Friendly LRL Holdings Responds to Startech's Extension of Poison Pill
August 26 2009 - 10:17AM
PR Newswire (US)
- Expresses Grave Concern that Startech's Board Continues to
Deprive Startech's Shareholders of Their Voice - Amends Startech
Tender Offer to Add Second-Step Merger Condition and Extend
Expiration Date to September 30, 2009 GENEVA, Aug. 26 /PRNewswire/
-- Friendly LRL Holdings LLC ("FLH"), whose wholly-owned subsidiary
("FAC") has commenced a tender offer to acquire all of the
outstanding shares of common stock of Startech Environmental
Corporation (OTC:STHK.OB) (BULLETIN BOARD: STHK.OB) ("Startech")
for $0.65 per share in cash, released the following statement in
response to Startech's announcement that its Board of Directors has
extended its preferred stock purchase rights or "poison pill". "We
are extremely disappointed by the decision of Startech's Board,
announced on August 24, 2009, to extend the expiration date of the
poison pill to September 23, 2009," said Sergey Mitirev of FLH.
"Startech's actions continue to deprive its shareholders of their
voice by refusing them the opportunity to monetize their investment
in Startech pursuant to our offer at a substantial premium to
Startech's historical trading prices." In connection with FLH's
offer, Startech has repeatedly emphasized that it has been in
discussions with other potential investors for the sale of a
controlling or non-controlling interest in Startech. In fact, when
it adopted the shareholder rights plan on July 24th and when it
extended the plan on August 24th, Startech asserted that the delays
caused by the implementation and subsequent extension of the plan
were intended to allow it time to continue discussions with a
number of parties regarding a potential investment in the company.
Yet Startech has refused to disclose any significant details with
respect to such discussions to permit its shareholders to make an
informed decision as to whether to tender their shares pursuant to
FLH's offer. "We believe that Startech's Board has had ample time
to raise equity capital and evaluate strategic alternatives, and it
has failed to do so," commented Dmitry Timoshin of FLH. "In its
Form 10-K for the year ended October 31, 2008, Startech disclosed
that its ability to continue as a going concern was dependent on
its ability to generate revenue from additional sales of its
products and/or the receipt of additional capital from one or more
financing sources. Startech further indicated that management was
continuing its efforts to sell products and secure funds through
the receipt of additional capital. Since Startech made such
disclosures, no products have been sold and no capital has been
raised." In light of Startech's recent operating performance and
current financial condition as reflected in its securities filings
as well as its inability to consummate a financing or strategic
transaction, FLH is skeptical of the Startech Board's ability to
effectively address Startech's near-term liquidity needs or
generate long-term value for Startech's shareholders in excess of
the transaction consideration that FLH is offering today. In
contrast, FLH is prepared to deliver substantial, immediate and
highly certain value to Startech's shareholders in an all-cash
transaction, with no financing condition. FLH's offer represents a
103% premium to the last reported sale of Startech common stock of
$0.32, the last trading day preceding FLH's public announcement of
its intention to commence its tender offer. In light of Startech's
decision to extend the expiration date of the poison pill, FLH is
today amending its tender offer to acquire all of the outstanding
shares of Startech. The principal amendments include: -- FLH has
added a condition to its offer that a definitive merger agreement,
in form and substance satisfactory to FLH in its reasonable
discretion, shall have been executed by Startech and FAC (and/or
FLH or any of its affiliates) with respect to a merger of FAC
(and/or FLH or any of its affiliates) and Startech. -- FLH has
extended its offer until 11:59 p.m., New York City time, on
Wednesday, September 30, 2009, unless further extended. The offer
was previously scheduled to expire at 11:59 p.m., New York City
time, on Monday August 31, 2009. Sergey Mitirev of FLH noted, "We
are dismayed that its Board has decided to extend the poison pill.
In so doing, Startech's Board continues to interfere with the
ability of Startech's shareholders to receive payment for their
shares pursuant to our all-cash offer. Rather than engaging in
constructive discussions with us, the only party that has been
named by Startech as having an interest in investing in the
company, or affording Startech shareholders the opportunity to
immediately monetize their investment in Startech pursuant to our
offer at a substantial premium to Startech's historical trading
prices, Startech's Board continues to act with a view towards
further entrenching its own position. We believe that such actions
are not in the best interests of Startech's shareholders." Sergey
Mitirev of FLH commented, "We are evaluating all available
alternatives with respect to our offer and Startech's conduct, and
we reserve the right to pursue any and all alternatives available
to us. Time is of the essence and there can be no assurance that in
the future we or any other buyer would pay the same premium that we
are offering today." As of 5:00 p.m., New York City time, on
Tuesday, August 25, 2009, approximately 1,658,925 shares of common
stock of Startech had been tendered in and not withdrawn from the
tender offer. DISCLAIMER: CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING STATEMENTS. Statements in this press release that
are not historical facts are "forward-looking statements". Such
forward-looking statements are inherently subject to a variety of
risks and uncertainties that could cause actual results to differ
materially from those projected. These risks and uncertainties
include, among others: the willingness of Startech shareholders to
tender their shares in the tender offer, the number and timing of
shares tendered and the satisfaction of the conditions to the
tender offer described in the Offer to Purchase and related
materials, as amended, filed by FLH and its affiliates with the
Securities and Exchange Commission. This press release speaks only
as of its date, and FLH and its affiliates undertake no obligation
to update or revise these forward-looking statements, whether as a
result of new information, future events or otherwise, except to
the extent required by law. ADDITIONAL INFORMATION AND WHERE TO
FIND IT. This announcement is for informational purposes only and
is neither an offer to purchase nor a solicitation of an offer to
sell securities. The tender offer is being made pursuant to a
tender offer statement on Schedule TO (including the Offer to
Purchase, Letter of Transmittal and other related tender offer
materials), as amended, initially filed by FLH and its affiliates
with the SEC on July 6, 2009. The tender offer statement (and
related materials), as they may be amended from time to time,
contain important information, including the terms and conditions
of the offer, that should be read carefully before any decision is
made with respect to the tender offer. These materials may be
obtained for no charge upon request to Morrow & Co., LLC, the
information agent for the tender offer, by calling toll-free at
1-800-607-0088. In addition, these materials (and all other offer
documents filed with the SEC) are available at no charge on the
SEC's Web site at http://www.sec.gov/. DATASOURCE: Friendly LRL
Holdings LLC CONTACT: Morrow & Co., LLC (Information Agent for
the offer), Stamford, CT, +1-800-607-0088 or +1-203-658-9400
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