Saxon Capital (NYSE:SAX)
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Saxon Capital, Inc. ("Saxon" or the "Company") (NYSE:
SAX), a residential mortgage lending and servicing real estate
investment trust (REIT), today announced the signing of a definitive
merger agreement pursuant to which Morgan Stanley (NYSE: MS) will
acquire all of the outstanding shares of Saxon for $14.10 per share in
cash. The total value of the transaction is approximately $706
million. The acquisition is subject to certain terms and conditions
customary for transactions of this type, including receipt of
regulatory approvals and Saxon shareholder approval, and is expected
to be completed by the end of 2006.
Commenting on the transaction, Richard A. Kraemer, Saxon's
Chairman of the Board, said, "Our board and management strongly
believe that this acquisition is in the best long-term interests of
our shareholders, clients and employees. Morgan Stanley's scale,
access to funding and strong mortgage franchise will all help to
enhance Saxon's business, particularly as we see increased competition
in a consolidating market. Saxon will be able to build on Morgan
Stanley's existing origination and securitization capabilities."
Anthony Tufariello, Morgan Stanley's Global Head of the
Securitized Products Group said, "The addition of Saxon to Morgan
Stanley's global mortgage franchise will help us to capture the full
economic value inherent in this business, and put the Firm in a better
position to leverage our competitive advantages in trading, risk
transfer, credit and structuring as well as our deep expertise in
hedging mortgage credit risk. This acquisition facilitates our goal of
achieving vertical integration in the residential mortgage business,
with ownership and control of the entire value chain, from origination
to capital markets execution to active risk management."
Saxon was advised by Credit Suisse Securities (USA) LLC, who
rendered a fairness opinion to Saxon's Board of Directors. Saxon's
legal advisors were Gibson, Dunn & Crutcher LLP and Ballard Spahr
Andrews & Ingersoll, LLP.
About Saxon
Saxon is a residential mortgage lender and servicer that manages a
portfolio of mortgage assets. Saxon purchases, securitizes, and
services real property secured mortgages and elects to be treated as a
real estate investment trust (REIT) for federal tax purposes. The
Company is headquartered in Glen Allen, Virginia and has additional
primary facilities in Fort Worth, Texas and Foothill Ranch,
California.
Saxon's mortgage loan production subsidiary, Saxon Mortgage, Inc.,
originates and purchases mortgage loans through indirect and direct
lending channels using a network of brokers, correspondents, and its
retail lending centers. As of June 30, 2006, Saxon's servicing
subsidiary, Saxon Mortgage Services, Inc., serviced a mortgage loan
portfolio of $26.4 billion. For more information, visit
www.saxonmortgage.com.
Information Regarding Forward Looking Statements
This press release contains forward-looking statements within the
meaning of the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. Statements about the expected effects,
timing and completion of the proposed transaction and all other
statements in this release, other than historical facts, constitute
forward-looking statements. You can identify forward-looking
statements because they contain words such as "believes," "expects,"
"may," "will," "would," "should," "seeks," "approximately," "intends,"
"plans," "estimates," or "anticipates" or similar expressions which
concern our strategy, plans or intentions. All forward-looking
statements are subject to risks and uncertainties that may change at
any time, and, therefore, actual results may differ materially from
what is expected. While we believe that our assumptions and
expectations are reasonable, we caution that it is very difficult to
predict the impact of known factors, and, of course, it is impossible
for us to anticipate all factors that could affect actual results. In
particular, we may not be able to complete the proposed transaction on
the terms summarized above or other acceptable terms, or at all, due
to a number of factors, including the failure to obtain approval of
our shareholders, regulatory approvals or to satisfy other customary
closing conditions. The factors described in this paragraph and other
factors that may affect our business or future financial results
generally are discussed in our filings with the Securities and
Exchange Commission, including our Form 10-K for the year ended
December 31, 2005, a copy of which may be obtained from us without
charge. You should not place undue reliance on our forward-looking
statements, which speak only as of the date of this press release.
Unless legally required, we assume no obligation to update any written
or oral forward-looking statement made by us or on our behalf as a
result of new information, future events or otherwise.
Additional Information and Where to Find It
The proposed transaction with Morgan Stanley will be submitted to
a vote of Saxon's shareholders, and Saxon will file with the SEC a
proxy statement to be used to solicit the shareholders' approval of
the proposed transaction, as well as other relevant documents
concerning the proposed transaction. Shareholders of Saxon are urged
to read the proxy statement regarding the proposed transaction and any
other relevant documents filed with the SEC when they become available
because these documents will contain important information. A free
copy of the proxy statement, as well as other filings containing
information about Saxon, may be obtained at the SEC's Internet site at
http://www.sec.gov. Copies of the proxy statement and the SEC filings
that will be incorporated by reference in the proxy statement can also
be obtained, without charge, by directing a request to Bobbi J.
Roberts, Vice President, Investor Relations, 4860 Cox Road, Suite 300
Glen Allen, Virginia 23060, or by phone at (804) 967-7879.
Participants in the Solicitation
Saxon Capital and its directors and executive officers and other
members of management and employees may be deemed to be participants
in the solicitation of proxies from the shareholders of Saxon who are
asked to vote in connection with the proposed transaction with Morgan
Stanley. Information regarding Saxon's directors and executive
officers is available in Saxon's proxy statement for its 2006 annual
meeting of shareholders, which was filed with the SEC on April 20,
2006. Additional information regarding the interests of such potential
participants will be included in the proxy statement and the other
relevant documents filed with the SEC related to the transaction when
they become available.