NEW YORK - April 16,
2019 - Medley Capital Corporation (NYSE: MCC, "MCC") (TASE:
MCC) and FrontFour Capital Group LLC ("FrontFour") today announced
that they have entered into a binding term sheet (the "Settlement
Term Sheet") that will form the basis of a definitive stipulation
of settlement in connection with the Delaware court decision
delivered on March 11, 2019 (the "Delaware Decision") relating to
MCC's proposed merger (the "MCC Merger") with Sierra Income
Corporation ("Sierra") and Sierra's proposed concurrent acquisition
(the "MDLY Merger") of Medley Management Inc. (NYSE: MDLY, "MDLY"
or "Medley").
The Settlement Term Sheet
contemplates that the merger agreement for the MCC Merger would be
amended to, among other matters, permit MCC to undertake a "go
shop" process to solicit superior transactions to the MCC Merger,
and to provide that if the MCC Merger is consummated, a settlement
fund will be created, consisting of $17 million of cash and $30
million of Sierra common stock, the number of shares of which is to
be calculated using the pro forma NAV reported in the future proxy
supplement describing the amendments to the MCC merger agreement,
for a total of $47 million of settlement consideration, which will
be distributed to eligible members of a class of MCC stockholders.
MCC and FrontFour have also undertaken to work together in good
faith to agree to supplemental disclosures relating to the
transactions consistent with the Delaware Decision.
In connection with the Settlement
Term Sheet, MCC's board of directors has appointed David A. Lorber
and Lowell W. Robinson to MCC's board of directors and independent
special committee, with Mr. Lorber being appointed as the Chair of
the special committee, effective immediately. These appointments
fill the two vacancies on MCC's board of directors created by the
resignations of John E. Mack and Mark Lerdal. Pursuant to the
Settlement Term Sheet, FrontFour will agree to customary standstill
restrictions and to vote in favor of any agreed upon amendment to
the MCC Merger (if put to a vote of MCC stockholders) and the
directors nominated by MCC's board of directors for election at the
MCC 2019 annual stockholder meeting.
"We are pleased to welcome David
and Lowell to our board of directors," said Arthur Ainsberg, lead
independent director of the MCC Board. "We look forward to working
with them to deliver value to MCC stockholders."
"We are pleased to have come to an
understanding that is expected to provide MCC stockholders with
considerably more value in connection with the proposed mergers, if
consummated, and new, independent voices in the boardroom to help
steer the 'go shop' process to solicit superior transactions. We
look forward to working with our fellow board members," said David
Lorber of FrontFour.
The Settlement Term Sheet also
contemplates amending the merger agreements for the MCC Merger and
the MDLY Merger to extend the outside date to October 31,
2019. If the proposed amendments to the MCC and MDLY merger
agreements have not been entered into by May 15, 2019, the Term
Sheet may be terminated by MCC or FrontFour. The proposed
amendments to the merger agreements will require the agreement of
Sierra and there can be no assurance that such agreement will be
obtained or that agreements on the amendments will be reached.
New Director
Biographies:
David A. Lorber is a Co-Founder of
FrontFour Capital Group LLC, an investment adviser, and has served
as a Portfolio Manager since January 2007. He is also a
Co-Founder of FrontFour Capital Corp., an investment adviser, and
has been a Principal since January 2011. Previously, Mr.
Lorber was a Senior Investment Analyst at Pirate Capital LLC, a
hedge fund, from 2003 to 2006. He was an Analyst at Vantis
Capital Management LLC, a money management firm and hedge fund,
from 2001 to 2003 and an Associate at Cushman & Wakefield,
Inc., a global real estate firm, from 2000 to 2001. Mr.
Lorber has served as a director of Ferro Corporation, a leading
producer of specialty materials and chemicals for manufacturers,
since May 2013, where he is also Lead Director, Chairman of its
Governance & Nomination Committee and a member of its
Compensation Committee. From April 2006 until December 2014, Mr.
Lorber served as a director of Aerojet Rocketdyne Holdings, Inc.
(formerly GenCorp Inc.), a technology-based manufacturer of
aerospace and defense products and systems with a real estate
segment. He also previously served as a director of Huntingdon
Capital Corp., a real estate company, from January 2010 to May 2013
and was a Trustee for IAT Air Cargo Facilities Income Fund, a real
estate company, from January 2009 to December 2009. He also
served as a director of Fisher Communications Inc., an integrated
media company, from April 2009 to March 2012. Mr. Lorber earned his
BS from Skidmore College.
Lowell W. Robinson is an
experienced executive with over thirty years of senior global
strategic, financial, M&A, operational, turnaround and
governance experience. From 2007 through 2009, Mr. Lowell served as
the Chief Financial Officer and Chief Operating Officer of MIVA,
Inc., an online advertising network, after initially joining the
company in 2006 as its Chief Financial Officer and Chief
Administrative Officer. Prior to that, Mr. Robinson served as the
President of LWR Advisors, LLC, a strategic and financial
consulting services firm, from 2002 to 2006. Previously, from 2000
to 2002, he served as the Chief Financial Officer and Chief
Administrative Officer at HotJobs.com Ltd., an online recruiting
and job search engine that was sold to Yahoo! Inc. Mr. Robinson was
the Chief Financial Officer and Chief Administrative Officer at PRT
Group Inc., a software and IT services company that he helped take
public, from 1997 through 1999. Mr. Robinson also previously
held senior financial positions at Advo, Inc., a direct-mail and
marketing services company (1994 to 1997), Citigroup Inc., a
multinational diversified financial services corporation (1986 to
1993), Uncle Bens Inc., a leading marketer of rice and a subsidiary
of Mars, Incorporated (1983 to 1986), and Kraft Foods Inc., at the
time one of the world's largest food companies (1983 to
1993). Currently, Mr. Robinson serves as a director of
Aratana Therapeutics, Inc., a commercial-stage biopharma company
focused on pet products, where he has served since May 2018. He
previously served as a director of each of EVINE Live Inc. (f/k/a
ShopHQ), a digital omnichannel home shopping network (March 2014 to
June 2018), SITO Mobile, Ltd., a leading mobile engagement platform
provider (April 2017 to June 2017), Higher One Holdings, Inc., a
financial technology company focused on providing cost-saving
solutions (June 2014 to August 2016), Support.com, Inc., a leading
provider of cloud-based software and services (March 2016 to June
2016), The Jones Group, Inc., an American designer, marketer and
wholesaler of branded clothing, shoes and accessories (2005 to
April 2014), and International Wire Group, Inc., a manufacturer and
marketer of wire products (2003 to 2009). Mr. Robinson's
prior board experience also includes serving as a director of each
of Independent Wireless One Corp., Diversified Investment Advisors
Inc. and Edison Schools Inc. Mr. Robinson earned his MBA from
Harvard Business School and BA in Economics from the University of
Wisconsin.
Additional details regarding the
Settlement Term Sheet will be included in a Form 8-K to be filed by
MCC with the Securities and Exchange Commission.
ABOUT MEDLEY
CAPITAL CORPORATION
Medley Capital Corporation is a
closed-end, externally managed business development company ("BDC")
that trades on the New York Stock Exchange (NYSE: MCC) and the Tel
Aviv Stock Exchange (TASE:MCC). Medley Capital Corporation's
investment objective is to generate current income and capital
appreciation by lending to privately-held middle market companies,
primarily through directly originated transactions, to help these
companies expand their businesses, refinance and make acquisitions.
Medley Capital Corporation's portfolio generally consists of senior
secured first lien loans and senior secured second lien loans.
Medley Capital Corporation is externally managed by MCC Advisors
LLC, which is an investment adviser registered under the Investment
Advisers Act of 1940, as amended. For additional information,
please visit Medley Capital Corporation at
www.medleycapitalcorp.com.
ABOUT FRONTFOUR
CAPITAL GROUP LLC
FrontFour Capital is an investment
adviser based in Greenwich, CT. FrontFour Capital focuses on
value-oriented investments in North American companies.
No Offer or
Solicitation
The information in this
communication is for informational purposes only and shall not
constitute an offer to sell or the solicitation of an offer to sell
or the solicitation of an offer to buy any securities or the
solicitation of any vote or approval in any jurisdiction pursuant
to or in connection with the proposed transactions or otherwise,
nor shall there be any sale, issuance or transfer of securities in
any jurisdiction in contravention of applicable law. No offer of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as
amended.
Important
Information and Where to Find It
In connection with the proposed
transactions, Sierra has filed with the Securities and Exchange
Commission (the "SEC") a Registration Statement on Form N-14 that
includes a joint proxy statement of Sierra, MCC, and MDLY and, with
respect to Sierra, constitutes a prospectus (collectively, the
"Joint Proxy Statement/Prospectus"). The Joint Proxy
Statement/Prospectus, as applicable, was first mailed or otherwise
delivered to stockholders of Sierra, MCC, and MDLY on or about
December 21, 2018. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ
THE JOINT PROXY STATEMENT/PROSPECTUS, AS WELL AS ANY AMENDMENTS OR
SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY
BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT SIERRA, MCC, AND
MDLY, THE PROPOSED TRANSACTIONS AND RELATED MATTERS. Investors and
security holders can obtain the Joint Proxy Statement/Prospectus
and other documents filed with the SEC by Sierra, MCC, and MDLY,
free of charge, from the SEC's web site at www.sec.gov and from
Sierra's website (www.sierraincomecorp.com), MCC's website
(www.medleycapitalcorp.com), or MDLY's website (www.mdly.com).
Investors and security holders may also obtain free copies of the
Joint Proxy Statement/Prospectus and other documents filed with the
SEC from Sierra, MCC, or MDLY by contacting Sam Anderson, Medley's
Investor Relations contact, at 212-759-0777.
Participants in
the Solicitation
Sierra, MCC, and MDLY and their
respective directors, executive officers, other members of their
management, employees and other persons may be deemed to be
participants in the solicitation of proxies in connection with the
proposed transactions. Information regarding the persons who may,
under the rules of the SEC, be considered participants in the
solicitation of the Sierra, MCC, and MDLY stockholders in
connection with the proposed transactions is set forth in the Joint
Proxy Statement/Prospectus filed with the SEC. More detailed
information regarding the identity of potential participants, and
their direct or indirect interests, by security holdings or
otherwise, is set forth in the Joint Proxy Statement/Prospectus and
in other relevant materials that may be with the SEC. These
documents may be obtained free of charge from the sources indicated
above.
Cautionary
Statement Regarding Forward-Looking Statements
This communication contains
"forward-looking" statements, including statements regarding the
proposed transactions. Such forward-looking statements reflect
current views with respect to future events and financial
performance, and each of Sierra, MCC and MDLY may make related oral
forward-looking statements on or following the date hereof.
Statements that include the words "should," "would," "expect,"
"contemplate," "intend," "plan," "believe," "project,"
"anticipate," "seek," "will," and similar statements of a future or
forward-looking nature identify forward-looking statements in this
material or similar oral statements for purposes of the U.S.
federal securities laws or otherwise. Because forward-looking
statements, such as the date that the parties expect the proposed
transactions to be completed and the expectation that the proposed
transactions will provide sustainable and increased profits,
greater likelihood of dividend growth, lower cost of capital and
improved liquidity for Sierra, MCC, and MDLY stockholders and will
be accretive to net investment income for both Sierra and MCC,
include risks and uncertainties, actual results may differ
materially from those expressed or implied and include, but are not
limited to, those discussed in each of Sierra's, MCC's and MDLY's
filings with the SEC, and (i) the satisfaction or waiver of closing
conditions relating to the proposed transactions described herein,
including, but not limited to, the requisite approvals of the
stockholders of each of Sierra, MCC, and MDLY, Sierra successfully
taking all actions reasonably required with respect to certain
outstanding indebtedness of MCC and MDLY to prevent any material
adverse effect relating thereto, certain required approvals
of the SEC and the Small Business Administration, the necessary
consents of certain third-party advisory clients of MDLY, and any
applicable waiting period (and any extension thereof) applicable to
the transactions under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, shall have expired or been terminated,
(ii) the parties' ability to successfully consummate the proposed
transactions, and the timing thereof, and (iii) the possibility
that competing offers or acquisition proposals related to the
proposed transactions will be made and, if made, could be
successful. Additional risks and uncertainties specific to Sierra,
MCC and MDLY include, but are not limited to, (i) the costs and
expenses that Sierra, MCC and MDLY have, and may incur, in
connection with the proposed transactions (whether or not they are
consummated), (ii) the impact that any litigation relating to the
proposed transactions may have on any of Sierra, MCC and MDLY,
(iii) that projections with respect to dividends may prove to be
incorrect, (iv) Sierra's ability to invest our portfolio of cash in
a timely manner following the closing of the proposed transactions,
(v) the market performance of the combined portfolio, (vi) the
ability of portfolio companies to pay interest and principal in the
future; (vii) the ability of MDLY to grow its fee earning assets
under management; (viii) whether Sierra, as the surviving company,
will trade with more volume and perform better than MCC and MDLY
prior to the proposed transactions; and (ix) negative effects of
entering into the proposed transactions on the trading volume and
market price of the MCC's or MDLY's common stock. There can be no
assurance of the level of any dividends to be paid, if any,
following consummation of the merger. Investors are cautioned that,
as a result of a number of factors (including those described
above), there remains substantial uncertainty regarding the ability
of MCC and Sierra to successfully consummate the MCC Merger.
The foregoing review of important
factors should not be construed as exhaustive and should be read in
conjunction with the other cautionary statements included in each
of Sierra's, MCC's and MDLY's filings with the SEC, including the
Joint Proxy Statement/Prospectus relating to the proposed
transactions, and in the "Risk Factors" sections of each of
Sierra's, MCC's and MDLY's most recent Annual Report on Form 10-K
and most recent Quarterly Report on Form 10-Q. The forward- looking
statements in this communication represent Sierra's, MCC's and
MDLY's views as of the date of hereof. Sierra, MCC and MDLY
anticipate that subsequent events and developments will cause their
views to change. However, while they may elect to update these
forward-looking statements at some point in the future, none of
Sierra, MCC or MDLY have the current intention of doing so except
to the extent required by applicable law. You should, therefore,
not rely on these forward-looking statements as representing
Sierra's, MCC's or MDLY's views as of any date subsequent to the
date of this material.
Investor Relations
Contact:
Sam Anderson
Head of Capital Markets & Risk Management
Medley Management Inc.
212-759-0777
Media Contacts:
Jonathan Gasthalter/Nathaniel Garnick
Gasthalter & Co.
212-257-4170
This
announcement is distributed by West Corporation on behalf of West
Corporation clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Medley Capital Corporation via Globenewswire
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