Duane Reade Inc. Enters Into an Amendment to Merger Agreement
22 June 2004 - 12:14AM
PR Newswire (US)
Duane Reade Inc. Enters Into an Amendment to Merger Agreement NEW
YORK, June 21 /PRNewswire-FirstCall/ -- Duane Reade Inc. (NYSE:DRD)
announced today that it has amended its merger agreement with Duane
Reade Shareholders, LLC and Duane Reade Acquisition Corp. The
amendment, among other changes, reduces the merger consideration
from $17.00 to $16.50 per share. Duane Reade Shareholders, LLC and
Duane Reade Acquisition Corp. are owned by Oak Hill Capital
Partners, L.P. The transaction is subject to, among other
conditions, approval by Duane Reade's stockholders. A stockholder's
meeting is expected to be held on July 26, 2004. The record date
for determining stockholders entitled to vote on the proposed
merger is June 3, 2004. The merger agreement among the parties was
also amended to modify and/or eliminate certain closing conditions
to make the consummation of the merger more likely. In connection
with the amendment, Oak Hill Capital Partners, L.P. provided a
renewed equity financing commitment and the debt financing sources
also provided a new commitment. Oak Hill had indicated last week
that it was not prepared to extend the equity commitment unless
there was a reduction in the purchase price. As part of the revised
terms of the transaction, Duane Reade and its financial advisor,
Bear, Stearns & Co. Inc., are entitled to solicit competing
proposals. The termination date for the merger agreement has been
extended until August 18, 2004. Founded in 1960, Duane Reade is the
largest drug store chain in the metropolitan New York City area,
offering a wide variety of prescription and over-the-counter drugs,
health and beauty care items, cosmetics, greeting cards, photo
supplies and photofinishing. As of March 27, 2004, the Company
operated 243 stores. Oak Hill Capital is a $1.6 billion private
equity fund formed in 1998 for the purpose of making control
investments in operating companies through acquisitions, build-ups,
recapitalizations, restructurings or significant minority
positions. The limited partners of Oak Hill Capital Partners
include a number of institutional and individual investors.
Important Information In connection with the acquisition of Duane
Reade by Duane Reade Acquisition Corp., Duane Reade Acquisition
Corp. and related entities have filed relevant materials with the
Securities and Exchange Commission (the "SEC"), including a
preliminary proxy statement, which was filed on March 19, 2004 and
amendment no. 1 to the preliminary proxy statement, which was filed
on May 14, 2004. The definitive proxy statement will be sent to
holders of Duane Reade's common stock if and when it becomes
available. Holders of Duane Reade common stock are urged to read
the preliminary proxy statement, as amended, on file with the SEC,
the definitive proxy statement if and when it becomes available and
any other relevant materials filed by Duane Reade or the Oak Hill
entities because they contain, or will contain, important
information. The preliminary proxy statement and amendment no. 1 to
the preliminary proxy statement are available, and amendment no. 2
to the preliminary proxy statement and the definitive proxy
statement will be available if and when they are filed, for free
(along with any other documents and reports filed by Duane Reade
with the SEC) at the SEC's website, http://www.sec.gov/. In
addition, you may obtain documents filed with the SEC by Duane
Reade free of charge by requesting them in writing from Duane Reade
Inc., 440 Ninth Avenue, New York, New York 10001, Attention:
Corporate Secretary, or by telephone at (212) 273-5700. Participant
Information Duane Reade Shareholders, LLC, Duane Reade Holdings,
Inc. and Duane Reade Acquisition Corp. were formed as the acquiring
entities at the direction of the equity sponsors, which currently
include Oak Hill Capital Partners, L.P., Oak Hill Capital
Management Partners, L.P. and certain members of Duane Reade's
management. Andrew J. Nathanson and Tyler J. Wolfram are the
initial directors of each newly formed Delaware corporation. These
entities and their directors and officers may be deemed to be
participants in the solicitation of proxies in connection with the
proposed transaction. As of the date of this communication, Mr.
Nathanson has an indirect interest (through his participation in an
investment partnership) of less than 1% in the outstanding shares
of the common stock of Duane Reade and none of the other foregoing
participants has any direct or indirect interest, by security
holdings or otherwise, in Duane Reade. Duane Reade and its
directors and executive officers may be deemed to be participants
in the solicitation of proxies from its stockholders in connection
with the proposed transaction. Certain information regarding the
participants and their interest in the solicitation is set forth in
the proxy statement for Duane Reade's 2003 annual meeting of
stockholders filed with the SEC on April 10, 2003 and the Form 4s
filed by Duane Reade's directors and executive officers since April
10, 2003. Stockholders may obtain additional information regarding
the interests of such participants by reading the preliminary proxy
statement and the definitive proxy statement, if and when it
becomes available. This document may contain statements, estimates
or projections relating to, among other things, the acquisition of
the Company by Oak Hill that constitute "forward-looking"
statements as defined under U.S. federal securities laws.
Forward-looking statements involve known and unknown risks and
uncertainties, which may cause the Company's actual results in
future periods to differ materially from forecasted or expected
results. Those risks include, among other things, the competitive
environment in the drugstore industry in general and in the
Company's specific market area, inflation, changes in costs of
goods and services and economic conditions in general and in the
Company's specific market area. Those and other risks are more
fully described in Duane Reade's reports filed with the SEC from
time to time, including its annual reports on Form 10-K, quarterly
reports on Form 10-Q and current reports on Form 8-K. You should
not place undue reliance on forward- looking statements, which
speak only as of the date they are made. Except to the extent
otherwise required by federal securities laws, we do not undertake
to publicly update or revise any forward-looking statements.
Approved By: John Henry (212) 273-5746 SVP - Chief Financial
Officer Contact: Cara O'Brien/Lila Sharifian Press: Stephanie
Sampiere (212) 850-5600 Financial Dynamics DATASOURCE: Duane Reade
Inc. CONTACT: John Henry, SVP-Chief Financial Officer, Duane Reade
Inc., +1-212-273-5746; or Cara O'Brien, Lila Sharifian, or Press,
Stephanie Sampiere, all of Financial Dynamics, +1-212-850-5600, for
Duane Reade Inc. Web site: http://www.duanereade.com/
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