WICHITA, Kan., April 2, 2002 (PRIMEZONE) -- Lone Star Steakhouse & Saloon, Inc. (Nasdaq:STAR) today announced that it has entered into a non-binding Letter of Intent with a prominent National buy-out firm ("Buyer") with respect to the proposed acquisition of all of the outstanding shares of common stock of Lone Star for $20.50 per share. The Letter of Intent was unanimously approved by the Board of Directors of Lone Star. Clark R. Mandigo, Lone Star's Chairman of the Board, stated, "This transaction reflects the outstanding results that have been achieved by our CEO, Jamie Coulter and the superb management team he has assembled."
The Letter of Intent grants the Buyer a 30-day exclusivity period to negotiate and sign a definitive agreement, which is expected to be executed on or before the expiration of the Letter of Intent on April 27, 2002. The transaction is subject to a number of conditions, including confirmatory due diligence, receipt of proceeds from sale and leaseback transactions and debt financing, as well as various regulatory and corporate approvals, including the approval by Lone Star's shareholders. The Company expects to file a Proxy Statement with the SEC shortly after the signing of a definitive agreement, followed by the mailing of such Proxy statement calling for a shareholder vote to approve the transaction.
Pending SEC comments and a positive shareholder vote, the transaction is anticipated to close in the third quarter.
There can be no assurance that a definitive agreement will be entered into or that any such transaction will be consummated. UBS Warburg is acting as financial advisor to Lone Star.
The transaction would take the form of a statutory merger of Lone Star with a newly created entity to be formed by Buyer ("NEWCO") pursuant to which the holders of Lone Star's issued and outstanding common stock would be entitled to receive $20.50 per share in cash.
The price represents a premium of 3.6% from the 30-day average trading price of $19.78. It also represents a 111.3% premium over the last trading price prior to the announcement of the engagement of UBS Warburg to review strategic alternatives of $9.70 on October 4, 2001.
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended including those related to cost savings, future results and a potential transaction resulting in a change of control of the Company. Although the Company believes the assumptions underlying the forward-looking statements contained herein, including the development plans of the Company, are reasonable, any of the assumptions could be inaccurate, and therefore, there can be no assurance that the forward-looking statements contained in the press release will prove to be accurate.