Preparing for the 2014 Proxy Season

While it may seem early to be preparing for the 2014 proxy season, my colleagues at Latham & Watkins, the law firm, and Georgeson, the proxy solicitor, hosted a webinar on that topic recently

Below, you’ll find the description of the webinar and a link to the registration page.

Link to registration page.

Corporate Governance Webcasts: A Complimentary Series2014 Proxy Season: Strategically Preparing for Your Fall and Winter
Program

The fall is a critical period for US public companies and their management and directors to become educated and organized for the 2014 Proxy Season.During this 60-minute program, Latham & Watkins and Georgeson join together again to provide recommendations on the pro-active steps companies should consider taking during this period in order to prepare for the 2014 Proxy Season. Topics that will be covered include:

  • Say-on-Pay Advance Preparation: lessons learned in the first three say-on-pay vote seasons; engagement with key institutional investors regarding executive compensation policies; preparation for compensation committee deliberations; dealing with new policies from the proxy advisory firms and more compensation proposals from shareholders; the impact of the new NYSE and Nasdaq listing standards on Compensation Committee advisor independence.
  • Proxy Season Advance Preparation: constructive engagement with key institutional investors and the proxy advisory firms to identify and seek early resolution of corporate governance issues; consideration of proposed SEC rulemaking; and potential proxy season litigation.
  • Advance Preparation for other hot button shareholder proposals such as political contributions and lobbying, board declassification, independent chairmen, proxy access, environmental, social and other governance issues.
 
Registration
Click here to register online.
Don’t miss out on our upcoming programs:

  • January 15, 2014 – Drafting Your Proxy Statement and Preparations for a Successful Annual Meeting
  • June 18, 2014 – Lessons Learned and Coming Attractions

 

Invitation to follow closer to the program date. To ensure that you receive an invitation, please opt-in to our Webcast Mailing List by clicking here.

 Speakers

Jim Barrall, Partner, Latham & Watkins

Steven Stokdyk, Partner, Latham & Watkins

Rhonda Brauer, Senior Managing Director, Corporate Governance, Georgeson

 

Questions

For more information and questions about this event, please contact: Michele Bravo

Sponsors

Latham & Watkins is a leading global law firm dedicated to working with clients to help them achieve their business goals and overcome legal challenges anywhere in the world. The firm has earned considerable market recognition based on a record of landmark matters and a unified culture of innovation and collaboration. From a global platform of offices covering the world’s major financial, business and regulatory centers, the firm’s lawyers help clients succeed. For more information, visit www.lw.com.

Georgeson is the world’s foremost provider of strategic shareholder consulting services to corporations and shareholder groups working to influence corporate strategy. We offer unsurpassed advice and representation in annual meetings, mergers and acquisitions, proxy contests and other extraordinary transactions. In global transactions, our capacity and network is unmatchedOur core proxy expertise is enhanced with and complemented by our strategic consulting services, as well as by the Georgeson inVU™ platform, a software tool that provides insight into investor ownership and voting profiles. For more information, visit www.georgeson.com.

 

M&A Trends In 2013

By Dennis McCarthy – (213) 222-8260 – dennis@mbsecurities.com – 

Stats now confirm what many of us in the M&A business have recognized for some time (link).  Middle market M&A activity has gotten stronger over the last several quarters.

The stats that I mention are courtesy of Mergermarket, the well-regarded source for M&A data.  Mergermarket reports that middle market M&A value is up 40% so far in 2013 vs  the same period last year as reported in its “Q1-Q3 M&A Trend Report”.

Stats like these are valuable but they’re a lagging indicator of deal activity because M&A projects typically take months from initiation to completion.   This report captures M&A deals that closed during this last three quarters ended September 30, 2013.  Companies embarked on those projects many months before, many in 2012, for example.

Now, another point to consider.  The fourth quarter of last year was a very strong quarter for M&A deals because deals  closed in 2012 qualified for favorable tax treatment. So the full year 2013 results may not show such a dramatic increase because last year’s fourth quarter was such a big M&A quarter.

I think the trend of increasing middle market M&A activity will continue; the conditions driving the trend remain favorable.

I’ve attached a link to the Mergermarket report below.

Please contact me to help your company to successfully complete an M&A deal or any capital market project.

Click here to go to the Mergermarket Q1-Q3 M&A Trend Report

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Canadian Activist Update Webinar

For my friends at Canadian public companies, here is an upcoming webinar (Oct 16th) recapping 2013 and suggesting what 2014 may hold in store.

Two of the webinar hosts created the following video to promote the webinar.

Click this link to take you to the related blogpost.

SEC Charges IR Exec. With Selective Disclosure

As a timely reminder to those of us who work with public companies, the SEC just charged an investor relations person at a public company with selective disclosure of what was material non-public information.

Those of us who’ve worked with public companies for many years recall the outrageous abuses which prompted Reg FD in order to promote full and fair disclosure of material financial information.

Even after Reg FD, however, occasionally company executives forget or get sloppy about following the disclosure rules strictly.

This case, then, is a valuable reminder to us all.  Please click here to take you to the article by Holland & Knight which describes the circumstances of the case.

http://www.jdsupra.com/legalnews/sec-charges-former-head-of-investor-rela-32855/?utm_source=jds&utm_medium=twitter&utm_campaign=securities
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Tender Offer Rule Fix Webinar

Delaware has modified its tender offer rules to streamline the second step merger process as I described in my post, Tender Offer Rule Fix.

Latham & Watkins hosted a valuable webinar on this topic recently with the replay available below.

The link to the sign up page and a description of the webinar are presented below.

Sign up link.

A Complimentary 60-minute Webcast

Amendments to Delaware Merger Statutes:
An Arrow in Your Quiver, Not a Silver Bullet

Program

The Delaware State Bar Association recently proposed amendments to the Delaware General Corporation Law (DGCL) intended to facilitate the use of tender offers in acquisitions of publicly traded corporations. If adopted, these amendments will, in many circumstances, permit the purchaser of a simple majority of a target’s outstanding shares (as opposed to the current 90 percent threshold) to effect a short-form merger immediately, saving substantial expense, eliminating the delay associated with SEC review of disclosure materials and facilitating financing for leveraged transactions.

 

Registration

 

Click here to register for this webcast. A confirmation message will be sent to your email address with instructions for logging on to the webcast.

 

In this 60-minute webcast, we will explore the intended benefits of the proposed amendments, why they represent a positive step in the recent evolution of tender offer practice, and what private equity firms in particular need to consider regarding this transaction structure.

 

Speakers
Michael Allen, Director, Richards, Layton and Finger

David S. Allinson, Partner, New York
Bradley C. Faris, Partner, Chicago
Timothy P. FitzSimons, Partner, Chicago
Howard A. Sobel, Partner, New York

Questions

For more information and questions about this event, please contact Michele Bravo at michele.bravo@lw.com or +1.213.892.3054.

Sponsors

Latham & Watkins LLP is a leading global law firm dedicated to working with clients to help them achieve their business goals and overcome legal challenges anywhere in the world. The firm has earned considerable market recognition based on a record of landmark matters and a unified culture of innovation and collaboration. From a global platform of offices covering the world’s major financial, business and regulatory centers, the firm’s lawyers help clients succeed. For more information, visit www.lw.com.

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Wharton MBA Classes Free Online

The Wharton School of the University of Pennsylvania is offering certain of its courses for free online through the Coursera organization.

Available courses include several at the entry level, specifically, financial accounting, corporate finance, marketing and operations management.  Five electives are also available through Coursera.

Thanks to PSFK London for tipping me to this interesting item – Link to article

Click here to take you to the Coursera site for Penn. and Wharton

 

Practical Guide to New Deal Marketing

I’ve just posted to my Growth Capital site (click here) practical steps to implementing the new marketing rules permitted under the JOBS Act.

Click or copy and paste this link: http://growth-cap.com/practical-guide-to-new-deal-marketing/

 

By Dennis McCarthy

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Covenant-lite Loan Volume Doubles

By Dennis McCarthy – (213) 222-8260 – dennis@mbsecurities.com –

If your company hasn’t already refinanced into a covenant-lite loan, you should consider refinancing now.  

Not all borrowers will qualify for a covenant-lite loan but, if you can obtain one, a covenant-lite loan is typically easier for a borrower. 

A borrower with a covenant-lite loan will likely spend less time managing to loan covenants and certainly less money on obtaining waivers of covenant terms.

Recently,  Standard & Poor’s reported that the volume of covenant-lite loans so far this year (through Aug 8th) is double that of all of last year.

So far in 2013, more than half the leveraged loans to come to market have been covenant-lite vs. roughly 22% of loans to this point in 2012.

In addition, S&P reports that even smaller loan sizes, $200 million and under, are getting covenant-lite treatment.

Covenant-lite does not mean covenant free. 

Covenant-lite generally means that the loan does not have maintenance covenants, such as a minimum ratio of cash flow to interest, known as an interest coverage test. 

If your company has a loan outstanding, it probably has several of these maintenance covenants set as a relatively tight “trip wire” to alert your lender at the first sign that your company’s results are diverging from its projections.

While covenant-lite loans don’t have maintenance covenants, they often have other types such as negative covenants and incurrence tests. For example, a negative covenant might limit the amount of dividends that a company could pay to its equity or an incurrence test might limit the amount of debt a company could take on.

These covenants restrict a company’s actions but leave a company plenty of flexibility.

What’s prompting lenders to offer covenant-lite loans? 

The increase in covenant-lite loans is largely attributable to the large size and dispersed ownership of leveraged loans today.  As loans have gotten larger in size, the ownership has gotten fragmented.  Many leveraged loans now are widely held by a large number of banks and special purpose hedge funds, or collateralized loan funds. 

These large groups of lenders find it difficult to manage a loan with tight maintenance covenants.  The reaction, therefore, is to eliminate maintenance covenants in favor of other types of covenants.

Recent history has shown that companies with covenant-lite loans have performed comparatively well. 

Lenders in covenant-lite loans have recovered slightly more of their loan, in the event of trouble, than lenders in loans with maintenance covenants.  The sample involved, however, is small and the history short and may be biased by the limited historical availability of covenant-lite loans to larger, better credits. 

Despite the positive historical statistics, some credit agencies are sounding the alarm at the increase in covenant-lite loans predicting that lenders will have less control should there be economic trouble ahead.

So, while the credit market is still receptive to covenant-lite loans, this is the time for your company to consider refinancing. 

I’ve provided links to several interesting articles below.

Please contact me to help your company to refinance its debt or to complete any capital market transaction.

http://www.forbes.com/sites/spleverage/2013/08/14/covenant-lite-leveraged-loan-volume-soars-to-new-record/

http://blogs.reuters.com/felix-salmon/2013/05/31/dont-worry-about-cov-lite-loans/

http://www.loomissayles.com/internet/internetdata.nsf/0/0BF67A378755F21085257B5000566A43/$FILE/CovenantLitePaper.pdf

http://www.pehub.com/2013/09/05/covenant-lite-issuance-more-doubles-2013/#!

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Financing Window for Middle Market Private Companies

GettingMoneyThe window is open for smaller middle market private companies to obtain capital from private equity funds.  The former cutoff of $5 million EBITDA to get interest from private equity firms seems no longer in place.  Smaller firms with less than $5 million of EBITDA are attracting interest.

If your smaller middle market company would benefit from additional equity capital, now may be the time.

Click here to go to my article on the new site, Growth Capital.
 By Dennis McCarthy
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Life Sciences IPOs Surge

There were 8 life science IPOs reported in May this year, according to “The Deal” and my colleague, David Feldman of Richardson & Patel.

We’ve just completed the best quarter for IPOs since 2000, reports these sources.

If your company is considering raising capital, now may be the time.

Public companies may find my Public Equity Series of videos helpful in learning the options available to them and the pro’s and con’s of each alternative.

Click here to go to David Feldman’s blog.

Post by Dennis McCarthy
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