Harbinger Group Inc.
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SEC Filings

HRG GROUP, INC. filed this Form DEF 14A on 04/05/2002
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          2. In a press release dated October 5, 2001, management stated that
     Zapata anticipates generating a tax benefit of approximately $15 million
     from capital losses resulting from the sale of certain investments. This
     means that the pre-tax loss on these investments must have been on the
     order of $45 million or approximately $19 per share. Clearly management's
     track record in making investment decisions for the company has not been
     very good and does not deserve to be continued.
          3. Based on the June 20, 2001 financial statements and the recent sale
     of the investments above, our calculations indicate that Zapata has cash of
     $85 million or more than $35 per share and 14.5 million shares of Omega
     Protein common stock worth about $12 per Zapata share. If this cash and the
     Omega Protein common stock were distributed to stockholders, they would
     receive a total value of about $47 per share. At the time of this letter,
     the closing price of Zapata stock reported by the New York Stock Exchange
     was about $18 per share. Thus the value of the distributions to
     stockholders in a liquidation of Zapata would be equal to about 260% of the
     current trading price."
     The Board of Directors opposes the proposal because it believes that
liquidation of the Company is not in the best interest of the stockholders.
     First, the proposal fails to recognize the potential negative effect
liquidation and distribution would have on the value of the stock of Omega
Protein Corporation held by the Company. A liquidation of the Company would
necessarily include the distribution of stock to Zapata's current record
holders, numbering over 4,800, and an even greater number of persons who have
beneficial ownership of those shares. With the potential that this stock could
immediately be sold on the market by persons or stockholders not affiliated with
Zapata, a distribution could have the effect of driving down the price of Omega
Protein. Additionally, value may be lost as a result of the loss of a control
premium that the market may attribute to Zapata holding approximately 60% of
Omega Protein's outstanding common stock.
     Second, the proposal does not take into account the negative effects of the
liquidation process. Liquidation of any business is a lengthy and time-consuming
process. This could negatively affect the value of the marketable securities
held by the Company. The proposal also does not take into account the expenses
to be incurred in the liquidation process.
     Finally, the Board of Directors believes that adequate capital resources,
including its available cash and cash equivalents, are necessary to accomplish
the Company's current strategies adopted by the Board of Directors. The Board's
view is that the Company should continue on its current path with the objectives
of maintaining cash reserves adequate to fund its business strategies going
     Overall, the Board believes that liquidation would not have a positive
effect on long-term stockholder value and that the long-term value of the
Company to its stockholders can best be realized as a going concern and not
through liquidation.
     The affirmative vote of a majority of the shares of Common Stock present in
person or by proxy at the meeting and entitled to vote on this matter is
required for approval of this proposal if it is presented. Under Nevada law, the
action to be recommended by this proposal could be taken only if first approved
by the Board of Directors. Therefore, if approved, the proposal would not
automatically result in a liquidation, but instead would serve as a
recommendation to the Board of Directors to take the steps necessary to effect a
liquidation of the Company.


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