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THE XXXXXXX COMPANIES LETTERHEAD EXHIBIT 3
Dear Stockholders:
On behalf of The Xxxxxxx Companies ("Xxxxxxx"), I am pleased to inform you
that on October 7, 1999, Xxxxxxx and its wholly-owned subsidiary, Xxxxxxx Homes
entered into a definitive Purchase Agreement and Escrow Instructions (the
"Purchase Agreement") with Xxxxxxx Xxxx Homes, Inc. ("Xxxxxxx Xxxx Homes"),
Xxxxxxx Xxxx and his son Xxxxxxx X. Xxxx (collectively, the "Xxxxx"), pursuant
to which the Xxxxx have commenced a tender offer (the "Offer") to purchase up to
10,678,792 shares of Xxxxxxx'x Series A Common Stock at $0.655 per share (the
"Offer Price") in cash.
The Purchase Agreement provides for the purchase (the "Acquisition") of
substantially all of the assets of Xxxxxxx Xxxx Homes for a cash purchase price
of $48 million (subject to adjustment) and the assumption by Xxxxxxx Homes of
all or substantially all of the liabilities of Xxxxxxx Xxxx Homes (the "Purchase
Price"). The closing of the Acquisition is conditioned, among other things, upon
the approval by Xxxxxxx'x stockholders of a merger of Xxxxxxx with and into a
wholly-owned subsidiary with the subsidiary being the surviving corporation (the
"Merger"). The principal purpose of the Merger is to implement restrictions on
the transfer of Xxxxxxx'x common stock that are intended to reduce, but not
eliminate, the risk that an ownership change will occur that would limit the use
of Xxxxxxx'x substantial tax net operating loss carryforwards. The Offer is
conditioned, among other things, on the closing of the Acquisition and
stockholder approval of the Merger.
THE SPECIAL COMMITTEE OF YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED
THE PURCHASE AGREEMENT AND DETERMINED THAT THE PURCHASE AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY ARE FAIR TO AND IN THE BEST INTERESTS OF
XXXXXXX AND ITS STOCKHOLDERS AND, IN FURTHERANCE OF THE TRANSACTIONS
CONTEMPLATED IN THE PURCHASE AGREEMENT, RECOMMENDS THAT THE HOLDERS OF THE
SERIES A COMMON STOCK (OTHER THAN THE XXXXX AND THE HOLDERS OF XXXXXXX'X SERIES
B COMMON STOCK WHICH ARE PARTIES TO PRIVATE SERIES B PURCHASE AGREEMENTS WITH
XXXXXXX XXXX HOMES (THE "NON-TENDERING HOLDERS")) ACCEPT THE OFFER AND TENDER
THEIR SHARES PURSUANT TO THE OFFER, PROVIDED THAT EACH HOLDER IS ADVISED TO
CONSULT WITH HIS OR HER FINANCIAL AND TAX ADVISORS PRIOR TO TENDERING HIS, HER
OR ITS SHARES.
In arriving at its recommendation, the Special Committee gave careful
consideration to the factors described in the enclosed
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9"),
which is being filed with the Securities and Exchange Commission, including,
among other things, the opinion dated September 16, 1999 and confirmed on
October 7, 1999 of Warburg Dillon Read LLC, the Special Committee's financial
advisor, to the effect that, after giving effect to the transactions
contemplated by the Purchase Agreement, the merger consideration and the tender
offer consideration are fair to the holders of Xxxxxxx'x Series A Common Stock
(other than the Non-Tendering Holders) from a financial point of view. The
Special Committee also considered the opinion of Xxxxxxxx, Xxxxx, Xxxxxx & Xxxxx
Financial Advisors, Inc., dated as of September 16, 1999, to the effect that the
consideration to be paid by Xxxxxxx and Xxxxxxx Homes in connection with the
purchase of substantially all of the assets of Xxxxxxx Xxxx Homes was fair to
Xxxxxxx and Xxxxxxx Homes from a financial point of view.
Accompanying this letter and the Schedule 14D-9 is the Offer to Purchase
and related materials, including Letters of Transmittal to be used for tendering
your shares of Series A Common Stock. These documents describe the terms and
conditions of the Offer and provide instructions regarding how to tender your
shares of Series A Common Stock. We urge you to read the enclosed materials
carefully.
Sincerely,
/s/ XXXX X. CABLE
Xxxx X. Cable,
President and Chief Executive Officer
