Varlen Enters Into Confidentiality and Standstill Agreement With Amsted
12 July 1999
Varlen Enters Into Confidentiality and Standstill Agreement With Amsted
- Varlen Board Announces That it has Received Expressions of Interest in
Excess of the Amsted Offer -
NAPERVILLE, Ill., July 12 -- Varlen Corporation
today announced that it has entered into a confidentiality and
standstill agreement with Amsted Industries Incorporated.
Under the terms of the confidentiality and standstill agreement, Amsted
and Varlen have agreed that Amsted will not, prior to August 23, 1999, accept
for payment or pay for any shares pursuant to the tender offer commenced by
Amsted on May 24, 1999 and will not seek or propose to solicit or participate
in the solicitation of any proxies or consents with respect to any securities
of Varlen.
Varlen is filing the complete text of the confidentiality and standstill
agreement with the Securities and Exchange Commission.
The Varlen Board also announced today that as part of Varlen's process of
exploring its strategic alternatives, Varlen has received from third parties
preliminary expressions of interest in making an investment in Varlen or
acquiring Varlen at a price per share in excess of that being offered by
Amsted in the tender offer.
The Varlen Board has determined unanimously that Varlen should explore its
strategic alternatives, including a potential merger, sale or recapitalization
of Varlen. Varlen anticipates that the confidentiality and standstill
agreement will allow Amsted to participate in Varlen's process of exploring
its strategic alternatives. As announced previously, the Varlen Board has
determined unanimously that Amsted's unsolicited cash tender offer for all of
the outstanding shares of Varlen at $35.00 per share is inadequate and not in
the best interests of its stockholders, and therefore has recommended
unanimously that Varlen's stockholders reject the Amsted Offer and not tender
their shares to Amsted.
As part of Varlen's process of exploring its strategic alternatives,
Varlen has entered into confidentiality and standstill agreements with third
parties other than Amsted. With the exception of the August 23, 1999
termination date, the provisions of the Amsted agreement are substantially
similar to the agreements that Varlen has entered into with other third
parties. Pursuant to the terms of such agreements, the standstill provisions
of those agreements will be modified to conform to the August 23, 1999
termination date of the standstill provisions in the Amsted agreement.
In light of these developments, the process being conducted by Varlen is
expected to result in continued discussions, additional expressions of
interest and negotiations with one or more third parties with respect to a
potential strategic transaction. The process being conducted by Varlen could
result at any time in (i) Varlen requesting and receiving formal proposals
from one or more third parties to engage in a strategic transaction with
Varlen, (ii) an agreement for a strategic transaction between Varlen and a
third party, (iii) an auction of Varlen involving multiple parties that have
communicated expressions of interest in Varlen, or (iv) other strategic
alternatives including but not limited to (a) an extraordinary transaction
such as a merger or reorganization involving Varlen or one or more
subsidiaries of Varlen and a third party, (b) a purchase, sale or transfer of
a material amounts of assets by Varlen or any of its subsidiaries, (c) a
tender or exchange offer for, or open market or privately negotiated purchases
or other acquisitions of, securities by or of Varlen, (d) a material change in
the present capitalization or dividend policy of Varlen, or (e) a business
combination or joint venture involving Varlen or any of its subsidiaries.
The Varlen Board expects to evaluate the strategic alternatives available
to Varlen, decide what action is in the best interest of Varlen's stockholders
and implement that decision. No timetable has been set for the completion of
this process. There can be no assurance that any of the foregoing will result
in any transaction being recommended to the Varlen Board, that any transaction
that may be recommended to the Varlen Board will be authorized or consummated,
or that a transaction other than those described herein will not be proposed,
authorized or consummated.
Varlen is a leading manufacturer of precision-engineered transportation
products for the heavy-duty truck/trailer, automotive and railroad industries.
The company, headquartered in a Chicago suburb, manufactures products in 24
facilities in the United States and Europe and sells them to customers around
the world. Varlen's common stock is traded on Nasdaq's National Market under
the symbol VRLN.
This news release contains forward-looking statements that are based on
assumptions about a number of important factors and involve risks and
uncertainties that could cause actual results to differ materially from what
appears here. These risk factors include reversal of market trends, decreased
demand for products, loss of key customers, limited customer production due to
capacity constraints, and additional factors that may be detailed from time to
time in Varlen's Securities and Exchange Commission filings. Varlen assumes
no obligation to update its forward-looking statements.