MAUMEE, Ohio – Dana Holding Corp. has announced a definitive agreement with Centerbridge Capital Partners L.P. to repurchase all 2.5 million shares of Series A preferred stock outstanding for $22.50 per underlying common share, representing an aggregate price of approximately $472 million. The transaction is contingent upon the successful closing of a senior notes offering.
Dana says this transaction will allow the company to deliver value to all of its shareholders by simplifying its capital structure and reducing the number of fully diluted outstanding shares by approximately 10 percent. At the completion of this transaction, Dana will have repurchased approximately $575 million in common and preferred shares, including more than $103 million of common shares already repurchased since last October. Authorization remains for the additional repurchase of approximately $425 million of common shares.
Upon completion of the transaction, the Series A preferred shares owned by Centerbridge will be retired. In conjunction with this transaction, Centerbridge-affiliated directors Mark Gallogly and Brandt McKee and Series A nominee Richard Wallman will relinquish their seats on Dana’s board of directors. Dana will examine the composition of the board and will begin a search to fill the vacancies. Joseph Muscari, non-executive chairman of the Dana board and a former CFO of Alcoa Inc., will replace Wallman as chairman of the audit committee of the board.
Dana Launches $600 Million Senior Notes Offering
Dana also announced that it is commencing, subject to market conditions, a registered offering of $600 million aggregate principal amount of senior unsecured notes due 2021 and 2023. The company intends to use the proceeds from the offering to repurchase all of its Series A preferred shares, to fund the company’s previously authorized share repurchase program, and for other general corporate purposes.
Rothschild Inc. is acting as financial adviser to Dana with respect to capital structure alternatives and its senior notes offering. Citigroup Global Markets Inc.; Merrill Lynch, Pierce, Fenner & Smith Incorporated; Barclays Capital Inc.; Deutsche Bank Securities Inc.; J.P. Morgan Securities LLC; UBS Securities LLC; and Wells Fargo Securities LLC are acting as joint-bookrunning managers in the offering.
The offering is being made pursuant to the company’s automatic shelf registration statement on Form S-3 filed with the Securities and Exchange Commission on Jan. 24, 2011, and pursuant to a preliminary prospectus supplement, which will also be filed with the SEC.
