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Annaly Capital (NLY) Begins Tender for CreXus Investment (CXS)

March 18, 2013 6:20 AM EDT Send to a Friend
Annaly Capital Management, Inc. (NYSE: NLY) announced that, through a newly formed subsidiary, CXS Acquisition Corporation (“Acquisition”), it has commenced an offer (the “Offer”) to purchase all the shares of CreXus Investment Corp. (NYSE: CXS) (“CreXus”) that Annaly does not already own for a price per share of $13.00 plus a sum approximating a prorated portion of the dividend the tendering stockholder would have received with regard to the quarter during which the offer expires, in cash net to the seller, but subject to any required withholding tax. The Offer will expire at 5:00 p.m. New York City time on April 16, 2013, unless it is extended.

The Board of Directors of CreXus, acting in accordance with a unanimous recommendation by a Special Committee of that Board consisting entirely of directors who are independent and are not employees or affiliates of Annaly or any of its subsidiaries (including the Annaly subsidiary that manages CreXus, FIDAC), unanimously (with the two directors who are employees of Annaly not present or voting) determined to recommend that the CreXus stockholders, other than Annaly and its subsidiaries, tender their shares in response to the Offer.

The Offer is being made pursuant to a previously announced Agreement and Plan of Merger dated as of January 30, 2013, among Annaly, Acquisition and CreXus. Under that Agreement and Plan of Merger, Acquisition will not be permitted to accept the shares that are tendered in response to the Offer unless they include at least 51% of the shares that are not owned by Annaly or any of its subsidiaries, or by officers or directors of Annaly, CreXus or FIDAC. If that condition is satisfied and Acquisition purchases the shares that are properly tendered and not withdrawn, Acquisition will subsequently be merged into CreXus (the “Merger”) in a transaction in which Annaly will become the sole stockholder of CreXus and the persons who are stockholders of CreXus immediately before the Merger will receive the same amount per share they would have received if they had tendered their CreXus stock in response to the Offer.

The payment in lieu of a dividend will be based on the dividend paid with regard to the calendar quarter immediately before the calendar quarter during which the Offer expires. CreXus has declared a dividend of $0.25 per share with regard to the first quarter of 2013 payable to holders of record on March 28, 2013. Therefore, if the expiration date of the Offer occurs during the second quarter of 2013, the payment in lieu of a dividend will be $0.002740 for each day between March 29, 2013, and the expiration date of the Offer (including the expiration date). If the Offer expires on April 16, 2013, the amount that will paid with regard to shares that are tendered in response to the Offer, and will be paid as a result of the Merger to CreXus stockholders who do not tender their shares, will be $13.05206 per share.

The Offer is subject to customary conditions in addition to the 51% tender condition. Annaly has the right to waive any or all of those additional conditions. Annaly also has the right to extend the expiration date of the Offer and to amend the terms of the Offer, except that the Agreement and Plan of Merger does not permit Annaly to decrease the offer price, to reduce the number of shares it is seeking or to change the form of consideration.

The Information Agent with regard to the offer is Innisfree M&A Incorporated, American Stock Transfer & Trust Company LLC is the Depositary, and BofA Merrill Lynch is the Dealer Manager.




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