Exhibit
(a)(2)
YOUR
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU
REJECT LITEX’S OFFER AND NOT TENDER YOUR SHARES
REJECT LITEX’S OFFER AND NOT TENDER YOUR SHARES
Dear Fellow Stockholder:
On March 2, 2010, Litex Acquisition #1, a wholly-owned
subsidiary of Litex Industries, Limited, commenced an
unsolicited, conditional tender offer to acquire your Craftmade
shares for $5.25 each.
After careful consideration, including a thorough review of
Litex’s Offer with our financial and legal advisors,
Craftmade’s Board of Directors unanimously determined that
Litex’s Offer is not in the best interests of
Craftmade’s stockholders.
Your Board Strongly Recommends that all Craftmade
Stockholders Reject Litex’s Offer and Not Tender their
Shares.
In reaching its recommendation, your Board considered, among
other things, that:
I) Litex’s Offer significantly undervalues
Craftmade. Litex’s Offer does not reflect the
underlying value of Craftmade’s assets, operations and
strategic plan, including its industry-leading position and
future growth prospects. Craftmade believes that the price
offered by Litex does not place value on its furniture business
recently acquired from Woodard. Since its founding, Craftmade
has delivered superior results for its stockholders and, by
virtue of its industry position, strategic direction,
management, and culture, Craftmade is poised to continue to
provide superior results for its stockholders. Craftmade’s
Board is confident that Craftmade will, consistent with its
history, deliver greater value to its stockholders by executing
its strategic plan than would be obtained under Litex’s
Offer.
II) The timing of Litex’s Offer is extremely
opportunistic. Litex is trying to obtain the future
value of Craftmade at a bargain price. Craftmade has positioned
itself to realize significant benefits as the economy emerges
from the recession, which makes the timing of Litex’s Offer
the wrong time to sell. Despite the challenges faced by the
housing industry the last few years, the Company has continued
to introduce innovative and distinctive products that reflect
emerging consumer trends.
III) Craftmade has received an inadequacy opinion
from its financial advisor. B. Riley & Co.,
LLC rendered an opinion to Craftmade’s Board that the
consideration proposed to be paid to the holders of
Craftmade’s shares (other than Litex or its affiliates)
pursuant to Litex’s Offer was inadequate from a financial
point of view to such holders.
IV) The Consummation of Litex’s Offer and the
proposed merger is illusory and highly uncertain. The
amount that Litex discloses it has to complete the Offer and pay
off the Company’s indebtedness is $7 million short
based on the amount of debt Litex estimated the Company has.
This shortfall is actually closer to $19 million because
the Company’s debt has increased since year-end to fund
ordinary course seasonal increases in working capital. In
addition, the numerous conditions of Litex’s Offer, many of
which may be asserted by Litex in its sole discretion, create
significant uncertainty and risk as to whether Litex’s
Offer can be completed and the timing for completion.
Your Board of Directors and management team will continue to
act in the best interest of Craftmade and its stockholders.
Your Board of Directors and management team take their fiduciary
responsibilities to you, our stockholders, extremely seriously.
We are committed to creating value for all of our stockholders,
and remain open to appropriate opportunities that will achieve
that result. The enclosed
Schedule 14D-9
contains a detailed description of the reasons for your Board of
Directors’ recommendation and the factors considered by the
Board. We urge you to read the
Schedule 14D-9
so you will be fully informed before you make your decision. If
you have any questions or need assistance, please contact