MIAMI, Aug. 29, 2011 /PRNewswire/ -- Benihana Inc.
(NASDAQ: BNHN; BNHNA), operator of the nation's largest chain of
Japanese theme and sushi restaurants, today sent a letter to
stockholders emphasizing the importance of voting in favor of the
proposal to reclassify each share of the Company's Class A Common
Stock into one share of Common Stock and highlighting the rationale
for the proposed exchange ratio.
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The full text of the letter is as follows:
August 29, 2011
Dear fellow Benihana stockholders:
You may have had the opportunity to review the strong quarterly
performance we issued last week. It is clear that our business is
moving forward, making progress, and laying the foundation for a
very bright future.
Against such a positive backdrop, it is imperative that
Benihana not lose momentum as a result of the actions of a single
stockholder, who is seeking to mislead other investors into voting
in a way that will protect its own 26.7% voting position.
VOTE THE WHITE CARD TO SEND THE MESSAGE THAT
YOU WANT OUR COMPANY'S PROGRESS TO CONTINUE
DO NOT BE MISLED BY THE GOLD CARD - BENIHANA OF TOKYO, INC.
(BOT) IS NOT YOUR COMPANY. IT IS A SHAREHOLDER SIMPLY SEEKING
TO PROTECT ITS 26.7% VOTING POSITION
With our management team putting the business firmly on a good
track, your Board voted in favor of a proposal to simplify the
Company's capital structure by reclassifying each share of Class A
Common Stock into one share of Common Stock.
The Company has also been very clear in detailing the compelling
advantages that we believe the proposed reclassification would have
on the Company, including:
- Improved liquidity and enhanced quality of trade execution by
aggregating the volume of common shares traded and allowing
investors to buy and sell larger positions with less impact on the
stock price.
As the Company made clear in its Form 8-K filing on August 22, 2011:
- A review of an indicative sample of Benihana's competitors in
the "casual dining" and "upscale casual" segments of the restaurant
industry shows that, based on various metrics, Benihana Inc. has
significantly less trading liquidity than its peers.
- Looking at an indicative sample of 25 reclassification
transactions, the median and mean of the change in average daily
trading volume of these precedents one year post-reclassification
reflected a 21.7% and 50.7% increase, respectively,
and the average daily trading volume one year post-announcement
increased in 19 of the 23 precedents with available data.
- Using a sample of the same indicative reclassification
transactions, the mean and median in share price of these
precedents thirty days post-reclassification reflected a
3.0% and 1.7% increase, respectively, and the share
price thirty days post-announcement was higher in 14 of the 24
precedents with available data.
Further, in a recent report on the reclassification proposal by
a shareholder advisory service, there was agreement that the
reclassification will increase liquidity, with the statement that
"Collapsing all common shares into a single class would increase
the total public float for Class A shareholders."
- Alignment of voting rights with economic ownership. By
eliminating the disparity between voting rights, including the
current right of Class A Common Stock holders to elect 25% of the
Board (voting as a separate class), the reclassification may make
our Common Stock a more attractive investment.
- Increased attractiveness to institutional investors. The
reclassification will address complexity and liquidity concerns of
institutional investors and will allow our Common Stock to be held
by certain institutional investors whose policies do not permit
investments in dual-class companies. That same advisory service's
report stated that "because investment guidelines at certain
institutional investors prohibit investing in companies with
dual-class common shares, the potential market for the company's
common shares could be increased by this proposal."
- Improved transparency and elimination of investor confusion.
The reclassification will simplify the Company's capital structure
and eliminate potential investor confusion as to the calculation of
the Company's total market capitalization, shares outstanding, and
earnings-per-share.
- Increased flexibility for future strategic opportunities. The
simplified structure could provide increased flexibility to
structure acquisitions and equity financing by using equity as
acquisition currency, and for possible future offerings of capital
stock to potential investors.
The proposed reclassification is in the best interest of ALL
stockholders
DO NOT VOTE THE GOLD CARD - BENIHANA OF TOKYO,
INC. (BOT) IS NOT YOUR COMPANY AND ITS OPPOSITION IS
UNFOUNDED
Some have asked why no premium is being paid to the holders of
Common Stock. Below we highlight our rationale for this
decision:
- The data we provided in the August 22,
2011 filing demonstrates that the Common and Class A shares
have been trading at roughly parity. Therefore, as the precedent
set provided also demonstrates, it would be highly unusual for an
exchange ratio of greater than 1:1 be paid in a situation such as
this. Of the indicative sample of reclassification transactions
where there was a 1:1 exchange ratio, the implied median premium
paid to high-vote shareholders relative to the one week and one
month prior high-vote to low-vote ratio was 1.1% and 1.4%,
respectively; the comparable premium for Benihana implies a 0.8%
and 0.5% premium paid to high- vote shareholders,
respectively;
- Further, the Company's charter prohibits payment of a premium
to the Common stockholders. According to an opinion of the
Company's Delaware counsel, a
reclassification transaction that would deliver a premium only to
the Common stockholders would contravene our Certificate of
Incorporation and would therefore be invalid.
PLEASE VOTE THE ENCLOSED WHITE PROXY CARD TODAY
TO ENSURE
YOUR COMPANY CAN IMPLEMENT ITS RECLASSIFICATION
PROPOSAL
We strongly believe that this proposal will improve both
Benihana Inc.'s liquidity as well as its share price, as
demonstrated by the precedent analysis laid out in our Form 8-K
filing. Additionally, we know that it is best practice to implement
'one-share, one-vote' voting structures at publicly traded
companies. Indeed, the shareholder advisory firm's conclusion
states that "the elimination of the dual-class structure would
ultimately be in the best interests of all common shareholders."
ALLOW THE COMPANY TO CONTINUE TO UNLOCK VALUE FOR ITS
STOCKHOLDERS – SIGN, DATE AND RETURN THE WHITE
PROXY TODAY, EVEN IF YOU VOTED ALREADY ON A CARD OF ANOTHER
COLOR
PLEASE DO NOT BE CONFUSED – BOT'S GOLD CARD DOES NOT
REPRESENT THE COMPANY'S POSITION AND IS A VOTE FOR A SINGLE
STOCKHOLDER'S AGENDA
Benihana's Board is taking decisive actions to strategically
improve our franchise and enhance value for all of our
stockholders. It is therefore extremely important to your Company's
continued progress that stockholders send an unambiguous signal of
support for a proposal that will simplify the capital structure,
improve transparency and liquidity, increase flexibility to pursue
strategic opportunities, and strengthen corporate governance.
Your vote is important regardless of the number of shares you
own. Please take the time to vote today. Even if you
have already voted, please take a moment right now to sign, date,
and return the enclosed WHITE proxy card, and please discard
any gold proxy cards you receive. Your latest dated proxy is
the one that counts!
If your shares are registered in your own name, please sign,
date and mail the enclosed WHITE proxy card to Georgeson in
the self-addressed, stamped envelope provided. If your shares are
held in the name of a brokerage firm, bank nominee or other
institution, please sign, date and mail the enclosed WHITE
proxy card in the self-addressed, stamped envelope provided. If you
have any questions or need assistance in voting your shares, please
contact our proxy solicitor at the following:
Georgeson
199 Water Street, 26th Floor
New York, NY 10038
Stockholders Call Toll-Free (888) 549-6618
With appreciation for your investment in, and support for
Benihana,
Richard C. Stockinger
Chairman, Chief Executive Officer, and President
Safe Harbor Statement
Except for the historical matters contained herein, statements
in this letter are forward-looking and are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. Investors are cautioned that forward-looking
statements involve risks and uncertainties that may affect the
business and prospects of Benihana, including, without limitation:
risks related to Benihana's business strategy, including the
Renewal Program and marketing programs; risks related to Benihana's
ability to operate successfully in the current challenging economic
environment; risks related to Benihana's efforts to strengthen its
Benihana Teppanyaki concept and build its RA Sushi and Haru brands;
and other risks and uncertainties that may cause results to differ
materially from those set forth in the forward-looking statements.
Past performance may not be indicative of future results. Although
Benihana believes the expectations reflected in such
forward-looking statements are based upon reasonable assumptions,
there can be no assurance that its expectations will be realized.
In addition to the risks and uncertainties set forth above,
investors should consider the risks and uncertainties discussed in
Benihana's filings with the Securities and Exchange Commission,
including, without limitation, the risks and uncertainties
discussed under the heading "Risk Factors" in such filings.
Benihana does not undertake any obligation to publicly update any
forward-looking statement to reflect events or circumstances after
the date on which any such statement is made or to reflect the
occurrence of unanticipated events.
Additional Information
On June 9, 2011, Benihana. filed
with the Securities and Exchange Commission a Registration
Statement on Form S-4, which has since been declared effective by
the Securities and Exchange Commission. The Registration Statement
on Form S-4 contains a proxy statement/prospectus which describes
the proposed reclassification. Stockholders of Benihana are
advised to read the proxy statement/prospectus, because it contains
important information. Such proxy statement/prospectus and
other relevant documents may be obtained, free of charge, on the
Securities and Exchange Commission's website (http://www.sec.gov)
or from Benihana at the Investor Relations section of
www.benihana.com/about or by contacting the Company by telephone at
(305) 593-6770 (Attention: General Counsel).
Benihana and certain persons may be deemed to be participants in
the solicitation of proxies relating to the proposed
reclassification. The participants in such solicitation may include
Benihana's executive officers and directors. Further information
regarding persons who may be deemed participants is available in
Benihana's proxy statement/prospectus.
Media Contacts
Jeremy Fielding / Anntal
Silver
Kekst and Company
(212) 521-4800
SOURCE Benihana Inc.