HC2 Receives Non-Binding Indication of Interest for Potential Acquisition of Continental Insurance Business
December 10 2020 - 4:17PM
HC2 Holdings, Inc. (“HC2” or the “Company”) (NYSE: HCHC), a
diversified holding company, announced today that it has received a
non-binding indication of interest (the “Indication of Interest”)
for the potential acquisition of the Company’s insurance segment
from Continental General Holdings LLC (the “Buyer”), an entity
controlled by Michael Gorzynski, a director of the Company and
beneficial owner of approximately 6.6% of the Company’s outstanding
common stock, for a total potential transaction value of
approximately $90 million, subject to certain adjustments,
consisting of, among other things, a combination of $65 million in
cash and the transfer to HC2 (or cancellation) and/or modification
of the terms of certain HC2 and HC2-affiliate securities owned by
Continental. The Company’s insurance segment is comprised of
Continental Insurance Group Ltd. and its indirect, wholly-owned
subsidiaries, Continental General Insurance Company and Continental
LTC Inc. (collectively, “Continental”).
The transactions contemplated by the Indication of Interest are
expected to be conditioned on, among other things, receipt of all
necessary regulatory approvals (including approval by the Texas
Department of Insurance), receipt of other required consents and
approvals, receipt of a fairness opinion and approval by the board
of directors of HC2 (the “Board”). Mr. Gorzynski, Executive
Chairman of Continental General Insurance Company in addition to
his role as a director of HC2, and Kenneth Courtis, an HC2
director, are recusing themselves from Board deliberations on this
matter.
The Board intends to engage a financial advisor, following which
time it expects to carefully evaluate the Indication of Interest
and, if appropriate, negotiate with representatives of the Buyer.
Skadden, Arps, Slate, Meagher & Flom LLP is serving as HC2’s
legal advisor. The Company is not in a position to make any
prediction at this time as to its response to the Buyer or any
outcome relating to the Indication of Interest. There can be no
assurance that any proposal or binding offer will be made or
accepted, that any definitive agreement will be executed (or the
timing or final terms thereof), or that any transaction will be
consummated in connection with the Indication of Interest. The
Company expects to file with the U.S. Securities and Exchange
Commission a Current Report on Form 8-K that will include a
description of the Indication of Interest.
HC2 recently completed a $65 million rights offering and has
been evaluating its portfolio to simplify its business, position
the Company for growth and profitability, and enhance its capital
structure.
About HC2
HC2 Holdings, Inc.(NYSE: HCHC) has a class leading portfolio of
assets primarily in Infrastructure, Life Sciences, Clean Energy,
Spectrum and Insurance. HC2’s largest operating subsidiary is
DBM Global Inc., a family of companies providing fully integrated
structural and steel construction services. Founded in 1994, HC2 is
headquartered in New York, New York and directly employs 18
people.
Cautionary Statement Regarding Forward-Looking
Statements
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995: This press release contains, and certain oral
statements made by our representatives from time to time may
contain, forward-looking statements regarding the Indication of
Interest and the transactions contemplated thereby, all of which
involve risks, assumptions and uncertainties, many of which are
outside of the Company’s control, and are subject to change.
Accordingly, no assurance can be given that any proposal or binding
offer will be made or accepted, or that any transaction will be
consummated on the terms contained in the Indication of Interest,
or at all. All forward-looking statements speak only as of the date
made, and unless legally required, HC2 undertakes no obligation to
update or revise publicly any forward-looking statements, whether
as a result of new information, future events or otherwise.
Media Contact:ReevemarkPaul
Caminiti/Pam Greene/Luc HerbowyHC2@reevemark.com(212) 433-4600
Investor Contact: FNK IRMatt Chesler,
CFAir@hc2.com(212) 235-2691
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