ARMOUR Commences Tender Offer for JAVELIN Shares
10 Mars 2016 - 1:46AM
ARMOUR Residential REIT, Inc. (NYSE: ARR, ARR PrA and ARR PrB)
("ARMOUR") announced today that, through a newly formed subsidiary,
JMI Acquisition Corporation ("Acquisition"), it has commenced an
offer (the "Tender Offer") to purchase all the shares of common
stock ("Common Stock") of JAVELIN Mortgage Investment Corp.
(NYSE:JMI) ("JAVELIN") for consideration per share to be paid in
cash (the "Tender Offer Price"), equal to 87% of the book value per
share of Common Stock ("BVPS") calculated as of 5:00 P.M. New
York City time on the date that is ten (10) business days prior to
the expiration of the Tender Offer (the "Calculation Date"), in
accordance with the previously announced Agreement and Plan of
Merger dated as of March 1, 2016, among ARMOUR, Acquisition and
JAVELIN (the "Merger Agreement"), including a reduction of $1.0
million for JAVELIN's transaction expenses. The Tender Offer will
expire at 11:59 P.M. New York City time on April 1, 2016 (the
"Expiration Time"), unless it is extended. Estimates of Tender
Offer Price and BVPS will be calculated as of 5:00 P.M. New
York City time on the date of the Offer to Purchase and on every
business day thereafter until the Calculation Date and posted to
JAVELIN's website, www.javelinreit.com, as soon as reasonably
practicable. As of March 4, 2016, the business day prior to the
date of the Offer to Purchase, the estimated Tender Offer Price was
$7.21 per share, based upon JAVELIN's estimated BVPS of $8.28. The
calculations of estimated Tender Offer Price and BVPS will be
floating between today and the Calculation Date and could vary
significantly.
ARMOUR believes that this is an attractive offer
to JAVELIN stockholders because it represents:
- A 20% premium over the last reported sale price of JAVELIN's
Common Stock on March 1, 2016 (the last trading day before the
public announcement of ARMOUR's proposal to acquire the JAVELIN
shares at the Tender Offer Price);
- A 25% premium over the weighted average trading price of
JAVELIN's Common Stock during the thirty trading days ended on
March 1, 2016; and
- An 11% premium over ARMOUR's estimate of JAVELIN's liquidation
value, which is less than 80% of book value based on anticipated
costs to terminate financing, hedging and management agreements,
expenses of winding down operations and losses on an immediate
liquidation of assets. ARMOUR also believes that a liquidation in
the face of current market volatility would pose substantial risks
to JAVELIN stockholders' ability to realize this amount.
The Board of Directors of JAVELIN, acting upon a
recommendation by an independent special committee of the Board of
Directors consisting of the director who is not employed by or
otherwise affiliated with ARMOUR, ARMOUR Capital Management LP, the
external manager of JAVELIN and ARMOUR, or any of their respective
subsidiaries (the "Special Committee"), has unanimously determined
to recommend that the JAVELIN stockholders tender their shares in
the Tender Offer.
Under the Merger Agreement, Acquisition will not
accept shares that are tendered in the Tender Offer unless they
include greater than fifty percent (50%) of the total number of
outstanding shares of Common Stock that are not owned immediately
before the Expiration Time by ARMOUR, any of its subsidiaries or
any officers or directors of ARMOUR, or JAVELIN (the "Minimum
Condition"). The Minimum Condition is not waivable. If the Minimum
Condition is satisfied and Acquisition purchases the shares that
are properly tendered and not withdrawn, Acquisition will
subsequently be merged into JAVELIN (the "Merger") in a transaction
in which ARMOUR will become the sole stockholder of JAVELIN and the
persons who are stockholders of JAVELIN immediately before the
Merger will receive the same amount per share they would have
received if they had tendered their JAVELIN stock in the Tender
Offer.
JAVELIN's Board has declared a dividend of $0.09
per share payable on March 28, 2016, to the persons who are holders
of record of JAVELIN Common Stock on March 15, 2016. No further
dividends will be declared or paid in connection with the Tender
Offer and the Merger.
The Tender Offer is subject to customary
conditions in addition to the Minimum Condition. ARMOUR has the
right to waive any or all of those additional conditions. ARMOUR
also has the right to extend the expiration date of the Tender
Offer and to amend the terms of the Tender Offer, except that the
Merger Agreement does not permit ARMOUR to decrease the offer
price, to reduce the number of shares it is seeking or to change
the form of consideration.
Lazard Frères and Co. LLC served as financial
advisor to ARMOUR and provided a fairness opinion to ARMOUR's Board
of Directors. Akerman LLP served as legal counsel to ARMOUR. JMP
Securities LLC served as financial advisor to JAVELIN's Special
Committee and provided a fairness opinion to JAVELIN's Special
Committee. Duane Morris LLP and Venable LLP served as legal counsel
to JAVELIN's Special Committee. Wachtell, Lipton, Rosen & Katz
served as legal counsel to JAVELIN.
The Information Agent with regard to the Tender
Offer is Alliance Advisors LLC. Continental Stock Transfer &
Trust Company is the Depositary and Paying Agent.
Notice to Investors
This press release is not an offer to purchase,
or a solicitation of sales of, JAVELIN Common Stock or any other
securities. The Tender Offer is made solely by the Offer to
Purchase and the related Letter of Transmittal. Acquisition and
ARMOUR are filing with the Securities and Exchange Commission (the
"SEC") today a Tender Offer Statement on Schedule TO that includes
the Offer to Purchase and the related Letter of Transmittal and
other documents relating to the Tender Offer. In addition, JAVELIN
will file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 that describes, among other things, the unanimous
recommendation of JAVELIN's Board that JAVELIN's stockholders
tender their shares in the Tender Offer. The documents filed with
the SEC contain important information, and JAVELIN stockholders are
urged to read them and the exhibits to them in their entirety in
connection with their decision whether to tender their shares.
Those documents can be obtained at no charge at the SEC's website,
www.sec.gov. In addition, copies of the Offer to Purchase, the
Letter of Transmittal and other documents relating to the Tender
Offer can be obtained from the Information Agent, Alliance Advisors
LLC, at 200 Broadacres Drive, 3rd Floor, Bloomfield, NJ 07003, or
by calling toll free (888) 991-1294 (for stockholders) or (973)
873-7721 (for banks and brokers).
Forward-Looking Statements
This press release includes forward-looking
statements. Actual results may differ from expectations, estimates
and projections and, consequently, you should not rely on these
forward-looking statements as predictions of future
events. Words such as "expect," "estimate," "project,"
"budget," "forecast," "anticipate," "intend," "plan," "may,"
"will," "could," "should," "believes," "predicts," "potential,"
"continue," and similar expressions are intended to identify such
forward-looking statements. These forward-looking statements
involve significant risks and uncertainties that could cause the
actual results to differ materially from the expected results,
including (i) that changes in the market values of JAVELIN's
agency securities and derivatives, appraised values of its
non-agency securities, its repurchase agreement balances or other
elements of its book value per share, computed in accordance with
the terms of the Merger Agreement, could change in a manner that
would reduce the consideration to stockholders in the Tender Offer
or Merger, (ii) that the Tender Offer may not be completed at
all or on the terms described, and (iii) that the merger may not be
consummated. Additional information concerning these and other risk
factors are contained in the most recent filings of ARMOUR with the
SEC. All subsequent written and oral forward-looking
statements concerning ARMOUR are expressly qualified in their
entirety by the cautionary statements above. ARMOUR cautions
readers not to place undue reliance upon any forward-looking
statements, which speak only as of the date made. ARMOUR does
not undertake or accept any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statements
to reflect any change in their expectations or any change in
events, conditions or circumstances on which any such statement is
based.
ARMOUR Contact:
James R. Mountain
Chief Financial Officer
ARMOUR Residential REIT, Inc.
(772) 617-4340
Javelin Mortgage Investment Corp. (NYSE:JMI)
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