements of Toys "R" Us for such periods. The financial
data for the 39 weeks ended November 2, 1996 and October 28, 1995 are unaudited,
but in the opinion of Toys "R" Us reflect all adjustments (consisting primarily
of normal recurring accruals) necessary for a fair presentation of such data.
The data for the 39 weeks ended November 2, 1996 and October 28, 1995 are not
indicative of results of operations for the entire fiscal year. The data should
be read in conjunction with the consolidated financial statements, related notes
and other financial information of Toys "R" Us incorporated by reference in this
Offer to Purchase. See "Incorporation of Certain Documents by Reference."
<TABLE>
<CAPTION>
FISCAL YEAR ENDED 39 WEEKS ENDED
FEB. 3, JAN. 28, JAN. 29, JAN. 30, FEB. 1, NOV. 2, OCT. 28,
1996(1) 1995 1994 1993 1992 1996(2) 1995
--------- ------ ------ ------ ------ --------- -----
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Net sales.................$9,427 $8,746 $7,946 $7,169 $6,124 $5,265 $4,822
Net earnings.............. 148 532 483 438 340 45 55
Earnings per share........ .53 1.85 1.63 1.47 1.15 .16 .20
BALANCE SHEET DATA
Total assets..............6,738 6,571 6,150 5,323 4,583 8,922 8,437
Long-term debt............ 827 785 724 671 391 1,028 782
Shareholders' equity......3,432 3,429 3,148 2,889 2,426 3,497 3,361
<FN>
(1) Results include restructuring and other charges of $269.1 million, net of
taxes. This is equivalent to $0.98 per share.
(2) Results include a non-recurring arbitration award charge of $34.6 million,
net of taxes. This is equivalent to $0.13 per share.
</FN>
</TABLE>
16
<PAGE>
BABY SUPERSTORE
The following table presents selected historical financial data for the
Company for the periods indicated. The financial data for each of the five
fiscal years in the period ended January 31, 1996 have been derived from the
audited consolidated financial statements of Baby Superstore for such periods.
The financial data for the 39 weeks ended October 30, 1996 and October 25, 1995
are unaudited, but in the opinion of Baby Superstore reflect all adjustments
(consisting only of normal recurring adjustments, except as noted in (1) below)
necessary for a fair presentation of such data. The data for the 39 weeks ended
October 30, 1996 and October 25, 1995 are not indicative of results of
operations for the entire fiscal year. The data should be read in conjunction
with the consolidated financial statements, related notes and other financial
information of Baby Superstore incorporated by reference in this Offer to
Purchase. See "Incorporation of Certain Documents by Reference."
<TABLE>
<CAPTION>
FISCAL YEAR ENDED 39 WEEKS ENDED
JAN. 31, JAN. 25, JAN. 26, JAN. 27, JAN. 29, OCT. 30, OCT. 25,
1996 1995 1994 1993 1992 1996(1) 1995
------ ------ ------ ------ ------ --------- -----
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Net sales................ $291 $175 $104 $63 $47 $321 $203
Net earnings (loss)...... 12 7 4 1 1 (9) 9
Earnings (loss) per share .60 .44 .25 .10 .05 (.49) .44
BALANCE SHEET DATA
Total assets............. 272 92 39 22 18 269 259
Long-term debt........... 115 0 12 5 6 115 115
Shareholders' equity..... 99 58 10 6 5 90 96
<FN>
(1) Results include a second quarter inventory charge of $7.4 million, net of
taxes, and a third quarter non-tax deductible merger-related charge. These
charges totaled $8.8 million, net of taxes, and are equivalent to $.46 per
share.
</FN>
</TABLE>
17
<PAGE>
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following discussion is for general information only and is based on
the federal income tax law now in effect, which is subject to change, possibly
retroactively. This summary does not discuss all aspects of federal income
taxation which may be relevant to any particular holder of the Notes in light of
such holder's individual investment circumstances or to certain types of holders
subject to special tax rules (e.g., financial institutions, broker-dealers,
insurance companies, tax-exempt organizations, and foreign taxpayers), nor does
it address specific state, local or foreign tax consequences. This summary
assumes that the holders of the Notes have held their Notes as "capital assets"
under the Internal Revenue Code of 1986, as amended. EACH HOLDER IS URGED TO
CONSULT SUCH HOLDER'S TAX ADVISOR REGARDING THE SPECIFIC FEDERAL, STATE, LOCAL,
AND FOREIGN INCOME AND OTHER TAX CONSEQUENCES OF THE OFFER.
SALE OF NOTES PURSUANT TO THE OFFER
The receipt of cash by a holder of the Notes in exchange for the Notes
will be a taxable transaction for federal income tax purposes and may also be a
taxable transaction under applicable state, local or foreign tax laws. Such
holder will recognize gain or loss in an amount equal to the difference between
(i) the amount of cash received (other than in respect of accrued interest) and
(ii) such holder's adjusted tax basis in the Notes. Subject to the market
discount rules discussed below, such gain or loss will be capital gain or loss
and will be long-term gain or loss if such holder has held such Notes for more
than one year.
The payment of accrued interest with respect to a Note generally will be
treated as ordinary income.
An exception to the capital gain treatment described above applies to a
holder who holds a Note with a "market discount." Market discount is the amount
by which the holder's basis in the Note immediately after its acquisition is
exceeded by the stated redemption price of the Note at maturity. (However, a
Note will be considered to have no market discount if such excess is less than
1/4 of 1% of the stated redemption price of the Note at maturity multiplied by
the number of complete years from the holder's acquisition date of the Note to
its maturity date.) The gain realized by the holder of a market discount Note on
its purchase by Baby Superstore will be treated as ordinary income to the extent
that market discount has accrued (on a straight line basis or, at the election
of the holder, on a constant interest basis) from the holder's acquisition date
to the date of sale, unless the holder has elected to include market discount in
income currently as it accrues. Gain in excess of such accrued market discount
will be subject to the capital gains rules described above.
RETENTION OF NOTES
Although not free of doubt, holders who retain their Notes should not
recognize any gain or loss by reason of Toys "R" Us, agreement to be jointly and
severally liable with Baby Superstore for all of the payment obligations under
the Notes and the Indenture. However, because of the uncertain state of the law,
holders are urged to consult their tax advisors regarding the tax consequences
of retaining their Notes and the conversion into Toys "R" Us Common Stock.
18
<PAGE>
THE DEPOSITARY
The Depositary for the Offer is The Bank of New York. All deliveries,
correspondence and questions sent or presented to the Depositary relating to the
Offer should be directed to one of the addresses or telephone numbers set forth
on the back cover of this Offer to Purchase. Requests for information or
additional copies of the Offer to Purchaser and the related Letter of
Transmittal should be directed to the Depositary.
Baby Superstore will pay the Depositary reasonable and customary
compensation for their services in connection with the Offer, plus reimbursement
for reasonable out-of-pocket expenses. Baby Superstore will indemnify the
Depositary against certain liabilities and expenses in connection therewith,
including liabilities under the Federal securities laws.
Brokers, dealers, commercial banks and trust companies will be reimbursed
by Baby Superstore for customary mailing and handling expenses incurred by them
in forwarding material to their customers. Baby Superstore will not pay any fees
or commissions to any broker, dealer or other person (other than the Depositary)
in connection with the solicitation of tenders of Notes pursuant to the Offer.
MISCELLANEOUS
Baby Superstore is not aware of any jurisdiction where the making of the
Offer is not in compliance with the laws of such jurisdiction. If Baby
Superstore becomes aware of any jurisdiction where the making of the Offer would
not be in compliance with such laws, Baby Superstore will make a good faith
effort to comply with any such laws or seek to have such laws declared
inapplicable to the Offer. If, after such good faith effort, Baby Superstore
cannot comply with any such applicable laws, the Offer will not be made to (nor
will tenders be accepted from or on behalf of) the holders of the Notes residing
in such jurisdiction.
19
<PAGE>
The Depositary for the Offer is:
THE BANK OF NEW YORK
By Mail Facsimile Transmission: By Hand/Overnight Courier:
The Bank of New York (For Eligible The Bank of New York
101 Barclay Street Institutions Only) 101 Barclay Street
New York, New York 10286 (212) 571-3080 7 East Side
Attn: George Johnson New York, New York 10286
Attn: George Johnson
Confirm by Telephone:
(212) 815-4997
EXHIBIT (a)(2)
LETTER OF TRANSMITTAL
TO TENDER
4-7/8% CONVERTIBLE SUBORDINATED NOTES DUE 2000
OF BABY SUPERSTORE, INC.
PURSUANT TO THE CHANGE OF CONTROL NOTICE AND OFFER TO PURCHASE
DATED FEBRUARY 14, 1997
- --------------------------------------------------------------------------------
SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THE OFFER TO PURCHASE,
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON APRIL 15, 1997, UNLESS THE OFFER IS EXTENDED (SUCH TIME AND DATE OR
THE LATEST EXTENSION THEREOF, IF EXTENDED, THE "EXPIRATION DATE"). NOTES
TENDERED IN THE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE
EXPIRATION DATE.
- --------------------------------------------------------------------------------
The Depositary for the Offer is:
THE BANK OF NEW YORK (THE "DEPOSITARY")
By Mail Facsimile Transmission: By Hand/Overnight Courier:
The Bank of New York (For Eligible The Bank of New York
101 Barclay Street Institutions Only) 101 Barclay Street
New York, New York 10286 (212) 571-3080 7 East Side
Attn: George Johnson New York, New York 10286
Attn: George Johnson
Confirm by Telephone:
(212) 815-4997
Delivery of this Letter of Transmittal to an address, or transmission of
instructions via facsimile, other than as set forth above will not constitute
valid delivery. THE INSTRUCTIONS CONTAINED HEREIN AND IN THE OFFER TO PURCHASE
(AS DEFINED BELOW) SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS
COMPLETED.
By execution hereof, the undersigned acknowledges receipt of the Change of
Control Notice and Offer to Purchase, dated February 14, 1997 (as the same may
be amended from time to time, the "Offer to Purchase"), of Baby Superstore, Inc.
("Baby Superstore") and this Letter of Transmittal and instructions hereto (the
"Letter of Transmittal"), which together constitute Baby Superstore's offer to
purchase (the "Offer") all of the outstanding 4-7/8% Convertible Subordinated
Notes due 2000 of Baby Superstore (the "Notes"), upon the terms and subject to
the conditions set forth in the Offer to Purchase.
HOLDERS WHO WISH TO BE ELIGIBLE TO RECEIVE PAYMENT FOR THE NOTES TO BE
PURCHASED PURSUANT TO THE OFFER MUST VALIDLY TENDER (AND NOT WITHDRAW) THEIR
NOTES TO THE DEPOSITARY PRIOR TO THE EXPIRATION DATE.
This Letter of Transmittal is to be used by holders of the Notes if
certificates representing Notes are to be physically delivered to the Depositary
herewith by holders of Notes. This Letter of Transmittal is also being supplied
for informational purposes only to persons who hold notes in book-entry form
through the facilities of The Depositary Trust Company ("DTC"). Tender of Notes
held through DTC must be made pursuant to the procedures described under
"Procedures for Tendering Notes -- Tendering Notes -- Notes Held Through DTC" in
the Offer to Purchase.
In order to properly complete this Letter of Transmittal, a holder of
Notes must (i) complete the box entitled "Description of Notes;" (ii) if
appropriate, check and complete the boxes relating to guaranteed delivery,
Special Issuance or Payment Instructions and Special Delivery Instructions;
(iii) sign the Letter of Transmittal; and (iv) complete Substitute Form W-9.
Each holder of Notes should carefully read the detailed Instructions contained
herein prior to completing this Letter of Transmittal.
The undersigned has completed, executed and delivered this Letter of
Transmittal to indicate the action the undersigned desires to take with respect
to the Offer.
If holders desire to tender Notes pursuant to the Offer and (i)
certificates representing such holder's Notes are not lost but are not
immediately available or time will not permit this Letter of Transmittal,
certificates representing such Notes or other required documents to reach the
Depositary prior to the Expiration Date, or (ii) the procedures for book-entry
transfer cannot be completed prior to the Expiration Date, such holders may
effect a tender of such Notes in accordance with the guaranteed delivery
procedures described under "Procedure for Tendering Notes -- Guaranteed Delivery
Procedures" in the Offer to Purchase. See Instruction 1 below.
<PAGE>
All capitalized terms used herein and not defined herein shall have the
meaning ascribed to them in the Offer to Purchase.
Your bank or broker can assist you in completing this form. The
instructions included with this Letter of Transmittal must be followed.
Questions and requests for assistance or for additional copies of the Offer to
Purchase, this Letter of Transmittal and the Notice of Guaranteed Delivery may
be directed to the Depositary. See Instruction 9 below.
-----------------
Baby Superstore is not aware of any jurisdiction where the making of
the Offer would not be in compliance with applicable laws. If Baby Superstore
becomes aware of any jurisdiction where the making of the Offer would not be in
compliance with such laws, Baby Superstore will make a good faith effort to
comply with any such laws or seek to have such laws declared inapplicable to the
Offer. If after such good faith effort, Baby Superstore cannot comply with any
such applicable laws, the Offer will not be made to, nor will tenders be
accepted from or on behalf of, the holders of Notes residing in such
jurisdiction.
-----------------
|_|CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY DELIVERED TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Holder(s):
Window Ticket No. (if any):
Date of Execution of Notice of Guaranteed Delivery:
Name of Eligible Institution that Guaranteed Delivery:
List below the Notes to which this Letter of Transmittal relates. If the
space provided below is inadequate, list the certificate numbers and principal
amounts on a separately executed schedule and affix the schedule to this Letter
of Transmittal. Tenders of Notes will be accepted only in principal amounts
equal to $1,000 or integral multiples thereof.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
DESCRIPTION OF NOTES
- -------------------------------------------------------------------------------------------------
Aggregate
Principal
Name(s) and Address(es) of Holder(s) Certificate Amount Principal Amount
(Please fill in, if blank) Number* Represented** Tendered**
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
- -------------------------------------------------------------------------------------------------
TOTAL PRINCIPAL AMOUNT OF NOTES
- -------------------------------------------------------------------------------------------------
<FN>
* Need not be completed by holders tendering by book-entry transfer (see
below).
** Unless otherwise indicated in the column labeled "Principal Amount
Tendered" and subject to the terms and conditions of the Offer to
Purchase, a holder will be deemed to have tendered the entire aggregate
principal amount represented by the Notes indicated in the column labeled
"Aggregate Principal Amount Represented." See Instruction 2.
- -------------------------------------------------------------------------------------------------
</FN>
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
SPECIAL ISSUANCE OR
PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 2 THROUGH 6)
To be completed ONLY if certificates for Notes represent a greater amount
of Notes than the holder is tendering or the check for the purchase price for
Notes to be purchased are to be issued to the order of someone other than the
person or persons whose signature(s) appear(s) within this Letter of Transmittal
or issued to an address different from that shown in the box entitled
"Description of Notes" within this Letter of Transmittal.
Issue: |_| Notes
|_| Checks
(Complete as applicable)
Name:
---------------------------------------------------------------------------
(Please Print)
Address:
------------------------------------------------------------------------
(Please Print)
- --------------------------------------------------------------------------------
Zip Code
- --------------------------------------------------------------------------------
Taxpayer Identification or Social Security Number
(See Substitute Form W-9 herein)
- --------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 2 THROUGH 6)
To be completed ONLY if certificates for Notes represent a greater amount
of Notes than the holder is tendering or the check for the purchase price for
Notes to be purchased are to be sent to an address different from that shown in
the box entitled "Description of Notes" within this Letter of Transmittal.
Deliver:|_| Notes
|_| Checks
(Complete as applicable)
Name:
---------------------------------------------------------------------------
(Please Print)
Address:
------------------------------------------------------------------------
(Please Print)
- --------------------------------------------------------------------------------
Zip Code
- --------------------------------------------------------------------------------
Taxpayer Identification or Social Security Number
(See Substitute Form W-9 herein)
HOLDERS WHO WISH TO ACCEPT THE OFFER AND TENDER THEIR NOTES MUST COMPLETE
THIS LETTER OF TRANSMITTAL IN ITS ENTIRETY.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Offer, the
undersigned hereby tenders to Baby Superstore the principal amount of Notes
indicated above.
Subject to and effective upon the acceptance for purchase of and payment
for Notes tendered thereby, by executing and delivering a Letter of Transmittal
a tendering holder of Notes (i) irrevocably sells, assigns and transfers to Baby
Superstore, all right, title and interest in and to all the Notes tendered
thereby and (ii) waives any and all rights with respect to the Notes (including
without limitation any existing or past defaults and their consequences in
respect of the Note and the Indenture under which the Notes were issued), (iii)
releases and discharges Baby Superstore from any and all claims such holder may
have now, or may have in the future arising out of, or related to, the Notes
including without limitation any claims that such holder is entitled to receive
additional principal or interest payments with respect to the Notes or to
participate in any redemption or defeasance of the Notes and (iv) irrevocably
constitutes and appoints the Depositary the true and lawful agent and
attorney-in-fact of such holder with respect to any such tendered Notes, will
full power of substitution and resubstitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest) to (a) deliver
certificates representing such Notes, or transfer ownership of such Notes, on
the account books maintained by DTC, together, in any such case, with all
accompanying evidences of transfer and authenticity, to Baby Superstore, (b)
present such Notes for transfer on the relevant security register and (c)
receive all benefits or otherwise exercise all rights of beneficial ownership of
such Notes (except that the Depositary will have no rights to, or control over,
funds from Baby Superstore, except as agent for Baby Superstore, for the
purchase price for any tendered Notes that are purchased by Baby Superstore),
all in accordance with the terms of the Offer.
The undersigned understands that tenders of Notes may be withdrawn by
written notice of withdrawal received by the Depositary at any time prior to the
Expiration Date. See Instruction 1.
<PAGE>
The undersigned hereby represents and warrants that the undersigned (i)
owns the Notes tendered and is entitled to tender such Notes and (ii) has full
power and authority to tender, sell, assign and transfer the Notes tendered
hereby and that when such Notes are accepted for purchase and payment by Baby
Superstore, Baby Superstore will acquire good title thereto, free and clear of
all liens, restrictions, charges and encumbrances and not subject to any adverse
claim or right. The undersigned will, upon request, execute and deliver any
additional documents deemed by the Depositary or Baby Superstore to be necessary
or desirable to complete the sale, assignment and transfer of the Notes tendered
hereby.
For the purposes of the Offer, the undersigned understands that Baby
Superstore will be deemed to have accepted for purchase validly tendered Notes
(or defectively tendered Notes with respect to which Baby Superstore has waived
such defect) only if, as and when Baby Superstore gives oral or written notice
thereof to the Depositary. Payment for Notes purchased pursuant to the Offer
will be made by deposit of the purchase price for such Notes with the
Depositary, which will act as agent for tendering holders for the purpose of
receiving payments from Baby Superstore and transmitting such payments to such
holders.
All authority conferred or agreed to be conferred by this Letter of
Transmittal shall survive the death or incapacity of the undersigned and every
obligation of the undersigned under this Letter of Transmittal shall be binding
upon the undersigned's heirs, personal representatives, executors,
administrators, successors, assigns, trustees in bankruptcy and other legal
representatives.
The undersigned understands that valid tender of Notes pursuant to any
one of the procedures described under "Procedures for Tendering Notes" in the
Offer to Purchase and in the instructions hereto will constitute a binding
agreement between the undersigned and Baby Superstore upon the terms and subject
to the conditions of the Offer, including the undersigned's waiver of any
existing defaults and their consequences in respect of the Notes and the
Indenture (including, without limitation, a default in the payment of interest).
The undersigned understands that the delivery and surrender of the Notes
is not effective, and the risk of loss of the Notes does not pass to the
Depositary, until receipt by the Depositary of this Letter of Transmittal, or a
facsimile hereof, properly completed and duly executed, together with all
accompanying evidences of authority and any other required documents in form
satisfactory to Baby Superstore. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Notes pursuant to the procedures described in the Offer to Purchase and the
form and validity (including time of receipt of notices of withdrawal) of all
documents will be determined by Baby Superstore, in its sole direction, which
determination shall be final and binding on all parties.
Unless otherwise indicated herein under "Special Issuance or Payment
Instructions," the undersigned hereby requests that any Notes representing
principal amounts not tendered be issued in the name(s) of the undersigned, and
checks constituting payments for Notes purchased in connection with the Offer be
issued to the order of the undersigned. Similarly, unless otherwise indicated
herein under "Special Delivery Instructions," the undersigned hereby requests
that any Notes representing principal amounts not tendered and checks
constituting payments for Notes to be purchased in connection with the Offer be
delivered to the undersigned at the address(es) shown herein. In the event that
the "Special Issuance or Payment Instructions" box or the "Special Delivery
Instructions" box, or both, are completed, the undersigned hereby requests that
any Notes representing principal amounts not tendered be issued in the name(s)
of, certificates for such Notes be delivered to, and checks constituting
payments for Notes purchased in connection with the Offer be issued in the
name(s) of, and be delivered to, the person(s) at the address(es) so indicated,
as applicable. The undersigned recognizes that Baby Superstore has no obligation
pursuant to the "Special Issuance or Payment Instructions" box to transfer any
Notes from the name of the registered holder(s) thereof if Baby Superstore does
not accept for purchase any of the principal amount of such Notes so tendered.
<PAGE>
- --------------------------------------------------------------------------------
PLEASE SIGN BELOW
(TO BE COMPLETED BY ALL TENDERING HOLDERS OF
NOTES REGARDLESS OF WHETHER NOTES
ARE BEING PHYSICALLY DELIVERED HEREWITH)
This Letter of Transmittal must be signed by the registered holder(s) of Notes
exactly as his (their) name(s) appear(s) on certificate(s) for Notes or by
person(s) authorized to become registered holder(s) by endorsements and
documents transmitted with this Letter of Transmittal. If the signature is by a
trustee, executor, administrator, guardian, attorney-in-fact, officer or other
person acting in a fiduciary or representative capacity, such person must set
forth his or her full title below under "Capacity" and submit evidence
satisfactory to Baby Superstore of such person's authority to so act. See
Instruction 3 below.
If the signature appearing below is not of the registered holder(s) of the
Notes, then the registered holder(s) must sign a valid power of attorney.
X
- --------------------------------------------------------------------------------
X
- --------------------------------------------------------------------------------
(Signature(s) of Holder(s) or Authorized Signatory)
Date: , 1997
Name(s):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please Print)
Capacity:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
(Including Zip Code)
Area Code and Telephone No.:
- --------------------------------------------------------------------------------
PLEASE COMPLETE SUBSTITUTE FORM W-9 HEREIN
SIGNATURE GUARANTEE (IF REQUIRED - SEE INSTRUCTION 3 BELOW)
Certain Signatures Must be Guaranteed by an Eligible Institution
- --------------------------------------------------------------------------------
(Name of Eligible Institution Guaranteeing Signatures)
- --------------------------------------------------------------------------------
(Address (including zip code) and Telephone Number (including area code)
of Eligible Institution)
- --------------------------------------------------------------------------------
(Authorized Signature)
- --------------------------------------------------------------------------------
(Printed Name)
- --------------------------------------------------------------------------------
(Title)
Date: , 1997
- -------------------------
- --------------------------------------------------------------------------------
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. PROCEDURES FOR TENDERING NOTES; GUARANTEED DELIVERY PROCEDURES;
WITHDRAWAL OF TENDERS. To tender the Notes in the Offer, certificates
representing such Notes, together with a properly completed and duly executed
copy (or facsimile) of this Letter of Transmittal, and any other documents
required by this Letter of Transmittal must be received by the Depositary at one
of its addresses set forth herein prior to the Expiration Date. The method of
delivery of this Letter of Transmittal, certificates for Notes and all other
required documents to the Depositary is at the election and risk of holders. If
such delivery is to be made by mail, it is suggested that holders use properly
insured registered mail, return receipt requested, and that the mailing be made
sufficiently in advance of the Expiration Date to permit delivery to the
Depositary prior to such date. Except as otherwise provided below, the delivery
will be deemed made when actually received or confirmed by the Depositary. THIS
LETTER OF TRANSMITTAL AND NOTES SHOULD BE SENT ONLY TO THE DEPOSITARY, AND NOT
TO BABY SUPERSTORE OR THE TRUSTEE.
This Letter of Transmittal is also being supplied for informational purposes
only to persons who hold notes in book-entry form through the facilities of DTC.
Tender of Notes held through DTC must be made pursuant to the procedures
described under "Procedures for Tendering Notes -- Tendering Notes -- Notes Held
Through DTC" in the Offer to Purchase.
Except as provided herein for the book-entry or guaranteed delivery
procedures, unless the Notes being tendered are deposited with the Depositary on
or prior to the Expiration Date (accompanied by the appropriate, properly
completed and duly executed Letter of Transmittal and any required signature
guarantees and other documents required by this Letter of Transmittal), Baby
Superstore may, in its sole discretion, reject such tender. Payment for Notes
will be made only against deposit of tendered Notes.
By executing this Letter of Transmittal (or a facsimile thereof), a
tendering holder waives any right to receive any notice of the acceptance for
payment of tendered Notes.
For a full description of the procedures for tendering Notes, see
"Procedures for Tendering Notes -- Tendering Notes" in the Offer to Purchase.
If a holder desires to tender Notes pursuant to the Offer and (i)
certificates representing such holder's Notes are not lost but are not
immediately available or time will not permit this Letter of Transmittal,
certificates representing Notes or other required documents to reach the
Depositary on or prior to the Expiration Date or (ii) the procedures for
book-entry transfer cannot be completed on or prior to the Expiration Date, such
holder may effect a tender of such Notes in accordance with the guaranteed
delivery procedures described under "Procedures for Tendering Notes - Guaranteed
Delivery Procedures" in the Offer to Purchase.
Tenders of Notes may be withdrawn at any time prior to the Expiration Date
pursuant to the procedures described under "Procedures For Tendering Notes --
Withdrawal Rights" in the Offer to Purchase.
2. PARTIAL TENDERS. Tenders of Notes pursuant to the Offer will be accepted
only in principal amounts equal to $1,000 or integral multiples thereof. If less
than the entire principal amount of any Notes evidenced by a submitted
certificate is tendered, the tendering holder must fill in the principal amount
tendered in the last column of the box entitled "Description of Notes" herein.
The entire principal amount represented by the certificates for all Notes
delivered to the Depositary will be deemed to have been tendered unless
otherwise indicated. If the entire principal amount of all Notes is not
tendered, certificates for the principal amount of Notes not tendered will be
sent to the holder unless otherwise provided in the appropriate box on this
Letter of Transmittal (see Instruction 4), promptly after the Notes are accepted
for purchase.
3. SIGNATURES ON THIS LETTER OF TRANSMITTAL, BOND POWERS AND ENDORSEMENT:
GUARANTEE OF SIGNATURES. If this Letter of Transmittal is signed by the
registered holder(s) of the Notes tendered hereby, the signature(s) must
correspond with the name(s) as written on the face of the certificate(s) without
alteration, enlargement or any change whatsoever.
IF THIS LETTER OF TRANSMITTAL IS EXECUTED BY A HOLDER OF NOTES WHO IS NOT
THE REGISTERED HOLDER, THEN THE REGISTERED HOLDER MUST SIGN A VALID POWER OF
ATTORNEY, WITH THE SIGNATURE OF SUCH REGISTERED HOLDER GUARANTEED BY AN ELIGIBLE
INSTITUTION.
If any of the Notes tendered hereby are owned of record by two or more joint
owners, all such owners must sign this Letter of Transmittal. If any tendered
Notes are registered in different names on several certificates, it will be
necessary to complete, sign and submit as many copies of this Letter of
Transmittal and any necessary accompanying documents as there are different
names in which certificates are held.
If this Letter of Transmittal is signed by the holder, and the certificates
for any principal amount of Notes not tendered for purchase are to be issued (or
if any principal amount of Notes that is not tendered for purchase is to be
reissued or returned) to the holder, and checks constituting payments for Notes
to be purchased in connection with the Offer are to be issued to the order of
the holder, then the holder need not endorse any certificates for tendered Notes
nor provide a separate bond power. In any other case (including if this Letter
of Transmittal is not signed by the holder), the holder must either properly
endorse the certificates for Notes tendered or transmit a separate properly
completed bond power with this Letter of Transmittal (in either case, executed
exactly as the name(s) of the registered holder(s) appear(s) on such Notes),
with the signature on the endorsement or bond power guaranteed by an Eligible
Institution, unless such certificates or bond powers are executed by an Eligible
Institution.
<PAGE>
If this Letter of Transmittal or any certificates representing Notes or bond
powers 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
proper evidence satisfactory to Baby Superstore of their authority so to act
must be submitted with this Letter of Transmittal.
Endorsements on certificates for Notes and signatures on bond powers
provided in accordance with this Instruction 3 by registered holders not
executing this Letter of Transmittal must be guaranteed by an Eligible
Institution.
No signature guarantee is required if: (i) this Letter of Transmittal is
signed by the registered holder(s) of the Notes tendered herewith and the
payments for the Notes to be purchased are to be made, or any Notes for
principal amounts not tendered for purchase are to be issued, directly to such
registered holder(s) and neither the "Special Issuance or Payment Instructions"
box nor the "Special Delivery Instructions" box of this Letter of Transmittal
has been completed; or (ii) such Notes are tendered for the account of an
Eligible Institution. In all other cases, all signatures on Letters of
Transmittal accompanying Notes must be guaranteed by an Eligible Institution.
4. SPECIAL ISSUANCE OR PAYMENT AND SPECIAL DELIVERY INSTRUCTIONS. Tendering
holders should indicate in the applicable box or boxes the name and address to
which Notes for principal amounts not tendered or not accepted for purchase or
checks constituting payments for Notes to be purchased in connection with the
Offer are to be issued or sent, if different from the name and address of the
holder signing this Letter of Transmittal. In the case of issuance in a
different name, the taxpayer identification or social security number of the
person named must also be indicated. If no instructions are given, Notes not
tendered or not accepted for purchase will be returned to the holder of the
Notes tendered.
5. TAXPAYER IDENTIFICATION NUMBER AND SUBSTITUTE FORM W-9. Each tendering
holder is required to provide the Depositary with the holder's correct taxpayer
identification number ("TIN"), generally the holder's social security or federal
employer identification number, on Substitute Form W-9, which is provided under
"Important Tax Information" below, or, alternatively, to establish another basis
for exemption from backup withholding. A holder must cross out item (2) in the
Certification box on Substitute Form W-9 if such holder is subject to backup
withholding. Failure to provide the information on the form may subject the
tendering holder to 31% federal income tax backup withholding on the payments
made to the holder or other payee with respect to Notes purchased pursuant to
the Offer. The box in Part 3 of the form should be checked if the tendering
holder has not been issued a TIN and has applied for a TIN or intends to apply
for a TIN in the near future. If the box in Part 3 is checked and the Depositary
is not provided with a TIN within 60 days, thereafter the Depositary will
withhold 31% from all such payments with respect to the Notes to be purchased
until a TIN is provided to the Depositary.
6. TRANSFER TAXES. Baby Superstore will pay all transfer taxes, if any,
payable on the purchase and transfer of Notes purchased pursuant to the Offer,
except in the case of deliveries of certificates for Notes for principal amounts
not tendered for payment that are to be registered or issued in the name of any
person other than the holder of Notes tendered hereby, in which case 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 will be deducted from
the purchase price unless satisfactory evidence of the payment of such taxes or
exemption therefrom is submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer stamps to be affixed to the certificates listed in this Letter of
Transmittal.
7. IRREGULARITIES. All questions as to the validity, form, eligibility
(including the time of receipt) and acceptance for payment of any tenders of
Notes pursuant to the procedures described in the Offer to Purchase and the form
and validity (including the time of receipt of notices of withdrawal) of all
documents will be determined by Baby Superstore, in its sole discretion, which
determination shall be final and binding on all parties. Baby Superstore
reserves the absolute right to reject any or all tenders determined by it not to
be in proper form or the acceptance of or payment for which may be unlawful.
Baby Superstore 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
Notes. Baby Superstore's interpretations of the terms and conditions of the
Offer (including without limitation the instructions in this Letter of
Transmittal) shall be final and binding. No alternative, conditional or
contingent tenders will be accepted. Unless waived, any irregularities in
connection with tenders must be cured within such time as Baby Superstore shall
determine. None of Baby Superstore, the Depositary or any other person will be
under any duty to give notification of any defects or irregularities in such
tenders or will incur any liability to holders for failure to give such
notification. Tenders of such Notes shall not be deemed to have been made until
such irregularities have been cured or waived. Any Notes received by the
Depositary that are not properly tendered and as to which the irregularities
have not been cured or waived will be returned by the Depositary to the
tendering holders, unless such holders have otherwise provided herein, as
promptly as practical following the Expiration Date.
8. MUTILATED, LOST, STOLEN OR DESTROYED CERTIFICATES FOR NOTES. Any holder
of Notes whose certificates for Notes have been mutilated, lost, stolen or
destroyed should contact the Depositary at the address indicated above for
further instructions.
9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions relating to the
procedure for tendering Notes and requests for assistance or additional copies
of the Offer to Purchase and this Letter of Transmittal may be directed to, and
additional information about the Offer may be obtained from the Depositary,
whose address and telephone number appears herein.
<PAGE>
IMPORTANT INFORMATION
Under federal income tax laws, a holder whose tendered Notes are accepted
for payment is required by law to provide the Depositary (as payer) with such
holder's correct TIN on Substitute Form W-9 included herein or otherwise
establish a basis for exemption from backup withholding. If such holder is an
individual, the TIN is his social security number. If the Depositary is not
provided with the correct TIN, a $50 penalty may be imposed by the Internal
Revenue Service, and payments made with respect to Notes purchased pursuant to
the Offer may be subject to backup withholding. Failure to comply truthfully
with the backup withholding requirements also may result in the imposition of
severe criminal and/or civil fines and penalties.
Certain holders (including, among others, all corporations and certain
foreign persons) are not subject to these backup withholding and reporting
requirements. Exempt holders should furnish their TIN, write "Exempt" on the
face of the Substitute Form W-9, and sign, date and return the Substitute Form
W-9 to the Depositary. A foreign person, including entities, may qualify as an
exempt recipient by submitting to the Depositary a properly completed Internal
Revenue Service Form W-8, signed under penalties of perjury, attesting to that
holder's foreign status. A Form W-8 can be obtained from the Depositary. See the
enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for additional instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the holder or other payee. Backup withholding is not an
additional federal income tax. Rather, the federal income tax liability of
persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments made with respect to Notes
purchased pursuant to the Offer, the holder is required to provide the
Depositary with either: (i) the holder's correct TIN by completing the form
included herein, certifying that the TIN provided on Substitute Form W-9 is
correct (or that such holder is awaiting a TIN) and that (A) the holder has not
been notified by the Internal Revenue Service that the holder is subject to
backup withholding as a result of failure to report all interest or dividends or
(B) the Internal Revenue Service has notified the holder that the holder is no
longer subject to backup withholding; or (ii) an adequate basis for exemption.
NUMBER TO GIVE THE DEPOSITARY
The holder is required to give the Depositary the TIN (e.g., social security
number or employer identification number) of the registered holder of the Notes.
If the Notes are held in more than one name or are held not in the name of the
actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
<PAGE>
PAYER'S NAME: THE BANK OF NEW YORK
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
<S> <C>
SUBSTITUTE Part 1 - PLEASE PROVIDE YOUR TIN Social Security Number
FORM W-9 IN THE BOX AT RIGHT AND CERTIFY OR_____________________________
BY SIGNING AND DATING BELOW. Employer Identification Number
- ---------------------------------------------------------------------------------------------------
Department of the Treasury Part 2 -
Internal Revenue Service Certification - Under penalties of perjury, I certify Part 3 -
that:
Payer's Request for Taxpayer Awaiting TIN
Identification Number (TIN) (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) and
(2) I am not subject to back-up withholding either
because I have not been notified by the Internal
Revenue Service (IRS) that I am subject to back-up
withholding as a result of failure to report all
interest or dividends, or the IRS has notified me that
I am no longer subject to back-up withholding.
Certified instructions - You must cross out item (2)
above if you have been notified by the IRS that you
are subject to back-up withholding because of
underreporting interest 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 stating
that you are no longer subject to back-up withholding,
do not cross out item (2).
SIGNATURE______________________ DATE _________________
- -----------------------------------------------------------------------------------------------
</TABLE>
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 CHECKED
THE BOX IN PART 3 OF SUBSTITUTE FORM W-9
- --------------------------------------------------------------------------------
CERTIFICATE OF TAXPAYER AWAITING IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration or (b) I
intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number within 60 days, 31 percent
of all reportable payments made to me thereafter will be withheld until I
provide a number.
_________________________________ _______________________, 1997
Signature Date
- --------------------------------------------------------------------------------
<PAGE>
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.,
000-00-000. 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 GIVE THE SOCIAL
FOR THIS TYPE OF SECURITY NUMBER FOR THIS TYPE OF SECURITY NUMBER
ACCOUNT: OF - ACCOUNT: OF -
- -------------------------------------------------------- -------------------------------------------------
<S> <C>
1. Individual The individual 8. Corporate The corporation
2. Two or more The actual owner of the 9. Association, club, The organization
account or, if combined religious, charitable,
funds, any one of the educational or other
individuals(1) tax-exempt
organization
3. Custodian account of The minor(2) 10. Partnership The partnership
a minor (Uniform
Gift to Minors Act) 11. A broker or The broker or
registered nominee nominee
4. a. The usual The grantor-trustee(1) 12. Account with the The public entity
revocable Department of
savings trust Agriculture in the
(grantor is also name of a public
trustee) entity (such as a
state or local
b. So-called trust The actual owner(1) government, school
account that is district, or prison)
not a legal or that receives
valid trust agriculture program
under state law payments
5. Sole proprietorship The owner(3)
6. Sole proprietorship The owner(3)
7. A valid trust, estate, The legal entity (Do
or pension trust not furnish the
identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated in
the account
title.)(4)
- -------------------------------------------------------- -------------------------------------------------
<FN>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Show the name of the owner.
(4) List first and circle the name of the legal trust, estate, or pension trust.
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.
</FN>
</TABLE>
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
Section references are to the Internal Revenue Code.
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service (the "IRS") and
apply for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
The following is a list of payees exempt from backup withholding and for which
no information reporting is required. For interest and dividends, all listed
payees are exempt except item (9). For broker transactions, payees listed in (1)
through (13) and a person registered under the Investment Advisers Act of 1940
who regularly acts as a broker are exempt. Payments subject to reporting under
sections 6041 and 6041A are generally exempt from backup withholding only if
made to payees described in items (1) through (7), except that a corporation
that provides medical and health care services or bills and collects payments
for such services is not exempt from backup withholding or information
reporting. Only payees described in items (2) through (6) are exempt from backup
withholding for barter exchange transactions, patronage dividends, and payments
by certain fishing boat operators.
<TABLE>
<S> <C>
(1) A corporation.
(2) An organization exempt from tax under section 501(a), or an individual
retirement plan ("IRA"), or a custodial account under 403(b)(7).
(3) The United States or any of its agencies or instrumentalities.
(4) A State, the District of Columbia, a possession of the United States, or any of their political subdivisions
or instrumentalities.
(5) A foreign government or any of its political subdivisions, agencies or instrumentalities.
(6) An international organization or any of its agencies or instrumentalities.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the United States or a possession of the United
States.
(9) A futures commission merchant registered with the Commodity Futures Trading Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the Investment Company Act of 1940.
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or listed in
the most recent publication of the American Society of Corporate
Secretaries, Inc., Nominee List.
(15) A trust exempt from tax under section 664 or described in section 4947.
</TABLE>
Payments of dividends and patronage dividends generally not subject to backup
withholding also include the following:
o Payments to nonresident aliens subject to withholding under section 1441.
o Payments to partnerships not engaged in a trade or business in the United
States and that have at least one nonresident partner.
o Payments of patronage dividends not paid in money.
o Payments made by certain foreign organizations.
Payments of interest generally not subject to backup withholding include the
following:
o 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.
o Payments of tax-exempt interest (including exempt interest dividends under
section 852).
o Payments described in section 6049(b)(5) to nonresident aliens.
o Payments on tax-free covenant bonds under section 1451.
o Payments made by certain foreign organizations.
o Mortgage interest paid by you.
Payments that are not subject to information reporting are also not subject to
backup withholding. For details see sections 6041, 6041(A)(a), 6042, 6044, 6045,
6049, 6050A and 6050N, and the regulations under such sections.
PRIVACY ACT NOTICE
Section 6109 requires you to give your correct taxpayer identification number to
persons who must file information returns with the IRS to report interest,
dividends, and certain other income paid to you, mortgage interest you paid, the
acquisition or abandonment of secured property, cancellation of debt, or
contributions you made to an IRA. The IRS uses the numbers for identification
purposes and to help verify the accuracy of your tax return. You must provide
your taxpayer identification number whether or not you are qualified to file a
tax return. 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) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. If you make
a false statement with no reasonable basis that results in no backup
withholding, you are subject to a $500 penalty.
(3) 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.
Exhibit (a)(3)
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF CERTIFICATES FOR
4-7/8% CONVERTIBLE SUBORDINATED NOTES DUE 2000
OF
BABY SUPERSTORE, INC.
Capitalized terms used but not defined herein have the meanings given them
in the Change of Control Notice and Offer to Purchase, dated February 14, 1997
(the "Offer to Purchase").
This Notice of Guaranteed Delivery may be used to cause a tender of 4-7/8%
Convertible Subordinated Notes due 2000 of Baby Superstore, Inc. (the "Notes")
by (i) a record holder of Notes if certificates for the notes are not
immediately available or time will not permit all required documents to reach
the Depositary on or prior to the Expiration Date or (ii) by a DTC Participant
if the procedures for book-entry transfer described in the Offer to Purchase
cannot be completed on a timely basis.
The Depositary for the Offer is:
The Bank of New York (the "Depositary")
By Mail: Facsimile Transmission: By Hand/Overnight Courier:
The Bank of New York (For Eligible The Bank of New York
101 Barclay Street Institutions Only) 101 Barclay Street
New York, New York 10286 (212) 571-3080 7 East Side
Attn: George Johnson New York, New York 10286
Attn: George Johnson
Confirm by Telephone:
(212) 815-4997
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY
Ladies and Gentlemen:
By execution hereof, the undersigned acknowledges receipt of the Offer to
Purchase and the Letter of Transmittal.
On the terms and subject to the conditions of the Offer to Purchase and
the Letter of Transmittal, the undersigned hereby represents that it is the
holder of the Notes (or the holder of interests in the Global Note) being
tendered (or caused to be tendered) hereby and is entitled to tender (or cause
to be tendered) such Notes as contemplated by the Offer and, pursuant to the
guaranteed delivery procedures described in the Offer to Purchase and Letter of
Transmittal, hereby tenders (or causes a tender) to Baby Superstore of the
aggregate principal amount of Notes indicated below.
Except as stated in the Offer to Purchase, 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.
A record holder must execute this Notice of Guaranteed Delivery exactly as
its name appears on its Notes and a DTC Participant must execute this Notice of
Guaranteed Delivery exactly as its name is registered with DTC. If signature is
by a trustee, executor, administrator, guardian, attorney-in-fact, agent,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person must set forth his or her name, address and capacity as
indicated below and submit evidence to Baby Superstore of such person's
authority so to act.
<PAGE>
Signed: If being executed by a DTC Participant:
DTC Participant's Number:
Name(s): Account Number:
Transaction Code Number:
(Please type or print)
Company:
Capacity:
Address:
Dated: , 1997
Aggregate Principal
Amount of Notes Tendered:
Certificate Nos. for Notes (if applicable):
THE GUARANTEE BELOW MUST BE COMPLETED
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a member of a registered national securities exchange or
of the National Association of Securities Dealers, Inc., or a commercial bank or
trust company having an office or correspondent in the United States or another
"Eligible Guarantor Institution" as defined in Rule 17Ad-15 under the Securities
Exchange Act of 1934, as amended, hereby guarantees that, within three New York
Stock Exchange trading days from the date of receipt by the Depositary of this
Notice of Guaranteed Delivery, a properly completed and validly executed Letter
of Transmittal (or a facsimile thereof), together with Notes tendered hereby in
proper form for transfer, (or confirmation of the book-entry transfer of such
Notes into the Depositary's account at the Depositary Trust Company, pursuant to
the procedures for book-entry transfer set forth under "Procedure for Tendering
Notes" in the Offer to Purchase) and all other required documents will be
delivered by the undersigned to the Depositary.
Name of Firm Authorized Signature
Address Title
Zip Code Name (Please Type or Print)
Area Code and Telephone No. Date
The institution which completes this form must deliver to the Depositary
the guarantee, the Letter of Transmittal (or facsimile thereof) and certificates
for Notes within the time periods specified herein. Failure to do so could
result in a financial loss to such institution.
DO NOT SEND CERTIFICATES FOR NOTES WITH THIS FORM-THEY SHOULD BE SENT WITH
THE LETTER OF TRANSMITTAL.
Exhibit (a)(4)
BABY SUPERSTORE, INC.
OFFER TO PURCHASE
FOR CASH ANY AND ALL OF THE OUTSTANDING
4-7/8% CONVERTIBLE SUBORDINATED NOTES DUE 2000
OF BABY SUPERSTORE INC.
- --------------------------------------------------------------------------------
SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THE OFFER TO PURCHASE, THE
OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
APRIL 15, 1997, UNLESS THE OFFER IS EXTENDED (SUCH TIME AND DATE OR THE LATEST
EXTENSION THEREOF, IF EXTENDED, THE "EXPIRATION DATE"). NOTES TENDERED IN THE
OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.
- --------------------------------------------------------------------------------
FEBRUARY 14, 1997
TO OUR CLIENTS:
ENCLOSED FOR YOUR CONSIDERATION IS A CHANGE OF CONTROL NOTICE AND OFFER
TO PURCHASE, DATED FEBRUARY 14, 1997 (AS THE SAME MAY BE AMENDED FROM TIME TO
TIME, THE "OFFER TO PURCHASE"), AND A FORM OF LETTER OF TRANSMITTAL AND
INSTRUCTIONS THERETO (THE "LETTER OF TRANSMITTAL"), RELATING TO THE OFFER (THE
"OFFER") BY BABY SUPERSTORE, INC. ("BABY SUPERSTORE") TO PURCHASE FOR CASH ALL
OF ITS OUTSTANDING 4- 7/8% CONVERTIBLE SUBORDINATED NOTES DUE 2000 (THE "NOTES")
AT 100% OF THE PRINCIPAL AMOUNT THEREOF, PLUS ACCRUED INTEREST THEREON TO BUT
EXCLUDING THE DATE OF REPURCHASE.
THE MATERIALS ARE BEING FORWARDED TO YOU AS THE BENEFICIAL OWNER OF
NOTES CARRIED BY US FOR YOUR ACCOUNT OR BENEFIT BUT NOT REGISTERED IN YOUR NAME.
A TENDER OF ANY NOTES MAY ONLY BE MADE BY US AS THE REGISTERED HOLDER AND
PURSUANT TO YOUR INSTRUCTIONS. THEREFORE, THE COMPANY URGES BENEFICIAL OWNERS OF
NOTES REGISTERED IN THE NAME OF A BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY
OR ANY OTHER NOMINEE TO CONTACT SUCH REGISTERED HOLDER PROMPTLY IF THEY WISH TO
TENDER NOTES IN THE OFFER.
ACCORDINGLY, WE REQUEST INSTRUCTIONS AS TO WHETHER YOU WISH US TO
TENDER ANY OR ALL SUCH NOTES HELD BY US FOR YOUR ACCOUNT OR BENEFIT PURSUANT TO
THE TERMS AND CONDITIONS SET FORTH IN THE OFFER TO PURCHASE AND THE LETTER OF
TRANSMITTAL. WE URGE YOU TO READ CAREFULLY THE OFFER TO PURCHASE AND LETTER OF
TRANSMITTAL BEFORE INSTRUCTING US TO TENDER YOUR NOTES.
YOUR INSTRUCTIONS TO US SHOULD BE FORWARDED AS PROMPTLY AS POSSIBLE IN
ORDER TO PERMIT US TO TENDER NOTES ON YOUR BEHALF IN ACCORDANCE WITH THE
PROVISIONS OF THE OFFER. NOTES TENDERED PURSUANT TO THE OFFER MAY BE VALIDLY
WITHDRAWN, SUBJECT TO THE PROCEDURES DESCRIBED IN THE OFFER TO PURCHASE, AT ANY
TIME PRIOR TO THE EXPIRATION DATE.
YOUR ATTENTION IS DIRECTED TO THE FOLLOWING:
1. THE OFFER IS FOR ALL OUTSTANDING NOTES.
2. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE ON THE
EXPIRATION DATE.
<PAGE>
3. ANY TRANSFER TAXES INCIDENT TO THE TRANSFER OF NOTES FROM
THE TENDERING HOLDER TO BABY SUPERSTORE WILL BE PAID BY BABY
SUPERSTORE, EXCEPT AS PROVIDED IN THE OFFER TO PURCHASE AND THE
INSTRUCTIONS TO THE LETTER OF TRANSMITTAL.
IF YOU WISH TO HAVE US TENDER ANY OR ALL OF YOUR NOTES HELD BY US FOR
YOUR ACCOUNT OR BENEFIT, PLEASE SO INSTRUCT US BY COMPLETING, EXECUTING AND
RETURNING TO US THE INSTRUCTION FORM THAT APPEARS BELOW. IF YOU AUTHORIZE THE
TENDER OF YOUR NOTES, ALL SUCH NOTES WILL BE TENDERED UNLESS OTHERWISE SPECIFIED
BELOW. THE ACCOMPANYING LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR
INFORMATIONAL PURPOSES ONLY AND MAY NOT BE USED BY YOU TO TENDER NOTES HELD BY
US AND REGISTERED IN OUR NAME FOR YOUR ACCOUNT OR BENEFIT.
INSTRUCTIONS
The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein relating to the Offer.
This will instruct you to tender the principal amount of Notes
indicated below held by you for the account or benefit of the undersigned
pursuant to the terms of and conditions set forth in the Offer to Purchase and
the Letter of Transmittal.
Box 1 [_] Please tender ALL my Notes held by you for my account or benefit.
Box 2 [_] Please tender LESS than all my Notes. I wish to tender $
principal amount of Notes.
Box 3 [_] Please do not tender any Notes held by you for my account or
benefit.
Date: , 1997
________________________________________
________________________________________
Signature(s)
________________________________________
________________________________________
Please print name(s) here
UNLESS A SPECIFIC CONTRARY INSTRUCTION IS GIVEN, YOUR SIGNATURE(S)
HEREON SHALL CONSTITUTE AN INSTRUCTION TO US TO TENDER ALL OF YOUR
NOTES.
Exhibit (a)(5)
BABY SUPERSTORE, INC.
OFFER TO PURCHASE
FOR CASH ANY AND ALL OF THE OUTSTANDING
4-7/8% CONVERTIBLE SUBORDINATED NOTES DUE 2000
OF BABY SUPERSTORE, INC.
- --------------------------------------------------------------------------------
SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THE OFFER TO PURCHASE, THE
OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
APRIL 15, 1997, UNLESS THE OFFER IS EXTENDED (SUCH TIME AND DATE OR THE LATEST
EXTENSION THEREOF, IF EXTENDED, THE "EXPIRATION DATE"). NOTES TENDERED IN THE
OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.
- --------------------------------------------------------------------------------
February 14, 1997
TO BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES AND OTHER NOMINEES:
Enclosed for your consideration is a Change of Control Notice and Offer to
Purchase, dated February 14, 1997 (as the same may be amended from time to time,
the "Offer to Purchase"), and a form of Letter of Transmittal and instructions
thereto (the "Letter of Transmittal") relating to the offer (the "Offer") by
Baby Superstore, Inc. ("Baby Superstore") to purchase for cash all of the
outstanding 4-7/8% Convertible Subordinated Notes due 2000 of Baby Superstore
(the "Notes") at 100% of the principal amount thereof, plus accrued interest
thereon to but excluding the date of repurchase.
We are asking you to contact your clients for whom you hold Notes
registered in your name or in the name of your nominee. In addition, we ask you
to contact your clients who, to your knowledge, hold Notes registered in their
own name. You will be reimbursed by Baby Superstore for customary mailing and
handling expenses incurred by you in forwarding any of the enclosed materials to
your clients. Baby Superstore will pay all transfer taxes, if any, applicable to
the tender of Notes, except as otherwise provided in the Offer to Purchase and
the Letter of Transmittal.
Enclosed is a copy of each of the following documents for forwarding to
your clients:
1. The Offer to Purchase.
2. A Yellow Letter of Transmittal, including Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9,
for your use in connection with the tender of Notes by record holders and
for the information of your clients.
3. A Green form of letter addressed "To Our Clients" that may be
sent to your clients for whose accounts you hold Notes registered in your
name or the name of your nominee, with space provided for obtaining the
clients' instructions with regard to the Offer.
<PAGE>
4. A Blue Notice of Guaranteed Delivery to be used to accept the
Offer if certificates for Notes are not lost but not immediately
available, or if the procedure for book-entry transfer cannot be completed
on or prior to the Expiration Date.
5. A return envelope addressed to The Bank of New York, the
Depositary (the "Depositary").
Your prompt action is requested. Notes tendered pursuant to the Offer may
be validly withdrawn, subject to the procedures described in the Offer to
Purchase, at any time prior to the Expiration Date.
Please refer to "Procedures for Tendering Notes" in the Offer to Purchase
for a description of the procedures which must be followed to tender Notes in
the Offer.
Additional copies of the enclosed materials may be obtained from the
Depositary at (212) 815-4997.
Very truly yours,
BABY SUPERSTORE, INC.
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
PERSON AS AN AGENT OF THE COMPANY, THE TRUSTEE, OR THE DEPOSITARY, OR AUTHORIZE
YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENTS ON BEHALF OF ANY OF THEM WITH
RESPECT TO THE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN THE OFFER TO
PURCHASE OR THE LETTER OF TRANSMITTAL.
Exhibit (a)(6)
The announcement is neither an offer to purchase nor a solicitation of
an offer to sell these securities. The Offer is made only in the Offer to
Purchase and the related Letter of Transmittal and is not being made to (nor
will tenders be accepted from) holders of Notes in any jurisdiction in which the
Offer or the acceptance thereof would not be in compliance with the securities
laws of such jurisdiction.
BABY SUPERSTORE, INC.
Change of Control Notice and Offer to Purchase for Cash
any and all of the Outstanding
4-7/8% Convertible Subordinated Notes Due 2000
of Baby Superstore, Inc.
Baby Superstore, Inc. ("Baby Superstore") is offering to purchase for cash
at the Repurchase Price, upon the terms and subject to the conditions set forth
in the Change of Control Notice and Offer to Purchase (as defined below), dated
February 14, 1997 (the "Offer to Purchase"), and in the related Letter of
Transmittal, any and all of the outstanding 4-7/8% Convertible Subordinated
Notes Due 2000 of Baby Superstore (the "Notes"). The Repurchase Price is 100% of
the principal amount of the Notes, plus accrued interest to but excluding the
date of repurchase. See the Offer to Purchase for capitalized terms used but not
defined herein. Unless the context otherwise requires, the term "Offer to
Purchase" includes the Letter of Transmittal.
The Offer is being made pursuant to the Indenture, which provides that,
following a Change of Control, Baby Superstore is required to repurchase at the
Repurchase Price any and all Notes from each Holder that properly exercises its
Change of Control Right. A change of control occurred on February 3, 1997 as a
result of the consummation of the merger of BSST Acquisition Corp., a wholly
owned subsidiary of Toys "R" Us, Inc. ("Toys "R" Us"), with and into Baby
Superstore, Inc., with Baby Superstore continuing as the surviving corporation
and becoming a wholly owned subsidiary of Toys "R" Us (the "Merger").
- --------------------------------------------------------------------------------
SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THE OFFER TO PURCHASE, THE
OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
APRIL 15, 1997, UNLESS THE OFFER IS EXTENDED (SUCH TIME AND DATE OR THE LATEST
THEREOF, IF EXTENDED, THE "EXPIRATION DATE"). NOTES TENDERED IN THE OFFER MAY BE
WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.
- --------------------------------------------------------------------------------
As of February 12, 1997, there was $115,000,000.00 aggregate principal
amount of Notes outstanding. Prior to consummation of the Merger, the Notes were
convertible into shares of Common Stock, without par value, of Baby Superstore
("Baby Superstore Common Stock") at a conversion price of $53.875 per share of
Baby Superstore Common Stock. Upon consummation of the Merger, pursuant to
adjustment mechanisms contained in the Indenture, the Notes became, and are
currently, convertible into shares of Common Stock, par value $.10 per share, of
Toys "R" Us ("Toys "R" Us Common stock") at a conversion price of $66.34 per
share of Toys "R" Us Common Stock.
On February 12, 1997, the closing price per $1,000 principal amount of
Notes, as reported on the Nasdaq SmallCap Market, was $995 and the closing price
per share of Toys "R" Us Common Stock, as reported on the New York Stock
Exchange, Inc. Composite Tape, was $25. A holder may convert Notes into shares
of Toys "R" Us Common Stock until, but not after, such Note is properly tendered
to the Bank of New York, as Depositary (the "Depositary"), unless the tender of
such Note is properly withdrawn or there is a default in payment of the
Repurchase Price. Any Notes which remain outstanding after consummation of the
Offer will continue to be obligations of Baby Superstore and will continue to be
convertible at the option of the holder thereof into shares of Toys "R" Us
Common Stock. Tenders of Notes may be withdrawn at any time prior to the
Expiration Date.
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) and applicable law, Baby Superstore will purchase, by accepting
for payment, and will pay for all Notes validly tendered (and not properly
withdrawn) pursuant to the Offer, promptly after the Expiration Date, such
payment to be made by the deposit of immediately available funds by Baby
Superstore with the Depositary, which will act as agent for tendering holders
for the purpose of receiving payment from Baby Superstore and transmitting such
payment to tendering holders.
<PAGE>
No person has been authorized to give any information or to make any
representations other than those contained in this Offer to Purchase and, if
given or made, such information or representations must not be relied upon as
having been authorized.
Neither Baby Superstore nor Toys "R" Us makes any recommendation as to
whether or not holders should exercise their Change of Control Right and tender
Notes pursuant to the Offer.
Any questions or requests for assistance or for copies of the Offer to
Purchase or related documents may be directed to the Depositary at the telephone
number set forth below. Any beneficial owner owning interests in Notes may
contact such beneficial owner's broker, dealer, commercial bank, trust company
or other nominee for assistance concerning the Offer.
The Depositary for the Offer is
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: George Johnson
(212) 815-4997
2
EXHIBIT 99(c)(2)
FIRST SUPPLEMENTAL INDENTURE
FIRST SUPPLEMENTAL INDENTURE, dated as of February 3, 1997 (this
"First Supplemental Indenture"), among Toys "R" Us, Inc., a Delaware corporation
("Toys "R" Us"), Baby Superstore, Inc., a South Carolina corporation (the
"Company"), and The Bank of New York, as successor in interest to Nationsbank of
Georgia, National Association, as Trustee (the "Trustee").
W I T N E S S E T H:
WHEREAS, the Company and the Trustee executed and delivered an
Indenture, dated as of October 3, 1995 (the "Indenture"), to provide for the
issuance of the 4-7/8% Convertible Subordinated Notes due October 1, 2000 of the
Company (the "Securities");
WHEREAS, on the date hereof, pursuant to an Agreement and Plan of
Merger, dated as of October 1, 1996, and as amended and restated as of December
26, 1996, among Toys "R" Us, BSST Acquisition Corp., a South Carolina
corporation and direct wholly owned subsidiary of Toys "R" Us ("Sub"), the
Company and Jack P. Tate ("Tate"), (a) Sub is being merged with and into the
Company, with the Company continuing as the surviving corporation and a wholly
owned subsidiary of Toys "R" Us (the "Merger") and (b) (i) each outstanding
share of common stock, without par value, of the Company ("Baby Superstore
Common Stock"), other than shares owned by Tate, is being converted into 0.8121
of a share of common stock, par value $.01 per share, of Toys "R" Us ("Toys "R"
Us Common Stock") and (ii) each share of Baby Superstore Common Stock owned by
Tate is being converted into 0.5150 of a share of Toys "R" Us Common Stock;
WHEREAS, in accordance with Section 1211 of the Indenture, Toys "R"
Us and the Company desire to provide for certain adjustments with respect to the
consideration into which the Securities are convertible;
WHEREAS, Section 901 of the Indenture permits the Company, when
authorized by a resolution of the Board of Directors of the Company, and the
Trustee, at any time and from time to time, to enter into one or more indentures
supplemental to the indenture, in form satisfactory to the
<PAGE>
Trustee, (i) to make provisions with respect to the conversion rights of Holders
pursuant to Section 1211 of the Indenture and (ii) to make any provisions with
respect to matters arising under the Indenture which are not inconsistent with
the provisions of the Indenture;
WHEREAS, Toys "R" Us desires to assume, jointly and severally, with
the Company, the due and punctual payment of the principal of, and premium, if
any, and interest on, the Securities when due; and
WHEREAS, Toys "R" Us and the Company have requested that the Trustee
execute and deliver this First Supplemental Indenture pursuant to Section 901 of
the Indenture, and all requirements necessary to make this First Supplemental
Indenture a valid instrument in accordance with its terms have been performed
and the execution and delivery of this First Supplemental Indenture have been
duly authorized in all respects by each of Toys "R" Us and the Company.
NOW, THEREFORE, Toys "R" Us and the Company covenant and agree with
the Trustee as follows:
ARTICLE I
CONVERSION
SECTION 1.01. Conversion of Securities. In accordance with the
provisions of Section 1211 of the Indenture, following the Merger, a Holder of a
Security shall have the right to convert such Security into shares of Toys "R"
Us Common Stock at a price of $66.34 per share of Toys "R" Us Common Stock (the
"Adjusted Conversion Price").
SECTION 1.02. Certain Adjustments. In accordance with the provisions
of Section 1211 of the Indenture, following the Merger, upon the occurrence of
an event with respect to Toys "R" Us which would have required an adjustment to
the Conversion Price pursuant to Article Twelve of the Indenture if such event
had occurred with respect to the Company prior to the Merger, the Adjusted
Conversion Price shall be adjusted in a manner as nearly equivalent as may be
practicable to the adjustment to the Conversion Price which would have been
required pursuant to Article Twelve of the Indenture if such event had occurred
with respect to the Company prior to the Merger.
<PAGE>
ARTICLE II
ASSUMPTION
SECTION 2.01. Assumption. (a) Toys "R" Us hereby irrevocably and
unconditionally assumes, jointly and severally with the Company, the due and
punctual payment of the principal of, and premium, if any, and interest on, the
Securities when due, whether at maturity, by acceleration, by redemption or
otherwise, and all other monetary obligations of the Company under the Indenture
and the Securities.
(b) Toys "R" Us does not hereby assume responsibility for or
guarantee the performance by the Company of any other of the covenants,
agreements or obligations of the Company under the Securities or the Indenture.
(c) Payment by either the Company or Toys "R" Us of the principal
of, and premium, if any, and interest on, any Security shall discharge the
obligation of both the Company and Toys "R" Us to make such payment.
SECTION 2.02. Subordination. (a) The obligations of Toys "R" Us
under Section 2.01 shall be subordinate and junior in right of payment to the
Toys "R" Us Senior Indebtedness (as defined in Section 2.02(b)) to the same
extent and in the same manner that the Securities are subordinate and junior in
right of payment to the Senior Indebtedness of the Company pursuant to Article
Thirteen of the Indenture.
(b) As used herein, "Toys "R" Us Senior Indebtedness" means the
principal of and premium, if any, and unpaid interest on, and any other
reasonable fees or costs related to, (a) indebtedness of Toys "R" Us (including
indebtedness of others guaranteed by Toys "R" Us), other than the obligations of
Toys "R" Us under Section 2.01, whether outstanding on the date hereof or
hereafter created, incurred, assumed or guaranteed, (i) for money owing to banks
or their subsidiaries or their affiliates, (ii) for money borrowed other than
from banks evidenced by notes, bonds, debentures or other similar instruments or
(iii) arising under a lease of property, equipment or other assets, which
indebtedness, pursuant to generally accepted accounting principles then in
effect, is classified upon the financial statements of Toys "R" Us as a
liability or
<PAGE>
obligation of Toys "R" Us, unless, in each case, the instrument creating or
evidencing the same or pursuant to which the same is outstanding provides that
such indebtedness is not superior in right of payment to the obligations of Toys
"R" Us under Section 2.01, and (b) renewals, extensions, modifications and
refundings of any such indebtedness; provided, however, that Toys "R" Us Senior
Indebtedness shall not include (i) indebtedness to a subsidiary or other
Affiliate of the Company, (ii) any indebtedness that is subordinated or junior
in any respect to any indebtedness of the Company other than Toys "R" Us Senior
Indebtedness and (iii) any trade payable.
ARTICLE III
MISCELLANEOUS
SECTION 3.01. Definitions. Capitalized terms used but not defined in
this First Supplemental Indenture shall have the meanings ascribed thereto in
the Indenture.
SECTION 3.02. Confirmation of Indenture. The Indenture, as
supplemented and amended by this First Supplemental Indenture, is in all
respects ratified and confirmed, and the Indenture, this First Supplemental
Indenture and all indentures supplemental thereto shall be read, taken and
construed as one and the same instrument.
SECTION 3.03. Concerning the Trustee. The Trustee assumes no duties,
responsibilities or liabilities by reason of this First Supplemental Indenture
other than as set forth in the Indenture.
SECTION 3.04. Governing Law. This First Supplemental Indenture, the
Indenture and the Securities shall be governed by and construed in accordance
with the internal laws of the State of New York.
SECTION 3.05. Separability. In case any one or more of the
provisions contained in this First Supplemental Indenture shall for any reason
be held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
First Supplemental Indenture, but this First Supplemental Indenture shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained herein.
4
<PAGE>
SECTION 3.06. Counterparts. This First Supplemental Indenture may be
executed in any number of counterparts each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
SECTION 3.07. Effectiveness. This First Supplemental Indenture shall
become effective upon the effectiveness of the Merger.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, as of the day and year first above written.
TOYS "R" US, INC.
By: /S/ LOUIS LIPSCHITZ
Name: LOUIS LIPSCHITZ
Title: EXECUTIVE VP & CFO
BABY SUPERSTORE, INC.
By: /S/ LOUIS LIPSCHITZ
Name: LOUIS LIPSCHITZ
Title: EXECUTIVE VP & CFO
THE BANK OF NEW YORK
By: /s/ SANDRA CARREKER
Name: SANDRA CARREKER
Title: AGENT
6
NYFS11...:\93\77893\0010\1738\INDN116V.24E
