Tejon Ranch Co. (“Tejon” or the “Company”) (NYSE:TRC) today announced that its Board of Directors has declared a dividend consisting of approximately 3 million warrants to purchase shares of Tejon Ranch Co. common stock at $40.00 per share (the “Warrants”) to be distributed on or about August 28, 2013, to holders of record of Tejon’s common stock as of August 21, 2013.
Tejon shareholders will be allocated 0.14771 Warrants for each share of Tejon common stock owned on the record date, with the actual number of Warrants issued to each shareholder rounded to the nearest whole number. No cash or other consideration will be payable in respect of any fractional Warrants that are rounded down. Each Warrant will entitle the holder to purchase one share of Tejon common stock at an exercise price of $40.00 per share, subject to anti-dilution adjustment for certain events. The Warrants will be exercisable through August 31, 2016, subject to the Company’s right to accelerate the expiration date under certain circumstances when the Warrants are in-the-money.
“As Tejon Ranch continues to grow, we want to provide our shareholders an additional opportunity to grow with us,” said Robert A. Stine, Tejon Ranch Co.’s President and CEO. “We have not provided our shareholders with a dividend of any kind for many years. Providing a dividend in the form of a warrant to purchase additional stock does two things,” he added. “It provides our shareholders with a new security that has value, while at the same time offering the Company the prospects of generating additional funding to meet its capital needs as it both begins, and in other cases, continues development of its real estate assets.”
Proceeds received from the exercise of warrants will be used to provide additional working capital for general corporate purposes, including development activities within the Company’s industrial and residential projects and to continue its investments into water assets and water facilities.