Apollo Education Group, Inc. (NASDAQ: APOL) today announced
that Glass, Lewis & Co. (“Glass Lewis”), a leading independent
proxy advisory firm, recommends that Apollo Education Group
shareholders vote “FOR” the merger agreement related to the
proposed acquisition by a consortium of investors including The
Vistria Group, LLC, funds affiliated with Apollo Global Management,
LLC and the Najafi Companies. The merger agreement is being
presented for approval at a special meeting of shareholders
scheduled for Apr. 28, 2016.
In its Apr. 14, 2016, report, Glass Lewis stated:
- “[W]e believe the AEG board, confronted
with an extremely challenging operating and regulatory environment,
having fully considered all alternatives available, reasonably
concluded that a going-private transaction, which provides
shareholders with the relative certainty of cash at a premium to
prevailing market prices, represents the best time- and
risk-adjusted outcome for shareholders at this time.”
- “Based on these factors, along with the
support of the board, we believe the proposed acquisition is in the
best interests of shareholders. Accordingly, we recommend that
shareholders vote FOR this proposal.”
Commenting on the proposed purchase price of $9.50 per share in
cash for both Class A and B shares, Glass Lewis stated:
- “In our opinion, the proposed purchase
price appears to be reasonable, after taking into account the
significant headwinds impacting the Company's recent and reasonably
expected future financial performance, as well as its near-term
liquidity position. Here, we are particularly cognizant of the low
visibility which has impaired the ability of management, external
advisors or investors to potentially forecast future results with
any confidence. Thus, we believe the purchase price represents a
reasonable and acceptable price at which AEG shareholders can cash
out their investments in the Company, thereby realizing an
immediate and assured value at a substantial premium to the
unaffected stock price, and avoiding further losses now, or an even
potentially worse outcome in the future.”
Throughout the solicitation process, Apollo Education Group’s
Board of Directors has highlighted the consequences of a no‐vote.
This sentiment was supported by the Glass Lewis report, which
stated that:
- “Were shareholders to vote down the
acquisition, we expect AEG's stock price would suffer a further
decline after incorporating the two most recent quarters of
declining performance and downward revised outlook, which aren't
entirely reflected in the current stock price due to the presence
of the pending buyout offer.”
In response to Glass Lewis’s favorable recommendation, Greg
Cappelli, Chief Executive Officer of Apollo Education Group,
commented:
- “We are pleased that Glass Lewis
recommended voting in favor of the transaction, which the Apollo
Education Group Board of Directors believes is in the best interest
of all shareholders and strongly supports our transformation
efforts at the University of Phoenix.”
Apollo Education Group announced on Feb. 8, 2016 that it had
entered into a definitive agreement to be acquired by a consortium
of investors including The Vistria Group, LLC, funds affiliated
with Apollo Global Management, LLC (NYSE: APO), and the Najafi
Companies for $9.50 per share in cash for both Class A and B
shares. The purchase price represents a premium of 30 percent over
Apollo Education Group’s 30-day volume weighted average stock price
for the period ended Feb. 5, 2016, and a 44 percent premium over
the closing price on Jan. 8, 2016, immediately prior to the
announcement that the Board of Directors was pursuing strategic
alternatives.
Apollo Education Group shareholders of record at the close of
business on Apr. 11, 2016, are entitled to vote at the Special
Meeting, to be held on Apr. 28, 2016 at 1:00 PM, local Phoenix
time, at 4025 South Riverpoint Parkway, Phoenix, Arizona 85040,
Rooms 101-102.
The Apollo Education Group Board of Directors has approved the
merger agreement and unanimously recommends that shareholders vote
“FOR” its adoption. Shareholders are
encouraged to vote in advance of the special meeting by following
the instructions set forth in the definitive proxy statement and on
their proxy cards. The failure to vote will have the same effect as
a vote “against” the merger.
Apollo Education Group shareholders seeking copies of the
definitive proxy statement or with questions about the special
meeting may contact the company’s proxy solicitor, Innisfree
M&A Incorporated, toll-free at (888) 750-5834. Banks and
brokers should call (212) 750-5833.
About Apollo Education Group, Inc.
Apollo Education Group, Inc. is one of the world’s largest
private education providers, serving students since 1973. Through
its subsidiaries, Apollo Education Group offers
undergraduate, graduate, professional development and other
non-degree educational programs and services, online and on-campus
principally to working learners. Its educational programs and
services are offered throughout the United States and
in Europe, Australia, Latin
America, Africa and Asia, as well as online
throughout the world. For more information about Apollo
Education Group, Inc. and its subsidiaries, call (800)
990-APOL or visit the Company’s website
at www.apollo.edu.
About The Vistria Group
The Vistria Group is a Chicago, IL based private investment firm
focused on investing in middle market companies in the healthcare,
education, and financial services sectors. Vistria’s team is
comprised of highly experienced operating partners and private
equity executives with proven track records of working with
management teams in building innovative market leading
companies.
About Apollo Global Management
Apollo Global Management is a leading global alternative
investment manager with offices in New York, Los Angeles, Houston,
Chicago, Bethesda, Toronto, London, Frankfurt, Madrid, Luxembourg,
Mumbai, Delhi, Singapore, Hong Kong and Shanghai. Apollo Global
Management had assets under management of approximately $170
billion as of December 31, 2015 in private equity, credit and real
estate funds invested across a core group of nine industries where
Apollo Global Management has considerable knowledge and resources.
Apollo Global Management has significant experience investing in
the education sector with current and former private equity fund
investments in leading companies including McGraw Hill Education,
Connections Academy and Sylvan Learning Centers. The portfolio
companies owned by funds managed by affiliates of Apollo Global
Management are managed and operate independently from one another.
For more information about Apollo, please visit www.agm.com.
About Najafi Companies
Najafi Companies is an international private investment firm
based in Phoenix, Arizona, targeting education, media, consumer
products, internet services, and direct marketing sectors. The firm
makes highly selective investments in companies with strong
management teams across a variety of industries, often in areas
undergoing rapid transformation. Najafi Companies funds its
investments with internally generated capital, not through a fund.
The firm is able to move quickly and decisively when investing and
make investments that create maximum value for the long term.
Forward-Looking Statements Safe Harbor
Statements about Apollo Education Group and its business in this
release which are not statements of historical fact, including
statements regarding Apollo Education Group's future strategy and
plans and commentary regarding future results of operations and
prospects, are forward-looking statements and are subject to the
Safe Harbor provisions created by the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are based on
current information and expectations and involve a number of risks
and uncertainties. Actual plans implemented and actual results
achieved may differ materially from those set forth in or implied
by such statements due to various factors, including, without
limitation: (i) the timing of the completion of the merger; (ii)
the failure of Parent to obtain the necessary equity financing set
forth in the equity commitment letters received in connection with
the merger agreement or the failure of that financing to be
sufficient to complete the merger and the transactions contemplated
thereby; (iii) the inability to complete the merger due to the
failure to obtain shareholder approval or the failure to satisfy
other conditions to completion of the merger, including receipt of
required regulatory approvals; (iv) the risk that regulatory
agencies impose restrictions, limitations, costs, divestitures or
other conditions in connection with providing regulatory approval
of the merger; (v) the outcome of pending or potential litigation
or governmental investigations; (vi) disruptions resulting from the
proposed merger making it more difficult for Apollo Education Group
to maintain relationships with its students, customers, employees,
suppliers and strategic partners; (vii) competitive responses to
the proposed merger; (viii) unexpected costs, liabilities, charges
or expenses resulting from the merger; (ix) the inability to
obtain, renew or modify permits in a timely manner, or comply with
government regulations; (x) the inability to retain key personnel
of Apollo Education Group or its subsidiaries; (xi) the occurrence
of any event, change or other circumstance that could give rise to
the termination of the merger agreement, including a termination of
the merger agreement under circumstances that could require Apollo
Education Group to pay a termination fee; (xii) unexpected expenses
or other challenges in integrating acquired businesses, student,
consumer or regulatory impact arising from consummation of such
acquisitions, and unexpected changes or developments in the
acquired businesses; (xiii) diversion of management’s attention
from ongoing business concerns; (xiv) limitations placed on Apollo
Education Group’s ability to operate its business by the merger
agreement; (xv) the impact of increased competition from
traditional public universities and proprietary educational
institutions; (xvi) the impact of the initiatives to transform the
University of Phoenix into a more-focused, higher-retaining and
less-complex institution, including the near-term impact on
enrollment; (xvii) the impact of Apollo Education Group’s ongoing
restructuring and cost-reduction initiatives; (xviii) impacts from
actions taken by our regulators that could affect the University of
Phoenix’s eligibility to participate in or the manner in which it
participates in U.S. Federal and state student financial aid
programs, including the recent requirement that all substantial
changes be approved by the U.S. Department of Education in advance;
(xix) further delay in the University of Phoenix’s pending
recertification by the U.S. Department of Education for
participation in Title IV student financial aid programs, or any
limitations or qualifications imposed in connection with any
recertification; (xx) the impact of any reduction in financial aid
available to students, including active and retired military
personnel, due to the U.S. government deficit reduction proposals,
debt ceiling limitations, budget sequestration or otherwise; (xxi)
changes in regulation of the U.S. education industry and
eligibility of proprietary schools to participate in U.S. Federal
student financial aid programs; (xxii) changes in the University of
Phoenix’s enrollment or student mix; (xxiii) the impact on student
enrollments of the announcement of the proposed merger and general
economic conditions; (xxiv) the impact of third party claims that
Apollo Education Group’s products and services infringe their
intellectual property rights; and (xxv) fluctuations in non-U.S.
currencies that could impact reported operating results of foreign
subsidiaries. For a discussion of the various factors that may
cause actual plans implemented and actual results achieved to
differ materially from those set forth in the forward-looking
statements, please refer to the risk factors and other disclosures
contained in Apollo Education Group's Form 10-K for fiscal year
2015, filed with the Securities and Exchange Commission (the “SEC”)
on October 22, 2015, Form 10-Q for the quarterly period ended
November 30, 2015, filed with the SEC on January 11, 2016, and
other filings with the SEC which are available at www.apollo.edu.
The cautionary statements referred to above also should be
considered in connection with any subsequent written or oral
forward-looking statements that may be issued by Apollo Education
Group or persons acting on Apollo Education Group's behalf. Apollo
Education Group undertakes no obligation to publicly update or
revise any forward-looking statements for any facts, events, or
circumstances after the date hereof that may bear upon
forward-looking statements. Furthermore, Apollo Education Group
cannot guarantee future results, events, levels of activity,
performance, or achievements.
Additional Information
This communication may be deemed to be solicitation material in
respect of the proposed sale of Apollo Education Group. In
connection with the proposed transaction, Apollo Education Group
has filed a definitive proxy statement on Schedule 14A with the SEC
on March 23, 2016 and has mailed the definitive proxy statement and
a form of proxy to the shareholders of Apollo Education Group on or
about March 25, 2016. Apollo Education Group’s shareholders are
encouraged to read the definitive proxy statement regarding the
proposed merger and any other relevant documents filed with the SEC
when they become available as they will contain important
information about the proposed merger. Apollo Education Group’s
shareholders will be able to obtain, without charge, a copy of the
definitive proxy statement and other relevant documents filed with
the SEC from the SEC’s website, www.sec.gov and Apollo Education
Group’s website, www.apollo.edu.
Participants in Solicitation
Apollo Education Group and its directors and officers may be
deemed to be participants in the solicitation of proxies from
Apollo Education Group's shareholders with respect to the proposed
merger. Information about Apollo Education Group’s directors and
executive officers and their ownership of Apollo Education Group’s
common stock is set forth in the definitive information statement
for Apollo Education Group’s 2015 Annual Meetings of Class A and
Class B Shareholders, which was filed with the SEC on December 23,
2015 and the definitive proxy statement on Schedule 14A, which was
filed with the SEC on March 23, 2016. Shareholders may obtain
additional information regarding the interests of Apollo Education
Group and its directors and executive officers in the proposed
merger, which may be different than those of Apollo Education
Group's shareholders generally, by reading the definitive proxy
statement and other relevant documents regarding the proposed
merger, when filed with the SEC.
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version on businesswire.com: http://www.businesswire.com/news/home/20160415005486/en/
For Apollo Education Group, Inc.:Voting
QuestionsInnisfree M&A IncorporatedShareholders: +1 888 750
5834Banks & Brokers: +1 212 750 5833orInvestorsBeth
Coronelli+1 312 660
2059beth.coronelli@apollo.eduorMediaBrunswick GroupTripp
Kyle / Tom Maginnis+1 212 333 3810apollo@brunswickgroup.comorFor
Apollo Global Management:InvestorsGary M. SteinHead of
Corporate CommunicationsApollo Global Management, LLC+1 212 822
0467gstein@apollolp.comorNoah GunnInvestor Relations ManagerApollo
Global Management, LLC+1 212 822
0540ngunn@apollolp.comorMediaCharles ZehrenRubenstein
Associates, Inc.+1 212 843 8590czehren@rubenstein.comorFor The
Vistria Group:Amy BrundageSKDKnickerbocker+1 202 464
6900abrundage@skdknick.comorFor The Najafi Companies:Anne
RobertsonLavidge Company+1 480 998 2600
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