WMI Holdings Corp. Announces Commitment by KKR for Strategic Investment
Parties Enter into Conditional Commitment Letter for KKR to Acquire Subordinated Debt, Convertible Preferred Stock and Warrants..
WMI Holdings Corp.
30 minutes ago
SEATTLE, Dec. 9, 2013 /PRNewswire/ -- WMI Holdings Corp. (WMIH) ("WMI" or the "Company") today announced that KKR & Co. L.P. has entered into a conditional commitment letter to make a strategic investment in the Company (the "Commitment Letter"), dated December 8, 2013.
Subject to the completion of definitive documentation, due diligence and the terms and conditions of the Commitment Letter, KKR has agreed (i) to purchase approximately $10.55 million face amount of convertible preferred stock of the Company at a price per share of $1.10 convertible on a one-for-one basis into shares of common stock of the Company (the "Convertible Preferred Stock"), and (ii) commit to purchase up to $150 million aggregate principal amount of subordinated 7.5% PIK notes, which may be issued in one or more tranches over a three year period, each with a seven year term from the date of initial issuance (the "Subordinated Notes"), subject to certain terms and conditions. Substantially all of the proceeds from the Subordinated Notes, if and when issued, would be used by the Company to fund future acquisitions. Upon consummation of the transactions contemplated by the Commitment Letter, KKR would receive five-year warrants to purchase approximately 61.4 million shares of the Company's common stock, 30.7 million of which would have an exercise price of $1.32 per share and 30.7 million of which would have an exercise price of $1.43 per share.
At this point we just have a letter of intent/commitment letter outlining a "potential" deal. If and when it is consummated at the end of next month, I would expect to see a dramatically sharp increase in the PPS. By the same token, if the deal falls through, we could see a precipitous decline as well. Another scenario is that this PR could bring about other interested parties with as deep, deeper, or much deeper pockets than KKR who may have their eyes on the $6 billion in NOLs. In a best case scenario, a bidding war ensues and we all finally get a peek at what a "significant recovery" for our shares actually looks like.
This may just be the first of many deals on the table for WMIH or it may be the only one for a while -- time will tell. Either way, one of the best things about this announcement is that it lets the major players know that we exist, we are planning on being around a while, we are looking to build a solid foundation to build or M&A strategy platform upon...and we're ready to do business.
It's good to see that they are doing something. Price action reflects this sentiment.
The terms from KKR do not appear to me to be very favorable.
CANT is bidding 1.18 and they are usually right about what the fair value is.
But maybe today's events will attract some attention. I'd like them to pay the $2 million cancellation fee to KKR when a better offer appears. For the avoidance of doubt, I am definitely making this up.
What's a horrible news? Yes, where is $4-$5. Like I said, NOLS was worthless, I wanted something in ESCROW, not $1.22 (It's the same #$%$042/share). They wasted a lots of money on attorneys and professional fees to get this amount.
MW is an idiot and an AMbulance chaser. Who contacted him to be equity member?
Michael Willingham, Chairman of the Company said, "We believe this investment from KKR will provide WMI Holdings with a compelling opportunity to create meaningful shareholder value. KKR has a global network of relationships, deep expertise in transaction execution, portfolio management, capital-raising, and operational improvement, and we believe a partner with these capabilities will augment our ability to execute on our stated acquisition strategy."
Tagar Olson, Member and Head of KKR's Financial Services team stated, "As a firm that invests across a wide range of asset classes, we think KKR is well-positioned to serve as a long-term aligned capital partner to the Company. We are looking forward to being a strategic investor in WMI as the Company grows and diversifies its platform in the coming years. We believe there is a compelling opportunity to help build shareholder value as a significant investor alongside WMI's existing shareholders."