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Thank you for finding this Deepjoy. I agree there is always something to learn, especially on AIM. Often a rather murky world to be invested in. I've been in/out of AIM investments for well over 15 years. I've topped up here quite substantially on 2 occasions, latest yesterday, which I don't recall ever doing on an AIM investment before. I really believe in my research here. I hope I am right!
The sad part of all this for me was that if I (or others) had been bothered to look in detail at Acacia's filing once the rumour started of them aquiring links Fund holding a few days beforehand we would have had clear red flags staring at us!! Lesson there for me again....
On 18th November 2019 (SEC filing) Acacia entered into a Securities Purchase Agreement with Starboard Value LP and certain of its affiliates pursuant to which Acacia issued Convertible Preferred Stock and warrants. Importantly, $365 million in senior secured notes were issued notes (due 2027). This was used to buy woodfords holdings but, once triggered, it attracts a 8% annual coupon rate!! We know this because the wording of this agreement was thereafter changed by the affect of the supplemental agreement I referred to yesterday - from ‘escrow account payments’ to the ‘approved Investment Proceeds’ referring to the escrow Account for certain criteria once £35m in cash was deposited.
It appears that once this had been done and to the benefit all parties Starboard, it’s affiliates and Acacia could thereafter designate suitable investments or acquisitions as “Approved Investments” and purchase some of the shares in orph in preference to, and foregoing the 8% coupon rate that would otherwise be outstanding on the covenants payable for any balance of debt on the Acacia loan. In effect, Starboard et al take up the option to buy stock as an approved investment and Acacia have a vested interest in them doing so to reduce their interest liabilities etc. Given it is Starboard and its affiliate we may have a number of holders/sellers but I am betting it amounted to 25m shares. No actual proof that this was actually done of course as no one is declaring anything...!!??
Not that it makes any real difference but I was like a dog with a bone trying to solve this so thought I'd share.
Have a good weekend all. DJ