Magnetek, Inc. (“Magnetek” or the “Company”) announced today that its Board of Directors has approved a 1-for-10 reverse split of its common stock. As previously disclosed in the Form 8-K filed November 10, 2011, the Company’s stockholders approved an amendment to Magnetek’s Restated Certificate of Incorporation to effect a reverse stock split of its common stock at any whole number ratio between 1-for-2 and 1-for-10, with the final decision to be determined by the Company’s Board of Directors in its discretion, but not later than December 31, 2012.
Magnetek currently intends for the reverse stock split to become effective after the close of trading on Friday, December 2, 2011. The Company’s common stock is expected to begin trading on a split adjusted basis on the New York Stock Exchange (“NYSE”) at the opening of trading on Monday, December 5, 2011, subject to the final determination of the NYSE. Magnetek’s common stock will continue trading on the NYSE under its ticker symbol “MAG” but the Company will trade under a new CUSIP number.
“The reverse stock split is a first step toward regaining compliance with the $1 minimum share price requirement of the NYSE. It also puts us in a position to apply for a listing on an alternative national exchange if we so choose, and could ultimately broaden our appeal to customers, suppliers, and certain institutional investors,” said Marty Schwenner, Magnetek’s chief financial officer.
As a result of the reverse stock split, every 10 shares of Magnetek’s pre-reverse split common stock will be combined and reclassified into 1 share of its common stock. No fractional shares will be issued in connection with the reverse stock split. Stockholders who otherwise would be entitled to receive a fractional share in connection with the reverse stock split will receive a cash payment in lieu of such fractional share from the Company’s transfer agent, American Stock Transfer & Trust Company, LLC (“AST”). The amount of the cash payment will be determined based on the following formula: x) the fractional share amount multiplied by y) the product of (i) the average of the high and low trading prices of the common stock as reported on the NYSE during each of the ten trading days immediately preceding December 2, 2011 and (ii) 10. Receipt of the cash payment is conditional upon submission of a letter by the Company’s stockholders to AST and, where shares are held in certificated form, the surrender of all old certificate(s).