An investorgroup is seeking representation on AstaFunding Inc.'s board after the company announced that it plans to starta Dutch auction tender offerof its common shares, according to an amended Schedule 13D filed April 5.
The group, composedof The Mangrove Partners Master Fund Ltd., The Mangrove Partners Fund LP, MangrovePartners Fund (Cayman) Ltd., MangrovePartners, Mangrove Capital, MPF Investco 4 LLC and Nathaniel August,beneficially owns approximately17.4% of Asta Funding's outstanding shares.
The group saidit is concerned that through the Dutch auction tender offer, Asta Funding is attempting"to cement control" of the company in the Stern family. The group alsosaid it has not had discussions with Asta Funding with respect to board representation,but it intends to engage in such discussions soon. It stated that in the event AstaFunding refuses to voluntarily provide the group with board representation or provideit with a representation it deems satisfactory, the group reserves all rights toseek the representation it deems appropriate.
The group believesthat Asta Funding and its management have been misleading about the group's to purchase up to 3 millionAsta Funding common shares by stating in its solicitation/recommendation statementthat the offer is "opportunistic," and that it significantly undervaluesthe company.
Conditions ofMangrove Partners' offer include that Asta Funding has not authorized or proposedthe acquisition or other reduction in the number of its common shares or other securities.Mangrove said in a separate news release that Asta Funding's Dutch auction tenderoffer triggered the condition and that it has determined to waive it. However, theinvestor added that it is adding a condition that Asta Funding's Dutch auction tenderoffer must be acceptable to Mangrove, and that Mangrove will make this determinationfollowing its review of all definitive documentation with respect to the Asta FundingDutch auction tender offer.