DALLAS, June 5, 2013 /PRNewswire/ -- The Hallwood
Group Incorporated (NYSE MKT: HWG), a Delaware corporation (the "Company"), today
announced that on June 4, 2013 the
Company, Hallwood Financial Limited, a corporation organized under
the laws of the British Virgin
Islands ("Parent"), and HFL Merger Corporation, a
Delaware corporation and a wholly
owned subsidiary of the Parent ("Merger Sub"), entered into an
Agreement and Plan of Merger (the "Merger Agreement"). The Merger
Agreement provides that, upon the terms and subject to the
conditions set forth in the Merger Agreement, Merger Sub will merge
with and into the Company (the "Merger"), with the Company
continuing as the surviving corporation and a wholly owned
subsidiary of Parent. Parent is controlled by Anthony J. Gumbiner, Chairman and Chief
Executive Officer of the Company and Parent currently owns
1,001,575, or 65.7%, of the issued and outstanding shares of common
stock, par value $0.10 per share, of
the Company (such shares, collectively, the "Company Common Stock,"
and, each, a "Share").
As previously announced, on November 6, 2012, the Company
received a proposal from Parent to acquire all of the outstanding
shares of Company Common Stock that it does not beneficially own at
a cash purchase price of $10.00 per
share. On November 7, 2012, at the Company's regularly
scheduled Board of Directors meeting, a special committee,
consisting solely of independent and disinterested directors (the
"Special Committee"), was formed to consider and negotiate the
proposal and to make a recommendation to the Company's Board of
Directors. Subsequently, the Special Committee retained its own
independent legal representation and selected and engaged a
financial advisor to assist in the review of the proposed
transaction.
All of the members of the Board of Directors of the Company
other than Anthony J. Gumbiner,
acting upon the unanimous recommendation of the Special Committee,
have (i) determined that it is in the best interests of the Company
and its stockholders (other than Parent and Merger Sub), and
declared it advisable, to enter into the Merger Agreement, (ii)
approved the execution, delivery and performance of the Merger
Agreement and the consummation of the transactions contemplated
thereby, including the Merger and (iii) resolved to recommend
adoption of the Merger Agreement by the stockholders of the
Company;
At the effective time of the Merger, each Share of Company
Common Stock outstanding immediately prior to the effective time of
the Merger and not already owned by Parent will receive
$10.00 in cash, without interest.
Stockholders of the Company will be asked to vote on the
adoption of the Merger Agreement at a special stockholders meeting
that will be held on a date to be announced. The closing of the
Merger is subject to a non-waivable condition that the Merger
Agreement be adopted by (i) the affirmative vote of the holders of
a majority of the outstanding shares of the Company Common Stock
entitled to vote on the adoption of the Merger Agreement, voting
together as a single class, and (ii) the affirmative vote of the
holders of a majority of the outstanding shares of the Company
Common Stock, voting together as a single class, excluding all
shares of Company Common Stock owned by Parent, Merger Sub, Mr.
Gumbiner or any of their respective affiliates (other than the
Company and its subsidiaries), or by any director, officer or other
employee of the Company or any of its subsidiaries.
Consummation of the Merger is subject to certain other customary
conditions, including, among others, (i) absence of any order
or injunction prohibiting the consummation of the Merger,
(ii) subject to certain exceptions, the accuracy of
representations and warranties with respect to the business of the
Company, (iii) each of the Company and Parent having performed
their respective obligations pursuant to the Merger Agreement and
(iv) the absence of a "Company Material Adverse Effect," which is
defined in the Merger Agreement to include the occurrence of an
"Event of Default" under that certain Loan Agreement, dated as of
March 30, 2012, among Branch Banking
and Trust Company, Brookwood Companies Incorporated, the Company
and the other signatories thereto, filed with Securities and
Exchange Commission (the "SEC") as Exhibit 10.20 to the Company's
Annual Report on Form 10-K for the year ended December 31, 2011.
The foregoing description of the Merger Agreement is not a
complete description of all of the parties' rights and obligations
under the Merger Agreement and is qualified in its entirety by this
reference to the Merger Agreement, which is filed as Exhibit 2.1 on
Form 8-K dated June 4, 2013.
In connection with the proposed merger transaction, the Company
will file with the SEC and furnish to the Company's stockholders a
proxy statement and other relevant documents. BEFORE MAKING ANY
VOTING DECISION, THE COMPANY'S STOCKHOLDERS ARE URGED TO READ THE
PROXY STATEMENT IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE AND ANY
OTHER DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE
PROPOSED MERGER OR INCORPORATED BY REFERENCE INTO THE PROXY
STATEMENT BECAUSE THOSE DOCUMENTS WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED MERGER AND THE PARTIES TO THE
MERGER. The Company's stockholders will be able to obtain a free
copy of documents filed with the SEC at the SEC's website at
http://www.sec.gov. In addition, the Company's stockholders may
obtain a free copy of the Company's filings with the SEC from the
Company's website at http://www.hallwood.com/hwg/SEC.php or by
directing a request to: The Hallwood Group Incorporated, 3710
Rawlins, Suite 1500, Dallas, TX
75219; Attention: Investor Relations; Phone: (214) 528-5588
or (800) 225-0135.
The Company's shares trade on the NYSE MKT stock exchange under
the symbol of HWG and closed on November 5,
2012 (the day prior to the receipt of the proposal) at
$6.00 per share. The Company's shares
closed on June 3, 2013 at
$8.05 per share.
This press release includes "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities Act"), and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
Forward-looking statements generally can be identified by the use
of forward-looking terminology, such as "may," "will," "would,"
"expect," "intend," "could," "estimate," "should," "anticipate",
"doubt" "plan" "forecast" or "believe." The Company intends
that all forward-looking statements be subject to the safe harbors
created by these laws. All statements other than statements
of historical information provided herein are forward-looking and
may contain information about financial results, economic
conditions, trends, and known uncertainties. All forward-looking
statements are based on current expectations regarding important
risk factors. Many of these risks and uncertainties are
beyond the Company's ability to control, and, in many cases, the
Company cannot predict all of the risks and uncertainties that
could cause actual results to differ materially from those
expressed in the forward-looking statements. Actual results
could differ materially from those expressed in the forward-looking
statements, and readers should not regard those statements as a
representation by the Company or any other person that the results
expressed in the statements will be achieved. Important risk
factors that could cause results or events to differ from current
expectations are described in the Company's annual report on Form
10-K for the year ended December 31,
2012 under Item 1A –"Risk Factors". These factors are
not intended to be an all-encompassing list of risks and
uncertainties that may affect the operations, performance,
development and results of the Company's business. Readers
are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. The
Company undertakes no obligation to release publicly the results of
any revisions to these forward-looking statements which may be made
to reflect events or circumstances after the date hereof, including
without limitation, changes in its business strategy or planned
capital expenditures, growth plans, or to reflect the occurrence of
unanticipated events, although other risks and uncertainties may be
described, from time to time, in the Company's periodic filings
with the SEC.
SOURCE The Hallwood Group Incorporated
