TSLX Reminds TICC Stockholders that Their Votes Still Count and Calls
on Them to Vote Today - Voting GOLD Will Allow Stockholders to
Potentially Realize the Value of the TSLX Offer
TPG Specialty Lending, Inc. (“TSLX”; NYSE:TSLX), a specialty finance
company focused on lending to middle-market companies, today sent a
letter to stockholders of TICC Capital Corp. (“TICC”; Nasdaq:TICC)
commenting on TICC’s recent statements regarding the Benefit Street
Partners transaction and agreement with Raging Capital Management, LLC.
A copy of the letter follows:
Dear Fellow TICC Stockholders:
We’re writing to ensure that you have access to simple facts regarding
the future of your investment in TICC Capital Corp. (“TICC”) and the
sale of TICC’s adviser (the “BSP Transaction”) to Benefit Street
Partners, L.L.C., an affiliate of Providence Equity Partners L.L.C.
(“BSP”).
A simple review of the record shows that TICC has not been forthcoming
with its stockholders.
A FEDERAL JUDGE HAS DECLARED THAT TICC LIKELY VIOLATED THE LAW AND
MISLED STOCKHOLDERS
The market has noticed TICC’s detrimental actions and expressed its
concern time and again. All three proxy advisors that independently
advise stockholders on how to vote, five of the six leading independent
analysts that cover TICC, and notable TICC stockholders have clearly
expressed significant concerns related to the BSP Transaction.
TICC’s desperate actions to strike an agreement with a single
stockholder and to adjust BSP’s fees once again do not change the basic
facts. The BSP Transaction is still inferior. TICC’s
adviser still does not deserve to be paid MILLIONS for a failed
performance.
TICC HAS REPEATEDLY MADE DESPERATE EFFORTS TO PROTECT THE MILLIONS
SELF-INTERESTED DIRECTORS WILL PAID
TPG Specialty Lending, Inc. (“TSLX”) has presented an offer that
delivers a substantial and upfront premium to stockholders and
opportunity to participate in the value creation of an industry leading
platform. In contrast, TICC has:
-
Refused to engage in any substantial conversations regarding our offer.
-
Been found to have likely misled stockholders and violated the law
regarding how it disclosed details of the BSP Transaction.
-
At least twice altered its deal with BSP under pressure from others.
-
Struck a side deal with one stockholder demonstrating its continued
lack of alignment in protecting the interests of ALL stockholders.
Adding insult to injury, TICC has taken these self-serving actions after
12 years of absolutely abysmal total returns for stockholders. Once
again, we present TICC’s total return figures for stockholders to
consider against key benchmarks and TSLX’s performance.
|
|
|
|
|
TICC Relative Underperformance
|
Total Return %
|
|
One Year
|
|
Three Year
|
|
Since IPO1
|
|
One Year
|
|
Three Year
|
|
Since IPO
|
TICC
|
|
(21.8
|
)%
|
|
(13.9
|
)%
|
|
51.6
|
%
|
|
-
|
|
|
-
|
|
|
-
|
|
BDC Composite2
|
|
(9.8
|
)
|
|
7.4
|
|
|
206.0
|
|
|
(12.0
|
)%
|
|
(21.3
|
)%
|
|
(154.4
|
)%
|
S&P 500
|
|
1.8
|
|
|
43.8
|
|
|
143.7
|
|
|
(23.6
|
)
|
|
(57.7
|
)
|
|
(92.1
|
)
|
US Treasuries
|
|
3.2
|
|
|
3.9
|
|
|
60.4
|
|
|
(25.0
|
)
|
|
(17.9
|
)
|
|
(8.8
|
)
|
Investment Grade Corporate Debt
|
|
1.1
|
|
|
7.3
|
|
|
84.3
|
|
|
(22.8
|
)
|
|
(21.2
|
)
|
|
(32.7
|
)
|
High Yield Corporate Debt
|
|
(1.5
|
)
|
|
10.7
|
|
|
105.7
|
|
|
(20.3
|
)
|
|
(24.6
|
)
|
|
(54.1
|
)
|
TSLX3
|
|
12.0
|
%
|
|
51.6
|
%
|
|
N/A
|
|
|
(33.8
|
)%
|
|
(65.5
|
)%
|
|
N/A
|
|
Note: Market data as of 15-Sep-2015; Source: Bloomberg, fixed income
benchmark data from Markit iBoxx
|
|
Stockholders must ask why TICC’s manager should be PAID millions to be
replaced when it can be replaced at NO COST? Stockholders have
already paid this manager more than $127 million for a completely failed
performance. This performance has destroyed the value of
stockholders’ investment and left its future in question, with five of
the six analysts covering TICC expecting it will have to cut its
dividend.
Raging Capital Management, LLC (“Raging”) previously called upon TICC to
postpone the special meeting of TICC stockholders originally scheduled
for October 27, 2015 and to “run a full, fair and complete strategic
review process to maximize value for all TICC stockholders.” To our
great disappointment, Raging Capital announced its support for the BSP
Transaction with no review, no process, and certainly no maximizing of
value. The only thing that has happened is a self-serving deal to BUY
this stockholder’s support in a bald attempt to push through an inferior
transaction.
TICC and its Special Committee continue to blatantly withhold key facts
from you, as they have been doing for weeks. A federal judge had to
intervene and issue a stinging critique of TICC AND ITS SPECIAL
COMMITTEE’s behavior and a direct order that TICC correct serious and
blatant attempts to mislead stockholders on critical facts. You
deserve better! How can anything TICC tells
stockholders about the BSP Transaction now be trusted?
ONE FACT HASN’T CHANGED – ONLY TSLX IS OFFERING STOCKHOLDERS AN
IMMEDIATE, UPFRONT PREMIUM
Under TSLX’s proposal, TICC stockholders would receive an upfront
premium and the opportunity to participate in the value creation of a
market-leading platform. Our proposal constitutes a 20% premium to the
closing price of TICC shares the day before we announced it publicly.4
We stand by our offer and are ready to deliver value to TICC
stockholders.
VOTE THE GOLD PROXY CARD AGAINST
MANAGEMENT’S PROPOSALS TODAY!
Do not let TICC continue to mislead you. Tell TICC that you are fed up
with their mismanagement. Vote the GOLD card NOW to send a clear message
to TICC to engage with TSLX. Visit www.changeTICCnow.com
for more information about TSLX’s compelling offer.
Sincerely,
Joshua Easterly
Chairman, Board of Directors
Co-Chief
Executive Officer
Michael Fishman
Co-Chief Executive Officer
If you have any questions concerning this letter or TSLX’s proposal,
please
call MacKenzie Partners at one of the phone numbers listed below.
MacKenzie Partners, Inc.
105 Madison Avenue
New York, NY 10016
TPG@mackenziepartners.com
(212) 929-5500 (call collect)
or
TOLL-FREE (800) 322-2885
About TPG Specialty Lending
TPG Specialty Lending, Inc. (“TSLX”, or the “Company”) is a specialty
finance company focused on lending to middle-market companies. The
Company seeks to generate current income primarily in U.S.-domiciled
middle-market companies through direct originations of senior secured
loans and, to a lesser extent, originations of mezzanine loans and
investments in corporate bonds and equity securities. The Company has
elected to be regulated as a business development company, or a BDC,
under the Investment Company Act of 1940 and the rules and regulations
promulgated thereunder. TSLX is externally managed by TSL Advisers, LLC,
a Securities and Exchange Commission (“SEC”) registered investment
adviser. TSLX leverages the deep investment, sector, and operating
resources of TPG Special Situations Partners, the dedicated special
situations and credit platform of TPG, with over $12 billion of assets
under management, and the broader TPG platform, a global private
investment firm with over $74 billion of assets under management. For
more information, visit the Company’s website at www.tpgspecialtylending.com.
Forward-Looking Statements
Information set forth herein includes forward-looking statements. These
forward-looking statements include, but are not limited to, statements
regarding TSLX proposed business combination transaction with TICC
Capital Corp. (“TICC”) (including any financing required in connection
with the proposed transaction and the benefits, results, effects and
timing of a transaction), all statements regarding TPG Specialty
Lending, Inc.’s (“TSLX”, or the “Company”) (and TSLX and TICC’s
combined) expected future financial position, results of operations,
cash flows, dividends, financing plans, business strategy, budgets,
capital expenditures, competitive positions, growth opportunities, plans
and objectives of management, and statements containing the words such
as “anticipate,” “approximate,” “believe,” “plan,” “estimate,” “expect,”
“project,” “could,” “would,” “should,” “will,” “intend,” “may,”
“potential,” “upside,” and other similar expressions. Statements set
forth herein concerning the business outlook or future economic
performance, anticipated profitability, revenues, expenses, dividends or
other financial items, and product or services line growth of TSLX (and
the combined businesses of TSLX and TICC), together with other
statements that are not historical facts, are forward-looking statements
that are estimates reflecting the best judgment of TSLX based upon
currently available information. 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 management’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, actual results or performance 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 Securities and Exchange Commission
(“SEC”). Risks and uncertainties related to the proposed transaction
include, among others, uncertainty as to whether TSLX will further
pursue, enter into or consummate the transaction on the terms set forth
in the proposal or on other terms, potential adverse reactions or
changes to business relationships resulting from the announcement or
completion of the transaction, uncertainties as to the timing of the
transaction, adverse effects on TSLX’s stock price resulting from the
announcement or consummation of the transaction or any failure to
complete the transaction, competitive responses to the announcement or
consummation of the transaction, the risk that regulatory or other
approvals and any financing required in connection with the consummation
of the transaction are not obtained or are obtained subject to terms and
conditions that are not anticipated, costs and difficulties related to
the 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 the transaction, unexpected
costs, liabilities, charges or expenses resulting from the transaction,
litigation relating to the 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
The information set forth herein is provided for informational purposes
only and does not constitute an offer to purchase or the solicitation of
an offer to sell any securities. TSLX has filed with the SEC and mailed
to TICC stockholders a definitive proxy statement and accompanying GOLD
proxy card to be used to solicit votes at a special meeting of
stockholders of TICC scheduled to be held on October 27, 2015 against
(a) approval of the new advisory agreement between TICC and TICC
Management, LLC (the “Adviser”), to take effect upon a change of control
of the Adviser in connection with the entrance of the Adviser into a
purchase agreement with an affiliate of Benefit Street Partners L.L.C.
(“BSP”), pursuant to which BSP will acquire control of the Adviser, (b)
the election of six directors nominated by TICC’s board of directors,
and (c) the proposal to adjourn the meeting if necessary or appropriate
to solicit additional votes.
TSLX STRONGLY ADVISES ALL STOCKHOLDERS OF TICC TO READ THE TSLX PROXY
STATEMENT AND ITS 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 AT TSLX’S WEBSITE AT HTTP://WWW.TPGSPECIALTYLENDING.COM.
IN ADDITION, TSLX WILL PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT
CHARGE UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO TSLX’S
PROXY SOLICITOR AT TPG@MACKENZIEPARTNERS.COM.
The participant in the solicitation is TSLX and certain of its directors
and executive officers may also be deemed to be participants in the
solicitation. As of the date hereof, TSLX directly beneficially owned
1,633,660 shares of common stock of TICC.
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 December 31, 2014,
which was filed with the SEC on February 24, 2015, its proxy statement
for the 2015 Annual Meeting, which was filed with the SEC on April 10,
2015, and certain of its Current Reports on Form 8-K. These documents
can be obtained free of charge from the sources indicated above.
Additional information regarding the interests of these participants in
the proxy solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, will also be included in
any proxy statement and other relevant materials to be filed with the
SEC when they become available.
________________________
1 TICC and benchmark returns to 21-Nov-2003
2 BDC
Composite comprised of ACAS, AINV, ARCC, FSC, GBDC, HTGC, MAIN, MCC,
NMFC, PNNT, PSEC, SLRC, TCAP, TCRD and BKCC
3 TSLX
3-year total return based off of 30-Jun-2012 NAV per share, 15-Sep-2015
closing stock price, and cumulative dividends declared during the period
4
For reference, the TSLX Proposal represents a 12.8% discount to TICC’s
NAV as of June 30, 2015, a narrower discount than the price at which the
shares have traded since June 30th.
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