Sale of National Holdings—Merger Discussion Update (Details):
National Holdings is now in merger discussions, and as a result, it has had to put its new $2 billion Stock Repurchase plan on hold. The Company had purchased only 80,000 shares ($0.2 billion) during 2015.
Today, NHLD can sell itself to CB Pharma for $3.25 cash. However, its stock has been in a lower trading range while its Independent Directors work with the Company’s outside advisors to obtain a superior value for NHLD’s stockholders via a sale of the Company at a price that is in line with recent precedent transactions. Clearly, the current stock price and the disclosed offers do not reflect NHLD's intrinsic value.
B. Riley's Letter-of-Intent to buy NHLD contained an “Exclusivity Period”, which, EXPIRED on December 28, 2015*, and as direct result, NHLD has contacted each company on its outside advisor’s "Prospects List" to identify any company interested in being a potential strategic partner or an acquirer. Based on interest expressed during these calls, NHLD sent a non-disclosure agreement to the prospective firms.
NHLD has received "non-binding" term-sheets outlining key terms and has entered into negotiations. The ensuing process, which includes Due Diligence by each company, Fairness Opinions by the outside advisors, and Board of Director approvals by both companies, should result in a Merger Agreement in about a month or so. In essence, NHLD will not announce anything until NHLD’s Board of Directors approve an offer that is deemed attractive in the form of a FINAL Merger Agreement.
*Consequences of the expiration of the "Exclusivity Period" of the B. Riley/NHLD Letter of Intent:
- NHLD did NOT sign the subscription agreement, and therefore, did NOT issue 1,538,462 new NHLD shares to B. Riley for $3.25 per share.
- NHLD did NOT appoint two nominees of B. Riley to its Board of Directors
- NHLD did NOT enter into a definitive agreement with B. Riley, whereby B. Riley would acquire all remaining NHLD’s shares for $3.25 per share all of which were to be paid in shares of B. Riley common stock.
- NHLD can solicit other offers and engage in any negotiations to be acquired by others.
- NHLD is no longer required to notify B. Riley of any discussions about another proposal or when others request information from the Company.
Note: LOI was dated 11/27/15 and signed 11/30/15, but Robert Fagenson told dizzydon the 30-day Exclusivity Period expired 11/28/15, the next business day after 11/27/15
