A Conditional Special Dividend of $0.50 per
Share Will Be Paid to USG Stockholders if the Merger Agreement is
Adopted
Holders of USG Stock on the Record Date Must
Hold that Stock Through the Conditional Special Dividend Payment
Date to Receive the Dividend
USG Corporation (NYSE: USG) today announced that it will hold a
special meeting of stockholders at 9:00 a.m. (Central Time) on
September 26, 2018, at USG’s corporate headquarters, 550 West Adams
Street, Chicago, Illinois 60661-3676. At the special meeting,
stockholders will be asked to take action to, among other things,
adopt the Agreement and Plan of Merger (the “merger agreement”),
dated as of June 10, 2018 with Gebr. Knauf KG (“Knauf”).
Stockholders of record as of the close of business on August 21,
2018 (the “record date”), will be entitled to vote at the special
meeting and any adjournment thereof. Under the terms of the merger
agreement, each share of common stock of USG, par value $0.10 per
share (“USG common stock”) issued and outstanding immediately prior
to the effective time of the merger (other than shares of USG
common stock owned by Knauf and its subsidiaries, USG or certain
other excluded holders pursuant to the terms of the merger
agreement) automatically will be converted into the right to
receive the closing consideration of $43.50 in cash.
The merger is subject to certain customary closing conditions,
including adoption of the merger agreement by the affirmative vote
of holders of at least 80 percent of the outstanding shares of USG
common stock and receipt of regulatory approvals. We expect the
merger to close in early 2019.
In addition, as contemplated by the merger agreement, the USG
board of directors has declared a conditional special cash dividend
of $0.50 per share of USG common stock (the “conditional special
dividend”) payable to holders of USG common stock as of the record
date, August 21, 2018, (subject to due bill trading as described
below) if the merger agreement is adopted by USG stockholders. If
the merger agreement is adopted, the conditional special dividend
will be paid following certification of the results of the special
meeting, and USG will announce publicly the date the conditional
special dividend will be paid (the “conditional special dividend
payment date”).
Important Information About the Special Cash Dividend
Due to the contingent nature of the conditional special
dividend, USG common stock will trade with “due bills,”
representing an assignment of the right to receive the conditional
special dividend, beginning on August 20, 2018 (one business day
prior to the record date) through the conditional special dividend
payment date (such period of time the “due bill period”). AS A
RESULT, HOLDERS OF USG COMMON STOCK ON THE RECORD DATE MUST HOLD
USG COMMON STOCK THROUGH THE CONDITIONAL SPECIAL DIVIDEND PAYMENT
DATE TO BE ENTITLED TO RECEIVE THE CONDITIONAL SPECIAL
DIVIDEND. PURCHASERS OF USG COMMON STOCK DURING THE DUE BILL
PERIOD (EVEN IF THE TRADE WILL SETTLE AFTER THE DUE BILL PERIOD)
WHO HOLD SUCH SHARES OF RECORD ON THE CONDITIONAL SPECIAL DIVIDEND
PAYMENT DATE WOULD BE ENTITLED TO RECEIVE THE CONDITIONAL SPECIAL
DIVIDEND IN THE EVENT STOCKHOLDER APPROVAL OF THE ADOPTION OF THE
MERGER AGREEMENT IS OBTAINED. STOCKHOLDERS THAT SELL USG COMMON
STOCK DURING THE DUE BILL PERIOD (EVEN IF THE TRADE WILL SETTLE
AFTER THE DUE BILL PERIOD) ARE NOT ENTITLED TO RECEIVE THE
CONDITIONAL SPECIAL DIVIDEND IN THE EVENT STOCKHOLDER APPROVAL OF
THE ADOPTION OF THE MERGER AGREEMENT IS OBTAINED. The due bill
obligations are settled customarily between the brokers
representing the buyers and sellers of USG common stock. USG has no
obligations for either the amount of the due bill or the processing
of the due bill. Buyers and sellers of USG common stock during the
due bill period should consult with their broker before trading in
USG common stock to be sure they understand the effect of due-bill
procedures.
USG common stock will begin to trade ex-dividend on the first
business day after the conditional special dividend payment date.
AS A RESULT, INVESTORS WHO ENTER INTO TRADES TO PURCHASE USG COMMON
STOCK ON OR AFTER THE EX-DIVIDEND DATE WILL NOT RECEIVE THE
CONDITIONAL SPECIAL DIVIDEND.
For U.S. federal income tax purposes, the conditional special
dividend will be characterized as a dividend to the extent paid out
of USG’s current or accumulated earnings and profits through the
end of the 2018 taxable year, as determined for U.S. federal income
tax purposes. Based on USG’s estimate of its current and
accumulated earnings and profits, it currently expects that only a
portion of the amount of the conditional special dividend will be
paid out of earnings and profits and thus treated as a dividend for
U.S. federal income tax purposes. To the extent that the
conditional special dividend exceeds USG’s current and accumulated
earnings and profits, the excess will first reduce the
stockholder’s basis in USG common stock, but not below zero, and
then will be treated as gain from the sale of the stockholder’s USG
common stock.
Stockholders should review USG’s definitive proxy statement, to
be filed with the Securities and Exchange Commission (the “SEC”).
USG expects to begin mailing the definitive proxy statement to its
stockholders promptly following the record date for the special
meeting. The definitive proxy statement will provide information
for USG stockholders, as well as instructions on voting and
additional details regarding the conditional special dividend and
U.S. federal income tax treatment. Shareholders should consult with
their own tax advisors regarding the particular tax consequences of
receipt of the conditional special dividend pursuant to the merger
agreement in light of their particular circumstances.
Cautionary Note Regarding USG Corporation Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
related to USG management's expectations about future conditions,
including but not limited to, statements regarding the proposed
merger with Knauf (the “proposed transaction”), including expected
timing, completion and effects of the proposed transaction. In some
cases, forward-looking statements include, without limitation, any
statement that may project, indicate or imply future results,
events, performance or achievements, and may contain the words
"expect," "intend," "plan," "anticipate," "estimate," "believe,"
"may," "will be," "will continue," "will likely result" and similar
expressions. Actual business, market or other conditions may differ
materially from USG management's expectations and, accordingly, may
affect its sales and profitability, liquidity and future value. Any
forward-looking statements represent its views only as of today and
should not be relied upon as representing its views as of any
subsequent date, and USG undertakes no obligation to update any
forward-looking statement. Among the risks, contingencies and
uncertainties that could cause actual results to differ from those
described in the forward-looking statements or could result in the
failure of the proposed transaction to be completed are the
following: the failure to obtain the necessary USG stockholder
approval for the proposed transaction; the failure to obtain
necessary regulatory or other governmental approvals for the
proposed transaction, or if obtained, the possibility of being
subjected to conditions that could result in a material delay in,
or the abandonment of, the proposed transaction or otherwise have
an adverse effect on USG; continued availability of financing or
alternatives for the financing provided in the Knauf debt
commitment letter; the failure to satisfy required closing
conditions; the potential impact on the UBBP joint venture in the
event the proposed transaction is not completed, including the risk
that, in connection with the execution of the merger agreement,
Boral Limited has the right to exercise its option to acquire USG’s
ownership of the UBBP joint venture; the risk that the proposed
transaction may not be completed in the expected timeframe or at
all; the effect of restrictions placed on USG and its subsidiaries’
ability to operate their businesses under the merger agreement,
including USG’s ability to pursue alternatives to the proposed
transaction; the risk of disruption resulting from the proposed
transaction, including the diversion of USG’s resources and
management’s attention from ongoing business operations; the effect
of the announcement of the proposed transaction on USG’s ability to
retain and hire key employees; the effect of the announcement of
the proposed transaction on USG’s business relationships, of
operations, financial condition, the market price of USG’s common
stock and businesses generally; the risk of negative reactions from
investors, employees, suppliers and customers; the outcome of any
legal proceedings that may be instituted against USG related to the
proposed transaction; the amount of the costs, fees, expenses and
charges related to the proposed transaction; and the occurrence of
any event giving rise to the right of a party to terminate the
merger agreement. Information describing other risks and
uncertainties affecting USG that could cause actual results to
differ materially from those in forward-looking statements may be
found in USG’s filings with the SEC, including, but not limited to,
the "Risk Factors" in USG’s most recent Annual Report on Form 10-K
and most recent Quarterly Report on Form 10-Q.
Additional Information and Where to Find It
This press release relates to the proposed transaction involving
USG and Knauf. In connection with the proposed transaction, USG
intends to file with the SEC and mail or otherwise provide to its
stockholders a proxy statement on Schedule 14A (the “Proxy
Statement”). This press release does not constitute an offer to
sell or the solicitation of an offer to buy any securities or a
solicitation of any vote or approval, and is not a substitute for
the Proxy Statement or any other document that USG may file with
the SEC or send to its stockholders in connection with the proposed
transaction. USG STOCKHOLDERS ARE URGED TO READ ALL RELEVANT
DOCUMENTS FILED WITH THE SEC, INCLUDING THE PROXY STATEMENT, WHEN
THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security
holders will be able to obtain the documents (when available) free
of charge at the SEC’s web site, http://www.sec.gov, and USG’s
website, www.usg.com, and USG stockholders will receive information
at an appropriate time on how to obtain transaction-related
documents for free from USG. In addition, the documents (when
available) may be obtained free of charge by a request in writing
to USG at 550 West Adams Street, Chicago, Illinois 60661-3676,
attention: Corporate Secretary.
Participants in Solicitation
USG and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from the holders of USG
common stock in respect of the proposed transaction. Information
about the directors and executive officers of USG is set forth in
the proxy statement for USG’s 2018 annual meeting of stockholders,
which was filed with the SEC on March 29, 2018, USG’s proxy
supplement, which was filed with the SEC on April 20, 2018, and in
USG’s Annual Report on Form 10-K for the fiscal year ended December
31, 2017, which was filed with the SEC on February 14, 2018. Other
information regarding the participants in the proxy solicitation
and a description of their direct and indirect interests, by
security holdings or otherwise, will be contained in the Proxy
Statement and other relevant materials to be filed with the SEC in
respect of the proposed transaction when they become available.
About USG Corporation
USG Corporation is an industry-leading manufacturer of building
products and innovative solutions. Headquartered in Chicago, USG
serves construction markets around the world through its Gypsum,
Performance Materials, Ceilings, and USG Boral divisions. Its wall,
ceiling, flooring, sheathing and roofing products provide the
solutions that enable customers to build the outstanding spaces
where people live, work and play. Its USG Boral Building Products
joint venture is a leading plasterboard and ceilings producer
across Asia, Australasia and the Middle East. For additional
information, visit www.usg.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20180809005068/en/
Media:Sard Verbinnen & Co:Jim
Barron/Pam Greene, 212-687-8080orUSG Corporation:Kathleen Prause,
312-436-6607KPrause@usg.comorInvestors:USG Corporation:Bill Madsen,
312-436-5349investorrelations@usg.com
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