—Offer Represents a 27.5% Premium to CENT’s Unaffected Share Price—
—Alternative Proposal Seeks to Acquire CENT’s Pet Segment for $750
million in Cash—
—Urges Board to Fulfill its Fiduciary Duties to all Stockholders—
NEW YORK--(BUSINESS WIRE)--Jun. 23, 2014--
Harbinger Group Inc. (“HRG”) today released its most recent letter that
it sent to the Board of Directors (“CENT Board”) of Central Garden & Pet
Company (“CENT”) on June 16, 2014. As outlined in such letter (a copy of
which is provided below), HRG is offering to acquire, directly or
through one of its affiliates, all of CENT for $10.00 in cash per share
of Common Stock, Class A Common Stock and Class B stock, representing a
27.5% premium over the Company’s unaffected Common Stock price of $7.84
at the close of business on June 6 (the last trading day before HRG
publicly released its previous letter to CENT), or alternatively to
acquire CENT’s Pet Segment for $750 million in cash. HRG also indicated
that it may be able to further increase the value of its current
proposals if the CENT Board engages in a constructive dialogue and
grants access to customary diligence materials.
In addition to its previous
letter sent to the CENT Board on June 9, 2014, HRG has repeatedly
attempted to communicate with the CENT Board regarding the opportunity
to create value from a potential transaction with CENT, including
offering to meet in person with the Chairman of the Board. To date, the
CENT Board and management have been unresponsive. In light of HRG’s
desire to commence meaningful dialogue with the CENT Board and
management team, and the complete lack of response from CENT, HRG is
making its most recent letter public.
Based on reactions of other CENT shareholders in response to its
previous letter of June 9th, HRG believes that there is wide and
emphatic support for the CENT Board to engage with HRG and consider its
proposals.
HRG believes that the CENT Board should impartially assess HRG's
proposal and determine the course of action that is in the best interest
of all of the Company’s stockholders and not only in the best interest
of Mr. Brown. Accordingly, as a minority shareholder, HRG urges the CENT
independent directors to promptly form a special committee of the CENT
Board and retain legal and financial advisors who are independent and do
not have a long standing relationships with the Company or Mr. Brown.
HRG believes that the formation of a special committee and retention of
independent advisors is an important first step in the CENT Board
fulfilling its fiduciary obligations to all of its stockholders.
Full text of the HRG letter follows:
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Members of the Board of Directors
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Central Garden & Pet Company
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1340 Treat Blvd., Suite 600
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Walnut Creek, California 94597
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Ladies and Gentlemen:
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On behalf of Harbinger Group Inc., I write further to my letter,
dated June 9, 2014, to again express our interest in entering into
an acquisition transaction with Central Garden & Pet Company (the
“Company”). As a clear sign of our seriousness to effect a
transaction, we are prepared (directly or through one or more of our
affiliates) to enter into one of the following two alternative
acquisition proposals:
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(i) acquire the Company at a price of $10.00 in cash per share of
Common Stock, Class A Common Stock and Class B Stock, representing a
27.5% premium over the Company's unaffected stock price of $7.84 at
the close of business on June 6 (the last trading day before we
publicly released our previous letter to you); or
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(ii) acquire the Pet segment for $750 million in cash.
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We firmly believe that either transaction would provide the
Company’s stockholders with a tremendous opportunity to realize the
Company’s value.
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The valuation underlying our proposals is based solely on publicly
available information because, despite numerous prior requests, we
have not been provided with the opportunity to engage in a dialogue
with the Company. We believe that through a constructive dialogue
with the Company’s Board and access to customary diligence
materials, we will be able to further increase the value of our
current proposals. We are confident that we can provide you with the
highest price, but are also willing, if necessary, to provide you
with sufficient time after signing a transaction agreement to test
the market for interest in a transaction at an even higher premium.
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In the face of the significant premium we are offering, combined
with your ability to potentially obtain even greater value from
either us or from a third party, we urge you as members of the Board
to fulfill your fiduciary duties to all the stockholders by engaging
with us regarding our value creating proposals. Based on the
reactions we have heard from many of the Company's stockholders in
response to our June 9 letter, we believe that the Company’s
stockholders emphatically support the Board’s entering into a
constructive and professional dialogue with us, and see absolutely
no downside in doing so.
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We are a diversified holding company and, together with our
affiliates, have a proven track record of successfully executed
transactions, including transactions in the branded consumer
products sector. We and our affiliates have substantial current
liquidity and have discussed with, and received further assurances
from, our financial advisor that we have the ability to finance the
consideration for either transaction.
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Our proposals are subject to customary confirmatory due diligence
review of the Company. We are prepared to devote considerable
resources to completing such review and consummating either of the
transactions proposed in this letter quickly, and are confident that
with your cooperation we will be able to execute a definitive
transaction agreement within 45 days.
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We are prepared to meet immediately with you and your advisors in
order to answer any questions about our proposals and to work out
the details for moving toward a completed transaction. Nothing in
this letter is intended to create a legally binding obligation, and
no such obligation will exist unless and until a definitive
transaction agreement is executed.
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We are very much looking forward to working toward a mutually
beneficial transaction.
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Very truly yours,
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/s/ Philip A. Falcone
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Philip A. Falcone
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Chief Executive Officer
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About Harbinger Group Inc.
Harbinger Group Inc. is a diversified holding company. HRG’s principal
operations are conducted through companies that: offer life insurance
and annuity products; offer branded consumer products (such as consumer
batteries, residential locksets, residential builders’ hardware,
faucets, shaving and grooming products, personal care products, small
household appliances, specialty pet supplies, lawn, garden and home pest
control products, personal insect repellents); provide asset-backed
loans; and own energy assets. HRG is principally focused on acquiring
controlling and other equity stakes in businesses across a diversified
range of industries and growing its existing businesses. In addition to
HRG’s intention to acquire controlling equity interests, HRG may also
make investments in debt instruments and acquire minority equity
interests in companies. HRG is headquartered in New York and traded on
the New York Stock Exchange under the symbol HRG. For more information
on HRG, visit: harbingergroupinc.com.
Forward Looking Statements
“Safe Harbor” Statement Under the Private Securities Litigation Reform
Act of 1995: This release contains, and certain oral statements made by
our representatives from time to time may contain, forward-looking
statements, including statements regarding the proposals and potential
transactions described herein and those contained in the letters
(“Letters”) sent to the Board of Directors of Central Garden & Pet
Company (“CENT”) and the potential impact of such transactions. Such
statements are based on the beliefs and assumptions of HRG's management
and the management of HRG's subsidiaries (including target businesses).
Generally, forward-looking statements include information concerning the
transactions described herein, other actions, events, results,
strategies and expectations and are generally identifiable by use of the
words “believes,” “expects,” “intends,” “anticipates,” “plans,” “seeks,”
“estimates,” “projects,” “may,” “will,” “could,” “might,” or “continues”
or similar expressions. Factors that could cause actual results, events
and developments to differ include, without limitation, that possibility
that no discussions are had between HRG and CENT or such discussion are
terminated, no transaction is consummated with CENT, a materially
different transaction is consummated with CENT than those described
herein or in the Letters and/or HRG or its affiliates change their
intentions or plans with respect to CENT, including their desire to
consummate a transaction or continue their investment in CENT. Other
general factors that could cause actual results, events and developments
to differ include: capital market conditions, the ability of HRG’s
subsidiaries (including, target businesses following their acquisition)
to generate sufficient net income and cash flows to make upstream cash
distributions, HRG’s and its subsidiaries’ ability to identify any
suitable future acquisition opportunities and their ability to achieve
efficiencies/cost avoidance, cost savings, income and margins, growth,
economies of scale and combined operations, future economic performance,
conditions to, and the timetable for, completing the integration of
financial reporting of acquired or target businesses with HRG or HRG
subsidiaries, completing future acquisitions and dispositions,
litigation, potential and contingent liabilities, management's plans,
changes in regulations, taxes and the risks that may affect the
performance of the operating subsidiaries of HRG and those factors
listed under the caption “Risk Factors” in HRG's most recent Annual
Report on Form 10-K and Quarterly Reports on Form 10-Q, filed with the
Securities and Exchange Commission. All forward-looking statements
described herein are qualified by these cautionary statements and there
can be no assurance that the actual results, events or developments
referenced herein will occur or be realized. Neither HRG nor any of its
affiliates undertake any obligation to update or revise forward-looking
statements, including to reflect changed facts, assumptions or the
occurrence of future events or results.
Source: Harbinger Group Inc.
Investors:
Harbinger Group Inc.
James Hart, w: 212-906-8560,
m: 908-672-7915
Investor Relations
or
Media:
Kekst
and Company
Jeremy Fielding / Margaret Rohrmann
212-521-4800
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