Fifth Street Asset Management Inc. Announces Agreement Between Fifth Street Finance Corp. and RiverNorth Capital Management
February 19 2016 - 7:32AM
Fifth Street Asset Management Inc. (NASDAQ:FSAM) (“FSAM”) today
announced that Fifth Street Finance Corp. (NASDAQ:FSC) (“FSC”) has
entered into an agreement with RiverNorth Capital Management, LLC
(“RiverNorth”), which, including its director nominees, is the
beneficial owner of approximately 8.7% of FSC’s common stock.
Under the terms of the agreement, RiverNorth will not contest FSC’s
slate of director nominees at the 2016 Annual Meeting of
Stockholders. Additionally, RiverNorth has agreed to withdraw
its binding proposal to terminate FSC’s Investment Advisory
Agreement with Fifth Street Management LLC (“FSM”), a subsidiary of
FSAM. Further, RiverNorth has agreed to abide by certain
standstill provisions through FSC’s 2017 Annual Meeting of
Stockholders, and has also agreed to vote its approximately 5.7%
shareholdings in Fifth Street Senior Floating Rate Corp.
(NASDAQ:FSFR) (“FSFR”) in accordance with the recommendation of
FSFR’s Board of Directors in connection with the FSFR 2016 Annual
Meeting of Stockholders.
“We are pleased that FSC has reached an amicable resolution with
RiverNorth. FSAM has a proven, 17-year track record of
investing in middle market credit through multiple economic cycles
and we continue to believe that FSAM is the right investment
adviser for FSC. As a result of the agreement with
RiverNorth, FSAM and I as a group will be FSC’s largest
shareholder, with approximately 14.6% of FSC common stock, which we
believe further solidifies the alignment of interests between FSAM
and FSC,” said Leonard M. Tannenbaum, Chairman and Chief Executive
Officer of FSAM, adding, “We respect FSC’s commitment to
maintaining an open dialogue with stockholders, and are pleased
that FSC and RiverNorth have reached an agreement in the interest
of continuing to create value for both FSAM and FSC
stockholders.”
Under the terms of the agreement, RiverNorth, including its
director nominees, will sell its holdings of FSC common stock to a
combination of an affiliate of FSAM and Mr. Tannenbaum for a
purchase price of $6.25 per share. The purchase of FSC common
stock from RiverNorth and its director nominees is expected to be
completed on or prior to March 31, 2016. FSAM has also issued
to RiverNorth a warrant to purchase shares of FSAM Class A common
stock that expires on March 18, 2017. The maximum payment by
FSAM to RiverNorth under the terms of such warrant is $5 million,
which under certain circumstances can be satisfied, in whole or in
part, in shares of FSAM Class A common stock. In addition, an
affiliate of FSAM has agreed to settle the FSC common stock swap
arrangements held by RiverNorth.
About Fifth Street Asset Management Inc.
Fifth Street Asset Management Inc. (NASDAQ:FSAM) is a nationally
recognized credit-focused asset manager. The firm has over $5
billion of assets under management across two publicly-traded
business development companies, Fifth Street Finance Corp.
(NASDAQ:FSC) and Fifth Street Senior Floating Rate Corp.
(NASDAQ:FSFR), as well as multiple private investment
vehicles. The Fifth Street platform provides innovative and
customized financing solutions to small and mid-sized businesses
across the capital structure through complementary investment
vehicles and co-investment capabilities. With over a 17-year
track record focused on disciplined credit investing across
multiple economic cycles, Fifth Street is led by a seasoned
management team that has issued billions of dollars in public
equity, private capital and public debt securities. Fifth
Street’s national origination strategy, proven track record and
established platform are supported by approximately 80
professionals across locations in Greenwich, Chicago and San
Francisco. For more information, please visit
fsam.fifthstreetfinance.com.
Forward-Looking Statements
This press release may contain, and certain oral statements made
by our representatives from time to time may contain,
forward-looking statements, because they relate to future events or
our future performance or financial condition, as well as actions
by third parties. Forward-looking statements may include
statements as to the timing of closing of the purchase of the
shares of FSC’s common stock owned by RiverNorth and its director
nominees, fees charged by FSAM to FSC and FSFR, FSAM’s future
operating results, dividends by FSAM and business prospects of
FSAM. Words such as “believes,” “expects,” “seeks,” “plans,”
“should,” “estimates,” “projects,” and “intend” indicate
forward-looking statements, although not all forward-looking
statements include these words. These forward-looking
statements involve risks and uncertainties. Actual results
could differ materially from those implied or expressed in these
forward-looking statements for any reason. Such factors are
identified from time to time in FSAM’s filings with the Securities
and Exchange Commission and include changes in the economy, the
financial markets and future changes in laws or regulations,
competitive conditions in the business development company space
and conditions in FSAM’s operating areas. FSAM undertakes no
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required by law.
CONTACT:
Investor Contact:
Robyn Friedman, Senior Vice President, Head of Investor Relations
(203) 681-3720
IR-FSAM@fifthstreetfinance.com
Media Contact:
Michael Freitag / James Golden / Andrew Squire
Joele Frank Wilkinson Brimmer Katcher
(212) 355-4449
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