Cole National Corporation Announces Amendment to Merger Agreement
with Luxottica Group at Increased Price Per Share
-- Luxottica raises merger price from $22.50 to a minimum of $26.00 per share
CLEVELAND, July 15 /PRNewswire-FirstCall/ -- Cole National Corporation
(NYSE:CNJ), today announced that it has entered into an amendment to its merger
agreement with Luxottica Group S.p.A. (NYSE:LUX) with the unanimous approval of
their Boards of Directors. Under the amendment, the original $22.50 per share
cash merger consideration to be paid by Luxottica has been increased to a
minimum of $26.00 per share. In addition, if Cole National stockholders
approve the Luxottica merger at the annual meeting, which will be adjourned to
July 22, 2004, the merger price will be further increased to $27.50 per share
in cash, plus an additional amount equal to 4% per annum from the date of
stockholder approval through the closing date of the merger. If Cole National
does not receive votes from a majority of the outstanding shares to approve the
Luxottica merger by July 22, 2004, the higher price would still be payable so
long as stockholder approval is obtained at a further adjourned meeting that is
held not later than July 29, 2004.
Based upon the $27.50 price, the total purchase price of the outstanding Cole
National shares and related equity rights is approximately $495 million, plus
4% per annum from the date of stockholder approval through the date of closing. Luxottica Group has advised Cole National that it will fund the payment of the
purchase price and transaction costs from Luxottica's cash flow from operations
and existing credit facilities.
The amendment to the merger agreement also strengthens Luxottica Group's
commitment to use its best efforts to avoid or eliminate impediments under any
antitrust laws asserted by any governmental entity with respect to the merger. Under the original merger agreement, Luxottica's commitment was qualified such
that it was not required to divest businesses or assets accounting for more
than $110 million in consolidated net revenue of Cole National alone or of Cole
National and Luxottica combined or more than $55 million in consolidated net
revenue of Luxottica alone. The amendment to the merger agreement eliminates
that qualification. In addition, the amendment to the merger agreement
strengthens Cole National's commitment to the Luxottica merger, by narrowing
the circumstances under which Cole National could terminate the Luxottica
merger agreement in order to accept a competing offer, including that Cole
National will no longer have such right after stockholder approval of the
Luxottica merger agreement. The amendment does not preclude Cole National from
considering a superior proposal prior to stockholder approval of the amended
Luxottica merger agreement.
To provide Cole National stockholders additional time to consider the recent
developments and their impact on the proposed merger with Luxottica Group, Cole
National intends to hold the election of directors at the previously scheduled
annual meeting on July 20, 2004, and then, prior to the consideration of the
Luxottica merger, adjourn the meeting to 4 p.m. local time, on Thursday, July
22, 2004, at The Charles Hotel, One Bennett St., Cambridge, Massachusetts
02138.
Cole National stated that its Board of Directors has unanimously confirmed its
recommendation that Cole National stockholders approve the Luxottica merger
agreement, as amended, at the reconvened meeting on July 22. Stockholders of
record of Cole National as of May 21, 2004 will be entitled to vote on the
Luxottica merger at the reconvened meeting on July 22, or any adjournment
thereof. The Luxottica merger agreement, as amended, is subject to approval by
Cole National stockholders, receipt of regulatory approvals and other customary
conditions. As Luxottica Group publicly announced earlier this week, Luxottica
Group and Cole National expect to complete their required submissions to the
Federal Trade Commission (FTC) in connection with its antitrust review by the
end of this week. In addition, as previously announced, the parties have
committed to the FTC not to close the transaction before September 30, 2004,
without its consent.
In connection with its approval of the amendment to the Luxottica merger
agreement, the Cole National Board of Directors considered, among other things,
the price, financing arrangements, timing and uncertainties associated with the
previously announced proposal from Moulin International Holdings Limited
submitted on July 12, 2004 to acquire Cole National at a price of $25.00 per
share in cash. Following the submission of a similar proposal from Moulin on
April 15, 2004 (as well as during the two months following Moulin's submission
of its initial acquisition proposal on November 17, 2003), Cole National had
provided access to confidential information to Moulin, HAL and their financing
sources and their respective advisors, and engaged in discussions and
negotiations with Moulin with respect to its proposed transaction. On May 12,
2004, Cole National was informed by Moulin that one of Moulin's financing
sources was not prepared to provide senior debt financing on the terms
originally proposed. The revised Moulin proposal contemplates financing to be
provided by the sale of certain Cole National assets to HAL Holding N.V. and
debt financing pursuant to financing commitments that are subject to customary
conditions but no further due diligence. Moulin's proposal is subject to the
termination of the merger agreement with Luxottica Group, completion and
execution of definitive agreements with Moulin, approval by Cole National's and
Moulin International's stockholders, receipt of regulatory approvals and other
customary conditions.
Additional information relating to Moulin's most recent proposal and the
factors considered by the Cole National Board of Directors in its approval of
the amendment to the Luxottica merger agreement are set forth in the supplement
to Cole National's proxy statement that will be filed later today with the
Securities and Exchange Commission and mailed to all Cole National stockholders
of record on May 21, 2004.
About Cole National Cole National Corporation's vision business, together with Pearle franchisees,
has 2,178 locations in the U.S., Canada, Puerto Rico and the Virgin Islands and
includes Cole Managed Vision, one of the largest managed vision care benefit
providers with multiple provider panels and nearly 20,000 practitioners.
Cole's personalized gift business, Things Remembered, serves customers through
727 locations nationwide, catalogs, and the Internet at
http://www.thingsremembered.com/. Cole also has a 21% interest in Pearle
Europe, which has 1,496 optical stores in Austria, Belgium, Denmark, Estonia,
Finland, Germany, Italy, Kuwait, Norway, the Netherlands, Poland, Portugal and
Sweden.
Safe Harbor Statement Certain statements in this press release may constitute "forward-looking
statements" as defined in the Private Securities Litigation Reform Act of 1995. Such statements involve risks, uncertainties and other factors that could cause
actual results to differ materially from those which are anticipated. Such
risks and uncertainties include, but are not limited to, risks that the
Luxottica merger will not be completed, risks that stockholder approval may not
be obtained for the Luxottica merger, legislative or regulatory developments
that could have the effect of delaying or preventing the Luxottica merger,
fluctuations in exchange rates, economic and weather factors affecting consumer
spending, the ability to successfully introduce and market new products, the
ability to effectively integrate recently acquired businesses, the ability to
successfully launch initiatives to increase sales and reduce costs, the
availability of correction alternatives to prescription eyeglasses, as well as
other political, economic and technological factors and other risks referred to
in their filings with the Securities and Exchange Commission. These
forward-looking statements are made as of the date hereof, and Luxottica and
Cole National do not assume any obligation to update them.
Cole National Corporation or Kekst and Company
Joseph Gaglioti Victoria Weld/Ruth Pachman
330-486-3100 212-521-4800
DATASOURCE: Cole National Corporation CONTACT: Cole National Corporation: Joseph Gaglioti, +1-330-486-3100; or Kekst and Company: Victoria Weld or Ruth Pachman, +1-212-521-4800 Web site: http://www.thingsremembered.com/
|