Gain Capital Holdings Inc (NYSE:GCAP) has formally reported the full details of the transaction by which its shareholders yesterday approved the purchase of London-based CFD and spread betting company City Index.
Subsequent to the announcement yesterday by GAIN Capital that its shareholders had accepted the company’s proposal to purchase City Index, a British company with a thirty year history in CFD trading, GAIN Capital has confirmed via a filing with the US Securities and Exchange Commission (SEC) that a special meeting of the stockholders of GAIN Capital was held via webcast on Thursday, March 12, 2015. At the special meeting, the following matters were submitted to a vote of stockholders:
1) The issuance of 5,319,149 shares of the Company’s common stock and $60 million in aggregate principal amount of the Company’s unsecured convertible senior notes in connection with the Company’s acquisition of City Index (Holdings) Limited.
2) An amendment to the Company’s Certificate of Incorporation to increase the number of authorized shares of common stock from 60 million to 120 million shares.
3) The removal of the “Aggregate Share Cap” and the “Conversion Share Cap” from the Company’s outstanding 4.125% Convertible Senior Notes due 2018 (as such terms are defined in the indenture governing the 4.125% Convertible Senior Notes).
At the close of business on February 5, 2015, the record date for the determination of stockholders entitled to vote at the Special Meeting, there were 43,088,234 shares of the Company’s common stock outstanding and entitled to vote at the special meeting. The holders of 40,045,966 shares of the Company’s common stock were represented in person or by proxy at the Special Meeting, constituting a quorum.
Full details of the voting by shareholders on these three motions is listed in this chart:
At the end of October last year, LeapRate broke the news that GAIN Capital was set to pay a total of $118 million to acquire City Index, at the time detailing that from a cash perspective it will come out ahead by about $16 million.
City Index had approximately $36 million of cash on its books at the end of October, and thus LeapRate’s report on the matter affirmed that the purchase price will consist of $20 million in cash, $60 million of convertible notes and the issuance of approximately 5.3 million Gain shares (worth about $38 million). The total purchase price of $118 million represents a $28 million premium above City Index’s book value as of September 30, 2014.
GAIN Capital CEO Glenn Stevens spoke to LeapRate on the future synergy between the two companies shortly after that particular announcement during the latter part of last year, enthusiastically looking forward to taking the CFD firm to an international audience.