Walter Industries Announces Rate of Taxable Dividend and Estimate of Merger Consideration Payable in Connection With Spin-Off of
April 16 2009 - 4:18PM
PR Newswire (US)
TAMPA, Fla., April 16 /PRNewswire-FirstCall/ -- Walter Industries,
Inc. (NYSE:WLT), a leading producer of U.S. metallurgical coal for
the global steel industry, announced today its estimated
calculations of the cash and non-cash distributions to be made to
its shareholders in the taxable dividend, and the stock
consideration to be paid to its shareholders in the merger,
relating to the spin-off of its wholly-owned subsidiary, Walter
Investment Management LLC ("Spinco") and its merger into Hanover
Capital Mortgage Holdings, Inc. ("Hanover"). As previously
announced, after the close of trading on the NYSE on April 17,
Walter expects to declare a spin-off dividend of one Spinco
interest for each share of Walter common stock outstanding on the
Feb. 27, 2009 record date. Immediately following the spin-off,
Spinco intends to pay a taxable dividend aggregating approximately
$80 million in cash and additional Spinco interests to holders of
Spinco interests received in the spin-off dividend, with the
precise mix of cash and interests based, in part, on elections made
on or prior to the election deadline of April 13 by record holders
of Walter Industries common stock who will receive Spinco interests
in the spin-off dividend. Twenty percent of the taxable dividend
will be paid in cash and the remainder will be paid in Spinco
interests. The tabulation of the results of the elections was
completed today. Holders of more than twenty percent of the
relevant shares elected to receive cash in the taxable dividend. As
a result, the amount of cash payable with respect to each Spinco
interest electing cash will be prorated as described in the
previously delivered election materials. Due to proration,
approximately 25.6 percent of the Spinco interests for which cash
was elected will receive a cash payment from Spinco in the taxable
dividend, and the remaining Spinco interests for which cash was
elected instead will receive additional Spinco interests. In the
taxable dividend: -- Cash Election: Spinco is expected to make a
payment of approximately $1.51 per Spinco interest to holders of
approximately 10.6 million Spinco interests electing to receive
cash in the taxable dividend; and -- Stock Election: Spinco is
expected to distribute approximately 0.3 Spinco interests per
Spinco interest to holders of approximately 42.3 million Spinco
interests who elected to receive Spinco interests, made no
election, or elected to receive cash but instead are receiving
Spinco interests as a result of proration; -- Following the
spin-off and the taxable dividend, and subject to the satisfaction
of all other conditions to closing the merger, Spinco will merge
into Hanover. The combined company will be named Walter Investment
Management Corp. (NYSE Amex: WAC). Based on the results of the
taxable dividend elections, and as a result of the merger, Walter
and Spinco estimate that: -- Cash Election: A holder of 100 shares
of Walter Industries common stock entitled to receive Spinco
interests in the spin-off who elected to receive cash in the
taxable dividend will receive approximately $38.80 in cash in the
taxable dividend and 36.5 shares of Walter Investment common stock
in the merger; and -- Stock Election: A holder of 100 shares of
Walter Industries common stock entitled to receive Spinco interests
in the spin-off who elected to receive additional Spinco interests
in the taxable dividend (or who made no election) will receive
approximately 39 shares of Walter Investment common stock in the
merger. The closing of the merger and related transactions continue
to be subject to the satisfaction of certain conditions. However,
Walter Industries and Spinco currently expect to complete the
spin-off, the taxable dividend and the merger of Hanover and Spinco
after the close of trading on the NYSE on April 17. Walter
Investment is expected to begin "regular way" trading on the NYSE
Amex when the market opens on Monday, April 20. Shares of Walter
Investment common stock issued in exchange for Spinco interests in
the merger are expected to be distributed on or about April 20,
2009. About Walter Industries Walter Industries, Inc., based in
Tampa, Fla., is a leading producer and exporter of metallurgical
coal for the global steel industry and also produces steam coal,
coal bed methane gas, furnace and foundry coke and other related
products. The Company has annual revenues of approximately $1.5
billion and employs approximately 2,250 people. For more
information about Walter Industries, please visit the Company
website at http://www.walterind.com/. About Hanover Capital
Mortgage Holdings Hanover Capital Mortgage Holdings, Inc. is a
mortgage REIT staffed by seasoned mortgage capital markets
professionals. Hanover invests in prime mortgage loans and mortgage
securities backed by prime mortgage loans. For further information,
visit Hanover's Web site at http://www.hanovercapitalholdings.com/.
Additional Information and Where to Find It In connection with the
proposed spin-off of the Financing business of Walter Industries,
Inc. through its wholly-owned subsidiary, Walter Investment
Management LLC, and the proposed merger of Walter Investment
Management LLC with Hanover Capital Mortgage Holdings, Inc. and
certain related transactions, Hanover Capital Mortgage Holdings,
Inc. filed a registration statement with the SEC on Form S-4, as
amended, containing a proxy statement/prospectus (Registration No.
333-155091), and Hanover Capital Mortgage Holdings, Inc. will be
filing other documents regarding the proposed transaction with the
SEC as well. BEFORE MAKING ANY INVESTMENT DECISION, INVESTORS ARE
URGED TO READ THE FINAL PROXY STATEMENT/PROSPECTUS REGARDING THE
PROPOSED TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS CAREFULLY IN
THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final
proxy statement/prospectus has been mailed to shareholders of
Hanover Capital Mortgage Holdings, Inc. and Walter Industries, Inc.
Shareholders will be able to obtain a free copy of the proxy
statement/prospectus, as well as other filings containing
information about Hanover Capital Mortgage Holdings, Inc. and
Walter Industries, Inc., without charge, at the SEC's Internet site
(http://www.sec.gov/). Copies of the proxy statement/prospectus and
the other filings with the SEC that will be incorporated by
reference in the proxy statement/prospectus can also be obtained,
without charge, at Hanover Capital Mortgage Holdings, Inc.'s Web
site (http://www.hanovercapitalholdings.com/). Walter Industries
and Hanover and their respective directors and executive officers
and other persons may be deemed to be participants in the
solicitation of proxies in respect of the proposed merger and
related transactions. Information regarding Walter Industries'
directors and executive officers is available in Walter Industries'
proxy statement for its 2009 annual meeting of shareholders, which
was filed with the SEC March 10, 2009 and revised April 8, 2009 and
Walter Industries' 2008 Annual Report on Form 10-K, which was filed
on Feb. 27, 2009, and information regarding Hanover's directors and
executive officers is available in Hanover's proxy statement for
its 2008 annual meeting of shareholders and Hanover's 2008 Annual
Report on Form 10-K, which were filed with the SEC on April 24,
2008, and March 31, 2009, respectively. Other information regarding
the participants in the proxy solicitation and a description of
their direct and indirect interests, by security holdings or
otherwise, is contained in Hanover's proxy statement/prospectus and
other materials referred to in Hanover's proxy
statement/prospectus. Safe Harbor Statement Except for historical
information contained herein, the statements in this release are
forward-looking and made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995.
Forward-looking statements, including expressions such as
"believe," "anticipate," "expect," "estimate," "intend," "may,"
"will," and similar expressions involve known and unknown risks,
uncertainties, and other factors that may cause Walter Industries'
or Hanover's actual results in future periods to differ materially
from the expectations expressed or implied by such forward-looking
statements. These factors include, among others, the following: the
market demand for Walter Industries' and Hanover's products as well
as changes in costs and the availability of raw material, labor,
equipment and transportation; changes in weather and geologic
conditions; changes in extraction costs, pricing and assumptions
and projections concerning reserves in Walter Industries' mining
operations; changes in customer orders; pricing actions by Walter
Industries' and Hanover's competitors, customers, suppliers and
contractors; changes in governmental policies and laws; further
changes in the mortgage-backed capital markets; changes in general
economic conditions; and the successful implementation and
anticipated timing of any strategic actions and objectives that may
be pursued, including the announced separation of the Financing
business from Walter Industries. In particular, the separation of
Walter Industries' Financing business is subject to a number of
closing conditions which may be outside of Walter Industries'
control. Forward- looking statements made by Walter Industries in
this release, or elsewhere, speak only as of the date on which the
statements were made. Any forward-looking statements should be
considered in context with the various disclosures made by Walter
Industries and Hanover about our respective businesses, including
the Risk Factors described in Walter Industries' 2008 Annual Report
on Form 10-K, the Risk Factors described in Hanover's 2008 Annual
Report on Form 10-K, and each of Walter Industries' and Hanover's
other filings with the Securities and Exchange Commission. Neither
Walter Industries nor Hanover undertakes any obligation to update
its forward-looking statements as of any future date.
http://www.newscom.com/cgi-bin/prnh/20020429/FLM010LOGO-cDATASOURCE:
Walter Industries, Inc. CONTACT: Investor Contact: Mark Tubb, Vice
President - Investor Relations, +1-813-871-4027, ; or Media
Contact: Michael A. Monahan, Director - Corporate Communications,
+1-813-871-4132, Web Site: http://www.walterind.com/
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