Spectrum Group Amends $7-9M Reduction in Securities Purchase Agreement
Spectrum Group International, Inc. (SPGZ) announced today that it has entered into an amendment to the securities purchase agreement with Afinsa Bienes Tangibles, S.A. En Liquidacion, and its wholly owned subsidiary Auctentia, S.L. with respect to the purchase of Afinsa's and Auctentia's ownership interest in SGI and SGI's 80%-owned trading subsidiary, A-Mark Precious Metals, Inc.
The amendment reduces the number of shares of SGI's common stock to be purchased from Afinsa and Auctentia to a number that would leave Afinsa and Auctentia collectively owning 9.9% of the issued and outstanding shares of the Company's common stock outstanding immediately following consummation of the purchase transaction. The purchase price will be reduced by $2.50 for each share of SGI's common stock retained by Afinsa and Auctentia. It is anticipated that this will result in a reduction in the original $58.25 million purchase price of between $7 million and $9 million, although the actual number of shares to be retained by Afinsa and Auctentia and the reduction in the purchase price will depend on the number of shares sold in the rights offering and the private placement currently being conducted by the Company.
Under the terms of the amendment, Antonio Arenas, a representative of Afinsa on the Company's Board of Directors, will step down from his position as executive chairman effective upon the closing of the transaction, but will continue to serve as a director for so long as Afinsa and Auctentia beneficially own 5% or more of the Company's common stock in the aggregate. George Lumby, Afinsa's other representative on the Board, will step down upon closing of the transaction, as originally provided in the securities purchase agreement. The Company has also agreed that, when Afinsa and Auctentia decide to sell the shares of common stock retained by them, it will use its reasonable commercial efforts to assist them in the sale in an orderly manner that will be non-disruptive to the public market for the common stock and at prices acceptable to Afinsa and Auctentia.
Under the terms of the rights offering, each holder of common stock (other than Afinsa and Auctentia) received 1.4 transferable subscription rights for each share of common stock owned as of the record date of July 31, 2012. Each transferable subscription right entitles its holder to purchase one share of common stock at a subscription price equal to $1.90 per share. Holders of rights are also entitled to exercise customary oversubscription rights. The transferable subscription rights issued by the Company may be exercised at any time prior to 5:00 p.m. New York City time on Thursday, September 20, 2012.
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