NEW YORK--(BUSINESS WIRE)--May 27, 2004--Annaly Mortgage
Management, Inc.
(NYSE: NLY) announced that at its annual meeting held
today Annaly stockholders voted to approve the acquisition of Fixed
Income Discount Advisory Company ("FIDAC"). FIDAC is a registered
investment advisor which, at December 31, 2003, managed, assisted in
managing or supervised approximately $13.6 billion in gross assets for
a wide variety of clients on a discretionary basis. FIDAC is a
fee-based management business with a global distribution reach. FIDAC
generally receives annual net investment advisory fees of
approximately 10 to 15 basis points of the gross assets it manages,
assists in managing or supervises. Following completion of the
acquisition, Annaly will continue to operate as a self-managed and
self-advised real estate investment trust, and FIDAC will operate as
Annaly's wholly-owned taxable REIT subsidiary.
Michael A.J. Farrell, the Chairman, Chief Executive Officer and
President of Annaly, said, "We are pleased with the outcome of today's
vote. We believe that the acquisition of FIDAC will, among other
things, enable us to take advantage of significant opportunities for
growth, increase the efficiency and flexibility of our business and
alleviate potential conflicts of interest. We look forward to closing
this transaction as soon as practicable."
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 of $18.40, 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 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.
As previously reported, a requirement for approval of the Merger
Agreement was a favorable vote by a majority of Annaly's shares of
common stock voting at the annual meeting as long as the total vote
cast at the stockholder meeting represented a majority of the shares
outstanding. More than 96% of the shares that voted on the acquisition
of FIDAC voted in favor of approving the Merger Agreement.
"We have a vision of Annaly as an asset management company that is
organized to maximize tax efficiency and generate substantial
dividends for shareholders," said Mr. Farrell. "We are now at the
point where we are able to take a step toward fulfilling our vision by
acquiring FIDAC. For Annaly shareholders, the purchase of FIDAC adds a
growing, fee-based asset management business to diversify the
Company's earnings stream. While the transaction is a relatively small
one, it is expected to be accretive to Annaly's earnings and introduce
a platform from which to continue to add assets under management."
The Company is a Maryland corporation which owns and manages a
portfolio of investment 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 investment
securities and the cost of borrowing to finance their acquisition.
This news release and our public documents to which we refer
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 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 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, FIDAC's clients removal of
assets FIDAC manages, FIDAC's regulatory requirements, and competition
in the investment management business. 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 Annual Report on Form 10-K for the fiscal year ended December
31, 2003. 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.
CONTACT: Annaly Mortgage Management, Inc.
Investor Relations, 888-8Annaly
www.annaly.com
SOURCE: Annaly Mortgage Management, Inc.