Item 1.01. Entry into a Material Definitive Agreement.
On September 8, 2021, JMP Group LLC, a Delaware limited liability company
("JMP", or the "Company"), Citizens Financial Group, Inc., a Delaware
corporation ("Citizens"), and Jolt Acquisition LLC, a Delaware limited liability
company and direct, wholly owned subsidiary of Citizens ("Merger Subsidiary")
entered into an Agreement and Plan of Merger (the "Merger Agreement"). Pursuant
to the Merger Agreement, Merger Subsidiary will merge with and into JMP,
whereupon the separate existence of Merger Subsidiary will cease, and the
Company will be the surviving corporation as a direct wholly owned subsidiary of
Citizens (the "Merger").
Pursuant to the Merger Agreement, each outstanding common share of JMP will be
converted into the right to receive cash consideration of $7.50 (the "Merger
Consideration"), or approximately $149 million in cash. The transaction is
targeted to close in the fourth quarter of 2021, subject to approval by the
shareholders of JMP, receipt of required regulatory approvals, and satisfaction
of other customary closing conditions.
At the Effective Time, as defined in the Merger Agreement, each outstanding
option to purchase JMP common shares under JMP's Equity Incentive Plan (the
"Stock Plan"), whether vested or unvested, shall be converted into an option to
purchase a number of shares of common stock of Citizens, equal to the product
(rounded down to the nearest whole number) of the total number of common shares
subject to such option immediately prior to the Effective Time, multiplied by
the per share Merger Consideration divided by the volume weighted average of the
closing sale prices per share of Citizens common stock on the New York Stock
Exchange on each of the five full consecutive trading days ending on and
including the third business day prior to the closing date of the Merger (the
"Equity Award Exchange Ratio"). The exercise price per share (rounded up to the
nearest whole cent) shall be equal to the exercise price per share of the common
shares subject to such JMP option immediately prior to the Effective Time,
divided by the Equity Award Exchange Ratio. At the Effective Time, each JMP
restricted stock unit ("RSU") under the Stock Plan shall be converted into an
RSU award representing the right to receive the number of denominated shares of
Citizens common stock equal to the product (rounded down to the nearest whole
number) of the total number of common shares subject to such JMP RSU award
immediately prior to the Effective Time multiplied by the Equity Award Exchange
Ratio.
The Merger Agreement contains customary representations, warranties and
covenants, including, among other things, covenants that, subject to certain
exceptions: (i) JMP will conduct its business in the ordinary course consistent
with past practice until the effective time of the Merger, (ii) Citizens, JMP
and Merger Subsidiary will each use its reasonable best efforts to consummate
the Merger and the other transactions contemplated by the Merger Agreement,
(iii) JMP will not solicit, initiate, encourage or otherwise facilitate the
submission of any alternative acquisition proposal or enter into or participate
in discussions or negotiations regarding, or provide any non-public information
regarding JMP in connection with, alternative acquisition proposals; (iv) JMP
will call and hold a meeting of its shareholders to consider and vote upon the
adoption of the Merger Agreement, and (v) the JMP Board of Directors will
recommend the adoption of the Merger Agreement by its shareholders. Under the
terms of the Merger Agreement, JMP may be permitted to declare a special cash
dividend to its shareholders prior to closing in an amount up to $5,000,000 in
the aggregate but only if JMP realizes a targeted valuation with respect to
certain marketable securities owned by JMP.
Consummation of the Merger is subject to various conditions, including: (i)
adoption of the Merger Agreement by JMP's shareholders in accordance with
Delaware law and the JMP LLC Agreement, (ii) the absence of any applicable law
that prohibits, makes the Merger illegal or enjoins the consummation of the
Merger, (iii) the applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act relating to the Merger having expired or been
terminated and (iv) certain other regulatory approvals, including the Financial
Industry Regulatory Authority, having been obtained as required by applicable
law. Each party's obligation to consummate the Merger is also subject to certain
additional customary conditions, including (i) subject to certain exceptions,
the accuracy of the representations and warranties of the other party, (ii)
performance in all material respects by the other party of its obligations under
the Merger Agreement and (iii) absence of any developments subsequent to the
date of the Merger Agreement that would have a material adverse effect on JMP.
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The Merger Agreement, in addition to providing that the parties can mutually
agree to terminate the Merger Agreement, contains certain termination rights for
JMP and Citizens, as the case may be, including upon: (1) March 8, 2022, if the
Merger has not been completed by that time; (2) the approval of any governmental
authority required for consummation of the Merger is denied; (3) failure of
JMP's shareholders to approve the Merger; (4) a breach by the other party that
cannot be cured by thirty days after written notice thereof is given if such
breach would result in a failure of the conditions to closing set forth in the
Merger Agreement; (5) a material breach of the no shop provision of the Merger
Agreement; (6) the occurrence of a Change of Recommendation (as defined in the
Merger Agreement); (7) failure by the JMP board of directors to publicly confirm
its board recommendation within five business days of a written request, made
prior to JMP stockholder approval, by Citizens; (8) the board of directors of
JMP recommending that shareholders tender their shares in a tender offer by
another party, or fails to recommend against such tender offer; or (9) the board
of directors of JMP authorizing JMP, subject to complying with the terms of the
Merger Agreement, including providing the required notice to Citizens, to enter
into a written agreement concerning a Superior Proposal (as defined in the
Merger Agreement). Upon termination of the Merger Agreement under specified
circumstances, JMP may be required to pay Citizens a termination fee of 4.0% of
the total Merger Consideration.
The foregoing description of the Merger and the Merger Agreement does not
purport to be complete and is qualified in its entirety by reference to the
Merger Agreement, which is filed as Exhibit 2.1 hereto, and is incorporated by
reference into this report. The Merger Agreement has been included to provide
security holders with information regarding its terms. It is not intended to
provide factual information about the parties or any of their respective
subsidiaries or affiliates. The representations, warranties and covenants of
each party as set forth in the Merger Agreement were made only for purposes of
that agreement and as of specific dates, are solely for the benefit of the
parties to the Merger Agreement, may be subject to limitations, qualifications
and exceptions agreed upon or to be agreed upon by the parties (including being
qualified by confidential disclosures), and may have been made for the purposes
of allocating contractual risk between the parties to the Merger Agreement
instead of establishing these matters as facts, and may be subject to standards
of materiality applicable to the parties that differ from those applicable to
investors. Accordingly, investors should read the Merger Agreement together with
the other information concerning Citizens and JMP that each company publicly
files in reports and statements with the SEC.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
2.1† Agreement and Plan of Merger
by and among Citizens Financial
Group, Inc., Jolt Acquisition
LLC and the Registrant, dated as
of September 8, 2021.
† Certain of the exhibits and
schedules to this Exhibit have
been omitted in accordance with
Regulation S-K Item 601(a)(5)
and 601(b)(2). The Registrant
agrees to furnish a copy of all
omitted exhibits and schedules
to the SEC upon its request.
104 Cover Page Interactive Data File
(embedded within the Inline XBRL
document)
Cautionary Note Regarding Forward-Looking Statements
Statements in this filing that relate to the future plans, events, expectations,
performance, objectives and the like of JMP Group LLC ("JMP") and Citizens
Financial Group, Inc. ("Citizens"), may constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995,
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Future events, risks and
uncertainties, individually or in the aggregate, could cause our actual results
to differ materially from those expressed or implied in these forward-looking
statements.
The material factors and assumptions that could cause actual results to differ
materially from current expectations include, without limitation, the following:
(1) the inability to close the merger in a timely manner; (2) the inability to
complete the merger due to the failure to obtain shareholder approval and
adoption of the merger agreement and approval of the merger or the failure to
satisfy other conditions to completion of the merger, including required
regulatory and other approvals; (3) the failure of the transaction to close for
any other reason; (4) the possibility that the integration of JMP's business and
operations with those of Citizens may be more difficult and/or take longer than
anticipated, may be more costly than anticipated and may have unanticipated
adverse results relating to JMP's or Citizens's existing businesses; (5) the
challenges of integrating and retaining key employees; (6) the effect of the
announcement of the transaction on Citizens's, JMP's or the combined company's
respective business relationships, operating results and business generally;
(7) JMP may not be permitted to issue a special dividend to its shareholders
prior to closing or the permitted dividend may be substantially less than
$5,000,000; (8) the possibility that the merger may be more expensive to
complete than anticipated, including as a result of unexpected factors or
events; (9) diversion of management's attention from ongoing business operations
and opportunities; (10) general competitive, economic, political and market
conditions and fluctuations; (11) actions taken or conditions imposed by the
United States and foreign governments; (12) adverse outcomes of pending or
threatened litigation or government investigations; (13) the impact of
competition in the industries and in the specific markets in which Citizens and
JMP, respectively, operate; and (14) other factors that may affect future
results of the combined company described in the section entitled "Risk Factors"
in the proxy statement to be mailed to JMP's shareholders and in Citizens's and
JMP's respective filings with the U.S. Securities and Exchange Commission
("SEC") that are available on the SEC's web site located at www.sec.gov,
including the section entitled "Risk Factors" in JMP's Form 10-K for the fiscal
year ended December 31, 2020. Readers are strongly urged to read the full
cautionary statements contained in those materials. We assume no obligation to
update any forward-looking statements to reflect events that occur or
circumstances that exist after the date on which they were made.
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Important Information for Investors and Shareholders
This communication may be deemed to be solicitation material in respect of the
proposed acquisition of JMP by Citizens. In connection with the proposed
transaction, JMP intends to file relevant materials with the SEC, including
JMP's proxy statement on Schedule 14A. JMP SHAREHOLDERS ARE URGED TO READ ALL
RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING JMP'S PROXY STATEMENT WHEN IT
IS AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
TRANSACTION. Investors and security holders will be able to obtain the documents
free of charge on the SEC's website at www.sec.gov, and JMP shareholders will
receive information at an appropriate time on how to obtain documents free of
charge from JMP that are not currently available.
Participants in the Solicitation
JMP Group LLC and its directors and officers may be deemed participants in the
solicitation of proxies of JMP's shareholders in connection with the proposed
transaction. Security holders may obtain more detailed information regarding the
names, affiliations and interests of certain of JMP's executive officers and
directors in the solicitation by reading JMP's Annual Report on Form 10-K for
the fiscal year ended December 31, 2020, and the proxy statement and other
relevant materials filed with the SEC in connection with the proposed
transaction when they become available. Information concerning the interests of
JMP's participants in the solicitation, which may, in some cases, be different
than those of their stockholders generally, will be set forth in the proxy
statement relating to the proposed transaction when it becomes available. Free
copies of these documents, when available, may be obtained as described in the
preceding paragraph.
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