Bel Fuse Inc. Files Definitive Proxy Statement and Issues Letter to Pulse Electronics Shareholders
Urges Shareholders to Vote the GOLD Proxy Card FOR the Election of its Two Highly-Qualified, Independent Director Nominees
The full text of the letter follows:
VOTE YOUR GOLD PROXY CARD TODAY
Dear Pulse Electronics Shareholder:
THE PULSE BOARD HAS REFUSED TO ENGAGE IN SERIOUS DISCUSSIONS WITH US REGARDING OUR PROPOSAL TO ACQUIRE PULSE
Over the past decade, the electronic components industry has become increasingly more cost-competitive and, as a result, it has become incrementally more difficult for businesses within the industry to sustain profitable results. Consequently, economies of scale and scope of resources have emerged as two extremely important aspects for remaining competitive and for producing long-term, sustainable shareholder wealth. Recognizing this dynamic, in 2006, representatives from Bel and Pulse began discussing a framework for a potential business combination that made strong strategic sense and that had the potential to create more value than either company could achieve on a standalone basis. Today, with the electronic components industry facing higher operating costs and a more competitive global environment, we are convinced that the strategic rationale for such a combined business entity is even more compelling.
Since 2008, we have attempted to renew merger discussions on four
different occasions with members of the Pulse Board. Unfortunately,
despite the clear benefits we believe a business combination would yield
for both companies and the value such a transaction would create for all
shareholders, we were told by members of the Pulse Board that it was
either "not the right time for a conversation" or that they preferred to
defer substantive negotiations to a future date. Each time, we
respectfully honored these requests, patiently waiting while Pulse
churned through four CEOs (including an interim CEO), the value of
Pulse deteriorated (Pulse's market value has declined by more than
After years of unsuccessful attempts to engage with the Pulse Board, we
felt we had no other option but to make our interest public. On
CONSIDER ALL OF THE FACTS REGARDING BEL'S PROPOSAL TO MERGE WITH PULSE
- Both companies have agreed in the past that a Bel/Pulse combination is compelling and makes long-term strategic sense for shareholders and other constituents.
-
On
February 28, 2011 , Bel proposed to purchase all of the outstanding shares of Pulse for$6.00 per share. -
The
$6.00 per share offer represents a premium of approximately 38% to Pulse's average closing share price onDecember 28, 2010 (the last trading day prior to Pulse's public disclosure of Bel's interest in discussing a potential business combination). -
The
$6.00 per share offer represents a premium of approximately 23% to Pulse's average closing share price for the 60 trading days endedFebruary 25, 2011 . -
The
$6.00 per share offer represents a premium of 11% to Pulse's closing share price onFebruary 25, 2011 (the last trading day before Bel made the proposal). - Bel's offer is not opportunistic. Bel has indicated its willingness to negotiate an increased purchase price that reflects any incremental value that Pulse can demonstrate.
- Again, Bel's offer is not opportunistic. Bel has also indicated its willingness to structure a transaction that makes the most sense for shareholders, including a form of consideration that may include (i) all cash, (ii) Bel stock, or (iii) a combination thereof.
-
Bel has a strong balance sheet representing over
$85 million in cash and no debt, and is prepared to produce a financing commitment letter from its investment banks once the Pulse Board shows its willingness to negotiate with us. - Bel is prepared to move quickly to consummate a deal subject to limited due diligence.
If elected, our two highly-qualified director nominees -- who are completely independent of Bel and were introduced to us through a specialized corporate governance consulting firm -- will represent a minority of the Pulse Board and are committed to working constructively with the other members of the Pulse Board to ensure that the interests of ALL Pulse shareholders are fully protected.
BEL'S
The Pulse Board has dismissed our
We have also stated that we are open to discussing alternative structures and forms of consideration. However, the Pulse Board must first agree to discuss such alternatives.
CONSIDER PULSE'S PERFORMANCE OVER THE PAST FIVE YEARS
PULSE HAS LOST
PULSE'S ADDITIONAL PERFORMANCE CONCERNS OVER THE PAST FIVE YEARS
Pulse Total Revenues
Decline
from
Income from Continuing Operations
Decline
from a
Total CEO & CFO Compensation
Total Capital Allocated to Acquisitions
Total Goodwill & Intangible Asset Impairment
Total Loss in Market Value
IN OUR OPINION PULSE SHAREHOLDERS DESERVE BETTER
While we continue to hope that the Pulse Board will work with us to
structure a transaction that enables shareholders to receive a full and
fair value for their investment, we do not believe this will occur under
the stewardship of this current board of directors. Therefore, we are
asking you to vote "FOR" the election of our two highly-qualified,
independent candidates
Sincerely,
Director, President and CEO
If you have any questions, require assistance in voting your GOLD
proxy card, or need additional copies of
(973) 873-7706 (Call Collect) whassan@allianceadvisorsllc.com
Or
CALL TOLL FREE (877)-777-5017
ADDITIONAL INFORMATION
This communication does not constitute an offer to buy or solicitation
of an offer to sell any securities. No tender offer for the shares of
ABOUT
FORWARD-LOOKING STATEMENTS
Except for historical information contained in this news release, the
matters discussed in this press release are forward-looking statements
that involve risks and uncertainties. Among the factors that could cause
actual results to differ materially from such statements are: the market
concerns facing our customers; the continuing viability of sectors that
rely on our products; the effects of business and economic conditions;
capacity and supply constraints or difficulties; product development,
commercializing or technological difficulties; the regulatory and trade
environment; risks associated with foreign currencies; uncertainties
associated with legal proceedings; the market's acceptance of Bel's new
products and competitive responses to those new products; and the risk
factors detailed from time to time in Bel's
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Investor Inquiries:
201-432-0463
www.belfuse.com
or
973-873-7710
or
973-873-7706
or
Media Inquiries:
215-325-0514
dpark@hedgerelations.com
or
Investor
Contact:
310-826-5051
info@berkmanassociates.com
Source:
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