The Elder-Beerman Stores Corp. announced that The Bon-Ton Stores, Inc. has proposed a combination of the two companies. Bon-Ton indicated that it is prepared to sign a merger agreement that would provide all Elder-Beerman shareholders with $7.00 in cash for each of their shares in a two-step transaction, consisting of a first step tender offer for all outstanding shares of Elder-Beerman at $7.00 per share, followed by a second step merger of Elder-Beerman with a subsidiary of Bon-Ton.
The principal conditions to consummation of the tender offer would be: (i) at least two-thirds of Elder-Beerman's outstanding common shares, on a fully diluted basis, being tendered and not withdrawn prior to the expiration date of the offer, (ii) the proceeds of the financings under Bon-Ton's commitment letters being available to Bon-Ton and (iii) the expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Elder-Beerman's Board of Directors met earlier today and after considering Bon-Ton's merger proposal, notified Wright Holdings, Inc. of Elder-Beerman's intention to enter into a merger agreement with Bon-Ton, subject to complying with Elder-Beerman's obligations under its existing merger agreement with Wright Holdings. As previously announced, on June 25, 2003, Elder-Beerman entered into a definitive agreement and plan of merger with Wright Holdings and its subsidiary providing for the acquisition of all outstanding shares of Elder-Beerman at a price of $6.00 per share. Under its merger agreement with Wright Holdings, Elder-Beerman is required to so notify Wright Holdings and engage in good faith negotiations with Wright Holdings for a three-business day period prior to accepting any proposal from any third party. These negotiations provide Wright Holdings an opportunity to increase the price per common share of Elder-Beerman payable under the existing merger agreement. Elder-Beerman emphasized that there can be no assurance as to the outcome of these negotiations with Wright Holdings.