Rewards Network Inc. (NASDAQ: DINE) announced that Rewards Network and EGI Acquisition, L.L.C. ("EGI Acquisition"), an affiliate of Equity Group Investments, L.L.C. ("EGI"), a private investment firm, have entered into a definitive merger agreement under which EGI Acquisition will offer to acquire all of the shares of Rewards Network common stock not owned by EGI Acquisition for $13.75 per share in cash. EGI Acquisition currently owns approximately 14.2% of the outstanding shares of Rewards Network common stock. Certain other affiliates of EGI collectively own approximately 12.1% of the outstanding shares of Rewards Network common stock and have agreed to tender such shares in the offer. The transaction values Rewards Network on a fully diluted share basis at approximately $126 million.
The $13.75 per share consideration represents an approximately 39% premium over the closing price of Rewards Network's common stock on June 8, 2010, the day before Rewards Network issued a press release noting that it had received indications of interest in pursuing a strategic transaction. The offer also represents a 14% dividend adjusted premium to the average closing price of Rewards Network's common stock during the twelve months ended June 8, 2010.
As noted in the Rewards Network press release issued on June 9, 2010, the Board of Directors constituted a Strategic Coordination Committee (the "Special Committee") consisting of disinterested members of the Board of Directors, and the Special Committee undertook a process to explore strategic alternatives for Rewards Network. The Special Committee unanimously recommended that Rewards Network's Board of Directors approve the EGI merger agreement. Subsequently, the Board of Directors approved the merger agreement and resolved to recommend that Rewards Network stockholders tender their shares in the EGI Acquisition offer.
Pursuant to the definitive merger agreement, EGI Acquisition will offer to acquire all shares of Rewards Network common stock not owned by EGI Acquisition through a cash tender offer for $13.75 per share. EGI Acquisition intends to commence the tender offer within seven business days. The tender offer will expire 20 business days after the date it commences unless it is extended. Following the expiration of the tender offer, if EGI Acquisition owns at least 90% of the outstanding shares of Rewards Network common stock, EGI Acquisition intends to complete the acquisition of Rewards Network through the short-form procedure under Delaware law, which does not require a vote or meeting of the stockholders of Rewards Network. In the merger, each outstanding share of Rewards Network common stock not tendered and purchased in the tender offer will be converted into the right to receive the same consideration provided in the tender offer.
If you are a current shareholder and would like to discuss your options of exercising your rights as a shareholder, which include ensuring that the company is getting the highest possible price for the company, and that the board of directors will act in the best interest of the shareholders, please contact us.
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