StoneMor Inc. Enters into Agreement to be Acquired by Axar Capital Management, LP
May 25 2022 - 9:00AM
StoneMor Inc. (NYSE: STON) (“StoneMor” or the
“Company”), a leading owner and operator of cemeteries and
funeral homes, today announced that it has entered into a
definitive merger agreement under which a subsidiary of Axar
Capital Management, LP (“Axar”) will be merged with and into
StoneMor and all outstanding shares of StoneMor common stock not
owned by Axar as to which dissenters’ rights are not perfected will
be converted into the right to receive $3.50 in cash per share.
Axar currently owns approximately 75% of the outstanding shares of
StoneMor common stock. The cash consideration represents a 54.2%
premium to the Company's closing share price on May 24, 2022, the
last trading day prior to today’s announcement of the execution of
a definitive merger agreement.
The agreement was entered into following receipt of a proposal
by Axar on September 22, 2021 in which Axar expressed an interest
in pursuing discussions concerning strategic alternatives that
might be beneficial to the Company and its various stakeholders.
The transaction was negotiated on behalf of StoneMor by the
Conflicts Committee of its Board of Directors, which is comprised
entirely of independent directors, with the assistance of
independent financial and legal advisors. Following the Conflicts
Committee’s unanimous recommendation, StoneMor’s Board of Directors
approved the merger agreement and has recommended that StoneMor’s
stockholders adopt and approve the merger agreement and the
merger.
“Our agreement with Axar delivers a significant premium for
StoneMor’s stockholders and ensures a strong foundation for us to
continue our expansion,” said Joe Redling, President and Chief
Executive Officer. “Our Board firmly believes that this transaction
is in the best interests of all of our stockholders other than Axar
and its affiliates and delivers an ongoing commitment to excellence
for our customers, employees and communities we serve.”
The agreement provides for a “go-shop” period during which the
Conflicts Committee (acting through its financial advisor) will
actively initiate, solicit, facilitate, encourage and evaluate
alternative acquisition proposals, and potentially enter into
negotiations with any parties that offer alternative acquisition
proposals. The “go-shop” period is 60 days subsequent to signing of
the Merger Agreement, ending July 23, 2022. There can be no
assurance that this “go-shop” process will result in a superior
proposal, particularly in light of Axar’s ownership position and
the fact that Axar has no obligation to support any such superior
proposal. StoneMor does not intend to disclose developments with
respect to the solicitation process unless and until its Conflicts
Committee and the Board of Directors has made a decision with
respect to any potential superior proposal. The Company will pay
Axar a termination fee in certain circumstances, including a fee
equal to 2% of the aggregate value of the non-Axar shares if the
Company terminates the agreement during the “go-shop” period to
enter into a superior proposal that Axar supports, and a fee equal
to 4% of the aggregate value of the non-Axar shares if the Company
terminates the agreement after the “go-shop” period to enter into a
superior proposal that Axar supports. No termination fee is payable
if the Company terminates the agreement upon a change of
recommendation in connection with a superior proposal that is not
supported by Axar. The merger is subject to approval by holders of
a majority of the outstanding common stock of StoneMor and in
addition, requires the approval by the holders of a majority of the
outstanding common stock of StoneMor not owned by Axar or any of
StoneMor’s directors or executive officers or members of their
immediate families. Axar has agreed to vote the shares of StoneMor
common stock it owns in favor of the merger agreement. The merger
agreement is also subject to customary closing conditions. Axar has
fully committed financing and the transaction is not subject to a
financing condition.
Subject to satisfaction of the conditions to closing, the
transaction is currently expected to close in the fall of 2022. If
the transaction is completed, StoneMor will become a privately held
company and its stock will no longer trade on the New York Stock
Exchange.
Duff & Phelps, now rebranded as Kroll, is serving as
financial advisor and Faegre Drinker Biddle & Reath LLP is
serving as legal counsel to the Conflicts Committee. Houlihan Lokey
is serving as financial advisor and Schulte Roth & Zabel LLP is
serving as legal counsel to Axar. Duane Morris LLP is serving as
legal counsel to the Company.
About StoneMor Inc.
StoneMor Inc., headquartered in Bensalem, Pennsylvania, is an
owner and operator of cemeteries and funeral homes in the United
States, with 304 cemeteries and 72 funeral homes in 24 states and
Puerto Rico. StoneMor’s cemetery products and services, which are
sold on both a pre-need (before death) and at-need (at death)
basis, include: burial lots, lawn and mausoleum crypts, burial
vaults, caskets, memorials, and all services which provide for the
installation of this merchandise. For additional information about
StoneMor Inc. please visit StoneMor’s website, and the investors
section, at http://www.stonemor.com.
Cautionary Note Regarding Forward-Looking
Statements
Certain statements contained in this press release, including,
but not limited to, information regarding activities of the
Conflicts Committee during the “go-shop” period, the anticipated
closing time frame and the effects of the merger on the Company,
are forward-looking statements. Generally, the words “believe,”
“may,” “will,” “would,” “estimate,” “continue,” “anticipate,”
“intend,” “project,” “expect,” “predict” and similar expressions
identify these forward-looking statements. These statements are
made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These statements are
based on management’s current beliefs, expectations, plans,
assumptions and objectives of the Company and are subject to
significant risks and uncertainties. All forward-looking statements
speak only as of the date as of which they are made. These
statements are not guarantees and involve certain risks,
uncertainties and assumptions concerning future events that are
difficult to predict. Factors that may cause actual results to
differ materially from current expectations include, but are not
limited to, the risk that the proposed transaction may not occur,
the risk of unexpected costs or liabilities, the risk that certain
closing conditions may not be timely satisfied or waived, the risk
of litigation, the risk that any announcements relating to the
proposed transaction could have adverse effects on the market price
of the Company’s common stock, and the risk that general and
business conditions may change. When considering forward-looking
statements, you should keep in mind the risk factors and other
cautionary statements set forth in StoneMor’s Annual Report on
Form 10-K and Quarterly Reports on
Form 10-Q and the other reports that StoneMor files with
the Securities and Exchange Commission (the “SEC”), from time to
time. Except as required under applicable law, StoneMor assumes no
obligation to update or revise any forward-looking statements made
herein or any other forward-looking statements made by it, whether
as a result of new information, future events or otherwise.
Additional Information and Certain Information Regarding
Participants
The Company, its directors and certain of its executive officers
may be deemed to be participants in the solicitation of proxies
from the Company’s stockholders in connection with the proposed
transaction. The Company intends to file a proxy statement and
other relevant materials with the SEC in connection with any such
solicitation of proxies from Company stockholders. COMPANY
STOCKHOLDERS ARE STRONGLY ENCOURAGED TO READ THE PROXY STATEMENT
AND ANY OTHER RELEVANT MATERIALS IN THEIR ENTIRETY WHEN THEY BECOME
AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION. Information
regarding the ownership of the Company’s directors and executive
officers in the Company’s common stock is included in their SEC
filings on Forms 3, 4, and 5, which can be found through the
Company’s website (http://www.stonemor.com), or through the SEC’s
website at www.sec.gov. Information can also be found in the
Company’s other SEC filings, including the Company’s Annual Report
on Form 10-K for the year ended December 31, 2021. More detailed
and updated information regarding the identity of potential
participants, and their direct or indirect interests, by security
holdings or otherwise, will be set forth in the proxy statement and
other materials to be filed with the SEC in connection with the
proposed transaction. Stockholders will be able to obtain the proxy
statement, any amendments or supplements to the proxy statement and
other documents filed by the Company with the SEC for no charge at
the SEC’s website at www.sec.gov. Copies will also be available at
no charge at the Company’s website at
http://www.stonemor.com or by writing to StoneMor at StoneMor
Inc., 3331 Street Road, Suite 200, Bensalem, PA 19020.
CONTACTInvestor RelationsStoneMor Inc.(215)
826-4438
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