Amendment to Tender-Offer Solicitation/Recommendation Statement — Schedule 14D-9
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SC 14D9/A Amendment No. 1 18 74K
2: EX-1 Proxy Statement 11 54K
3: EX-2 Employment Agreement 5 20K
4: EX-3 Employment Agreement 4 19K
5: EX-4 Consulting Agreement 6 24K
6: EX-5 Form of Mortgage 40 141K
7: EX-7 Letter to Shareholders 3 15K
8: EX-8 Press Release Dated March 19, 1997 3 16K
EX-7 — Letter to Shareholders
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EXHIBIT 7
(Letterhead of Family Steak Houses of Florida, Inc.)
DEAR SHAREHOLDERS:
You are all familiar with the fact that on March 6, 1997, Bisco Industries,
Inc. ("Bisco") commenced a $.90 per share cash tender offer (the "Offer") to the
public shareholders of Family Steak Houses of Florida, Inc. (the "Company").
After due consideration of the terms and conditions of the Offer and other
matters it deemed relevant, at a meeting on March 18, 1997, the Board of
Directors of the Company unanimously determined to recommend that the
shareholders reject the Bisco tender offer.
The Board based its decision on its opinion and consideration of a number
of factors, including:
1. the current market price and trading range of shares of the Company's
common stock and the current business, assets, financial condition and
future prospects of the Company, including the recent refinancing of its
long-term debt, recent new restaurant opening and its renewed momentum for
growth;
2. its franchisor's, Ryan's Family Steak Houses, Inc., concern about the
potentially disruptive influence of Bisco, which could lead to the Company
losing its exclusive franchise.
3. its lender's, Franchise Finance Corporation of America, confidence in the
Company's operations and current management team after extensive due
diligence in connection with the recent $15 million financing and their
concern regarding Bisco's financial strength, management expertise and
undefined plans for the Company;
4. the lack of information provided by Bisco with respect to its strategies
for the Company;
5. the lack of depth in Bisco's management team, its apparent lack of
experience and expertise in the franchised restaurant industry and its
apparently limited financial resources;
6. the range of values for the Company revealed in a valuation study prepared
by a nationally-recognized investment banking firm;
7. the Board's belief that it may be able to enter into an arrangement with a
third party other than Bisco that could provide greater financial
resources, a higher price per share, and better management expertise in the
Company's operations;
8. the Board's belief that it might be able to negotiate a higher offer price
per share from Bisco;
9. the opinion of most shareholders who had contacted the Company that the
price of the Offer was too low and their stated intent not to tender their
shares in response to the Offer;
10. the Offer for only 30% of the outstanding shares of the Company's common
stock could, upon its consummation, result in the Company being controlled
by a person with no expertise in the restaurant industry, little financial
resources and no experience managing a publicly traded corporation; and
11. the impact of any changes in the Company's operations, including the
disposition of restaurants mentioned as a possible strategy in the Bisco's
Offer materials, on the Company's 1,400 employees and its customers,
suppliers and other constituencies including the communities in which its
facilities are located.
These factors are discussed in greater detail in the enclosed Schedule
14D-9 which we have filed with the Securities and Exchange Commission today.
Therefore, the Board recommends that its shareholders NOT tender their
shares in response to the tender offer of Bisco Industries, Inc.
As stated in its offer materials, Bisco will only pay for shares tendered
if it is satisfied, in its sole discretion, that the Florida Control Share Act
does not apply to its Offer. The Control Share Act is a Florida state law
enacted to protect shareholders from, among other things, being forced to accept
an inadequate offer for their shares.
However, unless the Board of Directors approves Bisco's Offer or the
shareholders either vote for a resolution to grant voting rights to shares
acquired by Bisco or adopt a Bylaw amendment to "opt out" of the Control Share
Act at the annual meeting of shareholders scheduled for June 17, 1997, any
shares acquired by Bisco through the Offer will have no voting rights. The Board
has determined not to take any action that would make the Control Share Act
inapplicable to the shares acquired by Bisco.
At the March 18, 1997 meeting, the Board of Directors also decided to
declare a dividend of one Right for each outstanding share of the Company's
common stock under a shareholder rights plan previously adopted, pending certain
conditions, at the February 11, 1997 meeting of the Board of Directors. The
Board believes that the shareholder rights plan will provide the Company with
additional time to negotiate an increase in the Offer, to consider alternatives
to the Offer, and to insure that any acquisition of the Company occurs on terms
that provide fair value to all shareholders. The terms and conditions of the
shareholder rights plan are outlined in the enclosed Summary of Key Features of
Shareholder Rights Plan of Family Steak Houses of Florida, Inc.
The Board of Directors also adopted Amended and Restated Bylaws of the
Company (the "Bylaws") in response to Bisco's Offer. The revisions to the Bylaws
institute a classified Board of Directors, impose certain timing and notice
requirements on proposals and director nominations made by shareholders, and
authorize the Company to appoint inspectors of elections and consents to
determine the validity and effect of shareholder votes, proxies, consents and
revocations of consent. These revisions to the Bylaws are intended to provide
the Company with additional notice of, and to protect the Company from, coercive
tactics proposed by persons trying to exert control over the Company.
We are enclosing for your review the Company's Press Release published on
March 19, 1997, the Schedule 14D-9, and the Summary of Key Features of the
Company's Shareholder Rights Plan.
If you have already sent your shares in to Bisco, you can have them
returned to you by filling out the enclosed yellow withdrawal form or, if your
shares are held through a bank or broker, by contacting your representative at
that firm. If you have any questions or need assistance in withdrawing your
shares, please call our information agent, Corporate Investor Communications at
1-800-932-8498.
We will keep you advised of further developments.
Very truly yours,
Lewis E. Christman, Jr.
President and Chief Executive Officer
Dates Referenced Herein and Documents Incorporated by Reference
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