FMG Acquisition Corp. (stock symbol: [t]FMGQ[/t]), which apparently is having some problems closing its deal, is going to take out some of its shareholders:
FMG Acquisition Corp. Announces Issuance of 11% Notes Due 2011, Election of Certain Stockholders to Exchange Existing Common Stock for Notes and Tender Offer for up to 3,320,762 Shares of FMG Common Stock
Monday August 18, 9:10 am ET
FMG to issue approximately $18.3 million face amount of 11% Notes due 2011 (the "Notes") to two important sets of investors:
-- Bulldog Investors and HBK Master Fund L.P., which have each agreed with FMG to vote for the merger and to collectively exchange 869,565 shares (18.4% of FMG's IPO shares) of their existing common stock holdings into approximately $7.5 million face amount of Notes upon closing of the merger with United Insurance Holdings, LC
-- New investors, who will purchase approximately $10.8 million of face amount of Notes for $10.0 million in cash upon closing of the merger
-- Simultaneously with or as soon as practical following FMG's stockholder meeting, FMG to close a conditional tender offer for up to 3,320,762 shares (up to 70.2% of IPO shares) at $8.05 per share
-- The tender offer period will commence prior to the stockholder meeting and close immediately after the stockholder vote, prior to the effective date of the merger
-- Warrant holders will not be able to participate in the tender offer as the tender offer will conclude prior to the effective date of the merger
-- The tender offer will be reduced by the number of FMG shares, if any, whose conversion rights are exercised
FARMINGTON, Conn. & ST. PETERSBURG, Fla.--(BUSINESS WIRE)--FMG Acquisition Corp. (OTCBB: FMGQ; FMGQW; FMGQU) (“FMG”) and privately-held United Insurance Holdings LC (“United” or the “Company”) today jointly announced several matters in connection with their pending merger.
FMG entered into an agreement to sell an aggregate of $18,279,570 of newly-issued 11% Notes due three years from the date of issue (the “Notes”) to two sets of investors: (i) Bulldog Investors and HBK Master Fund L.P., which have agreed to vote in favor of the merger and to collectively exchange 869,565 shares (18.4% of FMG’s IPO shares) of their existing common stock holdings into approximately $7.5 million face amount of Notes upon closing of the merger and (ii) new investors, which are expected to purchase approximately $10.8 million of face amount of Notes for $10.0 million in cash upon closing of the merger.
The Notes will:
-- be issued at 93% of face amount;
-- bear interest at the rate of 11% per annum; be callable at 105% of face amount for the 30 day periods following their first and second anniversaries from issuance; and mature three years from issuance.
In addition, United and FMG have amended their merger agreement to account for the private placement of the Notes, the tender offer, and the economic effect of these events for the parties to the merger agreement. The closing of the issuance of the Notes is subject to applicable regulatory approvals and FMG stockholder approval, as well as other customary closing conditions. For more information please see our amended proxy statement to be filed today with the SEC.
FMG will use the proceeds from the issuance of the Notes and its other available cash resources following the closing of the merger to tender for the purchase of up to 3,320,762 shares of its outstanding common stock at $8.05 per share. The tender offer will be reduced by the number of FMG shares, if any, whose conversion rights are exercised. FMG will commence the tender offer prior to the stockholder meeting and will seek to close the tender period simultaneously with, or as soon as possible after, stockholder approval of the merger. The tender offer will be available to all holders of outstanding shares of common stock. The founding stockholders of FMG have agreed not to participate in the tender offer.
Gordon Pratt, Chairman and Chief Executive of FMG, said, "United and its chairman and management have shown great flexibility as we move forward to complete this merger. Our two largest stockholders have put their support behind the merger by providing long term financing and voting in favor of the transaction.” Mr. Pratt went on to say, "The tender offer provides a liquidity option for our stockholders, which some may find attractive. For those wishing to hold their shares, FMG represents an opportunity for stockholders to partner with United’s proven executive team and participate in United’s excellent prospects in the insurance business."
Don Cronin, President and CEO of United, said, “Our business has performed well through the first half of 2008, with earned premium and claim costs on plan due to our disciplined underwriting approach. We continue to see good opportunities in our market, and we look forward to going public through this merger with FMG.”
United’s Chairman, Greg Branch, said, “United is committed to our Vision of being a Responsive, Stable and Innovative insurance provider and to grow our business profitably by being proactive in a changing insurance environment. We believe that this merger will allow the Company and our shareholders more financial flexibility and help us to grow and prosper in the long term. By working creatively with FMG we have put ourselves in a position to complete this merger and prepare us to move to the next positive stage in the life cycle of the company.”
Phillip Goldstein of Bulldog Investors, FMG’s largest stockholder, said, “We are pleased to be in a position to support the management team at FMG—they found a good merger partner in United, and we are voting in favor of the transaction.”
The closing of the merger is subject to customary closing conditions, including the approval of the holders of a majority of outstanding shares of common stock of FMG issued in its initial public offering in October 2007 (the "IPO") that vote on the merger at the stockholders’ meeting. The closing is also subject to holders of less than 30% of FMG's shares of common stock issued in the IPO voting against the merger and electing to exercise their conversion rights. Assuming these conditions are met, FMG anticipates completing the acquisition in the late September or early October 2008.
For additional information on the acquisition see the Form 8-K, that will be filed by FMG within four business days, and can be obtained without charge, at the Securities and Exchange Commission's internet site (http://www.sec.gov). United’s website is www.upcic.com.
<snip>
biz.yahoo.com |
