HC2 Holdings, Inc. (“HC2” or the “Company”) (NYSE: HCHC), a
diversified holding company, issued the following statement in
response to Percy Rockdale LLC’s (“Percy Rockdale”) preliminary
consent solicitation filing with the Securities and Exchange
Commission.
HC2 urges all of its stockholders to refrain
from taking any action, including returning any consent card sent
by Percy Rockdale, at this time. Our Board of Directors, in
consultation with its advisors, is carefully reviewing Percy
Rockdale’s solicitation materials and will advise stockholders of
its recommendation regarding the solicitation in due course.
“HC2 is puzzled by Percy Rockdale’s course of
action, given the Company’s annual meeting is only a few months
away. This distracting and costly approach will only serve to
significantly increase the Company’s expenses and destroy
stockholder value,” commented Wayne Barr, lead independent director
of HC2.
“As previously noted, HC2 has offered to engage
directly with Percy Rockdale on multiple occasions and to actively
work with them to address their concerns in a cooperative manner
which benefits all stockholders. Percy Rockdale continually refuses
to engage with HC2’s management or the Board of Directors.
Nevertheless, the Nominating and Governance Committee of HC2’s
Board of Directors will carefully review the preliminary consent
statement and continue to work on behalf of the best interests of
all stockholders.”
HC2 is dismayed that Percy Rockdale has chosen
to move forward with a value-destroying public campaign mere months
away from the Company’s annual meeting and as HC2 continues to
successfully execute on the Company’s debt reduction strategy,
which includes the:
- Completed sale of Global Marine Group and the impending close
on the sale of Global Marine Group’s 49% joint venture with Huawei
Marine Networks Co., Ltd.
- Impending redemption of a sizable portion of the Company’s
11.5% Notes due 2021
- Advanced discussions to divest Continental Insurance and the
exploration of strategic options for DBM Global Inc.
- Recent expansion and diversification of our Board of Directors,
and
- Meaningful reduction in corporate overhead costs.
“HC2’s Board and management team continue to
execute on the Company’s strategic plan to monetize assets and
further reduce debt. We believe successful execution of our
strategy in the coming months is HC2’s most effective course of
action,” said Philip Falcone, Chairman, President and Chief
Executive Officer of HC2.
HC2 stockholders are not required to take action
at this time.
About HC2
HC2 Holdings, Inc. is a publicly traded (NYSE:
HCHC) diversified holding company, which seeks opportunities to
acquire and grow businesses that can generate long-term sustainable
free cash flow and attractive returns in order to maximize value
for all stakeholders. HC2 has a diverse array of operating
subsidiaries across multiple reportable segments, including
Construction, Energy, Telecommunications, Life Sciences,
Broadcasting, Insurance and Other. HC2’s largest operating
subsidiary is DBM Global Inc., a family of companies providing
fully integrated structural and steel construction services.
Founded in 1994, HC2 is headquartered in New York, New York. Learn
more about HC2 and its portfolio companies at www.hc2.com.
Cautionary Statement Regarding
Forward-Looking Statements
Safe Harbor Statement under the Private
Securities Litigation Reform Act of 1995: This press release
contains, and certain oral statements made by our representatives
from time to time may contain, forward-looking statements.
Generally, forward-looking statements include information
describing 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. The forward-looking statements in this press
release include, without limitation, any statements regarding our
expectations regarding building stockholder value, future cash
flow, longer-term growth and invested assets, the timing or
prospects of any refinancing of HC2's remaining corporate debt, any
statements regarding HC2’s expectations regarding entering
definitive agreements in respect of the potential divestitures of
Continental Insurance and/or DBM Global, reducing HC2’s leverage
and related interest expense at the holding company level generally
and with the net proceeds of such divestitures, reducing corporate
overhead, growth opportunities at HC2’s Broadcasting and Energy
businesses and unlocking value at HC2’s Life Sciences
segment. Such statements are based on the beliefs and
assumptions of HC2’s management and the management of HC2’s
subsidiaries and portfolio companies. The Company believes
these judgments are reasonable, but you should understand that
these statements are not guarantees of performance or results, and
the Company’s actual results could differ materially from those
expressed or implied in the forward-looking statements due to a
variety of important factors, both positive and negative, that may
be revised or supplemented in subsequent statements and reports
filed with the Securities and Exchange Commission (“SEC”),
including in our reports on Forms 10-K, 10-Q, and 8-K. Such
important factors include, without limitation, issues related to
the restatement of our financial statements; the fact that we have
historically identified material weaknesses in our internal control
over financial reporting, and any inability to remediate future
material weaknesses; capital market conditions, including the
ability of HC2 and HC2’s subsidiaries to raise capital; the ability
of HC2’s subsidiaries and portfolio companies to generate
sufficient net income and cash flows to make upstream cash
distributions; volatility in the trading price of HC2 common stock;
the ability of HC2 and its subsidiaries and portfolio companies to
identify any suitable future acquisition or disposition
opportunities; our ability to realize efficiencies, cost savings,
income and margin improvements, growth, economies of scale and
other anticipated benefits of strategic transactions; difficulties
related to the integration of financial reporting of acquired or
target businesses; difficulties completing pending and future
acquisitions and dispositions; effects of litigation,
indemnification claims, and other contingent liabilities; changes
in regulations and tax laws; and risks that may affect the
performance of the operating subsidiaries and portfolio companies
of HC2. Although HC2 believes its expectations and assumptions
regarding its future operating performance are reasonable, there
can be no assurance that the expectations reflected herein will be
achieved. There can be no assurance that the HMN transaction
will be completed as proposed or at all. These risks and other
important factors discussed under the caption “Risk Factors” in our
most recent Annual Report on Form 10-K filed with the SEC, and our
other reports filed with the SEC could cause actual results to
differ materially from those indicated by the forward-looking
statements made in this press release.
You should not place undue reliance on
forward-looking statements. All forward-looking statements
attributable to HC2 or persons acting on its behalf are expressly
qualified in their entirety by the foregoing cautionary
statements. All such statements speak only as of the date
made, and unless legally required, HC2 undertakes no obligation to
update or revise publicly any forward-looking statements, whether
as a result of new information, future events or otherwise.
Important Additional Information and
Where to Find It
HC2 plans to file a proxy statement (the “2020
Proxy Statement”) together with a WHITE proxy card and a consent
revocation statement (the “Consent Revocation Statement”) together
with a WHITE consent revocation card with the SEC, respectively, in
connection with the solicitation of proxies for the annual meeting
of HC2’s stockholders (the “Annual Meeting”) and the consent
solicitation initiated by Percy Rockdale LLC and certain of its
affiliates (the “Consent Solicitation”). STOCKHOLDERS ARE
URGED TO READ THE 2020 PROXY STATEMENT AND THE CONSENT REVOCATION
STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY
OTHER RELEVANT DOCUMENTS THAT HC2 FILES WITH THE SEC CAREFULLY IN
THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION.
Stockholders will be able to obtain, free of
charge, copies of the 2020 Proxy Statement, the Consent Revocation
Statement, any amendments or supplements thereto and any other
documents (including the WHITE proxy card and the WHITE consent
revocation card) when filed by HC2 with the SEC in connection with
the Annual Meeting and the Consent Solicitation at the SEC’s
website (http://www.sec.gov), at HC2’s website (http://ir.hc2.com)
or by contacting Okapi Partners LLC by phone,
banks/broker/custodians call (212) 297-0720, all other stockholders
please call (877) 274-8654, by email at info@okapipartners.com or
by mail at 1212 Avenue of the Americas, 24th Floor, New York,
New York 10036.
Participants in the
Solicitation
HC2, its directors and certain of its executive
officers and employees may be deemed to be participants in the
solicitation of proxies and consent revocation cards from
stockholders in connection with the Annual Meeting and the Consent
Solicitation. Additional information regarding the identity of
these potential participants, none of whom (other than Philip A.
Falcone, HC2’s Chairman, President and Chief Executive Officer)
owns in excess of one percent (1%) of HC2’s shares, and their
direct or indirect interests, by security holdings or otherwise,
will be set forth in the 2020 Proxy Statement, the Consent
Revocation Statement and other materials to be filed with the SEC
in connection with the Annual Meeting and the Consent Solicitation.
Information relating to the foregoing can also be found in HC2’s
definitive proxy statement for its 2019 annual meeting of
stockholders (the “2019 Proxy Statement”), filed with the SEC on
April 29, 2019. To the extent holdings of HC2’s securities by such
potential participants (or the identity of such participants) have
changed since the information printed in the 2019 Proxy Statement,
such information has been or will be reflected on Statements of
Ownership and Change in Ownership on Forms 3 and 4 filed with the
SEC.
Contact:Investor Relations
Garrett Edson ir@hc2.com (212) 235-2691
Okapi Partners LLCPat McHugh/Bruce
Goldfarb/Jason Alexander212-297-0720info@okapipartners.com
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