Highbury's Shareholder Fight Ends in an AMG Victory
Reported by Neil Anderson, Managing Editor
Highbury Financial's lead dissident shareholder just signed off on Highbury's sale to Affiliated Managers Group. On Monday the Denver-based parent of Aston Asset Management revealed that Timothy Brog's Peerless Systems Corporation (which owns 20.4 percent of Highbury) has agreed to vote in favor of the $117 million AMG deal, unveiled a week ago.
The move ends a long proxy fight between Brog and his allies on one side, and Highbury management on the other (see MFWire, 8/31/2009). As part of the deal, Highbury will pay Peerless $200,000 to cover legal expenses for its proxy fight. In exchange, Peerless will stop fighting to put Brog on Highbury's board, will stop two of their resolution campaigns, will vote for two board members and of course won't stop the merger.
And if the AMG deal is closed by July 16, 2010, Highbury promised to push Brog onto the board.
Company Press Release
DENVER, CO--(December 21, 2009) - Highbury Financial Inc. ("Highbury") (OTCBB: HBRF) (OTCBB: HBRFW) (OTCBB: HBRFU) announced today that it has entered into an agreement with Peerless Systems Corporation and Timothy E. Brog which will end Peerless' proxy contest to elect Timothy Brog to Highbury's board of directors at the 2009 annual meeting of Highbury stockholders and will end Peerless' support of two non-binding stockholder resolutions. Peerless owns 3,070,355 shares of Highbury common stock, representing 20.4% of the outstanding shares.
Under the agreement, Peerless and Mr. Brog will cease all of their proxy solicitation efforts with respect to the 2009 annual meeting of Highbury stockholders, will not vote any proxies obtained by them at the 2009 annual meeting of Highbury stockholders, will vote all of their shares of Highbury common stock in favor of the election of Hoyt Ammidon Jr. and John Weil as directors of Highbury for a term expiring at the 2012 annual meeting of Highbury stockholders, will vote all of their shares in accordance with the recommendations of the Highbury board of directors with respect to the proposed merger (the "Merger") of Highbury into a wholly-owned subsidiary of Affiliated Managers Group, Inc. ("AMG") on the terms currently proposed, will waive their appraisal and dissenters' rights with respect to the Merger and will not take any action in opposition to the recommendations or proposals of the board of directors of Highbury to effect a change of control of Highbury.
The agreement further provides that if the Merger is not completed on or before July 16, 2010, or the merger agreement between Highbury and AMG with respect to the Merger (the "Merger Agreement") is terminated, then the board of directors of Highbury will take all necessary action to appoint Mr. Brog to serve on the Highbury board of directors for a term expiring at the 2012 annual meeting of stockholders. Highbury also has agreed to reimburse Peerless for $200,000 of its expenses incurred in the proxy contest with respect to the 2009 annual meeting of stockholders. The parties also have agreed to customary mutual releases, covenants not to sue and non-disparagement provisions.
The agreement among Highbury, Peerless and Mr. Brog will terminate upon the earliest of (i) the mutual agreement of the parties, (ii) consummation of the Merger, (iii) August 13, 2010 or (iv) the termination of the Merger Agreement. The mutual releases and covenants not to sue will survive such termination.
Richard S. Foote, President and Chief Executive Officer of Highbury, stated, "We are pleased to have reached an agreement with Peerless Systems Corporation and Mr. Brog to obtain their support for the recommendations of Highbury's board of directors for the proposals to be voted on at our 2009 annual meeting and at a special meeting of stockholders to be held in 2010 with respect to our merger with AMG. We look forward to working diligently toward the timely consummation of the business combination."
Despite the agreement ending the proxy contest, the board of directors of Highbury urges stockholders to show their support for the election of Messrs. Ammidon and Weil at the 2009 annual meeting by returning the WHITE proxy card.
Where to Find Additional Information
Highbury and AMG intend to file with the Securities and Exchange Commission (the "SEC") a joint registration statement and proxy statement, which will contain a prospectus relating to the securities AMG intends to issue in the proposed merger and a preliminary proxy statement in connection with the proposed merger, and Highbury intends to mail a definitive proxy statement and other relevant documents to Highbury stockholders. Stockholders of Highbury and other interested persons are advised to read, when available, Highbury's preliminary proxy statement, and amendments thereto, and definitive proxy statement in connection with Highbury's solicitation of proxies for the special meeting to be held to approve the merger because these proxy statements will contain important information about AMG, Highbury and the proposed merger. The definitive proxy statement will be mailed to stockholders as of a record date to be established for voting on the merger. Stockholders will also be able to obtain a copy of the preliminary and definitive proxy statements, without charge, once available, at the SEC's Internet site at http://www.sec.gov or by directing a request to: Highbury Financial Inc., 999 Eighteenth Street, Suite 3000, Denver, CO 80202, Attention: Corporate Secretary, Tel: (303) 357-4802.
Highbury and its directors and executive officers may, under SEC rules, be deemed to be participants in the solicitation of proxies from Highbury's stockholders in connection with the special meeting to be held to approve the merger. Additional information concerning Highbury's directors and executives officers, including information regarding Highbury's directors' and officers' beneficial ownership of Highbury common stock and preferred stock, will be included in the preliminary and definitive proxy statements filed with the SEC when the preliminary and definitive proxy statements become available.
2009 Annual Meeting
Additional information relating to Highbury's director nominees and its 2009 annual meeting is included in the Definitive Proxy Statement filed with the SEC on November 24, 2009. The Definitive Proxy Statement and any other documents filed by Highbury with the SEC may be obtained free of charge at the SEC's web site at http://www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the Commission by Highbury on the "Investor Information" pages of Highbury's website at http://www.highburyfinancial.com, or by contacting Richard S. Foote at (212) 688-2341. Investors and security holders should read the proxy statement and the other relevant materials when they become available before making any voting or other decision with respect to the 2009 annual meeting. Highbury and its directors and executive officers may, under SEC rules, be deemed to be participants in the solicitation of proxies from Highbury's stockholders in connection with the 2009 annual meeting of stockholders. Additional information concerning Highbury's directors and executives officers is included in the Definitive Proxy Statement filed with the SEC.
Certain statements in this communication regarding the proposed merger between AMG and Highbury, and other statements relating to future results, strategy and plans of AMG and Highbury (including certain projections and business trends, and statements which may be identified by the use of the words "may", "intend", "expect" and like words), constitute "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected as a result of certain risks and uncertainties. For AMG, these risks and uncertainties include, but are not limited to changes in the securities or financial markets or in general economic conditions, the availability of equity and debt financing, competition for acquisitions of interests in investment management firms, the ability to close pending investments, the investment performance of AMG's affiliates and their ability to effectively market their investment strategies and other risks detailed from time to time in AMG's filings with the SEC. For Highbury, factors include, but are not limited to: the successful combination of Highbury with AMG's business, the ability to retain key personnel and the ability to achieve stockholder and regulatory approvals and to successfully close the transaction. Additional information on other factors that may cause actual results and Highbury's performance to differ materially is included in Highbury's periodic reports filed with the SEC, including but not limited to Highbury's Form 10-K for the year ended December 31, 2008 and subsequent Forms 10-Q. Copies may be obtained by contacting Highbury or at the SEC's web site at http://www.sec.gov. Highbury cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. These forward-looking statements are made only as of the date hereof, and Highbury undertakes no obligations to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.