Zones CEO reduces going-private offer to $7 per share; special meeting to be adjourned

By Lisa Kerner

Charlotte, N.C., Nov. 10 - Zones, Inc.'s special committee and its chairman, chief executive officer and majority shareholder, Firoz H. Lalji, announced a preliminary understanding to amend Lalji's offer to take the company private to $7.00 per share in cash from $8.65.

Lalji believes the surviving corporation may not remain within the lender's financial covenants if it borrows the previously contemplated amount of debt financing required for the deal at the $8.65-per-share price.

The reduced offer price also reflects changed economic conditions, a Zones news release said.

Zones' updated 2009 financial projections assume an 11.1% decline in sales compared to projected 2008 sales.

Financial projections disclosed in Zones' proxy statement for the going-private transaction used a sales growth rate assumption of between 9% and 11% per year for the next several years, the release said.

The growth rate was based on economic and industry conditions in July of 2008.

As a result of the change, Zones said it now plans to convene and then immediately adjourn its special meeting of shareholders on Nov. 19. A new meeting date will be set for December.

Zones is a single-source direct marketing reseller of name-brand information technology products. The company is located in Auburn, Wash.

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