DenAmerica Signs Letter of Intent to Merge With Tech Electro Industries.LOS ANGELES Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. and SCOTTSDALE, Ariz.--(BUSINESS WIRE)--May 1, 1998-- DenAmerica Corp. (AMEX AMEX See: American Stock Exchange : DEN), the owner and franchisor of the Black-eyed Pea restaurant chain and a leading franchisee of Denny's restaurants, today announced that the Company's Board of Directors has approved, through a letter of intent, a cash and stock merger with Tech Electro Industries, Inc. (Nasdaq: TELE). It is Tech Electro's intent to retain DenAmerica management to run the restaurant operations following the merger, which is expected to close before year-end. Under the terms of the agreement, DenAmerica shareholders will receive $4.00 in cash and $0.90 in newly-issued preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. in Tech Electro. Tech Electro will issue approximately $12 million of preferred stock to DenAmerica shareholders, which will have a 9% cash dividend, payable quarterly. In addition, if certain financial performance objectives are achieved by DenAmerica, the purchase price may be increased by up to $0.10 per common share. The proposed merger is subject to customary conditions to closing, including normal due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. , a shareholder vote by DenAmerica and Tech Electro shareholders and a fairness opinion Fairness Opinion A report put together by qualified analysts or advisors providing to key decision makers an evaluation of and facts about a merger or acquisition. Notes: A fairness opinion serves as a document used for guidance in a merger, takeover, or acquisition. . This transaction is also subject to various contingencies including financing, regulatory approvals and other matters. Both parties have agreed that although DenAmerica's Board of Directors believes the proposed merger consideration is fair, DenAmerica retains a fiduciary responsibility to consider any other bona fide [Latin, In good faith.] Honest; genuine; actual; authentic; acting without the intention of defrauding. A bona fide purchaser is one who purchases property for a valuable consideration that is inducement for entering into a contract and without suspicion of being offers for the Company. In the event that a substantially better (more) offer is presented, DenAmerica's Board will determine, at its sole discretion, in which direction the Company will proceed. Under the terms of the letter of intent, in the event that DenAmerica proceeds with another transaction, Tech Electro would receive a break-up fee. Tech Electro Industries Executive Vice President, Steven Scott, commented, "The DenAmerica acquisition follows our strategy of increasing shareholder value through accretive acquisitions Accretive Acquisition An acquisition that will increase the acquiring company's EPS. Notes: As they are expected to increase the acquiring company's future earnings, these acquisitions tend to be favorable for the company's market price. . We are pleased that the talented DenAmerica senior management team will continue to operate the Black-eyed Pea and Denny's restaurant operations." Jack M. Lloyd, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of DenAmerica, said, "The DenAmerica Board of Directors believes that the proposed merger, as structured with cash and ongoing participation through the preferred issue, reflects DenAmerica's present and long-term value. We have always focused on increasing shareholder value, and I think that this transaction accomplishes that goal. I am confident that our management team will continue to grow the business to the benefit of the common and preferred stockholders." Tech Electro Industries is a publicly-held company with operating subsidiaries in the computer industry. The Company's shares are traded on the Nasdaq Small Cap Market under the symbol TELE. DenAmerica Corp. operates full-service, family-oriented and casual dining restaurants, based primarily on DenAmerica's own Black-eyed Pea restaurant concept and the Denny's brand. The Company operates 104 Black-eyed Pea restaurants, franchises or licenses another three and operates 102 franchised Denny's units. -0- Except for the historical information in this press release, this press release includes forward-looking statements that involve risks and uncertainties, including, but not limited to, competitive pressures from within the restaurant industry, changes in the prices of food and beverages F&B is a common abbreviation in the United States and Commonwealth countries, including Hong Kong. F&B is typically the widely accepted abbreviation for "Food and Beverage," which is the sector/industry that specializes in the conceptualization, the making of, and delivery of foods. , quarterly fluctuations in results, the management of growth and other risks detailed from time to time in the Company's Securities and Exchange Commission filings. Actual results may differ materially from management expectations. CONTACT: DenAmerica Corp., Scottsdale Todd S. Brown, 602/483-7055 or Tech Electro Industries, Inc., Los Angeles David Kaye David V. Hope (born 14 October 1964), known professionaly as David Kaye, is a Canadian actor who is better known and revered for his work as a voice actor. Career , 310/396-1782 or Jaffoni & Collins Incorporated, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Robert L. Rinderman/Joseph N. Jaffoni, 212/835-8500 e-mail: rinderman@jcir.com |
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