GAIN Capital provides notice to holders of its 5.00% Convertible Senior Notes due 2022
The consummation of the merger with StoneX constitutes a fundamental change.
Online trading major Gain Capital Holdings Inc (NYSE:GCAP) today provided notice of a Make-Whole Fundamental Change to holders of its 5.00% Convertible Senior Notes due 2022. This follows the announcement about the completion of the acquisition of GAIN by StoneX Group, formerly known as INTL FCStone.
The consummation of the transactions contemplated by the Agreement and Plan of Merger constitutes a Make-Whole Fundamental Change under the Indenture, dated as of August 22, 2017, governing the 2022 Notes.
Pursuant to the Merger Agreement, each share of common stock, par value $0.00001 per share, of the Company (the “Common Stock”) issued and outstanding immediately prior to the effective time of the Merger (the “Effective Time”) (other than shares of Common Stock held by Parent or Merger Sub, shares of Common Stock owned by GAIN and shares of Common Stock owned by stockholders who have properly made and not withdrawn or lost a demand for appraisal rights under Delaware law) was converted into the right to receive $6.00 in cash, without interest and subject to applicable withholding taxes. The Effective Time occurred on July 31, 2020.
Under Section 10.08 of the 2022 Notes Indenture, because the Merger constituted a Merger Event, the right to convert the 2022 Notes into shares of Common Stock was changed to the right to convert the 2022 Notes into the cash amount that a holder of a number of shares of Common Stock equal to the applicable Conversion Rate immediately prior to the Merger would have been entitled to receive based on the Acquisition Price. In accordance with Section 9.01(d) of the 2022 Notes Indenture, the Company entered into a supplemental indenture, dated as of July 31, 2020, with The Bank of New York Mellon, as Trustee, under the 2022 Notes Indenture (the “Supplemental Indenture”) to effect such changes.
In addition, the consummation of the Merger constituted a Make-Whole Fundamental Change under the 2022 Notes Indenture. Pursuant to Section 10.07 of the 2022 Notes Indenture, the Conversion Rate of the 2022 Notes has not been temporarily increased. Noteholders are entitled to convert their 2022 Notes at any time before 5:00 p.m., New York City time, on August 31, 2020 into $732.06 in cash (without interest) per $1,000 principal amount of 2022 Notes.
Finally, the consummation of the Merger constituted a Fundamental Change. Pursuant to Section 3.01 of the 2022 Notes Indenture, GAIN is required to offer to repurchase the 2022 Notes of each noteholder for cash at a repurchase price equal to 100% of the principal amount of the 2022 Notes, together with accrued and unpaid interest thereon to, but excluding, the Fundamental Change Repurchase Date of September 1, 2020.
The Trustee, Paying Agent and Conversion Agent under the 2022 Notes Indenture is The Bank of New York Mellon. For questions or assistance related to converting the 2022 Notes, the noteholders are advised to contact The Bank of New York Mellon, Corporate Trust Administration at [email protected]. All other questions may be directed to Jonathan Kay at [email protected].