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Harbinger Group Welcomes Increased Investment From Leucadia National Corporation

Stocks in this article: HRG

Harbinger Group Inc. ("HGI" or the "Company")(NYSE:HRG), a diversified holding company, today announced that Leucadia National Corporation (“Leucadia”)(NYSE:LUK) has increased its beneficial ownership of HGI common stock from approximately 9% to approximately 20%.

Leucadia agreed to purchase an aggregate of 23,000,000 preferred securities of subsidiaries of funds managed by Harbinger Capital Partners (the "HCP Funds"), at a price of $11 per share. Following the receipt of insurance regulatory approval, the preferred securities are exchangeable for an aggregate of 23,000,000 shares of HGI’s common stock owned by the HCP Funds (the "Purchased Shares"). HGI is not selling any securities in this transaction.

"HGI has a long-standing relationship with Leucadia, one of the world’s leading long-term investors, and I am pleased that it has increased its stake in Harbinger Group,” said Phil Falcone, HGI's Chief Executive Officer. “Leucadia’s commitment to pursuing compelling value opportunities is a great fit with HGI’s core principles and investment approach.”

Omar Asali, HGI’s President, said: “HGI and Leucadia share a similar focus, and we are pleased to strengthen our relationship with them as we continue to execute on our strategy of creating long-term value through prudent and patient capital allocation.”

Under the terms of the transaction, while awaiting insurance regulatory approval, the HCP Funds have the right to vote the Purchased Shares and Leucadia has the right from time to time to sell all or a portion of the Purchased Shares and receive the proceeds from such sale for its own account.

In connection with their purchase, Leucadia has entered into a letter agreement with the Company pursuant to which, from and after the closing of the sale of the Purchased Shares, Leucadia will be entitled to appoint two representatives to the Company’s board of directors. The initial Leucadia representatives are expected to be Joseph S. Steinberg (Chairman of Leucadia) and Andrew Whittaker (Vice Chairman of Leucadia).

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