DALLAS, Jan. 30 /PRNewswire-FirstCall/ -- Alliance Data Systems
Corporation (NYSE: ADS), a leading provider of loyalty and marketing
solutions derived from transaction-rich data, today announced that it has
filed a lawsuit against Aladdin Solutions, Inc. (f/k/a Aladdin Holdco,
Inc.) and Aladdin Merger Sub, Inc. (together, "Blackstone"), the
acquisition entities formed by affiliates of The Blackstone Group to
acquire Alliance Data pursuant to the terms of a May 17, 2007 merger
agreement. The lawsuit, filed in the Delaware Court of Chancery, seeks
specific performance to compel Blackstone to comply with its obligations
under the merger agreement, including its covenants to use reasonable best
efforts to obtain required regulatory approvals and to consummate the
merger, and such other relief as the Chancery Court may deem just and
proper.
(Logo: http://www.newscom.com/cgi-bin/prnh/20051024/ADSLOGO )
As previously announced, after market close on Friday, January 25,
2008, Alliance Data received a notice from Blackstone pursuant to the terms
of the merger agreement stating Blackstone's belief that the condition to
closing the merger relating to obtaining approvals from the Office of the
Comptroller of the Currency (the "OCC") was not likely to be satisfied.
Blackstone's notice stated that the OCC is "demanding that extraordinary
measures be taken by ADS, Holdco and various Blackstone entities in
connection with the Change in Control Notice" that "represent operational
and financial burdens on ADS, Holdco and Blackstone that cannot be
reasonably assumed."
In subsequent communications from Blackstone's representatives to the
Company, Blackstone stated that it is unwilling to satisfy fundamental
requirements specified in the OCC letter. Blackstone also expressed its
belief that alternative solutions that would be acceptable to Blackstone
would not satisfy the OCC, and therefore that further negotiations with the
OCC would be futile.
The lawsuit asserts that Blackstone has failed to use good faith or
reasonable best efforts to negotiate or otherwise attempt to reach a
resolution and obtain required approvals from the OCC with respect to the
change of control of World Financial Network National Bank ("WFNNB"),
Alliance Data's bank subsidiary. Based on experience with similar banks,
the OCC has asked that safeguards be put into place to assure the safe
ongoing operation of WFNNB post-closing, to memorialize the obligation of
the bank's parent company to support the bank, and to establish a support
mechanism in the unlikely event that the bank's soundness were to
deteriorate and the support of the parent company were unavailable.
As detailed in its complaint, the Company believes that the OCC's
requests are reasonable and that Blackstone has the ability to satisfy them
and obtain the required approvals, but that Blackstone has chosen not to do
so as part of its apparent business decision not to complete the merger on
its terms, if at all. Notwithstanding Blackstone's selective public
comments since the date of its notice to the Company, Blackstone has
repeatedly made clear in its communications to Alliance Data that
Blackstone is unwilling to offer the OCC anything beyond what the OCC has
already indicated is insufficient and is thus unwilling to consummate the
merger. A copy of the complaint filed today in the Delaware Chancery Court
will be attached to the Company's current report on Form 8-K to be filed
with the SEC later today.
The Company's board of directors believes that the lawsuit is in the
best interests of the Company and its stockholders.
Akin Gump Strauss Hauer & Feld LLP and Delaware law firm Prickett,
Jones & Elliott, P.A. are representing Alliance Data in the litigation.
The Company's fourth-quarter and year-end 2007 earnings and 2008
outlook announcement will be made today at 3 p.m. Central/4 p.m. Eastern.
Alliance Data's management will not be taking calls or responding to
emails with regard to the transaction or otherwise at this time.
About Alliance Data
Alliance Data (NYSE: ADS) is a leading provider of marketing, loyalty
and transaction services, managing over 120 million consumer relationships
for some of North America's most recognizable companies. Using
transaction-rich data, Alliance Data creates and manages customized
solutions that change consumer behavior and that enable its clients to
create and enhance customer loyalty to build stronger, mutually beneficial
relationships with their customers. Headquartered in Dallas, Alliance Data
employs over 9,000 associates at more than 60 locations worldwide. Alliance
Data's brands include AIR MILES(R), North America's premier coalition
loyalty program, and Epsilon(R), a leading provider of multi-channel,
data-driven technologies and marketing services. For more information about
the Company, visit its website, http://www.AllianceData.com.
Alliance Data's Safe Harbor Statement/Forward-Looking Statements
This release may contain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended. Such statements may use
words such as "anticipate," "believe," "estimate," "expect," "intend,"
"predict," "project" and similar expressions as they relate to us or our
management. When we make forward-looking statements, we are basing them on
our management's beliefs and assumptions, using information currently
available to us. Although we believe that the expectations reflected in the
forward-looking statements are reasonable, these forward-looking statements
are subject to risks, uncertainties and assumptions, including those
discussed in our filings with the Securities and Exchange Commission.
If one or more of these or other risks or uncertainties materialize, or
if our underlying assumptions prove to be incorrect, actual results may
vary materially from what we projected. Any forward-looking statements
contained in this news release reflect our current views with respect to
future events and are subject to these and other risks, uncertainties and
assumptions relating to our operations, results of operations, growth
strategy and liquidity. These risks, uncertainties and assumptions include
those made with respect to and any developments related to the proposed
merger, including the risk that conditions to closing, including the
condition relating to OCC approval, may not be satisfied and that the
proposed merger may not be consummated, as well as risks and uncertainties
arising from actions that the respective parties to the merger agreement
may take in response to the developments discussed in this release and the
filing or outcome of the litigation commenced by the Company against
Blackstone. The Company cannot provide any assurance that the conditions to
closing the transactions will be satisfied or that the proposed merger will
be completed. We have no intention, and disclaim any obligation, to update
or revise any forward-looking statements, whether as a result of new
information, future results or otherwise.
"Safe Harbor" Statement under the Private Securities Litigation Reform
Act of 1995: Statements in this press release regarding Alliance Data
Systems Corporation's business which are not historical facts are
"forward-looking statements" that involve risks and uncertainties. For a
discussion of such risks and uncertainties, which could cause actual
results to differ from those contained in the forward-looking statements,
see "Risk Factors" in the company's Annual Report on Form 10-K for the most
recently ended fiscal year. Risk factors may be updated in Item 1A in each
of the Company's Quarterly Reports on Form 10-Q for each quarterly period
subsequent to the Company's most recent Form 10-K.
SOURCE Alliance Data Systems
back to top
