1
LOGO
December 4, 1996
To Our Shareholders:
I am pleased to inform you that Milgray Electronics, Inc. ("Milgray"),
Bell Industries, Inc. ("Bell") and ME Acquisition, Inc. ("Purchaser"), a
wholly owned subsidiary of Bell Industries, Inc., have entered into an
Agreement and Plan of Merger dated as of November 26, 1996 pursuant to which
Purchaser has commenced a cash tender offer (the "Offer") to purchase all of
the outstanding shares of Milgray common stock (the "Shares") for $14.77 per
share. Under the Merger Agreement, the Offer will be followed by a merger of
Purchaser into Milgray (the "Merger") in which any remaining Shares of
Milgray common stock (other than Shares as to which appraisal rights have
been properly exercised and perfected) will be converted into the right to
receive $14.77 per share in cash, without interest.
Your Board of Directors has unanimously determined that the Offer and
the Merger are fair to and in the best interests of the Company's
shareholders, as a group, and unanimously recommends that shareholders accept
the Offer and tender their Shares pursuant to the Offer, provided that each
shareholder should consult with his or her financial or tax adviser regarding
the impact thereof on such shareholder prior to tendering his or her Shares
in the Offer or voting to approve the Merger.
In arriving at its recommendations, the Board of Directors gave careful
consideration to a number of factors described in the attached Schedule 14D-9
that is being filed today with the Securities and Exchange Commission,
including, among other things, the opinion of Mesirow Financial, Inc., the
financial adviser retained by Xxxxxxx, that the consideration to be received
by holders of Milgray common stock in the Offer and the Merger is fair to
such holders from a financial point of view.
In addition to the attached Schedule 14D-9 relating to the Offer, also
enclosed is the Offer to Purchase, dated December 4, 1996, of Purchaser,
together with related materials, including a Letter of Transmittal to be used
for tendering your Shares. These documents set forth the terms and conditions
of the Offer and the Merger and provide instructions as to how to tender your
Shares. We urge you to read the enclosed material carefully.
Sincerely,
/s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx, President
and Chief Executive Officer
