WINSTON-SALEM, N.C., May 19 /PRNewswire-FirstCall/ -- Triad Guaranty Inc.
(Nasdaq: TGIC) today announced that its Board of Directors approved a
transaction with Collateral Investment Corp. ("CIC"), a corporation of which
TGIC's chairman, William T. Ratliff, III, is a shareholder and the president.
CIC is majority-owned by the Ratliff family and currently holds approximately
17.8% of the outstanding common stock of TGIC. In the transaction, CIC will
transfer all of its 2,573,551 shares of Triad common stock to the Company in
exchange for 2,528,514 newly issued shares of Triad common stock. The
difference in the number of shares represents a discount of approximately
1.75% to the Company. In addition, CIC has agreed to pay all of the Company's
expenses incurred in connection with the transaction. Immediately following
the transaction, CIC plans to liquidate and distribute the newly issued Triad
shares to the CIC shareholders. As a result, the CIC shareholders will have
direct ownership of the Triad shares rather than an indirect interest through
CIC, thereby allowing shareholders to obtain liquidity for their Triad shares
on a restricted basis over time. Sale of the new Triad shares received by the
CIC shareholders will be restricted for 90 days following the closing.
Furthermore, sales will be restricted to 10,000 Triad shares per quarter for
each CIC shareholder for up to one year and for up to four years for William
T. Ratliff, III and certain members of his family.
Mr. Ratliff stated: "The Triad team has a tremendous track record and I
look forward to working with them to continue building long-term value for all
Triad shareholders."
The Board's decision was based upon the unanimous recommendation of a
special committee of the Board consisting of four independent outside
directors. The recommendation was based upon consideration of contractual
terms and other benefits of the transaction to Triad Guaranty including being
accretive to earnings and book value and providing greater control over the
potential disposition of Triad shares currently held by CIC. The special
committee was advised by special independent outside counsel and received a
fairness opinion on the transaction from its financial advisor Cochran,
Caronia & Co.
The transaction is subject to satisfaction of various conditions,
including approval by the CIC shareholders and satisfaction of certain
regulatory requirements including either registration of the new Triad shares
with the Securities and Exchange Commission or satisfactory assurances that
the transaction is exempt from registration.
Triad Guaranty Inc.'s wholly owned subsidiary, Triad Guaranty Insurance
Corporation, is a nationwide mortgage insurer providing mortgage insurance
(MI) to residential mortgage lenders. Private MI makes homeownership
available to borrowers with equity of less than 20%, facilitates the sale of
mortgage loans in the secondary market and protects lenders from default-
related expenses. For more information about Triad Guaranty Insurance
Corporation, visit the Company's web site at http://www.triadguaranty.com .
SOURCE Triad Guaranty Inc.
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Related links:
http://www.triadguaranty.com
CONTACT:
Ron Kessinger, Senior Executive VP and COO of
Triad Guaranty Inc., +1-336-723-1282
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