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Stock for Cash and Stock Purchase
December 12, 20___
James Dean
Chief Executive Officer
Ltd.
Dear Mr. Dean:
On behalf of XYZ, I am pleased to submit the enclosed offer to
acquire ABC. We are extremely impressed with the business you and
your management team have developed. We are particularly excited about
how ABC complements our businesses and our strategies for future
growth by establishing deeper relationships and delivering greater
value for our consumers and business partners in vertical markets.
We see recruitment as a valuable part of XYZ's future growth
strategy - it's been one of the fastest industries to migrate online
and is poised to grow substantially over the next few years. We
believe that the combination of ABC and XYZ will create a
powerful new force in the recruitment marketplace.
XYZ is well positioned to help ABC capitalize on the future
opportunities in this market and to provide an exciting platform upon
which ABC's management and employees can build. XYZ's broad
reach, distribution, and desire to commit significant resources to
this opportunity, together with ABC's experienced management team,
large consumer base, diversified customer base and well-trained sales
force, would create a winning combination.
In short, the combination we propose is a logical next step for
the shareholders, customers and employees of both of our companies.
We believe a transaction between ABC and XYZ would provide
demonstrably superior value to your shareholders compared with the
transaction with John Doe Inc. We also believe that the combination of XYZ
and ABC represents a uniquely attractive opportunity to your
management team and employees. To that end, XYZ proposes to acquire
all outstanding ABC common stock at a fixed price of $10.50 per
share of consideration consisting of equal parts cash and stock. The
proposed price represents a 23% premium over the average implied price
of the John Doe Inc transaction over the last 30 trading days, and a 6% premium
over the implied price today (based on John Doe Inc's closing price on December
12, 2001).
To effect the transaction, we would commence an exchange offer for
all of ABC's outstanding common stock followed by a merger at the
same per share price. XYZ would use its currently existing cash
balances to finance the cash portion of the consideration. We expect
that the transaction could be consummated within six to eight weeks of
the execution of definitive transaction documentation. Because the
cash portion of the transaction would be financed entirely through
XYZ's existing cash reserves, our offer would not be subject to any
financing contingency. We are prepared to begin discussions with you
as early as tomorrow.
Our proposal is clearly superior for your shareholders to the
proposed transaction involving John Doe Inc for the following reasons:
-- Our proposal provides higher absolute value for each ABC share
-- Our proposal provides value certainty
-- Our proposal provides immediate liquidity
-- Our proposal is not subject to significant regulatory risk
PARTIAL DOCUMENT – THE REMAINDER IS NOT SHOWN. GET THE FULL DOCUMENT HERE.
ADDITIONAL TEMPLATE PREVIEWS
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|Guides |LOI Tools and Templates |
|Anatomy of LOI - Ver1 |Full Buyout |
|Anatomy of LOI - Ver2 |Asset Purchase - Ver1 |
|Asset vs. Stock Purchase |Asset Purchase - Ver2 |
|Purchase Price Payment Considerations |Stock For Cash |
|Ways to Structure the Deal - Ver1 |Stock For Stock |
|Ways to Structure the Deal - Ver2 |Stock For Cash & Stock |
|Ways to Structure the Deal - Ver3 |Earnout |
|Structuring Effective Earnouts |Partial Investments |
|Tax Implications |Series A Preferred |
|What is a Reverse Merger? |Series B Preferred |
| |Presentations |
| |Presenting the Deal - Ver1 |
| |Presenting the Deal - Ver2 (No Preview) |
| |Presenting the Deal - Ver3 |
| |Presenting the Deal - Ver4 |
| |Presenting the Deal - Ver5 |
| |Business Sale Presentation |
|Buying or Selling a Business Step-by-Step Procedure - Click Here To View |
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