"Bear Hug" Letters

Unsolicited letter from a prospective buyer to a target company's management

Intended to pressure target management by triggering their fiduciary duties
Letter can invite negotiations or make a detailed proposal
May or may not be publicly disclosed by bidder:

If public, first step in a hostile takeover
If private, target can make it public for tactical reasons
Proposals involving stock consideration can trigger prospectus filing requirements (Rules 165 and 425)

Simtek - Cypress Semiconductor 2008

$4B market cap company makes a bear hug offer for a $42mm market cap company

Corporate Express - Staples 2008

Staples (SPLS) made a 1.33B cross-border bear hug offer for Dutch-based office products distributor

CSK Auto - O'Reilly Automotive 2008

OReilly Automotive bear hugs CSK Auto
CSK and ORLY are both specialty retailers of automotive aftermarket parts, tools, and supplies

Diebold - United Technologies 2008

$2.63B bear hug offer

Packeteer - Elliott Associates 2008

$200mm bear hug offer

Axcelis Technologies 2008

Offer from Sumitomo Heavy Industries and its private equity partner, TPG

Take-Two Interactive- Electronic Arts 2008

Offer from rival video game maker
Offers $26 per share

Yahoo! - Microsoft 2008

Unsolicited offer from Microsoft
Offers $31 per share ($45 billion), in cash and stock

Dow Jones 2007

Unsolicited friendly offer from News Corp
Offers $60 per share ($5 billion), in either cash or stock
NWS press release 5.01.07
Bancroft family to meet with News Corp 5.31.07
Board recommends deal 7.17.07
DJ news - stock chart

Catalina Marketing 2007

15% holder makes unsolicited buyout proposal
Catalina Marketing

Warner Music Group 2006

Target publicly discloses rejection of an offer from EMI
EMI's offer had been subject of news reports
Warner Music Form 8-K 5.03.06

Shurgard Storage Centers / Public Storage 2005

REIT goes public with its unsolicited offer
after target refuses to negotiate

ValueAct Capital / Acxiom 2005

Company goes public first
10.3% holder (hedge fund) offers to buy 100%

Imperial Sugar Company 2005

Publicly disclosed bear hug proposal
From special situation investor: Schultze Asset Mgmt
Bear hug letter 5.19.05
Schedule 13D Amendment 5.19.05
IPSU profile

Ameritrade / E*Trade Financial 2005

Publicly disclosed bear hug proposal
Terms of proposal previously reported in news media

Circuit City Stores Inc / Highfields Capital 2005

Bear hug by hedge fund coupled with 6.8% stakehold
Schedule 13D 2.15.05
Scroll down for bear hug letter

Mandalay Resort Group / MGM Mirage 2004

Publicly disclosed bear hug proposal by gaming company
Target accepted increased offer

Airgate PCS / Alamosa Holdings 2004

Bear hug of one Sprint PCS affiliate by another
First sent privately
Publicly disclosed a month later
Alamosa press release 11.22.04
Includes "bear hug" letter 10.22.04
AirGate response 11.22.04
Acquisition was completed 2.15.05

CoreStates Financial / Mellon Bank 1997

Mellon Bank sent a private "bear hug" letter to CoreStates
CoreState's rejection was leaked to press and later publicly acknowledged by Mellon and CoreStates
CoreState's was ultimately acquired by First Union (now named Wachovia)
Background of Merger

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