UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE TO
TENDER OFFER STATEMENT UNDER SECTION 14(D)(1) OR 13(E)(1)
OF
THE SECURITIES EXCHANGE ACT OF 1934
RENN FUND, INC.
(Name of Subject Company (Issuer))
HORIZON KINETICS LLC
HORIZON ASSET MANAGEMENT LLC
(Name of Filing
Person(s) (Issuer))
Equity Securities
(Title of Class of
Securities)
759720105
(CUSIP Number of Class of
Securities)
Jay Kesslen
General Counsel & Chief
Compliance Officer
470 Park Avenue South,
8th Floor South
New York, New York 10016
(914) 703-6904
(Name, Address and Telephone
Number of Person Authorized to Receive Notices and
Communications on Behalf
of the Filing Person(s))
October 19, 2016
(Date Tender Offer
First Published,
Sent or Given to Security Holders)
CALCULATION OF FILING FEE
Transaction Valuation: | Not Applicable* | Amount of Filing Fee: | Not Applicable* |
* A filing fee is not required in connection with this filing as it relates solely to preliminary communications made before the commencement of a tender offer.
[ ] Check the 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:
_______________________________________________
Form or
Registration No.:
_______________________________________________
Filing Party:
_________________________________________________________
Date
Filed:
__________________________________________________________
[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:
[X] | third-party tender offer subject to Rule 14d-1. |
[ ] | issuer tender offer subject to Rule 13e-4. |
[ ] | going-private transaction subject to Rule 13e-3. |
[ ] | 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:
[ ] | Rule 13e-4(i) (Cross-Border Issuer Tender Offer) |
[ ] | Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) |
ITEMS 1-11.
Not applicable.
ITEM 12. EXHIBITS.
Exhibit No. | Document |
99.1 | Press release issued by RENN Fund, Inc.dated October 19, 2016. |
ITEM 13.
Not applicable.
RENN Fund Enters Into
Letter of Intent with Horizon Kinetics
DALLAS, TX October 19, 2016 -- RENN Fund, Inc. (NYSE MKT: RCG) (the Fund) has entered into a Letter of Intent with Horizon Kinetics LLC (Horizon) for Horizon, through one of its wholly owned subsidiary registered investment advisers, to become the new investment manager of the Fund, subject to shareholder approval. Under an Investment Advisory Agreement to be submitted to shareholders, Horizon would waive its management fee until the Funds assets reach $25 million, following which it would charge only 100 basis points on assets above $25 million. Horizon has indicated to the Board that it hopes to use a significant portion of the Funds existing tax loss carryforwards over time. The Letter of Intent contemplates that Horizon will consider recapitalizing the Fund through a rights offering or other mechanism in order to attempt to achieve at least $10 million in Fund assets. It also contemplates that Horizon may conduct a tender offer for up to the lesser of 10% of the Funds outstanding shares or $1 million worth of shares from existing shareholders at the Funds then-prevailing net asset value. Lastly, Horizon has informed the Board it will assume all expenses related to the proxy statement and shareholders meeting.
If the proposal is approved by the Funds shareholders, a new Board of Directors will be elected, except that Russell Cleveland will be nominated to continue to serve as a director.
According to Russell Cleveland, President of RENN Capital, the Funds current investment manager, I believe this is a good deal for the shareholders, of which I am one. Horizon Kinetics is an accomplished investment manager with approximately $6 billion under management. I believe the proposal will significantly reduce fees and costs, preserve the tax loss carryforwards, and create a bigger Fund. The Board of Directors believes joining Horizon is a better solution than liquidating the Fund. Added Murray Stahl, Horizons Chairman, There is significant shareholder value that can be achieved through this transaction. We believe Horizons deep value, long-term investment approach is a wonderful fit for this Fund and its shareholders. We look forward to working with Mr. Cleveland to the benefit of the Funds shareholders. Shareholders will receive a proxy statement outlining the details of the proposal and be asked to vote on the proposal to approve the appointment of Horizon as investment manager, a slate of new directors and the terms of the proposed Investment Advisory Agreement. Shareholders will also be asked to approve the abandonment of the Plan of Liquidation of the Fund that was approved at the Funds annual meeting of shareholders earlier this year. The Board hopes to complete the process over the next several months. If the proposals are approved, the Fund will not pursue the delisting of the Funds shares from the NYSE MKT or the liquidation of the Funds assets as contemplated by the Plan of Liquidation.
For additional information about the Fund, please visit www.rencapital.com.
For more information about Horizon, please visit www.horizonkinetics.com.
Important Additional Information will be filed with the SEC
This press release is for informational purposes only. It is not a solicitation of a proxy, nor does it constitute an offer to sell or to purchase, or a solicitation of an offer to purchase or to sell, any security. In connection with the proposals to change investment managers and adopt a new Investment Advisory Agreement, elect a new slate of directors, and to abandon the Funds previously-approved Plan of Liquidation, the Fund intends to file with the SEC a proxy statement and other relevant materials. Shareholders may obtain a free copy of the proxy statement and the other relevant materials (when they become available), and any other documents filed by the Fund with the SEC, at the SECs web site at http://www.sec.gov. In addition, the Fund will make available or mail a copy of the definitive proxy statement to shareholders of record on the record date when it becomes available. A free copy of the proxy statement, when it becomes available, and other documents filed with the SEC by the Fund may also be obtained by directing a written request to: RENN Fund, Inc., Attn: Secretary, lynnemarie@rencapital.com. If Horizon makes a tender offer for any shares of the Funds outstanding stock, it will be made pursuant to a Tender Offer Statement. Shareholders may obtain a free copy of the Tender Offer Statement, if any, and other relevant materials (when they become available), and any other documents filed by Horizon or the Fund with the SEC in connection with any tender offer at the SECs web site at http://www.sec.gov. SHAREHOLDERS ARE URGED TO READ THE PROXY STATEMENT, THE TENDER OFFER STATEMENT, IF ANY, AND THE OTHER RELEVANT MATERIALS WHEN THEY BECOME AVAILABLE BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE CHANGE IN INVESTMENT MANAGER AND INVESTMENT ADVISORY AGREEMENT, ELECTION OF A NEW SLATE OF DIRECTORS OR ABANDONMENT OF THE PLAN OF LIQUIDATION OR ANY DECISION WHETHER OR NOT TO TENDER SHARES IN THE TENDER OFFER, IF ANY, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Forward Looking Statements
This document contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on the current expectations and beliefs of the Funds management and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Such statements involve risks and uncertainties that may cause results to differ materially from those set forth in these statements. Such risks and uncertainties include, but are not limited to, the following: the possibility that the Funds shareholders may not approve the Horizon Investment Advisory Agreement; the possibility that the Funds shareholders could elect not to abandon the Funds current plan of liquidation and dissolution; the possibility that Horizon may not implement some or all of the plans it has advised the Board it intends to undertake or may not be able to achieve the cost-savings and growth it anticipates; the possibility that the Funds net operating losses may not be able to be utilized; the Funds ability to accurately estimate and make reasonable provision for the amounts required to pay all operating expenses, as well as other liabilities and obligations through any proposed recapitalization; the possibility that the NYSE MKT may elect to involuntarily delist the Funds shares; and other statements contained in this press release regarding matters that are not historical facts. Additional risk factors are more fully discussed in the Funds periodic reports filed with the SEC, all of which are available from the SECs website (www.sec.gov). The Fund is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events, or otherwise, except to the extent required by applicable law.
# # #
Investor Contact:
RENN Capital Group,
Inc.
Kathryn Semon
(214) 891-8294