TPG Specialty Lending, Inc. ("TSLX"; NYSE:TSLX), a specialty finance company
focused on lending to middle-market companies, today announced that it has
increased its offer, as a percentage of net asset value, to acquire TICC
Capital Corp. ("TICC"; Nasdaq: TICC) in a stock-for-stock transaction. TSLX
believes that its updated proposal is superior in that it would deliver to
ALL TICC stockholders an immediate, upfront premium and the opportunity to
participate in an industry-leading platform with a sustainable dividend.
Under the terms of the updated proposal announced today, TICC stockholders
would receive a number of shares of TSLX common stock that results in TICC
stockholders receiving 90% of TICC net asset value per share as of the
signing date of a definitive agreement. Based on TICC's reported net asset
value as of June 30, 2015, the updated proposal is equal to stockholders
receiving $7.74 per share.
TICC's stock price has not closed above 90% of its most recently reported
net asset value since December 10, 2014 and, based on its closing stock
price on Friday, October 30, 2015, is currently trading at a 25.7% discount
to TICC's most recently reported net asset value. The updated proposal adds
certainty for stockholders, indexing the value of TSLX's proposal with the
most recently reported net asset value. For example, should TICC's recent
investment performance increase net asset value, the TSLX proposal would
automatically increase to compensate stockholders for this value.
Josh Easterly, Chairman and Co-Chief Executive Officer of TSLX, commented:
"In recent weeks, TICC has readily admitted that the status quo is not a
viable path for the company and is not in the best interest of its
stockholders, who are overwhelmingly against TICC's proposed transaction
with Benefit Street Partners L.L.C. ("BSP"). The broader market has
recognized this as well. All of the major proxy advisory firms, five out of
six of TICC's own independent equity analysts, as well as many significant
stockholders have called on TICC to pursue a sale of TICC to deliver real
value to long-suffering TICC stockholders.
"Today we have increased the value of our proposal to demonstrate that we
are fully committed to completing this transaction. Our announcement today
addresses many of TICC's previous concerns and, most importantly, gives
stockholders a clear view on how our proposal delivers immediate and upfront
value for their investment. It is now time for TICC's board of directors to
act in the best interest of its stockholders and make the right choice by
engaging in substantive discussions with us.
"We also note that TICC is one of only approximately four BDCs that have yet
to announce the date on which they will release their latest financial
results. Stockholders should wonder why TICC is holding back on informing
stockholders about when it will update them regarding the state of their
investment.
"We stand by our superior proposal and remain confident that our increased
proposal is the most compelling option for TICC stockholders. We are ready
and willing to engage with TICC to make this transaction a reality."
In addition to the increased value and immediate upfront premium, key
benefits of the updated TSLX proposal include:
-- Only the TSLX proposal provides TICC stockholders with an immediate,
upfront premium for ALL of their shares;
-- The TSLX proposal is superior to the proposal made by BSP, whose share
repurchase program would result in the acquisition of only $50-$100
million of shares at 90% of net asset value, representing only
13.0-26.1%
of TICC's outstanding shares based on its October 30, 2015 closing stock
price of $6.39;
-- TICC stockholders would have the opportunity to participate in an
industry-leading platform that has delivered three-year total
stockholder
returns of 51.6%, a period in which the BDC sector generated 7.4% and
TICC generated NEGATIVE 13.9%;2
-- TSLX pays sustainable dividends funded by the income it generates rather
than its investors' own capital and expects to grow its dividend over
time as it executes its proven investment strategy;
-- TSLX has a stockholder-friendly approach to share buybacks and is
committed to repurchasing its stock if the share price falls below net
asset value;
-- TSLX has had lower relative fees than TICC since 2012, even when
compared
to the most recent BSP fee structure, after taking into account total
economic profit; and
-- TICC stockholders would benefit from the opportunity for increased
liquidity by owning shares in a combined company expected to have a pro
forma market capitalization in excess of $1.3 billion, as compared to
TICC's current market capitalization of approximately $380 million.
The updated proposed stockholder consideration reflects an increase as
compared to the 87% of TICC net asset value per share offered in the
original TSLX proposal delivered to the Special Committee of TICC's board of
directors on September 10, 2015. The proposal remains subject to the
negotiation of a definitive merger agreement with the board of directors of
TICC.
TSLX urges stockholders to vote against management's proposals on the GOLD
card today. Voting against the sale of TICC's adviser to an affiliate of BSP
will stop a transaction that rewards an underperforming manager and sends a
message to the TICC board of directors that it should engage with TSLX on
our superior proposal.
Goldman, Sachs & Co. is acting as financial advisor and Cleary Gottlieb
Steen & Hamilton LLP is acting as legal advisor to TSLX.
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