WARREN, Mich., May 9 /PRNewswire-FirstCall/ -- Asset Acceptance
Capital Corp. (NASDAQ:AACC), a leading purchaser and collector of
charged-off consumer debt, today announced it is commencing its
modified "Dutch auction" tender offer as part of a larger plan to
recapitalize Asset Acceptance Capital Corp. (the "Company") and
return $150 million to shareholders. The two key elements of the
recapitalization plan consist of using up to $75 million to
repurchase shares of common stock from shareholders and, subject to
further approval by the Company's Board of Directors, the remaining
balance of the $150 million will be paid in the form of a special
one-time cash dividend to the holders of the Company's common
stock. The repurchase of up to $75 million of shares from
shareholders will be accomplished through the following two
transactions: -- Through the repurchase of up to 1,858,000 shares
(plus up to an additional 2% of shares outstanding), to be
accomplished by a "Dutch auction" tender offer to its shareholders.
-- The remaining balance of the $75 million will be used to
repurchase shares pursuant to a stock repurchase agreement with the
Company's largest shareholder, its Chairman, President and Chief
Executive Offer and its Senior Vice President and Chief Financial
Officer. Under this agreement, the Company has agreed to repurchase
shares from these shareholders to maintain their pro rata
beneficial ownership interest in the Company after giving effect to
the tender offer. These shareholders currently own beneficially
approximately 50.4% of the Company's outstanding shares of common
stock and have elected not to tender any shares in the tender
offer. The repurchase will be at the same price per share as is
paid in the tender offer and will occur on the 11th business day
following the expiration date of the tender offer. The Company
anticipates obtaining the funds needed to finance the
recapitalization plan, including the tender offer, with the
proceeds of a new $150 million term loan being arranged by J.P.
Morgan Securities Inc., the dealer manager in the tender offer, as
part of a new credit facility that will also include a revised $100
million revolving credit facility. The Company has entered into a
commitment letter with the dealer manager and its affiliate,
JPMorgan Chase Bank, N.A., subject to customary conditions, to
arrange the new credit facility. However, the consummation of the
return of capital plan, including the tender offer, is conditioned
upon the Company's ability to close on the new credit facility on
terms and conditions satisfactory to the Company. Brad Bradley,
Chairman, President and Chief Executive Officer stated that: "We
believe that the recapitalization, including the tender offer, is a
prudent use of our financial resources given our business profile,
assets and current market price, and that purchasing our own shares
is an attractive use of capital and an efficient means to provide
value to our shareholders. The tender offer will provide those
shareholders who might prefer a less leveraged balance sheet with a
selling opportunity without the usual transaction costs associated
with open market transactions. Our plan also allows shareholders
who desire to continue their investment to retain their shares and,
after completion of our return of capital plan, potentially benefit
from (1) increased equity return opportunities available due to our
higher leverage, (2) the expected significant special cash dividend
described earlier, and (3) an increased percentage ownership in
AACC." Tender Offer In the tender offer, the Company intends to
purchase up to 1,858,000 shares (plus up to an additional 2% of
shares outstanding) in a price range of $18.25 to $20.00 per share.
The tender offer will expire, unless extended by the Company, at
5:00 P.M., New York City Time, on June 7, 2007. The high end of the
per share price range represents a maximum aggregate repurchase of
$37.2 million for 1,858,000 shares. It also reflects a premium of
approximately 24% relative to the closing price of $16.14 on April
24, 2006, the last closing price prior to the Company's
announcement of its intention to return $150 million of cash to
shareholders through the recapitalization plan. A modified "Dutch
auction" tender offer will allow shareholders to indicate how many
shares and at what price within the Company's specified range they
wish to tender. Based on the number of shares tendered and the
price specified by the tendering shareholders, the Company will
determine the lowest price per share within the range that will
enable it to purchase up to 1,858,000 shares, or such lesser number
of shares as are properly tendered. The Company also reserves the
right in the tender offer to purchase up to an additional 2 percent
of its shares outstanding. Tender offer materials will be
distributed promptly to shareholders and filed with the Securities
and Exchange Commission. Several of the Company's executive
officers have indicated they intend to tender shares. In addition,
the Company has entered into the stock repurchase agreement
described earlier with the Company's largest shareholder, its
Chairman, President and Chief Executive Offer and its Senior Vice
President and Chief Financial Officer. J.P. Morgan Securities Inc.
will serve as the dealer manager for the tender offer. MacKenzie
Partners, Inc. will serve as the information agent and LaSalle
Bank, National Association will serve as the depositary in the
tender offer. Stock Repurchase Agreement Under the stock repurchase
agreement the Company has agreed to repurchase a number of shares
beneficially owned by AAC Quad-C Investors LLC, its largest
shareholder and with whom the Company's directors, Terry D. Daniels
and Anthony R. Ignaczak, are affiliated; Nathaniel F. Bradley IV,
the Company's Chairman, President and Chief Executive Officer; and
Mark A. Redman, the Company's Senior Vice President and Chief
Financial Officer, to maintain their pro rata beneficial ownership
interest in the Company after giving effect to the tender offer.
These shareholders currently own beneficially approximately 35.6%,
12.2% and 2.6%, respectively, of the Company's outstanding shares
of common stock and have elected not to tender any shares in the
tender offer. This repurchase will be at the same price per share
as is paid in the tender offer and will occur on the 11th business
day following the expiration date of the tender offer. Assuming the
Company acquires 1,858,000 shares in the tender offer, 32,840,625
shares will be outstanding immediately after the tender offer and
the Company would then repurchase another 1,892,000 shares in the
aggregate pursuant to the stock repurchase agreement on the 11th
business day after the tender offer, with 1,335,000 shares, 459,000
shares and 98,000 shares to be repurchased from those beneficially
owned by AAC Quad-C Investors LLC, Mr. Bradley and Mr. Redman,
respectively. Special One-Time Cash Dividend The Company expects,
subject to the approval of its Board of Directors, to pay a special
one-time cash dividend to our shareholders shortly after the
completion of the purchases in the tender offer and pursuant to the
stock repurchase agreement in an amount which, after subtracting
the purchase price paid in the tender offer and pursuant to the
stock repurchase agreement, equals $150 million. Tender Offer
Statement This press release is for informational purposes only and
is not an offer to buy or the solicitation of an offer to sell any
of the Company's shares of common stock. The full details of the
tender offer, including complete instructions on how to tender
shares, will be included in the offer to purchase, the letter of
transmittal and related materials, which are expected to be mailed
to shareholders promptly. Shareholders should read carefully the
offer to purchase, the letter of transmittal and related materials
when they are available because they will contain important
information. Shareholders may obtain free copies, when available,
of the offer to purchase and other related materials that will be
filed by the Company with the Securities and Exchange Commission at
the Commission's website at http://www.sec.gov/. When available,
shareholders also may obtain a copy of these documents, free of
charge, from MacKenzie Partners., Inc., the Company's information
agent in connection with the offer, by calling toll-free (800)
322-2885. Shareholders are urged to read carefully those materials
when they become available prior to making any decisions with
respect to the tender offer. About AACC For more than 40 years,
Asset Acceptance has provided credit originators, such as credit
card issuers, consumer finance companies, retail merchants,
utilities and others an efficient alternative in recovering
defaulted consumer debt. For more information, please visit
http://www.assetacceptance.com/. Asset Acceptance Capital Corp.
Safe Harbor Statement This press release contains certain
statements, including the Company's plans and expectations
regarding its intended return of capital to shareholders, operating
strategies, charged-off receivables and costs, which are
forward-looking statements. These forward-looking statements
reflect the Company's views, at the time such statements were made,
with respect to the Company's future plans, objectives, events,
portfolio purchases and pricing, collections and financial results
such as revenues, expenses, income, earnings per share, capital
expenditures, operating margins, financial position, expected
results of operations and other financial items. Forward-looking
statements are not guarantees of future performance; they are
subject to risks and uncertainties. In addition, words such as
"plans," "estimates," "expects," "intends," "should," "could,"
"will," variations of such words and similar expressions are
intended to identify forward-looking statements. These statements
are not guarantees of future performance and involve certain risks,
uncertainties and assumptions ("Risk Factors") that are difficult
to predict with regard to timing, extent, likelihood and degree of
occurrence. There are a number of factors, many of which are beyond
the Company's control, which could cause actual results and
outcomes to differ materially from those described in the
forward-looking statements. Risk Factors include, among others:
ability to purchase charged-off consumer receivables at appropriate
prices, ability to continue to acquire charged-off receivables in
sufficient amounts to operate efficiently and profitably, employee
turnover, ability to compete in the marketplace, acquiring
charged-off receivables in industries that the Company has little
or no experience, integration and operations of newly acquired
businesses, ability to achieve anticipated cost savings from office
closings without the disruption of collections associated with
these offices, and additional factors discussed in the Company's
periodic reports filed with the Securities and Exchange Commission
on Form 10-K and 10-Q and exhibits thereto. Other Risk Factors
exist, and new Risk Factors emerge from time to time that may cause
actual results to differ materially from those contained in any
forward-looking statements. Given these risks and uncertainties,
investors should not place undue reliance on forward-looking
statements as a prediction of actual results. Furthermore, the
Company expressly disclaims any obligation to update, amend or
clarify forward-looking statements. In addition to the foregoing,
several Risk Factors are discussed in the Company's most recently
filed Annual Report on Form 10-K and other SEC filings, in each
case under the section titled "Forward Looking Statements" or
similar headings and those discussions regarding risk factors as
well as the discussion of forward looking statements in such
sections are incorporated herein by reference. DATASOURCE: Asset
Acceptance Capital Corp. CONTACT: Noel Ryan III of Lambert, Edwards
& Associates, +1-616-233-0500, Web site:
http://www.assetacceptance.com/
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