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TSLX Ready to Engage with TICC Toward Realizing Value of Transaction and Delivering Immediate, Upfront Premium to TICC Stockholders
TSLX Urges Stockholders to Vote the GOLD Proxy Card Today to Demand TICC Engage with TSLX’s Offer
A copy of the letter follows:
Dear Fellow TICC Stockholders:
You have an important choice regarding the future of your investment in
TICC reported its financial results for the third quarter of 2015 today and surprisingly refused to engage with stockholders or the investment community on the company’s conference call. TICC has asked its stockholders to approve an inferior transaction and turned down competing proposals yet still did not take questions from investors or analysts to address the concerns surrounding the company’s recent actions or its poor financial performance. As a stockholder, we continue to be disappointed with TICC’s lack of transparency and lack of focus on creating stockholder value.
In evaluating the BSP Transaction, we encourage stockholders to consider the following facts:
TICC’s net asset value (“NAV”) declined by 9.2% in a single quarter.
TICC’s NAV per share declined
$0.79, from $8.60as reported on June 30, 2015, to $7.81as reported today. TICC’s NAV has consistently declined over the last few years, falling from $9.90per share as of the third quarter in 2013 to $7.81today, a 21.1% decline.
TICC under-earned its dividend by 37.9% in the third quarter. TICC
only earned net investment income of
$0.18in the quarter yet has over-committed to issuing a dividend of $0.29. In the past four quarters, TICC has under-earned its dividend by an average of 31.6%.
- The simple fact is that paying a dividend consisting of investor capital is unsustainable and is reason enough for at least five equity analysts that cover TICC to believe the dividend will be cut.
- TICC exceeded the statutory debt to equity leverage limits of 1:1 for BDCs. Exceeding these limits places significant constraints on TICC’s ability to operate going forward and any meaningful share repurchase program. Although we hope it is different this time, we note that TICC has never meaningfully executed on previously authorized share buyback programs.
If TICC was operating under normal leverage levels for BDCs, the true
value of TICC’s reported net investment income in the third quarter
TSLX has presented TICC with a highly compelling offer that:
- Delivers an immediate, upfront premium to TICC stockholders;
- Provides an opportunity to participate in an industry-leading platform with a proven manager that has consistently outperformed TICC and the BDC Composite2;
- Offers to acquire ALL TICC shares at 90% of NAV, not only a portion of shares; and
- Ensures a definitive end to the failed TICC external manager contract.
TICC’S BOARD MUST PROTECT YOUR INVESTMENT OR BE REPLACED
You, TICC’s stockholders are the true owners of the company and should send a message to TICC’s board to engage with TSLX on our offer to deliver real value to stockholders. The TICC board needs to be urged to remember it is obligated to act in stockholders’ best interests to protect your investment.
TICC AND ITS SPECIAL COMMITTEE HAVE CONSISTENTLY FAILED TO PUT TICC STOCKHOLDERS FIRST
While claiming to act on behalf of stockholders in recent months, your board has taken the following actions:
- Struck a deal with BSP that would result in a payment of millions to TICC’s failed external manager;
- Been found by a federal judge to have repeatedly misled stockholders and violated federal securities law by inadequately disclosing details of the BSP Transaction;
- Under immense pressure from investors and outside parties, only altered its proposed deal with BSP in an attempt to push through an inferior transaction;
- Refused to engage in any substantial discussions regarding the TSLX offer and the immediate, upfront premium that TSLX’s offer would deliver to TICC stockholders;
- Struck a side deal with a stockholder to buy its support in a desperate attempt to push through an inferior transaction benefiting certain members of the board, demonstrating its continued lack of alignment in protecting the interests of ALL stockholders; and
- Failed to acknowledge or even respond to TSLX’s updated offer.
The time for change is now. Vote today to join the overwhelming chorus demanding that TICC begin substantive discussions with TSLX concerning its updated proposal.
TSLX IS READY AND WILLING TO ENGAGE WITH TICC TO DELIVER REAL VALUE TO TICC STOCKHOLDERS
TSLX stands by its superior proposal and remains confident that it is the most compelling option for TICC stockholders.
VOTE THE GOLD PROXY CARD AGAINST MANAGEMENT’S PROPOSALS TODAY!
Make your voice heard. Do not let TICC continue to mislead you. Reject the value-destructive transaction with BSP and urge TICC’s board to begin substantive discussions with TSLX.
Vote the GOLD card NOW to send a clear message to TICC to engage with TSLX. Visit www.changeTICCnow.com for more information about TSLX’s compelling offer.
Chairman, Board of Directors
Co-Chief Executive Officer
Co-Chief Executive Officer
If you have any questions concerning this letter or TSLX’s proposal,
(212) 929-5500 (call collect)
TOLL-FREE (800) 322-2885
Information set forth herein includes forward-looking statements. These
forward-looking statements include, but are not limited to, statements
regarding TSLX proposed business combination transaction with
Such forward-looking statements are inherently uncertain, and
stockholders and other potential investors must recognize that actual
results may differ materially from TSLX’s expectations as a result of a
variety of factors, including, without limitation, those discussed
below. Such forward-looking statements are based upon management’s
current expectations and include known and unknown risks, uncertainties
and other factors, many of which TSLX is unable to predict or control,
that may cause TSLX’s plans with respect to TICC, actual results or
performance to differ materially from any plans, future results or
performance expressed or implied by such forward-looking statements.
These statements involve risks, uncertainties and other factors
discussed below and detailed from time to time in TSLX’s filings with
Risks and uncertainties related to the proposed transaction include, among others, uncertainty as to whether TSLX will further pursue, enter into or consummate the transaction on the terms set forth in the proposal or on other terms, potential adverse reactions or changes to business relationships resulting from the announcement or completion of the transaction, uncertainties as to the timing of the transaction, adverse effects on TSLX’s stock price resulting from the announcement or consummation of the transaction or any failure to complete the transaction, competitive responses to the announcement or consummation of the transaction, the risk that regulatory or other approvals and any financing required in connection with the consummation of the transaction are not obtained or are obtained subject to terms and conditions that are not anticipated, costs and difficulties related to the integration of TICC’s businesses and operations with TSLX’s businesses and operations, the inability to obtain, or delays in obtaining, cost savings and synergies from the transaction, unexpected costs, liabilities, charges or expenses resulting from the transaction, litigation relating to the transaction, the inability to retain key personnel, and any changes in general economic and/or industry specific conditions.
In addition to these factors, other factors that may affect TSLX’s plans, results or stock price are set forth in TSLX’s Annual Report on Form 10-K and in its reports on Forms 10-Q and 8-K.
Many of these factors are beyond TSLX’s control. TSLX cautions investors that any forward-looking statements made by TSLX are not guarantees of future performance. TSLX disclaims any obligation to update any such factors or to announce publicly the results of any revisions to any of the forward-looking statements to reflect future events or developments.
Third Party-Sourced Statements and Information
Certain statements and information included herein have been sourced from third parties. TSLX does not make any representations regarding the accuracy, completeness or timeliness of such third party statements or information. Except as expressly set forth herein, permission to cite such statements or information has neither been sought nor obtained from such third parties. Any such statements or information should not be viewed as an indication of support from such third parties for the views expressed herein. All information in this communication regarding TICC, including its businesses, operations and financial results, was obtained from public sources. While TSLX has no knowledge that any such information is inaccurate or incomplete, TSLX has not verified any of that information. TSLX reserves the right to change any of its opinions expressed herein at any time as it deems appropriate. TSLX disclaims any obligation to update the data, information or opinions contained herein.
Proxy Solicitation Information
The information set forth herein is provided for informational purposes
only and does not constitute an offer to purchase or the solicitation of
an offer to sell any securities. TSLX has filed with the
TSLX STRONGLY ADVISES ALL STOCKHOLDERS OF TICC TO READ THE TSLX PROXY STATEMENT AND ITS OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY CONTAIN IMPORTANT INFORMATION. SUCH TSLX PROXY MATERIALS ARE AND WILL BECOME AVAILABLE AT NO CHARGE ON THE SEC’S WEB SITE AT HTTP://WWW.SEC.GOV AND AT TSLX’S WEBSITE AT HTTP://WWW.TPGSPECIALTYLENDING.COM. IN ADDITION, TSLX WILL PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT CHARGE UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO TSLX’S PROXY SOLICITOR AT TPG@MACKENZIEPARTNERS.COM.
The participant in the solicitation is TSLX and certain of its directors and executive officers may also be deemed to be participants in the solicitation. As of the date hereof, TSLX directly beneficially owned 1,633,660 shares of common stock of TICC.
Security holders may obtain information regarding the names,
affiliations and interests of TSLX’s directors and executive officers in
TSLX’s Annual Report on Form 10-K for the year ended
1 Pro forma net investment income per share calculated as if
TICC had sold assets at fair value and applied the proceeds to repay
outstanding indebtedness to achieve a debt-to-equity ratio at
2 BDC Composite comprised of ACAS, AINV, ARCC, FSC, GBDC, HTGC, MAIN, MCC, NMFC, PNNT, PSEC, SLRC, TCAP, TCRD and BKCC.
TPG Specialty Lending
Robert Ollwerther, 212-430-4119
TPG Specialty Lending
Lucy Lu, 212-601-4753
MacKenzie Partners, Inc.
Charlie Koons, 212-929-5708
TPG Specialty Lending
Luke Barrett, 212-601-4752
Tom Johnson or Pat Tucker, 212-371-5999
firstname.lastname@example.org / email@example.com