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MarketScreener Homepage  >  Equities  >  Nasdaq  >  Presidio, Inc.    

PRESIDIO, INC.

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PRESIDIO, INC. : Other Events, Financial Statements and Exhibits (form 8-K)

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10/29/2019 | 06:18am EDT

Item 8.01. Other Events.

On September 10, 2019, the Company filed its Preliminary Proxy Statement on Schedule 14A (the "Preliminary Proxy Statement"). On September 26, 2019, a putative class action lawsuit was filed in the United States District Court for the District of Delaware against Presidio and the individual members of the Presidio Board alleging that the defendants violated federal securities laws by making allegedly false and misleading statements and failing to disclose certain information in the Preliminary Proxy Statement. On September 30, 2019, and October 4, 2019, two purported class actions were filed in the United States District Court for the Southern District of New York making similar allegations. On October 7, 2019, the Company filed the Definitive Proxy Statement. On October 10, 2019, and October 17, 2019, two purported class actions were filed in the United States District Court for the Northern District of California and the United States District Court for the Eastern District of New York, respectively, against Presidio and the individual members of the Presidio Board alleging violations of the federal securities laws based on allegedly false and misleading statements and failing to disclose certain information in the Definitive Proxy Statement. These actions sought, among other relief, to enjoin the Merger (or, in the alternative, an award of rescissory damages in the event the Merger is completed), and an award of costs and attorneys' fees.

On October 21, 2019, another putative class action complaint was filed in the Court of Chancery of the State of Delaware against Presidio, its directors, Parent and Merger Sub under the caption Firefighters Pension System of City of Kansas City, Missouri Trust v. Presidio, Inc. et al, C.A. No. 2019-0839-JTL. The complaint alleges breaches of fiduciary duty by the directors in connection with the negotiation of the Merger and the disclosure made in the Definitive Proxy Statement and aiding and abetting of those alleged breaches by Parent and Merger Sub. The action seeks, among other relief, an injunction against the Merger and the stockholder vote, and other damages. On October 23, 2019, the Court of Chancery scheduled a preliminary injunction hearing for November 5, 2019.

The defendants believe that the actions are without merit, and that no further disclosure is required under applicable law. Nonetheless, to seek to avoid the risk of the litigation delaying or adversely affecting the Merger, the Company has agreed to make the below supplemental disclosures (the "Amended and Supplemental Disclosures") related to the Merger, as further set forth herein. The Amended and Supplemental Disclosures contained below should be read in conjunction with the Definitive Proxy Statement, which is available on the Internet site maintained by the Securities and Exchange Commission (the "SEC") at http://www.sec.gov, along with periodic reports and other information the Company files with the SEC. The Company and the other named defendants have denied, and continue to deny, that they have committed or assisted others in committing any violations of law or breaches of duty to Presidio stockholders, and expressly maintain that, to the extent applicable, they complied with their fiduciary and other legal duties and are providing the Amended and Supplemental

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Disclosures below solely to try to eliminate the burden and expense of further litigation, to put the claims that were or could have been asserted to rest, and to avoid any possible delay to the closing of the Merger that might arise from further litigation. Nothing in the Amended and Supplemental Disclosures shall be deemed an admission of the legal necessity or materiality under applicable laws of any of the Amended and Supplemental Disclosures set forth herein. To the extent that the information set forth herein differs from or updates information contained in the Definitive Proxy Statement, the information set forth herein shall supersede or supplement the information in the Definitive Proxy Statement. All page references are to pages in the Definitive Proxy Statement, and terms used below, unless otherwise defined, have the meanings set forth in the Definitive Proxy Statement.

SUPPLEMENTAL DISCLOSURES TO DEFINITIVE PROXY STATEMENT RELATED TO SHAREHOLDER ACTIONS

The "Summary" section of the Definitive Proxy Statement is hereby amended by:

Amending and restating the sixth paragraph on page 3 as follows.

AP VIII Aegis Holdings, L.P. ("Aegis"), an affiliate of investment funds managed by affiliates of Apollo Global Management, Inc. (together with its subsidiaries, "Apollo"), which owns 35,125,000 shares of Common Stock representing approximately 42% of the outstanding shares of Common Stock as of September 27, 2019, has entered into a voting agreement with Parent, dated as of August 14, 2019 (the "Voting Agreement"). Pursuant to the Voting Agreement, Aegis has agreed, among other things, to vote its shares of Common Stock in favor of the Merger Proposal, and against any competing transaction, so long as, among other things, the Presidio Board has not made a Change Of Recommendation (as described in the section of this proxy statement entitled "The Merger Agreement - Company Takeover Proposal; Non-Solicitation - Change in the Presidio Board Recommendation"). For more information, see the section of this proxy statement entitled "Agreements with Respect to Common Stock - The Voting Agreement." Pursuant to that certain Stockholders Agreement by and between the Company and Aegis (the "Stockholders Agreement"), Aegis has the right to nominate up to five directors to the Presidio Board, so long as Aegis collectively beneficially owns at least 50% of the outstanding Common Stock. Currently, five of the nine members of the Presidio Board are Aegis representatives: Heather Berger, Christopher L. Edson, Salim Hirji, Matthew H. Nord and Michael Reiss. In accordance with the Stockholders Agreement, if the Merger is not consummated, Aegis would only be entitled to nominate up to four members of the Presidio Board at the next annual meeting of the Company's stockholders, provided Aegis collectively beneficially owns at least 30% of the outstanding Common Stock but less than 50% of the outstanding Common Stock.

The "The Merger" section of the Definitive Proxy Statement under the heading "Background of the Merger" is hereby amended by:

Amending and restating the last sentence of the last paragraph beginning on page 28 as follows.

LionTree then left the meeting, and the Presidio Board discussed certain conflict disclosures provided to the Presidio Board by LionTree, and approved finalizing engagement terms with LionTree on the basis of the disclosures that had been provided as well as precedent fee information for comparable transactions the Board received prior to the meeting.

Adding the additional sentence below to the end of the last paragraph on page 30.

None of the Acceptable Confidentiality Agreements with the five prospective buyers contained a standstill provision.

Adding the additional sentence below to the end of the first paragraph on page 31.

The Company subsequently sent return or destroy notices to the interested parties (other than Party A) who declined to submit Company Takeover Proposals.

Amending and restating the third paragraph on page 31 as follows.

Later on September 23, 2019, the Presidio Board met telephonically, with LionTree and Wachtell Lipton present, to consider the Party A Proposal. In comparing the Party A Proposal and the transactions contemplated by the Original Agreement, the Presidio Board considered that Party A had not yet secured committed debt financing (but expected to secure committed financing from a lender group which included a number of Party A's customary financing sources) and that the Party A Proposal

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required the Company to pay the applicable Company Termination Fee without any reimbursement from Party A. The Presidio Board also considered that the Party A Proposal contemplated a CFIUS filing and related closing condition, which the Company's CFIUS counsel determined likely was not required. The Party A Proposal was also conditioned on Presidio maintaining Party A's anonymity. Wachtell Lipton discussed with the Presidio Board their fiduciary duties in the context of the go-shop process. Following discussion, and after consultation with LionTree and Wachtell Lipton, the Presidio Board determined that the Party A Proposal would be reasonably expected to lead to a Company Superior Proposal such that Party A and its portfolio company both qualified as Excluded Parties under the Original Agreement.

Amending and restating the fifth paragraph on page 31 as follows.

Also on September 24 2019, as required by the Original Agreement, the Company delivered written notice to Parent of the Presidio Board's determination that Party A and its portfolio company qualified as Excluded Parties. A representative of LionTree also had a conversation with a representative of BC Partners concerning the Party A Proposal, in which the representative of LionTree confirmed that Party A's Proposal offered a substantial economic improvement over the Merger Consideration, but neither the Company nor its advisors informed Parent or BC Partners of the proposed consideration payable to the Company's stockholders under the Party A Proposal.

Amending and restating the sixth paragraph on page 31 as follows.

Later on September 24, 2019, BC Partners submitted a proposal to amend the Original Agreement to increase the merger consideration to $16.60 per share in cash, without interest and to increase the Company Termination Fee to $41,000,000, which fee would be payable by the Company if it entered into an acquisition agreement providing for a Company Superior Proposal with any person, whether or not an Excluded Party (as compared to a Company Termination Fee of $18,000,000 payable by the Company should the Company terminate the Merger Agreement to enter into an acquisition agreement with an Excluded Party (including Party A) before October 4, 2019). BC Partners indicated that this proposal would expire at 7:00 p.m. the following day. Kirkland subsequently sent a draft of the proposed amendment to Wachtell Lipton along with a draft of an amendment to the Equity Commitment Letter increasing the equity commitment amount of the parties thereto.

Amending and restating the last sentence of the first full paragraph on page 32 as follows.

Party A stated that it had ongoing discussions with its financing sources, specifically with respect to indebtedness outstanding under the Company's existing facilities with Wells Fargo Bank, N.A. and PNC Bank, National Association. Party A additionally stated that it planned to submit a definitive debt commitment letter with its final proposal, but did not provide any more definitive assurances regarding its ability to secure committed debt financing or a willingness to eliminate CFIUS as a closing condition.

Adding the paragraphs below following the third full paragraph on page 32.

After the meeting of the Presidio Board on September 25, 2019, LionTree contacted Party A to update them on the results of the meeting. LionTree relayed to Party A that the price included in the amended Merger Agreement was higher than Party A's September 23 proposal, but lower than Party A's September 25 indicative price. LionTree also confirmed the higher break fee of $40 million in the amended Merger Agreement would now apply to Excluded Parties (including Party A), and told Party A that they continued to qualify as an Excluded Party under the Merger Agreement and that the Company was permitted to and prepared to continue discussions with Party A to assist Party A in submitting an improved and definitive offer. Party A expressed disappointment, but planned to regroup the following day and determine whether it wished to continue discussions with the Company.

On September 26, Wachtell Lipton contacted Party A's legal advisor and stated that the Company and its advisors continued to be permitted under the Merger Agreement to carry on discussions regarding an improved offer by Party A for the Company, and that the Company and its advisors were prepared to do so. Party A's legal advisors acknowledged that discussions between Party A and the Company could continue, but stated that Party A had not decided whether it wished to continue such discussions. Party A and its advisors did not engage with the Company and its advisors over the ensuing days. On October 2, Wachtell Lipton contacted Party A's legal advisor and Party A's legal advisor told Wachtell Lipton that it did not expect Party A to further pursue a bid for the Company and said that the Company could send Party A a return or destroy notice under Party A's NDA with the Company. On October 7, Party A confirmed to LionTree that it did not expect to further pursue a bid for the Company and said that the Company could send Party A a return or destroy notice. On October 8, the Company sent Party A a return or destroy notice, and on October 14 Party A acknowledged receipt of the notice and confirmed it was complying with the same.

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The "The Merger" section of the Definitive Proxy Statement under the heading "Reasons for the Merger; Recommendation of the Presidio Board" is hereby amended by:

Amending and restating the penultimate paragraph on page 34 as follows.

The Presidio Board's view that the terms of the Merger Agreement would be unlikely to deter interested third parties from making a Company Superior Proposal, including the Merger Agreement's terms and conditions as they relate to a 40-day go-shop period, the fact that Party A continues to be an Excluded Party under the Merger Agreement, changes in the recommendation of the Board of Directors and the payment by the Company of $40 million in connection with the termination of the Merger Agreement under certain circumstances (see the sections of this proxy statement entitled "The Merger Agreement - Company Takeover Proposal; Non-Solicitation"); and

The "The Merger" section of the Definitive Proxy Statement under the heading "Opinion of Presidio's Financial Advisor" is hereby amended by:

Amending and restating the last two sentences of the second paragraph on page 42 as follows.

The DCF analysis indicated a terminal value range of $2,184mm to $2,808mm and an . . .

Item 9.01. Financial Statements and Exhibits.


(d) Exhibits:


 Exhibit
   No.                                       Description

   99.1            Complaint filed by Jordan Rosenblatt on September 26, 2019 in the
                 United States District Court for the District of Delaware.

   99.2            Complaint filed by Mitsuko K Lin on September 30, 2019 in the
                 United States District Court for the Southern District of New York.


   99.3            Complaint filed by Walter Rice on October 4, 2019 in the United
                 States District Court for the Southern District of New York.

   99.4            Complaint filed by Stephen Bushansky on October 10, 2019 in the
                 United States District Court for the Northern District of
                 California.

   99.5            Complaint filed by Eric Weintraub on October 17, 2019 in the
                 United States District Court for the Eastern District of New York.


   99.6            Complaint filed by Firefighters' Pension System of the City of
                 Kansas City, Missouri Trust on October 24, 2019 in the Court of
                 Chancery of the State of Delaware.

   104           Cover Page Interactive File (embedded within the Inline XBRL
                 document).

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© Edgar Online, source Glimpses


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