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Launches consent solicitation to amend the indenture governing its
senior secured notes to provide greater flexibility to repurchase its
outstanding common stock; as of today, the beneficial holders of a
majority principal amount have committed their consents to the
amendment
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Launches offer to exchange a portion of its existing senior secured
notes due 2019 for its new unsecured notes due 2022
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Announces authorization to purchase up to $100 million of its common
stock, subject to effectiveness of the indenture amendments and other
conditions
NEW YORK--(BUSINESS WIRE)--May 14, 2014--
Harbinger Group Inc. (“HGI” or the “Company”; NYSE:HRG) today announced
that it is soliciting (the “Consent Solicitation”) the holders of its
7.875% Senior Secured Notes due 2019 (the “Senior Secured Notes”) to
amend (the “Proposed Amendments”) the indenture governing the Senior
Secured Notes (the “Secured Indenture”) to provide the Company with,
among other things, greater flexibility to repurchase or redeem its
outstanding common stock. The terms and conditions of the Consent
Solicitation are described in the consent solicitation statement dated
May 9, 2014 (the “Statement”). As of today’s date, the beneficial
holders of a majority of principal amount of the outstanding Senior
Secured Notes had committed to consent to the Proposed Amendments. Such
beneficial owners were not paid a consent fee by HGI and will have the
right to participate pro-rata with other holders of the Senior Secured
Notes in the Offer (as defined below).
Concurrently with the Consent Solicitation, the Company commenced an
offer (the “Offer”) to exchange a portion of its outstanding Senior
Secured Notes for up to $350,000,000 aggregate principal amount (the
“Tender Cap”) of new 7.750% Senior Notes due 2022 (the “Additional
Unsecured Notes”). The terms and conditions of the Offer are described
in the offering memorandum, dated May 14, 2014, and the related letter
of transmittal (together, the “Offer Documents”). The Proposed
Amendments will not be operative until the Company’s acceptance, subject
to any required proration, of the Senior Secured Notes validly tendered
(and not validly withdrawn) as of the Early Tender Time (as defined
below). The Proposed Amendments will be reflected in a supplemental
indenture (the “Supplemental Indenture”) with Wells Fargo Bank, National
Association, the trustee under the Secured Indenture.
If the Proposed Amendments become operative, the Company will have the
ability to purchase HGI common stock pursuant to a new $100 million
share repurchase program authorized by the Company’s board of directors.
The repurchase program authorizes purchases to be made from time to time
in one or more open market or private transactions. The manner of
purchase, the number of shares to be purchased and the timing of
purchases will be based on the price of HGI’s common stock, general
business and market conditions and applicable legal requirements, and is
subject to the discretion of HGI’s management. The program does not
require HGI to purchase any specific number of shares or any shares at
all, and may be suspended, discontinued or re-instituted at any time
without prior notice. The Company may fund any such repurchase with cash
on hand or other borrowings.
Subject to the terms and conditions set forth in the Offer Documents and
subject to the Tender Cap and any required proration, each eligible
registered holder of Senior Secured Notes (each, a “Holder”) who validly
tenders Senior Secured Notes at or prior to 5:00 pm, New York City time,
on Wednesday, May 28, 2014 (unless extended or earlier terminated, the
“Early Tender Time”) and does not validly withdraw its tender prior to
Wednesday, May 28, 2014 (unless extended or earlier terminated, the
“Withdrawal Deadline”) will receive the Total Consideration (as defined
below, which includes an early tender payment of $50 principal amount of
Additional Unsecured Notes) for Senior Secured Notes accepted in the
Offer.
Subject to the terms and conditions set forth in the Offer Documents and
subject to the Tender Cap and any required proration, eligible Holders
who validly tender Senior Secured Notes after 5:00 pm, New York City
time, on Wednesday, May 28, 2014 and at or prior to 11:59 pm, New York
City time (unless extended or earlier terminated, the “Expiration
Time”), at the end of Wednesday, June 11, 2014 will receive, if the
Offer is not fully subscribed as of the Early Tender Time, the Offer
Consideration (as defined below) for Senior Secured Notes accepted in
the Offer. If the Offer is fully subscribed as of the Early Tender Time,
Holders who validly tender Senior Secured Notes after the Early Tender
Time will not have any of their Senior Secured Notes accepted for
exchange.
The “Total Consideration” means, for each $1,000 principal amount of
Senior Secured Notes tendered and accepted by us, Additional Unsecured
Notes in the principal amount, rounded to the nearest cent, of:
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$1,000 x
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$1,092.50 (plus accrued and unpaid interest on $1,000
principal amount of Senior Secured Notes from January 15, 2014
to but not including the applicable settlement date)
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$1,000 (plus accrued and unpaid interest on $1,000 principal
amount of Additional Unsecured Notes from January 21, 2014 to
but not including the applicable settlement date)
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The “Offer Consideration” means, for each $1,000 principal amount of
Senior Secured Notes tendered and accepted by us, Additional Unsecured
Notes in the principal amount, rounded to the nearest cent, of:
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$1,000 x
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$1,042.50 (plus accrued and unpaid interest on $1,000
principal amount of Senior Secured Notes from January 15, 2014
to but not including the applicable settlement date)
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$1,000 (plus accrued and unpaid interest on $1,000 principal
amount of Additional Unsecured Notes from January 21, 2014 to
but not including the applicable settlement date)
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The applicable settlement date in respect of the Senior Secured Notes
that are validly tendered at or prior to the Early Tender Time and not
validly withdrawn prior to the Withdrawal Deadline and accepted for
exchange, subject to the Tender Cap and any required proration, will be
promptly after the Early Tender Time, and is expected to be on or about
Friday, May 30, 2014, two business days following the Early Tender Time,
unless the Early Tender Time is extended by the Company in its sole
discretion. The applicable settlement date in respect of Senior Secured
Notes that are validly tendered after the Early Tender Time but at or
prior to the Expiration Time and accepted for exchange, subject to the
Tender Cap and any required proration, will be promptly after the
Expiration Time and is expected to be on or about Friday, June 13, 2014,
two business days following the Expiration Time, unless the related
Offer is extended by the Company in its sole discretion. Tendered Senior
Secured Notes may be withdrawn in accordance with the terms of the Offer
prior to the Withdrawal Deadline.
The Company has retained Credit Suisse Securities (USA) LLC as its
exclusive financial advisor in connection with the Offer and Consent
Solicitation (the “Financial Advisor”).
D.F. King & Co., Inc. will act as the Information Agent and the Exchange
Agent for the Offer and Wells Fargo Bank, National Association will act
as the Tabulation Agent for the Consent Solicitation. Questions
regarding the Offer, including documentation, should be directed to D.F.
King & Co., Inc. at (800) 431-9633 (toll-free). Questions regarding the
Consent Solicitation, including documentation, should be directed to
Wells Fargo Bank, National Association at (917) 260-1550 or (612)
667-0337.
None of the representatives, directors, officers or employees of the
Company, any of its subsidiaries or affiliates, the Financial Advisor,
the Tabulation Agent, the Exchange Agent, Information Agent or Wells
Fargo Bank, National Association, as trustee under the Secured
Indenture, make any recommendations as to whether or not holders of the
Senior Secured Notes should issue their consents pursuant to the Consent
Solicitation or tender their Senior Secured Notes in the Offer, and no
one has been authorized by any of them to make such recommendations.
This press release does not constitute a solicitation of consents of
holders of the Senior Secured Notes and shall not be deemed a
solicitation of consents with respect to any other securities of the
Company. The Offer and the Consent Solicitation will be made solely by
the Offer Documents and the Statement and the accompanying consent form.
All statements herein regarding the terms of the Offer and the Consent
Solicitation, the Proposed Amendments, the Supplemental Indenture and
the Secured Indenture are qualified in their entirety by reference to
the text of the Offer Documents and the Statement and the accompanying
consent form and the Secured Indenture. The completion of the Offer and
the Consent Solicitation and the execution of the Supplemental Indenture
is subject to a number of conditions. No assurance can be given that any
such Consent Solicitation can or will be completed on terms that are
acceptable to the Company, or at all, or that the Supplemental Indenture
will become operative.
About Harbinger Group Inc.
Harbinger Group Inc. is a diversified holding company. HGI’s principal
operations are conducted through companies that: offer life insurance
and annuity products; offer branded consumer products (such as consumer
batteries, residential locksets, residential builders’ hardware,
faucets, shaving and grooming products, personal care products, small
household appliances, specialty pet supplies, lawn, garden and home pest
control products, personal insect repellents); provide asset-backed
loans; and own energy assets. HGI is principally focused on acquiring
controlling and other equity stakes in businesses across a diversified
range of industries and growing its existing businesses. In addition to
HGI’s intention to acquire controlling equity interests, HGI may also
make investments in debt instruments and acquire minority equity
interests in companies. HGI is headquartered in New York and traded on
the New York Stock Exchange under the symbol HRG. For more information
on HGI, visit: harbingergroupinc.com.
Forward Looking Statements
“Safe Harbor” Statement Under the Private Securities Litigation Reform
Act of 1995: This release contains, and certain oral statements made by
our representatives from time to time may contain, forward-looking
statements, including those statements regarding the transactions
described herein. These statements are based on the beliefs and
assumptions of HGI's management and the management of HGI's subsidiaries
(including target businesses). Generally, forward-looking statements
include information concerning the transactions described herein, other
actions, events, results, strategies and expectations and are generally
identifiable by use of the words “believes,” “expects,” “intends,”
“anticipates,” “plans,” “seeks,” “estimates,” “projects,” “may,” “will,”
“could,” “might,” or “continues” or similar expressions. Factors that
could cause actual results, events and developments to differ include,
without limitation, the Offer not being consummated, the Proposed
Amendments not becoming operative, a change in the Company’s current
intention to repurchase its common stock, capital market conditions, the
ability of HGI's subsidiaries (including, target businesses following
their acquisition) to generate sufficient net income and cash flows to
make upstream cash distributions, HGI and its subsidiaries ability to
identify any suitable future acquisition opportunities,
efficiencies/cost avoidance, cost savings, income and margins, growth,
economies of scale, combined operations, future economic performance,
conditions to, and the timetable for, completing the integration of
financial reporting of acquired or target businesses with HGI or HGI
subsidiaries, completing future acquisitions and dispositions,
litigation, potential and contingent liabilities, management's plans,
changes in regulations, taxes and the risks that may affect the
performance of the operating subsidiaries of HGI and those factors
listed under the caption “Risk Factors” in HGI's most recent Annual
Report on Form 10-K and Quarterly Reports on Form 10-Q, filed with the
Securities and Exchange Commission. All forward-looking statements
described herein are qualified by these cautionary statements and there
can be no assurance that the actual results, events or developments
referenced herein will occur or be realized. HGI does not undertake any
obligation to update or revise forward-looking statements to reflect
changed assumptions, the occurrence of unanticipated events or changes
to future operation results.
Source: Harbinger Group Inc.
Investors: Harbinger Group Inc. James Hart, 212-906-8560 Investor
Relations
or Media: Sard
Verbinnen & Co Jamie Tully / David Millar, 212-687-8080
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