Stockholders Are to Take No
Action on Percy Rockdale’s Consent Solicitation Materials
HC2 Continues to
Successfully Execute on the Company’s Strategy to Reduce Debt and
Pursue Strategic Alternatives, Which Has Resulted in a Positive ~24%
YTD Return for Stockholders Despite Recent Market Dislocation
Percy Rockdale Repeatedly
Refuses to Engage With HC2 Despite the Company’s Multiple Efforts to
Have a Constructive Dialogue That Would Benefit All Stockholders
Percy Rockdale’s Consent
Solicitation Will Result in Increased Company Expenses Jeopardizing
Stockholder Value Given the Company’s Annual Meeting Is Only a Few
Months Away
NEW YORK, March 13, 2020 (GLOBE
NEWSWIRE) -- HC2 Holdings, Inc. (“HC2” or the “Company”) (NYSE: HCHC),
a diversified holding company, issued the following statement in
response to Percy Rockdale LLC’s (“Percy Rockdale”) preliminary
consent solicitation filing with the Securities and Exchange
Commission.
HC2 urges all of its
stockholders to refrain from taking any action, including returning
any consent card sent by Percy Rockdale, at this time. Our Board of
Directors, in consultation with its advisors, is carefully reviewing
Percy Rockdale’s solicitation materials and will advise stockholders
of its recommendation regarding the solicitation in due course.
“HC2 is puzzled by Percy
Rockdale’s course of action, given the Company’s annual meeting is
only a few months away. This distracting and costly approach will only
serve to significantly increase the Company’s expenses and destroy
stockholder value,” commented Wayne Barr, lead independent director of
HC2.
“As previously noted, HC2 has
offered to engage directly with Percy Rockdale on multiple occasions
and to actively work with them to address their concerns in a
cooperative manner which benefits all stockholders. Percy Rockdale
continually refuses to engage with HC2’s management or the Board of
Directors. Nevertheless, the Nominating and Governance Committee of
HC2’s Board of Directors will carefully review the preliminary consent
statement and continue to work on behalf of the best interests of all
stockholders.”
HC2 is dismayed that Percy
Rockdale has chosen to move forward with a value-destroying public
campaign mere months away from the Company’s annual meeting and as HC2
continues to successfully execute on the Company’s debt reduction
strategy, which includes the:
- Completed sale of Global Marine Group and
the impending close on the sale of Global Marine Group’s 49% joint
venture with Huawei Marine Networks Co., Ltd.
- Impending redemption of a sizable portion of
the Company’s 11.5% Notes due 2021
- Advanced discussions to divest Continental
Insurance and the exploration of strategic options for DBM Global
Inc.
- Recent expansion and diversification of our
Board of Directors, and
- Meaningful reduction in corporate overhead
costs.
“HC2’s Board and management
team continue to execute on the Company’s strategic plan to monetize
assets and further reduce debt. We believe successful execution of our
strategy in the coming months is HC2’s most effective course of
action,” said Philip Falcone, Chairman, President and Chief Executive
Officer of HC2.
HC2 stockholders are not
required to take action at this time.
About HC2
HC2 Holdings, Inc. is a
publicly traded (NYSE: HCHC) diversified holding company, which seeks
opportunities to acquire and grow businesses that can generate
long-term sustainable free cash flow and attractive returns in order
to maximize value for all stakeholders. HC2 has a diverse array of
operating subsidiaries across multiple reportable segments, including
Construction, Energy, Telecommunications, Life Sciences, Broadcasting,
Insurance and Other. HC2’s largest operating subsidiary is DBM Global
Inc., a family of companies providing fully integrated structural and
steel construction services. Founded in 1994, HC2 is headquartered in
New York, New York. Learn more about HC2 and its portfolio companies
at
www.hc2.com.
Cautionary Statement
Regarding Forward-Looking Statements
Safe Harbor Statement under the
Private Securities Litigation Reform Act of 1995: This press release
contains, and certain oral statements made by our representatives from
time to time may contain, forward-looking statements. Generally,
forward-looking statements include information describing 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. The
forward-looking statements in this press release include, without
limitation, any statements regarding our expectations regarding
building stockholder value, future cash flow, longer-term growth and
invested assets, the timing or prospects of any refinancing of HC2's
remaining corporate debt, any statements regarding HC2’s expectations
regarding entering definitive agreements in respect of the potential
divestitures of Continental Insurance and/or DBM Global, reducing
HC2’s leverage and related interest expense at the holding company
level generally and with the net proceeds of such divestitures,
reducing corporate overhead, growth opportunities at HC2’s
Broadcasting and Energy businesses and unlocking value at HC2’s Life
Sciences segment. Such statements are based on the beliefs and
assumptions of HC2’s management and the management of HC2’s
subsidiaries and portfolio companies. The Company believes these
judgments are reasonable, but you should understand that these
statements are not guarantees of performance or results, and the
Company’s actual results could differ materially from those expressed
or implied in the forward-looking statements due to a variety of
important factors, both positive and negative, that may be revised or
supplemented in subsequent statements and reports filed with the
Securities and Exchange Commission (“SEC”), including in our reports
on Forms 10-K, 10-Q, and 8-K. Such important factors include, without
limitation, issues related to the restatement of our financial
statements; the fact that we have historically identified material
weaknesses in our internal control over financial reporting, and any
inability to remediate future material weaknesses; capital market
conditions, including the ability of HC2 and HC2’s subsidiaries to
raise capital; the ability of HC2’s subsidiaries and portfolio
companies to generate sufficient net income and cash flows to make
upstream cash distributions; volatility in the trading price of HC2
common stock; the ability of HC2 and its subsidiaries and portfolio
companies to identify any suitable future acquisition or disposition
opportunities; our ability to realize efficiencies, cost savings,
income and margin improvements, growth, economies of scale and other
anticipated benefits of strategic transactions; difficulties related
to the integration of financial reporting of acquired or target
businesses; difficulties completing pending and future acquisitions
and dispositions; effects of litigation, indemnification claims, and
other contingent liabilities; changes in regulations and tax laws; and
risks that may affect the performance of the operating subsidiaries
and portfolio companies of HC2. Although HC2 believes its expectations
and assumptions regarding its future operating performance are
reasonable, there can be no assurance that the expectations reflected
herein will be achieved. There can be no assurance that the HMN
transaction will be completed as proposed or at all. These risks and
other important factors discussed under the caption “Risk Factors” in
our most recent Annual Report on Form 10-K filed with the SEC, and our
other reports filed with the SEC could cause actual results to differ
materially from those indicated by the forward-looking statements made
in this press release.
You should not place undue
reliance on forward-looking statements. All forward-looking
statements attributable to HC2 or persons acting on its behalf are
expressly qualified in their entirety by the foregoing cautionary
statements. All such statements speak only as of the date made, and
unless legally required, HC2 undertakes no obligation to update or
revise publicly any forward-looking statements, whether as a result of
new information, future events or otherwise.
Important Additional
Information and Where to Find It
HC2 plans to file a proxy
statement (the “2020 Proxy Statement”) together with a WHITE proxy
card and a consent revocation statement (the “Consent Revocation
Statement”) together with a WHITE consent revocation card with the
SEC, respectively, in connection with the solicitation of proxies for
the annual meeting of HC2’s stockholders (the “Annual Meeting”) and
the consent solicitation initiated by Percy Rockdale LLC and certain
of its affiliates (the “Consent Solicitation”). STOCKHOLDERS ARE
URGED TO READ THE 2020 PROXY STATEMENT AND THE CONSENT REVOCATION
STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY
OTHER RELEVANT DOCUMENTS THAT HC2 FILES WITH THE SEC CAREFULLY IN
THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION.
Stockholders will be able to
obtain, free of charge, copies of the 2020 Proxy Statement, the
Consent Revocation Statement, any amendments or supplements thereto
and any other documents (including the WHITE proxy card and the WHITE
consent revocation card) when filed by HC2 with the SEC in connection
with the Annual Meeting and the Consent Solicitation at the SEC’s
website (http://www.sec.gov),
at HC2’s website (http://ir.hc2.com)
or by contacting Okapi Partners LLC by phone, banks/broker/custodians
call (212) 297-0720, all other stockholders please call (877)
274-8654, by email at
info@okapipartners.com or by mail at 1212 Avenue of the
Americas, 24th Floor, New York, New York 10036.
Participants in the
Solicitation
HC2, its directors and certain
of its executive officers and employees may be deemed to be
participants in the solicitation of proxies and consent revocation
cards from stockholders in connection with the Annual Meeting and the
Consent Solicitation. Additional information regarding the identity of
these potential participants, none of whom (other than Philip A.
Falcone, HC2’s Chairman, President and Chief Executive Officer) owns
in excess of one percent (1%) of HC2’s shares, and their direct or
indirect interests, by security holdings or otherwise, will be set
forth in the 2020 Proxy Statement, the Consent Revocation Statement
and other materials to be filed with the SEC in connection with the
Annual Meeting and the Consent Solicitation. Information relating to
the foregoing can also be found in HC2’s definitive proxy statement
for its 2019 annual meeting of stockholders (the “2019 Proxy
Statement”), filed with the SEC on April 29, 2019. To the extent
holdings of HC2’s securities by such potential participants (or the
identity of such participants) have changed since the information
printed in the 2019 Proxy Statement, such information has been or will
be reflected on Statements of Ownership and Change in Ownership on
Forms 3 and 4 filed with the SEC.
Contact:
Investor Relations
Garrett Edson
ir@hc2.com
(212) 235-2691
Okapi Partners LLC
Pat McHugh/Bruce Goldfarb/Jason Alexander
212-297-0720
info@okapipartners.com
