NEW YORK--(BUSINESS WIRE)--Jan. 2, 2004--Annaly Mortgage
Management, Inc.
(NYSE: NLY) ("Annaly" or the "Company") announced
today that it has signed a definitive merger agreement to acquire
Fixed Income Discount Advisory Company ("FIDAC"). FIDAC is a
registered investment advisor which, at September 30, 2003, managed,
assisted in managing or supervised approximately $13.1 billion in
gross assets for a wide array of clients on a discretionary basis.
FIDAC is fee-based asset management business with a global
distribution reach. FIDAC generally receives annual net investment
advisory fees of approximately 10-15 basis points of the gross assets
it manages, assists in managing or supervises. Annaly anticipates that
the acquisition will have a positive effect on Annaly's earnings per
share under current market conditions.
Mr. Michael Farrell, on behalf of FIDAC, approached Annaly about
the possibility of Annaly acquiring FIDAC. Annaly's board of directors
formed a special committee of independent directors to consider this
matter and the special committee retained independent counsel and
Lehman Brothers Inc.
to act as its financial advisor in connection
with the merger. Following negotiations between FIDAC and the special
committee, the special committee determined that Annaly should acquire
FIDAC and Annaly entered into a Merger Agreement, dated December 31,
2003, by and among, Annaly, FIDAC, FDC Merger Sub, Inc. and the FIDAC
stockholders (the "Merger Agreement").
Pursuant to the Merger Agreement, FIDAC will be merged into a
newly formed wholly owned subsidiary of Annaly. The closing of the
merger is subject to a number of conditions, including the approval of
Annaly's stockholders as described below.
Mr. Farrell, Annaly's Chairman of the Board, Chief Executive
Officer and President, Wellington J. Denahan, Annaly's Vice Chairman
and Chief Investment Officer, Kathryn F. Fagan, Annaly's Chief
Financial Officer and Treasurer, Jennifer S. Karve, Annaly's Executive
Vice President and Secretary, and other of the Annaly's officers and
employees are shareholders of FIDAC. Mr. Farrell, Ms. Denahan and
other officers and employees are actively involved in managing
mortgage-backed securities and other fixed income assets on behalf of
FIDAC.
Under the Merger Agreement with FIDAC, the purchase price will be
payable in shares of Annaly's common stock. Upon the consummation of
the merger, Annaly will issue shares of its common stock worth $40.5
million, based upon a valuation of shares of its common stock as of
December 31, 2003, to the stockholders of FIDAC. The Merger Agreement
includes an earn out feature, under which Annaly will pay up to an
additional $49.5 million, which will be payable in shares of its
common stock, to the stockholders of FIDAC if FIDAC meets certain
revenue and pre-tax profit margin targets over the next three years as
described in the merger agreement.
The shares of Annaly's common stock issued upon consummation of
the merger with FIDAC will be registered under federal securities
laws. The shares issued to the stockholders of FIDAC upon consummation
of the merger will be subject to restrictions on resale for three
years after completion of the merger, subject to certain exceptions.
The shares issued to the stockholders of FIDAC under the earn out
feature will be subject to restrictions on resale for either two years
or one year after the applicable earn out period, subject to certain
exceptions.
The merger is subject to the approval of Annaly's stockholders and
several other conditions. A vote on the proposed merger will be held
at the next meeting of Annaly's stockholders. Approval of the Merger
Agreement and the merger will require the affirmative vote of the
holders of a majority of Annaly's shares of common stock voting at the
stockholder meeting as long as the total vote cast at the stockholder
meeting represents a majority of the shares entitled to vote at the
stockholder meeting. Pursuant to the Merger Agreement, the FIDAC
stockholders have agreed to vote any shares of Annaly' s common stock
owned of record by them in accordance with, and in the same proportion
as, the votes cast by Annaly's stockholders who are not FIDAC
stockholders in connection with the merger. Annaly is not certain that
its stockholders will approve the merger or that the other conditions
to the merger will be satisfied. If the merger is not completed,
Annaly expects to continue to operate under a similar cost-sharing
arrangement to what it currently has with FIDAC.
Annaly will hold an investor conference call on January 2, 2004 at
10 a.m. EST. The number to call is 1-800-838-4403. The re-play number
is 1-800-428-6051 domestically and 1-973-709-2089 internationally and
the pass code is 324217. There will be a web cast of the call on
www.annaly.com. If you would like to be added to the e-mail
distribution list, please visit www.annaly.com, click on E-Mail
alerts, enter your e-mail address where indicated and click the
Subscribe button.
The information contained herein with respect to the proposed
merger is neither an offer to sell nor a solicitation of an offer to
buy any shares of Annaly's common stock. In connection with the
proposed transaction, Annaly will file a proxy statement/prospectus
with the Securities and Exchange Commission. Investors and securities
holders are urged to carefully read the proxy statement/prospectus
regarding the proposed transaction when it becomes available, because
it will contain important information. Investors and security holders
may obtain a free copy of the proxy statement/prospectus (when it is
available) and other documents containing information about Annaly and
FIDAC, without charge, at www.annaly.com or the SEC website at
www.sec.gov. Free copies of Annaly's filings may be obtained by
directing a request to 1211 Avenue of the Americas, Suite 2902, New
York, NY 10036. Attention: Investor Relations.
Annaly is a Maryland corporation which owns and manages a
portfolio of mortgage-backed securities. The Company's principal
business objective is to generate net income for distribution to
stockholders from the spread between the interest income on its
mortgage-backed securities and the cost of borrowing to finance their
acquisition. Annaly has elected to be taxed as a real estate
investment trust ("REIT") and currently has 96,074,096 shares of
common stock outstanding.
This news release and Annaly's public documents to which it refers
contain or incorporate by reference certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Forward-looking
statements which are based on various assumptions (some of which are
beyond Annaly's 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 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 financing. 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 Annaly's Annual Report on Form 10-K for the fiscal year ended
December 31, 2002. Annaly does 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 statement.
CONTACT: Annaly Mortgage Management, Inc.
Kathryn Fagan, Chief Financial Officer, 212-696-0100
Investor Relations, 1- (888) 8Annaly
SOURCE: Annaly Mortgage Management, Inc.