No need to get emotional. After all, your analysis may be more accurate than mine. The whole point of looking at all sides of any story is to make wise choices. You can't do that if don't step back from the buzz and look at the facts with a critical mind. For those who respect the process, the Sheldahl-Molex partnership serves as yet another piece of evidence. Will Molex do the same with Lumenon? There's no way to know. All we can do is look at their history and see the similarities.
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Segments of SEC filings:
* Molex increases control:
sec.gov
On July 30, 1998, we amended Section 1(a) of the Rights Agreement to provide that when applied to Molex Incorporated and any of its affiliated parties the 15% threshold for beneficial ownership shall be 22%. We increased this threshold with respect to Molex in connection with Molex's investment in our Series D Preferred Stock private placement of July 1998 which otherwise would have resulted in Molex triggering provisions of the Rights Agreement. The Rights Agreement remains in effect through June 2006 and could discourage tender offers or other transactions which could result in our shareholders receiving a premium over the market price of common stock. . . .
* Sheldahl announces production problems:
Through February 26, 1999, we have invested approximately $66 million in an advanced new production facility in Longmont, Colorado to produce ViaArray and ViaThin products in commercial volumes. As of November 1995, we anticipated
investing approximately $38 million in the Longmont Facility. Changes in the product characteristics of high density substrates relating to precious metal plating, solder mask overcoat and testing, plus the installation of assembly equipment not originally anticipated, significantly increased the original investment to bring the Longmont Facility on line. Recent purchases of land and equipment needed to increase originally anticipated capacity also contributed to the total investment in the Longmont Facility. We originally expected to commence production in our Longmont facility in April 1996. However, due to its own financial difficulties, one of our suppliers, Micro Plating Systems, Inc., delivered certain production equipment much later than initially scheduled and subsequently exceeded our anticipated installation period. In order to improve the design and delivery of future key production equipment, we have identified additional equipment suppliers. In addition to equipment problems, a more rigorous and lengthy process qualification and product acceptance by our customers as well as our customer's customers further delayed the facility's
realization of full volume production. As of the date hereof, however, Texas Instruments and Vitesse Semiconductor have qualified ViaThin substrates for their operations. We have begun shipping small volume production orders to these customers, and we expect that their initial orders will lead to larger orders from these and other customers as demonstrated by new designs and prototype orders currently in process from these and other customers. As of February 26, 1999, the Longmont Facility is operating at less than 10% of stated production capacity with projected breakeven at 45% of factory utilization or some $24 million to $26 million of annual revenue of ViaThin and ViaArray products. Breakeven volume at Longmont is not expected until the first quarter of fiscal 2000 at the earliest, and the fourth quarter of fiscal 2000 at the latest.
* Molex considers acquiring Sheldahl:
sec.gov
Molex and the Company have commenced and are currently engaged indiscussions regarding a potential acquisition of the Company by Molex wherebyMolex would pay $7.75 per share of Common Stock in cash for all outstandingequity interests in the Company not currently owned by Molex. Molex and theCompany have not reached an agreement in principle, no definitive agreement hasbeen entered into, and no assurances are given as to whether an agreement willbe signed or a transaction consummated. However, Molex and the Company haveentered into an agreement pursuant to which the Company will deal exclusivelywith Molex until March 10, 2000 with the Company responsible for Molex'sexpenses in the event the Company enters into an agreement to complete orcompletes a business combination transaction within 6 months after March 10,2000.
The proposal by Molex and its terms are subject to customary conditions,including, among others, reaching agreement on price and structure, negotiationof a definitive acquisition agreement, completion of a satisfactory duediligence investigation, absence of a
material adverse effect and regulatory andother approvals.
Molex may also purchase additional securities of the Company from time totime, which may result in acquiring control of the Company, or propose, orexercise its right of first refusal described in Item 6 of the First Amendmentto, an extraordinary business transaction involving the Company, either itself,through entities under its control and/or in concert with others, either in openmarket transactions, in privately-negotiated transactions or otherwise dependingon Molex's evaluation of the Company's business, prospects and financialcondition, the market for the stock of the Company, the terms and conditions ofthe transaction, other opportunities available to Molex, prospects for Molex'sown business, general market conditions, financial market conditions and otherfactors Molex may deem relevant to its investment decisions. Molex also may,subject to the transfer restrictions contained in the agreements discussed inItem 6 of the First Amendment, either itself, through entities under its controland/or in concert with others, dispose of some or all of its investment in theCompany depending on similar considerations. Such dispositions may be made fromtime to time in open market transactions, underwritten public offerings,privately-negotiated transactions or otherwise, on such terms and at such pricesas Molex shall determine. A purchase or sale of additional securities of theCompany by Molex may result in a change of control and/or a change in management and policies of the Company or lead to an extraordinarycorporate transaction.
* Molex changes its mind:
On March 20, 2000, Sheldahl, Inc. (the Company) announced that Molex Incorporated (Molex) had notified the Company that Molex would not make aproposal to enter into an agreement to acquire the remaining equity interestsof the Company not currently owned by Molex. A copy of the Press Release ofthe Company dated March 20, 2000 is attached hereto as Exhibit 99.1 and isincorporated herein by reference. As part of Molex's notification to the Company, Molex waived certainrights under the Agreement Relating to Sheldahl dated November 18, 1998 (theNovember 1998 Agreement) and under the exclusivity letter with the Companydated February 17, 2000 (the Exclusivity Agreement). A copy of Molex'sletter to the Company dated March 17, 2000 is attached hereto as Exhibit 99.2and is incorporated herein by reference. The November 1998 Agreement provides Molex with certain rights inconnection with (i) third party proposals to acquire substantially all of the assets of the Company or (ii) transactions in which a person becomes the beneficial owner of a majority of the common stock or voting power of theCompany or in which the shareholders of the Company before the transaction cease to own a majority of the common stock and voting power of the Companyafter the transaction. Certain of these rights are modified in situationswhere the Company desires to solicit interests for a transaction. In suchinstance, the Company shall advise Molex of the terms and conditions uponwhich it is willing to consummate a transaction. If Molex and the Company donot proceed with such a transaction, the Company is free to solicit thirdparty interests on terms no more favorable to the third party than thoseproposed to Molex, provided the Company gives Molex five business days'noticeprior to acceptance by the Company of such third party acquisitionproposal. The Company has provided Molex with the required notice and thegeneral terms of such a transaction. Although Molex has notified the Companythat it will not proceed to consummate a transaction with the Company, underthe terms of the November 1998 Agreement, the Company is still required toprovide five days' notice before the Company accepts an offer from a thirdparty meeting the requirements of the November 1998 Agreement. In its March17, 2000 letter, Molex has agreed to waive any such required notice until5:00 p.m., Central Time on June 15, 2000. Under the terms of the Exclusivity Agreement, the Company agreed todeal exclusively with Molex through March 10, 2000. In addition, under theExclusivity Agreement, in the event the Company enters into an agreement orconsummates an acquisition within six months after February 17, 2000 with anyperson or entity that made a proposal after February 17, 2000 and prior toMarch 11, 2000 (provided that such proposal has a value of not less than$7.50 per share and Molex has not advised the Company that it is willing toconsummate an acquisition of the Company at less than $7.75), the Company isobligated to pay Molex a non-accountable expense reimbursement of $750,000.In its March 17, 2000 letter, Molex has agreed to waive the $750,000 payment with respect to any transaction entered into between the Company and Irwin L.Jacobs within thirty days after March 17, 2000 on terms described in Molex's March 17, 2000 letter.There can be no assurance that the Company will enter into an agreement with respect to a transaction with any party or that any such transaction will be consummated.
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