EXHIBIT 99.2
SUN CAPITAL PARTNERS, INC.
April 20, 2006
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
Four World Financial Center
30th Floor
New York, NY 10080
Dear ▇▇. ▇▇▇▇▇▇▇▇:
On behalf of Sun Capital Partners Group IV, Inc. or its assigns ("Sun Capital",
"we", "us" or "our"), we are pleased to submit this non-binding offer to you
with respect to the acquisition (the "Acquisition") of ▇▇▇▇▇ Supermarkets, Inc.
("▇▇▇▇▇" or the "Company").
Except with regard to the provisions of the "Exclusivity Period" below, which
shall be binding when accepted by the Company, this letter is intended to serve
only as an expression of Sun Capital's intent and not as a binding obligation of
the parties to consummate the Acquisition; any such obligation will be created
only after satisfactory completion of Sun Capital's due diligence investigation
by execution and delivery of a definitive acquisition agreement. This paragraph
overrides any other conflicting provisions in this letter.
OVERVIEW OF PROPOSED TRANSACTION
Purchase Price. Sun Capital would acquire the Company for a purchase price of
$11.125 per share (the "Purchase Price"), but otherwise on substantially the
same terms as provided in our mark up of the draft Merger Agreement. This offer
assumes that there are 7,909,442 shares of common stock (including Class A
common stock and Class B common stock) issued and outstanding and 1,850,884
options outstanding having a weighted average exercise price of $13.22.
Sources of Financing. We have already received and are evaluating proposals from
major lending institutions for ABL and real estate financing. Nevertheless, we
and our affiliates have more than $3.5 billion of equity capital under
management. Sun Capital affiliates acquire controlling interests in companies
through Sun Capital's private equity fund, Sun Capital Partners IV, LP, with
$1.5 billion of committed equity capital and invests in non-controlling stakes
in equity, debt, and other securities of companies through its securities fund,
Sun Capital Securities Fund, with more than $1.2 billion of committed equity
capital. Sun Capital affiliates can invest more than $800 million of capital in
any one transaction and bridge the entire purchase price. Therefore, this offer
is not subject to any financing contingency.
Timing & Process. Upon receipt of your acknowledgment below relating to the
"Exclusivity Period," Sun Capital will immediately work towards (i) signing a
definitive agreement and (ii) closing the Acquisition as quickly as possible
after signing a definitive agreement.
Operating Plan for ▇▇▇▇▇. While Sun Capital's affiliates have a number of retail
investments, it is our intention to operate ▇▇▇▇▇ as a stand alone company and
we look forward to working with management and the employees of ▇▇▇▇▇ to
maximize the potential of the Company.
Confidentiality. Except with respect to the Company's respective shareholders,
members, subsidiaries, controlled-affiliates, directors, officers, employees,
advisors, attorneys, investment bankers, brokers, agents or any other person
acting on behalf of any of the foregoing (the "Company Representatives") in
connection with this offer, the Company agrees that, unless required by
applicable law or regulatory authority, it will not (and shall require the
Company Representatives not to) without the prior approval of Sun Capital,
disclose to any person (i) the existence, or any of the terms, conditions or
other facts, of this letter, (ii) the identity of Sun Capital or (iii) the
timing of the Exclusivity Period.
Should you have any questions or comments regarding this offer, please feel free
to ▇▇▇▇ ▇▇▇▇▇▇▇▇ at ▇▇▇-▇▇▇-▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ at ▇▇▇-▇▇▇-▇▇▇▇. Our legal
counsel is ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, a partner of ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP. ▇▇▇▇▇▇ can
be reached at ▇▇▇-▇▇▇-▇▇▇▇.
Very truly yours,
Sun Capital Partners Group IV, Inc.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
Exclusivity Period:
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The Company acknowledges that Sun Capital will devote substantial time and will
incur out-of-pocket expenses in connection with conducting confirmatory due
diligence and arranging the Acquisition. To induce Sun Capital to incur such
time and expenses, the Company hereby agrees that from the date hereof until the
earlier of (i) 11:59 PM, EST, on the date that is 21 days from the date on which
the Company executes this letter, or (ii) the date upon which Sun Capital
notifies the Company in writing that it no longer wishes to pursue the
Acquisition (the "Exclusivity Period"), the Company agrees that it will and it
will cause the Company Representatives to cease all ongoing Prohibited
Activities (as defined below) and will not, and it will cause the Company
Representatives
not to, (A) initiate, solicit or encourage any inquiries, proposals or offers
with respect to (i) the acquisition or sale of any units of capital stock or any
other voting securities or debt securities of the Company, or any interests
therein, (ii) the acquisition or sale of all or a material portion of the assets
and properties of the Company, or interests therein, (iii) the merger,
consolidation or combination of the Company, (iv) the refinancing of the
Company, (v) the liquidation, dissolution or reorganization of the Company, or
(vi) any other material transaction with the consummation of which would or
could reasonably be expected to materially interfere with, prevent or materially
delay the consummation of the Acquisition (each a "Potential Transaction"), (B)
provide information to any other party, or review information of any other
party, in connection with a Potential Transaction or (C) enter into any
contract, agreement or arrangement with any party, concerning or relating to a
Potential Transaction (each of the foregoing, a "Prohibited Activity"). The
Company agrees that if it or the Company Representatives engage in any
Prohibited Activity during the Exclusivity Period, then the Company shall
reimburse Sun Capital on demand for all of its out-of-pocket expenses (including
all fees and expenses of counsel, accountants, investment bankers, financing
sources, experts and consultants) incurred by or on behalf of Sun Capital in
connection with or related to the Acquisition, up to a maximum of $5 million in
the aggregate.
The Company hereby agrees that until the expiration of the Exclusivity Period,
the Company shall and shall cause each of the Company Representatives to afford
to Sun Capital and its attorneys, consultants, accountants, lenders, investors,
strategic partners, advisors and authorized representatives full access, upon
reasonable notice during normal business hours and at other reasonable times, to
all properties, book, contracts, commitments, records, personnel, lenders and
advisors of the Company in order to permit Sun Capital to conduct confirmatory
due diligence investigation of the Company. Such investigation shall include,
among other things, the receipt of relevant financial information, the review of
any relevant contractual obligations of the Company and the conduct of
discussions with the Company's management, employees and customers.
ACKNOWLEDGED AND AGREED TO:
▇▇▇▇▇ SUPERMARKETS, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman of the Board and Chief Executive Officer
Date: April 20, 2006