EATONTOWN, N.J., Sept. 1 /PRNewswire-FirstCall/ -- Osteotech, Inc.
(Nasdaq: OSTE) today released a letter by Richard W. Bauer, its Chief
Executive Officer, sent on August 30, 2005 to Bruce Stroever, President and
CEO of The Musculoskeletal Transplant Foundation (MTF). In the letter, Mr.
Bauer reiterated Osteotech's Board of Directors rejection of MTF's unsolicited
indication of interest as "inadequate and not in the best interests of
shareholders", pointing out Osteotech's firmly held view that " ... the value
of the Osteotech franchise, including the growth initiatives that we are
pursuing, far exceeds the value implied by MTF's initial indication of
interest at $6.25 per share."
Mr. Bauer also criticized MTF for its refusal to accept Osteotech's
repeated offers to meet to review Osteotech's strategic plan and growth
initiatives, and its unwillingness to consider more appropriate valuation
levels or negotiate in good faith, stating in the letter, "We believe such a
meeting would have enabled MTF to better evaluate and appreciate the many
attractive growth opportunities that Osteotech is pursuing and allow MTF to
better understand the value of the Osteotech franchise ... "
Finally, Mr. Bauer pointed out the inaccuracy of MTF's public statements
suggesting that Osteotech was unwilling to negotiate with MTF. He
characterized MTF's misleading suggestions as " ... solely a tactic to try to
wrest control of the Company from our existing shareholders at a price that is
significantly below Osteotech's true value ... "
The full text of Mr. Bauer's letter to Mr. Stroever is attached.
Certain statements made throughout this press release that are not
historical facts contain forward-looking statements (as such are defined in
the Private Securities Litigation Reform Act of 1995) regarding the Company's
future plans, objectives and expected performance. Any such forward-looking
statements are based on assumptions that the Company believes are reasonable,
but are subject to a wide range of risks and uncertainties and, therefore,
there can be no assurance that actual results may not differ materially from
those expressed or implied by such forward-looking statements. Factors that
could cause actual results to differ materially include, but are not limited
to, differences in anticipated and actual product and service introduction
dates, the ultimate success of those products in the market place, the
continued acceptance and growth of current products and services, the impact
of competitive products and services, the availability of sufficient
quantities of suitable donated tissue and the success of cost control and
margin improvement efforts. Certain of these factors are detailed from time to
time in the Company's periodic reports (including the Annual Report on Form
10-K for the year ended December 31, 2004 and the Form 10-Q for each of the
first two quarters of 2005) filed with the Securities and Exchange Commission.
All information in this press release is as of September 1, 2005 and the
Company undertakes no duty to update this information.
Osteotech, Inc., headquartered in Eatontown, New Jersey, is a leading
provider of human bone and bone connective tissue for transplantation and an
innovator in the development and marketing of biomaterial and implant products
for musculoskeletal surgery. For further information regarding Osteotech or
this press release, please go to Osteotech's website homepage at
http://www.osteotech.com and to Osteotech's Financial Information Request Form
website page at http://www.osteotech.com/finrequest.htm.
The following letter is from Richard W. Bauer to Bruce Stroever:
August 30, 2005
Mr. Bruce Stroever
President & CEO
Musculoskeletal Transplant Foundation
125 May Street
Edison, New Jersey 08837
Dear Bruce:
This letter is in response to your letter dated August 29, 2005.
As I indicated to you in our telephone conversation on August 23, 2005,
Osteotech's Board of Directors gave MTF's non-binding indication of
interest in acquiring Osteotech careful consideration at the Board of
Directors meeting that was held on August 18, 2005. As you know,
following a review of the Company's strategic and financial plans, the
Board concluded that MTF's proposal to acquire the Company at $6.25 per
share was inadequate and not in the best interests of Osteotech's
shareholders. As you also know, the Osteotech Board of Directors met
again on August 28, 2005 to further review and discuss MTF's proposal.
We are disappointed that MTF has refused our offers made on August 23rd
and August 26th to meet with MTF to review our strategic plan and growth
initiatives. We believe such a meeting would have enabled MTF to better
evaluate and appreciate the many attractive growth opportunities that
Osteotech is pursuing and allow MTF to better understand the value of the
Osteotech franchise that our management team and Board believe in so
firmly. We believe the value of our current franchise, including the
growth initiatives we are pursuing, far exceed the value implied by MTF's
indication of interest at $6.25 per share. In addition, we do not believe
that MTF's current proposal reflects any of the value to be derived by MTF
from an acquisition of Osteotech. Specifically, MTF's proposal does not
reflect any of the substantial synergies and cost savings that MTF expects
to realize from such a combination, as MTF outlined them to us in MTF's
June 30, 2005 letter to the Osteotech Board and in our meeting on July 21,
2005.
As you know, Osteotech and its Board of Directors have been responsive to
your expressions of interest in pursuing a transaction. We requested a
meeting with MTF, which was held on July 21, 2005, so that MTF could
provide us with an overview of MTF's proposal, including MTF's plans and
strategy for the combined company, MTF's views on its ability to
consummate a transaction as a not for profit charitable entity, MTF's
views on its ability to finance a transaction and preliminary plans for a
financing structure (which we understand from you is not yet in place) and
MTF's views of the substantial synergies that could be derived from a
combination of our businesses. At that same meeting, we outlined a
process for Osteotech's Board to consider MTF's proposal that MTF
indicated it understood and agreed to. It is troublesome and misleading,
therefore, to have MTF's public release of its proposal suggest to our
shareholders that Osteotech has been unresponsive and unwilling to
negotiate with MTF.
Given the openness of Osteotech's dialogue to date, and the fact that MTF
declined our recent offer to meet, I can only assume that MTF's strategy
of portraying Osteotech as being unresponsive is solely a tactic to try to
wrest control of the Company from our existing shareholders at a price
that is significantly below Osteotech's true value and substantially below
the value to be derived by MTF through the combination of our businesses.
Sincerely,
Richard W. Bauer
SOURCE Osteotech, Inc.
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Related links:
http://www.osteotech.com
Company News On-Call:
http://www.prnewswire.com/comp/668050.html
CONTACT:
Michael J. Jeffries, Osteotech,
+1-732-542-2800, or Richard J. Wolff, The Global Consulting
Group, +1-646-284-9400, for Osteotech
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