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
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.
