U.S.-based consumer products company HRG Group Inc. proposed a merger with consumer products company Spectrum Brands Holdings Inc., according to an amended Schedule 13-D HRG Group filed Dec. 19.
HRG owns a 59.6% stake, or 34,339,752 shares, in Spectrum Brands, according to the filing.
Under the terms of the merger proposal, HRG shareholders' ownership in the merged entity will equal the number of Spectrum shares held by HRG premerger on a one-for-one basis. The proposal also required an additional $200 million cash payment to premerger HRG shareholders and that the two companies bear their own costs associated with the transaction, among other stipulations.
On Dec. 17, HRG requested that Spectrum Brands change the composition of its board and its nominating and corporate governance committee by including two HRG appointees to its board and three HRG appointees to the committee.
Spectrum Brands, in a Dec. 20 SEC filing, said its board's special committee is reviewing HRG's merger proposal. The two companies have been in merger discussions for nine months, Spectrum said. Spectrum said its special committee "believes strongly" in the advantages of a potential merger transaction and will continue discussing the matter with HRG.
Spectrum further stated that it is reviewing HRG's board changes request according to its organizational and governance documents.
Spectrum Brands appointed Moelis & Co LLC as its special committee's independent financial adviser and Kirkland & Ellis LLP and Cleary Gottlieb Steen & Hamilton LLP as independent legal counsel, according to its SEC filing.