EXHIBIT (a)(3)
[LOGO OF AQUA ALLIANCE]
July 16, 1999
Dear Stockholders and Warrantholders:
I am pleased to inform you that, on July 9, 1999, Aqua Alliance Inc. ("Aqua
Alliance") entered into an Agreement and Plan of Merger (the "Agreement") with
Vivendi, a societe anonyme organized under the laws of the Republic of France
and the majority beneficial shareholder in Aqua Alliance ("Vivendi") and Aqua
Acquisition Corporation (the "Purchaser"), an indirect wholly owned subsidiary
of Vivendi, which is a majority shareholder of Aqua Alliance, pursuant to
which the Purchaser has commenced a cash tender offer (the "Offer") to
purchase all of the outstanding shares of Aqua Alliance Class A Common Stock
(the "Shares") at a purchase price of $2.90 per share and all of the
outstanding Warrants to purchase the Shares issued pursuant to the Aqua
Alliance Rights Offering dated January 26, 1998 (the "Warrants") at a purchase
price of $0.40 per Warrant. Under the Agreement, the Offer will be followed by
a merger (the "Merger") in which any remaining Shares will be converted into
the right to receive $2.90 per share in cash, without interest, and any
remaining Warrants will be converted into the right to exercise each Warrant,
with an exercise price of $2.50 per Warrant, in exchange for $2.90 in cash,
without interest.
YOUR BOARD OF DIRECTORS, AFTER RECEIVING THE REPORT AND RECOMMENDATION OF A
SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS, HAS DETERMINED BY A UNANIMOUS
VOTE OF THOSE MEMBERS PRESENT THAT THE OFFER AND THE MERGER ARE FAIR TO, AND
IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND WARRANTHOLDERS,
HAS APPROVED THE OFFER AND THE MERGER, AND UNANIMOUSLY RECOMMENDS THAT ALL
HOLDERS WHO WISH TO RECEIVE CASH TENDER THEIR SHARES AND WARRANTS PURSUANT TO
THE OFFER.
In arriving at their decisions, a Special Committee of the Board of
Directors and the Board of Directors of Aqua Alliance 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. Among
other things, the Special Committee retained The Beacon Group Capital
Services, LLC ("Beacon") to act as financial advisor to the Company. The
Special Committee and the Board of Directors of Aqua Alliance considered the
opinion of Beacon that the cash consideration to be received in the Offer and
the Merger is fair to the recipients other than Vivendi.
In addition to the attached Schedule 14D-9 relating to the Offer, also
enclosed is the Offer to Purchase, dated July 16, 1999, of the Purchaser,
together with related materials including a Letter of Transmittal to be used
for tendering your Shares and Warrants. These documents set forth the terms
and conditions of the Offer and the Merger and provide instructions as to how
to tender your Shares and Warrants. I urge you to read the enclosed material
carefully.
Sincerely,
/s/ XXXXXXX X. XXXXXX
_____________________
Xxxxxxx X. Xxxxxx,
President & Chief Executive Officer
