Steel Partners Holdings L.P. (NYSE:SPLP) Files An 8-K Entry into a Material Definitive Agreement
Item1.01. Entry into a Material Definitive
Agreement.
Merger Agreement
On December 7, 2016, Steel Partners Holdings L.P., a Delaware
limited partnership (Parent or Steel Partners),
entered into an Agreement and Plan of Merger (the Merger
Agreement) with SPH Acquisition Co., a Delaware corporation
and a wholly owned subsidiary of Parent (Merger Sub), and
Steel Excel Inc., a Delaware corporation (the Company or
Steel Excel), to which, among other things, Parent has
agreed to cause Merger Sub to make a tender offer (the
Offer) to purchase any and all of the outstanding shares
of common stock, par value $0.001 per share (the Shares),
of the Company not already owned by Parent or any entity that is
an affiliate of Parent, for 0.712 newly issued 6.0% Series A
preferred units, no par value (the Parent Preferred
Units), of Parent for each Share (the Offer Price).
SPH Group Holdings LLC, a wholly owned subsidiary of Parent,
beneficially owns approximately 64.2% of the outstanding Shares.
to the Merger Agreement, Merger Sub has agreed to commence the
Offer no later than 20 business days after the date of the Merger
Agreement. Merger Subs obligation to accept for payment and pay
for Shares to the Offer is subject to various conditions,
including (a) a nonwaivable condition that there be validly
tendered and not withdrawn prior to the expiration of the Offer
that number of Shares that, when added to the Shares already
owned by Parent and its subsidiaries, would represent at least a
majority of all then outstanding Shares, (b) a nonwaivable
condition that there be validly tendered and not withdrawn prior
to the expiration of the Offer that number of Shares that would
represent at least a majority of all then outstanding Shares not
owned by Parent or any of its affiliates, (c) the Parent
Preferred Units issuable in the Offer and the Merger (as defined
below) have been authorized for listing on the New York Stock
Exchange or, if for any reason they cannot be so listed, on the
OTC Bulletin Board or OTC Market, (d) Shares held by stockholders
that have properly exercised appraisal rights under Delaware law
do not exceed ten percent (10%) of the Shares outstanding
immediately prior to the expiration of the Offer, and (e) other
customary conditions. There is no financing condition to the
obligations to consummate the Offer.
The Merger Agreement further provides that upon the terms and
subject to the conditions set forth therein, following completion
of the Offer, Merger Sub will merge with and into the Company,
with the Company continuing as the surviving corporation and as a
wholly owned subsidiary of Parent (the Merger). In the
Merger, each outstanding Share (other than Shares held by the
Company or any of its subsidiaries, Parent, Merger Sub or any
other subsidiary of Parent, or held by stockholders who are
entitled to demand, and who properly demand, appraisal rights
under Delaware law), will be converted into the right to receive
the Offer Price, without interest. The Merger is subject to the
following closing conditions: (i)Merger Sub having accepted for
payment all Shares validly tendered and not withdrawn in the
Offer and (ii)there being in effect no law or order which makes
the Merger illegal or otherwise prohibits the consummation of the
Merger.
The Merger Agreement includes customary representations,
warranties and covenants of the Company, Parent and Merger Sub,
including, among other things, a covenant of the Company not to
solicit alternative transactions or to provide information or
enter into discussions in connection with alternative
transactions, subject to certain exceptions to allow the board of
directors of the Company to exercise its fiduciary duties. The
Merger Agreement may be terminated under certain circumstances,
including in connection with superior proposals as set forth
therein. If the Company terminates the Merger Agreement to enter
into an agreement for a superior proposal and in other specified
circumstances, the Company would be required to pay Parent a
$2,000,000 termination fee and its transaction expenses up to
$1,000,000.
The foregoing summary of the Merger Agreement and the
transactions contemplated thereby does not purport to be complete
and is subject to, and qualified in its entirety by, the full
text of the Merger Agreement, a copy of which is attached as
Exhibit 2.1 to this report and is incorporated herein by
reference.
The Merger Agreement and the above description have been included
to provide investors and security holders with information
regarding the terms of the Merger Agreement. They are not
intended to provide any other factual information about the
Company, Parent, Merger Sub or their respective subsidiaries or
affiliates or stockholders. The representations, warranties and
covenants contained in the Merger Agreement were made only for
purposes of the Merger Agreement and as of specific dates; were
solely for the benefit of the parties to the Merger Agreement;
and may be subject to limitations agreed upon by the parties,
including being qualified by confidential disclosures made by
each contracting party to the other for the purposes of
allocating contractual risk between them that differ from those
applicable to investors. Investors should not rely on the
representations, warranties and covenants or any description
thereof as characterizations of the actual state of facts or
condition of the Company, Parent, Merger Sub or any of their
respective subsidiaries, affiliates, businesses or stockholders.
Moreover, information concerning the subject matter of the
representations, warranties and covenants may change after the
date of the Merger Agreement, which subsequent information may or
may not be fully reflected in public disclosures by the Company
or Parent. Accordingly, investors should read the representations
and warranties in the Merger Agreement not in isolation but only
in conjunction with the other information about the Company or
Parent and their respective subsidiaries that the respective
companies include in reports, statements and other filings they
make with the Securities and Exchange Commission (the
SEC).
Additional Information and Where to Find It
The Offer described above has not yet commenced. This Current
Report on Form 8-K is neither an offer to purchase or exchange
nor a solicitation of an offer to sell or exchange shares of
Steel Excels common stock, nor shall there be any sale of
securities in any jurisdiction in which such offer, sale or
exchange would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction. At the time
the Offer is commenced, Steel Partners will file a Registration
Statement on Form S-4, containing a prospectus/offer to exchange,
a form of letter of transmittal and other related Offer documents
with the SEC. In addition, Steel Excel will mail to its
stockholders a Solicitation/Recommendation Statement on Schedule
14D-9. Stockholders will be able to obtain the Registration
Statement on Form S-4, the prospectus/offer to exchange, and the
Solicitation/Recommendation Statement of the Company on Schedule
14D-9, as each may be amended or supplemented from time to time,
and related materials with respect to the Offer free of charge at
the website of the SEC at www.sec.gov, and from any information
agent named in the Offer materials. Stockholders may also obtain,
at no charge, any such documents filed with or furnished to the
SEC by Parent under the Investors Relations section of Parents
website at www.steelpartners.com. STOCKHOLDERS ARE ADVISED TO
READ THESE DOCUMENTS, INCLUDING ANY SOLICITATION/RECOMMENDATION
STATEMENT OF THE COMPANY AND ANY AMENDMENTS THERETO, AS WELL AS
ANY OTHER DOCUMENTS RELATING TO THE OFFER THAT ARE FILED WITH THE
SEC, CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE,
PRIOR TO MAKING ANY DECISIONS WITH RESPECT TO WHETHER TO TENDER
THEIR SHARES INTO THE OFFER BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION, INCLUDING THE TERMS AND CONDITIONS OF THE OFFER.
Forward-Looking Statements
This communication may contain certain forward-looking statements
that reflect Steel Partners current expectations and projections
about its future results, performance, prospects and
opportunities. Forward-looking statements are based on
information currently available to Steel Partners and are subject
to a number of risks, uncertainties and other factors that could
cause its actual results, performance, prospects or opportunities
in 2016 and beyond to differ materially from those expressed in,
or implied by, these forward-looking statements. These factors
include, without limitation, Steel Partners subsidiaries need for
additional financing and the terms and conditions of any
financing that is consummated, their customers acceptance of its
new and existing products, the risk that Steel Partners and its
subsidiaries will not be able to compete successfully, the
possible volatility of Steel Partners unit price and the
potential fluctuation in its operating results. Although Steel
Partners believes that the expectations reflected in its
forward-looking statements are reasonable and achievable, any
such statements involve significant risks and uncertainties, and
no assurance can be given that the actual results will be
consistent with the forward-looking statements. Investors should
read carefully the factors described in the Risk Factors section
of Steel Partners filings with the SEC, including its Form 10-K
for the year ended December 31, 2015 and Form 10-Q for the
quarterly period ended September30, 2016, for information
regarding risk factors that could affect Steel Partners results.
Except as otherwise required by federal securities laws, Steel
Partners undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new
information, future events, changed circumstances or any other
reason.
Item7.01. Regulation FD
Disclosure.
On December 7, 2016, Parent issued a press release announcing
that Parent and the Company entered into the Merger Agreement. A
copy of such press release is attached as Exhibit 99.1 to this
Form 8-K and is incorporated herein by reference. The information
furnished in Exhibit 99.1 shall not be deemed filed for the
purposes of Section 18 of the Securities Exchange Act of 1934, as
amended (the Exchange Act), or otherwise subject to the
liabilities of that section, and shall not be deemed incorporated
by reference in any future filings by Parent under the Securities
Act of 1933, as amended, or the Exchange Act, unless Parent
expressly sets forth in such future filing that such information
is to be considered filed or incorporated by reference therein.
Item 9.01. Exhibits.
(d) Exhibits.
| Exhibit No. | Description |
| 2.1 |
Agreement and Plan of Merger, dated as of December 7, 2016, by and among Steel Partners Holdings L.P., SPH Acquisition Co. and Steel Excel Inc. |
| 99.1 | Press Release dated December 7, 2016 |
About Steel Partners Holdings L.P. (NYSE:SPLP)
Steel Partners Holdings L.P. (SPLP) is a diversified holding company that engages in multiple businesses through consolidated subsidiaries, associated companies and other interests. The Company owns and operates businesses, and has investments in companies, in various industries, including diversified industrial products, energy, defense, supply chain management and logistics, banking and youth sports. The Company’s segments are Diversified Industrial, Energy, Financial Services, and Corporate and Other. The Company’s Diversified Industrial segment consists of its Handy & Harman Ltd. (HNH) and WebFinancial Holding LLC (WFH LLC). The Company’s Energy Segment includes the operations of Steel Excel, Inc. (Steel Excel). The Financial Services segment consists of the Company’s subsidiary, WebFinancial Corporation (WFHC), which conducts financial operations through its subsidiary, WebBank, and WF Asset Corp. Steel Partners Holdings L.P. (NYSE:SPLP) Recent Trading Information
Steel Partners Holdings L.P. (NYSE:SPLP) closed its last trading session down -0.15 at 14.75 with 8,183 shares trading hands.