Vestis Extends Its Tender Offer for Sport
Chalet Stock at $1.20 per Share, Deferring 13% Price
Reduction
Sport Chalet Intends to File Preliminary
Proxy Statement
This press release is identical to the press release issued by
Vestis Retail Group, LLC and Sport Chalet, Inc. at 7 a.m. Eastern
Daylight Time on August 4, 2014, except for the addition of the
Sports Chalet stock ticker symbols to this version of the press
release.
The corrected release reads:
VESTIS RETAIL GROUP ANNOUNCES OVERWHELMING
STOCKHOLDER SUPPORT FOR ITS TENDER OFFER FOR SPORT CHALET
STOCK
Vestis Extends Its Tender Offer for Sport
Chalet Stock at $1.20 per Share, Deferring 13% Price
Reduction
Sport Chalet Intends to File Preliminary
Proxy Statement
Vestis Retail Group, LLC (“Vestis”) and its wholly owned
subsidiary, Everest Merger Sub, Inc. (“Merger Sub”), announced
today that the number of shares of Class A and Class B common stock
(the “Shares”) of Sport Chalet, Inc. (“Sport Chalet”) (NASDAQ:
SPCHA, SPCHB) tendered by the initial expiration date of its
previously announced cash tender offer (the “Offer”) that was
launched pursuant to the previously announced merger agreement
among Vestis, Merger Sub and Sport Chalet, together with the Shares
that Vestis has separately agreed to purchase from Sport Chalet’s
founding family members (the “Family Shares”), represent
approximately 93.5% of the outstanding Class A shares and 84.49% of
the outstanding Class B shares. Given this overwhelming stockholder
support for the Offer and the fact that less than 80,000 additional
Class B shares are needed to be tendered in the Offer to allow
Vestis and Merger Sub to consummate a merger with Sport Chalet
promptly following the consummation of the Offer, Vestis has
amended the terms of and extended the Offer at $1.20 per Share,
rather than taking immediate advantage of its right to allow the
offer price to decrease to $1.04 per Share in accordance with the
previously announced terms of the Offer.
The amended terms allow the current offer price of $1.20 per
Share to remain in effect until 12:00 midnight, New York City time,
at the end of August 15, 2014 (the “Extended Expiration Time”). If
the total number of Shares tendered in the Offer prior to the
Extended Expiration Time (together with the Family Shares and
shares issued pursuant to the “top-up” option pursuant to the
merger agreement) do not constitute at least 90% of each class of
Shares of Sport Chalet on a fully diluted basis (the “90%
Threshold”), the price to be paid to stockholders in the Offer will
automatically fall by 13% to $1.04 per Share.
As soon as possible after the consummation of the Offer, Vestis
and Merger Sub intend to acquire all Shares not acquired in the
Offer pursuant to a second-step merger (the “Merger”). Tendering
stockholders will receive consideration for their Shares at the
closing of the Offer. Non-tendering stockholders will receive the
same consideration for their Shares as paid for Shares tendered in
the Offer (subject to the exercise of appraisal rights), but will
not receive this consideration until after the Merger is
consummated. If the 90% Threshold is not met by the Extended
Expiration Date, the delay between the closing of the Offer and the
time that non-tendering stockholders receive payment for their
Shares will be significantly longer.
The Offer, and the deadline for reaching the 90% Threshold, was
previously scheduled to expire at 12:00 midnight, New York City
time, at the end of August 1, 2014 (the “Initial Expiration
Time”).
The Offer extension provides Sport Chalet stockholders an
additional ten business days to tender their Shares and receive
$1.20 per Share in the Offer. If the 90% Threshold is not
met by the Extended Expiration Time, all stockholders, including
tendering stockholders, will receive $1.04 per Share in the Offer
or the Merger (subject to the exercise of appraisal
rights).
As of the Initial Expiration Time, approximately 4,026,659 Class
A shares and 1,375,742 Class B shares had been validly tendered and
not withdrawn in the Offer. Such tendered Shares, when combined
with the Family Shares, represent approximately 93.5% of the
outstanding Class A shares and 84.49% of the outstanding Class B
shares.
The amended terms of the Offer have been made pursuant to an
amendment to the previously announced Agreement and Plan of Merger
(the “Merger Agreement”) by and among Vestis, Everest Merger Sub,
Inc. (“Merger Sub”) and Sport Chalet, which will be filed with the
Securities and Exchange Commission (“SEC”) and will be available on
the SEC’s website at www.sec.gov.
In addition, Sport Chalet today announced its intention to file
a preliminary proxy statement with the SEC with respect to a
special meeting of the Sport Chalet stockholders at which such
stockholders would vote to approve the Merger Agreement and the
Merger. The special meeting would only be held in the event that
the 90% Threshold described above is not achieved prior to the
Extended Expiration Time. At the special meeting, which will occur
following consummation of the Offer, Vestis and Merger Sub will own
Shares representing voting power sufficient to approve the Merger
on their own and Vestis and Merger Sub have committed to vote all
of their Shares in favor of the approval of the Merger.
Questions regarding the Offer should be directed to Georgeson,
Inc., the information agent for the Offer, at the number listed
below.
Notice to Investors
This press release and the description contained herein is
neither an offer to purchase nor a solicitation of an offer to sell
shares of Sport Chalet. Vestis has filed with the SEC a Tender
Offer Statement on Schedule TO containing an offer to purchase,
forms of letters of transmittal, and other documents relating to
the Offer and Sport Chalet has filed a Solicitation/Recommendation
Statement on Schedule 14D-9 with respect to the Offer. Vestis and
Sport Chalet have mailed these documents to stockholders of Sport
Chalet. These documents contain important information about the
Offer and stockholders of Sport Chalet are urged to read them
carefully. Stockholders of Sport Chalet are able to obtain a free
copy of these documents and other documents filed by Sport Chalet
with the SEC at www.sec.gov. In addition, stockholders are able to
obtain a free copy of these documents from Georgeson Inc. or from
Vestis.
Additional Information about the Merger and Where to Find
It
In connection with the proposed transaction, Sport Chalet will
file a proxy statement with the SEC. Additionally, Sport Chalet
will file other relevant materials with the SEC in connection with
the proposed acquisition of Sport Chalet pursuant to the terms of
the Merger Agreement. The materials to be filed by Sport Chalet
with the SEC may be obtained free of charge at the SEC’s website at
www.sec.gov. After Sport Chalet’s filing thereof, investors and
stockholders will also be able to obtain free copies of the proxy
statement from Sport Chalet by contacting the Investor Relations
department at One Sport Chalet Drive, La Cañada, California 91011,
telephone number (818) 949-5300. INVESTORS AND SECURITY HOLDERS OF
THE COMPANY ARE URGED TO READ THE PROXY STATEMENT AND THE OTHER
RELEVANT MATERIALS WHEN THEY BECOME AVAILABLE BEFORE MAKING ANY
VOTING OR INVESTMENT DECISION WITH RESPECT TO THE PROPOSED MERGER
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE MERGER
AND THE PARTIES TO THE MERGER.
Sport Chalet and its respective directors, executive officers
and other members of their management and employees, under the SEC
rules, may be deemed to be participants in the solicitation of
proxies of Sport Chalet’s stockholders in connection with the
proposed transaction. Investors and security holders may obtain
more detailed information regarding the names, affiliations and
interests of certain of Sport Chalet’s executive officers and
directors in the solicitation by reading Sport Chalet’s proxy
statement for its 2013 annual meeting of stockholders, the Annual
Report on Form 10-K for the fiscal year ended March 30, 2014, and
the proxy statement and other relevant materials which may be filed
with the SEC in connection with the transaction when and if they
become available. Information concerning the interests of Sport
Chalet’s executive officers and directors, which may, in some
cases, be different than those of Sport Chalet’s stockholders
generally, will be set forth in the proxy statement relating to the
transaction when it becomes available.
About Sport Chalet
Sport Chalet is a premier, full service specialty sporting goods
retailer featuring the industry’s top sports brands in apparel,
footwear, and sports equipment. Founded in 1959 by Norbert Olberz,
the company has 50 stores in Arizona, California, Nevada and Utah;
an online store at www.sportchalet.com; and a Team Sales division;
and offers more than 50 specialty services for the sports
enthusiast, including online same day delivery, climbing,
backcountry skiing, ski mountaineering, avalanche education, and
mountain trekking instruction, car rack installation, snowboard and
ski rental and repair, Scuba training and certification, Scuba boat
charters, gait analysis, baseball/softball glove steaming and
lacing, racquet stringing, and bicycle tune-up and repair at its
store locations. For more information, visit Sport Chalet at
www.sportchalet.com.
About Vestis Retail Group
Based in Connecticut, Vestis Retail Group, LLC was formed by
Versa Capital Management, LLC and encompasses Bob’s Stores (Bob’s)
and Eastern Mountain Sports (EMS). Bob’s is a 60-year-old,
award-winning Northeastern retailer of value-oriented footwear,
apparel and work wear. EMS is the second largest U.S. multi-channel
retailer of human-powered outdoor sports apparel and equipment with
stores in the Northeastern and Mid-Atlantic states. More
information is available at www.bobstores.com and www.ems.com.
About Versa Capital Management
Based in Philadelphia, PA, Versa Capital Management, LLC is a
private equity investment firm with more than $1.4 billion of
assets under management focused on control investments in special
situations involving middle market companies where value and
performance growth can be achieved through enhanced operational and
financial management. Versa’s portfolio includes retailers Avenue
Stores, EMS and Bob’s Stores; restaurants such as Black Angus
Steakhouses; community newspapers under Civitas Media; and
manufacturers that service a variety of industries. More
information can be found at www.versa.com.
Forward-Looking Statements
This news release contains forward-looking statements within the
meaning of and made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. All statements
other than statements of historical fact are forward-looking
statements, including all statements regarding the intent, belief
or current expectation of the companies and members of their senior
management teams. These forward-looking statements involve
significant risks and uncertainties, including those discussed
below and others that can be found in Sport Chalet’s Form 10-K for
the year ended March 30, 2014, and in any subsequent periodic
reports from Sport Chalet on Form 10-Q and Form 8-K. Vestis and
Sport Chalet are providing this information as of the date of this
news release and do not undertake any obligation to update any
forward-looking statements contained in this document as a result
of new information, future events or otherwise. Forward-looking
statements can be identified by the use of words such as “will,”
“could,” “should,” “may,” “anticipate,” “expect,” “intend,”
“estimate,” “believe,” “project,” “plan,” “potential,” “continue,”
or other similar expressions.
Forward-looking statements include, without limitation,
statements regarding business combinations and similar
transactions, prospective performance and opportunities, and the
outlook for Vestis’s and Sport Chalet’s businesses, performance and
opportunities; the expected timing of the completion of the
transactions contemplated by the Merger Agreement; the ability to
complete the transactions considering the various closing
conditions; and any assumptions underlying any of the foregoing.
Investors are cautioned that any such forward-looking statements
are not guarantees of future performance and involve risks and
uncertainties and are cautioned not to place undue reliance on
these forward-looking statements. Actual results may differ
materially from those currently anticipated due to a number of
risks and uncertainties. Risks and uncertainties that could cause
the actual results to differ from expectations contemplated by
forward-looking statements include: uncertainties regarding the two
companies’ ability to integrate successfully; uncertainties as to
the timing of the Offer and the second-step merger (the “Merger”);
uncertainties as to how many of Sport Chalet’s stockholders will
tender their stock in the Offer; the possibility that competing
offers will be made; the failure of Sport Chalet’s stockholders to
approve the Merger; the failure to complete the Offer or the Merger
in the timeframe expected by the parties or at all; the possibility
that various closing conditions for the transactions may not be
satisfied or waived; Sport Chalet’s ability to maintain
relationships with employees, customers, or suppliers; the negative
effect of the economic downturn and the lack of winter weather on
the Sport Chalet’s sales; limitations on borrowing under Sport
Chalet’s credit facilities; Sport Chalet’s ability to control
operating expenses and costs; the competitive environment of the
sporting goods industry in general and in Sport Chalet’s specific
market areas; the challenge of maintaining Sport Chalet’s
competitive position; Sport Chalet’s ability to maintain the growth
of its Team Sales Division and online business; Sport Chalet’s
ability to regain or subsequently maintain compliance with the
requirements for continued listing of its common stock; and changes
in costs of goods and services. These and other risks are more
fully described in Sport Chalet’s filings with the SEC.
Information Agent:Georgeson Inc.866-856-6388orSport
Chalet Contact:Steve Teng, 818-949-5300, ext.
5728investorrelations@sportchalet.comorVersa and Vestis
Contacts:Abernathy MacGregorChuck Dohrenwend,
212-371-5999cod@abmac.comorRivian Bell,
213-630-6550rlb@abmac.com
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