EXHIBIT 99.3
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P R E S S R E L E A S E
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FAB INDUSTRIES, INC.
000 XXXXXXX XXXXXX * XXX XXXX, N.Y. 10016 * (000) 000-0000 * FAX (000) 000-0000
FOR IMMEDIATE RELEASE: FAB INDUSTRIES, INC.
000 XXXXXXX XXXXXX
XXX XXXX, X.X. 10016
FAB INDUSTRIES, INC. (ASE)
EXECUTES A DEFINITIVE AGREEMENT FOR THE SALE, ON A GOING CONCERN BASIS, OF ALL
OF ITS ASSETS AND THE ASSUMPTION OF ALL OF ITS LIABILITIES TO SSJJJ
MANUFACTURING, LLC FOR $3.15 PER SHARE.
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NEW YORK, N.Y. - May 27, 2005 - Fab Industries, Inc. (the "Company"), a
manufacturer of knitted textile fabrics, laces, related finished home products
and laminated fabrics, today announced that it entered into a definitive
agreement for the "as is, where is" sale, on a going concern basis, of all of
its assets and the assumption of all of its liabilities to SSJJJ Manufacturing,
LLC, an acquisition vehicle owned by several members of the Company's
management, including Xxxxxx Xxxxx, the Company's President and Chief Operating
Officer ("SSJJJ"), at a cash price of $3.15 per share, for an aggregate
consideration of $16,427,347. The purchase price will be paid at the closing of
the transaction by having the Company retain an amount of cash equal to
$16,427,347, with any cash shortfall from such amount to be paid by SSJJJ.
A Special Committee (the "Special Committee") of the Company's Board of
Directors (the "Board of Directors"), comprised solely of independent directors,
evaluated and negotiated two offers-one made by SSJJJ and the other made by a
third party group comprised of shareholders of the Company holding approximately
ten percent (10%) of the Company's common stock. After considering a liquidation
scenario in lieu of the offers, upon consultation with its financial advisor,
the Special Committee unanimously recommended SSJJJ's offer to the Board of
Directors. The Board of Directors subsequently approved SSJJJ's offer. The
definitive agreement for the sale contains a fiduciary out provision, except
that the members of the third party shareholder group who submitted an offer
will not be permitted to submit another offer for the Company.
The closing on the asset sale is subject to the Company reaching a
final settlement of its previously disclosed shareholder litigation. The Company
and the plaintiffs have entered into a Memorandum of Understanding with respect
to the settlement of the shareholder litigation. Pursuant to the Memorandum of
Understanding, the settlement of the litigation is subject to the plaintiffs'
review of the integrity of the sale process and the final approval by the court.
The Memorandum of Understanding contemplates that the Company and the plaintiffs
will file settlement documents with the court in the next several days.
Under the Company's Plan of Liquidation and Dissolution (the "Plan")
that was adopted by the Company's stockholders on May 30, 2002, the Company is
required to transfer its assets and liabilities to a liquidating trust for the
benefit of the Company's stockholders on May 30, 2005 if the Company's business
has not been sold by such date. The Plan further provides that, upon the
transfer of the Company's assets and liabilities to the trust, the Company's
stock transfer books will close and its common stock will be delisted from
trading on the AMEX. Since May 30, 2005 is not a business day, the transfer to
the trust and the delisting of the Company's common stock from AMEX will occur
following the close of business on Friday, May 27, 2005. Consequently, Friday,
May 27, 2005, will be the last day the Company's common stock will trade on the
AMEX. The Company will file its certificate of dissolution, effective as of the
close of business on Friday, May, 27, 2005, at which time all of the Company
assets, including the definitive agreement for the sale of the business, and all
of the Company's liabilities will be transferred to the Fab Industries Trust.
Thereafter, certificates representing shares of Company common stock will not be
2
assignable or transferable, except by will, intestate succession or by operation
of law and the proportionate interests of all of the Company's stockholders in
the trust will be fixed on the basis of their respective stock holdings at the
close of business on Friday, May 27, 2005. After such date, any distributions
made by the trust will be made solely to the stockholders of record of the
Company at the close of business on May 27, 2005, except as may be necessary to
reflect subsequent transfers by will, intestate succession or by operation of
law. The interests in the trust will not be transferable, except transfers by
will, intestate succession or by operation of law. The trustee of the trust will
be Xx. Xxxxxx Xxxxxxxx, the Company's Chairman and Chief Executive Officer and
the trust will have a three year duration.
Except for historical information, the matters discussed in this press
release are forward-looking statements that are subject to certain risks and
uncertainties that could cause the actual results to differ materially,
including, but not limited to, the following: the actual amount of the aggregate
liquidating distribution(s) made to the stockholders; whether the sale of the
Company's business as a going concern will be consummated; overall economic and
business conditions; our continuing ability to support the demand for our goods
and services; competitive factors in the industries in which we compete; changes
in government regulation; changes in tax requirements (including tax rate
changes, new tax laws and revised tax interpretations); interest rate
fluctuations and other capital market conditions, including foreign currency
rate fluctuations; material contingencies provided for in a sale of our assets;
de-listing of our common stock from the American Stock Exchange; our ability to
retain key employees pending the consummation of a sale; and any litigation
arising as a result of our plan to wind down our operations or sell the
Company's business. Additional risks are discussed in the Company's filings with
the Securities and Exchange Commission, including the Company's annual report on
form 10-K for the year ended November 27, 2004. These risks and uncertainties
should be considered in evaluating any forward-looking statements contained in
this press release.
WEBSITE: XXXX://XXX.XXX-XXXXXXXXXX.XXX
CONTACT INFORMATION:
Xxxxx Xxxxxx Xxxxx X. Xxxxx
Vice President - Chief Financial Officer Partner
Fab Industries, Inc. Xxxx, Xxxxx, Xxxxxxx, Xxxxxxx &Garrison LLP
(000) 000-0000 (000) 000-0000
xxxxx.xxxxxx@xxx-xxxxxxxxxx.xxx xxxxxx@xxxxxxxxx.xxx
