Members of the Board of Directors:
As you know, CSC Generation Holdings, Inc. (together with its affiliates, “CSC” or “we”) is a meaningful shareholder of Flexsteel Industries, Inc. (“Flexsteel” or the “Company”). We are disappointed that the Board of Directors of the Company (the “Board”) has failed to respond to our recent acquisition proposal. We continue to firmly believe that the Company’s performance would be optimized under private ownership, and are accordingly pleased to present a new proposal to acquire 100% of the outstanding shares of common stock of Flexsteel not already owned by CSC at a price equal to $20.80 per share in cash (the “Transaction”). We are submitting this new proposal to acquire the Company in order to facilitate constructive discussions with the Board, with the goal of entering into a mutually agreeable Transaction that is in the best interests of all shareholders.
CSC believes this proposal provides an attractive opportunity for shareholders to obtain immediate liquidity at a full value that exceeds what we believe the Company can be expected to achieve in the coming years if it remains on its current standalone course in the public market. For shareholders, our proposal represents approximately a 22% premium over yesterday’s closing price of $17.10.
We would be able to fully fund the Transaction using cash on hand and external financing from our existing lenders, such that the Transaction would not be contingent on obtaining financing. Given our familiarity with Flexsteel and our deep experience in the furniture products industry, we would require limited due diligence in connection with the Transaction. We are prepared to immediately commence and promptly complete this diligence.
