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Recent Share Purchases by TICC Directors without a Board Authorized Share Repurchase Program Demonstrate a Clear Lack of Alignment Between the Board and Stockholder Interests
TSLX Demands TICC Board Announce a Substantial Board Authorized Stock Repurchase Program to Deliver Value to Long-Suffering TICC Stockholders
TSLX Again Calls on TICC to Provide an Update on the Timing of the Annual Meeting and Immediately Seat Nominee T. Kelley Millett on the TICC Board
TSLX encourages interested stakeholders to visit the website, www.changeTICCnow.com, to view other materials relating to TSLX’s efforts to effect positive change at TICC to maximize stockholder value.
A copy of the letter follows:
Mr. G. Peter O’Brien
Mr. Novak, Mr. O’Brien and Ms. Pankopf,
We are writing to you, the independent members of the board of directors
(the “Board”), as a significant stockholder of
We find the timing of these incremental purchases to be highly
questionable. Despite the shares trading below net asset value (“NAV”)
for 613 consecutive days as of
We believe Messrs. Royce, Cohen and Rosenthal are buying shares at this
time in order to build a larger stake prior to establishing the record
date for the Company’s as yet unscheduled 2016 Annual Meeting. As you
know, we previously submitted a proposal for TICC’s stockholders to vote
at the 2016 Annual Meeting to terminate the Company’s Investment
Advisory Agreement, dated as of
The only reasonable conclusion is that Messrs. Royce, Cohen and Rosenthal are acquiring shares out of self-interested motives – to vote against our proposal in an effort to retain the personal benefits to them under the Investment Advisory Agreement:
- The economic and voting benefit of these share purchases solely rests with Messrs. Cohen, Royce and Rosenthal, which they will no doubt vote without regard to the interests of TICC’s other stockholders.
- These purchases have been undertaken at a time when the Board has failed to set a record date or file a proxy statement for the 2016 Annual Meeting, consistent with the Company’s practice of doing so by this time in each of the last 11 years. This means Messrs. Cohen, Royce and Rosenthal will undoubtedly attempt to vote these additional shares at the meeting.
These purchases are especially troubling since we have been calling for the Board to approve share buy-backs that would benefit all of TICC’s stockholders for quite some time. The Board’s failure to approve share buy-backs is even more shocking in light of Mr. Novak’s recent share purchases. This means that a majority of the Board believes TICC shares represent a strong investment right now but yet the Board itself has failed to authorize a repurchase program. We remind the Board that buying shares personally is not mutually exclusive with authorizing a repurchase program.
Failing to make purchases at the Company level is another example of
TICC’s appallingly bad corporate governance and another clear
prioritization of the external manager fee stream at the expense of
stockholder value creation. Simply put, a board authorized stock
repurchase program would benefit all TICC stockholders (having delivered
The simple fact is that direct share purchases by self-interested directors and management team members effectively create votes in favor of the external manager. By failing to implement buy-backs at the Company level, it appears the board is allowing self-interested actions that directly undermine creating stockholder value to protect the external manager fee stream. How else can board members justify buying shares on the open market but not approving a stock repurchase program?
It is incumbent on you, the independent members of the Board, to protect stockholders from these self-serving actions and act in the best interest of ALL TICC stockholders.
Furthermore, given the past actions of the independent members of the
board, the time for you to demonstrate your ability to act independently
is now past due. As we stated in our last letter, Mr. Novak has
Furthermore, we continue to question Mr. Novak’s ability to be viewed as
independent. Mr. Novak led the Special Committee during the flawed and
failed transaction that attempted to reward the underperforming external
manager in 2015. This supposed leadership resulted in a process in which
a federal judge found TICC to have misled stockholders and to have
likely violated federal securities laws. We applaud Mr. Novak acceding
to our demands to finally purchase TICC shares – having not done so
We believe your reputation and ability to act as an independent director to protect stockholder value will hinge on how you now communicate to TICC stockholders. To address these serious actions we demand the independent members of the board act immediately to take the following steps:
|1.||Immediately announce a substantial, board authorized stock repurchase program;|
|2.||Immediately seat our nominee, T. Kelley Millet, on the Board and further refresh the Board with a new slate of independent directors, in consultation with us and other stockholders; and|
|3.||Immediately terminate the existing Investment Advisory Agreement.|
Furthermore, as a corporate governance matter, it is unacceptable that the 2016 Annual Meeting has yet to be scheduled, despite the Company having done so by this date in each of the last 11 years. A record date should be set and the meeting scheduled forthwith. In addition, we believe the Board needs to publicly outline the Company’s trading window policies for directors and executive officers in light of the dubious timing of these purchases by Messrs. Royce, Cohen and Rosenthal.
TICC stockholders deserve directors who will act clearly and assertively to deliver value. The time for action is now.
Very truly yours,
Michael Fishman Co-Chief Executive Officer
Information set forth herein may contain forward-looking statements,
including, but not limited to, statements with regard to the expected
future financial position, results of operations, cash flows, dividends,
portfolio, financing plans, business strategy, budgets, capital
expenditures, competitive positions, growth opportunities, plans and
objectives of management of
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 TSLX’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 or the actual results or
performance of TICC, TSLX or TICC and TSLX on a combined basis 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 the
Risks and uncertainties related to a possible transaction include, among others, uncertainty as to whether TSLX will further pursue, enter into or consummate a transaction on the terms set forth in its proposal or on other terms, uncertainty as to whether TICC’s board of directors will engage in good faith, substantive discussions or negotiations with TSLX concerning its proposal or any other possible transaction, potential adverse reactions or changes to business relationships resulting from the announcement or completion of a transaction, uncertainties as to the timing of a transaction, adverse effects on TSLX’s stock price resulting from the announcement or consummation of a transaction or any failure to complete a transaction, competitive responses to the announcement or consummation of a transaction, the risk that regulatory or other approvals and any financing required in connection with the consummation of a transaction are not obtained or are obtained subject to terms and conditions that are not anticipated, costs and difficulties related to a potential 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 a transaction, unexpected costs, liabilities, charges or expenses resulting from a transaction, litigation relating to a 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
In connection with TSLX’s solicitation of proxies for the 2016 annual
meeting of TICC stockholders in favor of (a) the election of TSLX’s
nominee to serve as a director of TICC and (b) TSLX’s proposal to
terminate the Investment Advisory Agreement, dated as of
TSLX STRONGLY ADVISES ALL STOCKHOLDERS OF TICC TO READ THE TSLX PROXY STATEMENT AND THE 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 ON TSLX’S WEBSITE AT HTTP://WWW.TPGSPECIALTYLENDING.COM. IN ADDITION, TSLX WILL PROVIDE COPIES OF THE TSLX PROXY STATEMENT WITHOUT CHARGE UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO TSLX’S PROXY SOLICITOR AT TPG@MACKENZIEPARTNERS.COM.
The participants in the solicitation are TSLX and
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
This document shall not constitute an offer to sell, buy or exchange or the solicitation of an offer to sell, buy or exchange any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
TPG Specialty Lending
Lucy Lu, 212-601-4753
Luke Barrett, 212-601-4752
Tom Johnson, 212-371-5999
Pat Tucker, 212-371-5999