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Post by jlaw277 on Apr 9, 2014 8:35:48 GMT -5
Just saw this and am trying to make sense of it. link It might be that in the event of a negative Adcom outcome he was going to take the company private. Any other ideas? |
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Post by liane on Apr 9, 2014 8:41:38 GMT -5
Interesting. Backing up 2 levels on the same website: www.ftc.gov/enforcement/premerger-notification-programPremerger Notification Program The Hart-Scott-Rodino Act established the federal premerger notification program, which provides the FTC and the Department of Justice with information about large mergers and acquisitions before they occur. The parties to certain proposed transactions must submit premerger notification to the FTC and DOJ. Premerger notification involves completing an HSR Form, also called a “Notification and Report Form for Certain Mergers and Acquisitions,” with information about each company’s business. The parties may not close their deal until the waiting period outlined in the HSR Act has passed, or the government has granted early termination of the waiting period. For more information about the program, read our Introductory Guides. The FTC administers the premerger notification program, and the staff of the Premerger Notification Office is available to answer questions about how and when to file. (and more) |
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Post by kippyt on Apr 9, 2014 8:51:08 GMT -5
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Post by jlaw277 on Apr 9, 2014 8:52:54 GMT -5
It could be that Al is about to purchase more shares. It seems if the value of an individual's holdings exceed a certain level ($126.2 million) then there is a requirement to file with the FTC in order to meet certain HSR provisions. Check out pages 5-7 of this presentation (Note that public disclosure is a disadvantage of file for early termination): link
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Post by silentbob on Apr 9, 2014 8:55:45 GMT -5
This could simply be related to estate planning or other asset management actions by Mann.
It does not have to imply a complete acquisition, a change of control either directly or indirectly seems to be enough.
At least that's what I take from a short look on that website.
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Post by jlaw277 on Apr 9, 2014 9:07:06 GMT -5
Per Kippy's findings, the last time that this was done, Al converted debt to shares. Here in the proxy it states: "In February 2012, the Company entered into a Common Stock Purchase Agreement with The Mann Group LLC, an entity controlled by Alfred E. Mann pursuant to which the Company is required to issue and sell, and The Mann Group LLC is obligated to purchase, 31,250,000 shares of the Company’s common stock, subject to the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, (“HSR Clearance”) as amended, and the Company’s receipt of stockholder approval to increase the authorized number of shares of its common stock, as necessary. The price of the shares to be sold to under this agreement will be $2.47 per share (the consolidated closing bid price of the Company’s common stock on February 2, 2012 as reported on The NASDAQ Global Market). The aggregate purchase price for the shares of common stock the Company will issue and sell to The Mann Group LLC will be approximately $77.2 million and will be paid for by cancelling indebtedness under the Amended and Restated Promissory Note issued to The Mann Group LLC on August 10, 2010, as amended on January 16, 2012, pursuant to an existing $350 million revolving loan arrangement. The closing is expected to occur following receipt of HSR Clearance and stockholder approval." See here on page 16: link
Does anyone know how much debt is outstanding with Al's providing debt facility? If converting, he could be freeing up the company's balance sheet for a variety of reasons. |
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Post by jlaw277 on Apr 9, 2014 10:04:17 GMT -5
Looks like per the recent 10-k there was approximately $49.5 million outstanding on that facility and there is $30.1 million of future availability. (pages 88 & 89 of the 10-k) Possibly, this is what is being converted and why the early termination notice was filed. The question is, is this part of general on-going housekeeping or something else? The last times it was done (that I could find) in 2006 and 2012, the filing for early termination came in conjunction with a stock offering where Mann participated in order to maintain his ownership position. Canceling of debt was the method of payment in 2012 but does not look like it in 2006. Speculative take-aways: Perhaps the company is intending to raise more cash via a stock offering, or more optimistically, perhaps a potential partner does not want to see "up front" money flow to the Mann Group (for repayment) instead of being invested in the business and as such wants the debt facility payed down. Or maybe Al is converting now at a lower price prior to a potential significant rise in price. In any event, the early termination notice seems to be something that warrants notice. |
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Post by oncostat on Apr 9, 2014 10:14:34 GMT -5
Is it possible that the potential partner wants to purchase MNKD shares and Al wants to match the same # of shares in order to maintain the share % ?
It is still dilution, but I am guessing that the purchase price will be high in this case...
Oncostat
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Post by jlaw277 on Apr 9, 2014 10:31:52 GMT -5
Oncostat,
Very interesting idea. I guess we won't know until we know, but it seems clear given past history that something is afoot.
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Post by otherottawaguy on Apr 9, 2014 10:36:04 GMT -5
Possibly the "Extension Funding" bringing Mr Mann's ownership back up to pre Deerfield / ATM (x2) levels?
Think it was previously at 47%, corrects welcomed...
OOG
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Post by harshal1981 on Apr 9, 2014 10:45:11 GMT -5
It is nothing but a reporting requirement when a publicly traded entity is controlled by a single person or another entity. Don't read too much in it. Language in that reporting kind of points to different conclusions but its standard reporting language.
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Post by babaoriley on Apr 9, 2014 10:56:26 GMT -5
It is nothing but a reporting requirement when a publicly traded entity is controlled by a single person or another entity. Don't read too much in it. Language in that reporting kind of points to different conclusions but its standard reporting language. Completely agree, harshal. |
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Post by jlaw277 on Apr 9, 2014 11:17:40 GMT -5
Thanks Harshal. Although, as opposed to say reporting like Form 4, 10Q&K's and Def14a's, it appears that the Early Termination Notice is part of the Hart Scott Rodino Review Process / US Merger Review Process where proposed mergers, acquisitions and joint ventures are reviewed by the DOJ and FTC. So it looks like it is transactionally oriented as opposed to normal reporting. That being said, my guess is that OOG nailed it in saying that the Early Termination Notice is probably associated with the ATM and/or Deerfield funding where Al is seeking to maintain his ownership percentage and while helping the company by extinguishing debt.
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Post by harshal1981 on Apr 9, 2014 11:30:06 GMT -5
Thanks Harshal. Although, as opposed to say reporting like Form 4, 10Q&K's and Def14a's, it appears that the Early Termination Notice is part of the Hart Scott Rodino Review Process / US Merger Review Process where proposed mergers, acquisitions and joint ventures are reviewed by the DOJ and FTC. So it looks like it is transactionally oriented as opposed to normal reporting. That being said, my guess is that OOG nailed it in saying that the Early Termination Notice is probably associated with the ATM and/or Deerfield funding where Al is seeking to maintain his ownership percentage and while helping the company by extinguishing debt. I mentioned it on some other thread that management will highly likely tap in to Al's credit of $30 mil to support operations until Jul instead of using ATM. That debt will be conveniently converted to shares when it is still sup $7 so that Al gets more shares. And hence Al will maintain his % holding amid 20 million dilution due to Deerfield. (OOG pointed same). They will exercise ATM close to PDUFA when we can now certainly expect some run up in $8 range. That way they will have to issue less shares to raise $50 million at the market price. If you search on the same FTC website, there are similar filings for Al in Feb 2012 and 2006 as well. I suppose when he would have increased his positions in MNKD. |
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