SOME INVESTORS NOT SATISFIED BY ENERGYSOLUTIONS PROXY STATEMENT

Despite the detailed description of failed offers to sell all or portions of the company at a higher price, some shareholders for EnergySolutions still believe that Energy Capital Partners is undervaluing the company in its proposed acquisition deal for $3.75 per share. Some shareholders responded negatively immediately after EnergySolutions announced the acquisition agreement Jan. 7, but a Feb. 8 proxy statement filed with the Securities and Exchange Commission detailing the genesis of the deal was intended to show that $3.75 per share was the best deal the company could make. However Prasad Phatek and Chris Koronada, managing members of Tappan Street Partners LLC wrote in a Feb. 15 letter to EnergySolutions’ board of directors that “as currently contemplated, we cannot vote in favor of the merger.” They explained: “While it is not surprising to us that the company did not receive a superior proposal from another party given its unusual collection of assets, the question … remains: does remaining independent provide more value to shareholders long-term? We believe incremental details from the proxy and the recent investor presentation to lenders serve to strengthen the case that the offer by ECP grossly undervalues the company.”

Of the offers that were made for EnergySolutions, Tappan Street Partners wrote that they are “dumbfounded” that Energy Capital Partners’ was accepted and another offer detailed in the proxy was ruled out. In December 2011, one party offered to invest $50 million in equity at a premium to the market price on that date, as well as $50 million in warrants struck at $7.00 per share. The combination of the purchased shares and exercised warrants, if the stock price were to rise to $7.00 per share, would have given Party H an ownership stake in the company of roughly 51 percent. In January of 2012, the Board rejected Party H’s proposal because they were concerned with "significant dilution to our stockholders." Tappan Street Partners wrote they are “dumbfounded the Board would be concerned with dilution at $7.00 per share, but is willingly allowing for 100% dilution of current stockholders at a price of $3.75 per share.” The option of a rights offering, where current holders could choose to invest more to offset potential dilution, should have been considered, Tappan Street Partners wrote. “Given this miss, we question why we should accept the Board’s assertion that the current offer is the most compelling alternative or why this offer is better than EnergySolutions operating independently.”

In addition, the company’s value is rising, Tappan Street Parnters wrote, which makes taking the deal now unsatisfactory for shareholders. Though in the proxy it was clear that the Zion nuclear power plant license stewardship decommissioning project was the main reason most interested parties did not pursue acquisition deals with EnergySolutions, “We believe the remedy for this problem is time,” Tappan Street Partners wrote. “While Zion is a 10 year project, much of the heavy lifting is completed in the first seven years. Once the Zion project is more mature and the balance sheet burden diminishes, we believe EnergySolutions will fetch a far better price in the market, should the Board choose to pursue a transaction at that time.” EnergySolutions is holding a shareholder vote for the ECP acquisition deal on April 5.