Special Meeting to be held on September 22,
2021 at 8:30 am CDT for LSB Industries stockholders of record as of
August 2, 2021 to approve Exchange Transaction and Special
Dividend
LSB Industries, Inc. (“LSB” or “the Company”), (NYSE: LXU),
today announced that it has filed a definitive proxy statement with
the Securities and Exchange Commission (“SEC”) and established
August 2, 2021 as the record date (the “Record Date”) for its
special meeting of stockholders (the “Special Meeting”) to be held
to, among other things, approve a definitive agreement (the
“Exchange Agreement”) with LSB Funding LLC, an affiliate of
Eldridge Industries, LLC (“Eldridge”), to exchange the shares of
LSB Series E-1 and Series F-1 Redeemable Preferred Stock held by
Eldridge for shares of LSB common stock. Under the terms of the
agreement, and assuming a closing date of September 27, 2021, LSB
would exchange, at the expected closing, approximately $310 million
of preferred stock held by Eldridge into an equivalent value of LSB
common stock based on an exchange price of $6.16, which is equal to
the 30-day volume weighted average price as of the date of the
Exchange Agreement. In connection with the transaction,
stockholders will receive a special dividend in the form of 0.30
shares of LSB common stock for every share owned as of the record
date, with any such dividend received by Eldridge reducing the
consideration payable to them in the exchange transaction.
The Special Meeting will be held virtually via live webcast at
8:30 am Central Daylight Time on September 22, 2021 and can be
accessed by visiting www.proxydocs.com/LXU. The proxy statement is
available at
https://investors.lsbindustries.com/financial-information/sec-filings
and www.sec.gov. Stockholders of record at the close of business on
the Record Date will be entitled to vote their shares at the
Special Meeting.
The LSB industries Board of Directors unanimously recommends
that stockholders vote “FOR” the transactions contemplated by the
Exchange Agreement with Eldridge as well as the other proposals set
forth in the proxy statement.
Transaction Highlights:
- Eliminates the current financial impact and repayment of the
accrued compounding preferred stock and future accruing dividends
at 14.5% (increasing to 16.0% in April 2023) unburdening the
Company and unlocking shareholder value.
- The Special Committee, Board of Directors and LSB management
believe this could lead to a rating upgrade potentially allowing
the Company to refinance its senior secured notes at a lower
interest rate and on improved terms, which would reduce its cash
interest expense and overall cost of capital.
- Improves the Company’s financial flexibility allowing it to
pursue organic growth initiatives, including in green ammonia and
clean energy and accretive M&A opportunities.
- Preserves the Company’s significant tax attributes, including
approximately $620 million of federal net operating losses, thereby
protecting potentially significant future cash savings and
stockholder value.
Mark Behrman, LSB Industries’ President and CEO, stated, “We
expect this transformative transaction to simplify our capital
structure, lower our cost of capital and provide us with greater
financial flexibility to pursue growth initiatives. Given the
favorable nitrogen industry dynamics we are currently experiencing,
we believe that now is an opportune time to execute this
transaction, particularly given our intention to refinance our
senior secured notes and opportunities we believe exist to drive
organic growth, including our entry into the rapidly emerging
blue/green ammonia and clean energy markets. Additionally, we
regularly evaluate M&A prospects that we believe could be
accretive to earnings as a result of the increased scale and
expanded production capabilities that they would provide us. We
believe that the exchange of this preferred stock into common stock
and the overall simplification of our capital structure, including
the potential refinancing of our senior secured notes, will enhance
our ability to generate profitable growth and greater long-term
value for our shareholders.
The proposed Exchange Agreement is expected to be consummated
after receipt of the required approvals by the stockholders of LSB
Industries and the satisfaction or waiver of certain other
conditions as specified in the Exchange Agreement. Assuming a
transaction closing date of September 27, 2021, and issuance of the
special dividend, LSB will have approximately 88.8 million shares
outstanding, approximately 61% of which will be held by
Eldridge.
About LSB Industries, Inc.
LSB Industries, Inc., headquartered in Oklahoma City, Oklahoma,
manufactures and sells chemical products for the agricultural,
mining, and industrial markets. The Company owns and operates
facilities in Cherokee, Alabama, El Dorado, Arkansas and Pryor,
Oklahoma, and operates a facility for a global chemical company in
Baytown, Texas. LSB’s products are sold through distributors and
directly to end customers primarily throughout the United States.
Additional information about the Company can be found on its
website at www.lsbindustries.com.
About Eldridge Industries, LLC
Eldridge Industries, LLC invests in businesses across the
Insurance, Asset Management, Technology, Mobility, Sports &
Gaming, Media & Music, Real Estate, and Consumer landscapes.
The firm seeks to build and grow businesses led by proven
management teams that have demonstrated leadership and experience
to scale an enterprise. Eldridge Industries, LLC is headquartered
in Greenwich, Connecticut, with additional offices in Beverly
Hills, New York, and London. Additional information about Eldridge
Industries, LLC can be found on its website at
www.eldridge.com.
Forward-Looking Statements
Statements in this release that are not historical are
forward-looking statements within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. These forward-looking
statements, which are subject to known and unknown risks,
uncertainties and assumptions about us, may include projections of
our future financial performance including the effects of the
COVID-19 pandemic and anticipated performance based on our growth
and other strategies and anticipated trends in our business. These
statements are only predictions based on our current expectations
and projections about future events. There are important factors
that could cause our actual results, level of activity, performance
or actual achievements to differ materially from the results, level
of activity, performance or anticipated achievements expressed or
implied by the forward-looking statements. Significant risks and
uncertainties may relate to, but are not limited to, our ability to
consummate the exchange transaction on the terms described herein
and in the definitive proxy statement referred to herein or at all,
business and market disruptions related to the COVID-19 pandemic,
market conditions and price volatility for our products and
feedstocks, as well as global and regional economic downturns,
including as a result of the COVID-19 pandemic, that adversely
affect the demand for our end-use products; disruptions in
production at our manufacturing facilities; and other financial,
economic, competitive, environmental, political, legal and
regulatory factors. These and other risk factors are discussed in
the Company’s filings with the Securities and Exchange Commission
(SEC), including its Annual Report on Form 10-K for the year ended
December 31, 2020.
Moreover, we operate in a very competitive and rapidly changing
environment. New risks and uncertainties emerge from time to time,
and it is not possible for our management to predict all risks and
uncertainties, nor can management assess the impact of all factors
on our business or the extent to which any factor, or combination
of factors, may cause actual results to differ materially from
those contained in any forward-looking statements. Although we
believe the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results,
level of activity, performance or achievements. Neither we nor any
other person assumes responsibility for the accuracy or
completeness of any of these forward-looking statements. You should
not rely upon forward-looking statements as predictions of future
events. Unless otherwise required by applicable laws, we undertake
no obligation to update or revise any forward-looking statements,
whether because of new information or future developments.
No Offer or Solicitation
This communication is not intended to and shall not constitute
an offer to buy or sell or the solicitation of an offer to buy or
sell any securities, or a solicitation of any vote or approval, 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
U.S. Securities Act of 1933, as amended, or an exemption from the
registration requirements thereof.
Additional Information about the Exchange Transaction and
Where to Find It
In connection with the proposed transaction, LSB has filed with
the Securities and Exchange Commission (“SEC”) a proxy statement
for the special meeting of LSB stockholders and may also file other
relevant documents with the SEC regarding the proposed transaction.
This communication is not a substitute for the proxy statement or
any other document that LSB may file with the SEC. The definitive
proxy statement was mailed to LSB stockholders commencing on August
26, 2021. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE
PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS THAT MAY BE FILED
WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE
DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME
AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT
INFORMATION ABOUT LSB AND THE PROPOSED TRANSACTION. Investors and
security holders will be able to obtain free copies of the proxy
statement and other documents containing important information
about LSB and the proposed transaction, once such documents are
filed with the SEC, through the website maintained by the SEC at
http://www.sec.gov. Copies of the documents filed with the SEC by
LSB may be obtained free of charge on LSB’s website at
www.lsbindustries.com or by contacting Michael Foster, General
Counsel and Secretary by email at mfoster@lsbindustries.com or by
phone at 405-510-3596.
Participants in the Solicitation
LSB and certain of its directors and executive officers may be
deemed to be participants in the solicitation of proxies in respect
of the proposed transaction. Information about the directors and
executive officers of LSB, including a description of their direct
or indirect interests, by security holdings or otherwise, is set
forth in LSB's proxy statement for its 2021 Annual Meeting of
Stockholders, which was filed with the SEC on April 19, 2021 and
its proxy statement for the special meeting of stockholders, which
was filed with the SEC on August 26, 2021, and LSB's Annual Report
on Form 10-K for the fiscal year ended December 31, 2020, which was
filed with the SEC on February 25, 2021. Other information
regarding the participants in the proxy solicitations and a
description of their direct and indirect interests, by security
holdings or otherwise, is contained in the proxy statement and
other relevant materials filed with the SEC regarding the proposed
transaction. Investors should read the proxy statement carefully
before making any voting or investment decisions. You may obtain
free copies of these documents from LSB using the sources indicated
above.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210826005259/en/
Company Contact: Mark Behrman, President & CEO Cheryl
Maguire, Executive Vice President & CFO (405) 235-4546
Investor Contact: The Equity Group Inc. Fred Buonocore,
CFA (212) 836-9607
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