|View printer-friendly version|
Urges TICC Stockholders to vote the GOLD Proxy Card to Terminate TICC’s External Manager Contract and Elect T. Kelley Millet to the TICC Board
Highlights Need For Change Given TICC’s External Manager and Board Have Delivered a Decade of Failed Returns While Collecting Millions of Dollars in Fees
Reminds TICC Stockholders That They Have the Right to Terminate the External Manager’s Contract AT NO COST
TICC Notifies Broadridge of Possible
TSLX understands that TICC has notified
The proxy materials are also available through the SEC’s website and at www.changeTICCnow.com.
A copy of the letter follows:
Fellow TICC Stockholders:
On behalf of
It is your right, under the Investment Company Act of 1940, as amended, to terminate the external manager’s contract at no cost to stockholders.
THE NEED TO CHANGE THE EXTERNAL MANAGER AND ENHANCE THE BOARD IS CLEAR. THE EXISTING EXTERNAL MANAGER AND THE TICC BOARD HAVE . . .
1. DELIVERED A DECADE OF FAILED RETURNS.
Since TICC’s IPO in 2003, the external manager has delivered total returns of just 53.9% versus 224.4% for the BDC Composite.1 Even more disturbing, TICC has underperformed the return of U.S. Treasuries by 18.4% over the past three years.
2. COLLECTED MILLIONS IN FEES.
By any measure and over any time period, the external manager’s
performance has been abysmal. Meanwhile, the external manager, majority
owned by TICC Board members
3. PAID AN UNSUSTAINABLE DIVIDEND.
The weak returns delivered by the external manager have led to TICC’s dividend policy becoming unsustainable. By TICC’s own admission, its past dividends are in part a return of investor capital and five independent analysts have stated the dividend is unsustainable. TICC has under-earned its dividend by a cumulative 45.3% in the six most recent quarters and likely would have under-earned its dividend in previous quarters if not for an accounting error by TICC disclosed in the first quarter of 2015.
4. TAKEN BLATANT SELF-SERVING ACTIONS TO PROTECT THE EXTERNAL MANAGER AT THE EXPENSE OF STOCKHOLDERS.
TICC has taken extraordinary measures to continue executing its self-serving strategy to the detriment of stockholders. Instead of replacing the failed external manager to generate value for stockholders – at no cost to stockholders – the Company instead pursued a value destructive transaction in 2015 that would have resulted in the owners of the external manager receiving millions of dollars in fees. A federal judge found that TICC likely violated federal securities law in its solicitation in favor of that transaction by failing to disclose the amount of payments to be made under that deal to its interested directors. In addition, TICC has refused to meaningfully engage on our compelling proposals to bring real change to TICC stockholders.
For the first time in 11 years, the Company has not filed proxy materials, nor publicly announced a record date or set a meeting date, for its annual meeting. At the same time, the owners of the external manager, including two Board members, are buying TICC shares for the first time in four years. These share purchases have been in direct proportion to their respective ownership interest in the external manager, a clear illustration that these purchases have been undertaken with the intent to permit the existing manager to build a stake in TICC to protect the external manager’s fee stream, and not to align the manager more closely with stockholders’ interests. It is hard to see the Board’s failure to publicly announce a record date or set a meeting date as anything but a blatant effort to buy time for insiders to acquire enough shares to block change at TICC to the detriment of stockholders. This governance record is concerning.
This level of failure demands immediate change. You deserve better.
VOTE TO TERMINATE THE EXTERNAL MANAGER AND ELECT T. KELLEY MILLET TO END A DECADE OF FAILURE AT TICC
Despite the Board’s own admission that change was needed, we have been
shocked by the lack of meaningful action since the failed Stockholder
vote held in
- Immediately terminating the existing investment advisory agreement;
- Immediately seating our nominee on the Board and further refreshing the Board with a new slate of independent directors, in consultation with us and other stockholders; and
- Promptly following the reconstitution of the Board, conducting a comprehensive strategic review process to identify the best path forward to deliver value to stockholders.
Time is overdue for TICC to become a professionally governed public company with a focus on maximizing stockholder value. Given the poor financial performance, the deterioration of NAV per share, declining values in the CLO equity portfolio, and an overall lack of transparency, the TICC Board needs to act now to prioritize stockholders’ interests over its own by terminating the existing management contract.
Mr. Millet’s more than 30 years of proven industry expertise across the
financial sector, particularly in credit markets, coupled with his
proven leadership as a director, make him the ideal candidate to effect
change at TICC. He has led companies across the financial services
sector in senior positions, including in his current role as CEO of
TICC has not yet publicly disclosed the date, time or location of the
annual meeting or the record date for determining the TICC stockholders
entitled to notice of and to vote at the annual meeting or filed a proxy
statement for the annual meeting with the
As always, we stand ready and willing to immediately engage in a constructive dialogue with the Company. Once the aforementioned issues are addressed, we believe there is a brighter path ahead for TICC and its stockholders.
The time for change is now.
VOTE TODAY TO TERMINATE THE EXISTING MANAGER AND SET TICC ON THE PATH TOWARD VALUE CREATION, STOCKHOLDER ALIGNMENT AND REAL CHANGE.
VOTE THE GOLD PROXY CARD. Visit www.changeTICCnow.com for more information about why voting to terminate the external manager’s contract and to elect our independent director nominee are votes to protect your investment.
Chairman and Co-Chief Executive Officer
Co-Chief Executive Officer
If you have any questions concerning this letter,
(212) 929-5500 (call collect)
TOLL-FREE (800) 322-2885
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.
1 TICC and benchmark returns indexed to
TPG Specialty Lending, Inc.
Lucy Lu, 212-601-4753
MacKenzie Partners, Inc.
Charlie Koons, 800-322-2885
Luke Barrett, 212-601-4752
Tom Johnson or Pat Tucker
firstname.lastname@example.org / email@example.com