Sunset and Alesco Amend Merger Agreement to Provide a Special Merger Dividend of $0.50 to Sunset Stockholders
21 Luglio 2006 - 1:22AM
PR Newswire (US)
JACKSONVILLE, Fla. and PHILADELPHIA, July 20 /PRNewswire-FirstCall/
-- Sunset Financial Resources, Inc. (NYSE:SFO) and Alesco Financial
Trust today announced a revision to the merger agreement to include
the addition of a special merger dividend of $0.50 per share to
Sunset stockholders. Daniel Cohen, Chairman of the Board of Alesco
said, "We continue to believe in the merits of this merger
transaction, and are focused on providing value to our combined
stockholders. The addition of the $0.50 per share dividend provides
additional value to Sunset stockholders and demonstrates our
commitment to the transaction. As I have stated before, we want to
ensure that all stockholders feel positive about the transaction
and we are confident that the revised merger agreement will be
beneficial to both Sunset and Alesco stockholders. We remain
enthusiastic about the value creation potential of the
transaction." The special merger dividend will be payable to all
Sunset stockholders of record as of the business day prior to the
merger and will be paid 10 days after the merger. In addition to
the special merger dividend payment, Sunset and Alesco also agreed
to extend the measurement date for the potential exchange ratio and
tender offer price adjustments based on the remaining principal
balance of the Peerless Loan from July 31, 2006 to September 14,
2006. Rodney Bennett, Chairman of the Board of Sunset, added, "We
are pleased with the mutual decision to provide the additional
merger consideration to Sunset's stockholders, and continue to
believe that the merger is the right transaction for Sunset
stockholders. The revised merger agreement demonstrates that Alesco
is a great partner and is committed to the deal. Sunset has made
substantial progress under the management agreement and we look
forward to the successful completion of the transaction." In
conjunction with the merger announcement in April, Sunset disclosed
its plan to provide a tender offer in which it would purchase for
cash up to $25 million of Sunset common stock from existing Sunset
stockholders at $8.74 per share. Under the revised merger
agreement, the tender offer price has been adjusted to $8.24,
reflecting the $0.50 special dividend amount. Sunset stockholders
tendering their common stock in the tender offer will receive the
special merger dividend and the revised tender offer price for an
aggregate of $8.74 per share. The tender is still expected to close
immediately prior to the closing of the merger. Current Sunset
stockholders will own 42% of the combined company (34% if the
self-tender amount is fully subscribed). On April 27, 2006, Sunset
Financial and Alesco Financial Trust announced a definitive
agreement to merge and entered into an interim management
agreement. The merged company will pursue Alesco's investment
strategy focused on trust preferred securities issued by banks and
insurance companies, middle market loans and residential mortgage
backed securities. Under the management agreement in place since
April 27, 2006, Sunset has begun redeploying its assets into assets
consistent with Alesco's investment strategy. To date Sunset has
sold approximately $373 million of its residential mortgage-backed
securities portfolio, repaid related reverse repurchase agreements,
terminated related interest rate swap agreements and has redeployed
the net proceeds of approximately $24 million into a warehouse line
of credit that will support the accumulation of approximately $225
million of trust preferred securities and also purchased 46% of the
preferred equity of an entity that issues loan obligations which
are collateralized by approximately $186 million of leveraged
loans. Additionally, Sunset has committed to sell approximately
$441 million of its residential mortgage- backed securities
portfolio for settlement during the week of July 24, 2006. After
repayment of related reverse repurchase agreements and termination
of certain interest rate swaps, the Company will receive net
proceeds of approximately $26 million for redeployment into new
assets. As indicated in the April 27, 2006 merger announcement, the
merger transaction is structured as tax free to Alesco
stockholders. Each Alesco shareholder will receive 1.26 Sunset
shares. The exchange ratio and tender offer values are subject to
adjustments based on the repayment of the Peerless Loan. The merger
agreement is also subject to shareholder approval from both
companies and other customary conditions. The transaction is
expected to close in the third or fourth quarter of 2006. Banc of
America Securities LLC acted as financial advisor to Sunset and
Locke Liddell & Sapp LLP acted as its legal counsel. JP Morgan
acted as a co-advisor to Sunset. Friedman, Billings, Ramsey &
Co., Inc. acted as the financial adviser to Alesco and Clifford
Chance US LLP acted as its legal counsel. About Sunset Financial
Resources Sunset is a specialty finance REIT headquartered in
Jacksonville, Florida and trades on the New York Stock Exchange
under the symbol "SFO". About Alesco Financial Trust Alesco is a
specialty finance REIT headquartered in Philadelphia, Pennsylvania.
The company is externally managed by an affiliate of Cohen
Brothers. Alesco invests in trust preferred stock issued by banks
and insurance companies, middle market loans, and residential
mortgage backed securities. As of March 31, 2006, Alesco had
approximately $2.2 billion in assets. Certain statements in this
news release may constitute "forward-looking statements" within the
meaning of the federal securities laws and involve risks,
uncertainties and other factors, which may cause the actual
performance of Sunset Financial Resources, Inc. to be materially
different from the performance expressed or implied by such
statements. These risks include the failure of the Company to
successfully execute its business plan, gain access to additional
financing, the availability of additional loan portfolios for
future acquisition, continued qualification as a REIT, the cost of
capital, as well as the additional risks and uncertainties detailed
in the Company's periodic reports and registration statements filed
with the Securities and Exchange Commission. Sunset has filed a
preliminary proxy statement/prospectus with the Securities and
Exchange Commission and will file a final proxy
statement/prospectus and a tender offer statement on Schedule TO
with the SEC. Investors are urged to read the proxy
statement/prospectus, the tender offer statement (including an
offer to purchase and related documents) when they becomes
available because they will contain important information. These
materials will be available free of charge at the SEC's website,
http://www.sec.gov/, or by directing a request to . Sunset, its
directors, and its executive officers may be considered
participants in the solicitation of proxies in connection with the
proposed transactions. Information about the directors and
executive officers of Sunset and their ownership of Sunset stock is
set forth in the 2005 Annual Report on Form 10K. Investors may
obtain additional information regarding the interests of such
participants by reading the proxy statement/prospectus for the
proposed merger when it becomes available. Contact: Sunset
Financial Resources Stacy Riffe 904-425-4365 Investors: KCSA
Worldwide Jeffrey Goldberger / Michael Cimini 212.896.1249 /
212.896.1233 DATASOURCE: Sunset Financial Resources, Inc. CONTACT:
Stacy Riffe of Sunset Financial Resources, +1-904-425-4365, ; or
Investors, Jeffrey Goldberger, +1-212-896-1249, , or Michael
Cimini, +1-212-896-1233, , both of KCSA Worldwide
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