sec document
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant |X|
Filed by a Party other than the Registrant | |
Check the appropriate box:
| | Preliminary Proxy Statement
| | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
| | Definitive Proxy Statement
|X| Definitive Additional Materials
| | Soliciting Material Under Rule 14a-12
LONE STAR STEAKHOUSE & SALOON, INC.
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(Name of Registrant as Specified in Its Charter)
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| | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
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previously. Identify the previous filing by registration statement number, or
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This filing consists of the following letter sent by Lone Star
Steakhouse & Saloon, Inc. (the "Company") to Barington Capital Group, L.P. on
November 17, 2006 in connection with the special meeting of stockholders of the
Company to be held on November 30, 2006 (the "Special Meeting"):
LONE STAR STEAKHOUSE & SALOON, INC.
224 EAST DOUGLAS
SUITE 700
WICHITA, KANSAS 67202
November 17, 2006
Mr. James A. Mitarotonda
Barington Capital Group, L.P.
888 Seventh Avenue
New York, New York 10019
Dear Mr. Mitarotonda:
We are writing in response to your letter, dated November 16, 2006, in which you
claim a financial advisor engaged by you has identified five parties that may be
interested in purchasing Lone Star Steakhouse & Saloon, Inc. (the "Company") at
a price higher than $27.10 per share. We find the claims made in your letter to
be disingenuous and oddly timed - alerting us only two weeks from the date of
our stockholders meeting.
Potential purchasers of the Company have a far greater ability to obtain access
to non-public information and enter into discussions with the Company regarding
an alternative transaction than in many comparable transactions. A potential
buyer does not have to submit a binding offer for the Company. If the allegedly
interested parties your financial advisor has identified are truly serious about
entering into a transaction with the Company, they could easily submit a bona
fide, non-binding proposal, expressly conditioned on their ability to conduct
further due diligence, based on the wealth of information publicly available
about the Company.
The Company continues to maintain a comprehensive, electronic data room, which a
serious purchaser could then readily review in determining whether to make a
firm offer. We find it hard to believe that a capable buyer would not be able to
complete its due diligence review of the Company in a limited period of time.
For you to say that, "from the point of view of a potential purchaser with
limited time, resources and personnel, the procedures are impractical," makes us
wonder if these purchasers you have identified, with such limited resources, are
truly qualified.
We also find the timing of your letter to be curious and question your
motivation for issuing your letter at this point in the process. Consider the
following:
o Three months have passed since we announced the transaction with Lone
Star Funds on August 18, 2006.
o Your financial advisor, Compass Advisers, LLP ("Compass"), initially
contacted our outside counsel on August 21, 2006, three days after the
announcement of the transaction, claiming that it represented a
financial buyer who might be interested in making an offer to acquire
the Company and inquiring as to the procedures for doing so. They were
told at that point to consult the merger agreement. Compass has
clearly had ample opportunity to familiarize itself with this
straightforward process. Why was it necessary for it, 1 1/2 months
later, to contact both our financial and legal advisors to once again
inquire as to this process?
o Based on the progress report submitted to you by Compass, it appears
as though Compass received the indications of interest from five
parties prior to October 3, 2006. Yet you did not inform the Company
of the nature of this potential interest until November 16, 2006, in a
publicly filed letter.
If you were truly interested in maximizing value for the Company's stockholders,
rather than simply trying to upset a comprehensive process that was carefully
negotiated by the Company's Board of Directors in the best interests of its
stockholders, then why are you only bringing this information to the Company's
attention now, a mere two weeks prior to the scheduled vote?
The transaction with Lone Star Funds provides stockholders the ability to
receive $27.10 in cash for their shares of the Company, whose financial results
have been in steady decline for the past several quarters and continue to
deteriorate. The transaction is fully financed and has limited closing
conditions. The Board of Directors received two fairness opinions from
nationally recognized investment banks regarding the $27.10 per share price. If
Barington still believes more value can be realized, it continues to have (as it
has had for the past three months) every opportunity to put forth a constructive
alternative proposal for the Company. Barington has not done so, rather it has
issued letters which are devoid of specifics, speculative as to value and skewed
as to the facts.
On behalf of the Board of Directors,
/s/ Fred Chaney
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Fred Chaney
Chairman of the Board of Directors
CERTAIN INFORMATION CONCERNING PARTICIPANTS
The Company has made a definitive filing with the Securities and Exchange
Commission of a proxy statement and accompanying proxy card to be used to
solicit votes in favor of the transactions (the "Transactions") contemplated by
that certain Agreement and Plan of Merger, dated as of August 18, 2006, by and
among the Company, Lone Star U.S. Acquisitions LLC and COI Acquisition Corp., at
the Special Meeting.
THE COMPANY STRONGLY ADVISES ALL STOCKHOLDERS OF THE COMPANY TO READ THE PROXY
STATEMENT AND OTHER PROXY MATERIALS RELATING TO THE SPECIAL MEETING BECAUSE THEY
CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS ARE AVAILABLE AT NO CHARGE
ON THE SECURITIES AND EXCHANGE COMMISSION'S WEB SITE AT HTTP://WWW.SEC.GOV. IN
ADDITION, A STOCKHOLDER WHO WISHES TO RECEIVE A COPY OF THE DEFINITIVE PROXY
MATERIALS, WITHOUT CHARGE, SHOULD SUBMIT THIS REQUEST TO THE COMPANY'S PROXY
SOLICITOR, INNISFREE M&A INCORPORATED, AT 501 MADISON AVENUE, 20TH FLOOR, NEW
YORK, NEW YORK 10022 OR BY CALLING INNISFREE TOLL-FREE AT (877) 456-3488.
The Company and its directors, executive officers and other members of its
management and employees may be deemed to be participants in the solicitation of
proxies from its stockholders in connection with the Transactions. Information
concerning the interests of the Company and the other participants in the
solicitation is set forth in the Company's definitive proxy statement filed with
the Securities and Exchange Commission in connection with the Transactions and
Annual Reports on Form 10-K, previously filed with the Securities and Exchange
Commission.