-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ISBq+1J/z2uhQuCQWMbTwqzLH3QkpjLTVtIySKcX4Wyj+VTglU7uyoqxu9BuWmcc UEpvVGfm8/uJyNjfiPvjGQ== 0000950109-99-002318.txt : 19990630 0000950109-99-002318.hdr.sgml : 19990630 ACCESSION NUMBER: 0000950109-99-002318 CONFORMED SUBMISSION TYPE: SC 13E4 PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 19990629 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: AMF BOWLING INC CENTRAL INDEX KEY: 0001044612 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-RACING, INCLUDING TRACK OPERATION [7948] IRS NUMBER: 133873268 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13E4 SEC ACT: SEC FILE NUMBER: 005-52055 FILM NUMBER: 99654639 BUSINESS ADDRESS: STREET 1: 8100 AMF DRIVE CITY: RICHMOND STATE: VA ZIP: 23111 BUSINESS PHONE: 8047304000 MAIL ADDRESS: STREET 1: 8100 AMF DRIVE CITY: MECHANICSVILLE STATE: VA ZIP: 23111 FORMER COMPANY: FORMER CONFORMED NAME: AMF HOLDINGS INC DATE OF NAME CHANGE: 19970818 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: AMF BOWLING INC CENTRAL INDEX KEY: 0001044612 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-RACING, INCLUDING TRACK OPERATION [7948] IRS NUMBER: 133873268 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13E4 BUSINESS ADDRESS: STREET 1: 8100 AMF DRIVE CITY: RICHMOND STATE: VA ZIP: 23111 BUSINESS PHONE: 8047304000 MAIL ADDRESS: STREET 1: 8100 AMF DRIVE CITY: MECHANICSVILLE STATE: VA ZIP: 23111 FORMER COMPANY: FORMER CONFORMED NAME: AMF HOLDINGS INC DATE OF NAME CHANGE: 19970818 SC 13E4 1 SCHEDULE 13 E 4 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------- SCHEDULE 13E-4 ISSUER TENDER OFFER STATEMENT (PURSUANT TO SECTION 13(E)(1) OF THE SECURITIES EXCHANGE ACT OF 1934) ---------------- AMF BOWLING, INC. (Name of Issuer) AMF BOWLING, INC. (Name of Person(s) Filing Statement) ZERO COUPON CONVERTIBLE DEBENTURES DUE 2018 (Title of Class of Securities) 03113VAA7 03113VAB5 (CUSIP Number of Class of Securities) Roland C. Smith President and Chief Executive Officer 8100 AMF Drive Richmond, Virginia 23111 (804) 730-4000 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Person(s) Filing Statement) Copies to: Joseph C. Carter, III, Esq. Mitchell S. Presser, Esq. McGuire, Woods, Battle & Boothe LLP Wachtell, Lipton, Rosen & Katz One James Center 51 West 52nd Street 901 East Cary Street New York, New York 10019 Richmond, Virginia 23219
June 29, 1999 (Date Tender Offer First Published, Sent or Given to Security Holders) ---------------- CALCULATION OF FILING FEE - -------------------------------------------------------------------------------
TRANSACTION VALUATION* AMOUNT OF FILING FEE $72,000,040 $14,401
- ------------------------------------------------------------------------------- * For purposes of calculating the filing fee pursuant to Rule 0-11 of the Securities Exchange Act of 1934, as amended, the market value of the Zero Coupon Convertible Debentures due 2018 proposed to be acquired was determined by the amount of cash to be paid for such debentures. [_]Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount Previously Paid: ------------ Form or Registration No.: ---------- Filing Party: ----------------------- Date Filed: ------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- INTRODUCTORY STATEMENT This Issuer Tender Offer Statement (the "Statement") is being filed with the Securities and Exchange Commission (the "Commission") by AMF Bowling, Inc., a Delaware corporation ("AMF Bowling"), in connection with an offer (the "Offer") by AMF Bowling to purchase for cash, on the terms and subject to the conditions set forth in the Offer to Purchase dated June 29, 1999 (the "Offer to Purchase") and the related Letter of Transmittal (the "Letter of Transmittal"), a minimum of $450,000,000 aggregate principal amount at maturity (40%) and up to $514,286,000 aggregate principal amount at maturity (45.7%) of its Zero Coupon Convertible Debentures due 2018 (the "Debentures"). Copies of the Offer to Purchase and the related Letter of Transmittal are filed as Exhibits (a)(1) and (a)(2) hereto. Item 1. Security and Issuer. (a) The issuer of the Debentures is AMF Bowling. The address of AMF Bowling's principal executive office is 8100 AMF Drive, Richmond, Virginia 23111. (b) The securities which are the subject of the Offer are the Debentures. As of June 28, 1999, there was $1,125,000,000 aggregate principal amount at maturity of Debentures outstanding. The Offer is for a minimum of $450,000,000 aggregate principal amount at maturity (40%) and up to $514,286,000 aggregate principal amount at maturity (45.7%) of Debentures, in denominations of $1,000 principal amount at maturity or integral multiples thereof, at a price of $140.00 per $1,000 principal amount at maturity. The information set forth in the section of the Offer to Purchase entitled "Ownership of Debentures" is incorporated herein by reference. (c) The information set forth in the section of the Offer to Purchase entitled "Market Price Information--The Debentures" is incorporated herein by reference. (d) Not applicable. Item 2. Source and Amount of Funds or Other Consideration. (a) The information set forth in the section of the Offer to Purchase entitled "Sources and Amount of Funds" is incorporated herein by reference. (b) Not applicable. Item 3. Purpose of the Tender Offer and Plans or Proposals of the Issuer or Affiliate. The information set forth in the sections of the Offer to Purchase entitled "AMF Bowling" and "Background and Purpose of the Offer" is incorporated herein by reference. (a) The information set forth in the sections of the Offer to Purchase entitled "AMF Bowling" and "Background and Purpose of the Offer" is incorporated herein by reference. (b) The information set forth in the sections of the Offer to Purchase entitled "AMF Bowling" and "Background and Purpose of the Offer" is incorporated herein by reference. (c) Not applicable. (d) The information set forth in the section of the Offer to Purchase entitled "AMF Bowling" is incorporated herein by reference. (e) The information set forth in the sections of the Offer to Purchase entitled "AMF Bowling--Recapitalization Plan," "Capitalization" and "Background and Purpose of the Offer" is incorporated herein by reference. (f) The information set forth in the sections of the Offer to Purchase entitled "AMF Bowling" and "Background and Purpose of the Offer" is incorporated herein by reference. (g) Not applicable. (h) Not applicable. (i) Not applicable. (j) Not applicable. Item 4. Interest in Securities of the Issuer. Not applicable. Item 5. Contracts, Arrangements, Understandings or Relationships with Respect to the Issuer's Securities. Not applicable. Item 6. Persons Retained, Employed or to Be Compensated. The information set forth on the cover page of the Offer to Purchase and in the sections of the Offer to Purchase entitled "Dealer Manager," "The Depositary," "Information Agent," "Fees and Expenses" and "Indemnification" is incorporated herein by reference. Item 7. Financial Information. (a) The following documents, which have been filed by AMF Bowling (File No. 001-13539) with the Commission under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are incorporated herein by reference: (1) AMF Bowling's Annual Report on Form 10-K for the fiscal year ended December 31, 1998; (2) AMF Bowling's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1999; (3) AMF Bowling's Current Reports on Form 8-K dated May 5, 1999, June 28, 1999 and June 29, 1999; (4) AMF Bowling's Information Statement on Schedule 14C dated May 5, 1999; and (5) AMF Bowling's Registration Statement on Form S-3 filed with the Commission on May 5, 1999 and Amendment No. 1 thereto filed with the Commission on June 28, 1999 (Registration Statement No. 333-77763). All documents filed with the Commission by AMF Bowling pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act on or subsequent to the date hereof shall be deemed to be incorporated by reference herein and to be a part hereof from the date any such document is filed. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes hereof to the extent that a statement contained herein (or in any other subsequently filed document that also is or is deemed to be incorporated by reference herein) modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part hereof. (b) The information set forth in the section of the Offer to Purchase entitled "Capitalization" is incorporated herein by reference. 2 Item 8. Additional Information. (a) The information set forth in the section of the Offer to Purchase entitled "Ownership of Debentures" is incorporated herein by reference. (b) There are no applicable regulatory requirements which must be complied with or approvals which must be obtained in connection with the Offer other than compliance with the Exchange Act and the rules and regulations promulgated thereunder including, without limitation, Rule 13e-4 promulgated thereunder, and the requirements of state securities or "blue sky" laws. The information set forth in the sections of the Offer to Purchase entitled "Important Information" and "Miscellaneous" is incorporated herein by reference. (c) Not applicable. (d) Not applicable. (e) Reference is hereby made to the exhibits hereto which are incorporated in their entirety herein by reference. Item 9. Material to Be Filed as Exhibits. (a) Exhibit (a)(1) Offer to Purchase, dated June 29, 1999. Exhibit (a)(2) Letter of Transmittal. Exhibit (a)(3) Notice of Guaranteed Delivery. Exhibit (a)(4) Letter to clients. Exhibit (a)(5) Letter to brokers, dealers, commercial banks, trust companies and other nominees. Exhibit (a)(6) Notice published in The Wall Street Journal on June 29, 1999. Exhibit (a)(7) Press Release dated May 5, 1999. Exhibit (a)(8) Press Release dated June 28, 1999. (b) Not applicable. (c) Not applicable. (d) Not applicable. (e) Not applicable. (f) Not applicable. 3 SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Statement is true, complete and correct. AMF BOWLING, INC. By: /s/ Roland C. Smith ---------------------------------- Name: Roland C. Smith Title: President and Chief Executive Officer Dated: June 29, 1999 4 EXHIBIT INDEX
Exhibit No. Description ------- ----------- (a)(1) Offer to Purchase, dated June 29, 1999. (a)(2) Letter of Transmittal. (a)(3) Notice of Guaranteed Delivery. (a)(4) Letter to clients. (a)(5) Letter to brokers, dealers, commercial banks, trust companies and other nominees. (a)(6) Notice published in The Wall Street Journal on June 29, 1999. (a)(7) Press Release dated May 5, 1999. (a)(8) Press Release dated June 28, 1999.
EX-99.A.1 2 OFFER TO PURCHASE Exhibit (a)(1) Offer to Purchase for Cash Up to $514,286,000 Aggregate Principal Amount at Maturity of Zero Coupon Convertible Debentures Due 2018 of AMF Bowling, Inc. at $140.00 Per $1,000 Principal Amount at Maturity - -------------------------------------------------------------------------------- SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THE OFFER TO PURCHASE, THE OFFER AND WITHDRAWAL RIGHTS AND THE PRORATION PERIOD WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON JULY 28, 1999, UNLESS THE OFFER IS EXTENDED (SUCH TIME AND DATE OR THE LATEST EXTENSION THEREOF, IF EXTENDED, THE "EXPIRATION DATE"). DEBENTURES TENDERED IN THE OFFER MAY BE WITHDRAWN AT ANY TIME BEFORE THE EXPIRATION DATE. - -------------------------------------------------------------------------------- AMF Bowling, Inc. ("AMF Bowling") hereby offers (the "Offer") to purchase upon the terms and subject to the conditions set forth in this Offer to Purchase (this "Offer to Purchase") and in the accompanying Letter of Transmittal (the "Letter of Transmittal"), a minimum of $450,000,000 aggregate principal amount at maturity (40%) and up to $514,286,000 aggregate principal amount at maturity (45.7%) of its Zero Coupon Convertible Debentures due 2018 (the "Debentures") at a cash purchase price of $140.00 per $1,000 principal amount at maturity (the "Repurchase Price"). The Debentures are designated for trading in the PortalSM Market ("PORTAL"). The closing bid quotation per $1,000 principal amount at maturity of the Debentures, as reported by Morgan Stanley & Co. Incorporated ("Morgan Stanley"), a market maker for the Debentures, on June 25, 1999 was $135.0. The Debentures are convertible into shares of common stock, par value $0.01 per share, of AMF Bowling (the "Common Stock"), at a rate of 8.6734 shares per $1,000 principal amount at maturity of Debentures, without giving effect to any adjustments to the conversion rate as a result of the Rights Offering (as hereinafter defined). The Common Stock is listed on The New York Stock Exchange, Inc. (the "NYSE") under the symbol "PIN". The reported closing price per share of Common Stock on the NYSE Composite Tape on June 25, 1999 was $6 5/16. ---------------- See "Risk Factors" and "Certain Federal Income Tax Consequences" for discussions of certain factors that should be considered by holders of Debentures in evaluating the Offer. ---------------- Unless the Offer is terminated or amended, the consummation of the Offer is conditioned, unless waived by AMF Bowling, upon (i) the closing on subscriptions obtained through exercise of the rights issued pursuant to the Rights Offering which is being conducted concurrently with the Offer with proceeds of at least $120,000,000, (ii) Debentures in an aggregate principal amount at maturity of not less than $450,000,000 (40%) being validly tendered in the Offer and not validly withdrawn (the "Minimum Tender Amount") and (iii) satisfaction of the General Conditions (as hereinafter defined). Unless the Offer is terminated, if all of the conditions to the Offer have been satisfied or waived, Holders (as hereinafter defined) whose Debentures are validly tendered by the Expiration Date and not withdrawn will receive the Repurchase Price with respect to such Debentures. The Offer and the concurrent Rights Offering are part of a recapitalization plan being undertaken by AMF Bowling and explained in greater detail in this Offer to Purchase. The funds required to purchase validly tendered Debentures and to pay fees and expenses related to the Offer are to be provided from the proceeds of the Rights Offering. AMF Bowling will accept for purchase up to $514,286,000 aggregate principal amount at maturity of the Debentures. If Debentures having an aggregate principal amount at maturity in excess of $514,286,000 are (continued on following page) The Dealer Manager for the Offer is: MORGAN STANLEY DEAN WITTER June 29, 1999 validly tendered and not withdrawn, AMF Bowling will purchase Debentures in aggregate principal amount at maturity of $514,286,000, pro rata in an amount per Holder equal to (i) a fraction the numerator of which is such Holder's total principal amount at maturity of Debentures tendered and the denominator of which is the total principal amount at maturity of all Debentures tendered, multiplied by (ii) $514,286,000 ("Pro Rata Acceptance"). Debentures may be tendered only in integral multiples of $1,000 principal amount at maturity. Affiliates of Goldman, Sachs & Co. ("Goldman Sachs") and affiliates of Kelso & Co. ("Kelso"), which own in the aggregate a majority of the Common Stock and approximately $495,950,000 principal amount at maturity of the Debentures and whose affiliates are directors of AMF Bowling, have indicated that they currently expect to tender all of their Debentures in the Offer, subject to market conditions, although they are not obligated to do so. ---------------- Any questions or requests for assistance may be directed to Morgan Stanley & Co. Incorporated, which is acting as dealer manager for the Offer (the "Dealer Manager"), at the address and telephone number set forth on the last page of this Offer to Purchase. The Dealer Manager is also acting as financial advisor to the Board of Directors (the "Board") of AMF Bowling in connection with the recapitalization plan, including the Rights Offering and the Offer. It is also advising a special committee (the "Special Committee") of the Board on matters relating to the Offer, including the pricing thereof. Requests for copies of the Offer materials should be directed to D.F. King & Co., Inc., which is acting as information agent for the Offer (the "Information Agent"), at the address and telephone number set forth on the last page of this Offer to Purchase or to a Holder's broker, dealer, commercial bank, trust company or other nominee. None of AMF Bowling, the Board, the Special Committee, the Trustee (as hereinafter defined), the Depositary (as hereinafter defined), the Dealer Manager or the Information Agent makes any recommendation as to whether or not Holders should tender any or all of their Debentures in the Offer. Each holder must make its own decision as to whether to tender Debentures pursuant to the Offer and, if so, the principal amount at maturity of Debentures to tender. 2 TABLE OF CONTENTS
Page ---- Important Information...................................................... 4 Available Information...................................................... 6 Incorporation of Certain Documents by Reference............................ 6 Disclosure Regarding Forward-looking Statements............................ 7 Summary.................................................................... 8 Risk Factors............................................................... 10 Recent Developments........................................................ 16 AMF Bowling................................................................ 17 The Debentures............................................................. 21 Market Price Information................................................... 22 Selected Historical and Pro Forma Financial Data........................... 23 Capitalization............................................................. 25 Background and Purpose of the Offer........................................ 26 The Offer.................................................................. 27 Procedures for Tendering Debentures........................................ 30 Ownership of Debentures.................................................... 34 Sources and Amount of Funds................................................ 35 Certain Federal Income Tax Consequences.................................... 35 Dealer Manager............................................................. 37 The Depositary............................................................. 38 Information Agent.......................................................... 38 Fees and Expenses.......................................................... 38 Indemnification............................................................ 38 Miscellaneous.............................................................. 38
3 Subject to applicable securities laws and the terms set forth in this Offer to Purchase, AMF Bowling reserves the right (i) to terminate the Offer, (ii) to waive any and all unsatisfied conditions to the Offer, (iii) to extend the Expiration Date or (iv) to otherwise amend the Offer in any respect. Any such waiver, termination, extension or amendment may be made by press release or such other means of announcement as AMF Bowling deems appropriate, subject to compliance with applicable laws. IMPORTANT INFORMATION This Offer to Purchase and the accompanying Letter of Transmittal contain important information which should be read before any decision is made with respect to the Offer. In order to validly tender Debentures in the Offer, a Holder must, on or before the Expiration Date, deliver to ChaseMellon Shareholder Services, L.L.C. ("the Depositary") at the address set forth on the last page of this Offer to Purchase a properly completed and duly executed Letter of Transmittal (or manually signed facsimile thereof) or an Agent's Message (as hereinafter defined), and any other documents required by the instructions to such Letter of Transmittal, together with the Debentures (or such Debentures must be transferred pursuant to the procedures for book-entry transfer described therein and a confirmation of such book-entry transfer, including an Agent's Message, must be received by the Depositary, on or before the Expiration Date). If a Holder does not deliver such documents on or before the Expiration Date, the Holder will not be eligible to receive the Repurchase Price. Only (i) those persons in whose name Debentures are registered in the registry maintained by the Trustee under the Indenture or (ii) persons, such as brokers, dealers, commercial banks, trust companies and other nominees, who are participants in the Depository Trust Company ("DTC") (or a substitute book-entry transfer facility) and whose names appear on a security listing as owners of the Debentures (collectively, the "Holders"), will be eligible to tender Debentures. Any beneficial owner whose Debentures are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender Debentures should contact promptly such registered Holder. See "Procedures for Tendering Debentures" and the accompanying Letter of Transmittal. The Depositary and DTC have confirmed that the Offer is eligible for the DTC Automated Tender Offer Program ("ATOP"). Accordingly, DTC participants may electronically transmit their acceptance of the Offer by causing DTC to transfer Debentures to the Depositary in accordance with DTC's ATOP procedures for transfer. DTC will then send an Agent's Message to the Depositary for its acceptance. The Depositary will establish an account with respect to the Debentures at DTC for purposes of the Offer, and any financial institution that is a participant in DTC's system may make book-entry delivery of the Debentures by causing DTC to transfer such Debentures into the Depositary's account at DTC in accordance with DTC's procedure for such transfer. Although tenders of Debentures may be effected through book-entry transfer at DTC, a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) with any required signature guarantees or an Agent's Message in connection with a book-entry transfer, must, in any case, be transmitted to and received by the Depositary at the address set forth on the last page of this Offer to Purchase on or before the Expiration Date or the Holder must comply with the guaranteed delivery procedures described herein. See "Procedures for Tendering Debentures." The method of delivery of Debentures and Letters of Transmittal, any required signature guarantees and all other required documents, including delivery through DTC and any acceptance of an Agent's Message transmitted through ATOP, is at the election and risk of the person tendering Debentures and delivering the Letter of Transmittal and, except as otherwise provided in the Letter of Transmittal, delivery will be deemed made only when actually received by the Depositary. If delivery is by mail, it is suggested that the Holder use properly insured, registered mail with return receipt requested, and that the mailing be made sufficiently in advance of the Expiration Date to permit delivery to the Depositary on or before the Expiration Date. Tendering Holders will not be obligated to pay any fees to the Dealer Manager, the Information Agent or the Depositary. 4 This Offer to Purchase does not constitute an offer to any person in any jurisdiction in which such offer would be unlawful, and the Offer is not made to, and tenders will not be accepted from, Holders in states in which the Offer or acceptance thereof would constitute a violation of the securities or blue sky laws of such jurisdiction. In accordance with various state securities laws applicable to the Offer which require the Offer to be made to the public by a licensed broker or dealer, the Offer is hereby made to the Holders residing in each such state by the Dealer Manager on behalf of AMF Bowling. No person has been authorized to make any recommendation on behalf of AMF Bowling as to whether the Holder should tender Debentures pursuant to the Offer. No person has been authorized to give any information or to make any representation in connection therewith, other than those contained herein or in the accompanying Letter of Transmittal. If made or given, such recommendation or any such information or representation must not be relied upon as having been authorized by AMF Bowling. Although it has no obligation to do so, AMF Bowling reserves the right in the future to seek to acquire Debentures not tendered in the Offer by means of open market purchases, privately negotiated acquisitions, subsequent exchange or tender offers, redemptions or otherwise, at prices or on terms which may be higher or lower or more or less favorable than those in the Offer. 5 AVAILABLE INFORMATION AMF Bowling is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith, files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information concerning AMF Bowling can be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the Commission's Regional Office at Seven World Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such material also can be obtained, at prescribed rates, from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission maintains a site on the Internet's World Wide Web at http://www.sec.gov. that contains reports, proxy and information statements and other information regarding registrants that have filed electronically with the Commission, including AMF Bowling. The Common Stock is listed and traded on the NYSE and such reports, proxy statements and other information concerning AMF Bowling may also be inspected at the offices of the NYSE, 20 Broad Street, New York, New York 10005. This Offer to Purchase constitutes a part of an Issuer Tender Offer Statement on Schedule 13E-4 (the "Schedule 13E-4") filed with the Commission by AMF Bowling pursuant to Section 13(e) of the Exchange Act and the rules and regulations promulgated thereunder. The Schedule 13E-4 and all exhibits thereto are incorporated in this Offer to Purchase by reference. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents, which have been filed by AMF Bowling (File No. 001- 13539) with the Commission under the Exchange Act, are incorporated herein by reference: (a) AMF Bowling's Annual Report on Form 10-K for the year ended December 31, 1998; (b) AMF Bowling's Quarterly Report on Form 10-Q for the quarter ended March 31, 1999; (c) AMF Bowling's Current Reports on Form 8-K dated May 5, 1999, June 28, 1999 and June 29, 1999; (d) AMF Bowling's Information Statement on Schedule 14C dated May 5, 1999; and (e) AMF Bowling's Registration Statement on Form S-3 filed with the Commission on May 5, 1999 and Amendment No. 1 thereto filed with the Commission on June 28, 1999 (Registration Statement No. 333-77763 (the "Registration Statement")). All documents filed with the Commission by AMF Bowling pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act on or subsequent to the date hereof and prior to the Expiration Date shall be deemed to be incorporated by reference herein and to be a part hereof from the date any such document is filed. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes hereof to the extent that a statement contained herein (or in any other subsequently filed document that also is or is deemed to be incorporated by reference herein) modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part hereof. The documents incorporated by reference herein (other than exhibits to such documents that are not specifically incorporated by reference herein) are available without charge to any person to whom this Offer to Purchase has been delivered upon written or oral request to AMF Bowling, Inc., 8100 AMF Drive, Richmond, Virginia 23111, Attention: Renee Antolik, Vice President, Investor Relations and Financial Reporting, telephone: (804) 730-4402. 6 DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS Certain matters discussed in this Offer to Purchase (and in the documents incorporated by reference) contain forward-looking statements, which are statements other than historical information or statements of current condition. The following statements are or may be forward-looking statements: statements set forth in this Offer to Purchase or statements incorporated by reference from documents filed with the Commission, including possible or assumed future results of the Company's (as hereinafter defined) operations, including but not limited to any statements contained in this Offer to Purchase or those documents concerning: (i) the manner, timing and expected results of AMF Bowling's recapitalization plan and related activities and charges, (ii) the expected success of the Company's plans to improve its bowling centers operations, including revenue enhancement and cost management programs, (iii) the ability of the Company's new management to execute its strategies, (iv) the success of the recent management reorganization of the Company's bowling centers and bowling products businesses, (v) the ability to increase the pace of the Company's bowling center acquisition program, (vi) the expected success of changes contemplated in the Company's bowling products business, (vii) the Company's expectations concerning the Asia Pacific region and the joint distribution and related arrangements with Shanghai Zhonglu Industrial Corporation ("Zhonglu"), (viii) the success of the Company's employee incentive efforts, (ix) the outcome of existing or potential litigation, (x) the timing or amount of any changes in the interest expense of the Company's indebtedness, (xi) the Company's ability to generate cash flow to service its indebtedness and meet its debt payment obligations, (xii) the amounts of capital expenditures needed to maintain or improve the Company's bowling centers, (xiii) any statements preceded by, followed by or including the words "believes," "expects," "predicts," "anticipates," "intends," "estimates," "should," "may" or similar expressions and (xiv) other statements contained or incorporated by reference in this Offer to Purchase regarding matters that are not historical facts. These forward-looking statements relate to the plans and objectives of the Company or future operations. In light of the risks and uncertainties inherent in all future projections, the inclusion of forward-looking statements in this Offer to Purchase should not be regarded as a representation by AMF Bowling or any other person that the objectives or plans of the Company will be achieved. Many factors could cause the Company's actual results to differ materially from those in the forward-looking statements, including: (i) the Company's ability, and the ability of its new management team, to carry out the Company's long-term business strategies, including increasing the pace of the Company's acquisition program, (ii) the Company's ability to integrate acquired operations into its business, (iii) the Company's ability to identify and develop new bowling markets to assist its growth, (iv) the continuation of adverse financial results and substantial competition in the Company's bowling products business, (v) the Company's ability to retain and attract experienced bowling center management, (vi) the continuation or worsening of economic difficulties in overseas markets, including the Asia Pacific region, (vii) the risk of adverse political acts or developments in the Company's existing and proposed international markets, (viii) the fluctuations in foreign currency exchange rates affecting the Company's translation of operating results, (ix) continued or increased competition, (x) the popularity of bowling, (xi) the decline in general economic conditions, (xii) the status or effectiveness of the Company's Year 2000 efforts, (xiii) adverse judgments in pending or future litigation, (xiv) the Company's ability to effectively implement the joint distribution and related arrangements with Zhonglu, (xv) changes in interest and exchange rates and (xvi) the other factors discussed under "Risk Factors." The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with other cautionary statements that are included elsewhere in this Offer to Purchase. AMF Bowling undertakes no obligation to release publicly the results of any future revisions it may make to forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. See "Risk Factors." 7 SUMMARY The following summary is qualified in its entirety by the more detailed information appearing elsewhere or incorporated by reference in this Offer to Purchase. Many of the statements in this Offer to Purchase are forward-looking in nature and, accordingly, whether they prove to be accurate is subject to many risks and uncertainties. See "Disclosure Regarding Forward-Looking Statements" and "Risk Factors." AMF Bowling AMF Bowling is a holding company, conducts all of its business through subsidiaries and has only limited management service operations of its own. Unless the context indicates otherwise, the terms the "Company" or "AMF" as used herein refer to AMF Bowling and its subsidiaries. AMF is the largest owner and operator of bowling centers in the world. On June 21, 1999, the Company owned and operated 541 bowling centers throughout the world, with 418 centers in the United States and 123 centers in 10 other countries. AMF is also a world leader in the manufacture and sale of bowling and other recreational products. AMF was acquired in 1996 (the "Acquisition") by an investor group led by an affiliate of Goldman Sachs. The original investor group currently owns approximately 73.6% of the Common Stock. Background and Purpose of the Offer The Offer is part of a comprehensive recapitalization plan designed to reduce the Company's overall debt burden, provide additional financial flexibility and allow the Company to increase the pace of its acquisition program on a selective basis. Rights Offering On or about July 7, 1999, AMF Bowling will distribute to each record holder of Common Stock, at no charge, .4698 transferable rights for each share of Common Stock owned (the "Rights Offering"), pursuant to a Prospectus (the "Prospectus") dated June 28, 1999, which forms a part of the Registration Statement. Each right issued under the Rights Offering entitles the holder to purchase one share of Common Stock at a subscription price of $5.00 per share. Each right carries with it a basic subscription privilege, an over- subscription privilege and a conditional over-subscription privilege as described in the Prospectus. The Rights Offering is part of a recapitalization plan being undertaken by AMF Bowling. Through the concurrent Rights Offering, which is part of the recapitalization plan, AMF Bowling seeks to raise up to $140 million. A portion of the net proceeds of the Rights Offering will be used to purchase validly tendered Debentures and to pay fees and expenses related to the Offer. The Offer Securities Tendered Zero Coupon Convertible Debentures due 2018. For CUSIP Nos. 03113VAA7 and 03113VAB5 Aggregate Principal $1,125,000,000 Amount at Maturity of Currently Outstanding Debentures
Expiration Date The Offer will expire at 12:00 midnight, New York City time, on July 28, 1999 (unless extended by AMF Bowling in its sole discretion or earlier terminated).
8 Repurchase Price AMF Bowling is offering to purchase, upon the terms and subject to the conditions set forth in this Offer to Purchase and the accompanying Letter of Transmittal, up to $514,286,000 aggregate principal amount at maturity (45.7%) of outstanding Debentures (the "Maximum Tender Amount") for a cash purchase price of $140.00 per $1,000 principal amount at maturity. The Debentures were issued pursuant to the terms of an indenture, dated as of May 12, 1998 (the "Indenture"), between AMF Bowling and The Bank of New York, as trustee (the "Trustee"). Acceptance of Promptly after the Expiration Date and subject to the Debentures for satisfaction or waiver of all relevant conditions, AMF Bowling Purchase; Payment will accept for purchase, and pay for, up to $514,286,000 for Debentures; Pro Rata aggregate principal amount at maturity of Debentures validly Acceptance tendered under the Offer as of the Expiration Date and not withdrawn. If Debentures having an aggregate principal amount at maturity in excess of $514,286,000 are tendered, AMF Bowling will purchase $514,286,000 aggregate principal amount at maturity, pro rata in an amount per Holder equal to (i) a fraction the numerator of which is such Holder's total principal amount at maturity of Debentures tendered and the denominator of which is the total principal amount at maturity of all Debentures tendered, multiplied by (ii) $514,286,000. Debentures may be tendered only in integral multiples of $1,000 principal amount at maturity. Withdrawal of Tenders Tenders of Debentures may be withdrawn on or before the Expiration Date. In order to be effective, withdrawals of Debentures must comply with the respective procedures therefor described under "Procedures for Tendering Debentures-- Withdrawal Rights." Tenders of any Debentures may also be withdrawn if the Offer is terminated without any such Debentures being purchased thereunder or as otherwise provided herein. In the event of any termination of the Offer, the Debentures tendered pursuant to the Offer will be returned promptly to the tendering Holder. Conditions; Minimum The Offer is being made as part of the Company's Tender Amount recapitalization plan, which includes the Rights Offering. AMF Bowling's obligation to accept for purchase, and to pay for, Debentures validly tendered pursuant to the Offer is conditioned upon (i) the closing on subscriptions obtained through exercise of the rights pursuant to the Rights Offering with proceeds of at least $120,000,000, (ii) Debentures in an aggregate principal amount at maturity of not less than $450,000,000 (40%) (the "Minimum Tender Amount") being validly tendered in the Offer and not withdrawn and (iii) satisfaction of the General Conditions. Amendment; Waiver AMF Bowling reserves the right (i) to terminate the Offer, (ii) to waive any and all unsatisfied conditions to the Offer, (iii) to extend the Expiration Date or (iv) to otherwise amend the Offer in any respect. If AMF Bowling makes a material change in the terms of the Offer or waives a material condition of the Offer, AMF Bowling will disseminate information concerning such change or waiver and will extend the Offer, in each case to the extent required by law. Any amendment applicable to the Offer will apply to all Debentures tendered pursuant to the Offer. How to Tender In order to validly tender Debentures in the Offer, a record Holder must, on or before the Expiration Date, deliver to the Depositary at the address set forth on the last page of this Offer to Purchase a properly completed and duly executed accompanying Letter of Transmittal (or manually signed facsimile thereof) or an Agent's Message, and any other documents required by the instructions in the Letter of Transmittal, together with such Debentures or such Debentures must be transferred pursuant to the procedures for
9 book-entry transfer described in the Letter of Transmittal and a confirmation of such book-entry transfer, including an Agent's Message, must be received by the Depositary. Guaranteed Delivery A Holder who desires to tender Debentures and who cannot comply with the procedures set forth herein on a timely basis or whose Debentures are not immediately available may tender such Debentures by following the procedures for guaranteed delivery set forth herein. See "Procedures for Tendering Debentures--Guaranteed Delivery Procedures" and the Letter of Transmittal. Special Procedures for Any beneficial owner whose Debentures are registered in the Beneficial Owners name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender Debentures should promptly contact such registered Holder. See "Procedures for Tendering Debentures" and the Letter of Transmittal. Certain Consequences Holders should consider the consequences of not tendering of Not Tendering their Debentures. See "Risk Factors." Dealer Manager AMF Bowling has retained Morgan Stanley & Co. Incorporated to act as the dealer manager in connection with the Offer. The Dealer Manager is also serving as the financial advisor to the Board and the Special Committee. In its capacity as the Dealer Manager, Morgan Stanley may contact Holders regarding the Offer and may request brokers, dealers, commercial banks, trust companies and other nominees to forward this Offer to Purchase and related materials to beneficial owners of Debentures. Depositary The Depositary for the Offer is ChaseMellon Shareholder Services, L.L.C. Information Agent The Information Agent for the Offer is D.F. King & Co., Inc.
RISK FACTORS In deciding whether to participate in the Offer, each Holder should consider carefully, in addition to the other information contained or incorporated by reference herein, the following: Market and Trading Information. The Debentures are currently listed for quotation on PORTAL. Although AMF Bowling expects the Debentures to continue to be listed for quotation on PORTAL following completion of the Offer, to the extent that Debentures are tendered and accepted for payment in the Offer, the trading market for Debentures that remain outstanding will be significantly more limited, which is likely to adversely affect the liquidity of the Debentures. If Debentures in an aggregate principal amount at maturity equal to the Maximum Tender Amount are purchased in the Offer, only $610,714,000 aggregate principal amount at maturity (54.3%) of Debentures will remain outstanding. If Debentures in an aggregate principal amount at maturity equal to the Minimum Tender Amount are purchased in the Offer, only $675,000,000 aggregate principal amount at maturity (60%) of Debentures will remain outstanding. An issue of securities with a smaller float may command a lower price than would a comparable issue of securities with a greater float. Therefore, the market price for Debentures that are not tendered or not purchased in the Offer may be adversely affected to the extent that the amount of the Debentures purchased pursuant to the Offer reduces the float. The reduced float also will tend to make the trading prices of the Debentures that are not tendered or purchased more volatile. As a result, there can be no assurance as to the depth or liquidity of the trading market for the Debentures after consummation of the Offer. Further, the Debentures are currently trading at a significant discount from their issue price and, if the Company's recapitalization plan (of which the Offer is a part) is successful, the trading price of the Debentures which remain outstanding may increase to levels in excess of the Repurchase Price. After the Expiration Date, AMF Bowling may purchase additional Debentures in the open market, in privately negotiated transactions, through subsequent tender or exchange offers or otherwise, subject to compliance with the Indenture and applicable law. Any future purchases may be on the same terms or on terms that may be more or less favorable to Holders than the terms of the Offer. 10 The Bowling Products Business has Experienced Significant Problems, Particularly in the Asia Pacific Region. In recent years, most of the Company's new center package sales have been to international markets, primarily Asia Pacific countries such as China, Taiwan and South Korea. New center package sales to China, Japan and other markets in the Asia Pacific region represented 52.8% of the Company's new center package sales for 1998, compared to 72.7% for 1997 and 66.5% of the Company's new center package sales for the first quarter of 1999, compared to 53.2% for the first quarter of 1998. Economic difficulties in the Asia Pacific region have had and will continue to have an adverse impact on new center package sales, shipments and order backlog. Another reason for the decline in new center package sales is the limited availability of financing for customers desiring to build new bowling centers, especially in the Asia Pacific region. In addition, Zhonglu, a Chinese manufacturer of bowling equipment, has become a significant competitor in China. As discussed under "Recent Developments" and "AMF Bowling--Bowling Products Business", the Company recently entered into three year joint distribution agreements with Zhonglu as well as a trademark license agreement and option agreement. Under these agreements, among other matters, the Company will exclusively distribute certain Zhonglu products and parts outside of China and Zhonglu will exclusively distribute AMF products and parts inside China. There can be no assurance that the arrangements with Zhonglu will be successful or that other Chinese or other foreign or domestic competitors will not begin selling bowling equipment within or outside China. At the end of 1998, new center package backlog was 1,078 which was 37.5% lower than at the end of 1997. As of March 31, 1999, new center package backlog was 755 units, which is 30% lower than it was at December 31, 1998. It is customary for a certain portion of the backlog to be cancelled before the expected shipping date. The Company has experienced a greater number of order cancellations recently because of economic difficulties in the Asia Pacific region. There can be no assurance that economic conditions in the Asia Pacific region and other regions will improve or that new center package sales will not decrease any further. Due to the decline in new center package sales, shipments and order backlog, in the near term, the Company is concentrating on sales of products designed to enable bowling center operators to modernize their facilities and on sales of consumer products such as bowling pins, parts, balls and supplies. There can be no assurance that the Company will be successful in this effort. China has recently strengthened its import restrictions by requiring the payment of full customs duties and value added taxes on the importation of new and used capital goods. The Chinese government has also begun to prohibit importation of used capital equipment without permits. Permits for the importation of used bowling equipment are very difficult to obtain. Local Chinese companies, including Zhonglu, however, are not subject to the same restrictions. For example, Zhonglu produces and sells bowling equipment which is not subject to the customs duties or permit requirements that affect the Company's imported equipment. Management believes that Zhonglu has experienced significant acceptance by local customers. These Chinese import restrictions have had, and for the foreseeable future, management believes will continue to have an adverse effect on sales of AMF bowling equipment in China. The Bowling Centers Business has Experienced Declines in Constant Center Revenue and EBITDA Margin. The Company's bowling centers have experienced a decline in constant center revenue and EBITDA margin primarily related to the Company's rapid growth through acquisitions. Such growth led to significant problems in integrating new bowling centers and managing the Company's expanded base of centers. In response to the decline in operating results, the Company curtailed the pace of acquisitions, assembled an experienced management team for U.S. bowling center operations, and is in the process of putting in place management infrastructure to support integration of new centers. The Company is also increasing the focus on training and recruiting center managers and implementing marketing and other customer satisfaction initiatives to increase revenue. 11 Despite these efforts to improve center performance, there can be no assurance that the Company will be able to reverse the decline in constant center revenue and EBITDA margins. Difficulties in Continuing Strategy to Grow through Acquisitions. The Company's principal strategy for growth has been to acquire bowling centers. In the past, the Company has had difficulties integrating acquired centers into its operations on an efficient basis. The Company recently curtailed the pace of its acquisition program so that the Company could focus on improving the financial performance of its existing centers. When the Company increases the pace of its acquisition program, it will consider acquisitions on a more selective basis. There can be no assurance that funding will be available for acquisitions or that existing debt will permit the Company to make acquisitions, that bowling centers will be available for acquisition or that the Company will be able to successfully integrate acquired centers into its operations. Declines in the Daily Number of Games Bowled per Lane. The Company's bowling centers business has experienced and is continuing to experience a decline in the number of games bowled per lane per day (also known as "lineage"). This decline has been primarily caused by a decrease in the number of league bowlers. While more people are bowling at the Company's bowling centers, they are bowling less often. As part of the Company's recent efforts to focus on improving the financial performance of its existing centers as described herein, the Company is seeking to improve lineage at its bowling centers. However, there can be no assurances that the Company's lineage will increase or that the lineage will not further decline. New Executive Management Team; Dependance on Experienced Center Level Management. Over the last six months, our executive management team has undergone significant change. Former chief executive officer, Douglas J. Stanard, who had significant bowling center experience, resigned effective January 1, 1999. He was replaced on an interim basis by Stephen E. Hare, the Company's chief financial officer, who served as acting chief executive officer. The Company has hired a new chief executive officer, Roland C. Smith, who has experience in managing multi-unit chains but does not have bowling industry experience. Mr. Hare will remain as chief financial officer. In addition, in August 1998, the Company hired a new president of its bowling center operations from outside the bowling industry and reorganized management of its bowling center operations. The Company also recently named a new president of its bowling products operations from within the company and reorganized its bowling products management team. While we believe that the current management team gives the Company significant executive strength, there can be no assurance that it will be able to successfully execute business strategies. The Company's future success depends on its ability to develop, motivate, retain and attract experienced and innovative bowling center managers. The loss of the services of key personnel, or the inability to attract additional qualified personnel, could have a material adverse affect on the Company's business, results of operations and financial condition. Competition in Both Lines of Business. The United States bowling center industry is very competitive and fragmented. It consists of two large bowling center operators, the Company and Brunswick Corporation, three medium-sized chains and over 5,000 bowling centers owned by single-center and small chain operators. The international bowling center industry is also extremely competitive and fragmented. There are typically few chain operators and a large number of single-center operators in any one country, which results in intense international competition. Bowling, as both a competitive sport and a recreational activity, also faces competition from other entertainment and athletic activities. The success of the Company's bowling center operations depends on, among other things, (i) customers' continued interest in league and open bowling, (ii) the availability and affordability of 12 recreational and entertainment alternatives, (iii) the amount of leisure time customers enjoy and (iv) other social and economic factors over which the Company has no control. The bowling products industry is also extremely competitive. The Company and Brunswick are also the two largest manufacturers of bowling center equipment. However, we also compete with smaller companies in certain product lines. For example, as described above, Zhonglu became a significant source of competition for the Company in China. Primarily because of the excess worldwide inventory of used bowling equipment, the Company has recently experienced intense price competition in virtually all of its markets for equipment. The Company expects the intense price competition to continue for the foreseeable future. Seasonality and Market Development Cycles. The financial performance of the Company's bowling center operations is seasonal. Cash flows typically peak in the winter and reach their lows in the summer. While the geographic diversity of the Company's bowling centers operations has helped to reduce this seasonality in the past, the increase in U.S. centers resulting from the Company's acquisitions has increased the seasonality of that business. The Company's bowling products business is also seasonal. The U.S. market, which is the largest market for modernization and consumer products, is driven by the beginning of league play in the fall of each year. While operators purchase consumer products throughout the year, they often place larger orders during the summer in preparation for the start of league play in the fall. Summer is also generally the peak period for installation of modernization equipment. Operators typically sign purchase orders for modernization equipment during the first four months of the year after they receive winter league revenue indications. Equipment is then shipped and installed during the summer when leagues are generally less active. However, sales of some major modernization equipment, such as automatic scoring and synthetic lanes, are less predictable and fluctuate from year to year because of the longer life cycle of those major products. Sales of new center packages can fluctuate dramatically as a result of economic fluctuations in international markets, as seen in the reduction of sales of new center packages to markets in the Asia Pacific region as a result of economic difficulties in that region. Substantial Leverage. As of March 31, 1999, the Company had approximately $1.4 billion of indebtedness outstanding and approximately $509.8 million of stockholders' equity. As of March 31, 1999, on a pro forma basis, after giving effect to the Offer and the Rights Offering and assuming Debentures in an aggregate principal amount at maturity equal to the Minimum Tender Amount and the Maximum Tender Amount, respectively, are purchased by AMF Bowling and $140 million is raised as a result of the exercise of rights in the Rights Offering, the Company would have had approximately $1,213.6 million and approximately $1,196.4 million of indebtedness, respectively, and approximately $694.0 million and approximately $701.6 million of stockholders' equity, respectively. As of March 31, 1999, on a pro forma basis, after giving effect to the Offer and the Rights Offering and assuming Debentures in an aggregate principal amount at maturity equal to the Minimum Tender Amount and the Maximum Tender Amount, respectively, are purchased by AMF Bowling and assuming that $120 million is raised as a result of the exercise of rights in the Rights Offering, the Company would have had approximately $1,213.6 million and approximately $1,196.4 million of indebtedness, respectively, and approximately $674.0 million and approximately $681.6 million of shareholders' equity, respectively. The Company's EBITDA was $53.1 million in the first quarter of 1998 and $55.0 million in the first quarter of 1999, an increase of $1.9 million, or 3.6%. The Company's EBITDA was $185.4 million in 1997 and $130.2 million in 1998, a decrease of $55.2 million, or 29.8%. The Company had interest expense of $118.4 million in 1997 and $114.7 million in 1998 and cash interest expense of $83.0 million, or 44.8% of EBITDA, in 1997 and $76.5 million, or 58.8% of EBITDA, in 1998. There can be no assurance that the Company will be able to generate enough EBITDA to pay its fixed charges (interest expense, amortization of debt issuance costs, and the portion of rent expense considered to represent interest expense) or that the Company will have enough cash to make interest payments on its debt when they become due. In addition, some of the Company's borrowings are at variable rates of interest and could require the Company to pay more interest on its debt if interest rates rise. Pursuant to a recent amendment to the Credit Agreement (as hereinafter defined), interest rates for borrowings under the Credit Agreement have been increased. See "AMF Bowling--Recapitalization Plan." 13 The Company's debt service obligations could make it more vulnerable to industry downturns and competitive pressures. In addition, the Company's substantial debt could adversely affect its ability to, among other things, (i) obtain additional financing or refinancing on terms and conditions acceptable to it, (ii) pursue its acquisition strategy, (iii) maintain its facilities, (iv) use its cash flows from operations for other purposes, such as working capital or capital expenditures and (v) achieve the Company's other business goals. The Company amended AMF Bowling Worldwide, Inc.'s ("Bowling Worldwide") credit agreement in September 1998 to increase the Company's financial flexibility through 1999. The September 1998 amendment waived certain financial covenants through the end of 1999, but also placed certain restrictions on the Company's ability to make capital expenditures, investments and acquisitions. Recently, the Company further amended the credit agreement as part of its recapitalization plan. The latter amendment, among other matters, relaxes certain financial covenants through the end of 2001, enables the Company to cure non-compliance with financial covenants and gives the Company added financial flexibility and the ability to make more acquisitions. However, there can be no assurance that the Company will meet the new financial covenants contained in the Credit Agreement. The amendment to the Credit Agreement will be effective on the closing of the subscriptions obtained in the Rights Offering and the closing of the Offer, except that the relaxation of certain financial covenants for the quarter ending June 30, 1999 is already effective. History of Losses; Repayment of Debentures Uncertain. The Offer is limited to $514,286,000 aggregate principal amount at maturity (45.7%) of Debentures, after which there will be no less than $610,714,000 aggregate principal amount at maturity (54.3%) of Debentures remaining outstanding. The Company has not reported net income since the Acquisition. The Company recorded a net loss of $125.9 million in 1998, a net loss of $32.2 million before extraordinary items in 1997 and a net loss on an adjusted basis (after giving effect to the Acquisition) of $21.5 million in 1996. For the quarter ended March 31, 1999, the Company recorded a net loss of $18.7 million compared to a net loss of $0.6 million for the quarter ended March 31, 1998. Accordingly, there can be no assurance that the Company will be able to perform at a level sufficient to assure repayment of the Debentures that remain outstanding following completion of the Offer. International Operations. The Company's international operations are subject to the risks inherent in operating abroad, including: (i) currency exchange rate fluctuations, (ii) economic and political fluctuations and destabilization, (iii) restrictive laws, tariffs and other actions by foreign governments, such as those taken by China, (iv) difficulty in obtaining distribution and support for the Company's products, (v) the risk of nationalization, (vi) the laws and policies of the United States affecting trade, international investment and loans and (vii) foreign tax law changes. These factors have contributed to the Company's decrease in international revenue between the first quarter of 1998 and the first quarter of 1999, and may have a further material adverse effect on the Company's results of operations. Holding Company Structure. AMF Bowling is a holding company with no direct operations, except providing certain management services to its subsidiaries. AMF Bowling conducts its business through its subsidiaries and has no significant assets other than the stock of its subsidiaries. AMF Bowling is dependent on capital contributions, dividends from subsidiaries or other financing to meet its debt service obligations, including any obligation to redeem or repurchase Debentures. AMF Bowling's subsidiaries are separate and distinct legal entities and have no obligation, contingent or otherwise, to make funds available to AMF Bowling, whether in the form of loans, dividends or otherwise. Moreover, Bowling Worldwide, AMF Bowling's principal operating subsidiary, is effectively prohibited under its debt agreements from up-streaming funds by dividends, loans or otherwise, to AMF Bowling to redeem or repurchase the Debentures. 14 Asset Encumbrances. The lenders (the "Lenders") under Bowling Worldwide's Fourth Amended and Restated Credit Agreement dated as of June 14, 1999 (the "Credit Agreement") have been granted security interests in all of Bowling Worldwide's capital stock and substantially all of Bowling Worldwide's current and future assets, including a pledge of all of the issued and outstanding shares of capital stock of certain of its subsidiaries. In addition, certain of such subsidiaries have granted to the Lenders security interests in all of the current and future assets of such subsidiaries (other than 35% of the outstanding capital stock of any foreign subsidiary of any such subsidiary). In the event of a default under the Credit Agreement (whether as a result of the failure to comply with a payment or other covenant, a cross-default, or otherwise), the Lenders will have a prior secured claim on the capital stock and the assets of Bowling Worldwide and such subsidiaries. If the Lenders should attempt to foreclose on their collateral, AMF Bowling's financial condition and the value of the Debentures will be materially adversely affected. Risks with respect to a Debenture Change of Control. Upon the occurrence of a Debenture Change of Control (as defined in the Indenture), the Debentures may be redeemed at the option of the Holder at a Debenture Change of Control Redemption Price equal to $252.57 per $1,000 principal amount at maturity (the "Issue Price") plus accrued Original Issue Discount (as hereinafter defined) to the date of redemption. AMF Bowling may, at its option, elect to pay any such Debenture Change of Control Redemption Price in cash or Common Stock. A Debenture Change of Control may also give rise to a requirement that the Company prepay, in some cases at a premium to principal amount, the Subsidiary Senior Subordinated Notes (as hereinafter defined), the Subsidiary Senior Subordinated Discount Notes (as hereinafter defined) and the Credit Agreement. The Company may not have the financial resources to make the required payments, and AMF Bowling may not have the financial resources to pay in cash its obligations which would then become due under the Debentures. In addition, in connection with the Acquisition, Bowling Worldwide issued 10 7/8% Senior Subordinated Notes Due 2006 (the "Subsidiary Senior Subordinated Notes") and 12 1/4% Senior Subordinated Discount Notes Due 2006 (the "Subsidiary Senior Subordinated Discount Notes" and, collectively with the Subsidiary Senior Subordinated Notes, the "Subsidiary Notes"). Upon the occurrence of a Change of Control (as defined in the indentures governing the Subsidiary Notes (the "Subsidiary Indentures")), each holder of a Subsidiary Note may require that all or a portion of such holder's Subsidiary Notes be repurchased at 101% of the principal amount of the Subsidiary Senior Subordinated Notes and 101% of the Accreted Value (as defined in the indenture governing the Senior Subsidiary Discount Notes) of the Subsidiary Senior Subordinated Discount Notes (or, following the Full Accretion Date (as defined in the indenture governing the Senior Subsidiary Subordinated Discount Notes), 101% of the principal amount thereof), as applicable, together with accrued and unpaid interest, if any, and Liquidated Damages (as defined in the Subsidiary Indentures), if any, to the date of repurchase. The Subsidiary Indentures require that prior to such a repurchase or shortly thereafter, the Company must either repay all outstanding indebtedness under the Credit Agreement or obtain any required consent of the Lenders to such repurchase. If such Change of Control (which may also constitute a Debenture Change of Control and an event of default under the Credit Agreement) were to occur, Bowling Worldwide may not have the financial resources to repay all of its obligations which would then become due under the Credit Agreement, the Subsidiary Indentures and any other indebtedness that would become payable upon the occurrence of such Change of Control, and AMF Bowling may not have the financial resources to pay in cash its obligations which may then become due under the Debentures. Volatility of Common Stock. The market price of the Common Stock has been volatile and has fallen dramatically over the past year. See "Market Price Information." In the future, the market price of the Common Stock into which the Debentures are convertible may be materially adversely affected by factors such as (i) the number of shares offered in and the price at which shares may be purchased pursuant to the rights issued under the Rights Offering, (ii) the actual 15 results of the Company's recapitalization plan and whether we accomplish the related operating improvements which the Company seeks to achieve, (iii) actual or anticipated fluctuations in the Company's operating results, (iv) the Company's bowling center acquisition activity, (v) the impact of international markets, (vi) changes in financial estimates by securities analysts or (vii) general market conditions. There can be no assurance that the market price of the Common Stock issuable upon conversion, redemption or repurchase of the Debentures will not decline below the levels prevailing at the time of the Offer or below the price offered pursuant to the rights issued under the Rights Offering. Pro Rata Acceptance. AMF Bowling will purchase Debentures in the Offer up to an aggregate principal amount at maturity equal to the Maximum Tender Amount. To the extent that the aggregate principal amount at maturity of the Debentures validly tendered exceeds the Maximum Tender Amount, AMF Bowling will purchase the tendered Debentures on a Pro Rata Acceptance basis. There can be no assurance, therefore, that all of a tendering Holder's validly tendered Debentures will be purchased by AMF Bowling pursuant to the Offer. Certain Bankruptcy Considerations. Any payments made to Holders in consideration for their Debentures may also be subject to challenge as a preference if such payments: (a) are made within 90 days of a bankruptcy filing by AMF Bowling (or within one year in the case of Holders who are determined to be insiders of AMF Bowling), (b) are made when AMF Bowling is insolvent and (c) permit the Holders to receive more than they otherwise might receive in a liquidation under applicable bankruptcy laws. If such payments were deemed to be a preference, the full amount of such payments could be recovered by AMF Bowling as a debtor in possession or by AMF Bowling's trustee in bankruptcy, and the Holder would be entitled to assert claims in respect of the Debentures against AMF Bowling in its reorganization or bankruptcy case. AMF Bowling does not believe that it is currently insolvent, although for purposes of the preference laws described above, AMF Bowling would be presumed insolvent for the 90 days preceding a bankruptcy or reorganization case. RECENT DEVELOPMENTS New Chief Executive Officer AMF Bowling appointed Roland C. Smith as the Company's President and Chief Executive Officer, effective April 28, 1999. Mr. Smith replaces Stephen E. Hare, the Company's Chief Financial Officer, who was Acting Chief Executive Officer for the preceding six months. Mr. Hare continues as Chief Financial Officer. Mr. Smith has also been appointed to the Board and the executive committee of the Board. Mr. Smith was most recently President and Chief Executive Officer of the Triarc Restaurant Group where, among other matters, he oversaw the restructuring and expansion of Arby's Restaurants. Mr. Smith was formerly associated with Procter & Gamble, Pepsi, Schering-Plough and KFC International. New Distribution Arrangement On June 13, 1999, AMF Bowling Products, Inc. signed joint distribution agreements, a trademark license agreement and an option agreement with Zhonglu. Under the distribution agreements, the Company will add to its product mix and exclusively distribute certain Zhonglu products and parts outside of China and Zhonglu will add to its product mix and exclusively distribute AMF products and parts inside of China. With this distribution arrangement, the Company will close all but one of its company owned offices in China and will be exclusively represented in China by Zhonglu. Additionally, AMF will have an option under certain circumstances to acquire Zhonglu's bowling products business during the three-year term of the agreements. 16 Amendment to Credit Agreement On June 14, 1999, the lenders under the Credit Agreement entered into an amendment of the Credit Agreement. See "Our Business, Recapitalization Plan and On-Going Business Strategies--Our Recapitalization Plan--Amendments to Bank Credit Agreement." Recent Litigation On April 22, 1999, a putative class action was filed in the United States District Court for the Southern District of New York by Vulcan International Corporation ("Vulcan") against AMF Bowling, The Goldman Sachs Group, L.P., Goldman, Sachs & Co., Morgan Stanley & Co. Incorporated, Cowen & Company, Schroder & Co. Inc., Richard A. Friedman and Douglas J. Stanard. Vulcan, as putative class representative for itself and all persons who purchased Common Stock in AMF Bowling's 1997 initial public offering, seeks, among other things, damages and/or rescission against all defendants pursuant to Sections 11, 12 and/or 15 of the Securities Act of 1933 based on allegedly inaccurate and misleading disclosures in connection with and following the initial public offering. Management believes that the litigation is without merit and intends to defend against it vigorously. AMF BOWLING Primary Business Segments and Strategies The Company principally operates in two business segments in the U.S. and international markets: (1) the ownership and operation of bowling centers and (2) the manufacture and sale of bowling equipment and bowling products. AMF is the largest owner and operator of bowling centers in the U.S. and worldwide. As of June 21, 1999, the Company owned and operated 418 bowling centers in the U.S. and 123 centers in 10 other countries. The Company is also one of the world's largest manufacturers and sellers of bowling equipment. The Company's business strategy is designed to (i) consolidate the bowling center industry through an acquisition program, (ii) build a nationally recognized AMF brand of bowling centers and (iii) manufacture, market and distribute bowling products in global markets. While the Company believes that its long-term business strategy is sound, it continues to experience the difficulties in its bowling centers and bowling products businesses that began in 1998 and are more fully discussed below. In response to these difficulties, the Company has reviewed its businesses with the assistance of management, other employees and independent consultants, to identify the critical operating issues and key action steps required to reinvigorate its businesses. In addition, the Company has recently appointed a new President and Chief Executive Officer and assembled an experienced management team to execute its business plan. Bowling Centers Business In the first quarter of 1999, the Company's bowling centers operations produced revenue of $172.6 million and EBITDA of $60.5 million, up from $150.2 million and $56.8 million, respectively, in the first quarter of 1998. In 1998, the Company's bowling centers operations produced revenue of $541 million and EBITDA of $142 million, up from $429 million and $130 million, respectively, in 1997. The 1998 EBITDA margin of 26.3% has declined from 30.4% in 1997. The deterioration of EBITDA margin was related primarily to the Company's rapid growth through acquisitions, which led to significant problems in integrating new bowling centers and managing the expanded base of centers. On a constant currency basis, the Company experienced declines in constant center revenue of 0.8% in the first quarter of 1999, 1.6% in the first quarter of 1998, and 1.9% in 1998, and an increase of 0.4% in 1997 compared to the same prior year periods. Additionally, operating expenses as a percentage of revenue increased in the first quarter of 1999 and in 1998 compared with the same prior year 17 periods. The increase in 1998 was primarily related to nationally branded chain development activities. The increase in 1999 was primarily attributable to higher expenses related to maintenance and supplies, advertising and payroll. The Company has taken several steps to address operating issues in its bowling centers business, including: Assembled an Experienced Management Team. In addition to hiring Roland C. Smith as President and Chief Executive Officer, the Company also hired John P. Watkins as President of U.S. Bowling Centers, and five new regional vice presidents with substantial multi-unit retail experience to manage U.S. bowling centers operations. The Company also appointed senior executives with bowling industry experience to key operating and staff vice president positions. Focus on Existing Centers. Beginning in September 1998, the Company curtailed the pace of its acquisition program and began evaluating acquisition opportunities on a more selective basis. The Company has been focusing on improving the performance of its existing centers to reinvigorate constant center revenue growth, as well as league and open play lineage, and to attract new customers. Focus on Training and Retaining Center Managers. The Company believes that performance of its centers depends heavily on its center managers and therefore the Company intends to implement a new stock-based incentive plan to reward its center managers. The Company is also designing programs to more effectively train its center managers and staff based upon the most successful practices of field managers. In addition, the Company has hired a new vice president of training for U.S. bowling center operations with multi-unit retail experience and created a training and human resources position in each of the six regions to implement these programs. Focus on Marketing and Customer Satisfaction. The Company is implementing several programs which are designed to attract and retain league and open play bowlers, including: (a) marketing initiatives, such as "League Development Leader" and "Friends Bowl with Friends" programs, to leverage the influence of key league bowlers in the Company's existing customer base to help grow and retain league participation; (b) capital spending on certain centers to improve customer satisfaction and generate incremental revenue with improved facilities and innovative and updated programs and product offerings such as the installation of Xtreme(TM) (glow-in-the-dark) bowling in many centers as part of an overall upgrading of certain facilities; and (c) upgrading the food and beverage menu selection and service to enhance customers' bowling experience and to increase revenue per visit. Bowling Products Business The Company's bowling products business experienced significant difficulties in the first quarter of 1999 and in 1998. In the first quarter of 1999, it produced revenue of $32.0 million, a decrease of 22.1% from the first quarter of 1998, and EBITDA of $(0.6) million compared to EBITDA of $0.1 million in the first quarter of 1998. It produced revenue of $213 million in 1998, a decrease of 29.0% from 1997, and EBITDA of $11 million, a decrease of 84.5% from 1997. This business, the growth of which was driven primarily by international sales of new center packages, was severely and adversely affected by economic difficulties in the Asia Pacific region. In addition, competitive global pricing and a strong U.S. dollar reduced the profitability of the Company's products business. 18 The Company is taking steps to address operating issues in its bowling products business, including: New Management Infrastructure. The Company recently appointed a president of bowling products, consolidated its international sales force under one senior vice president and consolidated responsibility of customer service in the U.S. under the vice president of U.S. sales. Cost Reduction Program. The Company is continuing to implement a comprehensive cost reduction program to align its cost structure with reduced bowling products revenue. The program includes closure of a manufacturing facility, production and material cost reductions, reduction of worldwide overhead and downsizing of its international sales force. In 1998, the Company was successful in reducing its bowling products costs by approximately $6 million. The Company is continuing its reduction efforts and is considering possible strategic alliances and other product development and sales initiatives in an effort to further reduce costs. In this regard, on June 13, 1999, AMF Bowling Products, Inc. signed joint distribution agreements, a trademark license agreement and an option agreement with Zhonglu. Under the distribution agreements, AMF will add to its product mix and exclusively distribute certain Zhonglu products and parts outside of China, and Zhonglu will add to its product mix and exclusively distribute AMF products and parts inside China. With this distribution arrangement, AMF will close all but one of its company owned offices in China and will be exclusively represented by Zhonglu in China. Additionally, AMF will have an option to acquire Zhonglu's bowling products business during the three-year term of the agreements. Focus on Modernization and Consumer Products. During this period of weakness in international sales of new center packages, the Company has been and is continuing to concentrate its selling efforts on products designed to enable bowling center operators to modernize their facilities and on consumer products such as bowling pins, parts, balls and supplies. Unlike new center packages, these products are not as dependent on emerging markets and produce more stable sales and profits. However, the Company intends to remain in a position to participate in any significant growth of demand for new center packages in emerging markets. Recapitalization Plan The Company is pursuing a recapitalization plan to enable it to enhance its ability to implement its three-part business strategy. The plan is designed to reduce leverage and increase financial flexibility so that the Company can resume its strategy of growing through acquisitions, building a nationally recognized brand and successfully manufacturing, marketing and distributing bowling products globally. The recapitalization plan has three primary components: The Offer. AMF Bowling is conducting this Offer to repurchase up to $514,286,000 aggregate principal amount at maturity (45.7%) of the Debentures. Affiliates of Goldman Sachs and Kelso, which own approximately 44% of the outstanding Debentures, have indicated that they currently expect to tender all of their Debentures in the Offer, subject to market conditions, although they are not obligated to do so. The Rights Offering. Concurrent with the Offer, AMF Bowling is conducting the Rights Offering in which it seeks to raise approximately $140,000,000. The net proceeds of the Rights Offering will primarily be used to reduce the Company's financial leverage by repurchasing up to $514,286,000 aggregate principal amount at maturity of Debentures in the Offer and repaying certain debt under the Credit Agreement. Certain members of the original investor group, who hold approximately 72.5% of the Common Stock, have indicated that they currently expect to fully exercise their basic subscription privileges in the Rights Offering, subject to market conditions, and it is currently anticipated that some of these members of the original investor group will exercise their conditional over-subscription privileges in the Rights Offering to an extent not yet determined, subject to market conditions. However, these members of our original investor group are not obligated to exercise their basic or conditional over-subscription privileges. Amendments to the Credit Agreement. As part of the recapitalization plan, the Company and the lenders recently entered into the Fourth Amended and Restated Credit Agreement. The Credit Agreement (i) allows the Company to use a portion of the net proceeds of the Rights Offering to repurchase the Debentures pursuant to 19 the Offer, (ii) allows the Company to retain a portion of the proceeds for general corporate purposes and for other purposes, including making open market purchases of Debentures and allowing Bowling Worldwide to redeem a portion of the Subsidiary Notes, (iii) increases access to the revolving credit facility under the Credit Agreement for acquisitions, subject to certain conditions, (iv) relaxes certain financial covenants through the end of fiscal year 2001, (v) enables the Company to cure non-compliance with financial covenants and (vi) excludes certain restructuring and other special charges from financial covenant calculations under the Credit Agreement. In addition, the Fourth Amended and Restated Credit Agreement increased the interest rates for borrowings thereunder. A copy of the amendments to the Credit Agreement (including the Fourth Amended and Restated Credit Agreement) has been filed as Exhibit 99.1 to the Company's Current Report on Form 8-K dated June 28, 1999. Restructuring and Other Special Charges The Company is likely to record certain restructuring charges, which are likely to be approximately $7.5 million. The Company also could record other special charges in 1999. Under the Credit Agreement such restructuring charges and an amount up to $27.5 million of other special charges, to the extent taken in 1999, are excluded from the calculation of the financial covenants relating to EBITDA. 20 THE DEBENTURES The following summary of certain terms of the Debentures does not purport to be complete and is qualified in its entirety by reference to the Indenture. All capitalized terms used in this summary and not defined shall have the meaning ascribed to them in the Indenture. The Debentures $1,125,000,000 aggregate principal amount at maturity of Zero Coupon Convertible Debentures due 2018. Interest Payment Dates There are not and will not be any periodic interest payments on the Debentures. Yield to Maturity of 7% per annum (computed on a semi-annual bond equivalent Debentures basis) calculated from May 12, 1998. Conversion Rights The Debentures are convertible, at the option of the Holder, at any time before maturity, unless previously redeemed or otherwise purchased by AMF Bowling, into Common Stock at the rate of 8.6734 shares per $1,000 principal amount at maturity of Debentures (the "Conversion Rate"). Upon conversion, the Holder will not receive any cash payment representing accrued Original Issue Discount; such accrued Original Issue Discount will be deemed paid by the delivery of the Common Stock received upon conversion. The Conversion Rate is not adjusted for accrued Original Issue Discount, but is subject to adjustment upon the occurrence of certain events, including the issuance of rights in the Rights Offering. Consequently, the Conversion Rate will be adjusted on the day following the record date for the issuance of the rights in the Rights Offering (on a basis assuming all rights issued in the Rights Offering are exercised). If not all of the rights issued in the Rights Offering are exercised, the Conversion Rate will be appropriately readjusted. Original Issue Discount The Debentures were originally offered at an original issue discount (the "Original Issue Discount") for federal income tax purposes equal to the excess of the principal amount at maturity of the Debentures over their Issue Price. Redemption The Debentures are not redeemable by AMF Bowling before May 12, 2003. Beginning on May 12, 2003, the Debentures are redeemable for cash at any time at the option of AMF Bowling, in whole or in part, at Redemption Prices equal to the Issue Price plus accrued Original Issue Discount to the date of redemption. Debenture Change of If there is a Debenture Change of Control, the Debentures Control may be redeemed at the option of the Holder at a Debenture Change of Control Redemption Price equal to the Issue Price plus accrued Original Issue Discount to the date of redemption. AMF Bowling may, at its option, elect to pay any such Debenture Change of Control Redemption Price in cash or Common Stock, or any combination thereof. Purchase at the Option AMF Bowling will purchase Debentures at the option of the of the Holder Holder as of May 12, 2003, May 12, 2008 and May 12, 2013 at Purchase Prices equal to the Issue Price plus accrued Original Issue Discount to the date of purchase. AMF Bowling may, at its option, elect to pay any such Purchase Price in cash or Common Stock, or any combination thereof.
21 Listing The Debentures are designated for trading in PORTAL. The Debentures are convertible into shares of Common Stock, which is listed and traded on the NYSE. Governing Law The Indenture and the Debentures are governed by the laws of the State of New York. Indenture Dated as of May 12, 1998 between AMF Bowling and The Bank of New York, as Trustee.
MARKET PRICE INFORMATION The Debentures The Debentures are designated for trading in PORTAL. The following table sets forth, for the period indicated, the high and low closing bid quotations per $1,000 principal amount at maturity for the Debentures as reported by Morgan Stanley, a market maker for the Debentures.
High Low ------- ------- 1998 Second Quarter (beginning May 12, 1998)................. $266.25 $235.00 Third Quarter........................................... 258.75 97.50 Fourth Quarter.......................................... 136.30 68.80 1999 First Quarter........................................... 137.50 110.00 Second Quarter (through June 25, 1999).................. 142.50 100.00
Such reported quotations may not reflect actual transactions. On June 25, 1999, the closing bid quotation per $1,000 principal amount at maturity of Debentures, as reported by Morgan Stanley, a market maker for the Debentures, was $135.00. The Common Stock The Common Stock, into which the Debentures are convertible, is listed and traded on the NYSE under the symbol "PIN". The following table sets forth the high and low sales prices per share of Common Stock as reported on the NYSE Composite Tape, for the periods indicated.
High Low ---- ---- 1997 Fourth Quarter (from November 7, 1997)................. $25 1/8 $21 1/2 1998 First Quarter.......................................... 27 3/8 20 1/2 Second Quarter......................................... 31 22 5/8 Third Quarter.......................................... 28 3/8 7 1/2 Fourth Quarter......................................... 9 3 7/8 1999 First Quarter.......................................... 6 4 Second Quarter (through June 25, 1999)................. 8 3/16 3 1/2
On June 25, 1999, the closing sales price per share of Common Stock, as reported on the NYSE Composite Tape, was $6 5/16. 22 SELECTED HISTORICAL AND PRO FORMA FINANCIAL DATA (Dollars in millions, except share data) The table below sets forth selected historical consolidated financial data of AMF Bowling and AMF Bowling's predecessor company and financial data of AMF Bowling adjusted for the effects of the Rights Offering and the Offer. AMF Bowling prepared the information using the consolidated financial statements of AMF Bowling and the combined financial statements of AMF Bowling's predecessor company as of the dates indicated and for each of the fiscal years in the five-year period ended December 31, 1998 and the quarterly periods ended March 31, 1998 and 1999. The adjusted financial data of AMF Bowling is presented as of December 31, 1998 and March 31, 1999 and for the periods then ended. The selected financial data includes operating results expressed in terms of EBITDA which represents earnings before net interest expense, income taxes, depreciation and amortization, and other income and expenses. EBITDA information is included because AMF Bowling understands that such information is a standard measure commonly reported and widely used by certain investors and analysts. EBITDA is not intended to represent and should not be considered more meaningful than, or an alternative to, other measures of performance determined in accordance with generally accepted accounting principles.
Three Months Four Months Ended Ended For the Year Ended December 31, March 31, April 30, -------------------------------------------------------------- ------------------------ ----------- Predecessor Predecessor Company (a) AMF Bowling, Inc. AMF Bowling, Inc. Company (a) -------------- ---------------------------------------------- ------------------------ ----------- (unaudited) As As Adjusted As Adjusted Adjusted 1994 1995 1996 (b) 1996 (c) 1997 1998 1998 (d) 1998 1999 1999 (d) 1996 (e) ------ ------ -------- -------- ------ ------- ----------- ------ ------ -------- ----------- (unaudited) Income Statement Data: Operating revenue.. $517.8 $564.9 $548.9 $384.8 $713.7 $ 738.1 $738.1 $187.3 $202.6 $202.6 $164.9 ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ Cost of goods sold.............. 196.0 184.1 173.6 130.5 212.6 202.2 202.2 38.9 39.6 39.6 43.1 Bowling center operating expenses.......... 115.2 166.5 178.8 123.7 251.2 335.7 335.7 78.4 93.2 93.2 80.2 Selling, general and administrative expenses.......... 57.1 50.8 51.0 35.1 64.5 70.0 70.0 16.9 14.8 14.8 35.5 Depreciation and amortization...... 24.8 39.1 73.5 49.4 102.5 120.6 120.5 26.8 33.4 33.3 15.1 ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ Operating income (loss)............ 124.7 124.4 72.0 46.1 82.9 9.6 9.7 26.3 21.6 21.7 (9.0) Interest expense... 7.4 15.7 106.2 78.0 118.4 114.7 101.9 26.0 31.0 25.9 4.5 Other income (expense), net.... (1.5) 0.2 3.8 3.9 (8.1) (5.3) (5.3) 0.1 2.3 2.3 (0.1) ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ Income (loss) before income taxes............. 115.8 108.9 (30.4) (28.0) (43.6) (110.4) (97.5) 0.2 (11.7) (6.5) (13.6) Provision (benefit) for income taxes.. 16.5 12.1 (8.9) (8.5) (12.8) 7.3 7.3 0.5 1.5 1.5 (1.7) ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ Net income (loss) before equity in loss of joint ventures and extraordinary items............. 99.3 96.8 (21.5) (19.5) (30.8) (117.7) (104.8) (0.3) (13.2) (8.0) (11.9) Equity in loss of joint ventures, net of tax........ -- -- -- -- (1.4) (8.2) (8.2) (0.3) (5.5) (5.5) -- ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ Net income (loss) before extraordinary items............. 99.3 96.8 (21.5) (19.5) (32.2) (125.9) (113.0) (0.6) (18.7) (13.5) (11.9) Extraordinary items, net of tax............... -- -- -- -- (23.4) -- 52.4 -- -- 58.3 -- ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ Net income (loss).. $ 99.3 $ 96.8 $(21.5) $(19.5) $(55.6) $(125.9) $(60.6) $ (0.6) $(18.7) $ 44.8 $(11.9) ====== ====== ====== ====== ====== ======= ====== ====== ====== ====== ====== Basic and diluted net loss per share before extraordinary items............. $(0.55) $(0.49) $(0.71) $ (2.11) $(1.45) $(0.01) $(0.31) $(0.15) Basic and diluted per share effect of extraordinary items............. -- -- (0.52) -- 0.67 -- -- 0.66 ------ ------ ------ ------- ------ ------ ------ ------ Basic and diluted net income (loss) per share......... $(0.55) $(0.49) $(1.23) $ (2.11) $(0.78) $ 0.01) $(0.31) $ 0.51 ====== ====== ====== ======= ====== ====== ====== ====== Weighted average shares outstanding....... N/A N/A 39,293 39,713 45,249 59,717 77,645 59,661 59,603 87,601 N/A Ratio of earnings to fixed charges (f)....... 10.3 6.1 -- -- -- -- -- 1.0 -- -- -- Selected Data: EBITDA............. $149.5 $163.5 $145.5 $ 95.5 $185.4 $ 130.2 $130.2 $ 53.1 $ 55.0 $ 55.0 $ 6.1 EBITDA margin...... 28.9% 28.9% 26.5% 24.8% 26.0% 17.6% 17.6% 28.4% 27.1% 27.1% 3.7%
23
As of As of December 31, March 31, ----------------------------------------------- ----------------------- AMF Bowling Inc. Predecessor ----------------------- Company(a) AMF Bowling, Inc. As Adjusted As Adjusted ----------- ----------------------- ----------- ----------- 1994 1995 1996 1997 1998 1998(d) 1999 1999 (d) ----- ----- ------- ------- ------- ----------- ----------- ----------- (unaudited) (unaudited) (unaudited) Balance Sheet Data: Working capital (g)..... $16.9 $29.2 $ 7.8 $ 43.9 $ 70.6 $ 103.0 $ 100.5 $ 132.8 Goodwill................ -- -- 771.1 772.3 772.7 772.7 767.4 767.4 Total assets............ 410.2 400.4 1,594.0 1,832.1 1,980.0 2,011.1 1,982.5 2,013.8 Total debt.............. 186.1 167.4 1,091.3 1,060.6 1,344.0 1,178.3 1,364.4 1,196.4 Stockholders' equity.... 132.4 161.5 408.8 654.0 529.6 726.5 509.8 709.2 Total capital........... 318.5 328.9 1,500.1 1,714.6 1,873.6 1,904.8 1,874.2 1,905.6 Book value per share, basic and diluted...... N/A N/A $ 9.64 $ 10.96 $ 8.86 $ 8.28 $ 8.55 $ 8.10
- -------- (a) Predecessor Company amounts represent the results of AMF Bowling Group (former owners). (b) Represents results of operations from January 1, 1996 through December 31, 1996 on a basis assuming the Predecessor Company had been acquired on January 1, 1996. (c) For the period from the inception date of January 12, 1996 through December 31, 1996, which includes the results of operations of the acquired business from May 1, 1996 through December 31, 1996. (d) Amounts are adjusted to give effect to (i) the purchase of the Debentures pursuant to the Offer, (ii) completion of the Rights Offering with proceeds in the amount of $140 million and (iii) the amendments to the Credit Agreement, as if such transactions had been consummated at the end of each period presented in the case of the balance sheet data, and on January 1 of each period presented in the case of the income statement data. The amounts are not adjusted for restructuring charges which may be recorded as part of the recapitalization plan. If the amount of proceeds in the Rights Offering is $120 million, instead of $140 million, the Company's as adjusted working capital and retained earnings for each of the periods presented would decrease by $20 million. The amounts are presented for illustrative purposes only and are not necessarily indicative of what the Company's actual financial position and results of operations would have been had the above referenced transactions been consummated as of the above-referenced dates or of the financial position or results of operations that may be reported by the Company in the future. (e) Represents results of operations from January 1, 1996 through April 30, 1996. (f) For the years ended December 31, 1998 and 1997 and the period ended December 31, 1996 on an historical basis, and the years ended December 31, 1998 and 1996 on an as adjusted basis, the Company had a deficiency of earnings to fixed charges of $110.4 million, $43.6 million, $28.0 million, $97.5 million and $30.4 million. For the quarter ended March 31, 1999, on an historical basis, and the quarter ended March 31, 1999, on an as adjusted basis, the Company had a deficiency of earnings to fixed charges of $11.6 million and $6.4 million. (g) Predecessor Company amounts reflect elimination of affiliate receivables and payables. 24 CAPITALIZATION The following table sets forth AMF Bowling's cash, debt and capitalization as of March 31, 1999. The table also sets forth AMF Bowling's cash, debt and capitalization as adjusted for the completion of the Rights Offering at the assumed subscription price of $5.00 per share and assuming AMF Bowling will receive proceeds of $140 million if all of the rights in the Rights Offering are exercised and $120 million if only 85.7% of all of the rights are exercised and the Company purchases 45.7% of the Debentures in the Offer.
March 31, 1999 ---------------------------- (dollars in millions) As Adjusted for Proceeds ------------------ Rights Offering Proceeds ------------------ Actual $140.0 $120.0 -------- -------- -------- Cash............................................. $ 56.8 $ 89.1 $ 69.1 ======== ======== ======== Short-term borrowings: Current maturities, long-term debt............. $ 34.2 $ 34.2 $ 34.2 -------- -------- -------- Long-term debt: Bank debt...................................... 556.7 526.7 526.7 Subsidiary senior subordinated notes........... 250.0 250.0 250.0 Subsidiary senior subordinated discount notes.. 219.5 219.5 219.5 Zero coupon convertible debentures............. 302.0 164.0 164.0 Mortgage and equipment notes................... 2.0 2.0 2.0 -------- -------- -------- Total debt................................... 1,364.4 1,196.4 1,196.4 Stockholders' equity: Preferred stock, par value $.01, and 50,000,000 shares authorized, no shares issued and outstanding................................... -- -- -- Common stock, par value $.01, 200,000,000 shares authorized, 59,597,550 shares issued and outstanding before the rights offering and 87,596,479 and 83,597,550 shares issued and outstanding after the Rights Offering ........ 0.6 0.9 0.8 Paid-in capital................................ 749.1 887.3 867.4 Retained deficit............................... (219.6) (166.3) (166.3) Equity adjustment from foreign currency translation................................... (20.3) (20.3) (20.3) -------- -------- -------- Total stockholders' equity................... 509.8 701.6 681.6 -------- -------- -------- Total capitalization......................... $1,874.2 $1,898.0 $1,878.0 ======== ======== ========
25 BACKGROUND AND PURPOSE OF THE OFFER Background On or about July 7, 1999, AMF Bowling will distribute to each record holder of Common Stock, at no charge, .4698 transferable subscription rights for each share of Common Stock owned, pursuant to a prospectus dated June 28, 1999. Each right issued under the Rights Offering entitles the holder to purchase one share of Common Stock, plus a portion of any shares remaining if all of the rights have not been exercised. The subscription price is $5.00 per share. The Rights Offering is part of a recapitalization plan being undertaken by AMF Bowling. As a result of matters discussed under the heading "AMF Bowling," the Board, at a meeting on May 4, 1999, considered a proposal to raise up to $140 million in equity capital. At that meeting, the Board appointed Messrs. Charles M. Diker, Paul B. Edgerley and Howard A. Lipson, directors who are not employees of AMF or affiliated with Goldman Sachs or Kelso (whose affiliates together own more than a majority of the Common Stock and approximately 44% of the outstanding Debentures), as the Special Committee to consider certain aspects of the Offer in the context of the recapitalization plan, including the price at which AMF Bowling would tender for the Debentures in the proposed concurrent Offer. AMF Bowling retained Morgan Stanley as financial advisor to the Board and the Special Committee. Morgan Stanley is also acting as dealer manager in the Offer. At a meeting held on May 4, 1999 after receiving advice from Morgan Stanley and considering various factors, the Special Committee recommended to the full Board pursuing the proposed Offer, subject to the approval of the recapitalization plan by the full Board and subject to the Special Committee approving the specific pricing of the proposed Offer. The Board approved pursuing the recapitalization plan at the May 4 meeting. At Board meetings held on June 10 and June 15, 1999, the Company's management made detailed presentations of the recapitalization plan, including the proposed amendment to the Credit Agreement and the proposed terms of the Rights Offering and the Offer. At each meeting, Morgan Stanley made a presentation to the Board regarding certain matters related to the Rights Offering and the Offer. Thereafter, the Special Committee met separately with Morgan Stanley to discuss certain matters relating to the Offer, including the possible pricing thereof. At a meeting held on June 16, 1999, management made a detailed presentation to the Board about all aspects of the proposed recapitalization plan and recommended that the Board approve it. Morgan Stanley also made a presentation to the Board and recommended the pricing and terms of the Rights Offering and the Offer. The Special Committee met separately with Morgan Stanley to discuss the proposed Offer, including the possible pricing thereof. The Special Committee then rejoined the Board meeting and, based on Morgan Stanley's presentation and recommendations and consideration of other relevant factors, recommended that the Board approve the Offer, including pricing the Offer on the basis presented by management and Morgan Stanley. Based on management's and Morgan Stanley's presentations, taking into account this recommendation of the Special Committee and after consideration of other relevant factors, the full Board then approved the recapitalization plan, including the Rights Offering, the Offer and the other contemplated transactions. At a meeting on June 22, 1999, the Company's management reviewed with the Board the final terms of the recapitalization plan, including the pricing of the Rights Offering and the Offer. The Board confirmed its approval of the recapitalization plan and those terms. Some of the factors considered by the Board include (i) the Company's capital requirements, (ii) the advice of Morgan Stanley, (iii) the alternatives available to the Company for the raising of capital, (iv) the market price of the Common Stock, (v) the market price of the Debentures, (vi) the added flexibility that could be achieved by improving the Company's capital structure and amending the Credit Agreement, (vii) the Company's business prospects, (viii) the operating challenges being faced by the Company, (ix) the Company's recent poor financial performance and results, (x) the Company's high degree of financial leverage, (xi) the Company's desire to reinvigorate its acquisition program, (xii) the Company's need for further flexibility in its debt agreements and (xiii) the general condition of the securities markets. 26 Purpose This Offer is part of a comprehensive recapitalization plan designed to reduce the Company's overall debt burden, provide additional financial flexibility and allow the Company to increase the pace of its acquisition program on a selective basis. Under the terms of the Offer, Debentures acquired by AMF Bowling will be purchased by AMF Bowling at a substantial discount to their Issue Price. Accordingly, if AMF Bowling acquires all of the Debentures for which the Offer is being made, AMF Bowling would recognize an extraordinary gain after giving effect to unamortized debt issuance costs and transaction costs of approximately $53.3 million (calculated as of March 31, 1999). Such extraordinary gain represents the excess of the Issue Price and accrued Original Issue Discount of the Debentures (calculated as of March 31, 1999) over their purchase price less the write off of unamortized deferred financing costs associated with the Debentures being purchased, expenses associated with the purchase of the Debentures and restructuring charges. As of December 31, 1998, AMF Bowling had, for income tax purposes, an accumulated net operating loss carryforward of approximately $194.5 million. Accordingly, AMF Bowling does not expect to incur any current income tax liability with respect to such gain. Transaction costs with respect to the Rights Offering are expected to be approximately $1.5 million. AMF Bowling expects to use the net proceeds of the Rights Offering to, among other things, purchase the Debentures in the Offer, pay such transaction costs of approximately $0.4 million for such purchase, repay $30.0 million of the outstanding Bank Facility as described under "Capitalization," pay $3.8 million to the bank lenders in connection with the amendment to the Credit Agreement and pay other fees and expenses of the Offer and the Rights Offering. The Company may use any remaining proceeds of the Rights Offering for general corporate purposes. THE OFFER Principal Terms of the Offer Upon the terms and subject to the conditions set forth in this Offer to Purchase and in the accompanying Letter of Transmittal, AMF Bowling is offering to purchase up to $514,286,000 aggregate principal amount at maturity (45.7%) of outstanding Debentures for a cash purchase price of $140.00 per $1,000 principal amount at maturity. Conditions of the Offer Notwithstanding any other provision of the Offer, AMF Bowling shall not be required to accept for purchase, or to pay for, the Debentures tendered pursuant to the Offer, and may terminate, extend or amend the Offer or delay or refrain (subject to Rule 14e-1(c) under the Exchange Act) acceptance for purchase or payment for Debentures so tendered, (i) unless the closing shall occur for the subscriptions obtained through exercise of the rights issued pursuant to the Rights Offering with proceeds of at least $120,000,000, (ii) unless, as of the Expiration Date, Debentures having an aggregate principal amount at maturity of at least the Minimum Tender Amount have been validly tendered and not withdrawn (the "Minimum Tender Condition") or (iii) if, at any time after June 28, 1999 and prior to the time of payment for any Debentures, any of the following (each a "General Condition" and collectively, the "General Conditions") shall occur: (1) there shall have been threatened, instituted or pending any action or proceeding by or before any court or governmental regulatory or administrative authority or tribunal, domestic or foreign, (i) which challenges the making of the Offer, the purchase of Debentures pursuant to the Offer or otherwise relates in any manner to the Offer, (ii) which, in the sole judgment of AMF Bowling, would or might directly or indirectly materially impair the contemplated benefits of the Offer to the Company, (iii) which, in the sole judgment of AMF Bowling, would or might directly or indirectly materially affect the business, assets, liabilities, condition (financial or otherwise), operations, results of operations or prospects of the Company, or (iv) which, in the sole judgment of AMF Bowling, otherwise is reasonably likely to result in the Offer not being in the best interests of AMF Bowling; (2) a statute, rule, regulation, judgment, order, stay, decree or injunction shall have been threatened, proposed, sought, promulgated, enacted, entered, enforced or deemed to be applicable by any court or 27 governmental regulatory or administrative agency, authority or tribunal, domestic or foreign, which, in the sole judgment of AMF Bowling, would or might directly or indirectly (i) prohibit, prevent, restrict or delay consummation of the Offer, (ii) materially impair the contemplated benefits of the Offer to the Company, (iii) materially affect the business, assets, liabilities, condition (financial or otherwise), operations, results of operations or prospects of the Company, or (iv) otherwise is reasonably likely to result in the Offer not being in the best interests of AMF Bowling; (3) there shall have occurred or be likely to occur any event affecting the business or financial condition of AMF Bowling that, in the sole judgment of AMF Bowling, would or might, directly or indirectly, (i) prohibit, prevent, restrict or delay consummation of the Offer, (ii) materially impair the contemplated benefits of the Offer to the Company, (iii) materially affect the business, assets, liabilities, condition (financial or otherwise), operations, results of operations or prospects of the Company or (iv) otherwise is reasonably likely to result in the Offer not being in the best interests of AMF Bowling; (4) (i) any general suspension or limitation of trading in, or limitation on prices for, securities in the financial markets of the United States, (ii) any suspension of trading of any securities of AMF Bowling on any United States securities exchange or interdealer quotation system, (iii) the declaration of a banking moratorium, or any suspension of payments in respect of banks, by Federal or New York authorities or (iv) any outbreak or escalation of major hostilities in which the United States is involved, any declaration of war by the United States or any other substantial state, national, or international calamity or emergency if the effect of any such outbreak, escalation, declaration, calamity or emergency makes it impractical or inadvisable in the sole judgment of AMF Bowling for AMF Bowling to proceed with the Offer; (5) any change in the general political, market, economic or financial conditions in the United States or abroad that in the sole judgment of AMF Bowling has or may have a material adverse effect on AMF Bowling's business, assets, liabilities, operations, results of operations, condition (financial or otherwise) or prospects or the trading in the securities of the Company, or any decline in either the Dow Jones Industrial Average or the Standard and Poor's Index of 500 Industrial Companies by an amount in excess of 10%, as measured from the close of business on June 28, 1999; (6) AMF Bowling shall not have obtained all consents, approvals, waivers or amendments from third parties necessary to permit the consummation of the Offer; or (7) any change shall have occurred (or any development shall have occurred involving any prospective change) in the business, assets, liabilities, condition (financial or otherwise), operations, results of operations, or prospects of AMF Bowling that, in the sole judgment of AMF Bowling, has or may have a material adverse effect on AMF Bowling or that would or might prohibit, prevent, restrict or delay consummation of the Offer. The foregoing conditions are for the sole benefit of AMF Bowling and may be asserted by AMF Bowling, in its sole discretion, regardless of the circumstances giving rise to any such condition or may be waived by AMF Bowling in whole or in part at any time and from time to time in AMF Bowling's sole discretion. The failure by AMF Bowling at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right which may be asserted at any time. Expiration Date; Extension; Termination; Amendments The Offer will expire on the Expiration Date. AMF Bowling expressly reserves the right to extend the Offer on a daily basis or for such period or periods as it may determine in its sole discretion from time to time by giving written or oral notice to the Depositary and by making a public disclosure before 9:00 a.m., New York City time, on the next business day following the previously scheduled Expiration Date. During any such extended period, all Debentures previously tendered and not accepted for purchase will remain subject to the Offer and may, subject to the terms and conditions of the Offer, be accepted for purchase by AMF Bowling or may be withdrawn by the applicable Holder. 28 AMF Bowling expressly reserves the absolute right, in its sole discretion, to (i) waive any condition to the Offer, (ii) amend any terms of the Offer and (iii) modify the Offer. Any waiver or amendment applicable to the Offer will apply to all Debentures validly tendered regardless of when or in what order such Debentures were tendered. If AMF Bowling makes a material change in the terms of the Offer or waives a material condition of the Offer, AMF Bowling will disseminate information concerning such change or waiver and will extend the Expiration Date, in each case, to the extent required by law. AMF Bowling expressly reserves the right, in its sole discretion, to terminate the Offer for any reason, including if any of the conditions applicable thereto set forth under "--Conditions of the Offer" shall exist and shall not have been waived by AMF Bowling. Any such termination will be followed as promptly as practicable by public announcement thereof. In the event AMF Bowling shall terminate the Offer, it shall give immediate notice thereof to the Depositary, and all Debentures theretofore tendered pursuant to the Offer shall be returned promptly to the tendering Holders. Any extension, delay, termination or amendment of the Offer will be followed as promptly as practicable by a press release or other public announcement thereof, such announcement in the case of an extension to be issued no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. Without limiting the manner by which AMF Bowling may choose to make such announcement, AMF Bowling will not, unless otherwise required by law, have any obligation to publish, advertise or otherwise communicate any such announcement. Acceptance of Debentures for Purchase; Payment for Debentures; Maximum Tender Amount and Pro Rata Acceptance Upon the terms and subject to the conditions of the Offer, unless previously terminated, promptly after the Expiration Date, AMF Bowling will, subject to the satisfaction or waiver of all relevant conditions, accept for purchase, and pay for, Debentures validly tendered under the Offer as of the Expiration Date and not withdrawn; provided, however, that if more than the Maximum Tender Amount of Debentures has been validly tendered, AMF Bowling will purchase Debentures in an aggregate amount equal to the Maximum Tender Amount on a Pro Rata Acceptance basis. AMF Bowling expressly reserves the right, in its sole discretion, to delay for a reasonable period, acceptance for purchase of Debentures validly tendered under the Offer or the payment for Debentures accepted for purchase (subject to Rule 14e-1(c) under the Exchange Act, which requires that AMF Bowling pay the consideration offered or return the Debentures deposited by or on behalf of the Holders promptly after the termination or withdrawal of the Offer), or to terminate the Offer and not accept for purchase any Debentures not theretofore accepted for purchase, if any of the conditions set forth under "--Conditions of the Offer" shall not have been satisfied or waived by AMF Bowling or in order to comply in whole or in part with any applicable law. In all cases, payment for Debentures purchased pursuant to the Offer will be made only after timely receipt by the Depositary of (i) such Debentures, or timely Book-Entry Confirmation (as hereinafter defined) of such Debentures into the Depositary's account at DTC pursuant to the procedures set forth below in "Procedures for Tendering Debentures," (ii) a properly completed and duly executed Letter of Transmittal (or an Agent's Message in lieu thereof) and (iii) all necessary signature guarantees and any other documents required by the Letter of Transmittal. See "Procedures for Tendering Debentures" for a description of the procedures for tendering Debentures pursuant to the Offer. For purposes of the Offer, AMF Bowling will be deemed to have accepted for payment (and therefore purchased) Debentures when and if it gives oral notice to the Depositary of its acceptance of such Debentures for payment pursuant to the Offer. Payment for Debentures purchased pursuant to the Offer will be made by AMF Bowling by depositing the Repurchase Price therefor with the Depositary, which will act as agent for tendering Holders for the purpose of receiving the Repurchase Price from AMF Bowling and transmitting the Repurchase Price to the tendering Holders. 29 Tenders with respect to the Debentures pursuant to the Offer will be accepted only in principal amounts at maturity equal to $1,000 or integral multiples thereof. If, for any reason whatsoever, acceptance for purchase of or payment for validly tendered Debentures pursuant to the Offer is delayed or AMF Bowling is unable to accept for purchase or to pay for validly tendered Debentures pursuant to the Offer, then the Depositary may, nevertheless, on behalf of AMF Bowling, retain tendered Debentures, without prejudice to the rights of AMF Bowling described under "--Expiration Date; Extension; Termination; Amendments," "--Conditions of the Offer" and "Procedures for Tendering Debentures--Withdrawal of Tenders," but subject further to Rule 14e-1(c) under the Exchange Act, which requires that AMF Bowling pay the consideration offered or return the Debentures deposited by or on behalf of the Holders promptly after the termination or withdrawal of the Offer. AMF Bowling does not expect to increase the consideration offered in the Offer, but if the consideration offered in the Offer is increased, all tendering Holders whose Debentures are accepted for payment pursuant to the Offer will be given the increased consideration regardless of when or in what order such Debentures were validly tendered. Under no circumstances will any interest be payable because of any delay in the transmission of funds to the Holders of purchased Debentures or otherwise. If any tendered Debentures are not accepted for payment for any reason pursuant to the terms and conditions of the Offer or if certificates are submitted evidencing more Debentures than are tendered, certificates evidencing unpurchased Debentures will be returned, without expense, to the tendering Holder (or, in the case of Debentures tendered by book-entry transfer into the Depositary's account at DTC, the account maintained at DTC designated by the participant therein who so delivered such Debentures), unless otherwise requested by such Holder under "Special Delivery Instructions" in the Letter of Transmittal, promptly following the Expiration Date or the termination of the Offer. The Debentures purchased pursuant to the Offer will cease to be outstanding and will be delivered to the Trustee for cancellation as promptly as practicable after such purchase. Any Debentures which remain outstanding after consummation of the Offer will continue to be obligations of AMF Bowling in accordance with the provisions of the Indenture. After the Expiration Date, AMF Bowling may purchase additional Debentures in the open market, in privately negotiated transactions, through subsequent tender or exchange offers or otherwise, subject to compliance with the Indenture and applicable law. Any future purchases may be on the same terms or on terms that may be more or less favorable to Holders than the terms of the Offer. Any future purchases will depend on various factors at that time. If more than 45.7% of the Debentures are validly tendered and not withdrawn in the Offer and/or if subscriptions are received for more than $120 million of AMF common stock, AMF Bowling may, but is not obligated to, increase the outstanding principal amount at maturity of Debentures being sought, but not in excess of 60% of the outstanding Debentures, and in that event extend the expiration dates of the Offer and the Rights Offering. PROCEDURES FOR TENDERING DEBENTURES Tendering Debentures The tender of Debentures pursuant to any of the procedures set forth in this Offer to Purchase and in the Letter of Transmittal will constitute a binding agreement between the tendering Holder and AMF Bowling upon the terms and subject to the conditions of the Offer. The tender of Debentures will constitute an agreement to deliver good and marketable title to all tendered Debentures on the Expiration Date free and clear of all liens, charges, claims, encumbrances, interests and restrictions of any kind. Except as provided in "--Guaranteed Delivery Procedures," unless the Debentures being tendered are deposited by the Holder with the Depositary on or before the Expiration Date (accompanied by a properly 30 completed and duly executed Letter of Transmittal), AMF Bowling may, at its option, reject such tender. Payment for Debentures will be made only against deposit of validly tendered Debentures and delivery of all other required documents. Any beneficial owner whose Debentures are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender Debentures should contact promptly such registered Holder. Only record Holders are authorized to tender their Debentures pursuant to the Offer. Accordingly, to properly tender Debentures or cause Debentures to be tendered, the following procedures must be followed: Debentures held through DTC. Each beneficial owner of Debentures held through a participant (a "DTC Participant") of DTC (i.e., a custodian bank, depositary, broker, trust company or other nominee) must instruct such DTC Participant to cause its Debentures to be tendered in accordance with the procedures set forth in this Offer to Purchase. To effectively tender Debentures that are held through DTC, DTC Participants should transmit their acceptance through ATOP, for which the transaction will be eligible, and DTC will then edit and verify the acceptance and send an Agent's Message to the Depositary for its acceptance. Delivery of tendered Debentures must be made to the Depositary pursuant to the book-entry delivery procedures set forth below or the tendering DTC Participant must comply with the guaranteed delivery procedures set forth below. No Letters of Transmittal will be required to tender Debentures through ATOP. The Depositary will establish an account with respect to the Debentures at DTC for purposes of the Offer within two business days after the date of this Offer to Purchase, and any financial institution that is a participant in DTC may make book-entry delivery of the Debentures by causing DTC to transfer such Debentures into the Depositary's account in accordance with DTC's procedures for such transfer. However, although delivery of Debentures may be effected through book-entry transfer into the Depositary's account at DTC, the Letter of Transmittal (or facsimile thereof), with any required signature guarantees or an Agent's Message in connection with a book-entry transfer, and any other required documents, must, in any case, be transmitted to and received by the Depositary at its address set forth on the last page of this Offer to Purchase on or before the Expiration Date, or the tendering Holder must comply with the guaranteed delivery procedures described below. Delivery of documents to DTC does not constitute delivery to the Depositary. The confirmation of a book- entry transfer into the Depositary's account at DTC as described above is referred to herein as a "Book-Entry Confirmation." The term "Agent's Message" means a message transmitted by DTC to, and received by, the Depositary and forming a part of the Book-Entry Confirmation, which states (i) that DTC has received an express acknowledgment from the DTC Participant described in such Agent's Message, (ii) the principal amount of Debentures which have been tendered by such DTC Participant pursuant to the Offer, (iii) that such DTC Participant has received this Offer to Purchase and the Letter of Transmittal and agrees to be bound by the terms of this Offer to Purchase and the Letter of Transmittal and (iv) that AMF Bowling may enforce such agreement against such DTC Participant. Debentures held by Record Holders. Each record Holder must complete and sign a Letter of Transmittal, and mail or deliver such Letter of Transmittal, and any other documents required by the Letter of Transmittal, together with certificate(s) representing all tendered Debentures, to the Depositary at its address set forth on the last page of this Offer to Purchase, or the Holder must comply with the guaranteed delivery procedures set forth in this Offer to Purchase. See "--Guaranteed Delivery Procedures." All signatures on a Letter of Transmittal must be guaranteed by a recognized participant in the Securities Transfer Agents Medallion Program, the NYSE Medallion Signature Program or the Stock Exchange Medallion Program; provided, however, that signatures on a Letter of Transmittal need not be guaranteed if such Debentures are tendered for the account of an Eligible Institution (as hereinafter defined). If a Letter of Transmittal or any 31 Debenture is signed by a trustee, executor, administrator, guardian, attorney- in-fact, agent, officer of a corporation or other person acting in a fiduciary or representative capacity, such person must so indicate when signing, and proper evidence satisfactory to AMF Bowling of the authority of such person so to act must be submitted. No alternative, conditional, irregular or contingent tenders will be accepted (unless waived). By executing a Letter of Transmittal or transmitting an acceptance through ATOP, each tendering Holder waives any right to receive any notice of the acceptance for purchase of its Debentures. Backup Federal Income Tax Withholding. Under the "backup withholding" provisions of federal income tax law, unless a tendering Holder, or his or her assignee (in either case, the "Payee"), satisfies the conditions described in Instruction 5 of the Letter of Transmittal or is otherwise exempt, the aggregate purchase price may be subject to backup withholding tax at a rate of 31%. To prevent backup withholding, each Payee should complete and sign the Substitute Form W-9 provided in the Letter of Transmittal or otherwise certify such Holder's exemption from backup withholding. See Instruction 5 of the Letter of Transmittal. Effect of Letter of Transmittal. Subject to and effective upon the acceptance for purchase of and payment for Debentures validly tendered thereby, by executing and delivering a Letter of Transmittal a tendering Holder (i) irrevocably tenders, sells, assigns and transfers to AMF Bowling, all right, title and interest in and to all of the Debentures tendered thereby, (ii) waives any and all rights with respect to the Debentures (including without limitation any existing or past defaults and their consequences in respect of the Debentures and the Indenture), (iii) releases and discharges AMF Bowling from any and all claims such Holder may have now, or may have in the future, arising out of, or related to, the Debentures including, without limitation, any claims that such Holder is entitled to receive additional principal or interest payments with respect to the Debentures or to participate in any redemption or defeasance of the Debentures and (iv) irrevocably constitutes and appoints the Depositary the true and lawful agent and attorney-in-fact of such Holder with respect to any such tendered Debentures, with full power of substitution and resubstitution (such power of attorney being deemed to be an irrevocable power coupled with an interest) to (a) deliver certificates representing such Debentures, or transfer ownership of such Debentures, on the account books maintained by DTC, together, in any such case, with all accompanying evidences of transfer and authenticity, to AMF Bowling, (b) present such Debentures for transfer on the relevant security register and (c) receive all benefits or otherwise exercise all rights of beneficial ownership of such Debentures (except that the Depositary will have no rights to, or control over, funds from AMF Bowling, except as agent for AMF Bowling, for the Repurchase Price for any tendered Debentures that are purchased by AMF Bowling), all in accordance with the terms of the Offer. All questions as to the validity, form, eligibility (including time of receipt) and acceptance of tendered Debentures will be resolved by AMF Bowling, in its sole discretion and whose determination will be final and binding. AMF Bowling reserves the absolute right to reject any or all tenders, in its sole discretion, that are not in proper form or the acceptance of which may be unlawful. AMF Bowling also reserves the absolute right to waive any condition to the Offer and any irregularities or conditions of tender as to particular Debentures. AMF Bowling's interpretation of the terms and conditions of the Offer (including the instructions in the Letter of Transmittal) will be final and binding. Unless waived, any irregularities in connection with tenders must be cured within such time as AMF Bowling shall determine in its sole discretion. None of AMF Bowling, the Trustee, the Depositary, the Dealer Manager, the Information Agent or any other person shall be under any duty to give notification of defects in such tenders or incur liabilities for failure to give such notification. Tenders of Debentures will not be deemed to have been made until such irregularities have been cured or waived. Any Debentures received by the Depositary that are not properly tendered and as to which the irregularities have not been cured or waived will be returned by the Depositary to the tendering Holder, unless otherwise provided in the Letter of Transmittal, as soon as practicable following the Expiration Date. Letters of Transmittal and Debentures must be sent only to the Depositary. Do not send Letters of Transmittal or Debentures to AMF Bowling, the Trustee, the Dealer Manager or the Information Agent. 32 The method of delivery of Debentures and Letters of Transmittal, any required signature guarantees and all other required documents, including delivery through DTC and any acceptance through ATOP, is at the election and risk of the persons tendering and delivering acceptances or Letters of Transmittal and, except as otherwise provided in the Letter of Transmittal, delivery will be deemed made only when actually received by the Depositary. If delivery is by mail, it is suggested that the Holder use properly insured, registered mail with return receipt requested, and that the mailing be made sufficiently in advance of the Expiration Date to permit delivery to the Depositary on or before such date. Guaranteed Delivery Procedures DTC Participants. A DTC Participant who wishes to cause its Debentures to be tendered, but who cannot transmit its acceptance through ATOP on or before the Expiration Date, may cause a tender to be effected if: (a) guaranteed delivery is made by or through a firm or other entity identified in Rule 17Ad-15 under the Exchange Act (an "Eligible Institution"), including (as such terms are defined therein): (i) a bank; (ii) a broker, dealer, municipal securities dealer, municipal securities broker, government securities dealer or government securities broker; (iii) a credit union; (iv) a national securities exchange, registered securities association or clearing agency; or (v) a savings institution that is a participant in a Securities Transfer Association recognized program; and (b) on or before the Expiration Date, the Depositary receives from such Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by mail, hand delivery, facsimile transmission or overnight courier) substantially in the form provided herewith; and (c) Book-Entry Confirmation of the transfer into the Depositary's account at DTC, and all other documents required by the Letter of Transmittal, are received by the Depositary within three NYSE trading days after the date of receipt by the Depositary of such Notice of Guaranteed Delivery. Record Holders. A record Holder who wishes to tender its Debentures but (i) whose Debentures are not lost, but are not immediately available and will not be available for tendering on or before the Expiration Date or (ii) who cannot deliver its Debentures, the Letter of Transmittal, or any other required documents, to the Depositary before the Expiration Date, may effect a tender if: (a) the tender is made by or through an Eligible Institution; and (b) on or before the Expiration Date, the Depositary receives from such Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by mail, hand delivery, facsimile transmission or overnight courier) substantially in the form provided herewith; and (c) a properly completed and executed Letter of Transmittal, as well as the certificate(s) representing all tendered Debentures in proper form for transfer, and all other documents required by the Letter of Transmittal, are received by the Depositary within three NYSE trading days after the date of receipt by the Depositary of such Notice of Guaranteed Delivery. Under no circumstances will interest be paid by AMF Bowling by reason of any delay in making payment to any person using the guaranteed delivery procedures described above or otherwise. Withdrawal Rights Tenders of Debentures (or any portion of such Debentures in integral multiples of $1,000 principal amount at maturity) may be withdrawn at any time before the Expiration Date in accordance with the procedures set forth below and in the Letter of Transmittal. Debentures held through DTC. A DTC Participant who has transmitted its acceptance through ATOP in respect of Debentures held through DTC may, before the Expiration Date, withdraw the instruction given thereby 33 by (i) withdrawing its acceptance through ATOP or (ii) delivering to the Depositary by mail, hand delivery or facsimile transmission of notice of withdrawal of such instruction. Such notice of withdrawal must contain the name and number of the DTC Participant, the principal amount of Debentures to which such withdrawal relates and the signature of the DTC Participant. Withdrawal of such an instruction will be effective upon receipt of such notice of withdrawal by the Depositary. Debentures held by Record Holders. A Holder may withdraw its tender of Debentures, before the Expiration Date, by delivering to the Depositary by mail, hand delivery or facsimile transmission of notice of withdrawal. Any such notice of withdrawal must (i) specify the name of the person who tendered the Debentures to be withdrawn, (ii) contain a description of the Debentures to be withdrawn and identify the Debenture certificate number or numbers shown on the particular certificates evidencing such Debentures and the aggregate principal amount at maturity represented by such Debentures and (iii) be signed by the Holder in the same manner as the original signature on the Letter of Transmittal by which such Debentures were tendered (including any required signature guarantees), or be accompanied by (x) documents of transfer in a form acceptable to AMF Bowling, in its sole discretion, and (y) a properly completed irrevocable proxy that authorized such person to effect such revocation on behalf of such Holder. If the Debentures to be withdrawn have been delivered or otherwise identified to the Depositary, a signed notice of withdrawal is effective immediately upon receipt by the Depositary even if physical release is not yet effected. Any Debentures properly withdrawn will be deemed to be not validly tendered for purposes of the Offer. All signatures on a notice of withdrawal must be guaranteed by a recognized participant in the Securities Transfer Agents Medallion Program, the NYSE Medallion Signature Program or the Stock Exchange Medallion Program; provided, however, that signatures on the notice of withdrawal need not be guaranteed if the Debentures being withdrawn are held for the account of an Eligible Institution. A withdrawal of an instruction or a withdrawal of a tender must be executed by a DTC Participant or a Holder, as the case may be, in the same manner as the person's name appears on its transmission through ATOP or Letter of Transmittal, as the case may be, to which such withdrawal relates. If a notice of withdrawal is signed by a trustee, partner, executor, administrator, guardian, attorney-in-fact, agent, officer of a corporation or other person acting in a fiduciary or representative capacity, such person must so indicate when signing and must submit with the revocation appropriate evidence of authority to execute the notice of withdrawal. A Holder or DTC Participant may withdraw a tender only if such withdrawal complies with the provisions of this Offer to Purchase and the Letter of Transmittal. A withdrawal of an instruction previously given pursuant to the transmission of an acceptance through ATOP or a withdrawal of a tender by a Holder may be rescinded only by (i) a new transmission of acceptance through ATOP or (ii) execution and delivery of a new Letter of Transmittal, as the case may be, in accordance with the procedures described herein and in the Letter of Transmittal. All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by AMF Bowling, in its sole discretion, which determination shall be final and binding. None of AMF Bowling, the Trustee, the Depositary, the Dealer Manager, the Information Agent or any other person shall be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liabilities for failure to give any such notification. OWNERSHIP OF DEBENTURES On November 12, 1998, GS Capital Partners II, L.P. ("GS Capital II"), GS Capital Partners II Offshore, L.P. ("GS Offshore"), GS Capital Partners II Germany Civil Law Partnership ("GS Germany"), Stone Street Fund 1995, L.P. ("1995 Stone"), Stone Street Fund 1996, L.P. ("1996 Stone"), Bridge Street Fund 1995, L.P. ("1995 Bridge") and Bridge Street Fund 1996, L.P. ("1996 Bridge" and together with GS Capital II, GS Offshore, GS Germany, 1995 Stone, 1996 Stone and 1995 Bridge, the "Goldman Sachs Group Affiliates"), 34 Kelso Investment Associates V, L.P. ("KIA V") and Kelso Equity Partners V, L.P. ("KEP V" and, together with KIA V, the "Kelso Affiliates") entered into an agreement (the "Debenture and Note Purchase Agreement"), in which the parties thereto agreed to make open market purchases of the Debentures from time to time for their respective accounts in agreed-upon proportions. Under the Debenture and Note Purchase Agreement, the Goldman Sachs Group Affiliates have purchased $415,957,000 in aggregate principal amount at maturity (approximately 36.9%) of Debentures and the Kelso Affiliates have purchased $79,993,000 in aggregate principal amount at maturity (approximately 7.1%) of Debentures, collectively representing approximately 44% of the outstanding Debentures. Both the Goldman Sachs Group Affiliates and the Kelso Affiliates have indicated that they currently intend to tender all of their Debentures in the Offer subject to market conditions, although they are not obligated to do so. SOURCES AND AMOUNT OF FUNDS The precise amount of funds required by AMF Bowling to purchase Debentures validly tendered pursuant to the Offer and to pay the fees and expenses related to the Offer will not be known until the Expiration Date. If the Maximum Tender Amount were tendered and purchased the amount of funds required to pay the aggregate Repurchase Price will be approximately $72 million. The funds required to purchase validly tendered Debentures and to pay fees and expenses are to be provided from the proceeds of the Rights Offering. CERTAIN FEDERAL INCOME TAX CONSEQUENCES The following discussion is for general information only and is based on the federal income tax law now in effect, which is subject to change, possibly retroactively. The following discussion is a summary of certain federal income tax consequences of the Offer and does not discuss all aspects of federal income taxation which may be relevant to any particular holder of Debentures in light of such holder's individual investment circumstances or to certain types of holders subject to special tax rules (e.g., financial institutions, broker-dealers, insurance companies, tax-exempt organizations, and foreign taxpayers) or holders that hold Debentures as a part of a straddle, hedge or synthetic security transaction for federal income tax purposes, nor does it address any state, local or foreign tax consequences. This summary assumes that the holders have held their Debentures as "capital assets" within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the "Code"). Each holder of Debentures is urged to consult such holder's tax advisor regarding the specific federal, state, local, and foreign income and other tax consequences of the Offer. As used herein, the term "U.S. Holder" means a holder of Debentures that, for United States federal income tax purposes, is (i) a citizen or individual resident of the United States, (ii) a corporation or partnership formed under the laws of the United States or any political subdivision thereof, (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source, or (iv) a trust, if a court within the United States is able to exercise primary jurisdiction over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust. The term "Non-U.S. Holder" means any holder of Debentures that is not a U.S. Holder. U.S. Holders A U.S. Holder who sells a Debenture to AMF Bowling pursuant to the Offer will recognize taxable gain or loss equal to the difference between the Repurchase Price and such U.S. Holder's adjusted tax basis in the Debenture. In general, a U.S. Holder's adjusted tax basis in a Debenture will equal its initial investment in the Debenture, increased by any original issue discount (as defined in the Code) ("OID") or market discount (as discussed below) includible in its income during the period it has held the Debenture and reduced by (i) the amount of any payments on the Debenture that are not qualified stated interest payments and (ii) the amount of any amortizable bond premium or acquisition premium applied to reduce interest on the Debenture. Except to the extent of any accrued market discount (as discussed below), any gain or loss recognized on the sale of a Debenture pursuant to the Offer should be capital gain or loss and will generally be long-term capital gain or loss if the U.S. Holder has held the Debenture for more than one year at the time of the sale. 35 In the case of an individual U.S. Holder, gain on most capital assets held for more than one year is subject to tax at a maximum rate of 20%. If an individual U.S. Holder recognizes a capital loss on the sale of the Debenture, such loss will be deductible only to the extent of such U.S. Holder's net capital gains from other sources, plus $3,000 of ordinary income. Any disallowed capital loss may be carried forward to subsequent taxable years, subject to the same limitation. In the case of a corporate U.S. Holder, any capital loss realized on the sale of a Debenture will be deductible only to the extent of such U.S. Holder's net capital gain from other sources. Any net capital loss may generally be carried back, subject to certain limitations, to the three immediately preceding taxable years and forward to the five immediately succeeding taxable years. An exception to the capital gain treatment described above applies if a U.S. Holder acquired a Debenture at a "market discount." Market discount is the amount by which the U.S. Holder's basis in the Debenture immediately after its acquisition is exceeded by the "revised issue price" of the Debenture (which is generally equal to the issue price of the Debenture plus the amount of OID that has accrued on the Debenture since its issuance). A Debenture will be considered to have no market discount if such excess is less than 1/4 of 1% of the stated redemption price of the Debenture at maturity multiplied by the number of complete years from the U.S. Holder's acquisition date of the Debenture to its maturity date. The gain realized by the U.S. Holder of a market discount Debenture on its sale to AMF Bowling will be treated as ordinary income to the extent that market discount on the Debenture has accrued on a straight-line basis (or, at the election of the U.S. Holder, on a constant interest basis) from its acquisition date to the date of sale, unless the U.S. Holder has elected to include market discount in income currently as it accrues. Gain in excess of such accrued market discount will be subject to the capital gains rules described above. Non-U.S. Holders Except to the extent of any OID accrued while a Debenture was held by a Non- U.S. Holder as described below and subject to the discussion concerning backup withholding, any gain realized by such Non-U.S. Holder on the sale of a Debenture pursuant to the Offer will not be subject to U.S. federal income tax, unless (i) such gain is effectively connected with such Non-U.S. Holder's conduct of a trade or business in the U.S. or, in the case of a Non-U.S. Holder that is a resident of a county that has a tax treaty with the U.S. and eligible to obtain the benefits of such treaty, is attributable to a permanent establishment (or, in the case of an individual, a fixed base) in the United States, (ii) subject to certain exceptions, the Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of the disposition and certain other conditions are met, or (iii) the Non-U.S. Holder is a U.S. expatriate (such as a former citizen or resident of the U.S.) and is subject to certain provisions of U.S. tax law applicable to certain U.S. expatriates. An exception to the general rules described above applies if any OID has accrued on a Debenture while such Debenture was held by the Non-U.S. Holder. The gain realized by such Non-U.S. Holder may be subject to U.S. federal income tax to the extent of such OID unless (i) such OID is not effectively connected with such Non-U.S. Holder's conduct of a trade or business in the U.S., (ii) such Non-U.S. Holder does not actually or constructively own 10% or more of the total voting power of all voting stock of AMF Bowling and is not a "controlled foreign corporation" (as defined in the Code) with respect to which AMF Bowling is a related person, and (iii) certain Internal Revenue Service certification statements prescribed in the Code, for example, Form W- 8, are provided to AMF Bowling or the Depositary. Information Reporting and Backup Withholding U.S. Holders. Proceeds payable to a U.S. Holder on a sale of Debentures pursuant to the Offer may be subject to "backup withholding" at a rate of 31% if (i) the U.S. Holder fails to furnish a social security number or other taxpayer identification number ("TIN") certified under penalties of perjury within a reasonable time after the request therefor, (ii) the U.S. Holder furnishes an incorrect TIN, (iii) the U.S. Holder fails to report properly interest or dividends, or (iv) under certain circumstances, the U.S. Holder fails to provide a certified statement, signed under penalties of perjury, that the TIN furnished is the correct number and that the U.S. 36 Holder is not subject to backup withholding. In addition, if the U.S. Holder does not provide AMF Bowling with a correct TIN, the U.S. Holder may be subject to penalties imposed by the IRS. Any amount withheld from a payment under the backup withholding rules will be creditable against the U.S. Holder's federal income tax liability, provided that the required information is furnished to the Internal Revenue Service. Backup withholding will not apply, however, with respect to payments made to certain holders, including corporations and tax-exempt organizations, provided their exemptions from backup withholding are properly established. Non-U.S. Holders. In the case of a Non-U.S. Holder, backup withholding and additional information reporting will not apply to payments of the Repurchase Price by AMF Bowling if the Non-U.S. Holder certifies as to its non-U.S. status under penalties of perjury or otherwise establishes an exemption (provided that neither AMF nor the Depositary has actual knowledge that such Non-U.S. Holder is a U.S. person or that the conditions of any other exemption are not, in fact, satisfied). The payment of the Repurchase Price to or through the U.S. office of any broker, U.S. or foreign, will be subject to information reporting and possible backup withholding unless the holder certifies as to its Non-U.S. Holder status under penalty of perjury or otherwise establishes an exemption, provided that the broker does not have actual knowledge that the holder is a U.S. person or that the conditions of any other exemption are not, in fact, satisfied. The payment of the Repurchase Price to or through a non-U.S. office of a non-U.S. broker that is not a U.S. related person will not be subject to information reporting or backup withholding. For this purpose, a "U.S. related person" is (i) a "controlled foreign corporation" for U.S. federal income tax purposes or (ii) a foreign person 50% or more of whose gross income from all sources for the three-year period ending with the close of its taxable year preceding the payment (or for such part of the period that the broker has been in existence) is derived from activities that are effectively connected with the conduct of a U.S. trade or business. In the case of the payment of proceeds to or through a non-U.S. office of a broker that is either a U.S. person or a U.S. related person, information reporting is required on the payment unless the broker has documentary evidence in the files that the holder is a Non-U.S. Holder and the broker has no actual knowledge to the contrary. Backup withholding will not apply to payments made through foreign offices of a broker that is not a U.S. person or a U.S. related person (absent actual knowledge that the payee is a U.S. person). Any amounts withheld under the backup withholding rules from a payment to a Non-U.S. Holder will be allowed as a refund or a credit against its U.S. federal income tax liability, provided that the required information is provided to the Internal Revenue Service. DEALER MANAGER Morgan Stanley is acting as the Dealer Manager for AMF Bowling in connection with the Offer. Any questions or requests for assistance may be directed to the Dealer Manager at the address or telephone number set forth on the last page of this Offer to Purchase. The Dealer Manager is also acting as financial advisor to the Board in connection with the recapitalization plan, including the Rights Offering and the Offer. It is also advising the Special Committee on matters relating to the Offer, including the pricing thereof. Morgan Stanley's advice has included assistance in determining the Repurchase Price, the subscription price in the Rights Offering and the impact of the Rights Offering on AMF Bowling and its stockholders from a financial point of view. It has also discussed with management and the Board the possible effects of the Rights Offering and the recapitalization plan, including the Offer. Morgan Stanley also performed analyses to assist the Board in determining the appropriate and desirable pricing and other terms for the Rights Offering and the Special Committee in determining the appropriate and desirable pricing of the Offer. Morgan Stanley and some of its affiliates have performed in the past and may perform in the future other financial advisory and investment banking services for the Company. The Company has paid, and may in the future pay, such parties compensation for their services. Morgan Stanley was one of the initial purchasers of the 37 Debentures when they were issued in May 1998 and is currently a market maker for the Debentures. In addition, Morgan Stanley was an underwriter of the Company's initial public offering in November 1997 (the "IPO"), serving as the qualified independent underwriter for purposes of the rules of the National Association of Securities Dealers, Inc. in the IPO. THE DEPOSITARY The Depositary for the Offer is ChaseMellon Shareholder Services, L.L.C. All deliveries, correspondence and questions sent or presented to the Depositary relating to the Offer should be directed to one of the addresses or telephone numbers set forth on the last page of this Offer to Purchase. INFORMATION AGENT D.F. King & Co., Inc. is acting as the Information Agent for AMF Bowling in connection with the Offer. Requests for copies of the Offer materials should be directed to the Information Agent at the address or telephone number set forth on the last page of this Offer to Purchase. FEES AND EXPENSES AMF Bowling has agreed to pay Morgan Stanley a fee of $500,000 for serving as Dealer Manager and financial advisor, as described above. AMF Bowling has also agreed to reimburse reasonable expenses of the Dealer Manager in connection with this Offer. The Company will pay the Depositary and the Information Agent reasonable and customary compensation for their services in connection with the Offer, plus reimbursement for reasonable expenses. Brokers, dealers (including the Dealer Manager), commercial banks, trust companies and other nominees will be reimbursed by AMF Bowling for customary mailing and handling expenses incurred by them in forwarding material to their customers. AMF Bowling will not pay any fees or commissions to any broker, dealer, commercial bank, trust company or other person (other than the Dealer Manager, the Depositary and the Information Agent) in connection with the solicitation of tenders of Debentures pursuant to the Offer. INDEMNIFICATION AMF Bowling has agreed to indemnify the Depositary, the Information Agent and the Dealer Manager against certain liabilities, including, in certain cases, under the securities laws. MISCELLANEOUS Directors, officers and regular employees of AMF Bowling (who will not be specifically compensated for such services) and the Dealer Manager may contact Holders by mail, telephone, telex, telegram messages, facsimiles and personal interviews regarding the Offer and may request brokers, dealers, commercial banks, trust companies and other nominees to forward this Offer to Purchase and related materials to beneficial owners of Debentures. AMF Bowling is not aware of any jurisdiction where the making of the Offer is not in compliance with the laws of such jurisdiction. If AMF Bowling becomes aware of any jurisdiction where the making of the Offer would not be in compliance with such laws, AMF Bowling will make a good faith effort to comply with any such laws or seek to have such laws declared inapplicable to the Offer. If, after such good faith effort, AMF Bowling cannot comply with any such applicable laws, the Offer will not be made to (nor will tenders be accepted from or on behalf of) the Holders residing in such jurisdiction. 38 Manually signed facsimile copies of the Letter of Transmittal will be accepted. Letters of Transmittal, certificates for Debentures and any other required documents should be sent by each Holder or such Holder's broker, dealer, commercial bank, trust company or other nominee to the Depositary at one of the addresses set forth below: The Depositary for the Offer is: ChaseMellon Shareholder Services, L.L.C. By Courier: Registered Mail: By Hand: ChaseMellon Shareholder ChaseMellon Shareholder ChaseMellon Shareholder Services, L.L.C. Services, L.L.C. Services, L.L.C. 85 Challenger Road--Mail Post Office Box 3301 120 Broadway, 13th Floor Drop-Reorg South Hackensack, NJ New York, NY 10271 Ridgefield Park, NJ 07606 Attention: Reorganization 07660 Attention: Reorganization Department Attention: Reorganization Department Department By Facsimile: (201) 296-4293 Confirm by Telephone: (201) 296-4860 Any requests for additional copies of this Offer to Purchase, the Letter of Transmittal and Notice of Guaranteed Delivery should be directed to the Information Agent at the address and telephone number set forth below: The Information Agent: D.F. King & Co., Inc. 77 Water Street New York, New York 10005 Banks and Brokers Call Collect: (212) 269-5550 All Others Call Toll Free: (800) 628-8532 Any questions or requests for assistance may be directed to the Dealer Manager at the address and telephone number set forth below: The Dealer Manager: MORGAN STANLEY & CO. INCORPORATED 1585 Broadway New York, New York 10036 Attention: Investment Banking Department Telephone No.: (800) 223-2440, ext. 7898 You may also contact your broker, dealer, commercial bank or trust company or any other nominee for assistance concerning the Offer. 39 EX-99.A.2 3 LETTER OF TRANSMITTAL Exhibit (a)(2) LETTER OF TRANSMITTAL To Tender up to $514,286,000 Aggregate Principal Amount At Maturity of Zero Coupon Convertible Debentures Due 2018 of AMF Bowling, Inc. Pursuant to the Offer to Purchase Dated June 29, 1999 SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THE OFFER TO PURCHASE, THE OFFER AND WITHDRAWAL RIGHTS AND THE PRORATION PERIOD WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON JULY 28, 1999, UNLESS THE OFFER IS EXTENDED (SUCH TIME AND DATE OR THE LATEST EXTENSION THEREOF, IF EXTENDED, THE "EXPIRATION DATE"). DEBENTURES TENDERED IN THE OFFER MAY BE WITHDRAWN AT ANY TIME BEFORE THE EXPIRATION DATE. The Depositary for the Offer is: ChaseMellon Shareholder Services, L.L.C. (The "Depositary") By Courier: Registered Mail: By Hand: ChaseMellon Shareholder ChaseMellon Shareholder ChaseMellon Shareholder Services, L.L.C. Services, L.L.C. Services, L.L.C. 85 Challenger Road--Mail Post Office Box 3301 120 Broadway, 13th Floor Drop-Reorg South Hackensack, NJ New York, NY 10271 Ridgefield Park, NJ 07606 Attention: 07660 Attention: Reorganization Reorganization Attention: Department Department Reorganization Department By Facsimile: (201) 296-4293 Confirm by Telephone: (201) 296-4860 DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE, OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE VALID DELIVERY. THE INSTRUCTIONS CONTAINED HEREIN AND IN THE OFFER TO PURCHASE (AS DEFINED BELOW) SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. By execution hereof, the undersigned acknowledges receipt of the Offer to Purchase, dated June 29, 1999 (as the same may be amended from time to time, the "Offer to Purchase"), of AMF Bowling, Inc. ("AMF Bowling") and this Letter of Transmittal and instructions hereto (the "Letter of Transmittal"), which together constitute AMF Bowling's offer to purchase (the "Offer") a minimum of $450,000,000 aggregate principal amount at maturity (40%) up to $514,286,000 aggregate principal amount at maturity (45.7%) of its Zero Coupon Convertible Debentures due 2018 (the "Debentures"), upon the terms and subject to the conditions set forth in the Offer to Purchase. HOLDERS WHO WISH TO BE ELIGIBLE TO RECEIVE PAYMENT FOR THE DEBENTURES TO BE PURCHASED PURSUANT TO THE OFFER MUST VALIDLY TENDER (AND NOT WITHDRAW) THEIR DEBENTURES TO THE DEPOSITARY BEFORE THE EXPIRATION DATE. This Letter of Transmittal is to be used by Holders if certificates representing Debentures are to be physically delivered to the Depositary herewith by Holders. This Letter of Transmittal is also being supplied for informational purposes only to persons who hold Debentures in book-entry form through the facilities of The Depository Trust Company ("DTC"). Tender of Debentures held through DTC must be made pursuant to the procedures described under "Procedures for Tendering Debentures -- Tendering Debentures -- Debentures Held Through DTC" in the Offer to Purchase. Delivery of documents to DTC does not constitute delivery to the Depositary. In order to properly complete this Letter of Transmittal, a Holder must (i) complete the box entitled "Description of Debentures Tendered;" (ii) if appropriate, check and complete the boxes relating to guaranteed delivery, Special Issuance or Payment Instructions and Special Delivery Instructions; (iii) sign the Letter of Transmittal; and (iv) complete Substitute Form W-9 (a foreign holder should obtain Form W-8 from the Depositary and complete such form). Each Holder should carefully read the detailed Instructions contained herein before completing this Letter of Transmittal. The undersigned has completed, executed and delivered this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Offer. If Holders desire to tender Debentures pursuant to the Offer and (i) certificates representing such Holder's Debentures are not lost but are not immediately available or time will not permit this Letter of Transmittal, certificates representing such Debentures or other required documents to reach the Depositary before the Expiration Date or (ii) the procedures for book- entry transfer cannot be completed before the Expiration Date, such Holders may effect a tender of such Debentures in accordance with the guaranteed delivery procedures described under "Procedures for Tendering Debentures -- Guaranteed Delivery Procedures" in the Offer to Purchase. See Instruction 1 below. All capitalized terms used herein and not defined herein shall have the meanings ascribed to them in the Offer to Purchase. Your bank or broker can assist you in completing this form. The instructions included with this Letter of Transmittal must be followed. Any questions or requests for assistance may be directed to Morgan Stanley & Co. Incorporated, the dealer manager for the Offer (the "Dealer Manager"), whose address and telephone number is set forth on the last page of this Letter of Transmittal. Requests for additional copies of the Offer to Purchase and this Letter of Transmittal should be directed to D.F. King & Co., Inc. (the "Information Agent"), whose address and telephone number are set forth on the last page of this Letter of Transmittal. See Instruction 9 below. AMF Bowling is not aware of any jurisdiction where the making of the Offer is not in compliance with the laws of such jurisdiction. If AMF Bowling becomes aware of any jurisdiction where the making of the Offer would not be in compliance with such laws, AMF Bowling will make a good faith effort to comply with any such laws or seek to have such laws declared inapplicable to the Offer. If, after such good faith effort, AMF Bowling cannot comply with any such applicable laws, the Offer will not be made to (nor will tenders be accepted from or on behalf of) the Holders residing in such jurisdiction. [_] CHECK HERE IF TENDERED DEBENTURES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY DELIVERED TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of Registered Holder(s): _________________________________________ Window Ticket No. (if any): ______________________________________________ Date of Execution of Notice of Guaranteed Delivery: ______________________ Name of Eligible Institution that Guaranteed Delivery: ___________________ If delivered by book-entry: _____________________________________________ DTC Account Number: __________________________________________________ Transaction Code Number: _____________________________________________ [_] CHECK HERE IF TENDERED DEBENTURES ARE BEING TENDERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK- ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER FACILITY MAY DELIVER DEBENTURES BY BOOK-ENTRY TRANSFER): Name of Tendering Institution: __________________________________________ Account Number: _________________________________________________________ Transfer Code Number: ___________________________________________________ 2 List below the Debentures to which this Letter of Transmittal relates. If the space provided below is inadequate, list the certificate numbers and principal amounts on a separately executed schedule and affix the schedule to this Letter of Transmittal. Tenders of Debentures will be accepted only in principal amounts at maturity equal to $1,000 or integral multiples thereof. ________________________________________________________________________________ DESCRIPTION OF DEBENTURES TENDERED ________________________________________________________________________________ Name(s) and Address(es) Aggregate Principal Aggregate Principal of Registered Holder(s) Certificate Amount at Amount at (Please fill in, if Number* Maturity Represented Maturity Tendered** blank) _______________________ ___________ ____________________ ____________________ _______________________ ___________ ____________________ ____________________ _______________________ ___________ ____________________ ____________________ _______________________ ___________ ____________________ ____________________ _______________________ ___________ ____________________ ____________________ _______________________ ___________ ____________________ ____________________ ________________________________________________________________________________ TOTAL PRINCIPAL AMOUNT AT MATURITY OF DEBENTURES: $_______ ________________________________________________________________________________ * Need not be completed by Holders tendering by book-entry transfer (see below). ** Unless otherwise indicated in the column labeled "Aggregate Principal Amount at Maturity Tendered" and subject to the terms and conditions of the Offer to Purchase, a Holder will be deemed to have tendered the entire aggregate principal amount at maturity represented by the Debentures indicated in the column labeled "Aggregate Principal Amount at Maturity Represented." See Instruction 2 below. 3 SPECIAL ISSUANCE OR SPECIAL DELIVERY INSTRUCTIONS PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 2 THROUGH 6) (SEE INSTRUCTIONS 2 THROUGH 6) To be completed ONLY if certifi- To be completed ONLY if certifi- cates for Debentures representing cates for Debentures representing principal amount at maturity not principal amount at maturity not tendered and/or the check for the tendered or not purchased and/or Repurchase Price for principal the check for the purchase price amount at maturity of Debentures for principal amount at maturity purchased are to be sent to an of Debentures purchased are to be address different from that shown issued to the order of someone in the box entitled "Description other than the registered Hold- of Debentures Tendered" within er(s) of the Debentures or the this Letter of Transmittal. name of the registered Holder(s) of the Debentures needs to be corrected or changed. Issue:[_] Debentures Deliver:[_] Debentures [_] Checks [_] Checks (Complete as applicable) (Complete as applicable) Name _____________________________ Name______________________________ (Please Print) (Please Print) Address __________________________ Address __________________________ __________________________________ __________________________________ (Zip Code) (Zip Code) __________________________________ __________________________________ (Taxpayer Identification or (Taxpayer Identification or Social Security Number) Social Security Number) (See substitute Form W-9 herein) (See substitute Form W-9 herein) 4 HOLDERS WHO WISH TO ACCEPT THE OFFER AND TENDER THEIR DEBENTURES MUST COMPLETE THIS LETTER OF TRANSMITTAL IN ITS ENTIRETY. NOTE: SIGNATURES MUST BE PROVIDED BELOW PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY Ladies and Gentlemen: Upon the terms and subject to the conditions of the Offer, the undersigned hereby tenders to AMF Bowling the principal amount at maturity of Debentures indicated above. Subject to and effective upon the acceptance for purchase of and payment for Debentures validly tendered hereby, by executing and delivering a Letter of Transmittal, a tendering Holder (i) irrevocably tenders, sells, assigns and transfers to AMF Bowling, all right, title and interest in and to all of the Debentures tendered hereby, (ii) waives any and all rights with respect to the Debentures (including, without limitation, any existing or past defaults and their consequences in respect of the Debentures and the Indenture under which the Debentures were issued), (iii) releases and discharges AMF Bowling from any and all claims such Holder may have now, or may have in the future, arising out of, or related to, the Debentures including, without limitation, any claims that such Holder is entitled to receive additional principal or interest payments with respect to the Debentures or to participate in any redemption or defeasance of the Debentures and (iv) irrevocably constitutes and appoints the Depositary the true and lawful agent and attorney-in-fact of such Holder with respect to any such tendered Debentures, with full power of substitution and resubstitution (such power of attorney being deemed to be an irrevocable power coupled with an interest) to (a) deliver certificates representing such Debentures, or transfer ownership of such Debentures, on the account books maintained by DTC, together, in any such case, with all accompanying evidences of transfer and authenticity, to AMF Bowling, (b) present such Debentures for transfer on the relevant security register and (c) receive all benefits or otherwise exercise all rights of beneficial ownership of such Debentures (except that the Depositary will have no rights to, or control over, funds from AMF Bowling, except as agent for AMF Bowling, for the Repurchase Price for any tendered Debentures that are purchased by AMF Bowling), all in accordance with the terms of the Offer. The undersigned understands that tenders of Debentures may be withdrawn by written notice of withdrawal received by the Depositary at any time before the Expiration Date. See Instruction 1 below. The undersigned hereby represents and warrants that the undersigned (i) owns the Debentures tendered hereby and is entitled to tender such Debentures and (ii) has full power and authority to tender, sell, assign and transfer the Debentures tendered hereby and that when such Debentures are accepted for purchase and payment by AMF Bowling, AMF Bowling will acquire good title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim or right. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or AMF Bowling to be necessary or desirable to complete the sale, assignment and transfer of the Debentures tendered hereby. For the purposes of the Offer, the undersigned understands that AMF Bowling will be deemed to have accepted for purchase validly tendered Debentures (or defectively tendered Debentures with respect to which AMF Bowling has waived such defect) only if, as and when AMF Bowling gives oral or written notice thereof to the Depositary. Payment for Debentures purchased pursuant to the Offer will be made by deposit of the Repurchase Price for such Debentures with the Depositary, which will act as agent for tendering Holders for the purpose of receiving payments from AMF Bowling and transmitting such payments to such Holders. All authority conferred or agreed to be conferred by this Letter of Transmittal shall survive the death or incapacity of the undersigned and every obligation of the undersigned under this Letter of Transmittal shall be binding upon the undersigned's heirs, personal representatives, executors, administrators, successors, assigns, trustees in bankruptcy and other legal representatives. The undersigned understands that valid tender of Debentures pursuant to any one of the procedures described under "Procedures for Tendering Debentures" in the Offer to Purchase and in the instructions hereto will constitute a binding 5 agreement between the undersigned and AMF Bowling upon the terms and subject to the conditions of the Offer, including the undersigned's waiver of any existing defaults and their consequences in respect of the Debentures and the Indenture under which the Debentures were issued (including, without limitation, a default in the payment of interest). The undersigned understands that the delivery and surrender of the Debentures is not effective, and the risk loss of the Debentures does not pass to the Depositary, until receipt by the Depositary of this Letter of Transmittal, or a facsimile hereof, properly completed and duly executed, together with all accompanying evidences of authority and any other required documents in form satisfactory to AMF Bowling. All questions as to the validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of Debentures pursuant to the procedures described in the Offer to Purchase and the form and validity (including time of receipt of notices of withdrawal) of all documents will be determined by AMF Bowling, in its sole direction, which determination shall be final and binding on all parties. Unless otherwise indicated herein under "Special Issuance or Payment Instructions," the undersigned hereby requests that any Debentures representing principal amounts at maturity not tendered be issued in the name(s) of the undersigned, and checks constituting payments for Debentures purchased in connection with the Offer be issued to the order of the undersigned. Similarly, unless otherwise indicated herein under "Special Delivery Instructions," the undersigned hereby requests that any Debentures representing principal amounts at maturity not tendered and checks constituting payments for Debentures to be purchased in connection with the Offer be delivered to the undersigned at the address(es) shown herein. In the event that the "Special Issuance or Payment Instructions" box or the "Special Delivery Instructions" box, or both, are completed, the undersigned hereby requests that any Debentures representing principal amounts not tendered be issued in the name(s) of, certificates for such Debentures be delivered to, and checks constituting payments for Debentures purchased in connection with the Offer be issued in the name(s) of, and be delivered to, the person(s) at the address(es) so indicated, as applicable. The undersigned recognizes that AMF Bowling has no obligation pursuant to the "Special Issuance or Payment Instructions" box to transfer any Debentures from the name of the registered Holder(s) thereof if AMF Bowling does not accept for purchase any of the principal amount at maturity of such Debentures so tendered. 6 PLEASE SIGN BELOW (TO BE COMPLETED BY ALL TENDERING HOLDERS OF DEBENTURES REGARDLESS OF WHETHER DEBENTURES ARE BEING PHYSICALLY DELIVERED HEREWITH) This Letter of Transmittal must be signed by the registered Holder(s) of Debentures exactly as his (their) name(s) appear(s) on certificate(s) for Debentures or by person(s) authorized to become registered Holder(s) by endorsements and documents transmitted with this Letter of Transmittal. If the signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, such person must set forth his or her full title below under "Capacity" and submit evidence satisfactory to AMF Bowling of such person's authority to so act. See Instruction 3 below. If the signature appearing below is not of the registered Holder(s) of the Debentures, then the registered Holder(s) must sign a valid power of attorney. Signature(s) of Holder(s) or Authorized Signatory: ____________________________ Dated: ____________ , 1999 Name(s): ______________________________________________________________________ (Please Print) Capacity: _____________________________________________________________________ Address: ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ (Include Zip Code) ____________________________________ _____________________________________ (Area Code and Telephone Number) (Tax Identification or Social Security Number) PLEASE COMPLETE SUBSTITUTE FORM W-9 HEREIN SIGNATURE GUARANTEE (IF REQUIRED--SEE INSTRUCTION 3 BELOW) CERTAIN SIGNATURES MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION _______________________________________________________________________________ (Name of Eligible Institution Guaranteeing Signatures) _______________________________________________________________________________ (Address (Including Zip Code) and Telephone Number (Including Area Code) of Eligible Institution) _______________________________________________________________________________ (Authorized Signature) _______________________________________________________________________________ (Printed Name) _______________________________________________________________________________ (Title) Dated: ____________, 1999 7 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. Procedures for Tendering Debentures; Guaranteed Delivery Procedures; Withdrawal of Tenders. To tender the Debentures in the Offer, certificates representing such Debentures, together with a properly completed and duly executed copy (or facsimile) of this Letter of Transmittal, and any other documents required by this Letter of Transmittal must be received by the Depositary at one of its addresses set forth herein on or before the Expiration Date. The method of delivery of this Letter of Transmittal, certificates for Debentures and all other required documents to the Depositary is at the election and risk of Holders. If such delivery is to be made by mail, it is suggested that Holders use properly insured registered mail, return receipt requested, and that the mailing be made sufficiently in advance of the Expiration Date to permit delivery to the Depositary on or before such date. Except as otherwise provided below, the delivery will be deemed made when actually received or confirmed by the Depositary. THIS LETTER OF TRANSMITTAL AND DEBENTURES SHOULD BE SENT ONLY TO THE DEPOSITARY, AND NOT TO AMF BOWLING, THE TRUSTEE, THE DEALER MANAGER OR THE INFORMATION AGENT. This Letter of Transmittal is also being supplied for informational purposes only to persons who hold Debentures in book-entry form through the facilities of DTC. Tender of Debentures held through DTC must be made pursuant to the procedures described under "Procedures for Tendering Debentures -- Tendering Debentures -- Debentures Held Through DTC" in the Offer to Purchase. Except as provided herein for the book-entry or guaranteed delivery procedures, unless the Debentures being tendered are deposited with the Depositary on or before the Expiration Date (accompanied by the appropriate, properly completed and duly executed Letter of Transmittal and any required signature guarantees and other documents required by this Letter of Transmittal), AMF Bowling may, in its sole discretion, reject such tender. Payment for Debentures will be made only against deposit of tendered Debentures. By executing this Letter of Transmittal (or a facsimile thereof), a tendering Holder waives any right to receive any notice of the acceptance for payment of tendered Debentures. For a full description of the procedures for tendering Debentures, see "Procedures for Tendering Debentures -- Tendering Debentures" in the Offer to Purchase. If a Holder desires to tender Debentures pursuant to the Offer and (i) certificates representing such Holder's Debentures are not lost but are not immediately available or time will not permit this Letter of Transmittal, certificates representing Debentures or other required documents to reach the Depositary on or before the Expiration Date or (ii) the procedures or book-entry transfer cannot be completed on or before the Expiration Date, such Holder may effect a tender of such Debentures in accordance with the guaranteed delivery procedures described under "Procedures for Tendering Debentures -- Guaranteed Delivery Procedures" in the Offer to Purchase. Tenders of Debentures may be withdrawn at any time before the Expiration Date pursuant to the procedures described under "Procedures For Tendering Debentures -- Withdrawal Rights" in the Offer to Purchase. 2. Partial Tenders. Tenders of Debentures pursuant to the Offer will be accepted only in principal amounts at maturity equal to $1,000 or integral multiples thereof. If less than the entire principal amount at maturity of any Debentures evidenced by a submitted certificate is tendered, the tendering Holder must fill in the principal amount at maturity tendered in the last column of the box entitled "Description of Debentures Tendered" herein. The entire principal amount at maturity represented by the certificates for all Debentures delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. If the entire principal amount at maturity of all Debentures is not tendered or not accepted for purchase, certificates for the principal amount at maturity of Debentures not tendered or not accepted for purchase will be sent to the Holder unless otherwise provided in the appropriate box on this Letter of Transmittal (see Instruction 4), promptly after the Debentures are accepted for purchase. 3. Signatures on this Letter of Transmittal, Bond Powers and Endorsement: Guarantee of Signatures. If this Letter of Transmittal is signed by the registered Holder(s) of the Debentures tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the certificate(s) without alteration, enlargement or any change whatsoever. 8 IF THIS LETTER OF TRANSMITTAL IS EXECUTED BY A HOLDER OF DEBENTURES WHO IS NOT THE REGISTERED HOLDER, THEN THE REGISTERED HOLDER MUST SIGN A VALID POWER OF ATTORNEY, WITH THE SIGNATURE OF SUCH REGISTERED HOLDER GUARANTEED BY AN ELIGIBLE INSTITUTION. If any of the Debentures tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If any tendered Debentures are registered in different names on several certificates, it will be necessary to complete, sign and submit as many copies of this Letter of Transmittal and any necessary accompanying documents as there are different names in which certificates are held. If this Letter of Transmittal is signed by the Holder, and the certificates for any principal amount at maturity of Debentures not tendered or accepted for purchase are to be issued (or if any principal amount at maturity of Debentures that is not tendered or accepted for purchase is to be reissued or returned) to the Holder, and checks constituting payments for Debentures to be purchased in connection with the Offer are to be issued to the order of the Holder, then the Holder need not endorse any certificates for tendered Debentures nor provide a separate bond power. In any other case (including if this Letter of Transmittal is not signed by the Holder), the Holder must either properly endorse the certificates for Debentures tendered or transmit a separate properly completed bond power with this Letter of Transmittal (in either case, executed exactly as the name(s) of the registered Holder(s) appear(s) on such Debentures), with the signature on the endorsement or bond power guaranteed by an Eligible Institution, unless such certificates or bond powers are executed by an Eligible Institution. If this Letter of Transmittal or any certificates representing Debentures or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and proper evidence satisfactory to AMF Bowling of their authority so to act must be submitted with this Letter of Transmittal. Endorsements on certificates for Debentures and signatures on bond powers provided in accordance with this Instruction 3 by registered Holders not executing this Letter of Transmittal must be guaranteed by an Eligible Institution. No signature guarantee is required if such Debentures are tendered for the account of an Eligible Institution. In all other cases, all signatures on Letters of Transmittal accompanying Debentures must be guaranteed by an Eligible Institution. 4. Special Issuance or Payment and Special Delivery Instructions. Tendering Holders should indicate in the applicable box or boxes the name and address to which certificates representing Debentures for principal amounts at maturity not tendered or not accepted for purchase or checks constituting payments for Debentures purchased in connection with the Offer are to be issued or sent, if different from the name and address of the Holder signing this Letter of Transmittal. In the case of issuance in a different name, the taxpayer identification or social security number of the person named must also be indicated. If no instructions are given, Debentures not tendered or not accepted for purchase will be returned to the Holder. 5. Taxpayer Identification Number and Substitute Form W-9. Each tendering U.S. Holder is required to provide the Depositary with the U.S. Holder's correct taxpayer identification number ("TIN"), generally the U.S. Holder's social security or federal employer identification number, on Substitute Form W-9, which is provided under "Important Tax Information" below, or alternatively, to establish another basis for exemption from backup withholding. A U.S. Holder must cross out item (2) in "Part III: Certification" on Substitute Form W-9 if such U.S. Holder is subject to backup withholding. Failure to provide the information on the form may subject the tendering U.S. Holder to a $50 penalty imposed by the Internal Revenue Service ("IRS") and to 31% federal income tax backup withholding on the payments made to the U.S. Holder or other payee with respect to Debentures purchased pursuant to the Offer. The U.S. Holder should write "Applied For" in the space provided for the TIN in Part I, and sign and date the Substitute Form W-9, including the section entitled "Certificate of Taxpayer Awaiting Identification Number" in Part IV, if the tendering U.S. Holder has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future. If "Applied For" is written in Part I and the Depositary is not provided with a TIN within 60 days, thereafter the Depositary will withhold 31% from all such payments with respect to the Debentures to be purchased until a TIN is provided to the Depositary. Each Non-U.S. Holder must complete and submit Form W-8 in order to be exempt from the 31% federal income tax backup withholding due on payments with respect to the Debentures. 9 6. Transfer Taxes. AMF Bowling will pay all transfer taxes, if any, payable on the purchase and transfer of Debentures purchased pursuant to the Offer, except in the case of deliveries of certificates for Debentures for principal amounts at maturity not tendered or purchased that are to be registered or issued in the name of any person other than the Holder of Debentures tendered hereby, in which case the amount of any transfer taxes (whether imposed on the registered Holder or such other person) payable on account of the transfer to such person will be deducted from the Repurchase Price unless satisfactory evidence of the payment of such taxes or exemption therefrom is submitted. Except as provided in this Instruction 6, it will not be necessary for transfer stamps to be affixed to the certificates listed in this Letter of Transmittal. 7. Irregularities. All questions as to the validity, form, eligibility (including the time of receipt) and acceptance for payment of any tenders of Debentures pursuant to the procedures described in the Offer to Purchase and the form and validity (including the time of receipt of notices of withdrawal) of all documents will be determined by AMF Bowling, in its sole discretion, which determination shall be final and binding on all parties. AMF Bowling reserves the absolute right to reject any or all tenders determined by it not to be in proper form or the acceptance of or payment for which may be unlawful. AMF Bowling also reserves the absolute right to waive any of the conditions of the Offer and any defect or irregularity on the tender of any particular Debentures. AMF Bowling's interpretations of the terms and conditions of the Offer (including without limitation the instructions in this Letter of Transmittal) shall be final and binding. No alternative, conditional or contingent tenders will be accepted. Unless waived, any irregularities in connection with tenders must be cured within such time as AMF Bowling shall determine. None of AMF Bowling, the Depositary, the Trustee, the Dealer Manager, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in such tenders or will incur any liability to Holders for failure to give such notification. Tenders of such Debentures shall not be deemed to have been made until such irregularities have been cured or waived. Any Debentures received by the Depositary that are not properly tendered and as to which the irregularities have not been cured or waived will be returned by the Depositary to the tendering Holders, unless such Holders have otherwise provided herein, as promptly as practical following the Expiration Date. 8. Waiver of Conditions. AMF Bowling expressly reserves the absolute right, in its sole and absolute discretion, to amend or waive any of the conditions to the Offer in the case of any Debentures tendered, in whole or in part, at any time and from time to time. 9. Requests for Assistance or Additional Copies. Questions relating to the procedure for tendering Debentures and requests for assistance may be directed to the Dealer Manager whose address and telephone number is set forth on the last page of this Letter of Transmittal. A Holder may also contact such Holder's broker, dealer, commercial bank, trust company or nominee for assistance concerning the Offer. Requests for additional copies of this Letter of Transmittal or the Notice of Guaranteed Delivery should be directed to the Information Agent whose address and telephone number is set forth on the last page of this Letter of Transmittal. 10 IMPORTANT INFORMATION Under federal income tax laws, a Holder whose tendered Debentures are accepted for payment is required by law to provide the Depositary (as payer) with such Holder's correct TIN on Substitute Form W-9 included herein or otherwise establish a basis for exemption from backup withholding. If such Holder is an individual, he TIN is his social security number. If the Depositary is not provided with the correct TIN, a $50 penalty may be imposed by the Internal Revenue Service, and payments made with respect to Debentures purchased pursuant to the Offer may be subject to backup withholding. Failure to comply truthfully with the backup withholding requirements also may result in the imposition of severe criminal and/or civil fines and penalties. Certain Holders (including, among others, all corporations and certain foreign persons) are not subject to these backup withholding and reporting requirements. Exempt Holders should furnish their TIN, write "Exempt" on the face of the Substitute Form W-9, and sign, date and return the Substitute Form W-9 to the Depositary. See the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional instructions. A foreign person, including entities, may qualify as an exempt recipient by submitting to the Depositary a properly completed Internal Revenue Service Form W-8, signed under penalties of perjury, attesting to that Holder's foreign status. A Form W-8 can be obtained from the Depositary. If backup withholding applies, the Depositary is required to withhold 31% of any payments made to the Holder or other payee. Backup withholding is not an additional federal income tax. Rather, the federal income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. PURPOSE OF SUBSTITUTE FORM W-9. To prevent backup withholding on payments made with respect to Debentures purchased pursuant to the Offer, the Holder is required to provide the Depositary with either: (i) the Holder's correct TIN by completing the form included herein, certifying that the TIN provided on Substitute Form W-9 is correct (or that such Holder is awaiting a TIN) and that (A) the Holder has not been notified by the Internal Revenue Service that the Holder is subject to backup withholding as a result of failure to report all interest or dividends or (B) the Internal Revenue Service has notified the Holder that the Holder is no longer subject to backup withholding; or (ii) an adequate basis for exemption. NUMBER TO GIVE THE DEPOSITARY. The Holder is required to give the Depositary the TIN (e.g., social security number or employer identification number) of the registered Holder. If the Debentures are held in more than one name or are held not in the name of the actual owner, consult the "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" included herein for additional guidance on which number to report. 11 PAYER'S NAME: ChaseMellon Shareholder Services, L.L.C. SUBSTITUTE Name: __________________________________________________ Form W-9 Business name, if different from above: ________________ Address (number, street and apt. or suite no.): ________ City, state and ZIP code: ______________________________ Department of Check appropriate box: [_] Individual/Sole Proprietor the Treasury [_] Corporation [_] Partnership Internal Revenue [_] Other (Specify) _____________ Service Requester's name and address (optional): _______________ ________________________________________________________ PART I: Taxpayer Identification PART II: For Number (TIN) Payees Exempt from Backup Withholding ____________________________________ Payer's Request Social security number For Payees Exempt for Taxpayer from Backup Identification OR withholding, see Number (TIN) and the enclosed Certification ____________________________________ Guidelines and Employer identification number complete as (If awaiting TIN write "Applied For" instructed and complete Parts III and IV) therein. ________________________________________________________ PART III: CERTIFICATION Under penalties of perjury, I certify that: (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me) and (2) I am not subject to backup withholding because (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding. ________________________________________________________ CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if you have been notified by the IRS that you are subject to backup withholding because you have failed to report all interest or dividends on your tax return. For real estate transactions, item (2) does not apply. For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally payments other than interest and dividends, you are not required to sign the Certification, but you must provide your correct TIN. __________________________ _____________________, 1999 Signature Date ________________________________________________________________________________ NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL INFORMATION. YOU MUST COMPLETE THE FOLLOWING CERTIFICATION IF YOU WROTE "APPLIED FOR" IN THE APPROPRIATE LINE IN PART I OF SUBSTITUTE FORM W-9 ________________________________________________________________________________ PART IV: CERTIFICATE OF TAXPAYER AWAITING IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration or (b) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number within 60 days, 31 percent of all reportable payments made to me thereafter will be withheld until I provide a number. ____________________________________ ________________________________, 1999 Signature Date 12 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER Social Security numbers have nine digits separated by two hyphens: i.e., 000- 00-0000. Employer Identification numbers have nine digits separated by only one hyphen: i.e., 00-0000000. The table below will help determine the number to give the Payer.
FOR THIS TYPE OF ACCOUNT: GIVE THE SOCIAL SECURITY NUMBER OF: ------------------------- ----------------------------------- 1. Individual The individual. 2. Two or more individuals (joint account) The actual owner of the account or, if combined funds, any one of the individuals(1) 3. Custodian account of a minor (Uniform Gift The minor (2) to Minors Act) 4. (a) The usual revocable savings trust (grantor The grantor-trustee (1) is also trustee) (b) So-called trust account that is not a legal The actual owner (1) or valid trust under state law 5. Sole proprietorship The owner (3) 6. A valid trust, estate, or pension trust The legal entity (Do not furnish the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title.) (4) 7. Corporation The corporation 8. Association, club, religious, charitable, The organization educational or other tax-exempt organization 9. Partnership The partnership 10. A broker or registered nominee The broker or nominee 11. Account with the Department of Agriculture The public entity in the name of a public entity (such as State or local government, school district, or prison) that receives agricultural program payments
- ------- (1) List first and circle the name of the person whose number you furnish. (2) Circle the minor's name and furnish the minor's social security number. (3) Show the name of the owner. (4) List first and circle the name of the legal trust, estate, or pension trust. NOTE: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. 13 Section references are to the Internal Revenue Code. Obtaining a Number. If you don't have a taxpayer identification number or you don't know your number, obtain Form SS-5, Application for a Social Security Number Card, or Form SS-4, Application for Employer Identification Number, at the local office of the Social Security Administration or the Internal Revenue Service (the "IRS") and apply for a number. Payees Exempt from Backup Withholding. The following is a list of payees exempt from backup withholding and for which no information reporting is required. For interest and dividends, all listed payees are exempt except item (9). For broker transactions, payees listed in (1) through (13) and a person registered under the Investment Advisers Act of 1940 who regularly acts as a broker are exempt. Payments subject to reporting under sections 6041 and 6041A are generally exempt from backup withholding only if made to payees described in items (1) through (7), except that the following payments made to a corporation and reportable on Form 1099-MISC are not exempt from backup withholding or information reporting: medical and health care payments, attorneys' fees and payments for services paid by a federal executive agency. Only payees described in items (2) through (6) are exempt from backup withholding for barter exchange transactions and patronage dividends. (1) A corporation. (2) An organization exempt from tax under section 501(a), or an individual retirement plan ("IRA"), or a custodial account under 403(b)(7) if the account satisfies the requirements of section 401(f)(2). (3) The United States or any of its agencies or instrumentalities. (4) A State, the District of Columbia, a possession of the United States, or any of their political subdivisions or instrumentalities. (5) A foreign government or any of its political subdivisions, agencies or instrumentalities. (6) An international organization or any of its agencies or instrumentalities. (7) A foreign central bank of issue. (8) A dealer in securities or commodities required to register in the United States or a possession of the United States. (9) A futures commission merchant registered with the Commodity Futures Trading Commission. (10) A real estate investment trust. (11) An entity registered at all times during the tax year under the Investment Company Act of 1940. (12) A common trust fund operated by a bank under section 584(a). (13) A financial institution. (14) A middleman known in the investment community as a nominee or listed in the most recent publication of the American Society of Corporate Secretaries, Inc., Nominee List. (15) A trust exempt from tax under section 664 or described in section 4947. Payments of dividends and patronage dividends generally not subject to backup withholding also include the following: . Payments to nonresident aliens subject to withholding under section 1441. . Payments to partnerships not engaged in a trade or business in the United States and that have at least one nonresident partner. . Payments of patronage dividends not paid in money. . Payments made by certain foreign organizations. . Section 401(k) distributions made by an ESOP. Payments of interest generally not subject to backup withholding include the following: . Payments of interest on obligations issued by individuals. NOTE: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct taxpayer identification number to the payer. . Payments of tax-exempt interest (including exempt interest dividends under section 852). . Payments described in section 6049(b)(5) to nonresident aliens. . Payments on tax-free covenant bonds under section 1451. . Payments made by certain foreign organizations. . Mortgage interest paid to you. 14 Payments that are not subject to information reporting are also not subject to backup withholding. For details see sections 6041, 6041(A)(a), 6042, 6044, 6045, 6049, 6050A and 6050N, and the regulations under such sections. Privacy Act Notice. Section 6109 requires you to give your correct taxpayer identification number to persons who must file information returns with the IRS to report interest, dividends, and certain other income paid to you, mortgage interest you paid, the acquisition or abandonment of secured property, cancellation of debt, or contributions you made to an IRA. The IRS uses the numbers for identification purposes and to help verify the accuracy of your tax return. You must provide your taxpayer identification number whether or not you are qualified to file a tax return. Payers must generally withhold 31% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. Penalties. (1) Penalty for Failure to Furnish Taxpayer Identification Number. If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) Civil Penalty for False Information with Respect to Withholding. If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty. (3) Criminal Penalty for Falsifying Information. Falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE 15 Any requests for additional copies of this Letter of Transmittal or the Notice of Guaranteed Delivery should be directed to the Information Agent at the address and telephone number set forth below. The Information Agent for the Offer is: D.F. KING & CO., INC. 77 Water Street New York, New York 10005 Banks and Brokers Call Collect: (212) 269-5550 All Others Call Toll Free: (800) 628-8532 Any questions or requests for assistance may be directed to the Dealer Manager at the address and telephone number set forth below. A Holder may also contact such Holder's broker, dealer, commercial bank or trust company or nominee for assistance concerning the Offer. The Dealer Manager for the Offer is: MORGAN STANLEY & CO. INCORPORATED 1585 Broadway New York, New York 10036 Attention: Investment Banking Department Telephone No.: (800) 223-2440 ext. 7898 EX-99.A.3 4 NOTICE OF GUARANTEED DELIVERY Exhibit (a)(3) NOTICE OF GUARANTEED DELIVERY for Tender of Certificates for up to $514,286,000 Aggregate Principal Amount at Maturity of Zero Coupon Convertible Debentures Due 2018 of AMF Bowling, Inc. Capitalized terms used but not defined herein have the meanings given them in the Offer to Purchase, dated June 29, 1999 (the "Offer to Purchase"). This Notice of Guaranteed Delivery, or one substantially equivalent hereto, may be used to cause a tender of Zero Coupon Convertible Debentures due 2018 (the "Debentures") of AMF Bowling, Inc. ("AMF Bowling") by (i) a record holder of Debentures if certificates for the Debentures are not immediately available or time will not permit all required documents to reach the Depositary for the Offer on or before the Expiration Date or (ii) by a DTC Participant (as defined in the Offer to Purchase) if the procedures for book-entry transfer described in the Offer to Purchase cannot be completed on a timely basis. The Depositary for the Offer is: ChaseMellon Shareholder Services, L.L.C. (The "Depositary") By Courier: Registered Mail: By Hand: ChaseMellon Shareholder ChaseMellon Shareholder ChaseMellon Shareholder Services, L.L.C. Services, L.L.C. Services, L.L.C. 85 Challenger Road--Mail Post Office Box 3301 120 Broadway, 13th Floor Drop-Reorg South Hackensack, NJ New York, NY 10271 Ridgefield Park, NJ 07606 Attention: 07660 Attention: Reorganization Reorganization Attention: Reorganization Department Department Department By Facsimile: (201) 296-4293 Confirm by Telephone: (201) 296-4860 DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER THAN AS SET FORTH ABOVE, DOES NOT CONSTITUTE A VALID DELIVERY. This form is not to be used to guarantee signatures. If a signature in a Letter of Transmittal is required to be guaranteed by an "Eligible Institution" under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box of the Letter of Transmittal. Ladies and Gentlemen: By execution hereof, the undersigned acknowledges receipt of the Offer to Purchase and the Letter of Transmittal accompanying the Offer to Purchase. On the terms and subject to the conditions of the Offer to Purchase and the Letter of Transmittal, the undersigned hereby represents that it is the holder of the Debentures being tendered (or caused to be tendered) hereby and is entitled to tender (or cause to be tendered) such Debentures as contemplated by the Offer to Purchase and, pursuant to the guaranteed delivery procedures described in the Offer to Purchase and Letter of Transmittal, hereby tenders (or causes a tender) to AMF Bowling Debentures of the aggregate principal amount at maturity as indicated below. Except as stated in the Offer to Purchase, all authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. A record holder must execute this Notice of Guaranteed Delivery exactly as its name appears on its Debentures, and a DTC Participant must execute this Notice of Guaranteed Delivery exactly as its name is registered with The Depository Trust Company. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, agent, officer of a corporation or other person acting in a fiduciary or representative capacity, such person must set forth his or her name, address and capacity as indicated below and submit evidence to AMF Bowling of such person's authority to so act. Aggregate Principal Amount at Maturity of Debentures Tendered:______________________________ __________________________________ Certificate Nos. for Debentures __________________________________ (if available): SIGNATURE(S) OF HOLDER(S) _______________________________________ _______________________________________ _______________________________________ _______________________________________ Dated:______________, 1999 Name(s) of Holders: __________________________________ [_] Check Box if being executed by a DTC Participant: __________________________________ Please Type or Print DTC Participant's Number: __________________________________ Address Transaction Code Number: __________________________________ Zip Code Account Number: __________________________________ Area Code and Telephone No. 2 THE GUARANTEE BELOW MUST BE COMPLETED GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a member of a registered national securities exchange or of the National Association of Securities Dealers, Inc., or a commercial bank or trust company having an office or correspondent in the United States or another "Eligible Guarantor Institution" as defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, hereby guarantees that, within three New York Stock Exchange trading days from the date of receipt by the Depositary of this Notice of Guaranteed Delivery, a properly completed and validly executed Letter of Transmittal (or a facsimile thereof), together with Debentures tendered hereby in proper form for transfer, (or confirmation of the book-entry transfer of such Debentures into the Depositary's account at The Depository Trust Company, pursuant to the procedures for book-entry transfer set forth under "Procedures for Tendering Debentures" in the Offer to Purchase) and all other required documents will be delivered by the undersigned to the Depositary. Name of Firm: _______________________________________________________ Address: ____________________________________________________________ Zip Code: ___________________________________________________________ Area Code and Telephone Number: _____________________________________ Authorized Signature: _______________________________________________ Title: ______________________________________________________________ NAME: _______________________________________________________________ (Please Type or Print) The institution which completes this form must deliver to the Depositary the guarantee, the Letter of Transmittal (or facsimile thereof) and certificates for Debentures within the time periods specified herein. Failure to do so could result in a financial loss to such institution. DO NOT SEND CERTIFICATES FOR DEBENTURES WITH THIS FORM. THEY SHOULD BE SENT WITH THE LETTER OF TRANSMITTAL. 3 EX-99.A.4 5 LETTER TO CLIENTS Exhibit (a)(4) Offer to Purchase for Cash Up to $514,286,000 Aggregate Principal Amount at Maturity of Zero Coupon Convertible Debentures Due 2018 of AMF Bowling, Inc. SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THE OFFER TO PURCHASE, THE OFFER AND WITHDRAWAL RIGHTS AND THE PRORATION PERIOD WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON JULY 28, 1999, UNLESS THE OFFER IS EXTENDED (SUCH TIME AND DATE OR THE LATEST EXTENSION THEREOF, IF EXTENDED, THE "EXPIRATION DATE"). DEBENTURES TENDERED IN THE OFFER MAY BE WITHDRAWN AT ANY TIME BEFORE THE EXPIRATION DATE. June 29, 1999 To Our Clients: Enclosed for your consideration is an Offer to Purchase, dated June 29, 1999 (as the same may be amended from time to time, the "Offer to Purchase"), and a Letter of Transmittal and instructions thereto (the "Letter of Transmittal") relating to the offer (the "Offer") by AMF Bowling, Inc. ("AMF Bowling") to purchase for cash a minimum of $450,000,000 aggregate principal amount at maturity (40%) and up to $514,286,000 aggregate principal amount at maturity (45.7%) of its Zero Coupon Convertible Debentures due 2018 (the "Debentures") at a price of $140.00 per $1,000 principal amount at maturity (the "Repurchase Price"). The materials are being forwarded to you as the beneficial owner of Debentures by us for your account or benefit but not registered in your name. A tender of any Debentures may only be made by us as the registered holder and pursuant to your instructions. Therefore, AMF Bowling urges beneficial owners of Debentures registered in the name of a broker, dealer, commercial bank, trust company or any other nominee to contact such registered holder promptly if they wish to tender Debentures in the Offer. Accordingly, we request instructions as to whether you wish us to tender any or all such Debentures held by us for your account or benefit pursuant to the terms and conditions set forth in the Offer to Purchase and the Letter of Transmittal. We urge you to read carefully the Offer to Purchase and the Letter of Transmittal before instructing us to tender your Debentures. Your instructions to us should be forwarded as promptly as possible in order to permit us to tender Debentures on your behalf in accordance with the provisions of the Offer. Debentures tendered pursuant to the offer may be validly withdrawn, subject to the procedures described in the Offer to Purchase, at any time before the Expiration Date. 1 Your attention is directed to the following: 1. Unless the Offer is terminated or amended, the consummation of the Offer is conditioned, unless waived by AMF Bowling, upon (i) the closing on subscriptions obtained in exercising of the rights issued in and pursuant to the terms of the Rights Offering (as defined in the Offer to Purchase) being conducted concurrently with the Offer with proceeds of at least $120,000,000, (ii) Debentures in an aggregate principal amount at maturity of not less than $450,000,000 aggregate principal amount at maturity (40%) being validly tendered in the Offer and (iii) satisfaction of the General Conditions (as defined in the Offer to Purchase). 2. Stockholders of AMF Bowling, which own in the aggregate a majority of AMF Bowling's common stock and approximately $495,950,000 principal amount at maturity of the Debentures, have indicated that they intend to tender all of their Debentures in the Offer subject to market conditions, although they are not obligated to do so. 3. The Offer and the concurrent Rights Offering are part of a recapitalization plan being undertaken by AMF Bowling. For more information, please refer to the Offer to Purchase. The funds required to purchase validly tendered Debentures and to pay fees and expenses related to the Offer are to be provided from the proceeds of the Rights Offering. 4. The Offer is being made for Debentures having an aggregate principal amount at maturity of a minimum of $450,000,000 (40%) and up to $514,286,000 (45.7%). If Debentures having an aggregate principal amount in excess of $514,286,000 are tendered, AMF Bowling will purchase Debentures having an aggregate principal amount of $514,286,000 pro rata in an amount per holder equal to a fraction the numerator of which is such holder's total principal amount of all Debentures validly tendered and the denominator of which is the total principal amount of Debentures tendered, multiplied by $514,286,000. 5. The Offer and withdrawal rights will expire on the Expiration Date. 6. Any transfer taxes incident to the transfer of Debentures from the tendering holder to AMF Bowling will be paid by AMF Bowling, except as provided in the Offer to Purchase and the Letter of Transmittal. If you wish to have us tender any or all of your Debentures held by us for your account or benefit, please so instruct us by completing, executing and returning to us the instruction form that appears below. If you authorize the tender of your Debentures, all such Debentures will be tendered unless otherwise specified below. The Letter of Transmittal is furnished to you for informational purposes only and may not be used by you to tender Debentures held by us and registered in our name for your account or benefit. 2 INSTRUCTIONS The undersigned acknowledge(s) receipt of your letter and the enclosed materials referred therein relating to the Offer. This will instruct you to tender the principal amount at maturity of Debentures indicated below held by you for the account or benefit of the undersigned pursuant to the terms of and conditions set forth in the Offer to Purchase and the Letter of Transmittal. Box 1 [_] Please tender ALL my Debentures held by you for my account or benefit. Box 2 [_] Please tender LESS than all my Debentures. I wish to tender $________ aggregate principal amount at maturity of Debentures. Box 3 [_] Please do not tender any Debentures held by you for my account or benefit. Date:_______________, 1999 ----------------------------------- ----------------------------------- ----------------------------------- ----------------------------------- SIGNATURE(S) PLEASE PRINT NAME(S) HERE Unless a specific contrary instruction is given, your signature(s) hereon shall constitute an instruction to us to tender all of your debentures. 3 EX-99.A.5 6 LETTER TO BROKERS, DEALERS, ETC. Exhibit (a)(5) OFFER TO PURCHASE FOR CASH UP TO $514,286,000 AGGREGATE PRINCIPAL AMOUNT AT MATURITY OF ZERO COUPON CONVERTIBLE DEBENTURES DUE 2018 OF AMF BOWLING, INC. SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THE OFFER TO PURCHASE, THE OFFER AND WITHDRAWAL RIGHTS AND THE PRORATION PERIOD WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON JULY 28, 1999, UNLESS THE OFFER IS EXTENDED (SUCH TIME AND DATE OR THE LATEST EXTENSION THEREOF, IF EXTENDED, THE "EXPIRATION DATE"). DEBENTURES TENDERED IN THE OFFER MAY BE WITHDRAWN AT ANY TIME BEFORE THE EXPIRATION DATE. June 29, 1999 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: Enclosed for your consideration is an Offer to Purchase, dated June 29, 1999 (as the same may be amended from time to time, the "Offer to Purchase"), and a Letter of Transmittal and instructions thereto (the "Letter of Transmittal") relating to the offer (the "Offer") by AMF Bowling, Inc. ("AMF Bowling") to purchase for cash a minimum of $450,000,000 aggregate principal amount at maturity (40%) and up to $514,286,000 aggregate principal amount at maturity (45.7%) of its Zero Coupon Convertible Debentures due 2018 (the "Debentures") at a price of $140.00 per $1,000 principal amount at maturity (the "Repurchase Price"). Unless the Offer is terminated or amended, the consummation of the Offer is conditioned, unless waived by AMF Bowling, upon (i) closing on subscriptions obtained in exercising of the rights issued pursuant to the terms of the Rights Offering (as defined in the Offer to Purchase) being conducted concurrently with the Offer with proceeds of at least $120,000,000, (ii) Debentures in an aggregate principal amount at maturity of not less than $450,000,000 aggregate principal amount at maturity (40%) being validly tendered in the Offer and (iii) satisfaction of the General Conditions (as defined in the Offer to Purchase). Stockholders of AMF Bowling, which own in the aggregate a majority of AMF Bowling's common stock and approximately $495,950,000 principal amount at maturity of the Debentures, have indicated that they intend to tender all of their Debentures in the Offer subject to market conditions, although they are not obligated to do so. The Offer and the concurrent Rights Offering are part of a recapitalization plan being undertaken by AMF Bowling. For more information, please refer to the Offer to Purchase. The funds required to purchase validly tendered Debentures and to pay fees and expenses related to the Offer are to be provided from the proceeds of the Rights Offering. We are asking you to contact your clients for whom you hold Debentures registered in your name or in the name of your nominee. AMF Bowling will pay all transfer taxes, if any, applicable to the tender of Debentures, except as provided in the Offer to Purchase and the instructions to the Letter of Transmittal. Enclosed is a copy of each of the following documents for forwarding to your clients: 1. The Offer to Purchase. 2. A Blue Letter of Transmittal, including Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9, for your use in connection with the tender of Debentures by record holders and for the information of your clients. Facsimile copies of the Letter of Transmittal may be used to accept the Offer. 3. A Yellow form of letter addressed "To Our Clients" that may be sent to your clients for whose accounts you hold Debentures registered in your name or the name of your nominee, with space provided for obtaining the clients' instructions with regard to the Offer. 4. A Gray Notice of Guaranteed Delivery to be used to tender in the Offer if certificates for Debentures are not lost but not immediately available, or if the procedure for book-entry transfer cannot be completed on or before the Expiration Date. YOUR PROMPT ACTION IS REQUESTED. DEBENTURES TENDERED PURSUANT TO THE OFFER MAY BE VALIDLY WITHDRAWN, SUBJECT TO THE PROCEDURES DESCRIBED IN THE OFFER TO PURCHASE, AT ANY TIME BEFORE THE EXPIRATION DATE. AMF Bowling will not pay any fees or commissions to any broker, dealer, commercial bank, trust company or other person in connection with the solicitation of tenders of Debentures pursuant to the Offer. You will be reimbursed by AMF Bowling for customary mailing and handling expenses incurred by you in forwarding any of the enclosed materials to your clients. Please refer to "Procedures for Tendering Debentures" in the Offer to Purchase for a description of the procedures which must be followed to tender Debentures in the Offer. Any requests for additional copies of the Offer to Purchase, the Letter of Transmittal and Notice of Guaranteed Delivery should be directed to the Information Agent and any questions or requests for assistance should be directed to the Dealer Manager at their respective addresses and telephone numbers set forth on the last page of the Offer to Purchase. Very truly yours, MORGAN STANLEY & CO. INCORPORATED NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY PERSON AS AN AGENT OF AMF BOWLING, THE TRUSTEE FOR THE DEBENTURES, THE DEALER MANAGER, THE INFORMATION AGENT FOR THE OFFER OR THE DEPOSITARY FOR THE OFFER, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO THE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN THE OFFER TO PURCHASE OR THE LETTER OF TRANSMITTAL. 2 EX-99.A.6 7 NOTICE PUBLISHED IN WALL STREET JOURNAL Exhibit (a)(6) This announcement is neither an offer to purchase nor a solicitation of an offer to sell these securities. The Offer is made only pursuant to the Offer to Purchase and the related Letter of Transmittal (which are incorporated by reference herein) and is not being made to (nor will tenders be accepted from) holders of debentures in any jurisdiction in which the Offer or the acceptance thereof would not be in compliance with the securities laws of such jurisdiction. Offer to Purchase for Cash Up to $514,286,000 Aggregate Principal Amount at Maturity of Zero Coupon Convertible Debentures due 2018 at $140.00 Per $1000 Principal Amount at Maturity by AMF Bowling, Inc. AMF Bowling, Inc. ("AMF Bowling") hereby offers (the "Offer") to purchase upon the terms and subject to the conditions set forth in the Offer to Purchase (the "Offer to Purchase") and in the accompanying Letter of Transmittal (the "Letter of Transmittal"), a minimum of $450,000,000 aggregate principal amount at maturity (40%) and up to $514,286,000 aggregate principal amount at maturity (45.7%) of its Zero Coupon Convertible Debentures due 2018 (the "Debentures") at a cash purchase price of $140.00 per $1,000 principal amount at maturity (the "Repurchase Price"). See the Offer to Purchase for capitalized terms used but not defined herein. Unless the context otherwise requires, the term "Offer to Purchase" includes the Letter of Transmittal. - -------------------------------------------------------------------------------- SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THE OFFER TO PURCHASE, THE OFFER, WITHDRAWAL RIGHTS AND THE PRORATION PERIOD WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON JULY 28, 1999, UNLESS THE OFFER IS EXTENDED (SUCH TIME AND DATE OR THE LATEST EXTENSION THEREOF, IF EXTENDED, THE "EXPIRATION DATE"). DEBENTURES TENDERED IN THE OFFER MAY BE WITHDRAWN AT ANY TIME BEFORE THE EXPIRATION DATE. - -------------------------------------------------------------------------------- Unless the Offer is terminated or amended, the consummation of the Offer is conditioned, unless waived by AMF Bowling, upon (i) the closing on subscriptions obtained through the exercise of the rights issued pursuant to the Rights Offering (as defined in the Offer to Purchase) which is being conducted concurrently with the Offer with proceeds of at least $120,000,000, (ii) Debentures in an aggregate principal amount at maturity of not less than $450,000,000 being validly tendered in the Offer and not validly withdrawn and (iii) satisfaction of the General Conditions (as defined in the Offer to Purchase). Subject to applicable securities laws and the terms set forth in the Offer to Purchase, AMF Bowling reserves the right (i) to terminate the Offer, (ii) to waive any and all unsatisfied conditions to the Offer, (iii) to extend the Expiration Date or (iv) to otherwise amend the Offer in any respect. Unless the Offer is terminated, if all of the conditions to the Offer have been satisfied or waived, Holders (as defined in the Offer to Purchase ) whose Debentures are validly tendered by the Expiration Date and not withdrawn will receive the Repurchase Price with respect to such Debentures. Affiliates of Goldman, Sachs & Co. and Kelso & Co., which own in the aggregate a majority of the common stock, par value $0.01 per share, of AMF Bowling (the "Common Stock") and approximately $495,950,000 principal amount at maturity of the Debentures, have indicated that they currently expect to tender all of their Debentures in the Offer, subject to market conditions, although they are not obligated to do so. There is $1,125,000,000 aggregate principal amount at maturity of Debentures outstanding as of June 28, 1999. The Offer and the concurrent Rights Offering are part of a recapitalization plan being undertaken by AMF Bowling. For more information, please refer to the Offer to Purchase. The funds required to purchase validly tendered Debentures and to pay fees and expenses related to the Offer are to be provided from the proceeds of the Rights Offering. The Debentures are designated for trading in the Portal/SM/ Market ("PORTAL"). The closing bid quotation per $1,000 principal amount at maturity of the Debentures as reported by Morgan Stanley & Co. Incorporated ("Morgan Stanley"), a market maker for the Debentures, on June 25, 1999 was $135.00. The Debentures are convertible into shares of Common Stock. The Common Stock is listed on The New York Stock Exchange, Inc. (the "NYSE") under the symbol "PIN." The reported closing price of the Common Stock on the NYSE Composite Tape on June 25, 1999 was $6.313 per share. AMF Bowling will accept for purchase up to $514,286,000 aggregate principal amount at maturity of the Debentures. If Debentures having an aggregate principal amount at maturity in excess of $514,286,000 are validly tendered and not withdrawn, AMF Bowling will purchase Debentures in aggregate principal amount at maturity of $514,286,000, pro rata in an amount per Holder equal to (i) a fraction the numerator of which is such Holder's total principal amount at maturity of Debentures tendered and the denominator of which is the total principal amount at maturity of all Debentures validly tendered, multiplied by (ii) $514,286,000. Debentures may be tendered only in integral multiples of $1,000 principal amount at maturity. Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms of any extension or amendment) and applicable law, AMF Bowling will pay for Debentures purchased pursuant to the Offer by depositing the Repurchase Price therefor with ChaseMellon Shareholder Services, L.L.C., the depositary for the Offer, which will act as agent for tendering Holders for the purpose of receiving the Repurchase Price from AMF Bowling and transmitting the Repurchase Price to the tendering Holders. No person has been authorized to give any information or to make any representations other than those contained in the Offer to Purchase and, if given or made, such information or representations, must not be relied upon as having been authorized. NEITHER AMF BOWLING NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY DEBENTURE HOLDER AS TO WHETHER TO TENDER ALL OR ANY OF HIS OR HER DEBENTURES. EACH DEBENTURE HOLDER MUST MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER DEBENTURES AND, IF SO, HOW MANY DEBENTURES TO TENDER. The information required by Rule 13e-4(d)(1) of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, is contained in the Offer to Purchase and is incorporated herein by reference. Any questions or requests for assistance may be directed to Morgan Stanley, which is acting as dealer manager for the Offer (the "Dealer Manager"), at the address and telephone number set forth below. Requests for copies of the Offer materials should be directed to D.F. King & Co., Inc., which is acting as information agent for the Offer (the "Information Agent"), at the address and telephone number set forth below. A Holder may also contact such Holder's broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer. The Information Agent for the Offer is: D.F. King & Co., Inc. 77 Water Street New York, New York 10005 Banks and Brokers Call Collect: (212) 269-5550 All Others Call Toll Free: (800) 628-8532 The Dealer Manager for the Offer is: MORGAN STANLEY DEAN WITTER 1585 Broadway New York, New York 10036 Attention: Investment Banking Department Telephone No.: (800) 223-2440, ext. 7898 June 29, 1999 EX-99.A.7 8 PRESS RELEASE DATED MAY 5, 1999 Exhibit (a) (7) AMF Bowling, Inc. International Headquarters Post Office Box 15060 804.730.4000 Telephone 804.559.6276 Facsimile 8100 AMF Drive Richmond, Virginia 23227 Richmond, Virginia 23111
FOR IMMEDIATE RELEASE Contact: Stephen E. Hare May 5, 1999 Chief Financial Officer (804) 730-4401 Renee D. Antolik Director, Investor Relations (804) 730-4402 (800) 832-0151 Press Release AMF Bowling, Inc. Announces Recapitalization Plan Rights Offering to Raise $140 Million of New Equity Richmond, Virginia--May 5, 1999--AMF Bowling, Inc. (NYSE: PIN) announced today a recapitalization plan which includes a rights offering to raise approximately $140 million and a tender for a portion of its outstanding convertible zero coupon debentures at a discount. AMF intends to effect a rights offering in which all AMF stockholders would receive rights to purchase new AMF common shares. AMF will apply to list the rights on the New York Stock Exchange. The rights would also have an over- subscription privilege pursuant to which participating stockholders could elect to purchase a proportionate share of the shares not purchased in the rights offering by other stockholders. The number of rights per share to be offered and the exercise price of the rights have not been determined. Certain of AMF's significant stockholders are currently expected to participate fully in the rights offering, subject to final terms and conditions, but they are not obligated to do so. The rights offering is expected to raise approximately $140 million. The offering would be made only by means of a prospectus filed as part of an effective registration statement under the Securities Act of 1933, as amended. The Company currently intends to use a portion of the proceeds of the rights offering to make a tender offer for the Company's outstanding convertible zero coupon debentures. The Company currently intends to tender for a minimum of 45% and up to 60% of the outstanding debentures at an indicated price not to exceed 14% of face value. Affiliates of Goldman Sachs and Kelso & Company, who together own approximately 44% of the outstanding debentures, have indicated that they currently expect to tender their debentures pursuant to the tender offer, subject to pro ration, and subject to the conditions and prices thereof, but they are not obligated to do so. A portion of the proceeds of the rights offering would also be used to fund future bowling center acquisitions, along with funds that may be available under the Company's credit agreement, and for general corporate purposes. AMF has requested that, in connection with its recapitalization plan, the lenders under its credit agreement provide the Company with (i) the ability to increase the pace of its center acquisition program on a selective basis, (ii) greater financial flexibility under the covenants contained in its credit agreement and (iii) certain other modifications. AMF Always Means Fun! The commencement of the rights offering and the tender offer are subject to approval by the Board of Directors of the final terms and pricing. The rights offering and the tender offer are expected to be conditioned upon each other. ---------------- As the largest owner and operator of bowling centers in the world, AMF is a leading provider of family fun and recreation. The Company owns and operates 545 bowling centers throughout the world, with 422 centers in the U.S. and 123 centers in 10 countries. AMF is also a world leader in the manufacturing and marketing of bowling products, manufactures and sells the PlayMaster and renaissance brands of billiards tables and owns the Michael Jordan Golf Company. A registration statement relating to the rights offering has been filed with the Securities and Exchange Commission but has not yet become effective. The securities referenced herein may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. The rights offering will be made only be means of a prospectus. This press release is not an offer or the solicitation of an offer to buy or sell any securities of AMF, and no such offer or solicitation will be made except in compliance with applicable securities laws. This press release contains forward-looking statements that are based upon the Company's estimates and expectations concerning future events and are subject to certain risks and uncertainties that could cause actual results to differ materially, all of which are difficult or impossible to predict and many of which are beyond the control of AMF. In light of the significant uncertainties inherent in forward-looking statements, the including of such forward-looking statements should not be regarding as a representation that the Company's objectives or plans will be realized. The Company does not hereby undertake to update such forward-looking statements. EX-99.A.8 9 PRESS RELEASE Exhibit (a)(8) [LETTERHEAD OF AMF APPEARS HERE] FOR IMMEDIATE RELEASE Contact: Stephen E. Hare June 28, 1999 Chief Financial Officer (804) 730-4401 Renee Antolik VP, Investor Relations [LOGO OF AMF APPEARS HERE] (804) 730-4402 (800) 832-0151 Press Release AMF Bowling, Inc. Announces Terms of $140 Million Rights Offering and Tender Offer for Debentures Richmond, Virginia--June 28, 1999--AMF Bowling, Inc. (NYSE: PIN) announced today the terms of its rights offering to raise up to $140 million and its tender offer for a portion of its outstanding Zero Coupon Convertible Debentures due 2018 as part of its previously announced recapitalization plan. Under the terms of the rights offering, the Company will issue rights to subscribe for approximately 28 million shares of common stock. Each holder of common stock will receive .4698 rights for each share held at the close of business on July 7, 1999, the record date for the rights offering. Each whole right may be exercised for one share of common stock at a subscription price of $5.00 per share. AMF's common stock price closed at $6.313 on June 25, 1999. The rights are transferable and will be listed for trading on the NYSE under the symbol "PINRT." The rights will expire at 5:00 p.m., New York City time on July 28, 1999, unless extended by AMF. The rights have an over-subscription privilege which entitles participating holders to elect to purchase a portion of the shares not purchased in the rights offering by other rights holders. The rights also include a conditional over-subscription privilege which entitles participating holders to elect to purchase additional shares to increase the total proceeds of the rights offering to $120 million, if the subscriptions otherwise received would not reach that amount. Certain of AMF's significant stockholders are currently expected to fully exercise their basic subscription privileges in the rights offering, subject to market conditions, and it is currently anticipated that some of those significant stockholders will exercise their conditional over-subscription privileges to an undetermined extent, subject to market conditions. However, those significant stockholders are not obligated to exercise their basic subscription and conditional over-subscription privileges in the rights offering. The Securities and Exchange Commission has declared the registration statement with respect to the rights offering effective today. Prospectuses and certificates evidencing the rights will be mailed on or about July 9, 1999 to stockholders of record on the record date. The Company also announced its tender offer for a minimum of 40% and up to 45.7% of the Company's outstanding zero coupon convertible debentures to be tendered by affiliates of Goldman, Sachs & Co. and Kelso & Company. The consideration for the tendered debentures is $140 cash per $1,000 principal amount of debentures at maturity. The Company will use a portion of the proceeds of the rights offering to pay for debentures tendered in the tender offer. Affiliates of Goldman Sachs and Kelso, who together own approximately 44% of the outstanding debentures, have indicated that they currently expect to tender their debentures pursuant to the tender offer, but they are not obligated to do so. If more than 45.7% of the outstanding debentures are tendered in the offer, AMF will purchase 45.7% of the outstanding debentures from tendering holders on a pro rata basis. Debentures may be tendered only in integral multiples of $1,000 principal amount at maturity. The tender offer is conditioned upon the rights offering closing with at least $120 million of total proceeds. The tender offer is expected to commence tomorrow. The tender offer and withdrawal rights for the tendered debentures will expire at 12:00 Midnight, New York City time, on July 28, 1999. A portion of the proceeds of the rights offering will also be contributed to the Company's principal operating subsidiary and be used to fund future bowling center acquisitions, along with funds that may be available under the Company's credit agreement, and for general corporate purposes. As part of its recapitalization plan, the lenders under AMF's credit agreement have amended the credit agreement to provide the Company with (i) the ability to resume its center acquisition program, (ii) greater financial flexibility under the covenants contained in its credit agreement and (iii) certain other modifications. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities of AMF, and no such offer or solicitation will be made except in compliance with applicable securities laws. The rights offering will be made only by means of a prospectus. A copy of the prospectus may be obtained from the information agent for the rights offering, D.F. King & Co. To contact the Information Agent, banks and brokerage firms should call collect (212) 269-5550, and others should call (800) 628-8532. D.F. King is also acting as information agent for the tender offer. Morgan Stanley & Co. is acting as dealer-manager for the tender offer. Questions or requests for assistance or for copies of the Offer to Purchase may be directed to either the Information Agent or the Dealer Manager. To contact D.F. King in connection with the tender offer, banks and brokerage firms should call collect (212) 269-5550, and others should call (800) 628-8532. To contact Morgan Stanley, please call (800) 223-2440, ext. 7898. As the largest owner and operator of bowling centers in the world, AMF is a leading provider of family fun and recreation. The Company owns and/or operates 541 bowling centers throughout the world, with 418 centers in the U.S. and 123 centers in 10 countries. AMF is also a world leader in the manufacturing and marketing of bowling products, manufactures and sells the PlayMaster and Renaissance brands of billiards tables and owns the Michael Jordan Golf Company. This press release contains forward-looking statements that are based upon the Company's estimates and expectations concerning future events and are subject to certain risks and uncertainties that could cause actual results to differ materially, all of which are difficult or impossible to predict and many of which are beyond the control of AMF. In light of the significant uncertainties inherent in forward-looking statements, the including of such forward-looking statements should not be regarding as a representation that the Company's objectives or plans will be realized. The Company does not hereby undertake to update such forward-looking statements. -----END PRIVACY-ENHANCED MESSAGE-----