Don’t Give Up Control of Rand for Inadequate
Consideration; Vote “AGAINST” All Proposals in the WHITE Proxy Card
Today
Questions? Need help? Contact MacKenzie
Partners at 1 (800) 322-2885 or at proxy@mackenziepartners.com
User-Friendly Phone Book, LLC (“User-Friendly”), the largest
shareholder of Rand Capital Corporation (“Rand” or the “Company”)
(NASDAQ:RAND) owning 1,455,993 shares or approximately 23.0% of the
Company, today urged Rand shareholders to vote AGAINST the proposed
transaction with East Asset Management, LLC (“East”) using the
WHITE proxy card at the special meeting of shareholders scheduled
to take place on May 16, 2019 (the “Special Meeting”).
Bruce Howard, Chief Executive Officer of User-Friendly, said,
“Rand has entered into a take-over agreement that we believe
overwhelmingly benefits East Asset Management, at the vast expense
of shareholders. It defies what we see as basic logic that the
company would sell a majority of itself at a grossly inadequate
price relative to net asset value, transferring corporate control
and over $7.8 million in shareholder capital. We think there are
better outcomes for shareholders and we urge our fellow
shareholders to vote against the East transaction by using the
WHITE proxy card today.”
Rand shareholders have a choice and the opportunity to
exercise that choice by voting against the East deal. By voting
against the transaction, Rand will be able to pursue a true
strategic alternatives process that could lead to:
1. A higher and fairer offer from East Asset Management;
2. A higher and fairer offer from a third party; or
3. An orderly sale of Rand’s portfolio
Should Rand pursue an orderly sale of its portfolio, which as of
March 31, 2019, had an NAV of $5.06 per share, User-Friendly
believes that shareholders should demand that the salaries of Rand
management be reduced by 50% and that the board should consider
implementing incentive bonus structures equal to 2-3% of the value
of the assets sold, if they are sold within 6 months, dropping to
1-2% if they are sold between 6-12 months.
HIGHLIGHTS OF THE
FLAWED EAST TRANSACTION AND WHY USER-FRIENDLY BELIEVES IT NEEDS TO
BE VOTED DOWN
INADEQUATE PRICE: East’s $3.00 per share acquisition
price represents an approximately 41% discount to the Company’s
stated net asset value (NAV) of $5.06 per share as of March 31,
2019. This is in spite of the fact that East will gain a
controlling interest, for which acquirers typically must pay a
premium.
GREATER RETURN UPON LIQUIDATION: put another way, Rand
shareholders would receive an approximately 69% greater return,
relative to East’s $3.00 per share acquisition price, if Rand
simply sold off its assets for their NAV of $5.06 per share, as
recent transactions by the Company prove can be done.
SUBSTANTIAL DILUTION: current shareholders’ investment in
Rand will be diluted by approximately 24% as a result of the East
transaction, reducing the NAV per share by $1.24 to $3.82 per
share. At the same time, East will see the NAV of its investment
increase 82 cents per share, or 27%. This significant transfer of
wealth from current shareholders to East has somehow been approved
by Rand management.
POTENTIAL TAX CONSEQUENCES: there is no assurance that
Rand will declare the Special Dividend (or any cash dividends going
forward), and if it does declare the Special Dividend, the Special
Dividend may not include sufficient cash to provide shareholders
with the ability to fully satisfy the resulting tax obligation.
CONFLICTS OF INTEREST: the Adviser’s fee structure under
the proposed Investment Management Agreement misaligns the
interests of the Adviser and the Company’s shareholders.
QUESTIONABLE VALUATIONS: there is no credible support
that the value of the assets to be contributed by East (the
“Contributed Assets”), which comprise 52.4% of the aggregate
consideration to be received by Rand, has been accurately
measured.
DON’T GIVE UP CONTROL OF RAND FOR INADEQUATE
CONSIDERATION
PLEASE VOTE “AGAINST” ALL PROPOSALS ON THE ENCLOSED WHITE PROXY
CARD TODAY.
DISCARD ANY CARD YOU RECEIVE FROM
RAND.
We appreciate your support, and if you need assistance or have
any questions, please call our proxy solicitor, MacKenzie Partners,
Inc., toll-free at (800) 322-2885 or
(212) 929-5500 or by email to
proxy@mackenziepartners.com.
CERTAIN INFORMATION CONCERNING THE PARTICIPANT
User-Friendly Phone Book, LLC (“User-Friendly”) is the sole
participant in this solicitation. User-Friendly has filed a
definitive proxy statement with the Securities and Exchange
Commission (“SEC”) consisting of a proxy statement and accompanying
WHITE proxy card to be used to solicit proxies to vote against the
proposed transaction with East Asset Management, LLC at the Special
Meeting of Stockholders of Rand Capital Corporation (the “Company”)
scheduled to be held on May 16, 2019.
USER-FRIENDLY STRONGLY ADVISES ALL STOCKHOLDERS OF THE
COMPANY TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS AS
THEY BECOME AVAILABLE BECAUSE THEY CONTAIN IMPORTANT INFORMATION.
SUCH PROXY MATERIALS ARE AVAILABLE AT NO CHARGE ON THE SEC’S WEB
SITE AT HTTP://WWW.SEC.GOV. IN ADDITION,
USER-FRIENDLY WILL PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT
CHARGE UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO
USER-FRIENDLY’S PROXY SOLICITOR, MACKENZIE PARTNERS, INC.,
TOLL-FREE AT (800) 322-2885 or (212) 929-5500.
As of the date hereof, User-Friendly owns 1,455,993 shares of
common stock of the Company, representing approximately 23.0% of
the issued and outstanding shares of the Company.
About User-Friendly Phone Book
Operating since 1999, User Friendly Media boasts a portfolio of
print, digital and mobile marketing solutions for small business.
The company’s product suite includes 35 print directories, User
Friendly Apps, a mobile app builder, User Friendly Mobile ads, a
platform for serving locally-targeted mobile ad impressions and
GoLocal247.com, one of the fastest growing local business directory
websites in the country.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190508005281/en/
Investor Contact:Paul Schulman / David WhisselMacKenzie
Partners212-929-5500Media Contact:Dan Gagnier / Jeffrey
MathewsGagnier Communications646-569-5897
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