0001157523-13-000388.txt : 20130131 0001157523-13-000388.hdr.sgml : 20130131 20130131064028 ACCESSION NUMBER: 0001157523-13-000388 CONFORMED SUBMISSION TYPE: SC TO-C PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20130131 DATE AS OF CHANGE: 20130131 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CreXus Investment Corp. CENTRAL INDEX KEY: 0001467027 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 262652391 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC TO-C SEC ACT: 1934 Act SEC FILE NUMBER: 005-85012 FILM NUMBER: 13560739 BUSINESS ADDRESS: STREET 1: 1211 AVENUE OF THE AMERICAS STREET 2: SUITE 2902 CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: (212) 696-0100 MAIL ADDRESS: STREET 1: 1211 AVENUE OF THE AMERICAS STREET 2: SUITE 2902 CITY: NEW YORK STATE: NY ZIP: 10036 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ANNALY CAPITAL MANAGEMENT INC CENTRAL INDEX KEY: 0001043219 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 223479661 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC TO-C BUSINESS ADDRESS: STREET 1: 1211 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 212 696 0100 MAIL ADDRESS: STREET 1: 1211 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10036 FORMER COMPANY: FORMER CONFORMED NAME: ANNALY MORTGAGE MANAGEMENT INC DATE OF NAME CHANGE: 19970729 SC TO-C 1 a50548528.htm ANNALY CAPITAL MANAGEMENT, INC. SC TO-C a50548528.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
 
SCHEDULE TO
 
TENDER OFFER STATEMENT UNDER SECTION 14(D)(1) OR 13(E)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
 
CREXUS INVESTMENT CORP.
(Name of Subject Company (Issuer))
 
ANNALY CAPITAL MANAGEMENT, INC.
(Name of Filing Person (Offeror))

Common Stock, par value $0.01
(Title of Class of Securities)
 
226553105
(CUSIP Number of Class of Securities)
 
 
R. Nicholas Singh, Esq.
Chief Legal Officer
Annaly Capital Management, Inc.
1211 Avenue of the Americas, Suite 2902
New York, New York
Tel: (212) 696-0100
Fax: (212) 696-9809
 
(Name, Address and Telephone Number of Person Authorized To Receive Notices and Communications on Behalf of the Filing Person)
 
 
Copy to:
David W. Bernstein, Esq.
K&L Gates LLP
599 Lexington Avenue
New York, NY 10022

 
 
 
 
 Calculation of Filing Fee
  
 
Transaction Valuation*
  
Amount of Filing Fee*
Not applicable
  
Not applicable
 
*
No filing fee is required because this filing contains only preliminary communications made before the commencement of a tender offer.
 
o
Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
     
Amount Previously Paid: Not applicable.
  
Filing party: Not applicable.
Form or Registration No.: Not applicable.
  
Date Filed: Not applicable.
 
x
Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the statement relates:
 
 
o
third-party tender offer subject to Rule 14d-1.
 
x
issuer tender offer subject to Rule 13e-4.
 
x
going-private transaction subject to Rule 13e-3.
 
o
amendment to Schedule 13D under Rule 13d-2.
 
Check the following box if the filing is a final amendment reporting the results of the tender offer:  
 
If applicable, check the appropriate box(es) below to designate the appropriate rule provision(s) relied upon:
 
 
o
Rule 13e-4(i) (Cross-Border Issuer Tender Offer).
 
o
Rule 14d-1(d) (Cross-Border Third-Party Tender Offer).
  
 
 
 
 
On January 31, 2013, Annaly Capital Management, Inc. (“Annaly”) issued a press release stating that it had entered into an Agreement and Plan of Merger (“Merger Agreement”), dated as of January 30, 2013, with CreXus Investment Corp. and CXS Acquisition Corporation, a wholly owned subsidiary of Annaly.  A copy of that press release is Exhibit 99.1 to this Schedule TO.
 
Tender Offer Statement
 
The press release that is an Exhibit to this Schedule TO is a pre-commencement communication.  It is not an offer to purchase, or a solicitation of an offer to sell, shares of the common stock of CreXus or any other securities.
 
If the prospective tender offer contemplated by the Merger Agreement commences, on the commencement date of the tender offer, Annaly will distribute, and will file with the Securities and Exchange Commission (“SEC”), an Offer to Purchase and other documents that contain information about the tender offer and include a means for CreXus stockholders to tender common stock.
 
If there is a tender offer as contemplated by the Merger Agreement, investors and security holders are urged to read the tender offer statement when it is available because it will contain important information.  Security holders will be able to get the tender offer statement and other filed documents for free at the SEC’s website (http://www.sec.gov) and at Annaly’s website (http://www.annaly.com).
 
 
Item 12.  Exhibits
 
Exhibit
Number
  
 
Exhibit Description
99.1
  
Press Release dated January 31, 2013

 
 
 
 
SIGNATURE
 
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
 
January 31, 2013
 
       
 
By:
/s/ R. Nicholas Singh  
  Name: R. Nicholas Singh  
 
Title: Chief Legal Officer
  
       
 
 
 EX-99.1 2 a50548528ex99-1.htm EXHIBIT 99.1 a50548528ex99-1.htm
Exhibit 99.1
 
Annaly Capital Management, Inc. Announces Agreement to Acquire CreXus Investment Corp.
 
NEW YORK--(BUSINESS WIRE)-- Annaly Capital Management, Inc. (NYSE: NLY) (“Annaly” or the “Company”) announced today that it has reached a definitive agreement with CreXus Investment Corp. (NYSE: CXS) (“CreXus”) to acquire for $13.00 per share in cash (plus a payment in lieu of a prorated dividend) all the shares of CreXus that Annaly does not currently own.
 
CreXus has approximately 76,630,528 shares of common stock outstanding, of which Annaly holds 9,527,778 shares, or approximately 12.4%. The transaction values CreXus at $996 million and represents a total consideration paid by Annaly of $872 million.
 
“This transaction represents a significant step toward Annaly’s commitment to investing directly in commercial real estate assets,” said Wellington Denahan, Annaly’s Chairman and Chief Executive Officer. “We believe that wholly owning the commercial real estate platform we currently manage through FIDAC is complementary to our existing business and return profile and should provide stable and diversified risk-adjusted returns to our shareholders.
 
“This transaction is part of a broad evolution of our capital allocation strategy. Certain highlights include:
 
 
●
Immediately accretive - All cash offer, which  is immediately accretive to both our taxable earnings and our dividends per share
 
●
Portfolio diversification - Strategic benefit of the acquisition given our existing asset management expertise and the resultant diversification of our investment portfolio
 
●
Scalable platform - Commercial platform is highly scalable when combined with Annaly’s broad capital base
 
“Our commercial real estate expertise, as well as our capabilities in other asset classes, are valuable strategic tools, and we look forward to updating the market on our portfolio as it evolves.”
 
AGREEMENT TERMS
 
The merger agreement has been approved by the CreXus Board of Directors, acting in accordance with a unanimous recommendation by a Special Committee of the CreXus Board consisting entirely of directors who are not employees of Annaly or any of its subsidiaries, including Fixed Income Discount Advisory Company (“FIDAC”), a wholly owned subsidiary of Annaly that manages CreXus under a management contract.  Under the terms of the merger agreement, Annaly will make a tender offer for all outstanding shares of common stock of CreXus it does not already own at $13.00 per share in cash, plus a cash payment per share to reflect a pro-rated quarterly dividend for the quarter in which the tender offer is closed.  If a majority of the shares that are not owned by Annaly or its affiliates are properly tendered and not withdrawn, Annaly will purchase the tendered shares and will complete the acquisition of CreXus through a merger, by which CreXus will become a wholly owned subsidiary of Annaly and CreXus shareholders who do not tender their shares in response to the tender offer will receive the same consideration they would have received if they had tendered their shares.
 
Under the Merger Agreement, Annaly’s tender offer will not begin until after a 45 day period during which CreXus will be able to seek alternate purchasers who would be willing to purchase control of CreXus or its assets on terms that the Special Committee determines to be more favorable to CreXus and its stockholders than those on which Annaly has agreed to purchase the CreXus shares it does not own.
 
 
 
 
 
The announced transaction follows a proposal Annaly made on November 9, 2012 to acquire all the CreXus shares it does not already own for $12.50 per share.  The increase in the price Annaly will pay resulted from negotiations between Annaly and the Special Committee of CreXus directors.
 
The price of $13.00 per share in cash represents approximately a 17.1% premium both to CreXus’ last reported share price on November 9, 2012, the last trading day before Annaly’s announcement of its proposal to acquire all the CreXus shares it does not already own, and to the weighted average trading price of CreXus shares during the 30 trading days ended on November 9, 2012.  The $13.00 price represents approximately a 9% premium to CreXus’ common stock book value per share on September 30, 2012 and a 7% premium to its reported fair value per share as of that date.    The merger agreement does not contain any financing condition but does contain customary conditions to the obligations to purchase the shares tendered in response to the tender offer.  Annaly’s right to accept the tendered shares or to do the merger is conditioned on a majority of the shares not owned by Annaly or its affiliates being properly tendered in response to the tender offer and not withdrawn.
 
Advisors
 
BofA Merrill Lynch is acting as financial advisor and K&L Gates LLP is acting as legal advisor to Annaly in connection with this transaction.
 
About Annaly Capital Management, Inc.
 
Annaly’s principal business objective is to generate net income for distribution to investors from its investment securities and from dividends it receives from its subsidiaries. Annaly is a Maryland corporation that has elected to be taxed as a real estate investment trust (“REIT”).
 
About CreXus Investment Corp.
 
CreXus (NYSE: CXS) is a specialty finance company that acquires, manages and finances, directly or through its subsidiaries, commercial mortgage loans and other commercial real estate debt, commercial mortgage-backed securities and other commercial real estate-related assets. CreXus’ principal business objective is to generate net income for distribution to investors from the spread between the yields on its investments and the cost of borrowing to finance their acquisition and secondarily to provide capital appreciation. CreXus, a Maryland corporation that has elected to be taxed as a REIT, was formed by Annaly in 2009 and is externally managed by FIDAC, which is a wholly-owned subsidiary of Annaly. Each of CreXus’ officers is an employee of Annaly or FIDAC.
 
News Release Not an Offer
 
This news release is not the commencement of the tender offer described above and is not otherwise an offer to purchase, or a solicitation of offers to sell, CreXus shares.  Any tender offer will be made by means of an Offer to Purchase, which will be accompanied by a means to tender CreXus common stock.
 
 
 
 
 
This news release and our public documents to which we refer contain or incorporate by reference certain forward-looking statements which are based on various assumptions (some of which are beyond our control) may be identified by reference to a future period or periods or by the use of forward-looking terminology, such as "may," "will," "believe," "expect," "anticipate," "continue," or similar terms or variations on those terms or the negative of those terms. Actual results could differ materially from those set forth in forward-looking statements due to a variety of factors, including, but not limited to, changes in interest rates; changes in the yield curve; changes in prepayment rates; the availability of mortgage-backed securities for purchase; the availability of financing and, if available, the terms of any financings; changes in the market value of our assets; changes in business conditions and the general economy; our ability to consummate the transaction and  integrate the commercial mortgage business; our ability to consummate any contemplated investment opportunities; risks associated with the businesses of our subsidiaries, including the investment advisory business of our wholly-owned subsidiaries, including: the removal by clients of assets managed, their regulatory requirements, and competition in the investment advisory business; risks associated with the broker-dealer business of our wholly-owned subsidiary; changes in government regulations affecting our business; our ability to maintain our qualification as a REIT for federal income tax purposes; and our ability to maintain our exemption from registration under the Investment Company Act of 1940, as amended. For a discussion of the risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q. We do not undertake, and specifically disclaim any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.
 
Annaly Capital Management, Inc.
Investor Relations, 888-8Annaly
Source: Annaly Capital Management, Inc.