BBX Capital Corporation (NYSE: BBX) (OTCQX: BBXTB) (the
“Company”) announced today that its Board of Directors has adopted
a shareholder rights plan and approved a one-for-five reverse stock
split.
Adoption of Rights Plan
The Company’s Board of Directors adopted the rights plan in
light of the COVID-19 pandemic, the significant market volatility
and uncertainties associated with the pandemic, and the impact on
the Company and the market price of its Class A Common Stock and
Class B Common Stock. In an effort to protect against investors
seeking short-term gains by taking advantage of current market
conditions at the expense of the Company and its long-term
investors, the Board determined that adopting the rights plan was
in the best interest of the Company and its shareholders. The
rights plan is similar to plans recently adopted by other public
companies in light of the current environment.
Pursuant to the rights plan, the Company will issue one right
for each share of the Company’s Class A Common Stock and Class B
Common Stock outstanding as of the close of business on June 29,
2020. Each right will initially trade with the share of the
Company’s Class A Common Stock or Class B Common Stock in respect
of which the right was issued. Subject to the terms and conditions
of the rights plan, including certain limited exceptions set forth
therein, the rights will become exercisable upon the earlier to
occur of (i) 10 business days following a public announcement that
a person or group of affiliated or associated persons or person(s)
acting in concert therewith has acquired, or obtained the right to
acquire, beneficial ownership of 5% or more of the outstanding
shares of the Company’s Class A Common Stock, Class B Common Stock
or total combined Common Stock or (ii) 10 business days (or such
later date as may be determined by action of the Company’s Board of
Directors) following the commencement of, or announcement of an
intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a
person or group of 5% or more of the outstanding shares of the
Company’s Class A Common Stock, Class B Common Stock or total
combined Common Stock. In addition to other limited exceptions set
forth in the rights plan, existing shareholders who beneficially
own 5% or more of the outstanding shares of the Company’s Class A
Common Stock, Class B Common Stock or total combined Common Stock
will not be required to divest any shares as their share ownership
will not trigger exercisability of the rights so long as they do
not become the beneficial owner of one or more additional shares of
the Company’s Class A Common Stock or Class B Common Stock (other
than pursuant to certain limited exceptions expressly set forth in
the rights plan or as determined by the Board of Directors) which
results in their beneficial ownership of 5% or more of the
outstanding shares of the Company’s Class A Common Stock, Class B
Common Stock or total combined Common Stock.
If the rights become exercisable, each right (other than the
rights beneficially owned by the triggering person, its affiliates,
associates and others acting in concert therewith, and certain of
their respective transferees, all of which rights will become void)
will entitle its holder to purchase, at the exercise price of
$50.00 per right (subject to adjustment in accordance with the
terms of the rights plan), a number of shares of the Company’s
Class A Common Stock or equivalent securities having a market value
at that time of twice the right’s exercise price. The Company, in
the discretion of its Board of Directors, may, rather than
permitting the exercise of the rights, exchange the rights (other
than rights which have become void, as described above) at an
exchange ratio of one share of the Company’s Class A Common Stock,
or other security of the Company having equivalent value, per
right. Until the occurrence of an event that causes the rights to
become exercisable, the Company’s Board of Directors may determine
to redeem the rights for $0.0001 per right and the Company will
generally be entitled to amend the rights plan. Prior to exercise,
a right does not give its holder any rights as a shareholder,
including, without limitation, any dividend, voting or liquidation
rights.
The exercise price and redemption price of the rights, the
number of shares issuable in exchange for or upon exercise of the
rights, and the number of outstanding rights is subject to
adjustment in accordance with the terms of the rights plan.
However, no further adjustments will be made as a result of the
contemplated one-for-five reverse stock split approved by the
Company’s Board of Directors, as described in further detail
below.
The rights plan has a term of two years, expiring on June 17,
2022, unless the rights are earlier redeemed or exchanged, or the
rights plan is earlier terminated or is extended by the Company’s
Board of Directors in accordance with the terms of the rights
plan.
The rights plan was not adopted in response to any effort to
acquire control of the Company. However, the rights plan may have
an anti-takeover effect and will be an impediment to a proposed
takeover which is not approved by the Company’s Board of
Directors.
The foregoing announcement of the Company’s adoption of the
rights plan is a summary only and is qualified by reference to the
full text of the rights plan. Additional information regarding the
rights plan and the rights will be contained in a Current Report on
Form 8-K that the Company will file with the Securities and
Exchange Commission (the "SEC"). A copy of the rights plan will be
filed as an exhibit to the Current Report on Form 8-K.
The Company’s previous shareholder rights plan expired during
September 2019 and the Company has taken steps under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) to
de-registered the preferred share purchase rights issued pursuant
to that plan and to delist those rights from the NYSE. These
actions were simply administrative in nature and will have no
effect on the Company's Class A Common Stock or Class B Common
Stock, which will continue to trade on the NYSE and the OTCQX,
respectively, and remain registered under the Exchange Act.
Approval of Reverse Stock Split
In addition to its adoption of the rights plan, the Company also
announced today that its Board of Directors has approved a
one-for-five reverse split of the Company’s Class A Common Stock
and Class B Common Stock. The Board made such determination in
light of, among other factors, the impact of the COVID-19 pandemic
on the Company and the market price of its Class A Common Stock, as
described above.
At the effective time of the reverse stock split, each five
shares of the Company’s Class A Common Stock outstanding will
automatically convert into one share of Class A Common Stock, and
each five shares of the Company’s Class B Common Stock outstanding
will automatically convert into one share of Class B Common Stock.
Fractional shares which would otherwise result from the reverse
stock split will be rounded up to the next largest whole share.
Other than immaterial adjustments as a result of the rounding up of
fractional shares, the reverse stock split will have no impact on a
shareholder’s proportionate ownership or voting interest in the
Company. Among other ratable adjustments, the number of authorized
shares of the Company’s Class A Common Stock and Class B Common
Stock will be ratably reduced as part of the reverse stock
split.
Shareholder approval of the reverse stock split is not required
by Florida law or other applicable law, rule or regulation.
However, pursuant to the special class voting rights of the
Company’s Class B Common Stock set forth in the Company’s Articles
of Incorporation, the holders of the Company’s Class B Common Stock
are required to approve the reverse stock split because it will
result in a reduction in the number of outstanding shares of Class
B Common Stock. The Company expects to obtain the required consent
of the holders of a majority of the Company’s Class B Common Stock
by written consent in lieu of a meeting.
In connection with the expected approval of the reverse stock
split by the holders of the Company’s Class B Common Stock by
written consent, the Company expects to file with the SEC and mail
to its shareholders an Information Statement on Schedule 14C.
Shareholders should read the Information Statement when it becomes
available because it will contain additional information regarding
the reverse stock split. Assuming that, as expected, the Company
receives the written consent of the requisite holders of the
Company’s Class B Common Stock approving the reverse stock,
shareholders will not be asked for proxies to vote their shares
with respect to the reverse stock split and no meeting of
shareholders will be held to consider the reverse stock split.
Under applicable SEC rules and regulations, the reverse stock
split may be effected no earlier than 20 calendar days following
the date on which the Information Statement is first mailed to the
Company’s shareholders. It is currently expected that the reverse
stock split will be effected upon or promptly following the
expiration of such 20 calendar day period. However, subject to the
required 20 calendar day waiting period, the effective time of the
reverse stock split will be determined by the Company’s Board of
Directors, in its discretion. The Company’s Board of Directors, in
its discretion, may also determine to abandon the reverse stock
split at any time prior to its consummation.
About BBX Capital
Corporation: BBX Capital Corporation (NYSE: BBX) (OTCQX:
BBXTB) is a Florida-based diversified holding company whose
principal investments include Bluegreen Vacations Corporation
(NYSE: BXG), BBX Capital Real Estate, BBX Sweet Holdings, and
Renin. For additional information, please visit
www.BBXCapital.com.
About Bluegreen Vacations
Corporation: Bluegreen Vacations Corporation (NYSE: BXG)
is a leading vacation ownership company that markets and sells
vacation ownership interests (VOIs) and manages resorts in popular
leisure and urban destinations. The Bluegreen Vacation Club is a
flexible, points-based, vacation ownership plan with approximately
221,000 owners, 68 Club and Club Associate Resorts and access to
more than 11,350 other hotels and resorts through partnerships and
exchange networks as of March 31, 2020. Bluegreen Vacations also
offers a portfolio of comprehensive, fee-based resort management,
financial, and sales and marketing services, to or on behalf of
third parties. Bluegreen is approximately 93% owned by BBX Capital
Corporation (NYSE: BBX) (OTCQX: BBXTB), a diversified holding
company. For further information, visit
www.BluegreenVacations.com.
Forward-Looking Statements:
This press release contains forward-looking statements based on
current expectations that involve a number of risks and
uncertainties. All opinions, forecasts, projections, future plans
or other statements, other than statements of historical fact, are
forward-looking statements. The forward-looking statements in this
press release are also forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Exchange Act. Forward-looking statements
involve risks, uncertainties and other factors, many of which are
beyond the Company’s control, that may cause actual results or
performance to differ from those set forth or implied in the
forward-looking statements. These risks and uncertainties include,
without limitation, risks associated with the shareholder rights
plan adopted by the Company, including that the market price of the
Company’s Class A Common Stock or Class B Common Stock may be
adversely impacted by the adoption or existence of the rights plan,
whether because the market may not view the rights plan favorably,
the operation of the rights plan may adversely impact the liquidity
or trading market of the Company’s Class A Common Stock or Class B
Common Stock, or otherwise; risks relating to the rapidly changing
effects of the COVID-19 pandemic and its impact on the Company and
its subsidiaries, including reduced demand for products and
services, supply chain disruptions, travel and business
restrictions, including required business closings, changes in
consumer preferences and decreases in discretionary spending and
leisure travel, volatility in the international and national
economy and credit markets, worker absenteeism, quarantines and
other health-related restrictions, the length and severity of the
COVID-19 pandemic, governmental and agency orders, mandates and
guidance in response to the COVID-19 pandemic, the pace of recovery
following the COVID-19 pandemic; competitive conditions; the
liquidity of and the availability of capital to the Company and its
subsidiaries; the ability to successfully implement strategic plans
and initiatives to navigate the COVID-19 pandemic; risks related to
indebtedness, including the potential for accelerated maturities
and debt covenant violations, and borrower defaults; the risk of
heightened litigation as a result of actions taken in response to
the COVID-19 pandemic; and risks associated with the contemplated
reverse stock split, including that the reverse stock split may not
be consummated when or on the terms expected, or at all, and that
the Company’s Class A Common Stock may not meet the requirements to
maintain its listing on the NYSE. In addition to the risks and
factors identified above, reference is also made to other risks and
factors detailed in reports filed by the Company with the SEC,
including the Company’s Annual Report on Form 10-K for the year
ended December 31, 2019 and the Company’s Quarterly Report on Form
10-Q for the quarter ended March 31, 2020, which may be viewed on
the SEC's website, www.sec.gov, or on
the Company’s website, www.BBXCapital.com. The Company cautions that the
foregoing factors are not exclusive. You should not place undue
reliance on any forward-looking statement, which speaks only as of
the date made. The Company does not undertake, and specifically
disclaims any obligation, to update or supplement any
forward-looking statements.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200617005782/en/
BBX Capital Corporation Contact
Info: Investor Relations:
Leo Hinkley, Managing Director, Investor Relations Officer
954-940-5300, Email: LHinkley@BBXCapital.com
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