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Trace International Holdings, Inc. Sites Market Conditions

19 October 1998

Trace International Holdings, Inc. Sites Market Conditions; Proposes New $12.00 Per Share Going-Private Transaction

    NEW YORK--Oct. 16, 1998--Trace International Holdings, Inc. informed Foamex International Inc. today that due to a deterioration in conditions in worldwide capital markets that Trace has been informed that it will be unable to obtain the debt financing originally contemplated for the proposed acquisition of all of the outstanding shares of common stock of Foamex International Inc., not currently owned by Trace or its subsidiaries for a purchase price of $18.75 per share.
    In addition, Trace International Holdings, Inc. has informed the Board of Directors of Foamex International that although it has attempted to obtain substitute financing, to date, it has not been successful in securing substitute financing for a transaction at $18.75 per share.
    In light of the inability to obtain financing and changes in market conditions, Trace has submitted a revised proposal to the Board of Directors of Foamex International to acquire all of the outstanding shares of common stock of Foamex International, not currently owned by Trace or its subsidiaries, at a cash price of $12.00 per share. The revised proposal represents a premium of 14.3% over the closing stock price of $10.50, on October 15, 1998. Trace will arrange for the $800 million necessary for the financing of the new proposal through The Bank of Nova Scotia.
    Trace and its subsidiaries currently beneficially own approximately 11,525,000 shares of Foamex International common stock, or approximately 46% of the outstanding common stock. Trace desires to have the stockholders of Foamex International vote on its proposal, and has suggested that the revised proposal be subject to the approval of a majority of the shareholders other than Trace and its subsidiaries.
    The proposed acquisition of the common stock is subject to a number of conditions, including (1) the approval of the Board of Directors of Foamex International, (2) the approval of the majority of the stockholders of Foamex International, other than Trace and its subsidiaries, (3) the receipt of necessary financing, (4) the termination of the existing merger agreement, (5) the execution of a new definitive agreement by November 5, 1998, at which date the financing arrangement will expire if no agreement is executed and (6) other conditions currently contained in the merger agreement or as may be typical for transactions of this type, including the receipt of any necessary regulatory approvals. Accordingly, there can be no assurances that the proposed acquisition will be consummated.
    This news release shall not constitute the solicitation of an offer to buy the common stock of Foamex or an offer to sell any other security in connection with Trace's proposal.