Medley Capital Corporation (NYSE: MCC), a publicly traded business development company, Sierra Income Corporation, a non-traded BDC, and Medley Management Inc. (NYSE: MDLY), have each rescheduled their respective special meetings of shareholders for March 29, 2019 where shareholders will vote on the proposed merger that was announced in August 2018.
The March 29th meetings will take place at the offices of Eversheds Sutherland (US) LLP, which is located at 1114 Avenue of the Americas, 40th Floor, New York, NY 10036.
The Medley Capital special meeting will be held at 9:00 a.m. EST; the Sierra special meeting will be held at 10:00 a.m. EST; and the Medley Management special meeting will be held at 11:00 a.m. EST.
The meetings were originally scheduled for February 8th, but were adjourned and rescheduled for March 8th, according to the company, due to the government shutdown as “key branches of the U.S. government were unable to process, review and/or approve documentation required to close the mergers.” A second adjournment resulted in the meetings being rescheduled for March 15th.
As reported by The DI Wire this week, the Delaware Court of Chancery ruled that Medley Capital’s directors breached their fiduciary duties in entering into the proposed merger and Medley was ordered to issue corrective disclosures and halt the merger vote until the disclosures were made and stockholders have had the opportunity to assimilate the information.
Medley Capital said that it is currently considering all available options, including appealing the court’s decision.
Sierra plans to acquire Medley Capital and Medley Management, with Sierra being the surviving company that would be structured as a publicly-traded BDC. Medley Capital and Sierra are both controlled by Medley Management.
Independent proxy advisory firms Glass Lewis & Co. and Institutional Shareholder Services, as well as FrontFour Capital Group LLC, a significant Medley Capital shareholder, recommended that shareholders vote against the proposed merger. Proxy advisory firm Egan-Jones Ratings recommended that shareholders vote for the merger.
Shares of MCC closed at $3.14 on Monday, and MDLY shares closed at $3.41.
Medley Capital Corporation is a closed-end, externally managed BDC that trades on the New York Stock Exchange (NYSE: MCC) and the Tel Aviv Stock Exchange (TASE: MCC). The company lends to privately-held middle market companies, primarily through directly originated transactions. As of September 30, 2018, the company’s portfolio had a fair market value of approximately $655.4 million.
Sierra invests primarily in first lien senior secured debt, second lien secured debt and, to a lesser extent, subordinated debt of middle market companies in a broad range of industries with annual revenue between $50 million and $1 billion. The company’s offering launched in April 2012 and has raised nearly $1 billion in total equity capital, as of the third quarter 2018. Sierra oversees a $967.7 million investment portfolio.
Medley Management is an alternative asset management firm with $4.8 billion of assets under management in two business development companies, Medley Capital Corporation and Sierra Income Corporation, Sierra Total Return Fund (NASDAQ: SRNTX), and several private investment vehicles.