Annaly Capital Management, Inc. Completes Exchange Offer for Hatteras Financial Corp. Common Stock
July 12 2016 - 7:00AM
Business Wire
Merger to Close July 12, 2016
Annaly Capital Management, Inc. (NYSE:NLY) (“Annaly”), announced
today that it has completed the previously announced exchange offer
for all of the outstanding shares of common stock of Hatteras
Financial Corp. (NYSE:HTS) (“Hatteras”).
The exchange offer to acquire all of the outstanding shares of
Hatteras common stock expired at 5:00 p.m., Eastern Time, on July
11, 2016. The depositary for the exchange offer has informed Annaly
that a total of 70,066,823 shares of Hatteras common stock,
representing approximately 74.12% of Hatteras’ outstanding common
stock, were validly tendered and not validly withdrawn in the
exchange offer. All shares that were validly tendered and not
validly withdrawn have been accepted for payment in accordance with
the terms of the exchange offer and applicable law.
Of the shares tendered into the exchange offer, 19,132,243
shares made an election to receive the mixed consideration,
3,000,559 shares made an election to receive the all-cash
consideration, and 47,934,021 shares made an election to receive
the all-stock consideration.
- Hatteras common stockholders who
elected to receive the mixed consideration or tendered without a
valid election will receive the mixed consideration, which consists
of $5.55 in cash and 0.9894 shares of Annaly common stock per share
of Hatteras common stock;
- Hatteras common stockholders who
elected to receive the all-cash consideration will receive $15.85
in cash per share of Hatteras common stock; and
- Hatteras common stockholders who
elected to receive the all-stock consideration will be subject to
proration at a rate of approximately 69%, and will receive their
consideration in the form of $15.85 in cash for each share not
accepted for the all-stock election due to proration and 1.5226
shares of Annaly common stock per share of Hatteras common stock
for shares that were accepted for the all-stock election.
Hatteras common stockholders will receive cash in lieu of
fractional shares of Annaly common stock.
Pursuant to the merger agreement, dated as of April 10, 2016,
among Annaly, Hatteras and Ridgeback Merger Sub Corporation, a
wholly owned subsidiary of Annaly (“Merger Sub”), Annaly intends to
complete the acquisition of Hatteras through a second-step merger
of Hatteras with and into Merger Sub without a vote of Hatteras’
stockholders, pursuant to Section 3-106.1 of the Maryland General
Corporation Law (the “Merger”). In accordance with Maryland law,
the Merger is expected to be consummated on July 12, 2016. Upon
consummation of the Merger, Hatteras will become a wholly owned
subsidiary of Annaly. In connection with the Merger, all shares of
Hatteras common stock not validly tendered into the exchange offer
will be cancelled and converted into the right to receive merger
consideration in the same amounts offered in the exchange offer.
Holders of these shares will have the opportunity to elect among
the mixed consideration, the all-cash consideration and the
all-stock consideration, subject to proration, as described in the
prospectus/offer to exchange, dated July 8, 2016, filed by Annaly
with the Securities and Exchange Commission in connection with the
transaction. In addition, upon consummation of the Merger, all of
the outstanding shares of Hatteras 7.625% Series A Cumulative
Redeemable Preferred Stock (the “Hatteras Series A Preferred
Stock”) will be cancelled and converted into the right to receive
one newly issued share of Annaly’s 7.625% Series E Cumulative
Redeemable Preferred Stock, which will have substantially the same
terms as the existing terms of the Hatteras Series A Preferred
Stock.
As a result of the acquisition, shares of Hatteras common stock
and Hatteras Series A Preferred Stock will cease to be traded on
the NYSE.
Wells Fargo Securities and Sandler O’Neill + Partners, L.P. are
serving as financial advisors to Annaly, and Wachtell, Lipton,
Rosen & Katz serves as legal counsel to Annaly.
About Annaly
Annaly’s principal business objectives are to generate net
income for distribution to its shareholders from its investments
and capital preservation. Annaly is a Maryland corporation that has
elected to be taxed as a real estate investment trust (“REIT”).
Annaly is managed and advised by Annaly Management Company LLC.
Forward-Looking Statements
This news release and our public documents to which we refer
contain or incorporate by reference certain forward-looking
statements which are based on various assumptions (some of which
are beyond our control) and may be identified by reference to a
future period or periods or by the use of forward-looking
terminology, such as “may,” “will,” “believe,” “expect,”
“anticipate,” “continue,” or similar terms or variations on those
terms or the negative of those terms. Actual results could differ
materially from those set forth in forward-looking statements due
to a variety of factors, including, but not limited to, changes in
interest rates; changes in the yield curve; changes in prepayment
rates; the availability of mortgage-backed securities and other
securities for purchase; the availability of financing and, if
available, the terms of any financings; changes in the market value
of our assets; changes in business conditions and the general
economy; our ability to grow our commercial business; our ability
to grow our residential mortgage credit business; credit risks
related to our investments in credit risk transfer securities,
residential mortgage-backed securities and related residential
mortgage credit assets, commercial real estate assets and corporate
debt; our ability to consummate any contemplated investment
opportunities; changes in government regulations affecting our
business; our ability to maintain our qualification as a REIT for
federal income tax purposes; our ability to maintain our exemption
from registration under the Investment Company Act of 1940, as
amended; the timing to consummate the Merger, and potential
business disruption following the acquisition of Hatteras. For a
discussion of the risks and uncertainties which could cause actual
results to differ from those contained in the forward-looking
statements, see “Risk Factors” in our most recent Annual Report on
Form 10-K and any subsequent Quarterly Reports on Form 10-Q. We do
not undertake, and specifically disclaim any obligation, to
publicly release the result of any revisions which may be made to
any forward-looking statements to reflect the occurrence of
anticipated or unanticipated events or circumstances after the date
of such statements, except as required by law.
Additional Information and Where to Find It
This press release is for informational purposes only and is
neither an offer to purchase nor a solicitation of an offer to sell
shares, nor is it a substitute for the exchange offer materials
that Annaly and its merger subsidiary have filed with the
Securities and Exchange Commission (“SEC”). Annaly and its merger
subsidiary have filed a tender offer statement on Schedule TO,
Annaly has filed a registration statement on Form S-4, and Hatteras
has filed a Solicitation/Recommendation Statement on Schedule 14D-9
with the SEC with respect to the exchange offer. THE EXCHANGE OFFER
MATERIALS (INCLUDING AN OFFER TO EXCHANGE, A RELATED LETTER OF
TRANSMITTAL AND CERTAIN OTHER EXCHANGE OFFER DOCUMENTS) AND THE
SOLICITATION/RECOMMENDATION STATEMENT CONTAIN IMPORTANT
INFORMATION. HATTERAS SHAREHOLDERS ARE URGED TO READ THESE
DOCUMENTS CAREFULLY BECAUSE THEY CONTAIN IMPORTANT INFORMATION THAT
HOLDERS OF HATTERAS SECURITIES SHOULD CONSIDER BEFORE MAKING ANY
DECISION REGARDING EXCHANGING THEIR SECURITIES. The Offer to
Exchange, the related Letter of Transmittal and certain other
exchange offer documents, as well as the
Solicitation/Recommendation Statement, are available to all holders
of Hatteras common stock at no expense to them. The exchange offer
materials and the Solicitation/Recommendation Statement are
available for free at the SEC’s website at www.sec.gov. Additional
copies may be obtained for free by contacting Annaly’s Investor
Relations department at 1-888-8Annaly (1-888-816-6159).
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