SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE TO
Tender Offer Statement under Section 14(d)(1) or 13(e)(1) of the Securities
Exchange Act of 1934
(Amendment No. 1)
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DAVE & BUSTER'S, INC.
(Name of Subject Company (Issuer))
D&B ACQUISITION SUB, INC. D&B HOLDINGS I, INC.
INVESTCORP, S.A. DAVE & BUSTER'S, INC.
DAVID O. CORRIVEAU JAMES W. CORLEY
WALTER S. HENRION WILLIAM C. HAMMETT, JR.
(Name of Filing Person (Offeror))
Common Stock, Par Value $0.01 Per Share
(including associated rights)
(Title of Class of Securities)
23833N104
(CUSIP Number of Class of Securities)
Simon Moore
President
D&B Acquisition Sub, Inc.
c/o Gibson, Dunn & Crutcher LLP
200 Park Avenue
New York, NY 10166
(212) 351-4000
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of the Person(s) Filing Statement)
Copy to:
E. Michael Greaney, Esq.
Gibson, Dunn & Crutcher LLP
200 Park Avenue
New York, NY 10166
(212) 351-4000
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CALCULATION OF FILING FEE
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Transaction Valuation* Amount of Filing Fee
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$ 146,532,792.00 $ 13,481.02
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* Estimated for purposes of calculating the amount of the filing fee only.
This calculation assumes the purchase of all of the issued and outstanding
shares of common stock, par value $.01 per share (the "Common Stock") of
Dave & Buster's, Inc., a Missouri corporation (the "Company"), including the
associated rights (the "Rights" and together with the "Common Stock" the
"Shares"), at a price per Share of $12.00 in cash, less 1,058,545 Shares
owned by stockholder who have agreed not to tender their Shares.
x Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
Amount Previously Paid:$13,481.02 Filing Party: D&B Acquisition Sub, Inc.
Form or Registration No.: Date Filed: June 4, 2002
Schedule TO-T
Check box if the filing relates solely to preliminary communications made
before the commencement of a tender offer.
Check the appropriate boxes to designate any transactions to which this
statement relates:
x third party tender offer x going-private transaction
subject to Rule 14d-1 subject to Rule 13e-3
issuer tender offer amendment to Schedule 13D
subject to Rule 13e-4 under Rule 13d-2
Check the following box if the filing is a final amendment reporting the
results of the tender offer.
This Amendment No. 1 to Schedule TO amends and supplements the Tender Offer
Statement on Schedule TO filed with the Securities and Exchange Commission (the
"SEC") on June 4, 2002 (as amended and supplemented, the "Schedule TO") by D&B
Acquisition Sub, Inc., a Missouri corporation ("Purchaser"), and the Rule 13e-3
Transaction Statement on Schedule 13E-3 filed with the SEC on June 4, 2002 (as
amended and supplemented, the "Schedule 13E-3") by Purchaser, D&B Holdings I,
Inc., a Delaware corporation ("Parent"), Investcorp, S.A., a Luxembourg
corporation ("Investcorp"), Dave & Buster's, Inc., a Missouri corporation (the
"Company"), David O. Corriveau, James W. Corley, Walter S Henrion and William C.
Hammett. The Schedule TO and Schedule 13E-3 relate to the offer by Purchaser to
purchase all of the issued and outstanding shares of common stock, par value
$0.01 (the "Shares"), of the Company, including associated rights (the "Rights"
and collectively the "Shares"), at a price of $12.00 per Share, net to the
seller in cash, upon the terms and subject to the conditions contained in the
Offer to Purchase, dated June 4, 2002 (the "Offer to Purchase"), and in the
related Letter of Transmittal dated June 4, 2002 (the "Letter of Transmittal,"
which, together with the Offer to Purchase, as each may be amended or
supplemented from time to time, constitute the "Offer"). Copies of the Offer to
Purchase and the related Letter of Transmittal have been filed as Exhibits
(a)(1) and (a)(2), respectively, to both the Schedule TO and the Schedule 13E-3.
This Amendment No. 1 to Schedule TO is being filed by Purchaser, Parent,
Investcorp, the Company, David O. Corriveau, James W. Corley, Walter S. Henrion
and William C. Hammett.
Unless otherwise stated below, the information set forth in the Offer to
Purchase (including all schedules thereto) is hereby expressly incorporated
herein by reference in response to all items of this Schedule TO. You should
read this Amendment No. 1 to Schedule TO together with the Schedule TO and the
Schedule 13E-3 filed with the SEC on June 4, 2002. Capitalized terms used herein
and not otherwise defined have the respective meanings ascribed to them in the
Offer to Purchase.
ITEM 4. Terms of the Transaction.
Item 4 of Schedule TO is hereby amended and supplemented by including the
following:
We amend the section entitled "The Tender Offer - Acceptance for Payment
and Payment for Shares" beginning on page 19 of the Offer to Purchase as
follows:
The second sentence of the 1st paragraph of that section, appearing on page
19 of the Offer to Purchase, is deleted and replaced in its entirety with the
following:
Subject to the Merger Agreement and any applicable rules and regulations of
the SEC including Rule 14e-1(c) under the Exchange Act (relating to Purchaser's
obligation to pay for or return tendered Shares promptly after termination or
withdrawal of the Offer), Purchaser expressly reserves the right to delay the
acceptance for payment of or the payment for any tendered Shares in order to
comply in whole or in part with any applicable laws, which delay may not be
consistent with the requirements of Rule 14e-1(c) under the Exchange Act. All
conditions to the Offer, other than regulatory approvals, will be satisfied or
waived prior to the time the Shares tendered in the Offer are accepted for
payment by Purchaser.
We amend the section entitled "The Tender Offer - Procedures for Accepting
the Offer and Tendering Shares" beginning on page 20 of the Offer to Purchase as
follows:
The last sentence of the 9th paragraph of that section, appearing on page
22 of the Offer to Purchase, is deleted and replaced in its entirety with the
following:
Subject to the terms of the Merger Agreement, Purchaser also reserves the
absolute right to waive any defect or irregularity in the tender of any Shares
of any particular stockholder of Dave & Buster's,
2
whether or not similar defects or irregularities are waived in the case of
other stockholders of Dave & Buster's.
We amend the section entitled "The Tender Offer - Certain Conditions of the
Offer" beginning on page 46 of the Offer to Purchase as follows:
The following sentence is added to the end of the last paragraph of such
section, appearing on page 48 of the Offer to Purchase:
All conditions to the Offer, other than regulatory approvals, will be
satisfied or waived prior to the time the Purchaser accepts the tendered Shares
for purchase.
ITEM 10. Financial Statements.
Item 10 of Schedule TO is hereby amended and supplemented by including the
following:
We amend the section entitled "Selected Consolidated Financial Information"
beginning on page 26 of the Offer to Purchase as follows:
The following sentence is added to the end of the 1st paragraph following
the financial table appearing at the top of page 26 of the Offer to Purchase:
Neither Dave & Buster's nor its management is disclaiming responsibility
for the accuracy and completeness of the reports and documents that have been
filed by Dave & Buster's with the SEC.
ITEM 11. Additional Information.
Item 11 of Schedule TO is hereby amended and supplemented by including the
following:
The second through fifth sentences of the 1st paragraph of the section
entitled "Certain Legal Matters; Regulatory Approvals" beginning on page 48 of
the Offer to Purchase, are deleted and replaced in their entirety with the
following:
Dave & Buster's and certain of its directors have been served with a
complaint filed purportedly on behalf of Dave & Buster's stockholders alleging
breach of fiduciary duties by directors of Dave & Buster's in connection with
their approval of the transactions contemplated by the Merger Agreement. The
purported class action, filed in state district court in Dallas County, Texas on
May 31, 2002, seeks an injunction preventing consummation of the proposed
transaction and unspecified damages. Dave & Buster's has also been served with
four similar complaints filed in the state of Missouri on or after June 3, 2002,
one filed in the circuit court of Greene County, and three in the circuit
court of Cole County. Dave & Buster's and each member of Dave & Buster's Board
of Directors have been named as defendants in each of the complaints, and two of
the complaints filed in Cole County purport to name Investcorp. Purchaser's
understanding is that, based solely upon its preliminary review of the
complaints, Dave & Buster's believes the allegations therein to be without merit
and intends to vigorously defend against the relief sought.
ITEM 13. Information Required by Schedule 13E-3.
Item 13 of Schedule TO is hereby amended and supplemented by including the
following:
We amend the subsection entitled "Special Factors - Background of the Offer
and the Merger" beginning on page 6 of the Offer to Purchase as follows:
The 2nd and 3rd paragraphs of that section, appearing on pages 6 and 7 of
the Offer to Purchase, are deleted and replaced in their entirety with the
following:
During the period from January to September 2000, Dave & Buster's continued
to receive unsolicited inquiries from various strategic and financial buyers
concerning a possible acquisition or business combination involving Dave &
Buster's. Dave & Buster's had informal discussions with each of these
prospective buyers to determine their level of interest, their ability
(financially and otherwise) to complete a transaction and their business plan
for Dave & Buster's. Set forth below is a summary regarding the entities which
appeared to be credible to conduct due diligence on Dave & Buster's and to
explore financing alternatives for a possible transaction:
* A private investor, not affiliated with Dave & Buster's but which was
an existing stockholder of Dave & Buster's, met with Messrs. Corriveau,
Corley and/or Henrion on at least three occasions to discuss a potential
acquisition of Dave & Buster's. Such investor had extensive experience
in the ownership of restaurant and entertainment businesses. Such
investor declined to sign a confidentiality agreement but conducted
limited due diligence based upon publicly available materials.
3
* A New York-based buyout firm, specializing in restaurant company
acquisitions, met with Messrs. Corriveau, Corley and/or Henrion on
approximately six occasions to discuss a potential acquisition of Dave
& Buster's. This firm signed a confidentiality agreement and conducted
limited due diligence. Messrs. Corriveau and Corley met with prospective
debt financing sources for such buyer on two occasions.
* A publicly held company engaged in restaurant ownership and operation,
headquartered in the southwestern United States, met with Messrs.
Corriveau and Corley on one occasion to discuss a potential acquisition
of Dave & Buster's. This company and Dave & Buster's were unable to
agree upon the terms of a confidentiality agreement.
Each of the prospective buyers was advised that in order to formally
proceed with a transaction, it would be required to make a specific proposal to
the Special Committee. Each party, however, ultimately declined to make an
acquisition proposal to the Special Committee. In September 2000, all
discussions with prospective purchasers had ceased, and Dave & Buster's Board of
Directors determined to disband the Special Committee.
In November 2000, Dave & Buster's received an unsolicited inquiry from a
prospective buyer, which expressed interest in exploring a possible acquisition
transaction that would involve Dave & Buster's management. This buyer was an
entity to be formed by a New York based venture investor and principals of a
diversified restaurant firm based in the southwestern United States, each of
whom signed confidentiality agreements with Dave & Buster's. In December 2000,
Dave & Buster's Board of Directors reconstituted the Special Committee with the
same members (Messrs. Levy (as Chairman), Bernstein, Edison and Maguire), in
anticipation of receiving a formal proposal from this prospective buyer. Messrs.
Corriveau, Corley and/or Henrion, as well as other members of management, met
with this prospective buyer on at least 10 occasions. The prospective buyer
conducted due diligence on Dave & Buster's and explored financing alternatives
for several months. In this connection, approximately four prospective debt
financing sources met with Dave & Buster's and some of these entities also
conducted limited due diligence. Although Dave & Buster's and the prospective
buyer reached a preliminary understanding as to the structure of a transaction,
the prospective buyer was unable to arrange financing commitments that would
permit it to indicate a price range for a prospective transaction or otherwise
make a written proposal to the Special Committee. These discussions ceased in
September 2001, due in part to the terrorist attacks that occurred on September
11th and the prospective buyer's perception of the potential impact of such
events on Dave & Buster's business and U.S. financial markets generally.
During the November 2000 to October 2001 period, Dave & Buster's also had
informal discussions with the following two additional entities which appeared
to be credible to conduct due diligence on Dave & Buster's and to explore
financing alternatives for a possible transaction:
* A New York-based buyout firm met with Messrs. Corriveau, Corley and
Henrion on one occasion to discuss a potential acquisition of Dave &
Buster's. This firm signed a confidentiality agreement but, to Dave &
Buster's knowledge, did not proceed with any due diligence investigation
other than from publicly available sources.
* A publicly held company engaged in restaurant ownership and operation,
headquartered in the southwestern United States, met with Messrs.
Corriveau, Corley and Henrion on one occasion to discuss a potential
acquisition of Dave & Buster's. This company signed a confidentiality
agreement but, to Dave & Buster's knowledge, performed only limited and
preliminary financial due diligence.
The second and third sentences of the 6th paragraph of that section,
appearing on pages 7 and 8 of the Offer to Purchase, are deleted and replaced in
their entirety with the following:
4
At this meeting, Houlihan Lokey provided its preliminary assessment of the
value of the Dave & Buster's and the March Proposal and discussed with the
Special Committee whether the March Proposal was sufficient to pursue further at
this time. Houlihan Lokey also described the methodologies used by it in making
its preliminary assessments of the values of Dave & Buster's and the March
Proposal and the methodologies it would use in determining whether the March
Proposal was fair to Dave & Buster's and its unaffiliated shareholders from a
financial point of view. In this regard, Houlihan Lokey discussed (i) a
discounted cash flow analysis, (ii) an analysis of historic trading prices,
volume and other publicly available data regarding Dave & Buster's and other
companies that Houlihan Lokey deemed comparable to Dave & Buster's and (iii) an
analysis of comparable transactions. Houlihan Lokey advised the Special
Committee that, in its view, the March Proposal may be worth further discussions
and negotiations with the prospective buyer, but that, based on its preliminary
assessment of the proposal's value, Houlihan Lokey would not be able to render a
fairness opinion in respect of the March Proposal should it be requested to do
so. Houlihan Lokey did not circulate written presentation materials to the
members of the Special Committee in connection with these discussions.
The first sentence of the 7th paragraph of that section, appearing on page
8 of the Offer to Purchase, is deleted and replaced in its entirety with the
following:
In late March 2002, representatives of Investcorp met with Messrs.
Corriveau, Corley, Henrion and Hammett to discuss various alternative
transactions involving Dave & Buster's.
The second sentence of the 11th paragraph of that section, appearing on
page 8 of the Offer to Purchase, is deleted and replaced in its entirety with
the following:
Counsel for the Special Committee also discussed and confirmed the need for
Investcorp to set the Minimum Tender Condition at no less than 80% of the
outstanding Shares in order for Parent to qualify to elect to treat the
acquisition of the stock of Dave & Buster's as an acquisition of the assets of
Dave & Buster's for United States tax purposes.
The last sentence of the 14th paragraph of that section, appearing on page
9 of the Offer to Purchase, is deleted and replaced in its entirety with the
following:
Following discussion with the Special Committee members and their financial
and legal advisors, Dave & Buster's Board of Directors accepted the Special
Committee's recommendations and unanimously (i) determined that the Offer, the
Merger and the Merger Agreement are fair from a financial point of view to, and
in the best interests of, the stockholders of Dave & Buster's, including the
unaffiliated stockholders, (ii) approved the Offer, the Merger and the Merger
Agreement and (iii) recommended that the stockholders of Dave & Buster's accept
the Offer and tender their Shares pursuant thereto.
We amend the subsection entitled "Special Factors - Background of the Offer
and the Merger - Recommendation of the Special Committee and Dave & Buster's
Board of Directors; Fairness of the Offer and the Merger" beginning on page 9 of
the Offer to Purchase as follows:
The following two paragraphs are inserted after the subheading and before
the first paragraph of such subsection:
As described above, the Dave & Buster's Board of Directors constituted and
empowered the Special Committee to evaluate acquisition proposals on behalf of
Dave & Buster's. The analyses and conclusions of the Special Committee are
described in detail below under the subheading "The Special Committee." The
Special Committee presented to the entire Board of Directors its conclusions
that the Offer and Merger was fair, from a financial point of view, to the
unaffiliated stockholders.
Separately, the Merger Agreement required the entire Dave & Buster's
Board of Directors to express its belief as to the fairness from a financial
point of view of the Offer, the Merger and the Merger
5
Agreement to all of the stockholders of Dave & Buster's. The analyses and
conclusions of the Board of Directors are described in detail below under the
subheading "Dave & Buster's Board of Directors." The Board of Directors did not
make any separate determination of fairness to the unaffiliated stockholders of
Dave & Buster's, but accepted the conclusions of the Special Committee and,
based upon the Special Committee's recommendations, approved the Offer, the
Merger and the Merger Agreement.
The following paragraph is inserted after the first existing paragraph of
such subsection, appearing on page 9 of the Offer to Purchase:
The Special Committee was comprised entirely of non-employee members of the
Board of Directors to act solely on behalf of the unaffiliated stockholders of
Dave & Buster's in negotiating and evaluating acquisition proposals such as the
Offer and the Merger. The Special Committee retained Houlihan Lokey as its
financial advisor and to render its opinion as to whether the transaction was
fair to unaffiliated stockholders of Dave & Buster's.
The fifth, sixth and seventh bullet points of the first paragraph on page
10 of the Offer to Purchase are deleted and replaced in their entirety with the
following:
* Dave & Buster's historical results of operations and financial
condition;
* current market and economic conditions and trends for the
restaurant and regional entertainment center industries;
* Dave & Buster's dependence upon the opening of new Dave & Buster's
entertainment centers to generate growth in revenues and net income;
* Dave & Buster's inability to meet its growth objectives under its
current capital structure, given that its existing bank credit agreement
(i) prohibits Dave & Buster's from opening new entertainment centers
subsequent to fiscal 2002, or entering into new lease commitments,
without the unanimous consent of the bank group, and (ii) restricts
capital expenditures associated with the construction, and first year
of operations, of new Dave & Buster's locations;
* Dave & Buster's need to identify and arrange a new capital structure
in order to meet its growth objectives;
* Dave & Buster's activities during 2002 to seek alternative debt or
equity financing arrangements in order to fund its future growth,
which activities have indicated that such alternative debt or equity
financing is subject to significant risks and uncertainties with respect
to its availability, cost and dilution to existing stockholders; and
that each of the potential debt financing alternatives identified to
date by Dave & Buster's continued to restrict the opening of new Dave &
Buster's entertainment centers;
* the fact that the $5.0 million termination fee was necessary to induce
Parent and Purchaser to enter into the Merger Agreement, and the
conclusion of the Special Committee and Dave & Buster's Board of
Directors, based in part on Houlihan Lokey's statement that the
termination fee did not present an impediment to rendering its Fairness
Opinion, that such amount should not significantly deter any third
party with serious interest in bidding for Dave & Buster's and is
reasonable in light of the benefits of the Offer and the Merger.
The following bullet point is inserted after the 4th bullet point on page
11 of the Offer to Purchase:
6
* the fact that if the Minimum Tender Condition is satisfied or if at
least 66 2/3% of the Shares have been validly tendered and the Merger
thereafter occurs, the Offer and the Merger have been effectively
conditioned upon the approval of in excess of a majority of the
unaffiliated stockholders of Dave & Buster's;
The following sentences are inserted after the last bullet point of such
subsection, appearing on page 11 of the Offer to Purchase:
The Special Committee also considered a variety of risks and other
potentially negative factors concerning the Offer and the Merger but determined
that these factors were outweighed by the benefits of the factors supporting the
Offer and the Merger. These negative factors included the following:
* certain terms and conditions set forth in the Merger Agreement,
required by Parent as a prerequisite to entering into the Merger
Agreement, that prohibit Dave & Buster's and its representatives from
soliciting third-party bids and from accepting third-party bids except
in specified circumstances and upon reimbursement of expenses relating
to the Merger Agreement and related transactions and payment to Parent
of a specified termination fee, and that these terms could have the
effect of discouraging a third party from making a bid to acquire
Dave & Buster's (See "The Merger Agreement; Other Arrangements -
No Solicitation");
* the $12.00 per share consideration is lower than the historic trading
prices of Dave & Buster's common stock on Nasdaq and the NYSE prior to
October 1999;
* the conflict of interest created by Messrs. Corriveau, Corley, Hammett
and Henrion's affiliation with Parent and by Messrs. Corriveau, Corley
and Hammett's expectation that they would continue as executives of
Dave & Buster's after the Merger, as well as the other factors
discussed in "The Merger Agreement, Other Arrangements";
* if the Merger is not consummated under circumstances further discussed
in "The Merger Agreement; Other Arrangements - Termination" and
"The Merger Agreement - Effect of Termination," Dave & Buster's may be
required to reimburse Parent and Purchaser for expenses relating to the
Merger Agreement and related transactions and to pay to Parent the
specified termination fee;
* following the Merger, Dave & Buster's will be a privately held
company and its current stockholders will cease to participate in any
future earnings and appreciation of value of Dave & Buster's.
The members of the Special Committee and the Board of Directors did not
consider factors that it did not consider relevant to its determination, such as
Dave & Buster's net book value and liquidation value.
We amend the subsection entitled "Special Factors - Background of the Offer
and the Merger - The Affiliate Stockholders' Position as to the Fairness of, and
Reasons for, the Offer and the Merger" beginning on page 12 of the Offer to
Purchase as follows:
The second sentence of the 2nd paragraph of such subsection, appearing on
page 12 of the Offer to Purchase, is deleted and replaced in its entirety with
the following:
Based on their beliefs regarding the reasonableness of the conclusions and
analyses of the Special Committee, the Affiliate Stockholders concur with, and
expressly adopt, the conclusions and analyses of the Special Committee described
above and believe that the Offer and the Merger are fair to Dave & Buster's
unaffiliated stockholders.
We amend the subsection entitled "Special Factors - Background of the
Offer and the Merger - The Affiliate Stockholders' Reasons for the Offer and the
Merger" beginning on page 12 of the Offer to Purchase as follows:
7
That subsection is deleted and replaced in its entirety with the following:
The Affiliate Stockholders' Reasons for the Offer and the Merger. Following
a significant decline in Dave & Buster's stock price in the fall of 1999, Dave &
Buster's began to receive several unsolicited inquiries from financial buyers
concerning a possible acquisition of Dave & Buster's and also exploring
management's interest in participating in any such transaction. Messrs.
Corriveau and Corley founded the Dave & Buster's concept and have spent nearly
their entire careers in the development and growth of such concept. They and the
other Affiliate Stockholders share a commitment to the continued development of
the Dave & Buster's concept. Accordingly, in responding to these inquiries, they
expressed their interest in continuing to invest in the future growth of Dave &
Buster's, subject to the risks of such continuing equity investment, if the
unaffiliated stockholders could otherwise receive consideration for their shares
that was fair from a financial point of view.
In assessing their interest in participating in an acquisition transaction
with inquiring parties since 1999, the Affiliate Stockholders have in each case
carefully considered the financial resources of the acquiring party. The
Affiliate Stockholders' interest in participating in an acquisition transaction
has been dependent upon their perception of the continuing entity's likelihood
of attracting suitable financing and otherwise achieving the future growth
objectives of the Affiliate Stockholders for Dave & Buster's. In responding to
Investcorp's inquiry regarding the interest of the Affiliate Stockholders in
participating with Investcorp in an acquisition transaction, the Affiliate
Stockholders have considered, among other factors, completed acquisition
transactions sponsored by Investcorp, the stated intentions of Investcorp and
its principals regarding the growth plans for the Dave & Buster's concept and
Investcorp's proposed financing for an acquisition and for post-acquisition
operations of Dave & Buster's.
The interest of the Affiliate Stockholders in pursuing the transaction
with Investcorp at the present time is based upon the following factors:
* the existence of commitment letters from significant institutional
lenders sufficient to allow Investcorp to complete the acquisition
transaction;
* the November 2001 amendment to Dave & Buster's bank credit agreement,
which prohibited Dave & Buster's from opening new entertainment
centers, other than the scheduled 2002 opening of the Islandia,
NY unit, or entering into new lease commitments, without the unanimous
consent of the bank group. The amendment also restricted capital
expenditures associated with the construction, and first year of
operations, of new Dave & Buster's locations;
* Dave & Buster's activities during 2002 seeking alternatives to its
present bank credit arrangements in order to fund its future growth.
These activities have indicated that such alternative debt or equity
financing is subject to significant risks and uncertainties with
respect to its availability and cost and to possible dilution to
existing stockholders. Each of the debt financing alternatives
identified by Dave & Buster's continued to restrict the opening of new
Dave & Buster's locations; and
* the significant lead time required to identify new Dave & Buster's
locations, negotiate leases for such locations and complete
construction. In order for Dave & Buster's to effectively plan for and
open new locations during 2003 and 2004, the Affiliate Stockholders
believed that a new capital structure would be required to be in place
during 2002.
We amend the subsection entitled "Special Factors - Background of the Offer
and the Merger - Fairness Opinion of Houlihan Lokey" beginning on page 12 of the
Offer to Purchase as follows:
The following sentence is added to the end of the 7th paragraph of that
subsection, appearing on page 14 of the Offer to Purchase:
8
Houlihan Lokey regarded each of the foregoing analyses to be appropriate
and reflective of generally accepted valuation methodologies given Dave &
Buster's trading volume relative to total shares outstanding, the accessibility
of comparable publicly traded companies, the availability of forecasts from
management of Dave & Buster's, and available information regarding similar
transactions in the restaurant industry.
The last sentence of the 10th paragraph of that subsection, appearing on
page 14 of the Offer to Purchase and subtitled "Market Multiple Methodology," is
deleted and replaced in its entirety with the following:
Houlihan Lokey calculated certain financial ratios for the comparable
restaurant and entertainment companies, including, the multiples of: (i)
enterprise value ("EV", the equity value of the company plus all
interest-bearing debt) to latest twelve months ("LTM") revenues, (ii) EV to both
LTM and projected next fiscal year ("NFY") earnings before interest, taxes,
depreciation and amortization ("EBITDA"), (iii) EV to LTM and NFY free cash flow
(which is defined as EBITDA less capital expenditures) (iv) EV to LTM earnings
before interest and taxes ("EBIT"), and (iv) EV to total assets.
The following two sentences are added to the end of the 12th paragraph of
that subsection, appearing immediately below the table on page 15 of the Offer
to Purchase:
To arrive at an indicated per share value, certain adjustments were made,
including adding Dave & Buster's current holdings of cash and cash equivalents
and subtracting debt obligations, as well as considering the impact from the
exercise of "in-the-money" options as applicable for each valuation indication.
The resulting indicated range of value from the Market Multiple Methodology was
$8.23 to $11.49 per share.
The following two sentences are added to the end of the 13th paragraph of
that subsection, appearing on page 15 of the Offer to Purchase and subtitled
"Discounted Cash Flow Methodology":
To arrive at an indicated per share value, certain adjustments were made,
including adding Dave & Buster's current holdings of cash and cash equivalents
and subtracting debt obligations, as well as considering the impact from the
exercise of "in-the-money" options as applicable for each valuation indication.
The resulting indicated range of value from the Discounted Cash Flow Methodology
was $8.98 to $11.62 per share.
The second sentence of the 14th paragraph of that subsection, appearing on
page 15 and subtitled "Determination of Equity Value" is deleted and replaced in
its entirety with the following:
Such adjustments included adding Dave & Buster's current holdings of cash
and cash equivalents and subtracting debt obligations, as well as considering
the impact from the exercise of "in-the-money" options as applicable for each
valuation indication.
The following paragraph is inserted following the 15th paragraph of that
subsection, appearing on pages 15 and 16:
The offering price of $12.00 for each Share in the transaction represents
(a) a premium of approximately 15.9% over the closing sale price of $10.35 for
Dave & Buster's stock on the New York Stock Exchange on May 29, 2002 (the
trading day immediately prior to the date on which the Special Committee and the
Board of Directors approved the transaction and Dave & Buster's entered into the
Merger Agreement), and (b) a premium of approximately 23.8% over the average
closing sale price of $9.69 for the 90 trading days prior to May 30, 2002.
9
We amend the subsection entitled "Special Factors - Background of the Offer
and the Merger - Purpose and Structure of the Offer and the Merger" appearing on
page 17 of the Offer to Purchase as follows:
The subsection is deleted and replaced in its entirety with the following:
Purpose and Structure of the Offer and the Merger.
Following completion of the Merger, the Shares will no longer be publicly
traded nor will they be listed on the NASD Bulletin Board system. In addition,
upon application to the SEC, the registration of Dave & Buster's Shares and Dave
& Buster's reporting obligations under the Exchange Act will be terminated. As a
result, Dave & Buster's will no longer bear the cost of compliance with SEC
regulations, including expenses associated with proxy rules and the preparation
of periodic reports.
Upon consummation of the Merger, Dave & Buster's will be a privately held
corporation. Accordingly, the unaffiliated stockholders of Dave & Buster's will
no longer continue to face the risk of losses generated by Dave & Buster's or a
decline in value of Dave & Buster's, but will instead have immediate liquidity
upon payment of the Offer Price as merger consideration. Similarly, the
unaffiliated stockholders of Dave & Buster's will not have the opportunity to
participate in the earnings and growth of Dave & Buster's and will not have any
right to vote on corporate matters. The Affiliate Stockholders will not receive
cash for most of their shares and will continue to face the risk of losses
generated by Dave & Buster's or a decline in value in Dave & Buster's. The
Affiliate Stockholders will, however, continue to have the opportunity to
participate in future earnings and growth of Dave & Buster's, and to vote on
corporate matters.
Purchaser, Parent and Investcorp are seeking to undertake the Offer and the
Merger in order to acquire control of, and the entire equity interest in, Dave &
Buster's. Dave & Buster's purpose for engaging in the transactions is to provide
its stockholders with an opportunity to receive cash for their shares at a price
per share representing a premium of 15.9% over the closing sale price on the New
York Stock Exchange on the trading day immediately prior to the date the Offer
and the Merger were approved by Dave & Buster's Board of Directors and the
Special Committee. Dave & Buster's is undertaking these transactions at this
time for the reasons considered by the Special Committee and outlined under
"Special Factors - Background of the Offer and the Merger." The Affiliate
Stockholders are pursuing this transaction at this time in order to provide Dave
& Buster's with the ability to fund its future anticipated growth and for the
other reasons described under "Special Factors - Background of the Offer and the
Merger."
The Affiliate Stockholders' interest in the net book value and net earnings
of Dave & Buster's will be affected by the Offer and the Merger. Prior to such
transactions, Mr. Corriveau's interest in the net book value as of May 5, 2002
and net earnings for the year ended February 3, 2002 is $6.0 million (3.6%) and
$0.3 million (3.6%), respectively, Mr. Corley's interest in the net book value
as of May 5, 2002 and net earnings for the year ended February 3, 2002 is $6.1
million (3.7%) and $0.3 million (3.7%), respectively, Mr. Henrion's interest in
the net book value as of May 5, 2002 and net earnings for the year ended
February 3,2002 is $0.8 million (0.5%) and $0.04 million (0.5%), respectively,
and Mr. Hammett's interest in the net book value as of May 5, 2002 and net
earnings for the year ended February 3, 2002 is $0.3 million (0.2%) and $0.01
million (0.2%), respectively. Following the consummation of the transactions,
the Affiliate Stockholders' interests in Parent will be as follows: (a) with
respect to each individual's fully vested ownership interests only, Mr.
Corriveau's interest in the pro forma net book value as of May 5, 2002 and pro
forma net earnings for the year ended February 3, 2002 is estimated to be $5.7
million (4.9%) and $0.05 million (4.9%), respectively, Mr. Corley's interest in
the pro forma net book value as of May 5, 2002 and pro forma net earnings for
the year ended February 3, 2002 is estimated to be $5.7 million (5.0%) and $0.05
million (5.0%), respectively, Mr. Henrion's interest in the pro forma net book
value as of May 5, 2002 and pro forma net earnings for the year ended February
3, 2002 is estimated to be $0.7 million (0.6%) and $0.007 million(0.6%),
respectively, and Mr. Hammett's interest in the pro forma net book value as of
May 5, 2002 and pro forma net earnings for the year ended February 3, 2002 is
estimated to be $0.3 million (0.3%) and $0.003 million (0.3%), respectively; and
(b) taking into account all of the Affiliate Stockholders' ownership interests,
whether or not immediately vested, Mr. Corriveau's interest in the pro forma net
book value as of May 5, 2002 and pro forma net earnings for the year ended
February 3, 2002 is estimated to be $9.4 million (8.2%) and $0.09 million
(8.2%), respectively, Mr. Corley's interest in the pro forma net book value as
of May 5, 2002 and pro forma net earnings for the year ended February 3, 2002 is
estimated to be $9.4 million (8.2%) and $0.09 million (8.2%), respectively, Mr.
Henrion's interest in the pro forma net book value as of May 5, 2002 and pro
forma net earnings for the year ended February 3, 2002 is estimated to be
10
$1.5 million (1.3%) and $0.01 million (1.3%), respectively, and Mr.
Hammett's interest in the pro forma net book value as of May 5, 2002 and pro
forma net earnings for the year ended February 3, 2002 is estimated to be $0.8
million (0.7%) and $0.008 million (0.7%), respectively.
The receipt of cash pursuant to the Offer or the Merger will constitute a
taxable transaction for U.S. federal income tax purposes under the Internal
Revenue Code of 1986, as amended (the "Code"), and may also constitute a taxable
transaction under applicable state, local, foreign and other tax laws. For U.S.
federal income tax purposes, a tendering stockholder would generally recognize
gain or loss in an amount equal to the difference between the amount of cash
received by the stockholder pursuant to the Offer or the Merger and the
stockholder's tax basis for the Shares tendered and purchased pursuant to the
Offer or the Merger. If tendered Shares are held by a tendering stockholder as
capital assets, that gain or loss will be capital gain or loss. Any such capital
gain or loss will be long term if, as of the date of the disposition of its
Shares, the tendering stockholder held such Shares for more than one year or
will be short term if, as of such date, the stockholder held such Shares for one
year or less.
The purchase of the Shares by the Purchaser pursuant to the Offer and the
subsequent Merger will be disregarded for federal income tax purposes, and the
transactions will be treated as a purchase of the Shares by Parent. If Parent
elects to treat the acquisition of the Shares as an acquisition of the assets of
Dave & Buster's for federal income tax purposes, Dave & Busters will be treated
as if it had sold all of its assets at the close of the acquisition date at fair
market value in a single transaction, and will be treated as a new corporation
which purchased all of its assets as of the beginning of the day after the
acquisition date. We do not believe that such deemed sale and repurchase will
result in any material federal income tax liability being incurred by Dave &
Buster's.
The exchange of the Affiliate Shares for the shares of Parent Stock
following completion of the Offer but before payment for the tendered shares
will not be subject to federal income tax.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: June 26, 2002
D&B ACQUISITION SUB, INC.
By: /s/ Simon Moore
------------------------------
Name: Simon Moore
Title: President
D&B HOLDINGS I, INC.
By: /s/ Simon Moore
------------------------------
Name: Simon Moore
Title: President
INVESTCORP, S.A.
By: /s/ Gary Long
------------------------------
Name: Gary Long
Title: Secretary
DAVE & BUSTER'S, INC.
By: /s/ David O. Corriveau
-----------------------------
Name: David O. Corriveau
Title: President
/s/ David O. Corriveau
-----------------------------------
David O. Corriveau
/s/ James W. Corley
------------------------------------
James W. Corley
/s/ Walter S. Henrion
------------------------------------
Walter S. Henrion
/s/ William C. Hammett, Jr.
------------------------------------
William C. Hammett, Jr.
13