NEW YORK--(BUSINESS WIRE)--
Jefferies Financial Group Inc. (NYSE:JEF or Jefferies), which currently
owns approximately 70% of the outstanding shares of common stock of
HomeFed Corporation (OTCMKTS:HOFD or HomeFed), a developer and owner of
residential and mixed-use real estate properties primarily in California
and New York, announced today that the Board of Directors of Jefferies
and the Special Committee of the Board of Directors of HomeFed have
approved a definitive merger agreement under which Jefferies will
acquire the shares of HomeFed common stock that it does not already own.
Under the terms of the transaction:
- HomeFed stockholders will be given the right to elect to receive
either cash or shares of Jefferies common stock in exchange for their
HomeFed shares.
-
If a HomeFed stockholder elects to receive cash, that stockholder will
receive $38.00 in cash for each share of HomeFed common stock.
-
If a HomeFed stockholder elects to receive shares of Jefferies’ common
stock and the Jefferies’ average share price (as defined below) is
equal to or less than $21.00 per share, that stockholder will receive
two shares of Jefferies common stock for each share of HomeFed common
stock.
-
If a HomeFed Stockholder elects to receive shares of Jefferies’ common
stock and the Jefferies’ average share price is more than $21.00 per
share, that stockholder will receive less than two shares of Jefferies
common stock for each share of HomeFed common stock, with the exchange
ratio being calculated by dividing $42.00 by the Jefferies’ average
share price. For example, if the Jefferies’ average share price is
$22.00, the exchange ratio would be 1.9091 and any HomeFed stockholder
electing to receive shares of Jefferies’ common stock would receive
1.9091 shares of Jefferies common stock.
-
If a HomeFed stockholder makes no election, that stockholder will be
deemed to have made a cash election if the Jefferies’ average share
price is equal to or less than $19.00 per share or a share election if
the Jefferies’ average share price is more than $19.00 per share.
The Jefferies’ average share price shall be calculated as
the volume-weighted average price of a share of Jefferies common stock
for the ten consecutive trading days ending on the trading day that is
three trading days before the date of the HomeFed stockholders meeting
at which HomeFed stockholders will vote on the transaction.
The transaction, which is expected to close during the third quarter of
2019, is subject to customary closing conditions, including approval by
a majority of the HomeFed stockholders (excluding Jefferies or its
affiliates).
In addition, concurrently with the execution of the merger agreement,
Jefferies entered into a voting agreement with HomeFed, pursuant to
which Jefferies has agreed to vote all of the shares of HomeFed common
stock owned by it in favor of the adoption of the merger agreement.
Following completion of the transaction, shares of HomeFed common stock
will no longer be quoted on the OTCQB Marketplace, there will be no
public market for shares of HomeFed common stock, and shares of
HomeFed common stock will be deregistered.
For a more complete description of the transaction, please see
Jefferies’ Form 8-K filed today.
As previously reported, Jefferies’ Board of Directors has approved the
repurchase of shares in the open market to offset the issued shares for
the transaction, which is in addition to the $500 million
share-repurchase approval already in place. The transaction would
involve the issuance of as many as 9.3 million shares of Jefferies
common stock, worth approximately $189 million based on the closing
price of Jefferies common stock on April 12, 2019. Upon completion of
the transaction, Jefferies’ total post-transaction carrying value of
HomeFed will be approximately $631 million.
Rich Handler and Brian Friedman, CEO and President, respectively, of
Jefferies, said “We are very pleased that the Special Committee of the
Board of Directors of HomeFed has approved the transaction. Merging with
HomeFed will allow Jefferies to consolidate HomeFed for tax purposes
(which will avoid an extra layer of taxes as HomeFed monetizes its
assets), affording greater flexibility as to the timing and form of
maximizing value over time. We very much look forward to continuing to
work closely with Chris Foulger, Paul Borden and the entire HomeFed team
to achieve those goals.”
Important Additional Information and Where to Find It
This communication is being made in respect of the transaction
contemplated by the Agreement and Plan of Merger, dated as of April 12,
2019, among Jefferies Financial Group Inc. (“Jefferies”),
HomeFed Corporation (“HomeFed”) and Heat
Merger Sub, LLC. This communication may be deemed to be solicitation
material in respect of the transaction involving Jefferies and HomeFed.
In connection with the transaction, Jefferies will file a registration
statement on Form S-4 with the SEC, which will include a proxy statement
of HomeFed and a prospectus of Jefferies with respect to the issuance of
Jefferies common stock. A definitive proxy statement/prospectus will
also be sent to HomeFed stockholders seeking any required stockholder
approval. This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be any
sale of securities in any jurisdiction in which such offer, solicitation
or sale would be unlawful prior to registration or qualification under
the securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the requirements
of Section 10 of the U.S. Securities Act of 1933, as amended. Before
making any voting or investment decision, investors and HomeFed
stockholders are urged to carefully read the entire registration
statement and proxy statement/prospectus when they become available, and
any other relevant documents filed with the SEC, as well as any
amendments or supplements to these documents, because they will contain
important information about the merger and other transactions
contemplated by the merger agreement. Investors and HomeFed
stockholders will be able to obtain free copies of the registration
statement and proxy statement/prospectus and the other documents filed
with the SEC by Jefferies and HomeFed through the web site maintained by
the SEC at www.sec.gov.
In addition, investors and HomeFed stockholders will be able to obtain
free copies of the registration statement and proxy statement/prospectus
by phone, e-mail or written request by contacting the investor relations
department of Jefferies at the following:
Jefferies Financial Group Inc.
Attention: Investor Relations
520
Madison Avenue
New York, New York 10022
212-460-1900
www.jefferies.com
Forward-Looking Statements
This communication may "forward-looking statements" within the meaning
of the safe harbor provisions of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements include statements about our future and
statements that are not historical facts. These forward-looking
statements are usually preceded by the words "should," "expect,"
"intend," "may," "will," or similar expressions. Forward-looking
statements may contain expectations regarding the transaction, and may
include statements of future performance, plans, and objectives.
Forward-looking statements represent only our belief regarding future
events, many of which by their nature are inherently uncertain. It is
possible that the actual results may differ, possibly materially, from
the anticipated results indicated in these forward-looking statements.
Information regarding important factors, including Risk Factors that
could cause actual results to differ, perhaps materially, from those in
our forward-looking statements is contained in reports we file with the
SEC. You should read and interpret any forward-looking statement
together with reports we file with the SEC.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190415005368/en/
Laura Ulbrandt
(212) 460-1900
Source: Jefferies Financial Group Inc.