THE NEW HOME COMPANY INC. Item 1.01 Entry Into a Material Definitive Agreement
Agreement and Plan of Merger
On
The Company's Board of Directors (the "Board") unanimously determined that the transactions contemplated by the Merger Agreement, including the Offer and the Merger, are advisable, fair to and in the best interests of the Company and its stockholders, and approved the Merger Agreement and the transactions contemplated thereby, and recommended that the stockholders of the Company accept the Offer and tender their Shares in the Offer.
The Offer, once commenced, will initially remain open for a minimum of 20 business days, subject to certain possible extensions on the terms set forth in the Merger Agreement (as extended, the "Expiration Time"). If at the scheduled Expiration Time any of the conditions to the Offer have not been satisfied or waived, then Merger Sub will extend the Offer for one or more consecutive periods of up to 5 business days to permit the satisfaction of all Offer conditions, except that if the sole remaining unsatisfied Offer condition is the Minimum Condition (as defined below), Merger Sub will only be required to extend the Offer on up to three occasions of 5 business days each, unless Parent and the Company otherwise agree. If the debt financing (other than with respect to any revolving credit facility thereunder) is not available at the scheduled Expiration Time of the Offer and the holders of a majority of the Company Senior Notes (as such term is defined in the Merger Agreement) have not delivered consents to the waiver of the requirement of the Company to make a "Change of Control Offer" under the Company Senior Notes Indenture (as such term is defined in the Merger Agreement), Merger Sub may, subject to certain conditions, extend the Offer on up to three occasions of 5 business days each.
Upon the consummation of the Offer, Merger Sub will merge with and into the Company (the "Merger") pursuant to Section 251(h) of the Delaware General Corporation Law (the "DGCL") with the Company as the surviving corporation (the "Surviving Corporation").
Merger Sub's obligation to purchase the Shares validly tendered and not validly withdrawn pursuant to the Offer is subject to the satisfaction or waiver of customary conditions, including, among others, (i) there being validly tendered and not validly withdrawn immediately prior to the Expiration Time the number of Shares that, together with any Shares held by Parent, Merger Sub or any of their respective affiliates, represents at least a majority of all then outstanding Company Shares as of the Expiration Time (the "Minimum Condition"), (ii) the absence of any law, injunction, judgment or other legal restraint that prohibits consummation of the Offer or the Merger, (iii) the accuracy of the representations and warranties of the Company contained in the Merger Agreement, subject to customary exceptions; (iv) the Company's compliance in all material respects with its covenants and agreements contained in the Merger Agreement (v) the absence of any continuing event, development or circumstance that has had or would reasonably be expected to have a material adverse effect on the Company, (vi) the completion of the "Marketing Period" (as defined in the Merger Agreement), and (vii) the provision of certain financial information required pursuant to Merger Sub's debt commitments related to the Merger, as well as other customary conditions set forth in Annex A to the Merger Agreement.
At the effective time of the Merger (the "Effective Time"), each Share (other than Shares (i) owned directly by the Company (or any wholly owned subsidiary of the Company), Parent, Merger Sub or any of their respective affiliates prior to the Effective Time or (ii) owned by any stockholder who is entitled to demand and properly demands the appraisal of such shares in accordance with, and in compliance in all respects with, the DGCL) will be automatically cancelled and converted into the right to receive an amount in cash equal to the Offer Price, without interest and subject to applicable withholding (the "Merger Consideration").
In addition, immediately prior to the Effective Time, (i) each Company stock
option that is outstanding and unexercised, whether vested or unvested, shall be
automatically cancelled and terminated and converted into the right to receive
from the
--------------------------------------------------------------------------------
its terms as in effect as of immediately prior the Effective Time, in each case,
subject to such individual's continued employment with the
The Merger Agreement contains customary representations, warranties and covenants, including covenants obligating the Company to continue to conduct its business in the ordinary course, to cooperate in seeking any required regulatory approvals and not to engage in certain specified transactions or activities without Parent's prior consent, and that the parties will use reasonable best efforts to cause the Offer and the Merger to be consummated. In addition, subject to certain exceptions, the Company has agreed not to solicit, initiate, knowingly facilitate or encourage the submission or announcement of any acquisition proposals from third parties or take certain other restricted actions in connection therewith. Notwithstanding the foregoing, if the Company receives an acquisition proposal that did not result from a breach (other than a de minimis breach) of the non-solicitation provisions of the Merger Agreement, and the Board determines in good faith, after consultations with its outside legal counsel and financial advisor, that such proposal constitutes, or would reasonably be expected to lead to, a transaction that would be more favorable to the Company's stockholders than the Offer and the Merger (a "Superior Company Proposal" as further described and defined in the Merger Agreement) then the Company can participate in discussions and negotiations regarding such acquisition proposal if the failure to do so would breach the Board's fiduciary duties under applicable law, subject to the terms and conditions of the Merger Agreement.
The Merger Agreement also contains certain customary termination rights in favor
of each of the Company and Parent, including the Company's right, subject to
certain limitations, to terminate the Merger Agreement in certain circumstances
to accept a Superior Company Proposal and Parent's right to terminate the Merger
Agreement if the Board changes its recommendation that stockholders tender their
Shares in the Offer (as further described in the Merger Agreement). In addition,
either the Company or Parent may terminate the Merger Agreement if the Offer has
not been consummated by
The foregoing description of the Merger Agreement and the transactions contemplated thereunder is not complete and is qualified in its entirety by reference to the Merger Agreement, a copy of which is filed as Exhibit 2.1 to this Current Report on Form 8-K (this "Report") and incorporated herein by reference. The Merger Agreement and the foregoing description thereof have been . . .
Item 8.01 Other Events. Support Agreement
In connection with the execution of the Merger Agreement, Parent entered into a
tender and support agreement (the "Support Agreement") with certain of the
Company's stockholders, including its current directors and executive officers,
and
The foregoing description of the Support Agreement does not purport to be complete and is qualified in its entirety by reference to the form of Support Agreement, a copy of which is filed as Exhibit 99.1 to this Report and incorporated herein by reference.
Financing Commitments
Parent has obtained equity and debt financing commitments for the transactions
contemplated by the Merger Agreement, the aggregate proceeds of which will be
sufficient for Parent to pay the aggregate Merger Consideration and all related
fees and expenses and to repay any of the Company's existing indebtedness that
does not remain outstanding. Funds managed by affiliates of Apollo Global
Management, Inc. (collectively, the "Apollo Funds") have committed, pursuant to
an equity commitment letter dated as of
Parent and certain commitment parties have entered into a debt commitment
letter, dated
--------------------------------------------------------------------------------
FORWARD-LOOKING STATEMENTS
This document includes forward-looking statements which reflect management's
current views and estimates regarding the ability of the parties to complete the
proposed transaction and the expected timing of completion of the proposed
transaction, among other matters. The words "anticipate", "assume", "believe",
"continue", "could", "estimate", "expect", "forecast", "future", "guidance",
"imply", "intend", "may", "outlook", "plan", "potential", "predict", "project",
and similar terms and phrases are intended to identify forward-looking
statements, although not all forward-looking statements contain these
identifying words. The Company cannot assure investors that future developments
affecting the Company will be those that it has anticipated. Actual results may
differ materially from these expectations due to uncertainties related to the
successful completion of our acquisition by Parent and Merger Sub, or our
failure to complete such acquisition; the impact of the pendency of our
acquisition by Parent and Merger Sub on our business and operations; the timing
and expected financing of the tender offer and the merger; uncertainty
surrounding how many of the Company's stockholders will tender their shares in
the tender offer; the possibility that any or all of the various conditions to
the consummation of the tender offer, including the failure to receive required
regulatory approvals from any applicable governmental entities, may not be
satisfied or waived in a timely manner, if at all; the possibility of business
disruptions due to transaction-related uncertainty; the occurrence of any event,
change or other circumstance that could give rise to the termination of the
merger agreement; and other risks and uncertainties including those identified
under the heading "Risk Factors" in the Company's most recent Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q, each of which are filed with the
IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT
The tender offer for the outstanding shares of common stock of the Company has
not yet commenced. This communication is for informational purposes only and is
neither an offer to purchase nor a solicitation of an offer to sell shares of
the Company's common stock. The solicitation and offer to buy shares of the
Company's common stock will only be made pursuant to the tender offer materials
that Merger Sub intends to file with the
--------------------------------------------------------------------------------
Item 9.01 Financial Statements and Exhibits
(d) Exhibits Exhibit No. Description 2.1 Agreement and Plan of Merger, dated as ofJuly 23, 2021 , by and amongNewport Holdings LLC ,Newport Merger Sub, Inc. andThe New Home Company Inc. * 99.1 Form of Support Agreement. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
* Certain exhibits and schedules have been omitted pursuant to Item 601(b)(2) of
Regulation S-K.
any of the omitted exhibits and schedules upon request by the
however, that the Company may request confidential treatment pursuant to Rule
24b-2 of the Exchange Act for any exhibits or schedules so furnished.
--------------------------------------------------------------------------------
© Edgar Online, source
