ALJ Regional Holdings, Inc. (Pink Sheets: ALJJ): Merger and Financing Efforts ALJ Regional Holdings, Inc. (Pink Sheets: ALJJ) (“ ALJ”) and Optima Specialty Steel, Inc. (“ Optima”) today announced that while Optima has not completed its proposed debt acquisition financing at this time, it continues to pursue various potential financing options that would enable it to complete the transaction on or before the “Outside Date” under the Merger Agreement (defined below), which is February 28, 2013. ALJ will proceed with its special meeting of stockholders (the “ Special Meeting”), scheduled for 8:00 am (Pacific Time) on December 21, 2012, for consideration of the sale of KES Acquisition Company, its majority-owned subsidiary (“ KES”), to Optima pursuant to a merger (the “ Merger”) as contemplated by the definitive merger agreement dated November 18, 2012 (the “ Merger Agreement”). The Merger remains conditioned on Optima’s obtaining sufficient financing to consummate the transaction. ALJ and KES have determined not to exercise their right to terminate the Merger Agreement at this time due to the fact that Optima has not secured financing at this time. “We are disappointed that our financing efforts have not succeeded as quickly as we had all hoped, but we continue to pursue various potential financing options that would enable us to complete this transaction, which we believe is a great fit for both companies,” said Kevin Stevick, Optima’s CEO. The Merger Agreement may be terminated by ALJ, KES or Optima, if Optima does not secure financing by February 28, 2013 and Optima would be obligated to pay KES a termination fee of $3,375,000 in such an event. Even if Optima secures financing, the closing of the Merger remains subject to certain other conditions, including approval by ALJ’s stockholders. The obligation of each of the parties to consummate the Merger is also conditioned upon the other parties’ representations and warranties being true and correct in all material respects and the other parties having performed in all material respects their obligations under the Merger Agreement. Each of the parties made customary representations, warranties and covenants in the Merger Agreement. We cannot estimate when, or if, Optima will secure financing or when, or if, the other conditions to closing in the Merger Agreement will be satisfied. Therefore, we cannot estimate when, or if, the Merger will close.
The Special Meeting for ALJ’s stockholders to consider the Merger will be held on December 21, 2012, at 8:00 a.m. Pacific Time, at the offices of Morrison & Foerster LLP, 555 West Fifth Street, Suite 3500, Los Angeles, California, 90013.Further detailed information about the Merger, including a copy of the Merger Agreement, can be found in the Current Report, dated November 18, 2012. Further detailed information about the Special Meeting can be found in the Notice of Special Meeting and Proxy Statement dated November 26, 2012. Both the Current Report and the Notice of Special Meeting and Proxy Statement are available electronically on ALJ’s website at www.aljregionalholdings.com and on the Pink Sheets website at www.pinksheets.com. Tender Offer ALJ also announced that it has extended the expiration date of its offer to purchase up to 30,000,000 shares of its outstanding common stock under its previously announced modified “Dutch auction” tender offer. The tender offer, which was originally due to expire at 12:00 midnight, New York City time, on Monday, December 24, 2012, is now set to expire at 12:00 midnight, New York City time, on January 17, 2013, unless further extended. To date, 1,283,430 shares of ALJ’s common stock have been tendered and deposited in the tender offer. In addition, a stockholder holding substantially more than 5% of ALJ’s outstanding shares has agreed to tender his shares in the tender offer. ALJ has extended the expiration date of the tender offer in light of the fact that Optima has not secured sufficient financing to complete the Merger at this time. The tender offer is conditioned upon completion of the Merger, which in turn is conditioned on Optima securing sufficient financing as discussed in detail above. Tender of shares must be made prior to the expiration of the tender offer and any shares previously tendered may be withdrawn any time prior to the expiration of the tender offer. All other terms and conditions of the tender offer as described in the Offer to Purchase and related materials distributed to stockholders continue to apply to the tender offer as extended.
This press release is for informational purposes only and is not an offer to buy or the solicitation of an offer to sell any shares of ALJ’s stock. ALJ’s tender offer is only being made pursuant to the Offer to Purchase and related materials (as amended and supplemented). Stockholders should read these materials carefully. The materials contain important information, including various terms and conditions to the tender offer. Stockholders can obtain a copy of the Offer to Purchase and related materials (as amended and supplemented) for free at ALJ’s website, www.aljregionalholdings.com, or from AST Phoenix Advisors, the information agent for the tender offer by calling – for banks and brokers (212) 493-3910, for all others, toll free (877) 478-5038. Stockholders are urged to carefully read these materials prior to making any decision with respect to the tender offer.About ALJ Regional Holdings, Inc. ALJ is the parent company of KES, the owner and operator of a steel mini-mill near Ashland, Kentucky producing both merchant bar quality flats (MBQ Bar Flats), and special bar quality steel flats (SBQ Bar Flats). Forward-Looking Statements This announcement contains, or may contain, “forward-looking statements.” Generally, the words “believe,” “anticipate,” “expect,” “may,” “should,” “could,” and other future-oriented terms identify forward-looking statements. Forward-looking statements include, but are not limited to, statements relating to the following: (i) the consummation and timing of the proposed Merger; (ii) Optima’s ability to secure and the timing of Optima securing sufficient financing to complete the Merger; (iii) the occurrence and timing of the Special Meeting and the Tender Offer; and (iv) assumptions underlying any of the foregoing statements. These forward-looking statements are based upon the current beliefs and expectations of the management of ALJ and Optima and involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond ALJ’s or Optima’s ability to control or estimate precisely and include, without limitation: (i) the failure to satisfy any of the conditions to complete the Merger, including the receipt of the required stockholder approval and Optima securing financing; (ii) the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement or failure of the Merger; (iii) the outcome of any legal proceedings instituted in connection with the proposed Merger; and (iv) the effect of any regulatory approvals or conditions imposed on us in connection with the Merger.
ALJ is also subject to general business risks, including its success in continuing to settle its outstanding obligations from its prior business activities, results of tax audits, its ability to retain and attract key employees, acts of war or global terrorism, and unexpected natural disasters and other risks and uncertainties, including those detailed from time to time in its periodic reports (whether under the caption Risk Factors or Forward Looking Statements or elsewhere). ALJ cannot give any assurance that such forward-looking statements will prove to have been correct. The reader is cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this announcement. Neither ALJ nor any other person undertakes any obligation to update or revise publicly any of the forward-looking statements set out herein, whether as a result of new information, future events or otherwise.