Cannae Holdings, Inc. Announces Final Results of Modified Dutch Auction Tender Offer

Rhea-AI Summary

Cannae Holdings, Inc. (CNNE) successfully completed a 'Dutch auction' tender offer to purchase $200 million of its common stock. The Company accepted 9,672,540 shares at $22.95 per share, totaling approximately $222.0 million.

Financial Analyst

The completion of Cannae Holdings' Dutch auction tender offer is a significant financial event with direct implications on the company's capital structure and shareholder value. By repurchasing approximately 13.4% of its outstanding shares, the company is effectively signaling confidence in its intrinsic value and future prospects. The buyback at $22.95 per share, a price within the initially proposed range, reflects a strategic move to optimize the equity base, potentially leading to earnings per share (EPS) accretion. This is due to the reduction in the number of shares outstanding, which may result in a higher EPS if net income remains constant or grows.

For investors, the buyback could indicate a bullish stance by the company's management, suggesting that they believe the stock is undervalued. The absence of a proration factor means that all shareholders who tendered their shares at or below the purchase price had their shares bought back in full, which could result in immediate liquidity and a premium over the market price prior to the announcement of the tender offer. However, investors should also consider the opportunity cost of the capital used for the buyback, which could have been allocated to other growth initiatives or debt reduction.

Market Research Analyst

The tender offer's impact on Cannae Holdings' stock will likely be multifaceted. The repurchase of a substantial portion of shares should theoretically increase the stock's scarcity, possibly leading to a positive short-term price movement. However, the long-term effect will depend on the market's perception of the company's growth opportunities and operational efficiency. Share repurchases are sometimes viewed critically if they occur at the expense of investment in core business activities or innovation.

Market participants will also assess the role of J.P. Morgan Securities LLC as the dealer manager in facilitating a smooth tender process, which may enhance investor confidence in the procedural aspects of the offer. The fact that the company chose to exercise its right to purchase an additional 2% of shares beyond the initial offer could be interpreted as a strong affirmative action, potentially reassuring investors about the company's financial health and market outlook.

Legal Expert

From a legal perspective, the tender offer process must adhere to regulatory requirements and provide equitable treatment to all participating shareholders. Cannae Holdings' adherence to the terms and conditions as stated in the offer and the absence of a proration factor, suggests a straightforward transaction without the need for a pro-rata distribution of accepted shares. This can help avoid potential legal complications that may arise from shareholder disputes in more complex tender offer scenarios.

The role of D. F. King & Co., Inc. as the information agent is important in ensuring that all shareholders receive accurate and comprehensive information about the offer, allowing them to make informed decisions. The smooth execution of the tender offer, including the timely payment for shares, reflects positively on the company's governance practices, which can be a critical factor for investor confidence and the company's reputation in the market.

LAS VEGAS--(BUSINESS WIRE)-- Cannae Holdings, Inc. (NYSE: CNNE) (“Cannae” or the “Company”) today announced the final results of its modified “Dutch auction” tender offer (the “Offer”) to purchase up to $200 million in aggregate purchase price of its outstanding shares of common stock, par value $0.0001 per share (each, a “Share”), at a single per-Share price not greater than $23.75 nor less than $20.75 per Share. The Offer expired at 12:00 midnight, New York City time, at the end of the day on April 1, 2024.

Based on the final count by Continental Stock Transfer & Trust Company, the depositary for the tender offer (the "Depositary"), a total of 9,672,540 Shares were properly tendered and not properly withdrawn at or below a purchase price of $22.95 per Share.

In accordance with the terms and conditions of the tender offer, the Company accepted for purchase an aggregate of 9,672,540 Shares, representing approximately 13.4% of the Shares issued and outstanding as of April 1, 2024, at a purchase price of $22.95 per Share, for an aggregate cost of approximately $222.0 million, excluding fees and expenses related to the tender offer. Included in the 9,672,540 Shares Cannae expects to accept for purchase in the Offer are 957,943 Shares that Cannae has elected to purchase pursuant to its right to purchase up to an additional 2% of its outstanding Shares. As the Company accepted for purchase all of the Shares which were properly tendered and not properly withdrawn at a price at or below $22.95 there is no proration factor. The Depositary has paid for all of the Shares accepted for purchase on April 4, 2024.

J.P. Morgan Securities LLC acted as dealer manager and D. F. King & Co., Inc. acted as the information agent for the Offer. Holders of the Shares who have questions or would like additional information about the Offer, should contact D.F. King & Co., Inc. at (866) 406-2284 (toll-free) or (212) 257-2468 (banks and brokers).

About Cannae Holdings, Inc.

We primarily acquire interests in operating companies and are actively engaged in managing and operating a core group of those companies. We believe that our long-term ownership and active involvement in the management and operations of companies helps maximize the value of those businesses for our shareholders. We are a long-term owner that secures control and governance rights of other companies primarily to engage in their lines of business and we have no preset time constraints dictating when we sell or dispose of our businesses.

Forward-Looking Statements and Risk Factors

This press release, and any related oral statements contain forward-looking statements that involve a number of risks and uncertainties. Statements that are not historical facts, including statements regarding our expectations, hopes, beliefs, plans, intentions, or strategies regarding the future are forward-looking statements. Forward-looking statements are based on management’s beliefs, as well as assumptions made by, and information currently available to, management. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. The risks and uncertainties that forward-looking statements are subject to include, but are not limited to: risks associated with our investment in JANA; changes in general economic, business and political conditions, including changes in the financial markets and changes in macroeconomic conditions resulting from the outbreak of a pandemic or escalation of the current conflict between Russia and Ukraine; risks associated with the Investment Company Act of 1940; our potential inability to find suitable acquisition candidates, acquisitions in lines of business that will not necessarily be limited to our traditional areas of focus, or difficulties in integrating acquisitions; significant competition that our operating subsidiaries face; risks related to the externalization of certain of our management functions to an external manager; and other risks.

This press release should be read in conjunction with the risks detailed in the “Statement Regarding Forward-Looking Information,” “Risk Factors” and other sections of the Company’s Forms 10-Q, Form 10-K and our other filings with the Securities and Exchange Commission.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240404433879/en/

Jamie Lillis

Managing Director, Solebury Strategic Communications

(203) 428-3223

jlillis@soleburystrat.com

Source: Cannae Holdings, Inc.

FAQ

What was the total amount Cannae Holdings, Inc. (CNNE) aimed to purchase in the tender offer?

Cannae Holdings, Inc. (CNNE) aimed to purchase up to $200 million of its outstanding shares of common stock in the tender offer.

At what price range were shareholders able to tender their shares in the offer?

Shareholders could tender their shares at a price not greater than $23.75 nor less than $20.75 per share in the tender offer by Cannae Holdings, Inc. (CNNE).

How many shares were accepted for purchase by Cannae Holdings, Inc. (CNNE) in the tender offer?

Cannae Holdings, Inc. (CNNE) accepted 9,672,540 shares for purchase in the tender offer.

What percentage of the total outstanding shares does the accepted purchase represent?

The accepted purchase of 9,672,540 shares by Cannae Holdings, Inc. (CNNE) represents approximately 13.4% of the total outstanding shares as of April 1, 2024.

Who acted as the dealer manager for the tender offer by Cannae Holdings, Inc. (CNNE)?

J.P. Morgan Securities acted as the dealer manager for the tender offer by Cannae Holdings, Inc. (CNNE).