Hubbell (HUB.A) – Share Exchange Transaction – 6% expected return

Current Price – HUB.A $118.91, HUB.B $96.85;

Offer – One share of HUB.A will be exchanged into one share of HUB.B + $28.

Upside – 5%

Expiration date – TBD (shareholder vote expected by the end of 2015 or beginning of 2016);

Transaction is subject to shareholder approval and other considerations

SEC Filling

 

Summary:

Hubbell Incorporated announced a proposed reclassification of the Company’s common stock in order to simplify the ownership structure. Under the terms of the proposed reclassification, holders of Class A Common Stock will receive a cash payment of $28.00 for each share of Class A Common Stock held, and each share of Class A Common Stock and each share of Class B Common Stock will be reclassified into one share of Common Stock of the Company. Shares of the reclassified Common Stock will be entitled to one vote per share on all matters brought to the Company’s shareholders. 

 

Timeline and Shareholder Approval:

Approval of the Reclassification Proposal requires (i) the vote of the holders of the Class A Common Stock, voting as a separate voting group, (ii) the vote of the holders of the Class B Common Stock, voting as a separate voting group, and (iii) the vote of the holders of the Class A Common Stock and the holders of the Class B Common Stock, voting together as a single voting group

From Q3 conf call: “And lastly, but certainly not least, we announced our share reclassification in the third quarter. The reclass is progressing as expected. We filed an updated S-4 yesterday, in response to SEC comments. Not substantially different from our prior filing, but addresses a tax question they had, and some additional disclosures that they were requiring. Schedule’s on track with expectations, currently contemplates working toward a tentative record date of November 6. And so the timeline remains consistent, shareholder vote expected late this year or early next year.”

 

 Source of Funds:

The Class A Cash Consideration, in the aggregate, will be approximately $200 million. The Company intends to finance payment of the Class A Cash Consideration and all other expenses and fees associated with the Reclassification from one or more of cash on hand ($434m available as of Q3 2015), funds from operations and new or existing borrowings.