WICHITA, Kan., May 9, 2002 (PRIMEZONE) -- Lone Star Steakhouse & Saloon, Inc. (Nasdaq:STAR) today announced that it will commence a Modified Dutch Auction tender offer for up to 4 million shares of its common stock, representing approximately 16% of its currently outstanding shares. Under the terms of the tender offer, Lone Star will invite shareholders to tender their shares at prices specified by the tendering shareholders at a purchase price not in excess of $22.50 nor less than $20.50 per share. The tender offer is expected to commence within the next week.
The funds required for Lone Star to consummate the tender offer will come from its available cash.
As previously reported, Lone Star retained UBS Warburg LLC to act as Lone Star's financial advisor in connection with Lone Star's consideration of strategic alternatives. After an extensive process to seek potential buyers involving a significant commitment of management time and effort, Lone Star entered into a non-binding Letter of Intent with Bruckmann, Rosser, Sherrill & Co. LLC ("BRS") with respect to the proposed sale and merger of Lone Star for $20.50 per share. However, as announced on May 6, 2002, the parties were not able to agree on the terms of a definitive agreement and the non-binding Letter of Intent expired on May 4, 2002. As a result of these developments, the Board of Directors decided to pursue alternatives to a sale of Lone Star and ultimately resolved that Lone Star commence a Modified Dutch Auction tender offer.
Based upon the number of shares tendered and the prices specified by the tendering shareholders, Lone Star will select a single per-share purchase price within the expected price range to be paid for shares which have been tendered at or below the selected price. If the offer is over-subscribed, shares will be purchased first from shareholders owning fewer than 100 shares and tendering all of such shares at or below the purchase price determined by Lone Star and then from all other shares tendered at or below such purchase price on a pro rata basis. Lone Star reserves the right to purchase more than 4 million shares. The tender offer will not be conditioned on any minimum number of shares being tendered.
A complete description of the terms and conditions of the tender offer will be set forth in Lone Star's Offer to Purchase. Subject to applicable law, Lone Star may, in its sole discretion, waive any condition applicable to the tender offer or extend or terminate or otherwise amend the tender offer.
Lone Star has also agreed to purchase from Jamie B. Coulter, Chief Executive Officer of Lone Star, up to a number of shares so that Mr. Coulter will have the same percentage ownership of outstanding shares of Lone Star immediately after the closing of the tender offer that he currently owns, subject to the same pro rata reduction as other shareholders if the tender offer is oversubscribed. Mr. Coulter currently owns 2,395,393 outstanding shares or approximately 9.7% of Lone Star's outstanding shares. As a result of this transaction, and assuming the tender offer is fully subscribed, Lone Star will have purchased an aggregate of approximately 18% of its outstanding shares of common stock.
Neither Lone Star nor its Board of Directors is making any recommendation to shareholders as to whether to tender or refrain from tendering their shares or as to the purchase price of any tender. Each shareholder must make his or her own decision whether to tender shares and, if so, how many shares and at what price or prices shares should be tendered.
SHAREHOLDERS SHOULD READ CAREFULLY THE OFFER TO PURCHASE AND RELATED MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING VARIOUS TERMS OF, AND CONDITIONS TO, THE OFFER. SHAREHOLDERS WILL BE ABLE TO OBTAIN THE OFFER TO PURCHASE AND RELATED MATERIALS FREE AT THE SEC'S WEB SITE AT WWW.SEC.GOV OR FROM THE INFORMATION AGENT, INNISFREE M&A INCORPORATED (888-750-5834). SHAREHOLDERS ARE URGED TO CAREFULLY READ THESE MATERIALS PRIOR TO MAKING ANY DECISION WITH RESPECT TO THE OFFER.
Lone Star Steakhouse & Saloon, Inc. owns and operates a chain of 249 domestic and 25 international Lone Star Steakhouse & Saloon restaurants. The Company also owns and operates five Del Frisco's Double Eagle Steak Houses and 15 Sullivan's Steakhouses.
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Although the Company believes the assumptions underlying the forward-looking statements contained herein, including the development plans of the Company, are reasonable, any of the assumptions could be inaccurate, and therefore, there can be no assurance that the forward-looking statements contained in the press release will prove to be accurate. In light of significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.