GAIN Capital to seek shareholders’ approval of deal with INTL FCStone at special meeting

Maria Nikolova

The GAIN board of directors says that the merger and the other transactions contemplated by the merger agreement are advisable and fair.

A special meeting of the stockholders of online trading major Gain Capital Holdings Inc (NYSE:GCAP) is set to be held on June 5, 2020, where the deal with INTL FCStone Inc. will be put to vote.

On February 26, 2020, GAIN entered into a definitive merger agreement with INTL FCStone and its wholly owned subsidiary, Golf Merger Sub I Inc.. Pursuant to the terms of the merger agreement, Merger Suv will be merged with and into GAIN, with GAIN surviving the merger as a wholly owned subsidiary of INTL FCStone.

If the merger is completed, GAIN stockholders will have the right to receive $6.00 in cash, without interest and less any applicable withholding taxes, for each share of common stock, par value $0.00001 per share, of GAIN that they own immediately prior to the effective time of the merger unless they have properly demanded appraisal rights for such shares in accordance with Delaware law.

The purchase price represents a premium of approximately 70% over GAIN’s closing share price on February 26, 2020, the last trading day prior to the announcement that GAIN had entered into the merger agreement and a premium of approximately 60% to GAIN’s 30-trading-day volume-weighted average stock price on the same date.

GAIN will hold a virtual special meeting of its stockholders in connection with the proposed merger on June 5, 2020 at 2 p.m., Eastern Time. At the special meeting (or any adjournment or postponement thereof), stockholders will be asked to vote on the proposal to approve and adopt the merger agreement. Under Delaware law, stockholders holding at least a majority of the shares of GAIN common stock outstanding at the close of business on the record date must vote “FOR” the merger proposal to approve and adopt the merger agreement.

Concurrently with and as a condition to INTL’s execution of the merger agreement, on February 26, 2020, INTL entered into voting and support agreements with certain GAIN stockholders, pursuant to which such stockholders agreed, among other things, and subject to the terms set forth in the voting and support agreements, to vote shares of GAIN common stock that represent in the aggregate, approximately 44% of GAIN common stock, in favor of the adoption of the merger agreement and each of the other actions contemplated by the merger agreement and the merger.

The merger cannot be completed unless GAIN stockholders approve and adopt the merger agreement.

“After careful consideration, the GAIN board of directors has determined that the merger and the other transactions contemplated by the merger agreement are advisable and fair to and in the best interests of GAIN stockholders and has approved the merger agreement. The GAIN board of directors recommends that GAIN stockholders vote “FOR” the proposal to approve and adopt the merger agreement”, GAIN says.

In addition, the Securities and Exchange Commission has adopted rules that require GAIN to seek a non-binding, advisory vote with respect to certain compensation that will or may be paid by GAIN to its named executive officers that is based on or otherwise relates to the merger. The GAIN board of directors recommends that GAIN stockholders vote “FOR” the named executive officer merger-related compensation proposal.

As FinanceFeeds has reported, not all shareholders of GAIN are supportive of the pricing terms of the deal. In particular, JB Capital Partners, L.P., whose principal business is making investments in marketable securities, and Alan W. Weber, whose principal business is acting as an investment adviser and as the general partner of JB Capital, believe that the Board of Directors must negotiate a merger price of $8.00 or more per share to reflect the performance of GAIN since February 26, 2020.

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