EXHIBIT (a)(5)
[KASH N' XXXXX FOOD STORES, INC. LETTERHEAD]
November 15, 1996
Dear Fellow Stockholder:
I am pleased to inform you that on October 31, 1996, Kash n' Xxxxx Food
Stores, Inc. ("Kash n' Xxxxx") entered into an Agreement and Plan of Merger (the
"Merger Agreement") with Food Lion, Inc. ("Food Lion") and its wholly-owned
subsidiary, KK Acquisition Corp. ("Purchaser"), pursuant to which Purchaser is
commencing a cash tender offer (the "Offer") to purchase all of the issued and
outstanding shares of Common Stock of Kash n' Xxxxx, including the associated
preferred stock purchase rights, at a purchase price of $26.00 per share in
cash. Following the successful completion of the Offer, in accordance with the
terms of the Merger Agreement, Purchaser will merge with and into Kash n' Xxxxx
(the "Merger") and Kash n' Xxxxx will continue as the surviving corporation
wholly owned by Food Lion. Each share of Kash n' Xxxxx Common Stock not
purchased in the Offer will be converted in the Merger into the right to receive
$26.00 per share (or any greater amount paid in the Offer) in cash, without
interest. Concurrent with the execution of the Merger Agreement, Kash n' Xxxxx
stockholders owning in the aggregate approximately 67% of the shares outstanding
entered into a Stockholders Agreement with Kash n' Xxxxx, Food Lion and
Purchaser pursuant to which they have agreed to tender their shares in the
Offer.
YOUR BOARD OF DIRECTORS HAS DETERMINED THAT THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER, TAKEN
TOGETHER, ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF KASH N'
XXXXX, AND RECOMMENDS THAT ALL STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR
SHARES PURSUANT TO THE OFFER.
In arriving at its recommendation, the Board of Directors gave careful
consideration to a number of factors which are described in the enclosed
Schedule 14D-9, including, among other things, the opinion of PaineWebber
Incorporated to the effect that the $26.00 per share cash consideration to be
received by Kash n' Xxxxx stockholders pursuant to the Offer and the Merger is
fair, from a financial point of view, to such stockholders.
In addition to the attached Schedule 14D-9 relating to the Offer, enclosed
is the Offer to Purchase, dated November 15, 1996, of Purchaser, together with
related materials, including a Letter of Transmittal, to be used for tendering
your shares of Common Stock. These documents set forth the terms and conditions
of the Offer and the Merger and provide instructions as to how to tender your
shares. I urge you to read the enclosed materials carefully.
On behalf of your Board of Directors, I thank you for your continued
support.
Sincerely yours,
Xxxxxx X. Xxxxxxx
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
