of a transaction by December 15, 2017. The Board again considered the potential risks associated with a protracted process involving Party B and Hershey, including the potential disruptions
to the Companys business and impact on the Companys employees and managements focus on executing its business plan, particularly in light of the strategic process the Board concluded in April 2017 and the Companys financial
performance to date in 2017.
Following this discussion, the Board discussed how best to encourage the parties to improve their respective
purchase prices and other terms. Because Hersheys and Party Bs proposals were within close range of each other, the Board determined to advance both parties to the next phase of the strategic process, to provide each party with
additional due diligence access and a draft merger agreement with respect to which the parties would be requested to provide comments, and to encourage them to increase their respective purchase prices in view of the competitive nature of the
process. The Board directed management, working with Jefferies, to structure the next phase of the process to target a potential conclusion on or about December 15, 2017, which the Board concluded was a realistic deadline for both Hershey and
Party B to complete their due diligence and negotiate and execute definitive agreements.
At the meeting, the Board also determined that
the Company should deny Hersheys request for exclusivity and instructed Jefferies to convey that message to Hershey. At the meeting, the Board also determined to reengage Potter Anderson to serve as special Delaware counsel to the independent
directors.
On November 20, 2017, Mr. Ennis spoke with Ms. Buck, and generally discussed the status of discussions between
the parties and their respective representatives. During the call, Mr. Ennis indicated that the Board was not willing to accept Hersheys request for an exclusivity period based on Hersheys November 15 proposal.
On November 22, 2017, bid process letters were sent to Party B and Hershey which, at the direction of the Board, set a second round bid
deadline of December 12, 2017, and requested marked drafts of the Companys proposed form of merger agreement by December 8, 2017.
On November 25, 2017, Hershey and Party B were provided access to an online data room containing nonpublic information regarding the
Company.
On November 27, 2017, Hershey and Party B were provided a draft merger agreement on behalf of the Company. The draft merger
agreement contemplated, among other things, an
all-cash
tender offer structure and a Company termination fee equal to 2% of the aggregate equity value of the transaction if the merger agreement was terminated
under certain circumstances.
On November 29, 2017, representatives of Party B informed representatives of Jefferies that Party
Bs board of directors would meet to discuss its final proposal on December 14, 2017, and, as a result, Party B would be unable to present a revised board-approved proposal by the December 12, 2017 deadline, but that it would endeavor
to provide information regarding the terms of its expected revised proposal, including price, on or prior to December 14, 2017.
On
December 1, 2017, the Board held a meeting to receive an update on the strategic process, among other matters. Members of Company management and representatives of Goodwin, Potter Anderson and Jefferies were present. Jefferies updated the Board
on the strategic process since the previous Board meeting, including the status of discussions with Party B and Hershey, their due diligence efforts and stated level of interest in a strategic transaction with the Company. Jefferies also reviewed
the timetable for the bidders to submit their final bids and
mark-ups
of the merger agreement, noting that Party B indicated it would not be able to submit its formal written revised proposal by the
December 12, 2017 deadline in view of its board meeting scheduled for December 14, 2017, but that it would endeavor to provide information regarding the terms of its expected revised proposal, including price, on or prior to
December 14, 2017.
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