Special Meeting of Foamex Board of Directors Held
20 October 1998
Special Meeting of Foamex Board of Directors Held to Discuss Revised Cash Buyout of $12.00 From Trace International Holdings, Inc.
LINWOOD, Pa.--Oct. 20, 1998--Board to Meet November 2, 1998 to Consider Revised Proposal
Tender Offers Extended; Settlement Hearing to be Cancelled
Foamex International Inc. today announced that its Board of Directors met Monday, October 19 to review the revised proposal of Trace International Holdings, Inc., the Company's principal shareholder, to purchase 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 Foamex Board has referred Trace's revised proposal to the Special Committee of the Board to determine its view of the advisability and fairness of the proposed buyout to Foamex International's stockholders other than Trace and its subsidiaries. The members of the Special Committee are John H. Gutfreund, President of Gutfreund and Co. Inc., a New York-based financial consulting firm, and Robert J. Hay, Chairman Emeritus of Foamex L.P. The Special Committee will continue to be represented by the law firm of Cleary, Gottlieb, Steen & Hamilton, and The Beacon Group Capital Services, LLC, investment banking advisers.
The Foamex Board also announced that it had retained the investment banking firm of Ramius Partners L.P. and the law firm of Paul, Weiss, Rifkind, Wharton & Garrison to advise the Board as a whole in connection with the revised Trace offer.
The Foamex Board has scheduled a special meeting for November 2, 1998, at which it is expected that the Board will consider Trace's revised proposal. Trace has informed the Foamex Board that it expects to arrange for the $800 million necessary for the financing of the new proposal through The Bank of Nova Scotia. The Bank of Nova Scotia has committed to provide one-half of the financing and has agreed to use its commercially reasonable best efforts to obtain the remainder of the financing required. Trace has indicated that it is willing to have the proposal subject to the approval of the majority of the shareholders of Foamex other than Trace, and that as part of the revised proposal it will eliminate the breakup fee and the transaction fee.
Trace has also informed the Foamex Board that Trace's revised offer is subject to a number of conditions, including (1) the approval of the Board of Directors of Foamex International, (2) the approval of the stockholders of Foamex International, including a majority of the stockholders other than Trace and its subsidiaries, (3) the receipt of necessary financing and consents from the holders of Foamex's outstanding public debt securities, (4) the termination of the existing merger agreement, (5) the execution of a new definitive agreement by November 5, 1998, at which date Trace has indicated that the financing arrangement will expire if no agreement is executed and (6) other customary conditions.
Trace and its subsidiaries beneficially own approximately 11,525,000 shares of Foamex common stock, or approximately 46% of the outstanding common stock. Foamex International Inc. has 25,014,823 shares of common stock outstanding.
Pending the Foamex Board's determination of the appropriate action to be taken in response to Trace's revised proposal, Foamex L.P., an indirect wholly-owned subsidiary of the Company, has extended the expiration date of the previously announced tender offers for two issues of public debt from Monday, October 19, 1998 to November 3, 1998, one day after the next Foamex Board Meeting. Following such meeting, the tender offers may be amended, extended or terminated.
Foamex also announced that in light of Trace's notification that Trace, to date, has not been able to obtain the debt financing for the proposed acquisition of all of the outstanding shares of common stock of Foamex International, not currently owned by Trace or its subsidiaries, for a purchase price of $18.75 per share, counsel for the parties in the action entitled In Re Foamex International Inc. Shareholders Litigation, Consolidated C.A. No. 16259NC, are requesting that the Delaware Chancery Court cancel the settlement hearing scheduled for October 27, 1998 at 2:00 p.m. with respect to the proposed settlement of such action.
Foamex manufactures and markets flexible polyurethane and advanced polymer products in North America. Foamex operates under four business units: Foam Products, Carpet Cushion Products, Automotive Products, and Technical Products.
For more information about Foamex International, visit its web site at http://www.foamex.com
Editors note: Foamex's company logo and executive photos can be retrieved in digital form by media without any charge from Wieck Photo DataBase (972) 392-0888.