Second Proxy Advisory Firm Supports Lone Star
Merger
Lone Star Merger Provides Immediate, Certain
Cash Value, and Transfers All Business Risks and Regulatory
Uncertainties to the Acquiror
Board Unanimously Urges Stockholders to Vote
FOR Transaction, Which Provides Immediate Cash Value
DFC Global Corp. (NASDAQ:DLLR) (“DFC Global” or “the Company”),
a leading international diversified financial services company
serving primarily unbanked and under-banked consumers for over 30
years, today announced that Glass Lewis, a leading independent
proxy voting and corporate governance advisory firm, recommends
that DFC Global stockholders vote “FOR” the proposed transaction
with an affiliate of Lone Star Funds (“Lone Star”) at DFC Global’s
special meeting of stockholders scheduled for June 6, 2014.
In recommending that DFC Global stockholders vote “FOR” the
proposed transaction, Glass Lewis stated in its May 27, 2014
report:
“…the board appears to us to have conducted a
relatively extensive sales process prior to executing the proposed
merger agreement with Lone Star. Since early 2012, the Company has
reached out to at least 44 different potential buyers, with Lone
Star being the only party interested in pursuing a deal beyond the
preliminary stages.”
“…based on our review of the Company’s
historical trading multiples and the analyses in the adviser’s
fairness opinion, and after taking into account the adverse market
conditions the Company faces, we believe that the proposed
consideration offers shareholders a relatively reasonable valuation
and greater certainty of value for their DFC common shares.”
“It’s also worth pointing out that for all
but one of the trading days since the deal was first announced, the
Company’s stock price has closed below the proposed purchase price,
with an average arbitrage spread of 1.6%. This suggests to us that
most investors feel that the proposed merger likely represents the
best opportunity available to the Company at this time.”
“Based on these factors, the unanimous
support of the board, and absent a higher competing bid from
another party, we believe that the proposed merger is in the best
interests of the Company’s shareholders at this time. Accordingly,
we recommend that shareholders vote FOR this proposal.”*
In addition, the Glass Lewis report specifically addresses
certain claims made by Royal Capital Management, LLC (“RCM”), one
of DFC Global’s stockholders, made in a public letter issued on
April 23, 2014:
“…as far as we can gather, the Company
appears to us to have been acting in good faith in terms of coming
up with earnings estimates that it believed would reasonably
reflect the Company’s prospects. After review, we do not agree with
RCM’s assertion that management simply adjusted its earnings
estimates downward to justify the proposed merger, particularly
considering that the Company had a higher offer from Lone Star on
the table before the March 2014 adjustment was made.”
Commenting on the Glass Lewis report, DFC Global issued the
following statement:
“We are pleased that Glass Lewis recognizes
the robust sale process conducted by the DFC Global Board of
Directors and supports the pending transaction. Glass Lewis
recognizes the proposed transaction will deliver immediate cash
value to our stockholders and further supports DFC Global’s view
that this transaction is in the best interests of all
stockholders.”
In addition to Glass Lewis, Egan Jones, another independent
proxy voting and corporate governance advisory firm, also
recommended that stockholders vote “FOR” the proposed
transaction with Lone Star at DFC Global’s special meeting of
stockholders.
DFC Global’s Board and management team are fully committed to
completing the transaction with Lone Star, which will deliver
certain and immediate cash value for DFC Global stockholders with
limited execution risk. DFC Global reiterates the Board’s unanimous
recommendation that stockholders vote “FOR” the proposal to
approve the merger agreement at the upcoming special meeting. The
special meeting is scheduled for June 6, 2014, at 9:00 a.m. eastern
time.
Stockholders with questions, or that need assistance in voting,
should reach out to DFC Global’s proxy solicitor, Okapi Partners
LLC, at (212) 297-0720 or toll-free at: (855) 208-8901.
Houlihan Lokey Capital, Inc. is acting as financial advisor to
DFC Global in connection with the transaction. Pepper Hamilton LLP
is acting as DFC Global’s legal advisor. Jefferies LLC is acting as
lead financial advisor to Lone Star Funds and Credit Suisse
Securities (USA), LLC is acting as financial advisor. Jefferies
Finance LLC and Credit Suisse AG are providing debt financing
commitments for the acquisition. Gibson, Dunn & Crutcher LLP is
acting as legal counsel to Lone Star Funds.
* Permission to use quotations from the Glass Lewis report was
neither sought nor obtained.
About DFC Global Corp.
DFC Global Corp. is a leading international non-bank provider of
alternative financial services, principally unsecured short-term
consumer loans, secured pawn loans, check cashing, gold buying,
money transfers and reloadable prepaid debit cards, serving
primarily unbanked and under-banked consumers through its
approximately 1,500 current retail storefront locations and its
multiple Internet platforms in ten countries across Europe and
North America: the United Kingdom, Canada, the United States,
Sweden, Finland, Poland, Spain, Romania, the Czech Republic and the
Republic of Ireland. The Company’s networks of retail locations in
the United Kingdom and Canada are the largest of their kind by
revenue in each of those countries. For more information, please
visit the Company’s website at www.dfcglobalcorp.com.
The Company believes that its customers, many of whom receive
income on an irregular basis or from multiple employers, choose to
conduct their personal financial business with the Company rather
than with banks or other financial institutions due to the range
and convenience of services that it offers, the multiple ways in
which they may conduct business with the Company and its
high-quality customer service. The Company’s products and services,
principally its unsecured short-term consumer loans, secured pawn
loans and check cashing and gold buying services, provide customers
with convenient access to cash for living expenses and other needs.
In addition to these core offerings, the Company strives to offer
its customers additional high-value ancillary services, including
Western Union® money orders and money transfers, reloadable VISA®
and MasterCard® prepaid debit cards and foreign currency
exchange.
About Lone Star Funds
Lone Star is a global private equity firm that invests in real
estate, equity, credit, and other financial assets. Since the
establishment of its first fund in 1995, Lone Star has organized
twelve private equity funds with aggregate capital commitments
totaling over $45 billion. The Funds are advised by Lone Star
Global Acquisitions, Ltd. (LSGA), an investment adviser registered
with the U.S. Securities and Exchange Commission. LSGA and its
global subsidiaries advise the Funds from offices in North America,
Western Europe and East Asia.
Forward-Looking Statements
This news release contains forward-looking statements,
including, among other things, statements regarding the following:
the Company’s future results, growth, guidance and operating
strategy; the global economy; the effects of currency exchange
rates and fluctuations in the price of gold on reported operating
results; the regulatory environment in Canada, the United Kingdom,
the United States, Scandinavia and other countries; the impact of
future development strategy, new stores and acquisitions;
litigation matters; financing initiatives; and the performance of
new products and services. These forward-looking statements involve
risks and uncertainties, including risks related to: approval of
the transaction by the Company’s stockholders (or the failure to
obtain such approval), the ability to obtain regulatory approvals
for the transaction, the Company’s ability to maintain
relationships with customers and employees following the
announcement of the transaction, the ability of third parties to
fulfill their commitments relating to the transaction, including
providing financing, the ability of the parties to satisfy the
closing conditions, and the risk that the transaction may not be
completed in the anticipated time frame or at all; the regulatory
environments of the jurisdictions in which we do business,
including reviews of our operations principally by the CFPB in the
United States and the Financial Conduct Authority in the United
Kingdom, and other changes in laws affecting how we do business and
the regulatory bodies which govern us; current and potential future
litigation; the identification of acquisition targets; the
integration and performance of acquired stores and businesses; the
performance of new stores and internet businesses; the impact of
debt and equity financing transactions; the results of certain
ongoing income tax appeals; the effects of new products and
services, or changes to our existing products and services, on the
Company’s business, results of operations, financial condition,
prospects and guidance; and uncertainties related to the effects of
changes in the value of the U.S. Dollar compared to foreign
currencies. There can be no assurance that the Company will attain
its expected results, successfully integrate and achieve
anticipated synergies from any of its acquisitions, obtain
acceptable financing, or attain its published guidance metrics, or
that ongoing and potential future litigation or the various U.S.
Federal or state, U.K., or other foreign legislative or regulatory
activities affecting the Company or the banks with which the
Company does business will not negatively impact the Company’s
operations. A more complete description of these and other risks,
uncertainties and assumptions is included in the Company’s filings
with the Securities and Exchange Commission, including those
described under the heading “Risk Factors” in the Company’s Annual
Report on Form 10-K for the Company’s fiscal year ended June 30,
2013, as amended in its Form 10-Q for the quarter ended December
31, 2013 and in its Form 10-Q for the quarter ended March 31, 2014.
You should not place any undue reliance on any forward-looking
statements. The Company disclaims any obligation to update any such
factors or to publicly announce results of any revisions to any of
the forward-looking statements contained herein to reflect future
events or developments.
Additional Information and Where to Find It
In connection with the proposed transaction, DFC Global has
filed a proxy statement with the SEC. The definitive proxy
statement and a form of proxy has been mailed to the stockholders
of DFC Global. BEFORE MAKING A VOTING DECISION, DFC GLOBAL’S
SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT BECAUSE IT
CONTAINS IMPORTANT INFORMATION. DFC Global’s stockholders and other
interested parties may obtain, without charge, a copy of the proxy
statement and other relevant documents filed with the SEC from the
SEC’s website at www.sec.gov. DFC Global’s stockholders and other
interested parties may also obtain, without charge, a copy of the
proxy statement and other relevant documents by going to the
Investors section of DFC Global’s corporate website,
www.dfcglobalcorp.com, or directing a request by mail or telephone
to DFC Global Corp., 1436 Lancaster Avenue, Berwyn, Pennsylvania
19312.
DFC Global and its directors and officers may be deemed to be
participants in the solicitation of proxies from DFC Global’s
stockholders with respect to the special meeting of stockholders
that will be held to consider the proposed transaction. Information
about DFC Global’s directors and executive officers and their
ownership of DFC Global’s common stock is set forth in the proxy
statement for the Company’s 2013 annual meeting of stockholders,
which was filed with the SEC on October 7, 2013 and the Company’s
Annual Report on Form 10-K for 2013 filed with the SEC on August
29, 2013. Stockholders may obtain additional information regarding
the interests of DFC Global and its directors and executive
officers in the proposed merger, which may be different than those
of the Company’s stockholders generally, by reading the proxy
statement and other relevant documents regarding the proposed
merger, when filed with the SEC.
DFC Global Corp.ICRInvestor Relations:Garrett Edson,
484-320-5800Media:Phil Denning, 646-277-1200orLone Star FundsJoele Frank, Wilkinson Brimmer
KatcherAndy Brimmer / Jed Repko / Joseph Sala, 212-355-4449
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